Marketing and Sales Plan of Malaysia Skin Care Clinic

The residents of Malaysia have become prone to contacting skin diseases including but not limited to eczema because of the high humidity experienced in the region (World Health Organization 2017, p.5). Sadly, women aged 23 years and above, who comprise 8.8 million of the total population are the ones at high risk. As a result of this ailment, a business plan for Malaysia Skin Care Clinic which involves the production of skin care products is proposed. This company is based in Kuala Lumpur, the nation’s capital. Among the key issues addressed are the marketing and sales plan, the operations, the financial feasibility as well as the eventual action plan. With this background, it is correct to affirm that the mission of the Malaysia Skin Care Clinic will be to solve the problem of eczema facing most of the women in the nation. Additionally, the vision of this company is to be the number one skincare and beauty clinic in Malaysia and beyond.

2.0 Marketing and Sales Plan

2.1 Nature of the Products

From basic business concepts, products can either be tangible or intangible (Tukker 2015, p.77) In this particular case, the nature of the company’s products is tangible since the goods on sale can be felt and transported from one location to another. Competition is at a high level as there is a variety of thriving beauty and skin care clinics in Malaysia including Ample Effect Sdn, OEM skin care and Cosmetics Company and Martiderm, among others (Ab Rahman 2016, p.2; Sing 2017, p.4). In a way, this means that with regards to competition, the nature of the goods and services that this business offers is competitive.

2.2 Nature and Power of Consumers

The target of this business is Malaysian women aged 22 and above. In a 2017 report, the population was estimated at 8.8 million (Hassan et al. 2017, p.52). Therefore, this implies that there is a ready market for the proposed business. Although there is a ready market, failure of proper promotion and delivery services may be a significant obstacle for the success of the company (Ariff and Abubakar 2016, p.1; Akhmetshin 2018, p.653). As a result, the promotion service that will be employed is the sales promotion, persuasion, and advertising.

The market population consists of women aged 22 and above, who are around 8.8 million. Ideally, women this age are obsessed with good looking and glowing skin, and this along with their huge population makes the consumers have a significant impact on the price of the commodity (Chittithaworn, et al. 2017, p.180). The anticipated cost of the skin care products is set to begin at $25. However, given the large population of the market and the nature of the consumers, the demand of the product may be high, which may lead to a decreased price of the commodity, especially during the harsh weather periods (Swidi et al. 2014, p.15). In particular, the anticipated price may remain static during the low demand time (during good weather) and decrease by a quarter during the high demand time. As a result, this means that although the consumers are the ones setting the price of the commodity indirectly as they are large in numbers, the consumer demand during different seasons will be the primary determinant of the cost of the skin care products.

2.3 Product Marketing

It is evident that sales promotion, persuasion, and advertising will be the main strategies and mode of promotion that will be employed in the marketing strategy (Lamb, Hair and McDaniel 2011, p.67). However, the communication or completion of these strategies is not expounded. In the sales promotion, the different sales agents will be stationed at various hair closets and beauty shops. Here, they will introduce the commodity to the clients visiting the multiple shops and offer them free use of the commodities after which they can decide to buy or not purchase the products. It is essential to note that feedback will also be included in this part since it will help the company to know where to adjust to make the commodity better and increase its sales.

With regards to persuasion, a more in-depth explanation of the products including their merits and demerits will be availed to the consumer so that they find the need to purchase the various skin care products. Finally, the last method will be advertising, which will be a paid advertisement. This advertisement approach will include face to face as well as virtual advertisements (Shah et al. 2018, p.126). The employment of virtual paid advertisement is as a result of the current digital era where most if not all of the target market is glued to social media platforms making it easier for them to come across the product (Kaser 2012, p.23; Barfield and Blitz 2018, p.464). The advertisements will be paid because payment is a form of reward and typically, rewards entice involved personnel to perform their tasks to perfection.

2.4 Products Distribution

Distribution is another essential factor of consideration in a business. With this in mind, the type of distribution in this business will be two-sided. The first one will be a short-term based distribution strategy and the second one will be a long-term distribution strategy. At the beginning of the business, the distribution strategy that will be utilised will be the selective distribution (Iacobucci and Winter 2016, p.47). Here, the outlets of accessing the skin care products will be placed at major cities of Malaysia.

Once the business grows to the point that it has enough funds, the outlets will also increase to have a presence not only in cities but also in other urban centres in Malaysia. Therefore, this means that the use of selective distribution is as a result of the lack of sufficient funds. However, the placement of the outlets in the cities will ensure that the business is easily accessible as most of the people visit the key cities regularly and are well versed with the locations. Therefore, even with the employment of the selective distribution of the outlets and products, the growth of the business will not be adversely affected.

2.5 Key People

Despite the existence of various stakeholders in the industry, some specific people will be quite influential. Among these persons are the chief executive officer (CEO), the general manager, and the chief financial officer (CFO). In the case of the CEO, he or she will ensure that the mission and vision of the company are well laid out (Luftman et al. 2016, p.117). The general manager will use his or her managerial skills to see to it that that the firm’s vision and mission are achieved through constant supervision, which ensures the completion of work at the desired time. Moreover, the CFO will ensure that the finances are appropriately used and also make sure that the company attracts as many investors as possible for the sake of its financial growth (Haszlinna Mustaffa and Potter 2015, p.246). Financial managers have adequate knowledge of handling and increasing finances in a business (Patra 2006, p.10).

Other key persons in the business will be the operational manager and the receptionist (Zakaria et al. 2014, p.606). Through the functional skills, the operational manager will see to it that all the activities of the business are taking place in the desired manner. Additionally, the receptionist is the face of the company as he or she is the first person that meets the clients. The receptionist will use their communication skills to persuade and welcome the consumers into the business.

3.0 Financial Feasibility

Before making an investment decision, it is vital to carry out a feasibility study of the planned investment plan to determine whether it is realistic or not (Bourke, Dattani and Robinson, 2004 p.179; Kananatu 2014, p.25). The financial feasibility study in this report will consider various economic aspects of the cosmetic business and evaluate whether the project is worth undertaking (Ionut 2015, p.517). The feasibility analysis will look at three major elements, that is, sales data, start-up costs, and funding.

3.1 Data on Sales and Start-up Costs

The company projects to make a total sales turnover of about $990,000 in the first year, which will be followed by constant growth in sales for the next five years. Table 1 below shows the Malaysian Skin Care Clinic’s sales projection for the next five years.

Table 1: Malaysian Skin Care Clinic’s sales projection

Values in thousands

Measure

Year 1

Year 2

Year 3

Year 4

Year 5

5-Year Total

Online sales Projection

$340.00

$400.00

$460.00

$530.00

$700.00

$2,430.00

Physical sales Projection

$650.00

$710.00

$890.00

$920.00

$1,090.00

$4,260.00

Total Sales

$990.00

$1,110.00

$1,350.00

$1,450.00

$1,790.00

$6,690.00

Loan Repayment

($389.24)

($389.24)

($389.24)

($389.24)

($389.24)

($389.24)

Additional Cost of Staffing

($130.00)

($170.00)

($220.00)

($250.00)

($290.00)

($1,060.00)

Projected, shipping, insurance and Material Cost

($60.00)

($76.00)

($85.00)

($110.00)

($140.00)

($471.00)

Projected IT hosting and maintenance cost

($115.00)

$0.00

$0.00

$0.00

$0.00

($115.00)

Training and distribution cost

($80.00)

($30.00)

($35.00)

($43.00)

($45.00)

($233.00)

Rent and Contract projection costs

($60.00)

($50.00)

($55.00)

($65.00)

($75.00)

($305.00)

Total Additional Costs

($834.24)

($715.24)

($784.24)

($857.24)

($939.24)

($2,573.24)

Cash flow

$155.76

$394.76

$565.76

$592.76

$850.76

$4,116.76

From the projected cash flow shown in Table 1, the business has a positive cash flow from the first year. However, the loan repayment is only calculated for the first five years while the total loan repayment should take not less than ten years. In conclusion, from the projected business cash flows, the project is viable.

It is essential to understand the marketing strategy of the company and how it intends to undertake its operation to determine the amount of capital required to establish the business successfully (Ferrell and Hartline 2013, p.3). Malaysian Skin Care Clinic is considering creating a vibrant online market platform alongside the physical distribution of products in the local market. The online marketing platform will not only help the business to establish itself as a modern beauty care clinic but also give it a competitive advantage against its rivals. Malaysian Skin Care Clinic requires a total of 6.5 million dollars to start up the project and run it for at least one financial year.

3.2 Funding

The company intends to use various financial instruments to raise the capital ($6.5 million). First, Malaysian Skin Care Clinic plans to raise a total of 3 million US dollars from direct investments. Secondly, the company plans to obtain a long-term loan of 2.5 million US dollars from the Hong Leong Bank. The company expects to repay the loan in 10 years at an interest rate of 4.5 percent per annum. Lastly, the company anticipates receiving a government business startup grant of one million US dollars. Table 2 below shows the outlay of the startup capital sources.

Table 2: Outlay of capital sources

Fund

Source

Amount ('000)

Cost

Direct Investment

Investors

$3,000

$0.00

Long-term Loan

Hong Leong Bank

$2,500

$1,382.42

Business Grant

Government of Malesia

$1,000

$0.00

4.0 Operational Plan

4.1 Components of production

The production of goods and services consists of acquiring of raw materials, manufacturing and packaging for the delivery to the desired clients (Bellgran and Säfsten 2009, p.39). In the case of extraction, the main idea usually is inbound logistics. Instead of relying on suppliers, the company will select various individuals who will ensure that there is a regular supply of the best materials for the creation of the fine and bulk skin care products (Dobbs 2014; Basu and Wright, 2017). The second component, which is manufacturing involves operations. Here, the company establishes its manufacturing stores at specific areas in Malaysia that are conducive for manufacturing activities.

The last stage, packaging for delivery purposes will include outbound logistics, marketing and sales, and service. The outlook of the outbound logistics is favourable since the company will have significant outlets in various cities in Malaysia (Duerre 2010, p.112). Intermediaries will be employed so that the products can reach these stores as well as the consumers in the long run. With regards to the marketing and sales, competent salespersons will be employed to ensure that the product is well marketed and sold to its market. Customer care services will also be provided physically and virtually on a 24-hour basis.

Other secondary sectors that are part of the listed components of production include infrastructure, human resource management, and technology. In the case of the infrastructure, there need to be well-commuting roads so that the supply of materials and the transportation of already manufactured products remains constant or else the company risks losing the target market. Further, with regards to human resource management, the company has to ensure that the employees are not only competent but offered a good working environment elsewise they will end up compromising the quality of the goods being produced. The last factor is technology. Without the employment of up to date technology, there is also a possibility that the quality may be low, which is not good for the business.

4.2 Porter’s Value Chain Model

According to this framework, value refers to what consumers are ready to pay for a company’s product or service (Cooper 2014, p.1; Koc and Bozdag 2017, p. 560). Some of the core areas that contribute to the production of a firm’s product include the operation, sales, and marketing, as well as human resource management. Consequently, it is evident that more value needs to be allocated to these areas. With regards to the operations, the company needs to allocate more funds to ensure that up to date technologies are used because such techniques foster fast and quality processes (Ajagbe and Ismail 2014, p.466). Additional expenses also have to be included in the human resource management to ensure that the workers are not facing any burning issue. The top resources must also be put in place to ensure that the sales and marketing approach is at its best (Grundy 2016, p.227). Failure to do this means that the business risks an early closure without realising any profit since any corporation is prone to failure due to poor marketing even with the best products in the market (Ahmad, Abdul and Mohd 2015, p.183). The target market becomes aware of the commodity and purchases it eventually through proper sales and marketing.

4.3 Quality Management

Based on the above description, quality appears to be a significant consideration. To ensure that quality is maintained on a long-term basis, various steps need to be put into account. The first and most essential step is extracting quality raw materials (Ross and Perry 2017, p.3). If the materials are of poor quality, the end product will also be of poor quality. Therefore, the first step the company will adopt in an attempt of maintaining quality is sourcing quality raw materials. Besides this, the company will also use highly digitalised types of equipment because unlike human beings, the devices will always deliver quality as they do not suffer from exhaustion or boredom as long as they are well maintained (Nikoloski 2014, p.307).

Furthermore, consumers are the main people who increase the sales of the company, and if they are not satisfied, the business risks failing (Hill 2017). Therefore, listening to the clients will help the company to know the mistakes they are making, and how they can improve or maintain quality. Hence, this should also be a factor of consideration. On an additional note, treating the employees well and providing them with rewards can also be another mechanism that the company can use to maintain the quality of their products (Noe et al. 2016, p.31).

4.4 Data and Information Management

According to Indarti and Landenberg (2016, p.19), along with maintaining quality, it is additionally necessary for the company to retain its informational and confidential business data especially in the modern times when cyber insecurity has become rampant. There are a plethora of ways that the company can consider to ensure the security of its sensitive and confidential data. However, two methods seem the best. The first approach is ensuring that the network that the company is using is secure and that it is not shared (Del Aguila-Obra and Padilla 2015, p.107; Doliwa, Frydrych and Horzelski 2016, p.326). Also, the use of strong passwords or digitalised passwords such as fingerprints and voice can be another mechanism that can ensure that the data of the business is well protected for the welfare of the company.

4.5 Outsourcing

Although the current plan is to involve the company and its stakeholders in the operations of the business, it would be additionally beneficial if the company decides to use outsourcing as an approach. Outsourcing is the process through which a firm uses another company or individual to gather information about a commodity or even sell their product or business idea (Jones 2014, p.25). Although outsourcing has its chain of demerits, on a bright side, new ventures are bound to emerge if the company goes for the outsourcing method of sales and marketing. For instance, through outsourcing, it becomes easy for the company to increase its target population or market, especially if the company or individual conducting the outsourcing is popular in another region. For this reason, it is rational if the company chooses the outsourcing method in the long run after the inception of the business.

The potential business ventures that are likely to arise in the course of outsourcing is the inclusion of beauty centres within and beyond Malaysia. The beauty centres will however not be involved in the selling of skin care products alone but also help in testing and treating skins through services like facials, among others. With these, various benefits are bound to transpire. The first benefit is the increased target population. While eczema is the main reason behind the introduction of the business idea, the new venture focuses on making the customers’ skins glow and remain young regardless of the effect of eczema. Therefore, this means that the target market will now include both females and males since men will now also have access to facial services.

The next benefit that will come out of this new business venture will be increased revenues and profits, which represents the final value of this business venture. With increased revenues from this new business venture, the company is likely to undergo expansion both regionally and internationally (Ashari et al. 2014, p.392). Facial or skin care services blend well with hair beauty. Hence, this can be an added business venture as well, which will translate into more revenues as well as profits. With all these highlighted benefits that come with the new undertakings, there is enough reason to opt for the outsourcing option.

5.0 Action Plan

Since the above projects are promising with regards to revenue and growth, it is necessary that dates be set to have a precise idea of when initiatives about the business can begin. Based on the plan at hand, the efforts may start no later than six months after the introduction of the company into the market. Although this sounds like more time, it is the perfect time to start the initiatives since funds and other resources will be required for the start of the new ventures or the enterprises. Currently, considerable funds are needed to ensure that the business begins. Therefore, it is only correct if six months is given for the company’s inception before introducing new ventures to accumulate the necessary funds.

However, there is no assurance currently that after six months, the business will be flourishing with regards to revenues and profits. Therefore, the company needs to consider clearing all the loans that will have been taken in the inception of this business. The aim will be to allow more room for borrowing from various financial institutions in case the company does not have enough money for new ventures six months after its introduction in the market. By taking this approach, the company will be able to balance the pressure of the finances needed at both phases. However, all the indications point out that the business proposal is promising.

6.0 References

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Ashari N., Koh, H.C., Tan, S.L., and Wong, W.H., 2014. Factors affecting income smoothing among listed companies in Singapore. Accounting and Business Research, 24(96), pp.291-301.

Barfield, W., & Blitz, M. J., 2018. Research Handbook on the Law of Virtual and Augmented Reality. Gloucestershire, England: Edward Elgar Publishing.

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7.0 Appendices

Table 1: Malaysian Skin Care Clinic’s sales projection

Values in thousands

Measure

Year 1

Year 2

Year 3

Year 4

Year 5

5-Year Total

Online sales Projection

$340.00

$400.00

$460.00

$530.00

$700.00

$2,430.00

Physical sales Projection

$650.00

$710.00

$890.00

$920.00

$1,090.00

$4,260.00

Total Sales

$990.00

$1,110.00

$1,350.00

$1,450.00

$1,790.00

$6,690.00

Loan Repayment

($389.24)

($389.24)

($389.24)

($389.24)

($389.24)

($389.24)

Additional Cost of Staffing

($130.00)

($170.00)

($220.00)

($250.00)

($290.00)

($1,060.00)

Projected, shipping, insurance and Material Cost

($60.00)

($76.00)

($85.00)

($110.00)

($140.00)

($471.00)

Projected IT hosting and maintenance cost

($115.00)

$0.00

$0.00

$0.00

$0.00

($115.00)

Training and distribution cost

($80.00)

($30.00)

($35.00)

($43.00)

($45.00)

($233.00)

Rent and Contract projection costs

($60.00)

($50.00)

($55.00)

($65.00)

($75.00)

($305.00)

Total Additional Costs

($834.24)

($715.24)

($784.24)

($857.24)

($939.24)

($2,573.24)

Cash flow

$155.76

$394.76

$565.76

$592.76

$850.76

$4,116.76

Table 2: Outlay of capital sources

Fund

Source

Amount ('000)

Cost

Direct Investment

Investors

$3,000

$0.00

Long-term Loan

Hong Leong Bank

$2,500

$1,382.42

Business Grant

Government of Malesia

$1,000

$0.00