1.

0 EXECUTIVE SUMMARY
Verns 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 objectives
The core financial objective for Verns 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 Market
The market for Verns 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 Strategy
The most suitable market entry mode for Verns 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 4Ps marketing mix strategy
Product- Latest of fashionable ladies shoes and handbags
Price- Competitive pricing with the other fashion companies, psychological pricing
Place- Urban area in Indonesia where is less fashion competitors
Promotion- Offer the products to consumers during seasonal sales or discount days

2.0 Company Background

Verns Holding Sdn Bhd

Company profile & Product & services offered

Verns Holding Sdn Bhd- Malaysia based shoes manufacturer which establish on
year 2005. Verns 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)
Verns has labor force of over 450 employees and over 70 stores in Malaysia
which frequently located in shopping malls. Verns take part in the in effect marketing
campaign which aiming at the end-user shopping center within Malaysia and also
South East Asia. Verns are ambitious to growth further in order to become a
trustworthy foot-wear label for consumers. (Verns Holding Sdn. Bhd., 2015)
According to Verns, (2015) main factor that lead Verns victory in the foot
market is the assurance to innovative and stylist designs and the outstanding skills of
shoemaking. Verns comprehends new and latest styles every season; moreover they
will reproduce merchandise to encounter widespread demand. Verns 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, Verns not only a
shoes manufacturer; they also expand their product range from shoes to handbags.
Verns 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, Verns only available in Malaysia and Brunei, in this
international marketing plan, the targeted market for Verns Holdings Sdn Bhd is
Indonesia.

3.0 Situation Analysis

Business Environment
Indonesia 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 Analysis
In 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 analysis
There 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

LocalSepatubella

InternationalBata

Provide customize ladies

footwear services.
-Product categories:
1. Boots
2. Flat Shoes
3. Platform shoes in
heels
4. Wedges
5. Sandal
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.

Middle range of price.

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

Fully rely on social

network such as
Facebook,
Instagram
Word-of-mouth

Psychological pricing as -Major

promotion
its pricing strategy
activities is sale offers
Price of shoes are during seasonal sales and
moderate
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 Verns 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 Skills
First of all, Verns Holding Sdn Bhd established on 27 th 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 Weaknesses
First of all, one of the strengths is Verns 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 Verns 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,
Verns 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 Verns
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. Verns 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 Verns 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 Verns can use to entry into Indonesia
market is foreign direct investment. The reason why it is the strategy that suitable for
Verns Company is because Verns 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 Verns Company to
gain the profit in the international market. Through this way, Verns 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 Verns Company can use is Joint Venture.
The reason why it is suitable for Verns Company is because the partner of the joint
venture can provide the Verns Company its capacity and experience in the Indonesia
market. That is because Verns 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, Verns can easier grasp the
information of government regulation, cultural, consumer behaviour and so on. It can
reduce some risk that faced by Verns Company and easier to Verns 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 Verns Company
to solve the potential problem and which can provide more benefit to it.

6.0 Objective

Mission Statement
At Indonesia, Our mission- Verns is to deliver a unique shopping experience that
pleases both the emotional and rational desires of shopping need of our Verns
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 Recommendations
The target market for Verns 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 Verns Company would targeted at is female
since they are selling female products. Verns 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 Verns 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 Verns products. Those fashion products from Verns Company are
affordable for them as Verns are targeting on people who have average income level.
Besides that, the most suitable market entry strategy for Verns Company is the
Foreign Direct Investment. This is because Verns Company does not need to depend
on other local companies in foreign countries. Verns 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 Verns to construct and own
buildings in Indonesia.
Fashion is one of the most competitive industries in the world. Hence, Verns
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). Verns 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. Verns Company can positioning itself through brand
communication with media coverage, events and promotions in order to enhance the
relationship with customers.
Verns marketing mix is comprised with the products, prices, places, place and
promotion. The main products for Verns included the fashion footwear and handbags.
In Indonesia, there are many fashion companies in the market. Thus, Verns need to
keep innovating and producing new products in order to become the latest in the

market. For the pricing strategy, Verns 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, Verns 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, Verns 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,
Verns 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

START
DATE
1/6/2015

Feasible studies

Mr.Sam & Mr. Sunny

(CEO & Marketing
Manager)

COMPLETIO
N
DATE
7/6/2015

Mr. Kelvin (Regulatory

Controller)

15/6/2015

15/7/2015

Mr.Sam & Mr. Sunny

(CEO & Marketing
Manager)

20/6/2015

27/6/2015

Mr.Clement (Logistic
Manager)

21/6/2015

25/6/2015

Ms. Joey (Designing

Manager)

1/7/2015

1/8/2015

Mr.Sunny & Ms.Linda

(Marketing Manager and
HR Manager)
Mr.Nicky (Export
Manager)

15/7/2015

20/7/2015

20/7/2015

25/7/2015

Obtaining export
procedures, licensing,
labeling approval

Analyzing location
for setting up retail
shop

Distribution &
pricing plans

Product design

Point-of sale
Promotion

Shipping schedules

Product launch

Mr.Sunny & Ms.Linda

(Marketing Manager and
HR Manager)

1/8/2015

8.0 Action plan for implementation

Monitoring Action Plan
First 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

Deregulation on
import duty

Pricing

55%

Natural disaster

Raw supply

75%

Counterfeiting imitation
Fire Disaster

Sales

90%

Raw supply

80%

Emergence of
competitor
Preference
products design of
customer change
Losses on
motivation of
employees
Time losses due to
logistic
management
problem

Quality

85%

Sales

65%

Production

50%

Sales

70%

Action/Ways to
overcome
Reduce exporting
in products
quantity
Purchase
insurances
Advertisement
Purchase
insurances
Spend money to do
heavy advisement
Do research and
develop a feedback
form for customer
Bonus such as
travel, bonus shares
and so on
Find a trusted
logistic company to
manage