TMA 1

Course Title : MARKETING MANAGEMENT

Course Code : BMK501/03

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Question No1.

Target segment is the process of identifying and aiming at a group of consumers from a large

marketplace into similar characteristics like choices, needs, desires and wants. The objective is to

form a blend of marketing mix that accurately matches the needs and preferences of our targeted

customers. To identify our targeted segment we must first asked ourselves questions that will

help us to ascertain our marketing goals.

 What is our objective? It is to successfully sell Green Toy products in Malaysia

 Who are our target groups? Basically the users are babies and toddlers. But the

purchasers are their parents. So in fact we are targeting educated parents who are health

conscious.

 How old are they? They should range from 25 to 40.

 What is their income level? Since our toys are costlier than average toys we should target

middle to high income wage earners.

 What are their level of education and their understanding of the eco-system and climate

change? Our targeted group should basically understand the effects and dangers of the

greenhouse gasses and issues about recycling and the ozone layers

We can start by conducting a demographic survey on selected regions with huge neighborhoods.

This can be done by obtaining statistical data on the population make-up and urban areas that

have the multiple shopping malls and neighborhoods with families.

So basically our target segment will consist of:-

 Parents

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  Toy suppliers – Toy stores that are most frequented by middle income to high income

parents.

 Retailers (Departmental Stores) – most famous hypermarkets and shopping stores in

Malaysia – Jusco, Aeon Big, Metrojaya, Parkson Grand, Sogo.

Family Life Cycles

We also have to identify potential customer base by developing a customer profile. To define our

target customers, we also need to collect demographics on the following factors:-

 Urbanites, suburbanites, northerners and southerners

 Age

 Gender

 Occupation

 Income level per household

 How many kids per household

 Geographical location

 Buying patterns / habits or brand consciousness

 Usual shopping locations

By conducting extensive research, we can then derive at a decision based on data gathered from

customers’ wants, needs and dislikes. In this case we can safely say that the decision maker

would be the parents, as toddlers are unable to make preferred choices. Parents in this case

would be categorized as healthy green shoppers. Green shoppers are basically a little older, more

educated and with a higher disposable income. They tend to shop more for reliable products and

they usually show brand loyalty behavior.

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 Contemporary parents have become smarter and choosier these days. So it is only natural for

parents to want to provide the best for their babies. Parents instinctively would want to know

more information on the toys that are available for their choices. You can see a new trend these

days whereby many urbanites have began reading labels and information printed on the package

of a product before purchasing them.

Further studies have also indicated that people are more aware of their surroundings these days.

They know more about climate change and greenhouse gasses. Many environmental groups like

the Greenpeace Movement and several NGOs have also increased caution to the world about the

various types of dangerous plastics, garbage and toxic chemicals used on many daily items in our

households. So to bring in a new eco friendly toy product, shows that we may have a huge

potential in capturing the Malaysian market.

Physiographic

Physiographics is basically the study or values, lifestyles, interest, attitude and trends and what

will make parents buy our products. We have to know what influences their buying decisions and

what we can further do to encourage them. Further studies on health conscious consumers have

indicated that there are basically 4 segments of the eco friendly green consumer

i. Resource Conserves

Basically this group hates wastage and they try to save in everything in their daily lives

including electricity, water, plastic bottles and even try to read everything online to try to

avoid printing on paper.

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  To capture their interest we can highlight how economical and durable our Green Toys

are.

ii. Health Fanatics

These groups of people worry about toxin in food, MSG and other toxic products. They go

for organic food and they fret about contamination on kids toys. There is great potential to

sell our toys to this group.

 To capture their interest we have to emphasize on the health benefits, natural ingredients

and colorless products.

iii. Animal Lovers

These groups are vegetarians and buy products that are animal free of any animal substance.

 To capture their interest we have to ensure them that the product is vegan and non-animal

substance or `suitable for vegans’.

iv. Outdoor Enthusiasts

These people love nature and would love to save trees and the natural environment.

 To capture their interest we can ensure them that our biodegradable products are saving

Mother Nature in the long run.

Capturing the market segmentation

Dynamic clustering can be used to segregate customers by analyzing their shopping preferences.

Divide the market into segments and decide on how to promote our product to each segment. As

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we have already ascertained that our main targets are parents and toy retailers we have to plan

how to influence them .

Parents

For parents it may begin at maternity clinics or at delivery wards right after delivery. We have to

put up posters at these maternity clinics and public information boards at the hospital’s lobby.

We can further invite them for talks at expos and provide information on the materials used on

our products. We should also participate at Baby Fairs or at Expos and provide play areas for

babies to play and familiarize themselves with our toys. There we can further communicate

directly to parents to promote our toy and to ask them feedback on their preferences.

Additionally we can assure parents that the materials used on the baby utensils can withstand

high heat as babies items will always have to be sterilized. Our assurance is that we have the

safest greenest product for babies and toddlers.

Toy retailers and baby shops

Educate and demonstrate to them about the difference in your product in comparison to other

toys. Develop a good relationship with them as they have the power to influence the buyers that

walk in. As they are also looking for good profits, we can discuss mutual gains that will put

everybody involved in a win-win situation. Once toy retailers see the prospective benefits open

to them, they will play their part in selling and advertising for us by word of mouth.

If we spend time to analyze and accurately identify our target market we may be able to capture

their interest and gain their loyalty in good time.

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Question No 2.

The main objective of Green Toys is in producing toys which are environmentally friendly,

durable while being attractive enough for mothers to purchase for their kids. The company

already has a well planned strategy in place for their toys so we just need to further strengthen it.

Additionally we also need to evaluate what is working, what is not and what needs to be

changed.

Green Toys’ main criteria is to create sustainable products from high quality eco friendly

materials. This concept goes farther than just being green and eco friendly. Their focus is for

people to think differently about them and to look at green toys with a sense of longing of

ownership. This idea comes from trying to reflect on companies that sell personal care products.

Another strategy that Green Toys explores is promoting an alternative type of toy for babies and

toddlers. Parents must be informed and educated on the type of materials used and what their

decision to purchase our toys would mean to the natural environment. Our safe criteria is

 Avoidance of lead

 No Phthalates

 No BPA

 No other substances that could leak and cause a health hazard.

Green Toys co founder Von Goeben has researched the market and chose HPPE (High density

polythene) as a material for the toys. Von Goeben has worked hard with the manufacturer and

other recycling plants to ensure the material meets up to it durability and health standards.

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We must give assurance to the parents that we have always maintained our standards in our

products in terms of the healthy materials and color used. The deciding parent should be able to

feel secure and safe with our non-toxic toys and baby accessories.

According to a research by Deloitee, characteristics of a Green Product should basically cover

the following

Reduced Packaging Energy efficient Non Toxic / Low volatile organic compounds

Organic / Local Biodegradable Recyclable (Material & Contents)

Grown

The management of Green Toys have additionally attempted to reduce freight and transportation

for the products by employing locals to do the job. This move will help increase local

employment in the districts that have been targeted to open our production centres. Furthermore

when transportation or freight charges are reduced this in turn will save consumption of

additional fuel. Our actions will prove to the customers that Green Toys is true to their word in

preserving the environment and saving the eco system.

There must be consistency with our promise of sustainability. An easily broken or cracked toy

will frustrate the parent and will reduce their trust in us. If our products are not sustainable the

preference for selecting Green Toys will slowly decline.

New healthy products

To add variety we can include interactive toys that respond to toddlers voices. Interactive toys

with nursery rhymes with touch buttons to further help develop linguistic skills could also be

introduced in the near future. Apart from sand play toys and jump ropes, we could also look into

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baby carriers such as cribs, strollers, walkers and baby chairs. There are an endless range of

products to try out to capture parent’s attention.

Market positioning

We must study the market position of our Green Toys in comparison with the other more well

known toy makers. Where does our brand stand? As a new business venture into the Malaysian

market our next priority would be in raising awareness and constant advertising. Our main

alternative feature is that we offer products from recycled healthy materials that will stand out

from other toys such as Disney, Hasbro and Mattel.

There should be a separate segment where our toys are placed in the Malls with appropriate

awareness posters educating the parents on how their extra purchase will help their children’s

future. Once they understand the dangers and hazards of Bisphenol and BPA in normal toys, I

believe many parents will go an extra mile and fork out extra cash to help their kids and the

natural environment. We need to know how to position our products in the minds of mothers so

that Green Toys will be the 1st thing they think about when they decide they want to purchase

something new.

Question No 3.

Tools are basically methods used by a company to market its products to consumers. The

marketing mix is an important established tool that we can use to launch Green Toys into the

Malaysian market.

The marketing mix plan basically involves the 4Ps elements which are product, price,

promotions, and place. Our business plan must have a clear outline of targeted groups and

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districts with buying patterns and strong competitors. Successful branding our our toys creates

strong awareness within our targeted market.

Product

We have to ensure that safety standards are always met. There must always be consistency in the

product’s shape, size, colour, model, weight and durability. Our toys features such as quality,

eco-friendly packaging, warranties and conditions of returned goods must also meet with high

standards of conformity. We must analyze the toy industry and understand what parents really

desire and then custom make our products to suit their needs. If we do not make an analysis, we

will just end up producing a product which we want but customers don’t.

Pricing

The pricing of our toys must be appropriate and suitable enough for the Malaysian market.

Customers from the middle and high wage earners should be able to afford to make a purchase.

However we have to ensure that the cost of our toy must cover profit margins, distributions cost

and other expenses.

We should start off with having a promotional price of 5% during the initial launch stage. This is

to get parents to start purchasing their 1st Green Toy product. Our first objective is to have at

least one Green Toy in almost all urban households. Only then can parents make comparisons

between our toys and the others. If they don’t take the first step to try out our toys they will

never know the comparison.

We must also be cautious of the pricing in the toy market. If the price is too high, customers will

look away and if the pricing is too low, we may not be able to achieve our targeted profits.

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Also we must always be weary of our competitors because once we start eating into their market

share, they will step forward with alternatives or further reduce the price of their existing toys.

Promotion - advertising and distribution of information

Print our brochures and distribute them with daily newspapers such as the The Sun, which goes

out free to millions of people throughout Malaysia. Work with magazine editors and advertise

monthly magazines such as Motherhood and Parenthood. Provide monthly write ups and articles

on our latest products. Always keep consistently reminding parents of our existence. We must

also keep them informed of any new eco-friendly products that has been recently launched.

We can also allow seasonal discounts during festivities (i.e.: Christmas or New Year). Our

constant advertising will be a costly venture but it may be necessary especially during the initial

starting stage. We can also hold promotional booths at Expos and Baby shows. Invite parents to

our booth and explain in detail about our product. Get their babies to sit in a designated play area

and allow them to try their hand with our toys.

Places

Distribution of our toys must be well orchestrated. It must cover places that are most frequented

by families during weekends. Our aim is that our toys must be within easy to reach. That means

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our brick and mortar outlets must be strategically located at family based shopping centers such

as KSL, City Square, Aeon as they have a high number of shoppers on weekends. We can also

bring our products into retailers such as Jusco, Parkson and Metrojaya in the kids department.

All the 4P’s of the marketing mix are interconnected and failure to focus on any one element will

affect the performance of the other P’s.

Additional tools that can be used to create awareness

 Boost Brand Awareness online (Social Media)

Increasing brand knowledge through social media is the new way to market our product. It is

cost saving and can geographically reach out to a larger amount of customers. In turn this will

show our responsibility in reducing paper wastage by printing lesser brochures. Well planned

advertising and announcements in baby related websites are a good way to capture the interest

of existing and new mothers.

Trying to reach the public through social media may go down pretty well with the younger

generation because many young parents are into social networking, viewing You Tube videos

and reading online promotions and offers. This tactic is an excellent new avenue that we can

utilize to up sell our toys.

 Communications and maintaining relationships.

Communicating with business partners (suppliers) and customers is essential in creating

awareness. Business models such as B2B (Business to Business ) and B2C (Business to

consumer) relationships should be further reinforced with constant interaction and feedback. We

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must also analyze past sales data, buying patterns and preferences and seasonal sales trends of

toy stores.

 Partnership

Create partnerships with baby milk brands and provide free Green Toys along with each

purchase of a tin of milk. Also provide printed brochures for the parents to read about our Green

Toy, along with added info of retail outlets and our website address.

 Infomercial

Another potential avenue to promote our products is getting involved in talk shows or interview

with talk show hosts.

With a powerful product strategy in line, we can make a relatively solid entrance into the

Malaysian toy market and maintain stability and growth for some time.

Question No 4 - Challenges

There are many challenges to encounter upon entering the toy industry in Malaysia. A detailed

research must be done to evaluate the environment such the Porter 5 Analysis and SWOT

Analysis. Once our strength and weaknesses and threats are identified we can strengthen our

business positioning. The Porter 5 analysis analyses the factors as displayed in the diagram

below

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We must always be prepared for our competitors. Once our eco-friendly product sales start to

soar and eat into their market share, they may try alternative strategies or reduce prices.

Malaysians buying power and preference

Majority of Malaysians fall into the middle income bracket. The high income earners only

represent a small share of the economy. Due to the rising cost of living, many middle to high

income earners may not want to dig too deep into their pockets to buy our toy when they can get

another branded toy for a cheaper price.

Consumers Unwillingness and Lack of Awareness

There are also a great many Malaysians unaware and there are also consumers who are not too

concerned about the greenhouses gasses and recycling efforts. There are also many others who

are aware but don’t do anything about it. Many people are too caught up with their busy

lifestyles and are not too anxious about saving the eco system. Although there are also a great

number of Malaysians who make the effort by using recycled bags but that is about the only

extend they go to. They would hesitate to fork out extra money to save the planet. They may

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regard our toy as too expensive because many average Malaysians also have to cope with the

rising costs of living.

Electronic Gadgets

Video games, Playstations and other electronic gadgets such as tablets and Ipads have shown a

growing trend within the younger generation and this trend has overflowed to young kids at

home and even to toddlers. Anyone can see the trend these days at restaurants and coffeshops

where parents give their kids an electronic gadget to keep them preoccupied at the dinner table.

Parents these days are investing in high tech gadgets basically for convenience to preoccupy and

entertain their kids at restaurants, banquets and at home. They are also able to download various

educational applications, nursery rhymes, interactive word building games and electronic jigsaw

puzzles for the kids. Some parents have even purchased these electronic gadgets for kids as

young as 8 months. They believe they can keep their young ones entertained with various

educational You Tube videos. Young parents proclaim that they are able to educate their kids

more effectively using these hi-tech gadgets. They also claim that they are contributing to eco-

system by buying lesser physical toys that may be obsolete within a year thus reducing garbage.

Electronic gadgets have become a very real growing threat for the toy industry and it is well

known fact that latest IT gadgets have become a substitute for toys. However due to this looming

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threat, many toy makers now have now produced toys that represent famous Disney and Pixar

movie characters (i.e. Monsters Inc, Cars, Superman, Transformers and Ironman) to maintain

interest in the kids.

In view of these challenges, we need to evaluate a 5 year historical data of the toy industry and

analyze its sales trend. It is no use producing toys if there is no demand for them.

Competitors

Other competitors have been in the market for a long time and consumers would not be willing

to switch unless they are absolutely sure of the stronghold of our product. Many consumers may

claim that they see no immediate benefits of purchasing a Green friendly toy as other toys from

Mattel and Hasbro seem to be safe as they see no side effects on their kids. Furthermore

following a report from SGS ( A Swiss quality control organization), the EU (European Union)

has increased safety standards due to frequent toy product recalls. The EU has developed

stringent enforceable safety regulations and guidelines for all toy factories worldwide. Since

80% of the world’s toys are made in China, SGS has established several technical committees to

ensure that these toy factories meet with the international safety standards. Upon hearing this,

many parents would not be too overly concerned because they will believe the existing toys are

basically safe for their kids. It will be a great challenge for Green Toys to begin influencing them

to change their current mindset. We must develop a competitive edge over our competitors once

we understand the challenges and threats from them

Gather feedback

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Lastly we truly have to understand what the parents really desire for their kids. Allow customers

to feedback online on their good and bad experiences with our product. This will enable us to

make modifications or remove unpopular products that will only cause a loss to produce.

Question No 5 (a)

Marketing research is basically a systematic collection and recording of data to help analyze

information scientifically in order to be able to derive at good business decisions. The role of

marketing research is to gather important and accurate information from the environment along

with all other relevant factors that affect our product. The main objective after gathering this

information, is to analyze it through statistical calculations and make critical decisions. We can

use these findings to identify and understand market rivalry, new opportunities for our toys and

the sales trends of parents buying preferences.

If there is no information about customers and their buying preferences, there will be no concrete

evidence to support our decisions. It is important for us to obtain factual data on kids play

patterns and parental behavior on making toy purchases before we embark on the production of

our Green Toys. Once we have analyzed the findings, the chances of making a bad marketing

judgment will be greatly reduced.

In summary marketing research will help Green Toys to gain insight information to help the

management in making a wise decision thus reducing risk and costly errors.

Question No 5 (b)

The research design stage is the next course of action that management will take right after

deciding the objective of conducting a market survey. It basically clarifies what we are going to

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do to achieve that objective. The elements that make up a research design are called data

collection methods.

There are two types of data collection that are applicable for research purposes. They are primary

data and secondary data. Primary Data constitutes new raw data that is compiled and

consolidated by the organization to help make an accurate analysis of the toy industry.

Secondary Data is data that has already been previously collected and recorded by other sources

and stored for future use. This data may consist of income groups, sales trends, graphs, consumer

buying patterns and socio economic profiles. Such data may be retrieved by other companies

wishing to use it for statistical research purposes. As the toy industry has been around for many

decades, secondary data may be available from previous surveys carried out by other companies .

The advantage of obtaining secondary data is that is saves time and cost for us. However if we

were to obtain secondary data we have to look at several factors before certifying if it is reliable:-

 Secondary data must represent the latest buying trends and socio economic patterns.

 It must not be outdated or obsolete.

 Data must be accurate and reliable.

 Data previously collected must serve the same purpose of our company’s objective of

conducting a marketing research.

If secondary data is unable to meet our criteria, we have to work on obtaining primary data.

Obtaining primary data will indeed increase our costs and it may take extra time before we get

the answer to our enquiries from the public. Compilation and consolidation of the data would

also require extra manpower and additional time. That would mean we may have to delay the

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launching our toys into the Malaysian market until proper data is presented and analyzed by

Management.

Primary data can be obtained by 3 methods of collection

 Observation

 Survey

 Experimentation

Observation

Observation involves observing buyers purchasing patterns, the amount of customers in toy shop

and baby shops and the amount of customers looking for healthy baby products. This method has

its limitations because it only observers behavior. There is no verbal feedback to check on

personal preferences and dislikes.

Survey

The Survey method is very effective but requires more work because it involves conducting

surveys on sample units of the population to get information on demographics and their socio

economic profiles. Survey methods comprises of :-

 Face to face interviews

 Telephone calls

 Online survey

 Questionnaires or Survey Forms (through mail)

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Primary data may be collected from customers, baby stores and toy retailers. Face to face

interviews may be conducted at toy stores. Some parents may be approached at child care centres

or Nursery schools to gather their feedback. However the downside of face to face interviews is

that some parents may not provide an accurate view of their actual actions. They may vocally

proclaim that they would buy our products to help the eco-system but in actual fact they would

always look into the cost factor when it comes to buying our toys.

Questionnaires and survey forms may be distributed to customers at shopping malls or sent to

them via mail or emails. Online surveys are the easiest to reach out to larger number of

consumers. To get them to respond, parents can be awarded with a small discount on our

products upon their 1st purchase after answering our online surveys. This way we may be able to

get more responses.

Telephone calls are another option to collect more information on parent’s preferences.

Telephone numbers can be randomly picked and calls can be made to make further enquiries.

Questionnaires can also be distributed to the public through newspaper distribution and at family

shopping malls especially at the cashier counters at large bookstores (i.e.: Popular, MPH or

Harris).

Even at expos and exhibition halls our brochures can be given out at the main entrances and we

can further encourage parents to answer our surveys or visit our website to give some feedback.

Another option is providing our questionnaires at baby shops and toy retailers and request their

assistance in passing it out to parents who make purchases there.

Experimentation

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Experimentation is another avenue to seek data. It may be interesting to conduct a study on

baby’s behavior and their preferences in the various types of toys. However this type of data is

more difficult to obtain and parents may not be willing to corporate.

Though there are limitations to all types of data collection methods, in my opinion it would be

more feasible to reach out to parents through online surveys and questionnaires. If properly

carried out, questionnaires and surveys can provide us with fairly accurate and valid qualitative

and quantitative information that can help the management make sound decisions.

-End-

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References:-

SGS. (2011). Solutions for the toy industry-get ready for new challenges.
http://www.sgs.my/~/media/Global/Documents/Brochures/SGS-Toy%20Global%20Solutions-
EN-11-V1.pdf. (Accessed: 18 August 2013)

Bob Li, Xinhua (16-12-2011), Toy industry analysis and outlook. China Toy Industry facing
challenge as EU tightens rules. http://www.trade2cn.com/news/111216105838lp4-1.html.
(Accessed : 19 August 2013)

Bob Patterson (n.d.) Marketing Communication Excellence. Awareness Building and Lead
Generation, Marketing Dynamic Duo: Part 1. http://www.mktx.com/awareness.htm. (Accessed:
19 August, 2013)

Net MBA. The Business Knowledge Centre. (n.d) The Marketing Mix (The 4Ps of marketing).
http://www.netmba.com/marketing/mix/. (Accessed: 20August, 2013)

Lee Ann Obringer. (n.d). Physcographics. How Marketing Plans work.

http://money.howstuffworks.com/marketing-plan14.htm. (Accessed: 25 August, 2013)

Scott Bearse. Peter Capozucca. Laura Favret (2009). Deloitte. Finding Green in today’s
shoppers. Sustainability trends and new shopper insights.
http://www.gmaonline.org/downloads/research-and-reports/greenshopper09.pdf. (Accessed: 27
August, 2013)

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