MARKETING PLAN

Coordinator
  
1
This page intentionally kept blank

2
 Acknowledgement

Carrying out this assignment was a great opportunity to apply our academic knowledge
on real life scenarios. Therefore, it is a pleasant task to acknowledge everyone who gave
their corporation to make this report a success.

It is a matter of utmost pleasure for me to extend our gratitude and give due credit to our
lecturer for all the knowledge and guidance given to us. Last but not least, we are forever
grateful and would like to extend our heartfelt thanks to our parents for being with us
through this entire work and helping us in every possible way.

3
 Table of Contents

Internal Audit..........................................................................................................6

Analysis of the company..................................................................................................6

Analysis of the product....................................................................................................7
International Country Selection...............................................................................8

Rationale for the selection................................................................................................8

External Audit..................................................................................................................8
SWOT Analysis....................................................................................................11

Strengths.........................................................................................................................11
Weaknesses....................................................................................................................11
Opportunities..................................................................................................................12
Threats............................................................................................................................12
The Marketing Plan...............................................................................................13

SMART Objectives........................................................................................................13
Marketing Strategies......................................................................................................14
Entry Mode Strategy......................................................................................................16
Marketing Mix (4Ps)......................................................................................................17
Conclusions...........................................................................................................22

References.............................................................................................................24

Table of Tables

Table 1: Weightage of Different Market Segments...........................................................15

Table of Figures

4
Figure 1: Product Stages..................................................................................................17

Executive Summary

Mackson Tiles Lanka (Pvt) Ltd is a leading tile manufacturer of wide range of floor tiles
for both household and commercial purposes, is a subsidiary of Mackson Holdings.
Mackson Holdings started as a trading venture in hardware and after progressed to the
paint industry. It now manufactures and delivers a wide range of tiles in different designs
and colors. They cater to requirements of established business organizations, small
businesses and also individual customers. They empower the industry through their novel
designs and innovations.

The operations are carried out by over 350 employees. The job training given, and the
experience of these employees ensure the quality of the products that they manufacture.
The company also invest in skills development programs to enable its employees to
widen their boundaries to ensure that all their functions are done efficiently and
effectively. Therefore, they improve career development within the company. The
performance of employees is monitored and controlled throughout the year. The highly
experienced and qualified staff of the company ensures that customer needs are addressed
in the most efficient way to improve quality and innovative features of their production.

Since they have established their business within the country, now they are considering
expanding their business activities globally in a country where they will have the
competitive advantage. Due to the fact that the company has experienced in the industry
for over years, has skilled employees, has industry specialists and research personnel with
more experience, they will definitely be able to achieve the competitive advantage and
economies of scale. The country they would wish to operate, their product and marketing
plans will be explained in the following sections.

5
 Internal Audit

Mack Tiles is a large-scale floor tile manufacturer in Sri Lanka. Up until 2014, the 50%
of the demand made locally was imported from other countries. But with the launch of
Macktiles, to save the outflow of foreign exchange of our country, they decided to focus
more on manufacturing the local demand within the boundaries of Sri Lanka.

Analysis of the company

Mackson Holdings which is the holding company of Macktiles has a proud history of
more than four decades. The company started as a trading venture in hardware items,
then they moved to the painting industry. After that they deal with general hardware,
paints, plastics, packing materials and gift-ware. Earlier for the local floor time demand,
they imported about 50% requirement. But do to the sufficiency and quality of raw
materials available in Sri Lanka, they decided to manufacture the whole local demand
locally. Since the materials available in Sri Lanka is of the best quality, the tiles
manufactured by the company is up to the world standard, and therefore comparable to
countries like Italy and Japan. They utilize the best quality machinery and technology
directly sourced from Italy in their operations. Their factory is located in Bandaragama
with several showrooms located island wide. They provide wide range of floor tiles for
commercial and household purpose locally.

The vision of the company is stated as follows.

“To be the most sought-after floor tile provider in the region backed by a motivated,
skilled, and customer – centric team of professionals.”

According to the vision, it suggests that the long-term goal of the organization is to be the
best floor tile manufacturer among other countries.

The mission of the company;

6
“To enhance our customers’ construction efficiency and effectiveness by applying
leading edge, engineering and design solutions with a holistic approach based on service
levels unprecedented by our competitors.”

Therefore, as explained by the vision and mission statement of the company, it is

dedicated to manufacturing best quality floor tile to cater the demands of customers in the
most efficient and effective manner. Since they have already achieved this locally, they
have the competitive edge and also the benefit, if they enter to international markets. The
country that they would select and the rational for their selection will be explained in the
latter sections.

Analysis of the product

The wide range floor tiles that they manufacture include Agasthi rocks, Athena,
Cemento, Dune, Hurricane, Marble, Mineral rocks, Platinum, Coral rock, Floral, Calido
pave, Light sand, Macula rock, Lavanews, Neo wood and many more. Their endeavor is
to cater to customer demands by providing high quality products in order to delight the
customers.

The tile sector in Sri Lanka shows signs of an oligopolistic market in a highly
competitive industry. The key oligopolists are Macktiles, Royal Ceramics, Lanka Tiles
and Lanka Walltile. In the floor tile sector, Macktiles dominates the local market with
about 35% market share. Annual profitability amounts for about Rs. 850 million a year.
Their specialized team, research personnel and high-quality machinery that they utilize
ensure that they operate at the lowest possible cost in the market and achieve competitive
advantage over their rivals.

7
 International Country Selection

Rationale for the selection

The global ceramic market is expected to grow during the coming years. The major cause
for the growth in this market is the growth in new construction and renovation activities.
The increasing demand for aesthetic features, durable, scratch resistant, easy to maintain
tiles is also another cause for this growth in the industry. Due to the fact that there is a
growth end – use industries and as well as changing lifestyle, it is expected that the
company will be benefitted by moving to Chinese market where there is large
construction industry. Also, the increasing urbanization of China will justify the
company’s selection of that market to enter into. Due to the higher investment in the real
estate industry the demand for floor tiles has shown a gradual increase. In China, floor
tiles are delivered in showrooms same as here in Sri Lanka. There are major
manufacturers of floor tiles in the Chinese market, however the growth in real estate
businesses and construction industry in China, and it has limited these firm’s capacity to
cater to the growing demand of the companies all over the country. Foshan Hanse
Industrial Co. Ltd, China Ceramics Co. Ltd, Shanghai Cimic Tiles Co. Ltd are the main
rival firms in the Chinese industry. Despite the fact that these company’s employee high-
tech machineries and skilled employees in their production, Macktiles still has the
competitive edge, because they have the similar capacity here in Sri Lanka.

8
External Audit
Macro Environmental Analysis
The macro environment consists of factors that have an immediate in effect on the
organization’s operations and these are outside the control of the organization. Some of
these factors can be explained as follows.

Political/Legal Environment

 After the election of the new government there are new reforms in the business
sector with the purpose of promoting international businesses. Therefore, the
company’s decision to establish their operations in a foreign country will
definitely have the influence from these political reforms.
 Also, the change in tax system encourages business firms to invest more.
Therefore, they will have the opportunity to invest in a foreign market.

Demographic Environment

 The growing population in China increases the demand for real estate
constructions. Due to that there is an indirect demand for floor tiles which cannot
be sufficiently addressed by the local business organizations in China.

Economic Environment

 The growing investment of Chinese companies in the construction industries,

increase the demand for floor tiles.
 The increase in the purchasing power / income of the Chinese population also
increase the demand for household constructions. It caused an increased demand
for floor tile industry.

These factors which is beyond the control of the organization has influenced the demand
for their products.

9
The Market
As explained earlier, there is a growth in the investments in construction industry. The
floor tile market is segmented by product, by application, by end – user, and by
construction. This market is expected to grow up by 7% by 2024, due to the growth in the
medical, housing and construction industries. The number of construction projects has
increased, owing to the increased demand for residential infrastructure and residential
buildings. China’s market for floor tiles is very large. The rapid increase of immigrants to
different urban centers of the Asia – Pacific region has driven the demand for residential
construction, and so the demand for ceramic tiles as well. These trends have given the
opportunity for Macktiles to enter into the Chinese market.

China is one the fastest growing countries in terms of consumption of ceramic tiles. The
customers use home decoration tiles for living room, kitchen, bathroom walls and other
spaces. Therefore, these customers have conspicuous consumption attributes. Customers
also focus on external factors such as brand image and appearance.

Competition
In terms of market share, some major players which dominate the Chinese ceramic tiles
market are Foshan Hanse Industrial Co. Ltd, China Ceramics Co. Ltd, Foshan Wondrous
Building Materials Co. Ltd, Shanghai Cimic Tiles Co. Ltd, and Guangdong Sanfi
Ceramics Group Co. Ltd. These companies utilize high - tech machineries in their
operations and therefore they are operating efficiently. However, with technological
advancement and product innovation, mid – size to smaller companies are increasing
their market presence by penetrating to new markets. The new consumption trends in the
market have greatly enhanced the competitive barriers in product development, terminal
image, user services, and supply chain capabilities.

10
 SWOT Analysis

The Macktiles will have the competitive edge in the foreign market to which they will
penetrate to. Some of their strengths and weaknesses with compared to primary
competition can be identified as follows. Also, the opportunities and threats that they will
face in penetrating to a new foreign market can be explained as follows.

Strengths
 The technical knowledge possessed by all employees. The employees being
provided with job training and skills development programs to facilitate and
promote career development of the employees. These highly skilled employees
improve the efficiency and productivity of operations of the company.
 The company have a team of industry specialists and research personnel who have
more than 15 years of experience in the industry. These resource personnel ensure
that the products are up to the technical standards, and also, they facilitate the
company in identifying new market trends.
 Due to the experience in the industry for years, technology utilized, and
productive employees, the company operates at a lower cost. Therefore, they have
a cost advantage over its rival firms in the market.
 They also operate in an environmentally friendly manner and provide best quality
products that exceed the expectations of the customers.

Weaknesses
 The technology they operate is highly costly to maintain. Therefore, they have to
consider that fact in considering entering into foreign markets because they will
have to incur a substantial investment.

11
Opportunities
 The change in trend of tiles consumption globally. This has created the demand
for
 Increased population creating demand for new constructions leading for the
demand for floor tiles.
 Development of industries globally also increase the demand for floor tiles.

Threats
 The existence of major competitors in both local market as well as the foreign
market. This will increase the competitive pressure of the company.

12
 The Marketing Plan

SMART Objectives
What Macktiles will aim to achieve through its marketing practices can be summarized as
follows. We can classify these objectives as financial and marketing objectives

Increase of Sales

One of the goals of penetrating to Chinese market through their products is driving their
business and increase their sales. To increase their sales, they will have to come up with
innovative designs and features. The changes in price will not be that sensitive strategy
because the income level of Chinese companies and individuals are high. However, if
they want to penetrate to the market and challenge the existing competitors, they will
have to lower the prices and keep the quality unchanged. The lowering of prices and
aesthetic and novel designs will ensure that the company will be able to increase their
sales internationally.

Increase of Profits

Another financial objective that they will consider when entering the international market
is to increase their profitability. Since they already enjoy production efficiency, and
therefore lower costs they have the profitability. When entering the global market,
maintaining product differentiation in different markets will ensure that they will have
increased demand as well as the expected profitability.

Creating Product Awareness

The main aim of any marketing campaign is to create awareness about the product among
the target market. To build customer awareness, the company can create a website for the
company, they can do this with the cooperation of industry in the Chinese economy.

Enhance Customer Loyalty

Through marketing efforts, the company should aim to attract more customer attention
and maintain good customer relationship. They can customize their products according to

13
the requirements of the customers. For this, they can make in their website the option for
the customer to customize the products.

Marketing Strategies
Segmentation
In the local market, their target market is both individual and commercial customers. But
now their segment has been extended to the Chinese market as well, to serve international
customers with variety of needs.

Within the Chinese market they can consider the following criterion in segmenting their
products.

End – user –

For tile industry end – users include both residential as well as commercial customers.
Since there is an expected-up rise in both residential and commercial constructions and as
well as renovations, we can expect an increased demand for floor tiles as well. For these
two categories, demand will be different. These household customers will demand
elegant designs at affordable prices, while the commercial customers will demand
durable products. However, the expected development in the construction industry
especially the business sector is expected to be high, therefore the company should pay
more attention on commercial customers.

Construction Type-

The construction type can be categorized as new constructions and replacement and
renovations. For new constructions they will concern more on the aesthetic designs,
durability. And for replacements and renovations, their major concern will be on price.
However, there will be an expected demand increase for new constructions rather than
replacements and renovations to existing buildings. Therefore, the company when
entering to the Chinese market should more focus on new constructions.

14
Application-

The Chinese tile market can be divided by application into three categories as floor tiles,
wall tiles and other types of tiles. The company is specialized in producing variety of
floor tiles. Anyhow they also engage in producing other tiles as well to address the
demand of all their customers. In the international market they expect to enter into, they
have to differentiate their products as that. For the customers, they have to give the option
to customize their products according to their requirements.

Targeting
Among all the segmentations that the company has identified, they have to consider the
importance of each segment and select the target market that they have to enter.

Construction Type End – user Weightage

Commercial (70%) 56%

New Constructions (80%)
Residential (30%) 24%

Commercial (60%) 12%

Replacements and renovations
(20%)
Residential (40%) 8%
Table 1: Weightage of Different Market Segments

The segment by application is not considered in deciding the target market because
despite of the type of the construction and the type of the end user, there is demand for
floor tiles, wall tiles and as well as other type of tiles as well.

After the careful review of the market, we have given weightage to each segment and
identified for which segment the highest attention should be given. As given in the table,
commercial new constructions will be a good segment to cater. Because these
construction companies are highly profitable industry in the Chinese market. Therefore,
the company will be able to charge a premium price from these business customers. The
company can also concern on the residential new constructions segment, after their
capacity to cater to the industrial customers has been fully utilized.

15
Positioning
In positioning we mainly focus on placing a good image about the company’s product in
consumer’s mind.

Macktiles is a floor tile company which cater to different needs of local customers at the
present. They are considering entering into the international market to expand their
business activities. The company’s employee team understands that customers are at the
forefront of their company. This understanding makes it easier for the company to
manufacture exceptional quality and innovative tiles that satisfy the needs of their
customers. They provide the option to their customers to customize their products.

And also, they will gain competitive advantage by ensuring high quality standards. And
they will charge medium price range from the customers, because they have to position
their products in the international market better than their competitors.

They will face competition of rival firms in the Chinese market. And also, there will be
the threat of penetrating to international market by local well-established firms such as
Lanka Tiles, Walltiles.

Therefore, the company have to position their product in the international market as a
high quality, medium price product.

Entry Mode Strategy

One way to enter a new market is through a strategic alliance with a local partner. A
strategic alliance involves a contractual agreement between two or more enterprises
stipulating that the involved parties will cooperate in a certain way for a certain time to
achieve a common purpose.

To meet the rapidly growing demand for floor and wall tiles in the Chinese market, the
company can enter into strategic partnership with a Chinese raw material supplier. It will
make sure that the company will have the competitive advantage, because they will have
the opportunity to obtain high quality raw materials at the lowest possible cost. Because
transporting raw materials from Sri Lanka to China will be costly. The strategic

16
partnership will make sure the company will operate at the lowest possible cost in the
Chinese market.

This successful venture will ensure that the company will be able to meet the escalating
market demand. The company will also be able to obtain Chinese quality standards to
ensure that sales will increase.

The key objective of the new venture between Macktiles and the raw material supplier is
to bridge the gap between the supply of good quality raw materials and the demand for
high quality floor and wall tiles in the Chinese market. It also ensures that Macktiles
meets the rapidly growing market demand.

Marketing Mix (4Ps)

Product
Market offering is anything that can be offered to a market for attention, acquisition, use
or consumption that might satisfy a want or need. This can be divided into two; products
or services. With the competition that marketers face, most of them are moving to a new
level in creating value for their customer. To differentiate their market offer, beyond
simply making products they are creating and managing customer experiences.

Likewise, in the case of “Macktiles”, they do not simply try to just make their products
and sell it to customers. They have differentiated their product by using high quality raw
materials, well capable team of employees and experienced research personnel.

As given in the diagram the product can be

divided into variety of stages. The product which
is offered by Macktiles belongs to the stage of
“augmented product”. Because the product that
is produced with customer specification satisfy
the customers beyond their requirements.

Figure 1: Product Stages

17
Product Attributes

1. Product Quality

The product is well matched to fulfill both stated and implied needs. By considering the
nature of the product, customers may consider durability as a special aspect of quality.
The high-quality raw materials that they used, and the production process being assured
by local standards ensure that the company will be able to assure the durability criterion
expected by both local and foreign customers. Further, the company will also obtain
international standards as well.

2. Packaging

Packaging is an essential component in the product. Customers pay special attention to

product packaging when making a product decision. Developing new designs in a foreign
market will have cost implications. Therefore, when making decisions about packaging
they have to consider about cost implications as well.

3. Product Features

The important attribute that customer consider in purchasing a product is its features. In
the tile industry, customers concentrate specially on aesthetic designs. Therefore, the
company should make sure that they will be able to provide customized products that
match with the customer requirements, while concentrating on the costs as well.

Product Branding

To be an acceptable brand, there should be following features.

 Relates to the benefits and qualities

The brand “Macktiles” tells about the product. It therefore is a good brand.
However, since they are entering to a new foreign market, they may have to
consider on changing their brand name.

 Easy to pronounce and remember

18
 With pronunciation is different. Also, they use their mother tongue more
frequently. Therefore, it will be important for the company Macktiles to come up
with a new brand name that will be suitable for Chinese culture as well.

 Distinctive and unique

The brand name should also be unique from the brand names that are established
in the market.

Price
Price is the only revenue generating variable in the marketing mix. Since it directly
affects the demand and the image of the market offering a much attention should be
placed on the pricing strategy.

“Macktiles” can use a value-based strategy when penetrating to the Chinese tile industry.
They have to set prices based on the benefits that they provide to customers not based on
the cost of the products. First, they have to identify the customer perception about their
products, by conducting market research. Then based on the expected value of the
product, they set prices to match customer perceived value. The company also customize
the product to meet special customer requirements. For such customized products they
can charge a unique price.

It is recommended for Macktiles to charge a medium price from the customers, because
they have the challenge of the influence of competitors as well.

Place
Distribution is the process of making product or service available for the customer or
business who expects the product from the market. Distribution can be done directly by
producer or service provider or using indirect channels with distributors and/or
intermediaries.

Macktiles when making the decision about distribution channel, a special attention should
be paid. Because even though they are specialized in production of floor and wall tiles, it

19
is difficult for them to sell such products in an unfamiliar foreign market. Therefore, it
will be beneficial for them to partner up with a Chinese wholesaler. Because direct sales
by the company will be difficult in a foreign market, they will be able to distribute their
products in already established Chinese show rooms.

Promotion
The tools that are used to communicate the customer value to the customer and to build
up strong customer relationships can simply be said as promotion or marketing
communication.
Since “Macktiles” is already established business in Sri Lanka, they use effective
channels of communication. They use official website as well as a Facebook page. The
website enables the company to enable their customers to customize their products
according to their requirements.

The company can use these same strategies in the international market that they will enter
into.

Official website –

The company has to expand the website to include details of new designs that they expect
to provide in the Chinese market. The objective of maintaining an official website is to
enable the customers to customize their products. The availability of product details such
as prices, designs, and different product categories will help the customers to make their
purchasing decisions in an efficient manner.

Facebook page –

However, there are limitations of using Facebook as a tool of promotion in the Chinese
market. Because the use of Facebook has been banned in China. Therefore, the company
will not be able to use it as a promotional tool. Instead it is recommended to publish in a
social media which is accepted by the Chinese economy.

20
Target Audience -

When designing the most appropriate marketing communication mix “Macktiles”

initially should have an idea about the target audience. Based on the target market of the
company, target audience should be mainly the construction firms in the Chinese market.

Message –

When designing the message which is to be communicated it should emphasis on the

benefits that the product provides to its end users in the target market. They have to give
a rational message to customers with the intention of providing more awareness and for
creating more interest to purchase.

Also, when designing the message, it should be designed in a manner that it gives the
idea to the customer that the product lasts a long time as per the previous
recommendation at the “Product Strategy”.

21
 Conclusions

The company that we have considered “Macktiles” is a leading well-established tile

manufacturer in Sri Lanka. Currently, they are considering entering into an international
market to establish their operations and popularize their brand name. In this report we
have identified the special strategies that they should follow in order to be successful in
the international market.

When we consider the reason for Macktiles entering to the Chinese market, it is obvious
that it is due to the booming of the construction industry. The company employees the
most skilled employees in their production followed by experience research personnel
who facilitate in innovations and product development. They are also equipped with high
– tech machines which facilitate productive operations. They are currently enjoying
economies of scale, so their production costs are also lower. This shows that they will
benefit from expanding their operations beyond the boundaries of Sri Lanka.

When we consider the competition, there will be a threat to the company from well-
established tile manufacturers in that country. However due to technological
advancement and product innovation in the industry, the company still have the chance of
penetrating to that market.

In their marketing plan, we mainly identified their objectives of entering into the foreign
market. These objectives can be divided into two as financial and marketing objectives.
Financial objectives are to increase sales and profits. For this, they can utilize the
opportunity available in that market and also the advantage of operating at a lower cost.
The marketing objectives are to create product awareness and customer loyalty. Through
effective marketing campaigns, they will achieve these objectives.

The tile industry in China can be segmented into three levels based on end user,
application and construction type. The application, which means the type of tiles the
company manufactures is irrelevant in selecting the target market. According to market
analysis, the target market that will be beneficial for Macktiles to operate is the market
for commercial new constructions where there is expected to have a higher demand and a

22
higher profitability. When considering about positioning of the product, it should also
consider the strategies of its competitors in the foreign market and position relative to
those competitors. They have to position their product as a high quality, medium price
product in the minds of their potential customers.

When we consider about the entry strategy of the company, they will establish a strategic
partnership with a major raw material supplier in China. This will make sure that they
will operate at the lowest possible cost even in China.

The product which satisfy the customer requirements beyond what they expect, and
therefore can be categorize as an augmented product. Product quality, packaging and
product features are the major attributes that the company should consider in managing
the product. The branding is also a very important tool in building customer awareness in
the new market. Due to high competition in the market they intend to enter into, they can
change their current pricing strategy to charge a medium price from customers in order to
penetrate to the market. They exclusively can distribute their products through well
recognized wholesalers in that country. When considering about the target audience of a
marketing campaign, it mainly includes construction companies. As a marketing tool the
company can launch a new official website. Also, they will too be able to use email
marketing as another tool, because of the nature of the target audience.

23
 References

Principles of Marketing; Kotler. P. (15th Edition)

Newspaper articles on “Macktiles”

https://www.macktiles.com – The official website of Mackson Tiles Lanka (Pvt) Ltd

https://www.facebook.com/macktiles - The official Facebook page of Mackson Tiles

Lanka (Pvt) Ltd

24