International Marketing Plan – TIB4M1R

(Examination Project)

J. Samodien

Student Number: 4587 002 0

Contact No: 076 195 3539

October / November 2009

Lecturer: R. Ojo

Contents:

Purpose of Marketing Plan – Page 3

Introduction – Page 4

Elements of Marketing Mix – Page 5

SWOT Analysis – Page 8

Target Market & Competition – Page 9

Country Overview – Page 10

International Mission Statement – Page 14

Marketing Mix Strategies – Page 15

Price Budget & Considerations – Page 20

Marketing Budget – Page 21

Conclusion – Page 23

References – Page 24

Purpose of Marketing Plan:

This plan is being structured for the use of exporting Aluminium patrol boats to Malaysia. In this report Malaysia Trade laws and economy will be discussed and strategy will be formulated to overcome any obstacles that may be encountered.

A country overview of Malaysia will appear in this plan as well as the various costs to be considered. Various strategies for the elements of the marketing mix will be formulated based on options that are best suited to entering foreign markets.

Target Markets will be identified and also any possible competitors that may already exist in the Market.

Basically the overall purpose of this plan is to formulate specific export strategy for SuperBoatbuilders to enter the Malaysian Market.

Introduction:

SupaBoatbuilders Pty Ltd is a company that manufactures and distributes Aluminum boats commonly use for military and coastal patrol purposes. The company is currently looking to expand and export its products into foreign markets, specifically Malaysia.

SuperBoatbuilders’ pride stems from the success of designing and building high speed Patrol boats. In 1987 it introduced its first ever power boat to South African Markets, the GreatWhite, the name inspired by one of the most resilient creatures in the sea. The company's GreatWhite design was selected by the South African Coastguard for its fleet. The company strives on customer satisfaction and quality; therefore it has never built a boat that did not meet or exceed customer specifications and requirements and has also won several awards for design and construction of its magnificent craftsmanship.

Currently the GreatWhite range is manufactured and built for any offshore operations with the latest marine and law enforcement electronics and shock mitigating seats. Powered by twin inboard diesel engines and water jets this boat can achieve speeds of up to 45 kts. Vessels can be customized to include any extra features that clients may require.

Elements of the Marketing Mix:

Product:

Main component of JS1801 boats is aluminium; reason for using aluminium is because it has great toughness and light weight. It can survive impacts that neither steel nor fibreglass can survive. Aluminum has considerable ductility; this is the ability to withstand permanent deformation without rupture. Fiberglas is extremely brittle and is most likely to crack and fracture on impact. Aluminum boats are much easier to repair; dents can often be pounded out with a hammer, but if necessary, sections of a plate can be cut out with a saw and simply replaced.

Unlike fibreglass aluminium cannot burn. Fibreglass is flammable because the resin contains petrol and despite petrol retardants use to depress this factor, although it is not eliminated altogether.

Aluminum boats are not built from moulds like fibreglass boats, therefore modifications to designs of various elements are easy to make and can be achieved faster than with fibreglass are all accomplished much more readily than with fibreglass. Aluminum also has an excellent resistance to salt water corrosion.

Standard Features of GreatWhite model • MCM 10-year hull warranty • Proven PowerLift hull • 1/4” marine grade aluminum hull plate • Welded aluminum handrails forward • Watertight below-deck bulkheads • Full instrumentation and controls • Hydraulic steering • Dual deluxe helm seats • Forward cabin with seats/berths • Aluminum windows • Opening hatch in cuddy • Weathertight aft cabin door • 12volt/110 volt electrical panels • 300 gallon fuel tank • Navigation lights • Custom bow/stern railing • Aft flushdesk cargio bay

The GreatWhite range is usually mass produced & sold directly to other companies via a sales force.
The company & its products is still in the growth phase of the product life cycle and therefore extensive advertising and personal selling is required to inform and enhance sales. The company sales people approach prospective clients with a catalogue of the products along with stating the benefits of using aluminium to build it.
With the plans to expand into foreign markets, a basic standard model with optional extras that can be added has to be designed and manufactured. The product itself has to be something that isn’t too costly to produce and can be transported easily.

Due to the increase in a pirate attacks in Malaysia, a need for high quality, fast and secure coastal patrols has risen in Malaysia.

Price:

Product is mass produce therefore the cost to manufacture it is based on resource availability and companies capacity to handle large orders and staff. SuperBoatbuilders has been providing local companies with its product for many decades and the price has remained in tact with regards to any economic conditions in the local market, however with the plan to expand many considerations will need to be made.

Any customs duties will need to be added or taken into consideration along with any modifications, along with transporting the product to Malaysia and insurance.

Promotion:

Currently they market domestically and usually their products are sold directly to businesses with the exception of the odd individual requesting a customised boat. Product information is usually distributed to clients via direct mail package that contains a catalogue of whats on offer as well as any new features and upgrades available. They also offer a 10 year guarantee which means that clients are more than welcome to come back with any problems they may encounter.

In the domestic market, a sales force is also sent out to source and approach any new propects about the product, but because of its size, its not exactly something that be easily carted around so the sales person has a harder job of selling it because he has to have very good negotiating and selling skills.

However they do have the added advantage of being the supplier of the South African Coastguard fleet.

Place:

They participate in local boat shows and information is easily obtainable from their website. Customers are welcome to visit the head office and main showroom where they can view what the company has on offer. Customers are able to order products online and view all product specifications and optional extras. However they will have to contact and set up a meeting the company as soon as they have decided what they would like to order to discuss and negotiate pricing. Alternatively clients can request a visit from the highly trained sales staff to come out and complete the sale.

SWOT Analysis:

Strengths: Supaboatbuilders has the capacity and capability to produce exactly the products needed to combat sea crimes. The products can with stand harsh sea conditions based on Malaysia tropical climate.

Weaknesses: Lack of market knowledge & trade laws.

Opportunities: Based on the recent attacks Malaysia needs to increase their patrol force, therefore a need has been identified for the product. Current equipment could prove to be inadequate with regards to quality and strength of current vessels being used.

Threats: Current local suppliers of vessels and any political or economic conditions. County might not be able to afford the costs of equipment due to global economic recession. They might not be too keen on purchasing the product because product is from a foreign country.

Target Market:

The Malaysian Maritime Enforcement Agency, also known as the Malaysian Coast Guard is a government agency whose main task is maintaining law and order and coordinating search and rescue operations in the Malaysian Maritime Zone and on the high seas.

The Agency is part of the Malaysian Civil Service and report directly to the Prime Minister's Department. The agency is also tasked to back up the Air Force and the Navy in any emergencies.

The product can also be sold to any other company’s who operate on the coast of Malaysia for security and patrol purposes.

The Malaysian Coast Guard can use these boats to patrol the seas in which they operate and monitor. The product is perceived as being of better quality because it is made from aluminium, which makes its faster and stronger than fiberglass boats. It’s also more secure and can withstand rough sea conditions.

Competition:

The quality of the boats that are manufactured in Malaysia are poorer than that of SuperBoatbuilders.

Most manufacturers in Malaysia use fiberglass to build the base of their products. With fiberglass the material has to first be moulded and then the overall process of reaching the end result is lengthy and time consuming. It also needs much more material and is far messier and labour intensive. Fiberglass is also not as strong as aluminium.

Aluminium is cheaper in South Africa and the country has companies that specialise and are skilled in using the material to make boats.

Country Overview:

Malaysia is a country in Southeast Asia, it consists of 13 states. It is a Federal state with constitutional elective monarchy. The Capital of Malaysia is Kuala Lumpur. The population stands at over 28 million (2007 est.). Malaysia shares borders with Thailand, Indonesia, Singapore and Brunei. The country is located near the equator, therefore it experiences a tropical climate.

Malaysia is a multi-ethnic, multi-cultural and multilingual society. Of the 28 million population; 62% Bumiputeras (including Indigenous people); 24% Chinese; 8% Indians, there are other minorities that are present along with foreigners.
The Malays, who form the largest community, play a dominant role politically, and are defined as Muslims in the Constitution of Malaysia. Their native language is Malay, which is the national language of the country. However, English is also widely spoken across the country.
Malaysia's population comprises many ethnic groups, with the Malays at 50.4% making up the majority and other bumiputra/indigenous (Aborigine) groups in Sabah and Sarawak at 11% of the population. Malaysia is a multi-religious society and Islam is the official religion.

Economy:

In 2008, GDP per capita of Malaysia was close to US$14,215, ranking it 48th in the world. In 2008 their major Imports partners were Singapore (23%), China (12.7%), Japan (9.8%), US (7.8%), Thailand (5.7%) & South Korea (4.3%).

Malaysia boasts trade links with more than 234 countries and a rapidly growing economy – economic growth is expected to be sustained. In 2007 it grew at 6%, against a global growth rate of 4.5%.

Malaysia’s main exports are palm oil, vegetable fats & oils, wood & wood articles, precision instruments, machinery and mechanical equipment & parts and major imports are minerals, base metals, wood pulp, cane sugar and car or automobile parts.

In 2008 the Malaysia has experienced a high rate of piracy crimes in the Gulf of Aden. They have tried to overcome this with the Malaysian navy has been escorting Malaysian vessels that use this route.

Piracy in major transit routes, like the Gulf of Aden, threatens global trade and is a major issue when it comes to wanting to form a globalize & integrated world economy. The Gulf of Aden is the route that connects Africa, Asia and Europe. Other economic cost caused by piracy are delayed deliveries, higher insurance rates, damaged ships and ransom payments to release captured ships, passengers & crew. Vessels carrying sensitive cargo can also mean that global security can be jeopardized if they are hijacked and land in the wrong hands.

In the past Malaysia has already fallen victim to piracy, the Straits of Malacca, a major international shipping route was also attacked by pirate activities. This prompted Malaysia to join forces with Indonesia & Singapore to find ways to overcome the issues. The venture involved joining naval forces and co ordinate patrols.

The establishment of full diplomatic relations in November 1993 has caused the relations between South Africa and Malaysia to blossom and grow. The countries now view each other as partners in the developing world. The countries have resident High Commissions in based in the foreign markets.

South Africa ties with Malaysia are the strongest out of the Southeast Asia region. Malaysia is the second largest investor on a cumulative basis since 1994. Areas of trade between Malaysia and South Africa is the telecommunications, energy and hospitality industries.

The best way to work out the tariff that could affect SuperBoat builders is to work on the basis of the tariff being ad valorem to the products value.

An ad valorem tariff is a set percentage of the value of the product that is being imported. For example 50% of the products perceived value. This percentage is normally set by Customs. In this case we determined that the ad valorem tariff on the boats would be about 30% of its market value which is set at R180000. However this tariff can be problematic because if the price of the product should drop then the tariff would have to decrease as well which makes the country more vulnerable to foreign competition. Sometimes these are problematic, as when the international price of a good falls, so does the tariff and domestic industries become more vulnerable to competition and vice versa.
Other tariffs that exist are: • A specific tariff, this tariff is set at a specific amount of money and is not sensitive to the product price. Therefore irrespective of any changes in price the tariff amount will remain the same. Specific tariffs are however vulnerable to market and inflation changes therefore the tariff needs to be updated periodically. • Revenue tariffs are set rates that are primarily designed to raise money for the government. • A prohibitive tariff is normally set so high that it de-motivates companies from importing to the country. • Protective tariffs are intended to artificially inflate the prices of imports with the hope of protecting domestic industries from foreign competition. This is also to eliminate any illegal operations of companies who are exporting goods into the country. • An environmental tariff is set to control the importing and exporting of good that are not environmentally friendly.
Currently there are no products in SuperBoatbuilder’s category that are being exported or imported into Malaysia. Therefore the market is one that is dominated by domestic manufacturers.
However below are tables of the value in ZAR and quantity of exports of products in its category from South Africa to other countries within Asia;

|890690.Other Rand value |
|DATE |
|DATE |200701 |200702 |200703 |
| | | | |
|Selling price | 180,000.00 | 80,000.00 | |
| | | | |
|Selling costs | 5,000.00 | 2,222.22 |5% |
| | | | |
|Import costs | 30,000.00 | 13,333.33 |30% |
| | | | |
|Export costs | 15,000.00 | 6,666.67 |15% |
| | | | |
|Agent costs | 10,000.00 | 4,444.44 |10% |
| | | | |
|Manufacturing/Product costs | 40,000.00 | 17,777.78 |40% |
| | | | |
|Expected Profit p/unit | 80,000.00 | 35,555.56 | |
| | | | |
| | | |100% |

The above amounts and table is based on the assumption that the overall extra costs will amount to R100000. The prices are also converted into Ringgits which is the official currency of Malaysia. The above table amounts are converted on the basis that ZAR1 = MYR2.25.

| |2009 |2010 |2011 |
|Exhibitions | 4,500,000 | 4,950,000 | 5,445,000 |
| | | | |
|Promotional Material | 6,000,000 | 6,600,000 | 7,260,000 |
| | | | |
|Agent | 3,750,000 | 4,125,000 | 4,537,500 |
| | | | |
|Website | 4,000,000 | 4,400,000 | 4,840,000 |
| | | | |
|Research | 5,000,000 | 5,500,000 | 6,050,000 |
| | | | |
|Misc. | 1,750,000 | 1,925,000 | 2,117,500 |

Conclusion:

Malaysia seems to be a very attractive market and will soon generate more imports from foreign countries who want to enter the market place.

More specifically the currency and economy is fairly strong and it is still a developing country therefore it will attract more foreign interest. The relationship between Malaysia and South Africa seems to be very positive and this may open up better opportunities for other Sputh African companies wanting to enter the Malaysian Marketplace.

The strategies that have been discussed have be considered the best strategies and options for exporting to Malaysia. SuperBoatbuilders could also become the supplier of the Malaysian Coast Guard and this will mean possible exemption from any import taxes and other possible tariffs.

The best suggested option for the company is to appoint an export agent to handle the entire export process and also certain aspects of Marketing. This will save the company money especially with time consuming research and also get the entire export process moving faster because the knowledge of the export agent.

Competition in Malaysia seems to be very long with regards to the products that are currently on offer and if SuperBoatbuilders should supply the Malaysian Coast Guard this could act as positive publicity for the company if they manage and maintain the relationship.

Overall the product is exportable and the process of exporting can be made easier for the company if they base their choices on the suggested strategies.

References:

http://www.dfa.gov.za/foreign/bilateral/malaysia.html

http://www.btimes.com.my/Current_News/BTIMES/articles/mmea19/Article/

http://www.indexmundi.com/malaysia/imports_partners.html

http://www.fita.org/countries/malaysia.html

http://www.austal.com/index.cfm?objectID=95CAD5E7-A0CC-3C8C-D94F325AB845888D

http://www.seaark.com/ http://www.lima.com.my/overview.php http://www.biztradeshows.com/trade-events/offshore-asia.html

http://www.langkawiboatshow.com/welcome-libex.htm

http://www.aseansec.org/14296.htm

http://www.portsworld.com/customs/proc_imp_exp.htm#IMPORT%20DUTY

http://www.heritage.org/Index/Country/Malaysia