Business and Management Internal In ternal Assessment Higher Level
How to increase sales of PT. Mitra Genesaret Texindo by analysing and implementing Marketing Mix?
Name
: Matthew Christoviano
School Name
: Sekolah Pelita Harapan-Lippo Cikarang
Candidate Number
: 002595-0008
Subject
: Business and Management
Level
: Higher
Word Count
: 1987
Acknowledgements I would like to give my biggest thanks to the following people for sparing their time off their busy schedules to talk to me about the problems of the company and help in providing me with all the data that I need in order to finish this task.
1. Mrs. Mrs. Monica Monica Lewa, Lewa, Chief Chief Execu Executive tive Offi Officer cer for for the compan company y 2. Mr. Mr. Edi Susant Susanto, o, Chief Chief Financi Financial al Office Officerr for the compan company y
Table of Contents 1. Executive Summary…………………………………………………….………………………1
2. Introduction……………………………………………………..………………………………2
3. Procedure/Method………………………………………….………………………………..….4
4. Findings……………………………………………………………………………………….…5
5. Analysis…………………………………………………………………………………….……7 5.1. SWOT Analysis…………………………………………………………………………7 5.2. 7Ps Analysis……………………………………………………………………..………8 6. Conclusions………………………………………………………………………………….…11
7. Recommendation……………………….……………………………………………..……….12
8. Appendices…………………………………………………………………………….….……14 8.1. Appendix 1: Interview Questions…………………………………………………….14 9. References………………………………………………………………………………….…..15
Proposal 1. How to increase sales of PT. Mitra Genesaret Texindo by analysing and implementing Marketing Mix? Rational for study
PT. Mitra Genesaret Texindo is a company that operates in the textile industry. PT. Mitra Genesaret Texindo operates a store that sells its clothing products and also operates a service that enables people to order clothes in bulks or custom-made clothes. PT. Mitra Genesaret Texindo is losing revenue from their clothing store because of their outdated product lines and its employees haven’t had training in a long time. Their order services and custom-made clothes services is also experience a downfall because of the limited human resource and machinery that makes clothing production slowing down which doesn’t please customers.
Theoretical Framework:
I plan to analyse the company through 7Ps and SWOT analysis to see what can be improved and what can be deleted from the company. Also through using marketing mix and investment appraisals, I will be able to suggest the best way or decision for the company to improve its sales revenue and be profitable. Areas of the syllabus to be covered
a. UNIT 1 a. 1.7 Growth and Evolution b. UNIT 2 a. 2.1 Human Resource Planning c. UNIT 3 a. 3.1 Sources of Finance b. 3.2 Investment Appraisal d. UNIT 4 a. 4.2 Marketing Planning b. 4.3 Product
c. 4.4 Price d. 4.5 Promotion e. 4.6 Place Methodology Primary Research:
I will interview key people of PT. Mitra Genesaret Texindo in order to get detailed data on the company as well as visit the company headquarter in order to get a hands-on feeling of the company and also to know the environment of the company. The interview will give me information on current and future plans of the company, partnering status, financial figures, and many more. Secondary Research:
To see the status and get more information about the textile industry in Indonesia, as well as to find prospective partnerships. Also secondary research will be used to review Indonesia’s economy and see the most suitable market segment that can be entered by PT. Mitra Genesaret Texindo. Also using textbook to analyse the data received Anticipated Difficulties Problems
Solution
Getting time to interview the key people of PT. Mitra Genesaret Texindo will be hard because of their busy activities
Contact them through email, their secretary, as well as create an appointment with them
Up-to-date data of the company may be hard to obtain
Use the internet to complete missing data as well as interview more people in the finance department
Datas required for the research maybe sensitive and State this systematic error in the conclusion confidential PT. Mitra Genesaret Texindo has no website for secondary crosscheck on the company
Prioritise research on primary research and depend less on secondary research
Action Plan Action
Due Date
Finish research proposal (checked)
December 18, 2014
Initiate research and prepare questionnaire for interview
January 1, 2015
Confirm Interview time
January 3, 2015
Conduct Interview
January 10 - 12, 2015
Action
Due Date
Review companies Annual report
January 25, 2015
Analyse data and findings received from the interview, annual report, etc.
January 29, 2015
First draft (consult with teacher)
February 21, 2015
Second draft (checked)
March 3, 2015
Final draft
March 10, 2015
1. Executive Summary The introduction is going to explain and introduce background information about PT. Mitra Genesaret Texindo as a whole and the marketing strategy of the company that was applied before, and its results. The Introduction is going to show what is going to be analysed through this essay, which will be used to formulate a resolution for the ongoing problem in the company, regarding revenue and marketing.
Interviews with relevant key people of the company will be used as a primary source in order to get a better picture on what has been done, its results, and what they actually wanted. Also to aid the interview as a primary source I will use data given by the key people of the company regarding their revenue and marketing strategy.
All the data acquired will be will later be analysed in order to come with a solution to the problem. The data will be analysed by using SWOT analysis, as well as the 7Ps to help aid finding the resolution to the ongoing problem of the company. The result of the analysis will be shown in the conclusion and the resolution will be shown in the recommendation.
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2. Introduction PT. Mitra Genesaret Texindo is a family company basing its products in the textile industry. PT. Mitra Genesaret Texindo is not a new company in the textile industry. Since it is a family company PT. Mitra Genesaret Texindo is not a publicly traded company, and so selling shares as source of finance is not an option. They have been in this industry for about 10 years. Even though they have been in the industry for quite a long time, they have never excel in terms of sales and revenue. The company’s sale is always constant and for the past couple months, it has been going down a steep hill. The company is barely surviving due to its negative sales and expense that keeps on going on.
The company has 40 employees to help run the business. Most of the employees are not trained and qualified because of the fact that some of employees are family to the owner. The fact that it’s a family company, strict rules and regulations are sometimes not taken seriously by the employees. Employees whom are family to the owners take their job for granted. The employees does not work professionally, thus causing low productivity and jeopardising the sales of the company. Their salaries ranges from Rp 2.000.000 - 4.000.000/month which is equivalent to $150 - $350/month
The company has its own store where it sells clothing of own label brand and also other external brands. Besides running the store, the company has a service that enables customers to order clothes in bulks and also custom made it to their own preference. However, the custom made clothing service is not running very well because of the low orders and the stores are not attracting lots of visitors. The company tried to open a branch at a shopping mall where they display their products. This though has failed due to not strategic placing of the store, items displayed are not attractive, and other reasons.
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The company leaders are finding a way of how to increase sales of the company and get it back on its feet. After some discussions and observation it is identified that the largest obstacle or problem that is keeping the company from developing is its poor marketing technique that is not presenting any benefit to the sales of the company. The low creativity and initiative of the marketing team also supported by the low allocated budget for the marketing departments causes the low attractiveness of the store and the company. Therefore this investigation will focus on marketing effect on sales. My research question is “ How to increase sales of PT. Mitra Genesaret Texindo by analysing and implementing Marketing Mix?”
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3. Procedure/Method Primary Research: • Interview with key people • CEO Mrs. Monica Lewa • CFO Mr. Edi Susanto • Interview with employees • Interview with customers • Receive annual financial report from finance department • Visit the store to see the employees and the store as well as the products • Get details on the Marketing department • Allocated budget • What have been done in terms of marketing effort • Results of the effort
Secondary Research: • Review statistics on Indonesia’s textile industry • What does successful textile company has that PT. Mitra Genesaret Texindo does not has • Research about 7Ps implementation and how it is affective towards increasing sales of a company
• Review what is the fashion trend going on in the society
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4. Findings Based on the interview with the company executives, employees, and customers here are the things I found about why the company’s revenue is facing a down fall:
• Outdated items being sold at the stores • With insufficient funding of the company due to the low sales, the company is unable to refresh its items being sold. With outdated products being sold at the stores it will not attract customers to the store, thus negatively affecting sales revenue
• Unskilled & Untrained employees • Since it is a family business, most of its employees are relatives of the owners. Most of them are unqualified and are accepted for the job just because of the family status. unskilled and untrained employees have low productivity which does not contribute anything for the company. Also their presence in the company is just wasting limited funds for their wage.
• Low marketing effort • This is also supported by the unqualified employees in this department. Since they’re unqualified they have lack of creativity and knowledge in terms of marketing. Without marketing, it’s difficult for a company develop or expand its business. With low marketing effort sales are going down. This cycle will just keep on repeating until the company is bankrupt.
• Family business • PT. Mitra Genesaret Texindo is a family business and so selling shares is not an option for sources of finance. The company prefers to stay as a family business and depend on bank loans for finance whereas loans have collaterals and with this
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condition the company is actually setting up its own bankruptcy
• Over-stocking • The company has to much stock of clothing. With the community around it has a low purchasing power with all the reasons above, these over stocking are just causing more and more problem for the company. The clothes are outdated, they’re dirty, and no one is buying them. Keeping them will just add cost but releasing them will just wast money.
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5. Analysis 5.1. SWOT Analysis
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-
Internal
Strengths • The infrastructure and capital are sufficient enough for improvement • Employees are family, and so communication should be easy. The employees also have a sense of ownership and responsibility towards the company • The company is not new in the textile industry. Since 2005 • Affordable clothing for a community with low purchasing power that surrounds the store
Weaknesses • Unskilled and untrained employees • Outdated items being sold at the store • Low marketing effort • Limited source of finance since it is a family business
External
Opportunities • Strategic partnership with other company working on the same industry • Product price matched the community surrounding it • Change the status of the company to public limited to be able to sell shares and gain money from it
Threats • Low purchasing power of the community around it • Competitors are getting stronger with up-to-date products and fashion trend
Based on the extensive SWOT analysis of the company, we can see all four aspects of analysing the company. We can see that the company has a strong foundation in the textile industry. It is not a new company and it has all the capital asset needed to establish itself as a company in the industry. However, it is lacking in funds that is a result of the low marketing effort and the negative side effect of being a family business. In tackling this problem there are options that the company may consider. These options include, partnership and changing the status of the company into a public 7
limited company. These options however will distort the basis of the company as a family business. By using the options it will involve other people in the company besides the family.
5.2. 7Ps Analysis 7P Product
Current Situation
• Outdated Products • The custom order clothing
Suggested Action
• Refresh products and items
being sold in the store service is slow in production • Increase the standard for and produces medium quality control to assure quality products high quality products • It has a variety of products • Involve more machinery for for all ages larger output Price
• Relatively low prices for the • Maintain pricing but make low purchasing power of the sure it aligns with the community production cost • Outdated products • Degrading prices should still experience degrading prices be profitable
Place
Promotion
• Not strategic placement of
• Move the location of the
the store • The community that is surrounding the store has low purchasing power
store or add sign boards so that people are aware of the store • Move to a surrounding with much higher purchasing power • Increase above the line marketing
• Minimum effort for
• Increase allocated budget for
• • • •
marketing marketing Low allocated budget for • Increase above the line marketing marketing Unskilled employees in the • Change the status of the marketing department company into a public No above the line marketing limited company to be able Minimum below the line to gain money from selling marketing shares
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7P People
Current Situation
• Unskilled and untrained
Suggested Action
• Provide sufficient training
employees for the employees based on the department they’re • Each department has its own employees working on • The CEO is directly • Increase the standard for involved in the day to day employee who wants to activity of the store work • Change the mindset of the company in hiring employees from families, to qualified cnadidates Physical Evidence
• The company owns a headquarter and a store. • It has 40 employees • It has the tools and machinery to run the custom order clothing service
Process
• Renovate the store so that it has a much more appealing design that will attract customers
• Custom order clothing
• Involve more machinery in
service is done manually with the help of machinery and tools • Manual labor produces medium quality products
production to increase productivity as well as quality of the produced products. • Provide more training for manual labor to increase quality of the products
The 7Ps analysis provides and in-depth analysis of the seven important aspects of a company. Here i provide what the company is currently at regarding the seven aspects. Then i provide a relevant advice on improving each of the seven aspects. I used the 7Ps instead of the 4Ps because it analyses more aspects that is as important as the original four. The more aspect that is being analysed, the more information we can gather from the company, thus making our judgement on the company more accurate than just basing it on the 4Ps. Based on the 7Ps it seems that there are a lot of things that needs to be done to help improve the financial status of the company. In terms of its stores, the company should renovate its stores to have a much more appealing look to attract customers as well as refresh the items being sold in the store. For its custom order clothing service the company
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should involve more machinery in the making process to sustain high quality products and higher production output for maximum sales.
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6. Conclusions There are lots of factors that are causing the low sales of PT. Mitra Genesaret Texindo. Internal and external factors plays a huge role in the sales of the company. Though both plays a huge role we can clearly see that Internal factors plays the major role in the downfall of the company. Ironically, these internal factors can be controlled by the stakeholders in it, such as quality control standard, quality of the employees, and many others. These internal constraints can be tackled easily by the stakeholders if they were to put aside their ego and not letting personal relationship taking over professionalism. External factors such as the low purchasing power community that surrounds it may be a hard thing to control, but it should have been in consideration before opening a store in the particular area.
The decreasing sales of the company seems to be caused by the decisions made by the company itself. The way the company operates and how it hires its employees shows how careless decisions presents a lethal impact towards the company. The company should consider restructuring, reorganising, and rethink the way they operate, what the company stands for, and how they hire their employees. However, the company has all it needs to change its falling sales. They have the right capital and sufficient amount of employees that are in need of training. It needs the right decision to get back on its feet.
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7. Recommendations In order to tackle internal factors that are negatively causing sales of the company it is recommended that the company should:
• Refresh products or items being sold • New products follows the fashion trends of the society. With the most up to date products in the store it will attract attention of customers. With lots of customer it would increase sales. With out refreshing the items, the items on display will just get older and it would lose its value. Refreshing products should also follow the current fashion trend in the society.
• Provide training for employees • Employees are ones who run the company on a daily basis. Trained and skilled employees would know how to persuade customers to buy products, have high productivity, have high creativity, and will positively impact the sales through the department they’re assigned to.
• Change the status of the company to a public limited company • The company is in need of huge fund to be able to fix it self. Without funds, all of the solutions can’t be applied. Selling shares to the public is a great source of finance. Besides getting money from it, the liability of the company would be spread evenly through out the shareholders. These are the recommended action that are to be taken into consideration by the company to be able to tackle external factors that are negatively causing sales of the company:
• Create strategic partnership • If the company does not want to be a public limited company, a strategic partnership should be considered because of the mutual relationship. In a strategic
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partnership, both sides should benefit one another. Strategic partnership should also help funding problem.
• Increase above the line marketing • Since the community surrounding the store has low purchasing power, the company needs to push its above the line marketing to grow attention in the people about what the store offers. Above the line marketing would be seen clearly by the people.
• Store renovation and remodelling • An attractive store would attract people well. If the store does not produce a good first impression, no one would visit the store. First impression is very important in getting the attention of customers.
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8. Appendices 8.1. Appendix 1: Interview Questions 1.
What is your position in the company?
2.
Do you like you job?
3.
What is the main problem of the company?
4.
What causes the decreasing sales of PT. Mitra Genesaret Texindo?
5.
How does this decrease affect the productivity and the daily basis operation of the company?
6.
Does this decrease affect your personal income?
7.
What have been done in tackling this problem? How are the results?
8.
What are the strengths of the company?
9.
How are the losses of the company being covered?
10. How’s the reaction of the surroundings towards the presence of the store? 11. What do you like about the store? 12. What brings you to this store to shop? 13. How are the price and the quality of the items 14. Are the products up to date? 15. How likely are you going to return to this store?
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9. References Articles • ”Marketing Theories – The Marketing Mix – From 4 P's to 7 P's." • Professional Academy. N.p., n.d. Web. 12 Feb. 2015. • Marc. "7Ps of Marketing | Additional Elements of Marketing Mix." Entrepreneurial-insights. N.p., 12 Aug. 2014. Web. 13 Feb. 2015. • Hanlon, Annmarie. "How to Use the 7Ps of the Marketing Mix?" Smart Insights. N.p., 05 Mar. 2014. Web. 19 Feb. 2015.
Text • Hoang, Paul. Business & Management . Melton, Vic.: IBID, 2007. Print.
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