1.0 EXECUTIVE SUMMARYVern’s Holding Sdn Bhd was founded in the year 2005 and is engaged in the

manufacture of women fashion products like footwear and handbags. The company headquarter is located at Kuala Lumpur, Malaysia.

Main objectivesThe core financial objective for Vern’s Holding Sdn Bhd is to increases 30% sales

per year through the growth of market share. For marketing objective, the company hopes to accomplish brand awareness of 20% in Indonesia by the end of year 2017.

Target MarketThe market for Vern’s Holding Sdn Bhd will go in is the fashion market. The

country that we would be is Indonesia which is the neighbour country for Malaysia. The market segment for the company would be based on females who fall in the age groups from 15-54 years old in Indonesia.

Market Entry StrategyThe most suitable market entry mode for Vern’s Holding Sdn Bhd would be the

Foreign Direct Investment where the company can directly construct or own a building in Indonesia at the beginning stage.

The 4P’s marketing mix strategyProduct- Latest of fashionable ladies shoes and handbags Price- Competitive pricing with the other fashion companies, psychological pricingPlace- Urban area in Indonesia where is less fashion competitorsPromotion- Offer the products to consumers during seasonal sales or discount days

2.0 Company Background

Vern’s Holding Sdn Bhd

Company profile & Product & services offeredVern’s Holding Sdn Bhd- Malaysia based shoes manufacturer which establish on

year 2005. Vern’s delighted in persistent growth through successful speculations in manufacturing, licensing and retail business of stylish handbags and ladies shoes for the market. (Verns Holding Sdn. Bhd., 2015)

Vern’s has labor force of over 450 employees and over 70 stores in Malaysia which frequently located in shopping malls. Vern’s take part in the in effect marketing campaign which aiming at the end-user shopping center within Malaysia and also South East Asia. Vern’s are ambitious to growth further in order to become a trustworthy foot-wear label for consumers. (Verns Holding Sdn. Bhd., 2015)

According to Vern’s, (2015) main factor that lead Vern’s victory in the foot market is the assurance to innovative and stylist designs and the outstanding skills of shoemaking. Vern’s comprehends new and latest styles every season; moreover they will reproduce merchandise to encounter widespread demand. Vern’s offer a variety range of quality ladies foot wears, for example wedges, high heels, flats and so on due to they are assert their relevance in the fashion world. Moreover, Vern’s not only a shoes manufacturer; they also expand their product range from shoes to handbags. Vern’s never negotiate on the quality of products and endlessly looking for solutions for customer loyalty through product developments based on the insight and feedback from customer. Up to date, Vern’s only available in Malaysia and Brunei, in this international marketing plan, the targeted market for Vern’s Holdings Sdn Bhd is Indonesia.

3.0 Situation Analysis

Business EnvironmentIndonesia is experiencing remarkable economic growth which they are the 18 th

largest economy in the world. The Indonesian government is targeting to 5.7 percent of GDP growth in the Revised 2015 State Budget. Indonesian President believe that their country are able to achieve this target due to the fallen of their public and private debt and inflation rate has been under control (Indonesia-Investment 2015). The increases in growth rate indicates a positive economic situation in Indonesia. Hence, the purchasing power of consumers in Indonesia will also growing because of the positive economic situation.

Besides that, Indonesia government has taken some steps to reduce the cost pressure for the footwear industry in Indonesia (GBG Indonesia 2014). One of the example is that the Industry Ministry had extended financial support to local footwear producers by seeking to replace those old machineries. Thus, Indonesia Government has given some benefits to foreign footwear companies to joint venture with local producers. For example, foreign companies can save their start-up cost by form a joint venture with local producers.

Market AnalysisIn term of the market characteristics, Indonesia has its own two main key

characteristics in the economy. Firstly, the export pattern of focus on internal factors instead of external factors to export mainly of resources and primary goods. Second, the staggering rise of the MAC class in Indonesia with existing around 5 million in the Indonesia and based on the forecast, it would has total 54 million population entering into middle class level.

Besides, according to the Euromonitor International (2015), the consumer expenditure increase from $496,368.4 in year 2011 to $530,297.1 in year 2015. Besides, the annual gross income also increase from $635,089.7 in year 2011 to $686,483.5 in year 2015. As a whole, the living standard and purchasing behaviour of Indonesian has gradually increasing year by year.

Competitor analysisThere are a lot of Indonesia local shoes manufacturer out there in Indonesia, for example like Amble, Marc &Stuart, Sepatubella, Ziviti, Stfebian and so on. Moreover, not only local shoes manufacturer, there are a lot of international brands expand their market into Indonesia.

Product Pricing strategies Promotion

Local- Sepatubella

Provide customize ladies footwear services.-Product categories:

1. Boots2. Flat Shoes3. Platform shoes in

heels4. Wedges5. Sandal

Middle range of price.-Price range from 285000 Indonesia Rupiah to 500000 Indonesia Rupiah. (Which around RM 80- RM 200 )

- Fully rely on social network such as Facebook, Instagram

- Word-of-mouth

International-Bata

Variety range of footwear:- Boots- Casuals- Sandal- Flats- Heel- Pump- Wedges

There are 18 brands under Bata, in order to offer the best shoes in the best price.

Psychological pricing as its pricing strategyPrice of shoes are moderate

-Major promotion activities is sale offers during seasonal sales and discount period.-rely on pull strategy.

For Indonesian local shoes manufacturer- Sepatubella, a ladies footwear manufacturer which made the brand so famous in Indonesia because of they do provide customize ladies footwear services. Their differentiated their products through pricing differentiation. The pricing strategies use by them is different product will be having different price due to they provide customize services. Their promotion strategies is mainly relying on online social networking such as Facebook, Instagram and so on. They relying on word-of-mouth as their promotion tools.

For international shoes manufacturer- Bata, Bata does provide a wide range of ladies footwear as Sepatubella and Vern’s did. There are 18 brands under Bara just to ensure that they offering the best shoes in the best price. Bata pricing strategies had gained Bata a great response from the market due to the mass market and affordable pricing. This pricing strategies lead everyone can buy Bata product easily. Moreover, they did uses psychological pricing as their pricing strategy. Bata normally rates their product to the nearest lower nine 9 digit figure from the actual price of the product. For instance, a flat that supposed to be price at RM 20 is priced at RM19.99 to attract consumers. Last but not least, Bata prices their shoes and apparel in a moderate price and keeps consumer to afford it more easily. (Bata shoes for all, 2015)

In addition, Bata focus on loyalty of consumer base, therefore undifferentiated marketing strategy implemented by Bata. Major promotion activities such as sales offers during seasonal sales and discount periods was carried out by Bata in order to gain consumer, more over by doing this way, this will make Bata gain word-of-mouth

by consumer and this ultimately assist Bata to save more on promotion campaigns, and this will reduce the cost of Bata and in the end bring advantage to consumer which is shoe with low price. (Bata shoes for all, 2015)

Organization Assets and SkillsFirst of all, Vern’s Holding Sdn Bhd established on 27th May 2005 and success in a very short time since they have a strong venture in franchising, retail business and manufacturing of ladies handbags and shoes. They have over 400 workers and more than 70 outlets nationwide in Malaysia.the stage of international marketing involvement of Vern is regular foreign marketing since it has been fully approached in Malaysia and Brunei. They uses its own sales force and also has production capacity devoted to foreign markets. On the other hands, they have no previous experience in international markets but now in Southeast Asia. They manufacture themselves instead of get sources from supplier or distributors. They usually train their staff become friendly and good in problem-solving in order to achieve customer satisfaction and build up customer loyalty. For instances, when a customer ask about what are the material used for the shoes, they will answer it directly. Furthermore, they always envisage new styles of their products every season in order to meet popular demand. They also provide a wide range of quality essential in order to meet up different standard customer.

4.0 SWOT Analysis

Strengths and WeaknessesFirst of all, one of the strengths is Vern’s company capacity in manufacturing and

strong sales forces, this means that they can produce themselves, selling it by themselves, they can set their product price cheaper since there were not have any middleman among the products. Another strength is they have a good quality and attitude employees, they can build good relationship with customer, at the same time, they also achieve their mission which is Customer Satisfaction. On the other hands, their employees also have a deep knowledge towards the products, so when the customer asking about the products information, they can explain it clearly to them. Apart from that, Vern also produce their products with different materials which is based on the market needs in order to approach different income level customer. One of the weaknesses of Vern’s company is they have no much experience in exploiting in the international market, so when they extend their company to foreign market, they shall met a lot of issues which are not necessarily for them.

Opportunity and Threats In Indonesia, the proportion of employed women has been gradually increased to

43 million from year 2002 to 2012 (HKTDC RESEARCH 2014). This had leaded to the increases of income level for Indonesia women. The higher incomes would also enhance the purchasing power of Indonesia women and this would creating opportunities for producers of household and fashion products in Indonesia. Hence, Vern’s company would has the opportunity also since it is selling fashion product like footwear and handbags. Based on the competitor analysis, we also found that Vern’s will gain some opportunities for their business in Indonesia, the first point is that both countries, no matter in Malaysia or Indonesia, both country here having a similar shopping behavior. Due to similarities of culture of nation, Indonesian and Malaysian do have a similar purchasing behavior, consumer looking for quality product with a moderate range of price. Vern’s do provide low or middle price range of ladies footwear and handbags with a promise of good quality. Moreover, the changing of consumer lifestyle of Indonesian was predicted to produce a strong growth of demand for footwear market in Indonesian.

On the other hands, on the threats side, Indonesia government had increasing the minimum wages in Indonesia and this would be affected the total work force in the country (GBG Indonesia 2014). The labor costs would increases due to the increasing of minimum wages. Thus, this would affected the profits of footwear companies because the margin in the shoe making business is hinge on the competitive labor costs. Also, we found that variety of competition among local Indonesian footwear manufacturer, International footwear brands manufacturer and so on in competitor analysis. Competition among the footwear industry is high, and this will let consumer to have more choices and this will lead to a phenomena that substitute products will become more easier due to the intense of competition among the industry. Consumer

will make comparison to make the best decision.

5.0 Alternative of Entry Strategy

There are a lot of entry strategies for company to entry into foreign market like licensing, joint venture, direct exporting, franchising, foreign direct investment, partnership and so on (Trade Start.CA, 2015). Among these strategies, the 2 most suitable methods for Vern’s company are foreign direct investment, joint venture and franchising. Below is the advantages and disadvantages of foreign direct investment and joint venture:

Firstly, one of the entry strategies that Vern’s can use to entry into Indonesia market is foreign direct investment. The reason why it is the strategy that suitable for Vern’s Company is because Vern’s Company has a strong capacity in manufacturing and sales forces. It has its own standard process from designing, manufacturing until selling. When it directly invest in the foreign country, it can help Vern’s Company to gain the profit in the international market. Through this way, Vern’s can expand its market into global market and make it bigger and bigger. Also, it can reduce the cost of resources and labour in operating due to the cost in Indonesia is lower than in Malaysia.

Secondly, the others entry strategy that Vern’s Company can use is Joint Venture. The reason why it is suitable for Vern’s Company is because the partner of the joint venture can provide the Vern’s Company its capacity and experience in the Indonesia market. That is because Vern’s Company has less experience in exploiting in the foreign country. Therefore, it may face lots of problems when steps into a new market. Through joint venture with another local company, Vern’s can easier grasp the information of government regulation, cultural, consumer behaviour and so on. It can reduce some risk that faced by Vern’s Company and easier to Vern’s Company to run

its business faster in the Indonesia market.In a small conclusion, both of the entry strategies has its repetitive advantages and disadvantages when go into the Indonesia market. It is based on how Vern’s Company to solve the potential problem and which can provide more benefit to it.

6.0 Objective

Mission StatementAt Indonesia, Our mission- Vern’s is to deliver a unique shopping experience that pleases both the emotional and rational desires of shopping need of our Vern’s consumers by providing them a massive, exciting collection of in-season styles with a combination with the convenience and value desired by our consumer. We strive to outshine our company through concentrated on business expansion, distinction through revolution, desire through empowerment, profitability and play an active role in society.

Financial Objectives Sales upsurge of 30% per year through growth of market share. Experience double figure rate of growth within first three years of expansion. Minimize overhead of store by 6% each year Reaching cost-effectiveness in two year time.

Marketing Objectives Accomplish brand awareness in Indonesia of 20% by the end of year 2017 Lessening the cost of consumer acquisition by 10% per annum. Upsurge repeat consumer by 15% per annum. Construct an in effect pull campaign, conveying in potential consumers at rate

of 6% per quarter increasing.

7.0 RecommendationsThe target market for Vern’s Company should be aimed on demographic

variables. Demographics are one of the common strategies that companies used to

segment the markets (Kokemuller, N. 2015). Companies that using demographics as their target market would be focus on a specific gender, age group, education level or income level. Firstly, the gender that Vern’s Company would targeted at is female since they are selling female products. Vern’s Company should also focus on the females who are from 15 to 54 years old. Consumers from age 15 to 24 years old is considered as teenager and from 25 to 54 years old is considered as working adult. The reason why Vern should targeting for these age groups is because based on our research, there are 29.19% of females are fall within this age groups in Indonesia. Thus, this is consider a large target market for Vern’s because it is more than a quarter of Indonesia population. Another reason is because most of them in these age groups are able to work by themselves and have their own income so that they will have the ability to purchase Vern’s products. Those fashion products from Vern’s Company are affordable for them as Vern’s are targeting on people who have average income level.

Besides that, the most suitable market entry strategy for Vern’s Company is the Foreign Direct Investment. This is because Vern’s Company does not need to depend on other local companies in foreign countries. Vern’s Company can directly own a foreign asset and transfer all their resources like capital, technology and personnel to the country. Furthermore, the ASEAN land ownership regulations had stated that the land ownership for business purposes is a key exception to the land ownership rules in other countries (SENADA 2006). In Indonesia, the 1960 Basic Agrarian Law stated the right to build on land are given to legal entities domiciled in Indonesia included foreign companies, which means that is legally for Vern’s to construct and own buildings in Indonesia.

Fashion is one of the most competitive industries in the world. Hence, Vern’s Company need to have a good positioning strategy for their brand in order to differentiate with other fashion brands and products in Indonesia. Brand positioning is the process of positioning the brand to the customers mind (Bueno, BJ. & Jeffrey, S. 2006). Vern’s Company can positioning itself as the value fashion store for women

since their stylish yet comfortable fashion products are able to gain a strong brand recognition from customers. Vern’s Company can positioning itself through brand communication with media coverage, events and promotions in order to enhance the relationship with customers.

Vern’s marketing mix is comprised with the products, prices, places, place and promotion. The main products for Vern’s included the fashion footwear and handbags. In Indonesia, there are many fashion companies in the market. Thus, Vern’s need to keep innovating and producing new products in order to become the latest in the market. For the pricing strategy, Vern’s can design it to be competitive with the other fashion shoe retailers in Indonesia. It can also use psychological pricing as its pricing strategy. For example, Vern’s can price its product to the nearest lower “9” digit figure of the actual price like RM100 is priced at RM99.99 in order to attract more customers. Furthermore, Vern’s Company should choose it location at urban area in Indonesia since they are selling fashion products. The company should also choose it location where is less competitors in that area. Lastly, for the promotion strategy, Vern’s Company can offer its fashion products to customers by giving a seasonal sales

or discount days to them. As a fashion industry, Vern should always come out the new products and the old products should not put in the store for too long time. Hence, Vern can offer a huge discount to customers in order to clear the old products.

ACTIVITY/TASK RESPONSIBLE/PERSON -IN-CHARGE

STARTDATE

COMPLETIONDATE

Feasible studies Mr.Sam & Mr. Sunny(CEO & Marketing Manager)

1/6/2015 7/6/2015

Obtaining export procedures, licensing, labeling approval

Mr. Kelvin (Regulatory Controller)

15/6/2015 15/7/2015

Analyzing location for setting up retail shop

Mr.Sam & Mr. Sunny(CEO & Marketing Manager)

20/6/2015 27/6/2015

Distribution & pricing plans

Mr.Clement (Logistic Manager)

21/6/2015 25/6/2015

Product designMs. Joey (Designing Manager)

1/7/2015 1/8/2015

Point-of sale Promotion

Mr.Sunny & Ms.Linda (Marketing Manager and HR Manager)

15/7/2015 20/7/2015

Shipping schedules Mr.Nicky (Export Manager)

20/7/2015 25/7/2015

Product launch Mr.Sunny & Ms.Linda (Marketing Manager and HR Manager)

1/8/2015

8.0 Action plan for implementation

Monitoring Action PlanFirst of all, in order to monitoring, we are required to: (I) Observe continually with those participates in the task or activities. (II) Keep tracing with the quality of the activities and including participators’ feedback. (III) Examine the collected information regularly. (IV) Inspect the results from the analysis of the plan. After that, we are required to carry on with evaluation procedure with the following process: (I) Make decision on who will participate in decision-making process of this evaluation procedure. (II) Determine the main objective of this evaluation that our company are required to assume. For instances, does the project works? Can it be done in the expectation period? (III) develop the methodology for evaluation process (IV) Set up the evaluation plan and start evaluating in order to get a better results.

Contingency Plan

Events Impacts Risk Level Action/Ways to overcome

Deregulation on import duty

Pricing 55% Reduce exporting in product’s quantity

Natural disaster Raw supply 75% Purchase insurances

Counterfeiting - imitation

Sales 90% Advertisement

Fire Disaster Raw supply 80% Purchase insurances

Emergence of competitor

Quality 85% Spend money to do heavy advisement

Preference product’s design of customer change

Sales 65% Do research and develop a feedback form for customer

Losses on motivation of employees

Production 50% Bonus such as travel, bonus shares and so on

Time losses due to logistic management problem

Sales 70% Find a trusted logistic company to manage