Table of Contents Contents Part 1: Introduction to the Cultural of the Country I. Company Background i. Company Profile ii.

The Product to be Exported iii. The Country that the Product is to be Exported II. History of Australia III. Geographical Setting i. Location and Topography ii. Climate of Australia IV. Social Institutions i. Family ii. Education iii. Politic iv. Living Conditions v. Recreation, Sport and other leisure activities vi. Health vii. Language V. Executive Summary 10 6 5 5 4 Page

Part 2: The Economic Analysis of the Country I. Population II. Economic statistic and activity i. GDP ii. Transportation iii. Communication System iv. International Trade Statistic v. Labor Force III. Development in Science and Technology IV. Channel of distribution V. Media VI. Entry Mode VII. Executive Summary 17 17 18 20 21 12 12

Part 3: The Marketing Strategies I. Product Strategy i. Product characteristics and benefits ii. Branding iii. Packaging iv. Product Warranties v. Strategies alternatives 22

II. Pricing Strategy III. Placing Strategy IV. Promotion Strategy i. Above the line sales promotion ii. Below the line sales promotion V. Executive Summary

24 25 26

27

Appendix

29

APA References

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Part 1: Introduction to the Cultural of the Country I. Company Background i. Company Profile Our company is called SKPC. Spreading over 25 countries, our companys goals are to fulfill the needs of consumers. Their well being is our utmost concern. SKPC was founded in the year 1993 by Christopher Lee, a Malaysian who spent his years studying architectural in the US. SKPC is a privately held company that designs most of the products based on customization. Consumers are able to choose from the readymade home products or even customize their own preferences. In every branch of SKPC, there are always a minimum of 250 employees that helps to make the lives of consumers easier by assisting them with products that they need. SKPC consists of many departments which mainly are the Human Resource Department, Finance Department, Customer Service Department and also the Research and Development Department. In addition, each branch of SKPC is equipped with a cafeteria where consumers and dine in whenever they like. ii. The Product to be Exported The product that is going to be exported is called Compatible L-shape sofa. It is a three sitter sofa that has five other functions. The first function is like any sofa where one can sit on it, relax and watch the television while sipping on his coffee or perhaps popping popcorn into his mouth. The second one is where there is a build in table which is convenient for the consumer to either eat or do their project using their laptop. Build in an L-shaped design; one may also use it as a bed. Besides that, a build in refrigerator that is available is also essential when one comes back from work tired and wanted to relax while watching the television may pull out a can of beer from it. Apart from all that, what makes the product special is the build in massage function. With a touch of a button, this sofa guarantees the user is able to relax themselves after a tough day at work.

iii. The Country that the Product is to be Exported This product will be exported into Australia which is the smallest continent in the world. This is because being one of the countries that is well developed, it gives us the opportunity to bring in a new product that helps them to improve their home productivity. II. History of Australia The first people are thought to arrive around fifty thousand years ago when the sea levels were low and the land was more humid compared to now. Even though Australia became populated, the middle dry areas didnt attract settlers until around twenty five thousand years ago (Australian Explorer, 2000). It then grew quicker around ten thousand years ago as the climate improved. When the British settle in Sydney Cove, it is estimated that three hundred thousand aboriginal people who speak around 250 languages inhabited Australia. Europeans soon arrive and took the land as their own when they find that there is absence in political structure (Australian Explorer, 2000). The natives were immediately driven out of their homes and many were killed in the process. Besides that, the Europeans brought new diseases with them and that fact also killed many who were infected. In addition to the destruction of the natives, the

introduction of feral and domestic animals contributed to the annihilation of natural habitats (Atlapedia, 2005). Because of the fight between the Europeans and the natives which wiped out them out of Tasmania, the population of Australia greatly decreases. In the early twentieth century, legislations were enforced to protect the aboriginals. Assimilation quickly became the governments aim after World War II. Rights were taken from the aboriginals and attempts were made to Europeanize them. Over the years, Australia brought together many states such as Queensland, Tasmania, Melbourne, Gold Coast, Perth, Sydney and many more (Atlapedia, 2005). III. Geographical Setting i. Location and Topography Australia is the smallest continent in the world. Lying southeast of Asia, it is bound by the Pacific Ocean to the east, the Coral Sea to the northeast, the Timor Sea to the northwest, the Indian Ocean to its west and the Tasman Sea to the southeast. The continent consists largely of three regions.

The Western Plateau which is a vast desert and semi desert region that covers 66% of the land area, the Central Eastern Lowlands which includes Lake Eyre as well as the Murray, Darling and Gulf of Carpentaria and finally the Eastern Highlands which is also known as the Great Dividing Range (Atlapedia, 2005). Australia also has a remarkable landscape and is known for its outbacks which are the remote lands of the interiors. The desert outback covers most of the interior and its hot and dry barren land makes it hard to support many people. There are large areas of grasslands in Eastern Australia for sheep and cattle ranches. In addition to that, Australia also has some mountainous areas and plateaus which are scattered throughout the country (Kidport, 2006) .

ii. Climate of Australia Australia's climatic conditions are characterized by warmth, little rain, clear skies and sunshine while temperature ranges are moderate with the absence of an intense cold winter (Atlapedia, 2005). The continent can be divided into several climatic zones, an arid and semiarid interior, the monsoonal north and the sub-humid to humid east. Australia can experience hurricanes and cyclones on both coasts mainly on the northeast and northwest while droughts are also common (Kidport, 2006). In summer (December to March) the average temperature is 84F (29C). The hottest region is the northern two-thirds of the continent, which experiences humid and wet conditions in summer. Further south summer is warm with occasional hot spells and mild nights. Winter (June to August) averages 56F (13C) for the country as a whole, with warm days and mild nights in the northern areas, becoming cool and showery in the south. IV. Social Institutions i. Family The most common family type in Australia was a couple with children. Just over 2.4 million (45 per cent) of all families, were in this group, the highest proportion of them being in the Australian Capital Territory and Victoria. Of all couple families with children, most were young families with

children under 15 years (69 per cent, or 1.6 million couple families). These families might also have included dependent students (aged 1524 years) and non-dependent children still living with their parents. Couples families with children under 15 were the most common family type in every state and territory. The Northern Territory had the highest proportion, with 80 per cent of all couple families with children falling into this group. Marital status of Australia is nearly 8 million (49.6 per cent) were married. Just over 5 million (33.2 per cent) had never married. Just over 1.8 million (11.3 per cent) were separated or divorced, and nearly 937,000 were widowed. (Go Australia, 2009) This is an opportunity because of the family condition in Australia that consists of family which covers 45 % of the population. Families need well furnished house to fulfill their needs. Besides that, the marital status covers almost half of the population in Australia. This also gives an opportunity because marital people tend to move out and build their own family in the process.

ii. Education Australians are highly educated and they are more concern about the green environment and are aware of unforeseen environmental disaster. Building better lifestyle is needed to contribute by all communities. On the same side, caring the community and the environment conservation and protection concept are aligned with our company vision. So this is an opportunity for our company which reduces the barrier to enter into the Australian market. All children receive 11 years of compulsory education from the age of 6 to 16 (Year 1 to 10), before they can undertake two more years (Years 11 and 12), contributing to an adult literacy rate that is assumed to be 99%.Government grants have supported the establishment of Australia's 38 universities; all but one is public. There is a state-based system of vocational training, known as TAFE Institutes, and many trades conduct apprenticeships for training new trades people. Approximately 58% of Australians aged from 25 to 64 have vocational or tertiary qualifications and the tertiary graduation rate of 49% is the highest among OECD countries. (Wikipedia, 2005) Besides, we also provide knowledge of the products and the product experience to our customers, so consumers can learn by purchasing our products which had valued and enhanced by the purchasing

experiences. In addition, feedback from customers and highly value by our company and we are willing to accept and adapt to the idea giving by the unsolicited Australia consumers or citizen.

iii. Politic The Australian political system of government is based on the liberal democratic tradition that contains freedom of speech and religious tolerance. It includes The Parliamentary System, The Commonwealth Parliament, Governor-General, The Senate, The House Of Representatives, Executive Government, and Federal Judicature. Major Political Parties of Australia is Australian Democrats, Australian Greens, Australian Labor Party, Country Liberal Party, Family First Party, Liberal Party, and The Nationals. The government in Australia is said to be stable when Julia Gillard took the place of Australias Prime Minister in September 2010. Besides that, Australia is a free trade area that eliminates all of its barriers to entry. This means Malaysians are able to export certain of their products without any tariffs. This is an opportunity because when Australia is a free trade area, it means that all goods have zero duties on them. Costs of exporting will also greatly reduce.

iv. Living conditions Home ownership is a key cultural icon in Australia. Home-ownership has been seen as creating a responsible citizenry; according to a former Premier of Victoria, "The home owner feels that he has a stake in the country, and that he has something worth working for, living for, fighting for." The Australian government has encouraged broad-scale home-ownership through tax incentives; as a result, 70% of households own their own homes one of the largest proportions of any nation. The prevalence of home-ownership has meant that renters and owners are not divided as sharply along income lines as they are elsewhere: 55% of low-income households and 80% of high-income households are homeowners. In the past, home-ownership has been a sort of equalizing factor; in postwar Australia, immigrant Australians could often buy homes as quickly as native-born Australians. Additionally, Australian suburbs have been more socio-economically mixed than those in Britain or America. The ratio of Australians' average income to the price of the average home was at an all-time low in the late 1990s. Young people are buying homes at the lowest rates ever, and changes in work patterns are

reducing many households' ability to retain their homes. After the finding, we decide to sell our product which is furniture into the country, this is due to the ownership of homes in Australia is the largest proportion which is 70% among US, Denmark, Germany, Japan, Netherlands, Switzerland, and we also found that many countries in Northern Western Europe country have lower rates of homeownership compare to Australia. (Wikipedia, 2009) When a household own a house, they will normally buy their own favorite furniture to decorate their house for long term usage and this provide an opportunity for us to enter this market.

v. Recreation, Sport, and other leisure activities Base on the findings, most of the national sports are played by Australians. The notional team of Australia also participates in world level competition and there are also frequent winnings in the competition by Australias team. The name of some of the major sports league in Australia are National Rugby League, A-League, Queensland Rugby League, National Soccer League, National Basketball League, Australian Football League, and so on. On the other hand, they also spend a lot of time in recreation and leisure activities like socializing, religious activities, reading and etc. However, the time they spend on audio or visual media activities is the most and this give us a change to sell our products to this country because usually they will use it when watching TV, play computer or listening to the music after come back from work and so on.

vi. Health Life expectancy in Australia is relatively high, with figures of 78.7 years for males and 83.5 years for females born in 2006. Australia has the highest rates of skin cancer in the world, while cigarette smoking is the largest preventable cause of death and disease. Australia has one of the highest proportions of overweight citizens amongst developed nations; it has also been one of the most successful in managing the spread of HIV/AIDS. In Australia the health care system, known as Medicare, was instituted in 1984. It coexists with a private health system. Medicare is funded partly by a 1.5% income tax levy (with exceptions for low-

income earners), but mostly out of general revenue. An additional levy of 1% is imposed on highincome earners without private health insurance. As well as Medicare, there is a separate Pharmaceutical Benefits Scheme viithat heaviliiy subsidizes prescription medications. In 2007-08, Australia spent 9.1% of GDP on health care, or AUD$4874 per capita. (Wikipedia, 2009) Our product includes a massaging function so this will improve the health of consumers because it will relieve them from their stressful day and thus reducing the rate of hypertension and high blood pressure.

v. Language Sydney has the most diverse culture in Australia (intimately followed by Melbourne). More than 30% of the population of Sydney does not speak English at home. Sydney and Melbourne are residence to approximately 65% of all non-English speaking migrants, who together speak a total of 240 foreign languages. Many migrants primarily use their mother tongue on a daily basis and only a little of English. Australian English is similar to British English but has its own multicolored dialect, called strine. Only around 20 are spoken frequently and trained in schools of the original 250 languages. Kriol is the most to use the local language of many young Aboriginals spoken regularly in northern Australia. It contains many English words but the meanings are regularly dissimilar and the spelling is phonetic. This may be a threat to us when meanings might be displaced and misunderstandings happen.

V. Executive Summary Australia consists of mostly families. They cover most of the population there. In the northern region which has the highest proportion falls into the family category. The marital status is also high in Australia. We consider this as an opportunity because due to the family conditions in Australia, many will need a well furnished house to satisfy the lifestyle of the people living in the household. At the same time, Australians now educate their children to look after the environment more. Children are now taught to keep the environment clean. Besides that, the society themselves are also

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encourage to look after the environment by the government. Because of this fact, we consider this as an opportunity because the product we are exporting is environmental friendly in a way that we use recycled material as the packaging. In the political view, Australias government is considered stable and thus it encourage people to invest in Australia. This will then lead to an increase in their GDP and so they have the ability to purchase our product. Besides that, Australia banishes tariffs and tax on many products since it is a free trade area. The barrier to enter their market has been reduce and thus, this is an opportunity for us to penetrate their market. Also, based on our research, most of the population in Australia tends to own their houses instead of renting it from others. When residents buy their own house, they will make sure that it is well furnished and are able to fulfill their needs. This is mainly the reason why we consider this as an opportunity for us to penetrate into their market. In addition to that, most of the Australians spend a lot of time doing recreational activities. However, considering the time they spend on audio and visual activities, they have high potential in purchasing our product. This is because our product provides them with the necessary function that guarantees to enhance their senses while carrying their audio and visual activities. However, there are also threats that become a barrier to us. The threat is language. Even though the language use in Australia is English which is the international language of the world, both the slang and pronunciation is different there compared to in Malaysia. Misunderstandings may happen because words use might lead to a different meaning. But with extra precaution and checking of the words and pronunciation use, this obstacle can be overcome. To sum it all up, there may be threats that creates a barrier for us to penetrate the Australian market, there are still many opportunities available. After analyzing Australias social institutions, we discover that there are more opportunities than threat and so we have decided to go on with the penetration.

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Part 2: The Economic Analysis of the Country I. Population Australia is a big country that contains about 22.4 million citizens. We also found that the growth rate of the population is about 1.195% and the birth rate is 12.47 births per 1000 population. The median age of the total population is about 37.3 years old; the median age for male is 36.6 years old and 38.1 years old for female. Next, the range of age of the population can be dividing into three parts which are 0-14, 15-64 and 65 or above. The table below shows a more detail picture about it. (Australia People, 2010)

Range of Age 0-14 15-65 65 or above

Percentage (%) 18.6 67.9 13.5

Male 2,026,975 7,318,743 1,306,329

Female 1,923,828 7,121,613 1,565,153

89% of the Australian is staying in the urban area and the rate of urbanization is 1.2% annual rate of change. The migration rate is 6.23 migrants per 1000 population. In this country, 92% of populations are white, 7% of Asian and 1% of aboriginal or other. Basically, all the people in Australia including children, youth, adult, old people, and so on will become our target market because our products are suitable for all level of people.

II. Economic statistic and activity i. GDP The total GDP of the country is 1.193 trillion AUD with a growth rate of 3.3% and the GDP per capita is 47,857 USD. The median household income is 66.820 AUD in the year of 2007-2008 and the table below shows some information about the average weekly earnings of the people in Australia (Wikipedia, 2010). Average Weekly Earning

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May 2010 Feb 2010 to May 2010 $ % change

May 2009 to May 2010 % change

TREND ESTIMATES Private & public sectors Full-time earnings Full-time adult total earnings All employees total earnings Private sector Full-time earnings Full-time adult total earnings Public sector Full-time earnings Full-time adult total earnings adult ordinary time 1 341.90 1 386.70 1.4 1.4 6.2 6.2 adult ordinary time 1 231.00 1 282.20 1.1 1.2 5.4 5.4 adult ordinary time 1 256.30 1 305.10 982.80 1.2 1.2 1.4 5.6 5.5 6.2

SEASONALLY ADJUSTED ESTIMATES Private & public sectors Full-time earnings Full-time adult total earnings All employees total earnings Private sector Full-time earnings Full-time adult total earnings Public sector Full-time adult ordinary time1 337.40 0.6 5.8 adult ordinary time 1 227.80 1 279.70 0.7 0.9 5.1 5.1 adult ordinary time 1 253.10 1 302.40 982.40 0.8 0.9 1.4 5.2 5.3 6.4

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earnings Full-time adult total earnings 1 383.00 0.9 5.9

Full-time adult total earnings, Quarterly % change in trend estimates - All Sectors

Full-time adult total earnings, Quarterly % change in trend estimates - Private and Public (a)

(Adapt from Education and Training Reform Amendment Regulations, 2010) From the graph above, we can know more detail about the weekly income earn by the Australian in private and public sector and also the percentage change in trend estimates for all and public or private sector. From the information above, we can conclude that Australia is a high income country and

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this means that the purchasing power of Australians is very strong. This is a good chance for us to sell our product to this country because they are able to buy our product which is normally needed by most family that owned a house no matter it is big or small.

ii. Transportation The infrastructure in Australia is very convenient and it provides a way or mean for foreign businessman to deliver their goods in or out of the country easily, indirectly the export and import of the country will be increase. The transportation that is available in this country is airplane, train, cars, ships and so on. From the research we found that there are also many highways built by the government and it can be divided into 3 different categories which are the Federal Highway, State Highway, and Local Roads. For railway transport it comprise into 5 types or services which are inter-state rail services, intrastate rail services, Metro, mining railways, and cane railways. Next, the waterway in Australia is also very convenient because there are a lot of port built and according to the statistic for the shipping industry in Australia, there are about 53 ships of 1000 gross register tons (GTO) or over in this country. The examples of the port in this country are Brisbane, Dampier, Fremantle, Gladstone, Hay Point, Melbourne, Newcastle, Port Hedland, Port Kemble, Port Walcott, and Sydney. Lastly, there are also many airports in the country, for example Canberra International Airport, Albury Airport, Armidale Airport, and Portland Airport and so on. The examples of the airport company are Qantas, Virgin Blue, and Tiger Airways Australia. With all these convenience available in this country, we can take this as an advantage to enter the market because we can distribute our products easily to the country in a secure way.

iii. Communication System The communication systems in Australia consist of telephone, radio, television, and internet. From the findings we found out that the internet users in this country is around 15.17 million which is more than half of the total population and it is a good mean for business people to advertise their goods and also update the latest information of its product or company. This may be a good time for us to enter

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the market because a good communication system will help us a lot when we want to contact with the customer, do advertising on our products, easy for customer to consult us and so on.

iv. International Trade Statistic Exports Export Goods $161.5 billion (2009) Coal, Iron ore, Gold, Meat, Wool, Alumina, Wheat, Machinery, Transport equipment, Education Main Export Partners China (21.81%), Japan (19.19%), South Korea (7.88%), India (7.51%), US (4.95%), UK (4.37%), New Zealand (4.1%) Imports Import goods $160.9 billion (2009) Machinery, Transport equipment, Computers, Office machines, Telecommunication equipment, Parts, Crude oil, Petroleum products Main Import Partners China (17.94%), US (11.26%), Japan (8.36%), Thailand (5.81%), Singapore (5.54%), Germany (5.3%) (Adapt from Wikipedia, 2009) The table above shows us about the detail of exports and imports of goods and partners in Australia in year 2009. We can see that the amount of export of this country is obviously more than the amount of import and we also found that the export and import partners are mainly from China which is 21.81% and 17.94% respectively. Maybe this is a threat for our products to enter the market because we are not going to manufacture the products in Australia and Malaysia is also not the main import partner in this country.

v. Labor Force The labor force in Australia is approximately 11.4million people which are about half of the total population. However the unemployment rates of the country are about 5.1% and the inflation rates is around 3.1%. The employment rates and inflation rates may be a threat for us to sell our product there although it is just a normal rate which is not too high until it will affect the whole economy of the country. (Wikipedia, 2010)

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III. Development in Science and Technology A recent report released by the Australia Institute of Technology and Commerce rated Australia in the top five most penetrated PC markets in the world. Australia is currently fifth, following Norway, Denmark, the United States and Switzerland. In Australia, access to computers is currently at 78%. The total PC installed base there is also expected to reach more than 19.2 million by 2012. The growing PC market in Australia serves as an indication that IT is widely growing within the country and Australia are becoming more tech-savvy. This is not only for businesses but also an indication for households (About Australia, 2008) In April 2009 the government plan to invest A43$ billion (US$33.6 billion) over eight year in National Broadband Network scheme which will deliver superfast broadband to Australia homes and workplaces and this is a good time for us to expand our business in future using the advantages of internet that provided by the government.

IV. Channel of distribution Channel of distribution is an organized network of agencies and institutions which, in combination, perform all the activities that required to link producers with users to accomplish the marketing task. In short, it is a system that link manufacturers to customers. A warehouse is also a type of distribution channel. It is a commercial building that store goods such as raw materials, components, or finished goods. It is designed to efficiency receive goods from suppliers and then fill orders for individual stores or customers. A warehouse can be use as our companys distribution channel in getting the products into the marketplace. We choose to use a warehouse because it helps in reducing costs, guaranteeing service and reliability, reducing capital investment and speed up delivery times to customers. The warehouse does not require a large and complex supply chain and these helps the company to save a lot of cost. In addition, the use of warehousing is increasing recently because of the internet impact. The internet-based stores do not require the physical retail space, just require warehouse to store goods. The warehousing processes are receiving, put away, order preparation/picking, shipping and inventory management. Our company would not build a new warehouse in early stage when penetrate to Australia market because we can save the cost by temporary place our product in a warehouse at the shipping port.

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Indeed, warehouse will helps save cost in many related issue and make our business easily penetrate to Australia market.

V. Media Media in Australia is an important component in Australia Economy which Contribution highly to the Australia social and economy.

The Availability: Media such as Newspaper, Television (free-to-air and pay TV), Radio, Magazines, Outdoor and cinema are the most common media which covers entire Australia. While most of the Australian are shifting their preference on Internet and it has a significant growth rate due to high advertiser satisfaction that combined strong level of search activity which increases the online experience (Refer Appendix A). Besides, Most Australian is adapting the use of online media widely from year 2000 onwards. According to a report released by the Australian Bureau of Statistics (ABS), the acceptance of online shopping grow significantly among Australian consumers with a 66 percent increase in the number of people buying online in the year to November 2000. - February 16, 2001, Online Shopping Blooms, ABS.

Furthermore, the anticipation of Future Trends (Australian Online Search and Directories Advertising Market 2009-2013 report) which was released by consulting company Frost and Sullivan stated that online search is one of the most active areas of online business. Despite a down trend result in the Global Financial Crisis, The Australias online search advertising market still attaining a 30% growth rate during 2008-2009. (Saturday, 2 January 2010, Australian Online Search Market 2008-09 and Future Trends)

Thus, it shows that the advertising through online media is effective in Australia as compare to other advertising media.

The Cost:

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The rate of online media are calculated monthly and paid by click. The rate of online media may refer to Yodel online advertising firm as shown in Appendix B. While average the rate for Television are based on the timely basis The average rate of Newspaper advertising are shown in Appendix C.

The Coverage: The TV advertising covering mostly entire Australia, approximately 94% Australian will tune in to the TV at least once a week. Besides, the average Australian household spends between 3-5 hours on watching TV. Furthermore, the expenditure on TV advertising grows at the steady rate of approximate 5-6% per year. On the other hand, the watching behavior of Australians under 24 has reduced over the past 10 years since the younger generation had shift their time using other devices such as the Internet. In contrast, online media is another effective ways to directly reach the audience and will attain new business cost effectiveness. The coverage area of online advertising is the wide via internet and mostly selected to advertise on the popular social network website and popular search engine such as Face-book, Twitter, Google and Yahoo.

Facts about the online advertising in Australia: In the year 2000, 6.6 million Australians were using the Internet. While, in the year 2005 there was over 14 million Australians online, that is 68% of the population. Next, the Australian Internet advertising industry grew at 67% in 2005/2006 due to the outstanding value for money the medium offers advertisers. Due to Recent research from Neilson Net Ratings in Jan 2006 highlights that the average Australian Internet user at work is spending more than 39 hours per month online which is almost 2 hours per day. (The above facts are provided by ROI.com.au) (an online marketing firm based in Melbourne, Australia.) While for the newspaper advertising also covering widely in Australia based on which paper printing media firm. The average rate of newspaper advertisement is shown in Appendix C. Besides, advertising through print media or electronic media, Publicity maybe use to create the awareness to Australian at the same time applying on corporate social responsibility (CSR) as well. The

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publicity may include green strategy, environmental consideration, charity and the society wellness. This is to spread the ideology of Earth save via our company products toward the community of Australian.

VI. Entry Mode After analyzing the macro- environment of Australia, we will use exporting as our entry mode to test the Australia market in in the beginning. We choose an export agent to help our company to penetrate the Australian market. Export agent has been chosen because they are a firm that is experienced in undertaking most of the exporting activities in a foreign country. They may travel abroad, do research, prepare an export plan, provide the information needed and advise the exporter on how to adapt their marketing mix to the county that wan penetrated. Export agents will help our company prepare most of the thing that is related to enter the market. This helps our company to not waste time and extra money in seek for other information. In addition, the export agent have a special key feature which is they never really take ownership of the goods which is a benefit to exporter because the goods ownership still remain under their control instead of the export agent. Export agents play an important role in assisting our product in Australia, so we need to choose an export agent which have the skills and experience to perform the job, has good network of contacts with others, working knowledge of the foreign marketplace such as well known their cultural and their language and have suitable personality to sell our products abroad. After choosing the suitable export agents that are needed, they can help us make contact and negotiate deals with potential buyers, handling the logistics, necessary documentation and take care of all promotional activities that bring our business more easy penetrate to Australia furniture markets. The cost for using export agent is affordable because they just receive the commission on any sales generated. In addition, we need to pay for the expenses for export agent that they had expensed on the marketing functions and handling the export administration. We need to maintain a good relationship by keeping in touch with them to ensure good communication with us and provide the absolutely clear order detail to us. Indeed, using an export agent that we could trust as our product distribution channel is truly easy and beneficial way for our company to enter the export market. VII. Executive Summary

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Australia itself is already a continent which consists of 22.4 million people. Majority of the population in Australia are staying in urbanize areas which means that they can afford our product. This is considered as an opportunity because all the population in Australia are said to be our potential customers because our product is suitable for citizens of all levels. In the view of economics, it is also considered as an opportunity to us because based on our research on the average income of Australians, Majority of them are high income earners. This means that their purchasing power is also high and strong and thus giving us a chance to sell our product there as they can afford it and since it is convenient for them and their family. Besides that, in terms of transportation, it is considered convenient for us to deliver our product due to the good infrastructure of Australia. The means of entering Australia is also convenient due to the amount of transportation available in this country. Due to these factors, it is an opportunity to enter the markets of Australia because the distribution of our products can be carried out smoothly and securely. In addition to that, the communication system is Australia is also a good mean for us to advertise our products and also to update the citizens there with our latest information. This will then become a good opportunity for us to penetrate their market as it will help us to keep in contact with customers and also to follow up with them after they purchase our product. However, based on the Australian international trade statistic, it may be a threat to us because even though the amount of goods imported by Australia is a lot, their main import partners are China. As Malaysia is not the main import partner of Australia, this may be a barrier for us to penetrate their market. Australias labor force consists of approximately half of the total population. Both the inflation rates and the unemployment rates are also considered quite normal. However, due to this factor, we consider this as a threat to us because it might fluctuate at any time and affect us. Reports have also shown that Australia is rated as the top five most penetrated PC markets in the world. This is also an opportunity to us because the government of Australia intends to invest in the National Broadband Network which scheme which will deliver superfast broadband everywhere and this will then help us to expand our business online where consumers are able to make their orders there.

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Media is one of the important factors that give one an opportunity to penetrate the market. Australia has various types of media that permits us to transmit our message regarding our product to consumers. Besides that, it also helps us to advertise our product effectively as stated in the Australian Online Search Market and thus, adding another opportunity in our list. All in all, to sum everything up, there are various opportunities and threats based on Australias economic analysis. Despite the threat that creates a barrier for us, the opportunities to enter the market are much more so therefore, we have decided to go on with the penetration.

Part 3: The Marketing Strategies I. Product Strategy Product characteristics and benefits The usage of fabric is cheaper as compared to using leather and it is produces based on nonanimal origin which is aligned with our company strategy. The featured L-shape sofa from our company is made of wood and metal alloy, electronic material, cushion, and fillings. The body of the L-shape sofa consists of electronic materials which is consists of wires, remote control, spring, and supporting steel for easy control. The skin of the cushion is made from fabric. There are many types of fabric that we offer such as nylon, cotton, polyester, and microfiber. Each of the fabric type has its own purpose. The filling for cushion is made by polyester and it is recyclable. The benefit of using our fabric sofa is that it provides a wide variety of patterned and solid designs, giving a specific look for a room that fits with modern living style. By using the microfiber, it can help prevent wrinkles and moisture that changes the shape of the sofa. The advantages of the L-shape sofa is that it is easy for cleaning as compared to leather and it also comes with many functions. In order to clean the fabric sofa, the vacuuming method can be used while the durability of it can be increased by using suitable protective spray. The advantages of using this sofa are that it is easy to clean. It is also environmental friendly because we choose the right trees to make the body of the sofa to guarantee its quality and all the unused part of the tree will be sent to the box factory for making box, cork, ceiling and other suitable goods instead of just disposing it. This will not cause the improper wastage.

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Branding The brand name of our company is SKPC and by using this brand we can penetrate the market. It also helps in differentiating our products from other competitors. Branding is very important today because consumers view brand as added value to the products. The type of brand that our company chooses is family branding which means that a single brand name that identifies several or even a large number of related products. All members of the family will receive the benefit of promotion of the brand. The members of the family should be complementary with each other and of similar quality so that favorable experiences with one item holding the brand will reflect on the others. Besides that, local product or local brand is also one of the concepts that our company use. It is a way that creates local products and brands in an effort to cater to the needs and preferences of particular country markets.

Packaging Normally, packaging has 3 major objectives which is protection against damage, assistance in marketing and cost effective packaging. Obviously, these are the purpose of our companys packaging. We package our product by using plastic and boxes that resist water and minimize damages. Besides that, we can also attract customers by labeling. Moreover, we will always make sure that the cost of packaging is reasonable and environmental friendly. We will use the materials which can be recycled or recyclable materials for our packaging.

Product Warranties Product warranties will be provided for customers who buy our products. Normally the products will be given two years warranty if there are any damages found on our products. We will send technicians to the particular house to repair the product and it is free of charge. Besides that, there is also a 30 days money refund guarantee which means if the customers feel dissatisfaction with the products, they can return the products back to us and get back the refund for that product.

Strategies alternatives

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Next are the strategies alternatives that we are going to choose in global marketing. The strategy that our company chooses is strategy 3 which is product adaptation-communication extension. This approach of global product planning is to adapt the product to local use or preference conditions while extending, without minimal change, the basic home-market communications strategy or brand name. Our company will change the style or the design or even the feature of our product which can suit the preferences that customers required. However, we will make sure that the quality and the services of our products is maintained because this is also a competitive advantage for us to sell our products to the country which is highly educated and they will not solely purchase something based on the price but also on the quality and services provided.

II. Pricing Strategy Pricing is the most important component in the marketing mix. It is the only element that produces revenue when all the other marketing mix is costs. Our company has decided to set AUD 1300 as the price of our product. We set such a high price in order to reflect the quality of our product and also to attract the high income earners first before reducing it little by little. There are also a few strategies we are planning to use. Firstly, our company will use the market skimming strategy to penetrate the Australian market by creating an awareness that reflects the quality of our products. Prices are set at a high level at first to attract the higher income households before reducing the price to increase the target market to those middle incomers. As higher incomers tend to buy luxury products, theyll definitely be willing to purchase our product which is of high quality with disregard of the prices set. When prices are subsequently reduced overtime, middle incomers in turn will have their chance of experiencing our product. In addition, we will also be using the value pricing strategy where we offer consumers the value they deserve. This is to build a strong brand identity in the market. By providing value-added benefits, loyalty is also guaranteed. This is because serving customers in the best way increases their marginal utility. Theyll feel that the amount they pay for our product is worth the price.

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Other than that, we also offer discount and allowance pricing to wholesalers that wish to purchase our product to be sold to consumers. This is to encourage them to purchase is bulk. Whatever prices they set for the consumers is entirely up to them. However, consumers are still free to acquire the product they desire from our warehouse at a discounted price also. That way, our channel of distribution is enlarge through business to business and also business to consumer. Of course, our main focus which is on consumers maintains.

III. Placing Strategy Distribution channels are a system of marketing institutions or intermediaries that provide the physical flow of goods and services along with ownership titles from producer to end users. The distribution channel that we choose is direct distribution channel which mean there is no intermediaries between the manufacturer and the customers because we will sell our products directly to the customers. This will indirectly reduce the price of our products because the earnings of intermediaries have been cancelled and we can also control the price of the products. By using this method, we will store our products in the warehouse before sending it to the final users. Because this is our first time penetrating this country, we will just temporarily rent a place at the port as a warehouse for our products. After the demands of the customers have stabled or increase, we will then buy or build our own warehouse in the country. We will build our warehouse in the urban areas like Sydney, Melbourne, and so on. This is because the transportation, communication, and security system in the urban areas are better compared to the rural areas. Besides that, we will also use direct marketing method to advertise our products through the internet. Our company also has an online buying system which gives the customers another option to purchase our product online. This is because the times spent on internet by Australians are the highest among other media. After we receive the order from customers which have detailed information about them, we will send a notice to them stating the time the product will arrive, price and also the details about the product. The purpose of doing this is to give customers some time to prepare before the products reach their house. Next, the product will be sent by our staff or workers to the house and we will make sure the products are in good condition before the customers pay for them. If there is any damages cause during the product is delivered, we will change a new one or repair it if it is possible.

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IV. Promotion Strategy There are several promotion activities that will be launch by our business to attract and create awareness about our products and our company brand name toward Australian. Above the line sales promotion Based on the Market analysis in Australias Media, our company planned to adopt the Electronic media on our product (L-Shape Sofa with special designed feature) through internet since the internet and broadband are the most active activities using in Australia. In this case, we have our own company website that have been enhanced with the graphical features such as (interactive internet ads) motion of the virtual products, 3D animation, and sound embedded features. So, we are going to have an E-catalog on our website so customer can see, learn and understand more about our companys products. Besides that, the e-catalog will give our customer a different purchasing experience by playing with the virtual product that is available in our company website. Thus, we encourage direct purchase from our company. Customer could directly order from us and pay by credit or installment (AEON credit service). In addition, On-line coupons are also available in our company website to get our consumer to reach and visit our warehouse, or get a low price purchase via online. Furthermore, our company will also consider adopting promotion on Television since the coverage and reach of this media is high. The advertisement promotion on television will launch adapting to Australian watching flavor. Advertising using the entertainment way, our company will use the celebrity testimonials to demonstrate the way of using our products.

Below the line sales promotion Besides on giving promotion by promoting our products solely, we also consider in using sampling and consumer sales promotion to attract and retain our valued customers.

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Besides directly purchasing from us, our company also provided a showroom (held in our warehouse) tour for any citizen in Australia. A sample of product will be provided by our company for everyone to try and feel the products so that there wont be any doubt on them. On the other consumer sales promotion, our company will adopt loyal reward programs to retain our valued customers in long term. Other consumer sales promotions may also be apply depending on the adaptation on the Australian culture trend to trend basis. In addition, our company will launch a Product Recycling Program which encourage trade-in for our company products. Besides fostering the sale on our products, our company will promote the Product recycling program around the world where the total of the recycled product or maybe some of the fine products will be donated to the poverty area for those who needs it.

V. Executive Summary The materials used to make our L-shape sofa are mainly metal alloy, electronic material, nylon, cotton and polyester. Our product has various advantages such as it is easy to clean and also environmental friendly as any unused part of the tree will be sent over to box factories to be made into cork and boxes. SKPC will be use as our branding when we penetrate the market in order to differentiate ourselves from other competitors. As for the packaging, our company will be using plastics and boxes that can withstand moisture and also damage. Labeling will also be included to attract consumers. Product warranty of two years will also be given and customers can refund back their money within 30 days of purchase if they are dissatisfied with the product. In addition to all that, our product is designed to adapt with the local preferences without neglecting its quality. In terms of pricing, there are a few strategies that our company will be adapting. In order to penetrate the market in Australia, the skimming pricing will be used first in order to reflect the quality of our product. We will then reduce the price as time goes by. We will also use the value pricing strategy to provide customers the value they deserve in order to create a strong brand identity and to also preserve customers loyalty. Besides customers, we also provide discounts for wholesalers who want to purchase our product to be sold to consumers in order to enlarge our distribution channel.

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For our placing strategy, there will be no intermediaries between the manufacturer and customers because we chose direct distribution as our distribution channel. We will sell the product to our customers directly in order to maintain control over the price. As this is the first time penetrating the market, our product will be store in a rented warehouse which is located at the port. As demand increases, personal warehouses will be built around urban areas such as Melbourne and Sydney. Besides that, customers can also order our product online using our webpage. The product will then be delivered to them in a given period. Based on our research, Australians spend more of their time online compared than other media. This is the reason why our promotion strategy is through the internet. Our company provides consumers with E-catalog that allows them to learn about our products in detail. On-line coupons are also available in the website to encourage direct sales from us. Promotion will also be on television as we will be using the superstars to promote. In addition to that, customers are also encouraged to visit our showroom to try on our product so that there wont be any doubt on them. Loyal reward program is also used to retain the loyalty of customers.

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Appendix A

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Appendix B

$5 per day

$674

$1251

$2,390

$10 per day $1,331

FREE 1-Page Website 3 months FREE Web Hosting FREE Subdomain

$2,471

$4,723

$15 per day $1,971

$3,662

$7,002

$20 per day $2,594

Monthly Reporting

$4,824

$9,229

$25 per day $3,202

$5,958

$11,406

$30 per day $3,795

$7,065

$13,533

$50 per day $6,246

$11,639

$22,305

All prices are in Australian dollars and include GST

FREE 2-Page Website 6 months FREE Web Hosting FREE Subdomain Monthly Reporting

FREE 4-Page Website 12 months FREE Web Hosting FREE Domain Name Monthly Reporting

Senior Account Managers Personal Client Relations Consultant Fortnightly High-End Reporting

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Appendix C

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APA Referencing Australia Education. (n.d.). Retrieved from the Australia Wiki: http://en.wikipedia.org/wiki/Australia#Education

Australia Population. (n.d.). Retrieved October 13, 2010, from http://goaustralia.about.com/cs/people/a/austpopulation.htm

Home Ownership in Australia. (n.d.). Retrieved October 17, 2010, from the Australia Wiki: http://en.wikipedia.org/wiki/Home_ownership_in_Australia

Health Care in Australia. (n.d.). Retrieved October 16, 2010,from the http://en.wikipedia.org/wiki/Health_care_in_Australia

Australian History. (n.d.). Retrieved October 13, 2010,from the Australian Explorer: http://www.australianexplorer.com/australian_history.htm

Australia Geography. (n.d.). Retrieved October 16, 2010,from the Australia.com: http://www.aboutaustralia.com/facts/geography

World Geography of Australia. 2006. Retrieved October 22, 2010, from the kidport : http://www.kidport.com/reflib/worldgeography/australia/australia.htm

Countries Australia. 2005. Retrieved October 13, 2010, from atlapedia.com: http://www.atlapedia.com/online/countries/austral.htm

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Parlsys. (n.d.). Retrieved October 13, 2010, from Aph.gov.au.com: http://www.aph.gov.au/parl.htm#parlsys

The official language of Australia. (n.d.). Retrieved October 13, 2010, from Xomba.com: www.xomba.com/the_official_language_of_australia

Australia - Language, Culture, Customs and Etiquette. (n.d.). Retrieved October 15, 2010, from Kwintessential: www.kwintessential.co.uk/resources/global.../australia.html

Australia country. (n.d.). Retrieved October 13, 2010, from Heritage.org: http://www.heritage.org/index/country/australia

Australia Economy. (n.d.). Retrieved October 13, 2010, from the Australia Wiki: http://en.wikipedia.org/wiki/Economy_of_Australia

Employment and workplace. (n.d.). Retrieved October 13, 2010,from: http://australia.gov.au/topics/employment-and-workplace

Australia People. (n.d.). Retrieved October 15, 2010, from: http://www.theodora.com/wfbcurrent/australia/australia_people.html

Business Topics of Fair Trading Laws. (n.d.). Retrieved October 17, 2010, from: http://www.business.gov.au/BusinessTopics/Fairtrading/Pages/Fairtradinglaws.aspx

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Workplace and Relations. (n.d.). Retrieved October 15, 2010, from: http://www.dfat.gov.au/facts/workplace_relations.html

Bilateral and Region Trade agreements. (n.d.). Retrieved October 18, 2010, from: http://www.pc.gov.au/projects/study/trade-agreements/draft/media-release

Australia Statistic. May,2010. Retrieved October 23, 2010, from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6302.0Main+Features1May%202010?OpenDocu ment

Senate Banking, Housing, and Urban Affairs Committee Hearing. Thu, 30 Sep 2010. Retrieved October 27, 2010, from: http://www.tradingmarkets.com/news/stock-alert/fre_senate-banking-housing-andurban-affairs-committee-hearing-1200960.html

Australian Policy Online. Retrieved October 28, 2010, from: http://www.apo.org.au/economics/84

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