PROJECT TITLE : Spongejoy

MARKETING PLAN

BUSINESS MANAGEMENT

SEMESTER 1 / YEAR 1

GROUP LEADERS NAME & MATRIC NO. :

Muhammad Esmad Danial UDC 170057

GROUP MEMBERS NAME & MATRIC NO. :

1.KAVINEESH A/L RAMATHAN UDC 170033

2.MUHAMMAD IZZAT AIMAN BIN MOHD ZAINI UDC 170064

3.SAIFUL BAHRI UDC 170044

4.RIDZUAN UDC 170101

5.AHMAD AKMAL FARID UDC 170005

LECTURERS NAME : MDM. KHAIRUNNISA BINTI BUJANG

DATE OF SUBMISSION : 21ST AUGUST 2017

Table of Contents
Executive Summary.3
1.0 Current Marketing Situation..4
1.1 Market Description.5
1.2 Product Review..6
2.0 Competitive Review...7
2.1 Channel and Logistics Review..7
3.0 SWOT Analysis..8-9
4.0 Objectives and Issues..10
5.0 Marketing Strategy..11
6.0 Action Programs..12
7.0 Budget..13
8.0 Controls14

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Executive Summary

- Johnny Boy Cooperation is preparing to launch a new brand of sponge called Sponge
joy. Although the competition in the sponge market is low, the other competitors
brands of sponges are still growing. Sponge joy will be positioned by the slogan of
Sponge Makes Better. The smiley shaped of the sponge was implemented to make
the consumer feels better when doing their house chores. Johnny Boy Company is
taking advantage of the sponge market because of the speciality of the product.
Sponge joy will target customers from Gen X, as they are the generation that always
does the chores and the ones that are looking for a sponge that is durable.

The primary marketing objective is to achieve first year objectives which is the sales
of RM 70 Million with the price of RM 7 each , roughly 2% of the sponge market.
Based on this market, shared goals of the company expect to sell more than 10 million
units of sponge joy in the first year and breakeven in the final period of the year.

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1.0 Current Marketing Situation

The Johnny Boy Company was founded by a man who had a problem with handling paper
work with a dirty hand after repairing machinery. He started to think on ways to clean his
hands without the use of chemicals. For two months, he started to develop a new form of
polymer that can clean not only his hand but also rust of stainless steel object without
scratching the surface of the object thus sponge joy was created. The specialty of the sponge
joy is the change of firmness by only adjusting the water temperature. The sponge joy comes
with four different colors such yellow, blue, green and red. The growth of business increase
annually like clock wise due to the effectiveness and the specialty of sponge joy. In the recent
year shows that the company have earned a revenue worth RM90 million and a profit of RM
30 million. As part of the growing strategy, Johnny Boy company are preparing to enter the
market with a new idea in order to gain more profit.

As a household category, sponges experience a great growth from the year 1990 to
2000 due to the improve of the material of the sponges. The average number of sponges
bought by a household in Malaysia two per month. Although the number of sponges bought
are tempered due to the decrease of income of household, the amount of household buying
sponges are still in a good rate because it is a must for household to have a sponges in order
to clean kitchen utensils.
Competition are getting more intense due to the vast number of brand that is already
in the market such as Lysol and Scotch Brite that are constantly dominating the sponge
market. Brand like Lysol holds 40% of the global sponge supply and are constantly
dominating the market.
To break into this market, dominated by huge global corporation and littered by
dozens of other small company, Johnny Boy must carefully target specific areas with features
to that environment.

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1.1 Market Description
The sponge market consist of different types of sponges. Varieties of sponges are in the
market such as cellulose sponges, abrasive sponges, compress cellulose sponges, natural
sponges and dry sponges. These types of sponges are usually sell as a consumer product.
Although some consumer may not perceive much of a difference between brands,
others are drawn to specific product features and benefits provided by other brands. For
examples, most consumers believe that natural sponges are better than cellulose sponges
because natural sponges does not cause pollution because it does not contain any form of
chemical. Other consumer prefer to buy abrasive sponges due to the low price in comparison
to buying a cellulose sponges.
Sponges also distinguish themselves by the quality and the type of sponge. Johnny
Boys market for Sponge joy consist of consumers that are continue to look for a better type
of sponge that last longer. Better in this concept means last longer and have multipurpose
by only purchasing a single sponge. Majority of consumers only purchase sponge that are
already well establish and are afraid to change the sponge that consumers bought because of
the fear that it will not be as good as the previous sponge that the consumer have bought.
Johnny Boys strategies is to promote the sponge joy based on the areas or the behavior of the
consumer in the particular areas.

1.2 Product Review

Johnny Boys new line of sponges named Sponge joy offers the following features:

1.Comes in four colours, including yellow, green, blue and red.

2.Comes into one shape of a circle.

3.Our sponge can fit inside smaller items.

4.Spongejoys unique shape makes it easy to grab and use in a variety of ways.

5.It doesnt scratch any surface of kitchen appliances.

6.The sponge becomes harder when soaked in cold water. It helps to remove hard stains on
kitchen appliances.

7.Spongejoy does not absorb smells and stains from food particles.

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2.0 Competitive Review
The companys revenue is more than RM 160 Million in annual sales and it conquers 50% of
the market. Our sponge is easy to access since our product are sold in all retail stores around
Malaysia. Our variety of colours attract customers
- Good maid At the price of RM 3 , the sponge has some advantages such as
antibacterial agents, to resist orders for hygienic areas. To use the sponge we have to
rinse the sponge thoroughly before and after use. To clean non-stick pans, plastic
bathrooms suites, or any dedicate surface by losing the yellow part of sponge. The
sponge comes in variable sizes such as pack of threes and pack of fives. The cons of
the sponge is the product isnt durable enough. The annual sales exceed RM 100
Million and commends 20% of the sponge market. To them we are a fierce competitor
due to our brand long lasting use and unique material.

- Scotch-brite At also the price of RM 5., the sponge has some advantages
including removing tough, big-on messes 50% faster than other sponges. It is great for
the kitchen, garages, and outdoors. The sponge also have some cons, it is made from
high chemical. You can get the sponge for a price of RM 5 for a pack of six. With
more than RM 200 Million in annual revenues and capturing 61% of the market,
Scotch-brite is the most dominant sponge brand in the Malaysian market. The
company doesnt look at us as a strong competitor since we are a new company in the
market.

- Magic Eraser This sponge are sold for RM 4 for a pack of four. Magic Eraser
works best on hard surfaces like countertops, table tops, walls and appliances.
Compared to Scotch-brite, this sponge is chemical free. The cons of this sponge is, it
crumbles easily when used with force and also works better with cleaning products
than if used alone. Magic Erased annual sales are more than RM 150 Million and it
conquers 33% of the market. We do not have to worry much about this brand because
they are not well-established brand in Malaysia.

Despite the strong competition, Sponge joy believes it can create a relevant brand image
and gain recognition among the targeted segment. The brand offers strong points of
differentiation with the unique ability to change its texture according to the water
temperature, and it doesnt absorb food ordos. With other strategic assets, Johnny Boy
company is confident it can establish a competitive advantage that will allow sponge joy
to grow in the market.

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2.1 Channel and Logistics Review

The purchase of Sponge joy users independent distributing channels. The strategies used to
avoid some heavy competition such as Scotch-brite. As a solution, we focus on placing our
product in retail locations such as:
- Retail stores: Regional retail chains such as AEON, Tesco and Giant.
- D.I.Y stores: Chains such as Mr. D.I.Y, ACE Hardware and Home-fix.
- Convenience stores: Stores such as 7-Eleven, KK-Mart, 99 Speedmart.

As the brands gain acceptance, channels will expand into larger retail stores, convenience
stores, D.I.Y stores and unique locations relevant to the target customer segment.

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3.0 Strengths, Weakness Opportunities, and Threats Analysis,.
Sponge joy has a vast number of strengths that would give a great head start, but its weakness
also causes the company to have difficulty in starting the project. Sponge joy also has a great
opportunity such as low competition and on demand by households. Threats such as limited
space and vast number of brand.
Strengths
Sponge joy has some important strength to rely on:
1. Superior quality: Sponge joy has a great quality of materials to create the sponge
that dwarf other sponges such as Scotch Brite. It does not require any dish soap,
detergent or washing agent. It is soft if it is dip into warm water for cleaning
utensils and it is hard if it is dip into cold water for heavy cleaning.
2. Multipurpose: Majority of sponges only function as a tool to clean kitchen utensils
and not for other purposes. With sponge joy, not only kitchen utensils that the
sponge can be use but also rough surfaces such as kitchen walls and kitchen floors
can also be cleaned by using the sponge joy.
3. Style and design: The basic shape of a sponge is rectangle, but with sponge joy
the style and design is a round shape. The benefit of having a round shape in
comparison to a rectangle shape sponge is that it is easy to clean round surfaces
which usually rectangle shaped sponge is hard to clean such as cups and glass.

Weaknesses
Sponge joy also has some weaknesses such as:
1. Lack of raw material: In order to create the sponge joy some raw material are
needed because of the special attribute that it has over other sponges. One of the
raw material that is needed is polymer foam that is specially made for the sponge
joy.
2. Less knowledge: As a new product, sponge joy will have difficulty to enter and
compete in the market due to lack of knowledge. Sponges like Lysol and Scotch
Brite are a few example of brands that households usually buy. This means that
people will have a preconceive notion that other brands are not good because it is
less well known than Lysol and Scotch Brite.
3. Price: The price to make the sponge can be expensive due to the cause of
producing the sponge. Besides, not only the cost of making the sponge that the

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 company needs to take into account but also the packaging and advertisement
must also be considered.

Opportunity
1. Growing market: The compound annual growth rate for sponges is forecasted to
grow to 2.32% during the period 2017-2021. The market for sponges are growing
with a constant pace. Furthermore, sponges are requirements for every household
in the world due to the functionality to clean not only household purposes but also
heavy-duty cleaning.
2. Low competition: Sponges are very common in the market. Most people only buy
sponges that looks good without looking or knowing the brand of that sponges.
This means, the competition with other company is low because most people buy
them for the sake of household purpose.

Threats
1. Limited space: Usually competitors are the main threat towards the company but
limited space are one of the biggest threat in the market. The reason why space is
a big threat because sponges are usually not put on a shelf at retail store. This
mean majority of the people will not know about the existing of the product thus
causes sponge joy to be just another type of sponge.

Vast number of brand: Sponges are common throughout a lot of supermarket and
convenience store. Majority of sponges are well establish brand that customer usually buy
and there are a lot of other brand that customer also buy because the shape or the design of
these sponges attract the customer. Sponge joy will have a difficulty to compete with other
brands because of the duration of those sponges being in the market.

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4.0 Objectives and Issues

First-Year Objectives - For our first year, we did not expect much sales but our main purpose
was to promote our product to other customers to give knowledge about our product and to
gain public attention to introduce our product into the market.

Second-Year Objectives For our second year, we wanted to start growing our project by
creating promotions, sharing information about our products in social medias, just to boost up
our products sales as we promoted our product for the past two years.

Issues The first of the most issues we had this product is to find the proper raw materials
supplier. Without a supplier, we would be able to get the raw materials to make the sponge.
Our next issue with the product is the lack of capital we have in the company
itself. Since we are a new company, the money has been quite an issue for us to overcome.

Furthermore, our next issue is the lack of labour in the company. This issue
would tremendously slow down our production of the sponges. The lack of production would
not meet the customers demand and would jeopardize the companys annual revenue.

The last issue we had with this product is to find the best market segment. If the
market segment we choose is not the right segment, it would cause loss to the companys
profits and it would lead to bankruptcy.

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5.0 Marketing Strategy
Johnny Boy marketing strategy will involve developing a more for the same positioning
based of the extra benefits for the price. The brand will also establish channel differentiation,
as it will be available in locations where major competing brands are not. The primary target
segment is households, which are people aged (25-80 years of age)
Subsets of this segment includes married couples etc.

Positioning
Sponge joy will be position as quality guaranteed value proposition. This helps to
differentiate. The product based on product features, attractiveness, quality, style and design.
Sponge joy will focus on conveying that its a sponge worth of their money.

Product Strategy
This product will be sold with the description in the product review. As the product been
advertised more types will be available. Sponge joy will give the market a solid product to
position our product in the customers mind.

Pricing
Even though our product costs a bit expensive, quality is being served to satisfied customers.
The regular price of a sponge costs RM7. This price has been set based on the materials used
and labour cost. We will not be targeting normal retail shops because high prices cant be set.
These products will be sold at well-established retail shops, wholesale markets and shopping
mall.

Distribution Strategy
Selective distribution strategy well known grocers. This distribution will be executed through
independent distributor. The brand would be later accepted by bigger shopping malls such as
Tesco
Marketing Research
To remain on top, we will research on customers and promoting location. In this way, Sponge
joy will gain customers attention and customers perceptions on brand.

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6.0 Action Programs

Sponge joy will be introduced in February. The following are the summaries of action
programs that will be used during the first six months of the year to achieve the stated
objectives.

January: Johnny boys representative will work with retailers and independent-distributor to
educate them on the trade promotional campaign, incentives and the advantages of the product
in comparison to other product. Representatives also will educate retailers and distributor on
the promotion of the product as well the instruction to display the product. Besides, the
representative will also provide the retailers with the social web on the date of release product
and the location of the retailer shop. Johnny boy company will also provide sample to groups
such as celebrities, reviewers and influential bloggers.

February: On the date of availability, the company will provide display shippers will be placed
at selected retail stores. The full web site and social media campaign for the product will be
release through Facebook, Twitter and Google+. The slogan sponge makes better will be
posted through the web site and social media as well as the product features and the values by
donating to Share at The Doorstep and the social cause that provide less fortunate people
appliances for their daily life.

March: To enhance the online and social marketing campaign, location based services will be
employed to distribute the product through online marketing. Point of purchase display and
signage will be updated to support the effort and continue to support the retailers. The campaign
will focus on all aspect of sponge makes better.

April: A mobile phone ad campaign will provide additional support that will lead to the web
site and social media of the product thus leading the traffic to the retailers

May: A trade sales contest will provide additional incentive and prizes to distributors and
retailer that sells the most Sponge joy within a four-week period to gain better relationship.

June: An event marketing campaign will mobilize a team of Sponge Joy representatives to held
a concert and indoor activity to promote the product to potential customer thus giving them the
opportunity to sample the product.

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7.0 BUDGET

Johnny Boy company has set a first-year goal at RM 70 million with an average retail price
of RM 7.00 per sponge for a total of 10 million units. An average wholesale price of RM 3.50
per unit, which brings a profit of RM 35 Million. Johnny Boy company expects a breakeven
of a wholesale price of RM 3.50 per unit, variable cost of RM 2.00 and a fixed cost of RM
57000. The break-even cost is:

RM 57000 = RM 38000
RM 3.50 RM 2.00

8.0 Controls

- Johnny Boy Company is planning tight control measures to closely monitor product
quality, brand awareness, brand image and customer satisfactory. This will result in

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the company being unable to react quickly in connecting any problems that may
occur. Given the market volatility, contingency plans are also in place to address fast-
moving environmental changes such as shifting customer preferences, new products
and new competition.

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