Table of Contents

1.0

2.0

3.0

4.0

5.0

Executive summary .................................................................................................... 03

1.1
Objective of the R&D team ............................................................................ 03
1.2
Function of members ...................................................................................... 04
1.3
Overall aims of prototype ............................................................................... 05
Market study ............................................................................................................... 06
2.1
Demographic Profile ...................................................................................... 06
2.2
Market Size and Trends .................................................................................. 06
2.3
Market Analysis ............................................................................................. 07
2.4
The Targeted Needs of Customers Addressed ............................................... 08
2.5
Value of the Product ....................................................................................... 09
2.6
Pricing Strategy .............................................................................................. 10
2.7
Promotion ....................................................................................................... 10
2.8
Distribution Strategy ...................................................................................... 12
Design plan ................................................................................................................. 13
3.1
Technical drawing of finish ............................................................................ 14
3.2
Bill of material and estimated cost of component .......................................... 16
3.3
Technical assembly instruction ...................................................................... 17
3.3.1 Mechanism Assembly Instruction ...................................................... 17
3.3.2 Laptop Bag Transform into Chair Step .............................................. 18
3.4
Prototype ........................................................................................................ 19
Finance ....................................................................................................................... 20
4.1
Breakeven quantity ........................................................................................ 28
4.2
NPV ............................................................................................................... 29
Packaging plan ........................................................................................................... 30
5.1
Requirements of Packaging ............................................................................ 30
5.1.1 Protection ........................................................................................... 30
5.1.2 Handle-ability...................................................................................... 30
5.1.3 Security ............................................................................................... 30
5.1.4 Environment Consideration ................................................................ 31
5.2
Problem Identification .................................................................................... 31
5.2.1 Compression ....................................................................................... 31
5.2.2 Abrasion ............................................................................................. 31
5.2.3 Shipment Handling ............................................................................. 31
5.2.4 Environmental Exposures .................................................................. 32
5.3
Protection Measures ....................................................................................... 32
5.3.1 Requirements of Protection ................................................................ 32
5.3.1.1
Outer Packaing ........................................................... 32
5.2.1.1.1
Corrugated Fiberboard Boxes ................................... 32
5.3.1.2
Inner Packaging .......................................................... 33
5.3.1.2.1
Bubble Wrap .............................................................. 33
5.3.1.3
Labeling and Marking ................................................ 33
5.3.1.4
Sealing ........................................................................ 33
1

6.0
7.0

5.3.1.5
Palletizing Cartons .................................................... 34
5.3.1.6
Products Monitoring ................................................. 34
Conclusion....35
Reference.................................................................................................................... 36
Appendix A ................................................................................................................ 37

1.0

Executive Summary

1.1

Objective of the R&D Team

The Objective of our R&D team is to build something by providing a convenient

lifestyle for human. The purpose of forming this team is to build something that we don't
have in currently and is cheap and functioning. We start up with a combination of laptop bag
and chair, this is our first product. We try to innovate and produce quality product to make
human life easier with the main focus of creating low cost product.
We innovate our product through research and development can give a company its
competitive advantage in the industry.

First-class intellectual: by virtue of the local intelligence, develop potential energy

exert wisdom. We broadened our perspective to create the functionality product.

First-class quality: Our R&D team always keeps track with the new technology of the
world, and keeps upgrading. We integrate manufacturing costs, processing
technology, product material, packing, shipping freight and users demand, in order to

provide the best quality of the product for customer.

First-class service: We do not only provide the world-class intelligent products, we
pay more attention to the effects of integration, providing perfect services for
customers, improving the innovation mechanism, creating the biggest value-added for
customers and expanding the sales company's profit.

1.2

Function of Members
3

Name
Na Chin Yeak
Jimmy Wong See Weoi
Huang Yuit Hwai
Chung Ren Fatt
Teoh Wei Sen

1.3

Function
Technical Drawing
Finance Planner
Packaging Planner
Product Designer
Marketing Planner , Product Presenter

Overall Aims of Prototype

Produce a laptop bag that can be transformed into a seat.

Solve problem of finding place to sit.
Enhance portability.
Produce low cost product

We believe that most of the people will face a problem which is finding a place to sit while
working on a laptop. Our objective is to design a product are able user have a seat anytime
and anywhere.
Our main target customers are students. Most of the students will face problems when finding
place to seat and using laptop, campus place for study and seat is limited, as picture below:

Because of this problem, we designed a product, which is the combination of laptop

bag and chair. We call this product "THE BACH" (Bag + Chair). This product is foldable,
laptop bag transformed into a seat, easy to carry and low cost. The most important is to solve
the problem finding a place to sit.

2.0

Market Study

2.1

Demographic Profile

All of the founders are from Melaka, therefore it is only natural to study on the state of
Melaka. Melaka, with a total population of 788,706 by 2010, consist of an area of 1,664km2.

As in 2013, Malaysia has 414 Private Colleges, 37 private universities, 20 private universitycolleges, 7 foreign branch campus and 20 public universities.
Two of the most famous universities are University Teknikal Malaysia (UTeM) located in
Durian Tunggal Malacca, and Multimedia University (MMU). Multimedia University
(MMU) Melaka would be a great place to start this business. According to our survey, many
respondents consist of MMU students and lecturers.
2.2

Market Size and Trends

MMU students population at 31 December 2013 is shown below:

Campus

Total Student

Melaka
Cyberjaya
Other Branch
Total

10164
7598
256
18018

Initially, we would like to target MMU students. At the later stage, we would like to expand
the business to more than MMU, for example University Teknikal Malaysia Melaka (UTeM)
or even universities and colleges all over Malaysia. Currently there are 1,134,134 students
enrolled in Malaysian higher education institutions with almost 100,000 of them are
international students. Since our sales will be made online, the total potential buyers can be
expanded, and expand to other countries.

2.3

Survey Analysis

Before we start to produce the product, we have done the survey about the product need in
the market. Total we have 40 respondents. From the survey we gathered the result and
summary as below and the survey data is attach on the appendix A.
The result of survey show that 65% of the respondents is on age range between 18 and
22; 33% is on age range between 23 and 26; and only 1 of the respondents is above 26 years
old. 40 respondents, 50% is male and 50% is female. 80% of the respondents is having their
own laptop bag.
6

From the result, we found that 23 of the respondents are agreeing that finding a place
to sit while working on a laptop is a huge problem whereas 7 respondents strongly agree.
Thats a total of 30 respondents out of 40, which is 75%. We introduced our product that is
combination of the laptop bag and chair to respondents, 25 of respondents agreed that the
product will save thier trouble and 4 respondents strongly agrees while 11 respondents are not
sure about that. In sum, we obtained 29 positive answers out of 40 respondents.
About the problem related to convinience, we asked them how well would the word
convinient describes the product. We got 12 respondents who answered moderately well;
18 respondents answer very well and 6 respondents answer that it was extremely well.
When it comes to the term innovative, 12 of 40 respondents feel the word described the
product moderately well, 20 respondents felt it was very innovative and 8 of respondents is
felt it was extremely innovative. In the last question, 75% of the 40 respondents fell that the
product will be widely used within next 5 years. We are successful on this stage, we saw our
product market as the results was promising.

2.4

The targeted needs of customers addressed

The first targeted customers are students.

i) Affordable price:
Most students doesnt have income, therefore they need to make best decisions when it comes
to money management. The price of a laptop bag is not cheap these days, the same goes to
the price of a comfortable chair. Therefore, this product can ease their burden by providing
these two functions on a single item at an affordable price.
7

ii) Need to save space:

Chair and bags do occupy space. This product could save lots of space since it is combined
into a single item.
iii) Durable product:
when it comes to seating, customer opt for a durable and sturdy one. It also should be safe
and stable. Our product contains these values as the materials used are strong and good in
quality.
iv) Entertainment anywhere:
Often we require a place to just relax and just look for entertainment with our laptops, from
sitting comfortably and enjoy a movie, or just to browse the internet at specific areas with hot
spot. A good example is we could deploy our product anywhere on the beachside.
v) A seat for working anywhere:
Students are given assignments all the time, finding an area during assignment submission
week is difficult as the seats at public facilities are always occupied. The same scenario goes
to meetings or even group work. Thus, our product could prove to be useful at these times.
In addition, this product can be applied at for employees at work also. For instant, engineers,
architect or technicians could work on their computers with the convenience of sitting
anywhere as the working cites requires long hours of work.

2.5

Value of the product

i) Convenience:
The highest selling point of our product. Customers need a place to sit down and use their
own laptop whenever they need and wherever they want. Often we find that public meeting
areas are occupied or unavailable. With this product, we dont have to look for a place to seat.
We could sit anywhere, for example a confortable indoor area or even outdoors with a
conducive environment for work.

ii) Space saving:

With this product, we could save space by combining a chair and a bag. For instance, after
taking out the laptop from a normal laptop bag, we must figure out where to put the bag so
that it will not block the pathway and trip passers or cause obstructions to everyone. With our
product, we would never have the problem to keep the bag right after we took out the laptop
bag. Besides, we can cut down the cost of buying a separate chair to use our laptops.
iii) Time saving:
We would never need to waste time finding a place to sit and use our laptops anymore. Often
during the beginning of group meetings for students, we need to find a place with an empty
seat to proceed with our meetings. With this product, we could save a lot of time by just
deciding on our venue of choice anywhere. Moreover, setting up the seat only requires less
than a minute. Finding a seat near a plug for the laptop will never be this simple.
iv) Comfort:
Not only it serves as a bag, it also provides a place to seat. The material used is soft and
comfortable to sit on. Thus, this product allows us to rest anywhere and use our laptops at the
same time.
v) Value:
The simple and straight forward but yet useful design is good in value too. Our product will
be cheaper than the separate cost of a chair and a laptop bag as we simply reuse the same
object to serve as another purpose. In other words, the total material used for a separate chair
and a laptop bag will be more than our combined product, thus, our product will greatly cut
off cost.
vi) Warranty:
Warranty is provided to maintain the satisfaction of customers. It will gain confidence of
customers to buy our product.

2.6

Pricing Strategy

Pricing is the process of determining what a company will receive in exchange for its
products. Pricing factors are manufacturing cost, market place, competition, market
condition, quality of product. Due to this definition, we have undergone a detailed price
analysis from our competitors. A normal laptop bag on market is around RM 120 to RM 400,
but in order to build our reputation in this early stage, we set the product selling price at RM
110.00, the strong partnership with suppliers is important, so we are able to sell good quality
product at reasonable price because our main target is students, they are no much of money to
spend on laptop bag.
2.7

Promotion

Introductory price Initially, price of the product must be set lower to pique the interest of
customers. After a month, this offer will be revoked.
Sales Promotions Promotions should be offered from time to time, for example, Christmas,
New Year or even PC fair sales. By making these promotions
Social networking sites Social networking sites are one of the easiest way to spread
information worldwide. Information can be viral in just an instant. Therefore, using this
medium would assist in exposing our product through the internet. Facebook is a very
popular social networking website with over 1.3 billion active users as of June 2014 therefore
promoting our product in Facebook will be great. Youtube is also a good place to invest on
promoting our product. Advertisements at the beginning of each video are often hard to skip,
so Youtube viewers can look through our product and might be interested in it.
Magazine Magazine would be a good medium to promote our product as it is a picture rich
medium. Viewers can have a good insight on the product and all information is provided in
the magazine. Magazines such as PCMAG, PC Mania and CHIP Magazine are good
platforms to promote our product. We might even attach coupons that viewers can cut out to
be used when buying our product.
Newspaper It is a good move to advertise our product on the newspaper. The literacy rate of
Malaysia is 83.5% with a number of 31 daily newspapers. The total circulation is 17,000. The
Star is a good selling newspaper in Malaysia with an average circulation of 290,000 to

10

300,000 according to Audit Bureau of Circulations, Malaysia (July 2013 Dec13). We can
advertise our product under the Tech or Lifestyle section. Another good newspaper is the
New Straits Times with a circulation of 200,000.

Figure 1: Advertisement Poster

2.8

Distribution Strategy

Online website - We will first create an online website and then advertise our website. All
information such as product detail, contact info, customer service, and promotions can be
found in the website.
Our distribution channel will be the direct distribution that involves distributing direct from a
manufacturer to the consumers, for example Dell Computers providing directly to its target
customers. The advantage of direct distribution is that it gives the manufacturer a complete
control over our product

11

Manufactu
rer

Consumer

Express couriers Skynet, DHL, Poslaju, GDExpress can be considered as our courier
service. Either one is great to deliver in-country deliveries.

3.0 Design Plan

The DESIGN cycle of our product includes:

12

Product
specification

Design
reviews

Design
verification

Design
planning

Design
execution

Product
validation

Documentat
ion

Product
developmen
t

Design Planning: A highly refined plan including schedule, with tasks and durations,
necessary resources & estimated costs for the product design work will be developed to
guide our products design.
Design Documentation: The necessary documentation is developed including
comprehensive information defining the process to build product.
Product Development: Models will be created to define product specifications. We will
perform the necessary analysis to determine performance expectations for our product.
Design Execution: Our product is then built using the design documentation that will be
used for design verification.
Design Reviews: Reviews to evaluate current design information against product
specification to determine if progress on work will meet desired requirements. The R&D
team will constantly seeking for improvement.
Design Verification: Testing to verify product design is conducted to determine alignment
with product specifications. Design changes will be incorporated to continually improve
the product.
Product Validation: Utilizing independent testing to determine if the product will meet the
market needs. Results of validation can be input for both changes to the product
specification and the product design.

13

3.1

Technical Drawing of Finish Product

Figure 7: Overview of Product

Figure 8: Overview of Product

14

Figure 9: Front, Top and Side view of Product

Figure 10: Diamension fo Product

15

3.2
No

Bill of Material and Estimated Cost of Components

Part

Material

Quantity need
per Product
1

Cost per
Item
RM32.00

Total Cost
RM32.00

Aluminium

RM5.00

RM5.00

Aluminium

RM5.00

RM5.00

Plastic

RM2.50

RM5.00

Plastic

RM2.00

RM2.00

Alumium

RM1.00

RM2.00

Stainless
Steel

RM0.50

RM2.00

Total

RM53.00

Raw Material Cost = RM 53.00

Assembly Cost per item = RM 2.00

16

3.3

Technical Assembly Instruction

3.3.1

Mechanism Assembly Instruction

17

3.3.2

Laptop Bag Transform into Chair Step

Step 1:

Step 2:

Step 3:

Step 4:

Step 5:

18

3.4

Prototype

19

4.0 Finance Plan

20

21

22

23

24

25

According to our expected financial forecast, we assume that our product and sales will reach
RM374,000. Our sales might not be so good because our products still in introductory, we
had to penetrate the market first. We assume that we make loss in the first year and expect our
sales will increase in next year. In the second year, we assume our sales up to RM660,000
and third year is RM924,000.

26

Fixed cost of every month is RM15,490. Fixed cost included administration cost, marketing
cost and operation cost. However there is a variable cost which we put it under operation cost
because this cost is the courier expenses for our entire product.
According to the break-even analysis, we able to earn profit after 282 units sales.

27

4.1

Breakeven Point

28

29

4.2

NPV

NPV =

CF 1

CF 2
CF 3
$ 152,846.57 $ 441,567.15 $ 885,087.72
+
+
ICO =
+
+
$ 140,000=$ 954,484.49
1
2
3
(1+ k ) (1+k ) (1+ k )
(1+ 0.13)1
(1+0.13)2
(1+0.13)3

30

5.0 Packaging Plan

Product packaging must be accompanied with prominent and appealing design in order to
attract consumers attention, and serve as an efficient and functional shipping container.
Products can be physical or non-physical; most of the physical products require packaging
and this involves a series of wrapping and designing box actions to place the products into a
safe room. Therefore, it provides protection and acts as a temporary store before the
products are delivered to the consumers.
Packaging is a critical issue in overall performance and cost reduction. There are two main
purposes of packaging; the first purpose involves logistics as the packaging should protect
products in transit. Therefore, it will reduce the occurrence of damage or loss due to
misplaced goods. The second purpose is marketing strategic which is related to customer
service and sales promotion.
5.1

Requirements of Packaging

5.1.1

Protection

The products should be protected from different external impacts such as mechanical shock,
compression, dirt, etc. where these can be done by the use of various methods like
polystyrene chips, plastic-wrap, bubble-wrap, etc. The protection method is varied from
different types of product; therefore, an adequate protection of product should be concerned
in term of types of material, design and robustness.
5.1.2

Handle-ability

Regattieri et al. had conducted a study state that the perception of packaging by end
consumers stated that the main requirement a package should guarantee is that of
handleability. Hence, the packaging design should follow the ergonomic principle. In other
words, it must comply with human behavior and physique when using the product.
5.1.3

Security

The packages must be secure while shipping to minimize theft and time spent on the product
traceability. Therefore, it is necessary to include identification technologies such as barcode
or RFID tags.
31

5.1.4

Environment Consideration

The packaging design should take environmental issue into consideration to minimize waste
materials which will cause impact to the environment. Hence, it is necessary to produce
package that comply with three Rs concept: reuse, reduce and recycle. This is not only
reduces the environmental pollution level but increase customer satisfaction due to its three
Rs characteristics.
5.2

Problem Identification

5.2.1

Compression

When external forces resulted from vibration between packages or transport, stacking of
packages, shock from emergency brake, etc. which will cause compression, it will damage
the packages or products.
5.2.2

Abrasion

It is caused by the contact between packages during transportation. For instance, the improper
packaging that does not fix the product into a rigid package and induce movement of product
inside the package, therefore, causes the damage to the product.
5.2.3

Shipment Handling

Improper handling will increase the risk of product damage due to road conditions and
mechanical handling. In addition, during the handling shock and vibration will form. Hence,
products will absorb these external impacts and causes damage.

32

5.2.4

Environmental Exposures

It can be categorized into three main exposures:

Temperature
Temperature may be varied from one place to another or one country to another. Extreme
temperature changes will affect the performance of packaging materials since its

characteristics either in physical or chemical might change.

Humidity
Level of humidity will cause the products or packaging materials facing condensation,
corrosion or mustiness problem. For instance, high humidity environment will reduce the

rigidness and compression resistance of paper-based products.

Others
Dust and odors will affect the consumer satisfactory level.

5.3

Protection Measures

By comply with National Motor Freight Classification (NMFC) in which minimum

packaging requirements should be achieved to ensure the products are protected during
transit. Therefore, it is important to evaluate the transportation characteristics in term of
liability, handling, density and stow-ability.
5.3.1

Requirements of Protection

5.3.1.1

Outer Packaging

5.3.1.1.1

Corrugated Fiberboard Boxes

It is paper based material that comprised of a fluted corrugated sheet and linerboards which
act as cushion for the products to reduce shocks, vibrations, etc. therefore, it is used to pack
the products (in this case bag with chair) for storing, distribution and retailing. It is selected
as outer packaging due to its characteristics:

light weight
low price
come in various size
recyclable

The materials used for corrugated fiberboard boxes must not susceptible to any impacts and
hence, it is necessary to perform four-foot drop test so the metal bar of the bag will not
33

damage. This is to ensures that the products will be able to withstand any impacts during
shipping.
5.3.1.2

Inner Packaging

5.3.1.2.1

Bubble Wrap

It is made of low density polyethylene with a number of spaced protruding air-filled bubbles
to provide cushioning function. Our products contain metal bars which might damage during
transit, hence, with the use of bubble wrap, it can reduce and prevent shocks and scratch
during shipment.
5.3.1.3

Labelling and Marking

All the products must be labelled and marked including barcode, tags, ID of each product,
name and address of shipper and consignee with proper ZIP code. With these labeling and
marking, the items can be traced if there is any incident happen such as theft, item lost, item
damage, etc.
In addition, the packages should include handling and precautionary markings. This
can be done by pasting text and pictorial markings on the packages to ensure the shippers are
able to notice them while loading, unloading or delivering with special care.
5.3.1.4

Sealing

Sealing ensures the packages remain intact and the products are secure inside it. The sealing
tape must be pressure sensitive to seal the package and cannot be replaced by common tapes
such as cellophane, duct tape, etc.

5.3.1.5

Palletizing Cartons

34

When the products are packaged completely it is then enter into palletizing stage from storage
stage to distribution stage. Palletizing stage must consider the total weight of packages and
size of distribution from one place to another place. Column stack is a common method to
palletize packages because it can reduce the cartons top-to-bottom compression.
During storage stage, it is important to estimate the optimum storage period as long
term storage will degrade the corrugated or other paper-based boxes or products. Therefore,
the palletizing cartons will lose its strength in holding it and damage the packages. In
addition, the storage location must avoid from high humidity environment. When a humidity
level is increased until a certain percentage, it will reduce the packages resistance.
5.3.1.6

Products Monitoring

Three terms to be concerned during monitoring stage:

Order lead time: prevent longer lead time

Tracking orders: prevent item lost and if the lead time is behind the expected lead time

then order can be tracked by referring the product ID.

Stock movements: product receipt inspection, stock control in storage location and
product releasing from storage and dispatch.

In summary, packaging plan should consider all expected and unexpected variables. It is not
only about the appearance of the packages but problem identifications are crucial to prevent
any losses during packaging since the issues are listed. Hence, protection measures are able to
apply to all packages to handle the problems.

35

6.0

Conclusion

To create a business plan, we first identified the problems and frustration faced by the people
around us. Using our engineering course knowledge and some knowledge about
contemporary business and management, we came out with a new product that solves the
problems. Thus, the business plan was created.
In market study, we discovered the needs and wants of potential buyers and customers and
provided goods and services. We defined the target market, which are students. We studied
about the external environment and focused on the marketing mixes which are product, price,
promotion and distribution strategy.
For the design plan, we incorporated some engineering knowledge that we learnt. Using 3D
modelling, we could present the product in a more sophisticated way. Designing the
prototype also requires some understanding about forces and properties of materials. A good
design plan will ensure the functionality and stability of the product.
As for the financial planning, we analysed the value, cost and stock in the short term and also
the long term. We prepared financial forecast, breakeven point, and net present value (NPV)
in the financial planning. According to the break-even analysis, we able to earn profit after
282 units sales.
There are two main purposes of packaging; the first purpose involves logistics as the
packaging should protect products in transit. Therefore, it will reduce the occurrence of
damage or loss due to misplaced goods. The second purpose is marketing strategic which is
related to customer service and sales promotion.
To sum it all, in creating a business, we should identify the reasons for starting the business,
analyse the market, plan properly in advance, evaluate our results. Therefore each team
members should play their role to constantly maintaining and improving the business.

36

7.0

Reference

Universities in Malaysia. (n.d.). Retrieved from

http://www.etawau.com/edu/IndexUniversity.htm
Smallbusiness.wa.gov.au. (n.d.). Retrieved from
http://www.smallbusiness.wa.gov.au/marketing-place-distribution-strategy/
Company Info | Facebook Newsroom. (n.d.). Retrieved from
http://newsroom.fb.com/company-info/4.
Press Reference. (n.d.). Retrieved January 15, 2015, from
http://www.pressreference.com/Ky-Ma/Malaysia.html
Create your marketing strategy. (n.d.). Retrieved from
http://www.infoentrepreneurs.org/en/guides/create-your-marketing-strategy/
Packaging and Shipping Business Plan. (n.d.). Retrieved from
http://www.bplans.com/packaging_and_shipping_business_plan/executive_summary_
fc.php

37

Appendix A

38

39

40

41