Malaysia Has the Second Highest Per Capita Income in the Region

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Malaysia has the second highest per capita income in the region, 4.5% growth, and is a stable country in the otherwise volatile southeast Asia. The cosmetics market is strong and continues to grow. And Malaysia continues to be a U.S. product friendly market. STUDY REPORT ON LAUNDRY PRODUCTS STRATAGY OF LAUNCHING OXYWASH COSMETICS AND TOILETRIES Malaysia SUMMARY Buoyed by strong economic growth in 2003, the Malaysian cosmetics and toiletries market recorded sales of approximately US$800 million. Sales were sustained by increased urbanization, a rise in the number of women working, and aggressive marketing and promotional activities of the retailers. The numerous new product launches also signified that the market still has room for growth. Imported cosmetics and toiletries are well received and are perceived to be of high quality. An increase in purchasing Regular resulted in more women seeking higher quality products and branded cosmetics. Competition is stiff in the local market, especially among the companies from the U.S. and France. Advertising and promotion play an important role in cosmetic and toiletries products. Market Overview

Transcript of Malaysia Has the Second Highest Per Capita Income in the Region

Page 1: Malaysia Has the Second Highest Per Capita Income in the Region

Malaysia has the second highest per capita income in the region, 4.5% growth, and

is a stable country in the otherwise volatile southeast Asia. The cosmetics market is strong and continues to grow. And Malaysia continues to be a U.S. product friendly market.

STUDY REPORT ON LAUNDRY PRODUCTS STRATAGY OF LAUNCHING OXYWASH

COSMETICS AND TOILETRIESMalaysia

SUMMARY

Buoyed by strong economic growth in 2003, the Malaysian cosmetics and toiletries market recorded sales of approximately US$800 million.  Sales were sustained by increased urbanization, a rise in the number of women working, and aggressive marketing and promotional activities of the retailers.  The numerous new product launches also signified that the market still has room for growth. 

Imported cosmetics and toiletries are well received and are perceived to be of high quality.  An increase in purchasing Regular resulted in more women seeking higher quality products and branded cosmetics.  Competition is stiff in the local market, especially among the companies from the U.S. and France. Advertising and promotion play an important role in cosmetic and toiletries products.

Market Overview

The local cosmetics and toiletries market is valued at approximately RM3 billion or about US$800 million, with a growth rate of 13% annually. It is estimated that there are more than 60,000 types of cosmetic products in the local market.  Imported products from Thailand, the United States, France, Singapore and Japan dominate the market in Malaysia.

The local cosmetics and toiletries industry generally involves mixing and formulation processes, using imported ingredients.  Many of these companies are contract manufacturers, mainly for products such as shampoo and

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conditioners, other hair care products, perfumes, and cosmetics.  The Federation of Malaysian Manufacturers – Malaysian Cosmetics and Toiletries Industry Group (FMM-MCTIG) reported that there are now about 50 small and medium sized local companies producing cosmetics.

Market Trends

Cosmetic products in Malaysia can be divided into the following categories:

a.        color cosmetics

b.       skincare

c.        perfumes and fragrances

d.       toiletries

e.        hair care

The market can be divided int  

a.        Mass market

Low to medium range price cosmetics and toiletries are sold at mass market in supermarkets, pharmacies and through direct selling agents such as Avon, Amway, Cosway, Maybelline, Neutrogena, L’Oreal and Mode Circle.

b.       Prestige brands

Exclusive brands such as Estee Lauder, Clinique, Chanel, Christian Dior and Shiseido are usually sold at major departmental stores.

c.        Others

Outlets (especially franchise chains) such as Body Shop, Red Earth, Origins, 5S, Sasa, and Roche operate individually in shopping complexes. These individual outlets usually specialize in natural based products while beauty centers such as Leonard Drake, Dermatologica, Thalgo Cosmetics, Clara International, PT Mustika Ratu, and Bella Skin Care offer niche and specialized products to the middle and higher income groups. 

Sun care, skin care, and color cosmetics segments are still relatively undeveloped when compared those in developed countries.  However, the skincare market is quickly growing, with suppliers trying to cater to the needs of increasingly demanding customer base, which include both men and women.  Clarins recently introduced its men’s range of skincare products and its beauty salon.

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The latest concept of retailing cosmetic and skin care products in Malaysia is KENS apothecary.   Inspired by Barneys Apothecary at Barneys Madison Avenue, E6 Apothecary in Boston and Space NK apothecary in London, KENS apothecary seeks to bring clean brightness to the world along with unique and exciting products for connoisseurs beauty.  KENS apothecary houses some of the finest fragrances, skincare, and cosmetics only previously available in New York, Paris, Milan, and Hong Kong.  Hip and happening cult brands such as Aesop,

T.LeClerc, and Diptyque stand side by side with Annick Goutal and Peter Thomas Roth.

Although mass brands still continue to dominate color cosmetics and skin care, sales of premium products are supported by the improving economy, especially as consumer spending increases.  Premium brands of color cosmetics and skin care will soon overtake mass brands, just as premium fragrances have started gaining an edge over mass fragrances.  It is projected that the sale of premium brands of color cosmetics and skin care will overtake mass brands by 2006.

The same applies to the hair care products market.  Popular brands such as Sunsilk, Rejoice, Pantene, Organics, Vidal Sassoon and Head & Shoulders fill the supermarket shelves.  From normal hair shampoo, shampoo for the colored hair, dandruff-control, and niche market, to the salon-looking hair market, the current strategy is to offer a full range of shampoos to fit different consumer needs and lifestyles, as well as to cater to

different purchasing Regular.

In 2002 and 2003, more lifestyle products were launched.  As the economy grew stronger and purchasing Regular increased, consumers were more willing to indulge themselves.  Hence, competitiveness in the beauty business is increasing and niche products are highly sought after.  Aromatherapy products and spa-related products and services have been widely introduced. Many beauty and cosmetic companies have started to include these ranges of new products and services to their clients.  For instance, Esthetics International Group Bhd. owns and operates Leonard Drake professional skincare outlets, which provides beauty and wellness treatments and services.  It also exclusively distributes Dermalogica range of skincare products in Malaysia and other ASEAN countries.  In addition, the company distributes Eve Taylor (London) Ltd for aromatherapy products and represents Nemecton GmbH, Weyergans High Care AG and Ros’ Esthetican Electomedicina for beauty equipment. 

Statistical Data

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Cosmetic and Toiletries(U.S Million)

  2002 2003 2004(e)

Total Market Size 352.47 369.86 419.22Total Local Production * 159.96 210.50 273.36Total Exports 86.83 147.18 191.33Total Imports 279.34 306.54 337.19Total Imports from the U.S 44.40 32.84 34.48Exchange Rate 3.8 3.8 3.8

* Note: the latest local production available is year 2000.  Estimated data is use for the purpose of this report.Source:  Department of Statistics Malaysia

Import Market share of cosmetics in 2002 & 2003 (top exporting countries)

  2002   2003  Country US$ mil % US$ mil %Thailand 37.31 13.35 51.88 17.46United States 44.40 15.90 32.37 10.89France 25.46 6.57 31.29 10.53Singapore 26.94 9.65 29.60 9.96Japan 19.21 6.88 19.21 6.46

The U.S. was the highest exporter of cosmetics to Malaysia in 2002 with a market share of 15.9 %.  However, in 2003 its market share dropped to 10.89%, a 33.8% decrease.  On the other hand, Thailand’s exports of cosmetics to Malaysia increased by 30.8% in 2003, to 51.88%.

Malaysia exports her cosmetic products such as beauty creams and skincare products to Singapore, Hong Kong, Thailand, Japan, and India.

COMPETITION

Despite unfavorable currency exchange, some European brands (e.g. L’Oreal, Chanel, and Christian Dior) products are successful due to their commercial responsiveness.  Consumers associate the brand with fashion, expertise in cosmetology and dermatology research, and innovative breakthroughs.

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*Top Companies by market share in 2003 (% value)

Colgate-Palmolive (M) Sdn. Bhd.            9.2 Unilever (M) Holdings Sdn. Bhd.             8.4

L’Oreal (Malaysia) Sdn. Bhd.                 5.7

Unza                                                   5.6

Procter & Gamble                                 5.5

Johnson & Johnson                               4.8

Avon Cosmetics (M) Sdn. Bhd.               4.5

Estee Lauder                                         4.1

Gillette (M) Sdn. Bhd.                             3.5

Amway                                                  3.4

Kao (Malaysia)                                       2.8

Shiseido Co Ltd.                                     2.7

* Euromonitor

END USERS

Approximately six million, out of an estimated population of 24.53 million as of 2002, will fuel demand for cosmetics and dermatological products.  When this segment of the population matures, demand should grow stronger because age-related skin problems such as fine lines, wrinkles, dull skin and brown spots start to surface

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Women in Malaysia tend to characterize their skin type by its external appearance: according to matte or shiny, the skin texture, the size of the pores, and its thickness and sensitivity.

SALES PROSPECTS

Best Prospects

The following sub-sectors are ranked according to their highest retail value:

No. 1:  Skincare, especially for anti-aging and skin whitening

No. 2: Bath and shower

No. 3: Color cosmetics (includes foundation, rouge, face powder, blusher, highlighters, face bronzers and 2-way cake products)

No. 4: Fragrances

MARKET ACCESS

Regulatory Regime

The Control of Drugs and Cosmetic Regulations 1984 Act stipulated that all cosmetics in Malaysia:

Be Registered with the Drug Control Authority Manufacturers, importers and wholesalers must be licensed

All cosmetic products must be registered with the Drug Control Authority, National Pharmaceutical Control Bureau of the Ministry of Health, effective January 1, 2004.  Due to the large number of cosmetic products in the local market, the products are divided into two categories for the registration exercise.  Category 1 products are those that have the potential of being absorbed through the skin or mucous membranes.  These products include those meant for application around the eyes (except eyebrow products), lip products, oral cavity products, and sun tanning products containing topical dyes or tan accelerators that are applied over a large area of the body.  Applications for registration of Category 1 began in January, 2002. 

All other cosmetic products are placed under Category 2.  These include hair dyes not containing phenylendiamine, toluenediamine, their salt and derivatives, and sun tanning products not containing topical dyes

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or tan accelerators (hair dyes containing phenylendiamine, toluenediamine and their derivatives, and tooth whiteners, have already been subjected to registration  during the 1990s).  Applications for registration of Category 2 cosmetics began in January 1, 2003. 

Manufacturers must disclose all the composition/ingredients of any cosmetics before they can be registered.  The products must be manufactured, packed, and stored under sanitized conditions as stipulated under the good manufacturing practice (GMP) requirements.  Products must be labeled according to the following information:

the name of the product and its function instructions on how to use the product

a list of all the ingredients in the product

the country of manufacture

name and address of the company responsible for the product

the content – quantity in metric units of measurement

the batch number

the registration number

warnings or cautions, where necessary for safe use of the product

statement that declares the presence of bovine/porcine parts

Registration of cosmetics can be conducted on-line.  All the necessary information and guidelines are available on the National Pharmaceutical Control Bureau’s website: www.bpfk.gov.my

In regard to “cosmaceuticals”, the terminology has not yet been applied by the Drug Control Authority (DCA).  In general, the DCA uses three basic criteria to determine whether the product is classified as a cosmetic.   The criteria includes site of application, purpose, and composition or ingredient.  If the cosmetic product has medicinal claims, it needs to be referred to the Drug Control Authority to ascertain its classification.  For example, a beauty cream that claims its ability to treat acne is classified as an OTC product.

Currently, there is no duty for cosmetic products, except for the 20% to 30% import duty on talcum powders, face powders and hair preparations.  However, as stipulated in the regulations, as of January 1, 2004 all importers, manufacturers, and, wholesalers need to be licensed with the Drug Control Authority before they are allowed to manufacture, import, or sell the products.

Distribution Channels

Department stores are the leading channel for premium lifestyle products such as fragrances, color cosmetics, and skincare.  Branded cosmetic and toiletries such as Estee Lauder, Christian Dior, Chanel, and Bobby Brown are sold at their respective counters in departmental stores.  However, some of the finest fragrance and cosmetic brands, such as Laura Mercier, Annick Goutal, T.LeClerc, Peter Thomas Roth, Aesop, and, Philip B are only sold at Kens apothecary outlets.  In addition, Crème De La Mer ranges are only sold at Metrojaya Departmental Store and Isetan.  Other reputable brands such as Sothy’s and Thalgo are distributed by dealers. The products are only sold at their beauty centers and beauty salons, as they offer not only cosmetics, but also slimming, and the latest trend in spa products.

Other brands that cater for the mass market such as Neutrogena, L’Oreal, and Maybelline are sold at pharmacies, supermarkets, and other personal care stores.  Direct selling companies such as Avon, Amway, Cosway and the latest addition Tupperware are selling their products via direct-selling.  Direct selling stockists claim that their products are 30% cheaper than those sold in pharmacy or retail outlets.   Direct sellers lead in sales in the rural and suburban areas where the strength of their distribution network comes into play.

Advertising and promotion is crucial for cosmetics and toiletries products, in order to create an awareness of new products and build brand loyalty among consumers.  Advertisements in TV and the print media such as newspaper and magazines, especially women’s magazines, are very common.  Samples of toiletries products are distributed to individual households and products in sachet form are attached to magazines.  Free gifts are given during promotion periods and are advertised in the local major newspapers and on the web.

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According to the industry, the market is saturated with many different types of products, and in the long run, established brands that emphasize quality and service will have the edge.

Consumer Products - Products Soaps

The product categories can be classified into three segments; premium (Lux, Dove), popular (Nirma, Cinthol), and economy (Nirma Bath, Lifebuoy). The price differential between the premium and economy segments is about 2X. The popular and economy segments account for about 4/5ths of the entire market for soaps. 

Penetration of toilet soaps is high at 88.6%. However per capita consumption levels remain low India's per capita consumption of soap at 460 gms per annum is lower than that of Brazil at 1,100 gms per annum. 

Raw Materials80% of the raw materials used in soap are oils. Since animal fats (which are used worldwide and are far superior to vegetable oils and also cost effective) are banned in India, Indian soap manufacturers are forced to use vegetable fats and hence settle for a poorer quality of soap. Various kinds of oils such as rice bran, palm, soyabean, neem, karanji, olive, kopra etc. are used for manufacturing of soap, depending upon its positioning. The most commonly used oil is rice bran, followed by palm. Other oils are also added but in a small quantity to get different variants of soaps. 

Rice bran and palm oil are the most common base oil used in nearly all soaps, Apart from the base other additives used are perfumes, colour and other more expensive oils in small quantities. Since these additives are added in small quantities they do not make much difference to the cost structure. Therefore the contribution (excluding packaging cost) on premium soaps vis-à-vis the popular soaps is substantially higher. 

Distribution network Soaps are available in 5 m retail outlets in India, 3.75 m of which are in the rural areas. Therefore availability of these products is not a problem. 75% of India's population is in the rural areas; hence about 50% of the soaps are sold in the rural markets. 

GrowthRural demand growth is expected to occur mainly with consumers moving up towards premium products. But in the past, the proportion of premium soaps to economy soaps has not changed much, in volume terms. This is because as some consumers move up the value chain with increase in disposable incomes, some consumers move down looking for cheaper substitutes as prices move up. This has been the case especially, as growth in soap prices has generally outpaced overall consumer inflation. 

Detergents The Indian fabric wash market consists of synthetic detergents (comprising bars, powder and liquids) and oil-based laundry soaps. 

Although the per capita consumption of detergents in India (2.7 kg pa) is comparable to some countries like Indonesia, China and Thailand (around 2 kg pa), it is lower than in others such as Malaysia, Philippines (3.7 kg) and the USA (10 kg). The Indian detergent market is expected to grow at 7-9% pa in volume terms. 

The synthetic detergent market can be classified into premium (Surf, Ariel), mid-price (Rin, Wheel) and popular segments (Nirma), which account for 15%, 40% and 45% of the total market, respectively. The product category is fairly mature and is dominated by two players, HLL and Nirma. Nirma created a revolution in the market by pioneering the concept of low-

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cost detergents. Currently, the market is highly segmented with the differential between the premium and popular segments at almost 7X. 

GrowthHigh consumer awareness and penetration levels will enable the market to grow at an average 8-10% per annum with slightly higher growth in the rural areas. Higher penetration stems from popularity of low-cost detergents. Hence, besides increase in per capita consumption, there is tremendous scope for movement up the value chain. 

HLL, Nirma and P&G are the major players in the market with 40%, 30% and 12% share, respectively. While HLL dominates the premium segment, Nirma is the leader in the popular segment. 

Personal Care Products The annual value of personal products business in India, including oral care, hair cares and skin cares products, is currently estimated to be Rs 54.6 bn. 

Just five years ago personal products were considered to be luxury items and attracted a high excise duty of 120% (except the oral care category). Gradual taxation reforms in India since 1991 have lowered the excise duty rates to a reasonable 30%, making these products more affordable. At the same time, rising income levels have led to rising aspirations on the part on Indian consumers. These factors have been the catalysts in the exponential growth rate in the personal product category over the past five years. 

Personal care products are further divided into 6 categories:

Oral care

Hair care - oils

Hair care - shampoos

Skin care

Cosmetics

Feminine Hygiene

Oral Care

The oral care market can be segregated into toothpaste (60%), toothpowder (23%)

and toothbrushes (17%). While 60% of toothpaste is sold on the family platform,

around 35% is sold on cosmetic propositions. On the other hand, while toothpowder

accounts for 52% of the market, red toothpowder accounts for 40% and black

toothpowder accounts 8%. The penetration level of toothpast/powder in urban areas is

3X that in the rural areas. Traditional materials such as neem and tobacco are popular

for cleaning in the rural areas, Frequency of usage for toothpaste is only 1.5 times

among other consumers, compared with 2 times in the developed world. Per capita

consumption of toothpaste is only 70 gm compared with 300 gm in Europe and 150

gm in Thailand. 

Given the low per capita consumption and penetration rates, toothpaste demand is

mainly being driven by the overall market growth of 8-10%. Toothpowder growth is

also being driven by the rural segment. 

Hair care - Oils 

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The hair oil market is huge, valued at Rs 6 bn. Due to the varied consumption habits

of consumers across the country, where coconut oil and edible oil are interchangeably

used, the size of the market is likely to be higher than estimated. More importantly, the

market is growing at an impressive 6-7% in volume terms despite the high penetration

level. 

Usage of hair oil is a typical Indian traditional habit. It is perceived to offer benefits of

nourishment, hair strengthening, faster and better growth, and reduce the problem of

falling hair. There are two types hair oil available in the market; coconut oil and non

greasy perfumed oil. Coconut oil comprises 2/3 rd of the total market and the balance

comprises the non greasy perfumed oil. 

Usage of hair oil is an everyday habit with 50% of the population out of which some

perceive that massaging the head with hair oil has a cooling impact. The penetration

of hair oil is fairly high at around 87% and evenly distributed among the urban and

rural areas. 

Hair Care - Shampoos

The shampoo market in India is valued at Rs 4.5 bn with the penetration level at 13%

only. The market is expected to increase due to lower duties and aggressive

marketing by players Shampoo is also available in a sachet, which is affordable and

makes upto 40% of the total shampoo sale. 

The Indian shampoo market is characterised by a twin-benefit platform: cosmetic and

anti-dandruff. It is basically an upper middle class product, as more than 50% of the

consumers use ordinary toilet soap for washing hair. 

While the awareness level is high, the penetration level is very low even in the metros

which is only 30%. Urban markets account for 80% of the total shampoo market, The

penetration level is rapidly increasing due to decline in excise duty, which was 120%

in 1993 to 30% currently. 

Skin Care

The skin care market is at a very nascent stage with basic requirements of the

consumers being protecting the skin from cold and dryness in winter, and improving

fairness of the skin. Most of the product categories are niche segments. 

While the awareness rate is high in both urban areas accounting for 60% and rural

areas accounting for 30%, the penetration level is low for both. This is because of

apprehensions that usage of skin care products may benefit in the long run due to the

chemical contents. Many households prefer to use traditional and natural home made

products. 

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Since the market is at a very nascent stage with very low penetration levels, the

growth rates are expected to be higher at 24-255 over the next five years. New

players such as Avon and Oriflame have entered the market with the natural

ingredient benefit platform, which could further spur growth. 

Cosmetics

The cosmetic segment primarily comprises of colour cosmetics (face, eye, lip and nail

care products), perfumes, talcum powder and deodorants. All these are very small

segments. 

Talcum powder is the most popular cosmetic product in India. This market is

estimated at Rs 3.5 bn and is yet growing at 10-12% pa. Awareness is very high at

80%, with a penetration of 45.4% in urban areas and 25.2% in rural areas. Pond's

dominates the talcum market with a 70% share followed by Johnson & Johnson, which

has a 15% market share. 

Attar and alcoholic perfumes each account for 50% of the fragrance market estimated

at Rs 3 bn. In the alcoholic perfume market, 1/3rd represented by an unorganised,

with the balance largely imported. The June 98 budget halved duties to 50%. Lakme

has a minor presence in the segment. 

Perception of damage to skin on account of chemical ingredients restricts usage of

face care products. The nailpolish market is the largest at Rs 1.25bn followed by the

lipstick market at Rs 0.7 bn. All segments in this category are growing at Rs 25-30%. 

Deodorants have a very negligible presence in the Indian market with an estimated of

Rs 0.3 bn. Worldwide, deodorants is the largest market followed by skin care,

shampoos and toothpaste. HLL has launched a couple of products in this segment. 

Feminine Hygiene Most women use cloth during their menstruation days. This is

because price is the biggest entry barrier. A pack of 10 sanitary napkins would cost Rs

30-40. Therefore, average spending during the menstruation days would be around

Rs 48, which is expensive by Indian standards. 

While awareness in the urban areas would be reasonable given the substantial

advertising, the penetration rate is abysmally low at 10%. The product is virtually

absent in rural markets. 

Given the low base and increasing awareness of hygienic products, the market is

growing at a robust 20-25%. Entry of cheaper brands, at Rs 20 for a pack of 10, has

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spurred market growth. Currently, the market is mainly urban.

INTRODUCTION

Laundry detergent is used in millions of households around the world to remove soils and stains from fabrics. Although soap has been used since ancient times to wash laundry, the first commercial detergents were not produced for household use until just after World War II. In the following years, the production of laundry detergent grew rapidly into a worldwide industry, mature in developed countries, but still expanding in developing regions. By the mid-1990s, the industry had become extremely competitive.

The primary method available to manufacturers to gain market share was the introduction of new or

reformulated products. Manufacturers competed primarily on performance, cost, and environmental attributes. (Chynoweth, 1993)

INDUSTRY STRUCTURE

Product

The primary function of laundry detergents is removing soil particles from fabric. Laundry detergents are produced in two major types of formulations: powder and liquid. Powders are generally more effective in removing clay and ground-in dirt, while liquids work well on oily soils. Both powders and liquids are used in automatic washing machines and also in washtubs and sinks. After the laundry has been washed,the washwater is emptied down the drain, and sent into the municipal water treatment system.

Laundry detergents comprise one category of the several different types of cleaning preparations

manufactured and sold worldwide. Laundry detergents are generally classified under the broader category of soaps and detergents, which includes bar soaps, fabric softeners and bleaches as well as household surface cleaners and dishwashing detergents. Laundry detergents represent the largest piece of this segment.

Detergent formulations vary considerably from region to region for several reasons. First, manufacturers are extremely sensitive to consumer preferences for fragrances, mildness, etc., which typically vary across cultures. For example, Japanese consumers tend to prefer much milder detergents than those demanded by U.S. consumers. Second, the types and operating temperatures of washing machines are different in different countries, requiring specific detergent formulations to achieve proper foaming and cleansing activity. Finally, water supplies vary regionally in their hardness, or metallic content, which affects the performance of surfactants. To satisfy these various demands, the laundry detergent industry operates in a primarily regional fashion.

Detergents are comprised of four major types of ingredients: builders, surface active agents (surfactants), additives, and fillers. Surface active agents, or surfactants, perform the actual task of

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removing soil from the fabric. They work through the action of their hydrophilic (attracting water) and hydrophobic (repelling water) molecules. One end of the surfactant attaches to soil particles and the other end to water, drawing dirt out of clothing to be rinsed away. Surfactants also reduce the surface tension of water, causing droplets to spread and thoroughly wet fabric surfaces. In the 1990s, the most commonly used surfactant was linear alkylbenzene sulfonate (LAS), accounting for 45% of the commodity surfactant market. LAS is made from benzene and kerosene, which are derived from petroleum.

Builders are used to soften hard water, and allow surfactants to perform more effectively and efficiently. Phosphates had been widely used as builders since 1947. Comprised of condensed or complex phosphates and sodium, the most common phosphate used by the detergent industry was sodium tripolyphosphate4(STPP). STPP softens water by sequestering calcium and magnesium ions, enhancing the detergency of surfactants and preventing the redeposition of soil particles onto fabric. Additives enhance the detergent, providing fragrances, bleaches, stain removers, optical brighteners, and fabric softeners. Fillers are used to dilute the detergent for convenient usage, water for liquid formulations, and sodium silicate for powders.

Enzymes are also used to enhance performance. Although they primarily function as stain removers,enzymes perform other functions, such as protecting cotton fibers. Enzymes are natural proteins produced by plant or animal organisms which break down other proteins, fats, or starches. Proteases are enzymes that attack protein-based stains, such as egg. Lipases break down fat-based stains such as butter.

Amylases are enzymes that attack starch-based stains such as gravy. Cellulases are enzymes that protect fabrics from fiber damage (i.e., "fuzz" or "pills" on fabric surface) from repeated washing. Enzymes are considered environmentally benign, and even beneficial, as they supplant synthetic chemicals use.

The primary production methods for powder detergents are spray-drying, agglomeration, and dry mixing.

Spray-drying involves spraying a mixture of liquid and dry ingredients through nozzles to form small droplets, which then fall through a current of hot air and form hollow granules as they dry. (Soaps and Detergents, 1994) In agglomeration, dry raw materials are blended with liquid materials by rolling or mixing. Dry mixing is used to blend primarily dry raw materials, although small quantities of liquids may be added. (Soaps and Detergents, 1994)

Liquid detergents are produced through both batch and continuous blending processes. In the typical blending process, dry and liquid ingredients are combined and blended to a uniform mixture using in-line or static mixers (Soaps and Detergents, 1994).

Introduction ---OUR PLAN -1

Enzyme technologies , India leading manufacture of detergent plans to introduce its wide range of products in Malaysia in the year of 2012. Therefore, a local repacker will be appointed in Malaysia for the repacking and marketing of the product.

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As to succeed this, the Enzyme technologies , India will first register its detergent brand in Malaysia. And a Trademark will be registered as “OxyWash”. All our products which will be introduced in Malaysia will be named “OxyWash” and followed by the size and packing name. OR WE CAN OPEN A PRODUCTION UNIT IN MALAYSIA IN A SMALL WAY INITIALLY .

Product placement

PRODUCT SUPERIORITY AND TECHNOLOGY

Non Phosphate /Non Polluting

Non LABSA/ACIDIC

Non Allergic

Non Toxic

Biodegradable

Eco friendly

New Generation Technology with Oxygen release.

Nano molecules of oxygen

Latest molecules for whitening& brightening

Single rinse technique

Non salting technique

True & total detergent

Powerful cleaning ability

Automatic Whitening & Brightening effect

Automatic sterile effect

Less water consumption

Less power consumption

No pollution to the nature

Long lasting perfumes

Less quantity of powder required and High economy

PRODUCTS AND SPECIFICATIONS

OXYWASH PREMIUM DETERGENT POWDER-

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It is based on the new generation technology with oxygen release. It is a non acidic/slurry, and non

salted detergent powder with more than 60 percentage of oxygen molecules .All the ingredients

used are eco-friendly in nature. It is low foaming, non acidic, non phosphate, non toxic, non allergic

and bio degradable in nature.

Due to the low foaming property, it is best suitable for machine wash and also requires less water.

During the wash cycle, it releases sterilizing agent, color guard, whitening, brightening and color

retention agents. Hence the fabric becomes dirt free, sterile and looks brighter. Pleasant fragrances

have been added to the formulation, which persists for more than 12 hours of usage.

OXYWASH CLASSIC DETERGENT POWDER

It is based on the new generation technology with oxygen release. It is a non acidic/slurry, and non

salted detergent powder with more than 25 percentage of oxygen molecules . All the ingredients

used are eco-friendly in nature .It is non foaming, non acidic, non phosphate, non toxic, non allergic

and bio degradable in nature.

Due to the low foaming property, it is best suitable for machine wash and also requires less water.

During the wash cycle it releases sterilizing agent, color guard, whitening, brightening and color

retention agent. Hence the fabric becomes dirt free, sterile and looks brighter. Pleasant fragrances

have been added to the formulation, which persists for more than 12 hours of usage.

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OXYWASH REGULAR DETERGENT POWDER

It is based on the new generation nano technology with oxygen release. It is a non acidic/slurry and

non salted detergent powder WITH NANO OXYGEN MOLECULES FOR STAIN REMOVAL and a

brightening agent .It comes with classic jasmine fragrance and is available in 3 pack sizes of 20 gm,

80 gm and 500 gm.

ECO-WASH DETERGENT POWDER

It is an eco friendly non phosphate washing powder with whitener and brightener. It contains

specially formulated molecules for brightening, designed as per the eco friendly specification for

economic usage.

HEALTHY WASH

The low cost detergent powder with better washing ability

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OXYCLEAN DISH WASH BAR/LIQUID

It contains triclosan as an anti bacterial agent with corrosion inhibition property (non corrosion),

which avoids the corrosion of the utensils. It comes in 2 pack sizes -100 gms. and 200 gms.

OXYWASH DETERGENT CAKE

It is a new generation detergent cake with the latest molecules of OB and color guard. OXYWASH

DETERGENT CAKE is available in 3 different Pack sizes of 115 gms., 180 gms. and 250 gms.

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OXYCLEAN DISH WASH GRANULES

Dish wash granules are available with an anti microbial agent, which can sterilize your utensils/plates

.It is non foaming, non acidic, non phosphate, non toxic, non allergic, bio degradable and Eco

Friendly in nature. It comes in two pack sizes of 250 gms. and 500 gms.

OXYWASH BABY CARE DETERGENT POWDER

The First detergent powder designed exclusively for baby clothes. It is eco- friendly, bio degradable,

non-toxic and non-allergic in nature. The sterilizing agent present in the formulation kills bacteria,

virus and fungi. Using the latest generation fabric conditioners, it helps to keep the clothes of the

baby soft, tender, sterile and fresh. It is available in pack sizes of 300 gms. and 600 gms.

PRODUCT LIST

S.NoProduct Name

Grade Category Technology Advantage

1 OXYWASH Premium Detergent Powder

New generation oxygen release

Non acidic, Non phosphate, non toxic, bio degradable

2 OXYWASH Classic Detergent Powder

3 OXYWASH Regular Detergent Powder

Nano With Nano oxygen

4 OXYWASH Economy Detergent

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Powder5 OXYWASH Liquid

DetergentNano With Nano

oxygen & whitener

6 OXYWASH Sterile Dish wash granules

Latest sterilizing technology

7 OXYWASH Detergent for baby clothes

Nano With nano sterilizer

8 OXYWASH Detergent cake

Latest molecule with cleaning & brightening technology

9 OXYCLEAN Dish wash cake

With Triclosan Antibacterial Agent

10 OXY SOFT & STERILE

Fabric Conditioner

Nano With Nano Sterilizer

11 OXY SHOWER & FRESH

Bathing Soap

12 OXYNANO Beauty Soap nano

13 OXYNANO Facial & Anti Aging Soap

Nano Germanium & Ginseng

14 OXYNANO Frecle Clearing Soap

Nano

15 OXYNANO Abdomen Slimming Soap

Nano

16 NANOCARE

Disinfectant solution

Nano Kills germs and viruses

17 NANOCURE

Skincare Solution

Nano

18 NANOLADY Breast Uplifting Cream

Nano

19 OXYPOWER

Detergent Booster

Oxygen concentrate

20 OXYBRIGHT

Whitening Enzyme

With Nano Oxygen

BRANDS

S.No Product Name Price

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Status of Launch

1 Oxy wash Premium Detergent Powder

Chts.1400/ 500gm Launched in INDIA

2 Oxy wash Classic Detergent Powder

Chts840 / 500gm Launched in INDIA

3 Oxy wash Regular Detergent Powder

Chts560 / 500gm Launched in INDIA

4 Eco-Wash Detergent Powder Chts.420/ 500gm Launched in INDIA

5 Oxy wash Baby care Chts.1400 / 300gm

Launched in INDIA

6 Oxy wash Dish wash Granules Chts.980 / 500gm Launched in INDIA

7 Oxy Clean – Veg & Fruits Chts.420 / 100 gm Ready for Launch

8 Oxy Clean Dish Wash Bar chts.140/ 170gmchts.90/-90gm

Launched in INDIA

9 Oxy Wash Detergent Cake chts.250 / 220gmchts 90/ 90gm

Launched in INDIA

10 Oxy Soft & Sterile – Fabric Conditioner

chts.280/50ml Ready for Launch

11 Oxy Soft & Sterile – Fabric Conditioner

Chts2500/ Litre Ready for Launch

Defining the market size

Currently the market size for detergent products in Malaysia is RM 100,000,000.00 per annum and expected to grow at 1.5% respectively. The more complex market size can be defined using the number of users for the detergent products.

In the recent statistic, it is shown that totally 25 million of purchases annually are solid on detergent products. This means, per month, there are approximately 2 million purchases on detergent products in Malaysia. Therefore, these 2 million integers are considered as our targeted customers. This is the figure of our potential customers who are currently customers of our competitors. Our market size is 2 million customers and the revenue is RM8 million per month.

1Market Research

Currently in Malaysia detergent market there are many competitors playing their role. The major two competitors and majority market holders are Fab and Breeze products. And the most significantly growing new competitor is Daia. These 3 detergent brands will be our main competitor for our OxyWash products.

The Fab is the elder company in Malaysia detergent market. They had established a good sale by taking over 29% of the detergent market. Their best selling product is the ‘Fab Bar Detergent’. This

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product was introduced to market many years ago. The 30% of market means, they had win 600,000 customers who are giving the company revenue of RM2.4 million every month. They are the giant who managed to major the market by holding 30% of the detergent market.

The second competitor is Breeze. This brand was also brought into market many years ago. They are well playing in this market by still having promotions on many of their products until today. They have not bring down their promotions and advertisement because they are afraid of losing their current customers which are 25% of the market.

Anyway, the profits generated by Breeze are still very less comparing to its major competitor Fab because they still spending a lot on advertisement and promotions against their competitors. They have 500,000 of customers. And generate revenue of RM2.0 million. But these figures do not show them strong because they spend back 40% of their revenue on product promotions and advertisement which waste them a lot.

The third competitor is Daia brand of detergents. This brand of products was introduced to market 3 years ago. But in this 3 years time, they had grown rapidly until holding up 15% of the Malaysia detergent market. Their growth is spectacular which was 2never expected by the major competitors, Fab and Breeze. Holding 15% of the market within 3 years of product introduction is so unbelievable. They knocked a big alert for Fab and Breeze competitors. These 3 of our competitor are still competing in market actively with each other with maximizing their spending on advertisement and promotions to attract and steal customers from each other. This 15% means, 300,000 of customers and RM1.2 million of revenue.

The rest 30% of the detergent market are Regulared by other brands such as Dynamo, Kenko, Niesa Wash, Starlight and others.

3Medium Term Forecasting for 2012 The period for this medium term forecasting is 6 months. In this period, our company will focus on sales volume and maximizing advertisement to attract more customers and increase the number of customers for products. This should be done within the 6 month period. The forecasted amount of money to spend on Advertisement is RM 2.4 million for this 6 month period. This means, we will spend every month on advertisement as;

a) RM 500,000 will be spending for advertisement on first and second month.

b) RM 400,000 will be spending for advertisement on third and fourth month.

c) RM 300.000 will be spending for advertisement on fifth and sixth month.

The total spending on advertisement at the end of 6th month is RM 2,400,000 (RM 2.4m)

By this time, our number of customers will increase significantly. The expected figures are;

a) For 1st month: 50,000 new customers.

(Will generate revenue of RM 200,000)

b) For 2nd month: 50,000 existing customers and another 50,000 new customers

(Will generate revenue of RM 400,000)

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c) For 3 rd month: 100,000 existing customers and another 40,000 new customers

(Will generate revenue of RM 560,000)

d) For 4 th month: 140,000 existing customers and another 40,000 new customers

(Will generate revenue of RM 720,000)

4e) For 5th month: 180,000 existing customers and another 30,000 new customers

(Will generate revenue of RM 840,000)

f) For 6 th month: 210,000 existing customers and another 30,000 new customers

(Will generate revenue of RM 960,000)

At the end of these 6 months, the total revenue which is collected from sales will amount

to RM 3,680,000 (RM3.68m) The conclusion on this forecasting is the high spending on advertisement for the first six months cost RM2.4 million while the revenue generated is RM3.68 million. The revenue will overcome the expenses for the advertisement. We need to spend very high

on the advertisement because we are newly introducing our product into the market at this time. This high spending to ensure we can grab high numbers of customers within this medium period of 6 months with the help of advertisement.

5Long Term Forecasting for 2012 The period for this long term forecasting is 3 years. The forecast take position from beginning of year 2012 until end of 2014.

In the year 2012, our estimated number of customer is 300,000 at the end of the year. This is the first year of product introduction. In this one year time, we will gain up to 300,000 customers which mean 15% of the detergent market in Malaysia. To achieve this point, our company will be spending a lot on advertisement. This to ensure our product can capture and attract customers. The advertisement spending will be at least 50% of our total revenue for the year. It is compulsory to do this high spending to make sure our product can sit strong in the market. Our product need to be strongly establish on market to make sure can fight through our competitors to gain more customers for our product, OxyWash. In the year 2013, our estimated number of customers is 500,000. This figure is 200,000 more than the previous year. At this year, we will slowly step down our advertisement spending. We will go forward with promotion plans. This is because, our roducts already gain good numbers of customers and our product’s future is slightly promising. At this period, we no longer need to attract more customers but at the same time, it is our responsible to retain our customers. Because it is predicted that our major competitors will try hard to gain or stole back our customers to their product. Especially the Fab, Breeze, and Daia competitors who are strong financially will try hard to gain back their customers. They will do promotions at this time while we also will do the same to retain our customer with us. Losing our customers will cause our product future to be mild. The promotion that we will be doing at this time is exactly going to be very 6competitive with our competitors’ promotions. If they give 20% discount promotion, then we will give ‘Buy 1 Free 1’ promotion. This will cut and throw our competitors’ promotions. Our brand

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will still stand strong in market. The spending for these promotions in this whole year is targeted to reach at least 30% of our total revenue.

By end of the year 2014, our brand of product, OxyWash will be strong in market with total customers of 600,000. This figure is 100,000 more than last year. This high figure was collected because of last year’s high spending on promotions. The previous advertisements and promotions were worth for our company and product’s future which is now very promising. The figure 600,000 means we had Regulared 30% of the detergent market in Malaysia. This is equal to our major competitor ‘Fab’. But by this time, the situation will be reverse because we had already stole 10% of Fab’s market. Therefore, our competitor Fab will be holding 20% of the market while we will be holding 30% of the market which caused us to be top of the market. Our product, OxyWash will be top in detergent market. Both advertisement and promotion will be bringing down to zero and we will now focus on adding up value to our product. It seemed that our product had reached the top and definitely our competitors will try to bring it down. To strong our self in the market now, we need more value added product. Therefore, we will spend on value adding our product OxyWash. Value added product can establish strong position for itself to continue being top in the market.

7Marketing Plan for 2012

Packaging and Branding

Our product brand will be ‘OxyWash’. And repacker will be appointed in Malaysia. The repacker will be located at the Terengganu state. This is because, at that state, the land rent and labour cost are cheap. Therefore the repacker will only charge us in small amount. We repack at Terengganu and send it to other states for marketing. Our OxyWash product will be available in 3 main form which is powder, bar, and liquid. The packing will be as below;

a) OxyWash Regular-Box 5 - This box will contain 5kg powder detergent

b) OxyWash Regular-Box 3 - This box will contain 3kg powder detergent

c) OxyWash Regular-Box 1 - This box will contain 1kg powder detergent

d) OxyWash Regular-Pack 5 - This plastic pack will contain 5kg powder detergent

which will be used to refill the Regular-Box-5 because now day’s consumers are very concern about being economical and saving.

e) OxyWash regular-Pack 3 - This plastic pack will contain 3kg powder detergent

f) OxyWash Premium - Will contain detergent in large bar foam

g) OxyWash Classic - Will contain detergent in small bar foam

h) OxyWash Nano plus - Will contain 1liter of liquid detergent in plastic bottle

i) OxyWash Nano - Will contain 500mililiter of liquid detergent plastic bottle

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Our product packing will be culturally acceptable. This is because we will highlight title of our product with both English and Malay language. Besides that, our product will also contain explanation in Malay, English, Mandarin, Cantonese and Tamil.

8Pricing

The pricing plays very important role to make sure our product is acceptable in the current detergent market. Therefore, the product price will be various from time to time. Based on our marketing stages, our product prices will be low at introduction time, high at advertisement time, decreased at promotion time, and increased again when product well accepted and established in market. The pricing scenes are arranged like this;

a) Introduce to market at low price comparing to competitors. This refers to slow penetration strategy.

b) Increase price equal to competitors as advertisement increased. This is based on rapid skimming process.

c) Decrease the price at promotion period to encourage more active buying. We apply rapid penetration strategy in this stage.

d) Increase the price back to normal as our product had established well in the market. Therefore we prefer slow skimming process.

This various prices promise our product to reach to the market slowly and rise up to be giant and well established in long term. If we introduce to the market at high price, then our product has chances of losing to our competitor’s product due to high price. This is the concept of slow penetration strategy. Then we will advertisement and highlight our product’s advantage which is antimite, most consumers are concern about their health more than the money. We follow rapid skimming process. Therefore, to afford our advertising expenses, the product price 9will be increased equal to our competitor price. Consumers will still buy our product as they are alert about the anti-mite properties which will safe them from allergies and triggers asthmatic attacks. At the next stage of it, the product price will be decrease as we increase on promotions. Promotions will be in the manner of giving discounts and additional free products. Example of promotion is cutting the price by giving 30% discount or giving free gift for every purchase whereas they will be given one OxyWash Princess with every purchase of OxyWash Regular-Box-5. This rapid penetration strategic is very important to make sure our competitors do not win through product because they might have launched their product promotions by this time to steal our customers.

Once we managed to win through the competitors’ promotion period by giving promotions to our products also, we will move to next stage whereas our product is well establish in the market. We managed to put our product at strong position in the market. Now, this is the right time to apply slow skimming process. We will increase the price back to normal price which will be slightly higher than the before stage. We step down all our advertisement and promotions.

10Channel of Distribution and Sales Wholesaling

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To do our business effectively in Malaysia, we need to select wholesaling rather than retailing. As we had decided, we are only hiring a repacker in Malaysia to handle the packing locally. And we will not build our manufacturing plant there. This shows we do not have our own manufacturing place and stock keeping place in Malaysia. The repacker saves our time in getting the product ready locally in Malaysia. The same goes for wholesaling which will be saving our time and management stress in handling the distributions and sales in Malaysia. The wholesaler will have good knowledge and well established distributing channels and networks whole over Malaysia. This will save us time to contact and handle business with many retailers. The wholesaler will take care of retailers. The network promises our product to reach all over Malaysia effectively.

Furthermore, the wholesaler will have their own stock keeping place. This saves us money to arrange our stock keepings as the wholesaler will take care of it. Adding advantage to wholesaler, they will buy our stocks in bulk and this promises our products to be marketed at a high volume within some short period.

11Strategic Marketing Stages

Our marketing process will have 4 stages. We will step into one by one. By this method, we can ensure that our product are being marketed properly and made highly available and preferable by our potential customers. The strategies in each stage will be implemented effectively with motive of succeeding our product OxyWash. The stages are;

a) Introduction stage

b) Evolution stage

c) Competition stage

d) Winner stage

Introduction Stage

This is the first stage. We will not focus on advertising or promoting. We will be very clear in term of giving our product at very cheap price. The price will be at least 50cents cheaper than our competitor price. This actually will not gain us any give profit. But the advantage of this technique is, our product will reach fast into the fast. Questioning why? It is simple, our product was the cheapest detergent product, therefore our wholesaler will agree to buy our product at that so cheap price as he can gain more profit. This means the wholesaler will be very motivated to buy our product in bulk and he will immediately push it to sell through his retailers. And the retailers will also be happy to buy the product at cheap price and source it immediately to the market whole over Malaysia. Within one month, the whole Malaysia will have our product OxyWash. By this time, we will win 1% of Fab market, 1% of Breeze, 1% of Daia, and 2% of other brands. This achieved only because of our very cheap price. Cheap price is the primary

12criteria for customers to buy a product. But anyhow, the other factors such as brand loyalty will block many of the consumers to shift to our product. We will only manage to gain 5% of the market. The price is low and the promotion is low, this is called slow penetration strategy. Once the 5% of the market target reached, our marketing will move to the next stage.

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Evolution Stage

In this second stage, the biggest evolution will happen in the detergent market history. This is all because we are going to target a large number of customers to shift brand from our competitors. We will make them to choose our product. This will be done by spending high on advertisement. We will highlight on every media that our product contains anti-mite properties which will safe the users from allergies and triggers asthmatic attacks. Most of the Malaysian detergent consumers are very concern about their health. They care more for their health rather than their money. Therefore, once we advertise and alert people about our advantage, definitely high number of consumers will shift their brand to our brand OxyWash. To afford the advertisement cost, we will immediately increase the price of our product equal to our competitor’s product. This is Rapid skimming process. We equal our price to our competitor and we have our advantage of anti-mite besides high spending on advertisement. Therefore, many consumers will select us while the losers are our competitors. By this time, we will win 10% of Fab market, 7% of Breeze, 5% of Daia, and 8% of other brands. In total, we will be holding 30% of the detergent market in Malaysia. Once this figure achieved, we will move to next stage.

13Competition Stage

This is the third marketing stage. Previously when we introduced our product in the market at introduction stage, our competitors did not move aggressively toward our product because we was just a small industry player who they though will not effect their business much. But the shock was given in the evolution stage by taking over 30% of the market and being top of the detergent market. This stage really will have made our competitors to wake up and look as us as their real competitor. They now know our product’s real Regular which highlighted our product. Therefore, they will try to win back their loyal customers by giving a lot of promotions on their products. They will be giving the promotion because they are financially very stable. So, to prove ourselves as their real competitors who have strength on the market, we also will move into promotions. Previously we equaled our price to competitors. Now, we equal our promotions to our competitor. We even will do more than our competitors now. If the competitor gave 20% discount, then we will announce 30% discount. If they give ‘buy 1 free 1’ promotion, we also will give the same promotions. We are now very strong in the market and it is very important to retain our customers without losing to our competitors. In the stage, the highlight is, low price and high promotion. This is called rapid penetration strategy. We will fight over our competitor straight forward. At the end of this, the competitors will be loser while we move to the next stage.

Winner Stage

This is where the winner are standing, OxyWash. In this stage, we are considered as highly established product with high number of consumers. Therefore, we will now cut 14out the promotions and advertisements. Together we will increase the price back to normal price. This is called slow skimming process. This product is now our cash cow. It will generate high revenue for us. But never to be declined that the losers, our competitors will definitely try again to back strong on market by producing new product with high features or value add their current product to be competitive with our product again. There are now chances for our product to lose if we do not enhance our product by value adding it. At this stage, we are not only looking into good profit and stable position, but we also looking forward on how to retain our position on top. For this to happen,

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we need to value add our product. Anyway, at this point we can understand that this is the end of the product life cycle. And we are giving only 3 options; one is to kill the product, another one is to value add the product and keep the product existing in the market or lastly bring up a new product with more advantage than this product and move it into the market exactly as we moved in this OxyWash products. The best option will be value adding the product. This is because, if we kill the product, then we lose our position immediately in the market. Or else if we decided to move in with new product then we need to do all the advertising and promotions which will again cost us a lot. The best is value adding which will help it be to the consumers’ choice always and be leading in the market.

Conclusion

The conclusion of this marketing plan is our product OxyWash which moved into the market will face many challenges from competitors. To over come this, our 4 stage marketing strategy is the ideal strategy. By this, the OxyWash products are very promising.

15Recommendation on Export Opportunities

Based on our strategic marketing plan, we can conclude that our product will be top of the market within 3 to 5 years time. In this period, due to high demand and support on our product, we will have chances to export our product to other countries. Our repacking located at Malaysia and our product will be packed based on Malaysian cultural and designed using their main languages which is Malay, English, Mandarin, Cantonese, and Tamil. These languages are top languages of Asia. This means our Malaysia repacked products can be circulated or exported all over Asia without any boundaries. Besides, we can invite our competitor’s importers to also import our product to their country and encourage them to sell it there locally. Our invitation will be accepted by many of the importers because our products are the leading product and fast growing product in the Malaysia Detergent market. The conclusion of this text is, our opportunities to export our product in the future are very bright and promising to us. The chances and capability for us to export are very high within 3 to 5 years from the time this product launched to Malaysian market