Business proposal for V-car wash and reflective easy

Author: Iloka Benneth Chiemelie
Published: 27th December 2017

Chapter 1

Introduction

1.1  Industry Background

The automobile industry in Malaysia has been doing well over the past few years. In a world where prices of goods & services are always going up, there are some things which is turning at the opposite direction. One of it is the automotive sector. Cars are becoming affordable for consumers. At present the Klang Valley is considered one of the most vibrant communities in Malaysia. There are approximately 6 million people living in the Klang Valley. ( (Ministry of Federal Terrorities and Urban Well Being, 2010).  Cars has become part of their lives and proven by number of personal cars registered which has increased from 537,092 in 2008 to 594,610 in 2010. (Road Transport Department Malaysia, 2008).

Advancement with time and technology, the automobile industry had led to many other business to sprout such as the automobile repair business and car wash business. Car wash industry has been around since the 1900. The first commercial car wash began in United States of America in the year 1914 whereby 2 businessmen started the manual car wash. The customer’s car had to be pushed around a circle to different stations where the car goes through number of stages of washing.

In 1946, the first semi-automatic car wash appeared in Detroit, United States of America. It is called semi-automatic because even though the car is pulled by machines, the car was scrubbed by manually operated brushes. A lot of changes happened in the 1950’s. Car wash businesses expanded and became a huge business opportunity especially in the United States of America.  A group of car wash professionals formed the Automatic Car wash Association (ACA) in 1955. The organization main function is to represent retail and supply segments of the car wash industry in North America and around the globe. It is now known as the International Carwash Association (ICA).  (International Carwash Association Issue III, 2003)

Malaysia is considered to be still novice in the car wash business. There are no documented or information on the origin of the commercial car wash first came into Malaysia. However commercial car wash service was common in the urban areas since the 1970’s this was actually run by both the local and foreign retail petrol stations as a side business. With the many “unlicensed car wash operators” sprouting all over Malaysia especially in the urban areas since the last decade, car wash service offered by the retailing petrol segments is considered almost extinct. These operators require very little operating cost and therefore many of this car wash business is not stable and easy to shut down if not managed properly.

1.2  Business concept

The business concept is to establish a car wash that is none like what is presently obtainable. It will offer numerous features besides the traditional sphere of just washing cars for consumers. The name of the firm is “V-car Wash”, and the logo is as illustrated below.

Figure 1.1: Logo of V-car wash

From the logo above, a number of information can be gathered as to what the firm is all about, what it intends to offer and how it will go about offering such services. The logo is designed with such a sleek outlook that pictures a “classic and vintage car” - which clearly represents luxury and quality -, then wrapped up with a hot and girl in some sort of seductive outlook. The reason is just to show that V-car wash is not like the mare megrims that presently occupy the industry. It is designed to offer customers the desired features besides the normally dogma of just ‘having their cars washed.’

The letter “V” as well as the slogan is designed with the colour of water and it represents the firm’s main resources in the business. The water used in washing car is ‘very clan’ as the logo states and the price to be paid by customers is ‘very cheap.’ The other letters ‘-car wash’ are waxed up in gold-plated covers and they represents the high quality that the firm promises to offer. In terms of describing what the high quality will be like, this car was services will features extra ‘freebies’ as:

1.      Free Wifi – all the clients will have free Wifi at their disposal while waiting for their cars to be washed and waxed up.  The free Wifi is designed to eliminate those boring moments when all the customers can do is just watch the car washers. The Wifi will be configured in such a way that customers will be directed to the firm’s website once they get connected. This is to create awareness for other services that the firm offers.

2.      POS or e-Payment features – unlike other car wash service providers, the new business concept will also feature a point-of-sale and/or e-payment via the firm’s website features. This is also to allow the consumers needed convenience when it comes to making payment for our services as well as to increase the chances of for higher sales. The actual fact is that consumers will be able to make payment for needed services even before coming to the firm, and print out the payment receipt to obtain the paid service upon arrival.

3.      Mini-mart / Bar for relaxation – in line with expanding the sources of revenue in the business, the car wash will also feature a mini-mart and a bar to offer customers needed relaxation sphere as well as provide them with the convenience of going directly from the car wash to their house – by shopping for their groceries at the car wash. Another understanding is that customers can also engage in a form of impulse purchase by just seeing the mini-mart and bar and this is expected to increase their purchase intention in the process.

4.      Home call-up services – the firm will also be able to offer home-call up service, which implies that it will be going to customers’ homes to wash their car as well. However, this is only applicable to corporate businesses that have numerous cars and need the service of car washers but can’t afford the stress of having to move down all the cars to the car washing centre. This is still in line with the main objective of increasing revenue by offering numerous services tailored to meet the individual needs of customers.

1.2.1 Business opportunity

Klang Valley has a dense population especially in the main towns of the area. With a high volume of personal cars being used in the Klang Valley along with a well strategized urban area there are many opportunities for the car wash business to boom. Moreover with the average people so busy with their work or personal will not wash their own car as it seems to be a waste of time or too tedious.

Malaysia enjoys a hot and humid throughout the year. Recently over the years the Klang valley is going through a hot and dry weather especially in months of May till September where average temperature ranges from 27^oC to 32^oC. There is hardly any serious rainy or monsoon season in the Klang Valley. Even though it rains heavily it only lasts to a few days only.  In conclusion this kind of weather is perfect for the car wash business. (Source)

In relation to the long dry and hot weather over the past few years in Klang valley has the water crisis recently. With the water crisis water at hand, many car owners will look into other alternatives to get their car cleaned rather than wasting water. (Malaysian Chinese Association, 2011). This paves way for the new concept of car wash to be introduced and penetrate the market.

There are many opportunities in terms of financing. Malaysian government has also been giving many incentives for entrepreneurs to start up on car wash franchise and business. For an example, the Malaysian government has allocated total of RM 11 billion to Central Bank of Malaysia which provides loan to SME (Small Medium Enterprises) be it new or current entrepreneurs. (Malaysian South-south Association, 2007). In addition to that the government has set up a SME corporation to provide financial funding, advisory, market access and other support programmes to start up a business. (SME Corp Malaysia, 1996). Private funding or loans comes in the form of venture capital organizations such as Cradle Investment Programme ( (Cradle Investment Fund, 2007), private banks which provide loans for entrepreneurs with low interest. A good example would be the New Entrepreneur fund by Maybank which offers a maximum loan of RM 5 million with terms and conditions being applied. (Maybank Malaysia Berhad, 2001-2011).

1.1  Purpose and rationale

One could question by taking a look at the new business and featured concepts as to why all these features are necessary in the car washing industry and how the firm hopes to recoup expenses considering the fact that price is the most significant force in the industry. The answer to these questions is the main purpose of the business. The main purpose of the establishment is to ‘generate higher revenue, be competitive in the industry, be innovation and benchmark competitors with higher quality services.’ The rationale is self-explanatory. By so doing, the firm will be able to establish business sustainability and improve its performance as well as expand its business networks. The only free service here is Wifi and this is not be much of an issue because Wifi network are highly affordable but the extra spice it could give customers with respect to increased convenience, satisfaction and comfort could be priceless when it comes to measuring it against increase in loyalty, repurchase and good word-of-mouth.

1.4 Terms of reference:

1.4.1 Research Questions

In order to understand the chances for success in the business as well as measure the barriers to make such success, a number of questions need to be addressed as the building block of the research process. These questions will feature:

1           What are the core competencies needed to ensure sustainability in the industry?

2           How will the new service features offer higher competitive advantage in the industry?

3           What factors could create barriers to success and how will it be mitigated in order to reduce chances of failure?

1.4.2 Research Objectives

The main objective of this research is to conduct an analysis of a new business development proposal in the car wash industry, determining the factors that will enhance the potential for success and designing the right business plan in order to increases chances for success and make such new establishment very successful in the industry. Basically, the objective is centred on creating the right framework for establishing a successful new business by taking extra measures to understand the factors that will influences success and how it can be enhanced, the factors that can influence failures and how it should be mitigated, and overall level of increased competitiveness of the new business in the industry it operates in.

1.4.3 Research Framework

Figure 1.2: research framework

While numerous chapters will be used to achieve the research objective, the overall framework is designed around 3 main ideas of developing a new business concept, analysing the industry the business will operate in and developing a business plan that will ensure increased chances of success.

The new concept will be innovative, creative and properly conceptualized in order to ensure that chances for success are increased. The industry analysis will include understanding both the customers and competitors as this is the right platform for establishing a solid foundation in the industry. The business plan will be strategic and based on combining the understanding gained with respect to the industry and on how the new concept can be strategic, competitive and successful to develop a plan on how the business will be operated to ensure profitability.

Chapter 2

Literature Review

2.1 Introduction

This chapter explains the point of view of Concept Framework of the V-car wash in the car wash industry and the need to set up an V- car wash business. Moreover important Marketing theories are taken into account to run the business for maximizing success. Theories, concepts and previous research relating to the business development proposal includes:-

1)      Marketing Mix

2)      Service Marketing

3)      Consumer buying decision

4)      Previous Research

2.2 Marketing Mix

The external factor of buying purchase decision lies in the marketing mix section(McCarthy, 1996). Marketing tools such as product, price, place and promotion are the set of controllable tactical marketing tools from the buying purchase decision. (Zikmund, 1996)states that marketing stimulus is the specific combination of interrelated and independent marketing activities in which an organization engages to meet the objective. The basic elements of the marketing stimulus are product, place, price, and promotion, which also called controllable variables of marketing.

(Kotler, 2000)stated that Price , Promotion, Product and Place are the marketing stimuli. Other stimuli include technological, political, and cultural and buyer’s environment-economic. All stimuli enter the buyer’s black box, where they are turned into a set of observable buyer response shown on the right-product choice, brand choice, dealer choice, purchase timing and purchase amount.  Figure 2.1 shows the model of buyer behaviour.

Marketing Stimulus	Other Stimulus
-          Product -          Price -          Place -          Promotion	-          Technological -          Political -          Cultural -          Economic

Buyer’s Characteristics	Buyer Decision Process
-          Cultural -          Social -          Personal -          Psychological	-          Problem Recognition -          Information search -          Evaluation of alternatives -          Purchase decision -          Post purchase behaviour

Buyer’s Decision

-          Product Choice -          Brand choice -          Dealer choice -          Purchase timing -          Purchase amount

Source :(Kotler, 2000)

The concept on the process of how the stimuli are changed into each consumer’s black box must be understood by each marketer. There are two parts of the black box. The first box represents the buyer’s individualities on how he or she perceives reacts to the stimuli while the second box represents the buyer’s decision process effects on the outcome.

(P.Kotler, 1997) says that there is a correlation between the model of buyer behaviour-influence on the buyer’s consciousness which in the end relates to buyer’s purchase decision.  Marketing stimulus which is the product, price, promotion and price components are involved with this relationship. (Kotler, 2000)also stated that marketing mix is a set of marketing tools that uses to trail its marketing objectives in the target market.  Figure 2.2 below shows the marketing variables whereby the communication between marketing mix meets the demands of customer and provides customer value. 

Figure 2.1        Model of buyer behaviour

Source: (Kotler, 2000)

2.2.1 Product

(Zikmund, 1996)stated that to satisfy customers, a package  of tangible and intangible which offers good  service and ideas attributes  to the satisfaction. (Kenneth, 1998), mentioned that product is the element of the marketing mix that represents the basic offering being made to consumers. (Kotler, 2000), phrased that "Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need”. This includes services, places, persons, organizations, ideas and physical objects. (P.Kotler, 1997)mentioned that a product can be offered to a market for acquisition, attention or consumption that might satisfy a want or a need.

The product has much potential. These potentials of products include, styling options, brand name, warranties, size, services, quality features and returns. (Zikmund, 1996)mentions that the product is a reflection of the customer present or future acquirements.

1.      Quality:      (McCarthy, 1996)stated that it is the objective of a product to fulfil a customers need or requirements. (Kotler, 2000)mentions that the quality of a product is the ability to perform its basic functions which includes reliability, durability and other characteristics.

2.      Feature:    (Kotler, 2000)mentioned that products can be offered with a variation of mixed  colors, sizes or models. This fit to be a competitive tool and stands to differentiate the firm’s product from another.

3.      Brand:       A name, term, sign, symbol, design, or combination of these, intended to identify the goods, or services of one seller or group of sellers and differentiate them from those competitor is called brand, mentioned by Kotler (2003).

4.      Packaging:   (Harris, 1993)stated thatthe customers attitude towards a product can be influenced by the packaging as the first customers exposure to the product is the packaging.

5.      (K.H.R, 1994)mentioned that packaging refers to any container that is offered for sale and on which information is communicated.

2.2.2 Price

(Zikmund, 1996)stated that the price is amount of money or other consideration that is of something of value given in exchange for a product. (Kenneth, 1998)mentioned that price is perceived value of goods and services measured in some medium of exchange. Consumers are often prepared to pay a premium price for something that fits their needs better than the product they currently use.

1.      List Price: (Kenneth, 1998)  phrased that “The price of the product that the sellers are willing to sell to the consumers.” Marketer need to know what the customers are prepared to pay or an estimation of it. This if course does not correlate with the manufacturing costs.

2.      Discount:     (McCarthy, 1996)stated that it is a  reduction from list price given by a seller to buyers who give up some marketing function or provide the function themselves.

3.      Allowances:  (K.H.R, 1994) mentioned that allowance is the reductions from list or quoted price to buyers for performing some activity. (Kotler, 2000)stated that allowance is the promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer’s products in some way.

2.2.3 Place

(Zikmund, 1996)stated that place is an important element in the marketing mix. (P.Kotler, 1997)mentioned that place is another key marketing-stimuli tool and stands for the various activities the firm undertakes to make the product accessibility and variable to get the target customer. (P.Kotler, 1997)also stated that place is the key element to make the product accessible and available to target customers.

1.      Coverage:     To cover a market, companies have to decide on a number of channels distribution e exclusive distribution will limit the number of the intermediaries, but selective distribution will use more than a few and less than all of the intermediaries, whereas intensive distribution will placing goods as many as possible. (Kotler, 2000).

2.      Assortment:     (Kotler, 2000)also mentioned that place assortment is the arrangement method by classifying and arranging the products into groups. The customer can find the product easily by good place assortment.

3.      Location:       (Kotler, 2000)states that the location is the most critical factor in success and ability to attract customers.

2.2.4 Promotion

(Zikmund, 1996)stated that promotion is an all form of marketing communication or the means which marketers talk to existing and potential buyers. (Shimp, 1997)mentioned that sales promotion consists of all marketing activities that speeds up buyer action or a sales of a product. Promotion brings a psychological attribute to the consumer especially on the behavioural side. (P.Kotler, 1997)mentioned that activities that communicates with product or service and its merits to target customers and persuade them to purchase the products or services.

1.      Sales promotion:    McCarthy (1996) stated that sales promotion are activities that stimulate interest, trial and purchase by final customers. The usage of coupons, samples, signs, catalogues or circulars are examples of sales promotion. This is considered to be a short term incentive. (P.Kotler, 1997)mentioned that sales promotion consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker and/or greater purchase of particular products/services by consumers or the trade companies use sales promotion tools to draw a stronger and quicker buyer response.

2.      Advertising:    Advertising is a paid form of non-personal presentation and promotion of ideas, goods or service by an identified sponsor. (Pelsmacker, 2001)defines advertising as a mass communication which consists of television, radio, internet, magazines, billboard etc whereby the content is determined and paid by a clearly identified firm.

3.      Public Relations:   (Kotler, 2000) mentioned that public relations are aa variety of programs designed to promote or protect firm’s image or its individual products. (Kotler, 2000)also mentioned that public relation is the key to bridge good relations between the firm and the public.

2.3 Service Marketing

Service marketing emphasizes on relationship and value. This is used to market a service and product. There is a huge difference from a service based business than a product based business. Among the major differences are:-

1)      Buyer cannot return the service

2)      Service may be based on the reputation of a single person

3)      Buyer purchases are intangible

4)      Service marketing mix adds 3 more Ps whichare people, physical environment and process.

In the servicing industry of a business, the components of a service encounter that has been performed successfully are reputation, value and delivery. It is very important for customers that there must be a need of good benchmark of comparisons as without it, customers might not appreciate the full worth of the service.

2.4 Consumer Buying Decision Process

Buying Decision Process is defined as the decision making process by the customers in regards to a potential market transaction regard of the purchase of the product or service.

Decision making is a reasonable course of action. For an example, would be the decision to shop and places to dine. Based on observable actions, we assume that people have made a commitment to effect the action. There are 3 ways of analysing customer buying decision:-

A)    Economic models – These models are measured in quantitative & based on rationality and near perfect knowledge.

B)    Psychological models – this model emphasizes on processes such as cognitive and psychological. Sociological factors such as cultural and family influences are built around them.

C)    Consumer behaviour models – Models are used by marketers. Typically it’s a combination of psychological and economic models.

2.4.1 The consumer decision process model 

There are five basic consumer decision processes that have to be taken during the purchase process: -

1)      Purchase and consumption

2)      Search for information

3)      Need recognition

4)      Divestment

5)      Post consumption evaluation.

2.4.1.1 Need recognition

There are 3 factors that influence this decision:-

a)      Environmental influences

b)      Individual differences

c)      Memory

This stage is strongly influenced by the individual, situation and of past experiences. For an example if in the past experience of a customer had purchased a product that has been positive then a positive image of the product or brand will be instilled in the customers memory. The purchase environment has contributed to the specific purchase.

2.4.1.2 Search for information

This is both an internal & external process. The level of information required to the involvement, experience and level of perceived risk - so even if there has been a significant degree of past experience if there is a high degree of involvement or risk the purchase will require an external search for information

2.4.1.3 Purchase and consumption

Once the consumer have gathered reliable information with respect to the particular product or services, the consumers will then move ahead to make purchases for such products and/or services in order to satisfy the needs for which it was purchased.

2.4.1.4 Divestment

Consumer need to know how to divest themselves of a purchase. In addition to that ecological factors also effect decision purchase decisions. The question arises if the items will be recycled.

2.4.1.5 Post consumption evaluation

Finally after a customer’s consumption, consciously or subconsciously will decide whether the purchase is satisfactory or not. This will create a future impact on the purchase behaviour either in a positive or negative way depending on what the purchaser has learnt.

Diagram below shows a framework analysis of that can influence the marketing decision and future problems that might come up in the purchasing process.

 2.4.2 Variablesthat shape the decision process

There are 3 categories that influence consumer decision making process which is individual differences, environmental influence and psychological process. Table 2.3 shows the categories of each process.

Individual differences	Environmental influence	Psychological process
·         Demographics, psychographics, values and personality ·         Consumer resources ·         Motivation ·         Knowledge ·         Attitude	·         Culture ·         Social class ·         Personal influence ·         Situation	·         Information processing ·         Learning ·         Attitude and behaviour change

Table 2.3         Variable that shape the decision process

2.5 Previous Researches

International Carwash Association, the world’s largest organization for car wash professionals had identified and detailed variables that influence costs and profitability in car wash business. The organization has indicated various details for entrepreneurs to pay attention to which includes technical custom specifications to set up a car wash, target washes to aim and prices to set to ensure profit without losing customers. Based on their investigation that one of the many number of factors that ensures car wash business succeed is the number of vehicles washed on a yearly basis.

(Organization, 2011) Indicates that technology made it possible for car wash to get vehicles cleaner, reduce labour & operating last but not least boosting customer services and increase throughput. In addition to that (Anthony, 2012) says that customers tend to get their car washed only when it looks dirty and the best strategy is to go with the best wash possible and quality remains the most important factor. Quality of the car wash service is what earns the trust and will create a stable customer base.

(Thantum, 2011)Stated that a lot of teamwork and homework is required to offer a quality package to satisfy the customers.(Thantum, 2011)cited “ At the end of the day it’s the name of the shop that the customer will remember when they leave the shop. Customers must always walk away with a satisfaction”.

Chapter 3

Research Methodology and data analysis

3.1 Introduction

There are multiple factors that influence the decision making on setting up the V-car wash business. A study is planned to determine the factors and subsequently a survey is constructed based on questionnaires to collect data mostly from car owners in the vicinity of Klang Valley. The purpose of this study is to identify the marketing mix and the demographic factors that influence decision making on using the V-car wash service in the Klang Valley area. In order to test the hypotheses and answer the research questions, data variables from the survey will be analysed using frequency, mean, standard deviation, percentage and One-way ANOVA. Furthermore BCG Matrix & SWOT analysis applications will be used to analyse the current market in this industry together with competition and the environments which is involved.

3.2 Information needs specification

Considering the fact that this is a new entrepreneurial service, the need to source for information is inevitable as it would serve as the right foundation for actually experiencing the market first hand before plunging into it with the new business. As such, the primary research is important because it will help the entrepreneur to understand the market with respect to its competitors and how competitive it is, its customers and the demands of these customers, as well as how to establish the new business strategically in the market. Another areas that calls for interest is with respect to understanding what potential customers actually think of the added services features in order to predict whether it will be a success in the business process or not.

3.3       Research Methodologies

3.3.1 Sample Unit (Target Respondents)

Basically, the sample unit in this case are car owners that reside within Klang Valley. The focus on car owners instead of those who have driving licence is because car owners are the rightful people who make the decision of where to wash their cars, while possessing driving licence isn’t a guarantee that the person actually owns a car and the person can also be working under the command of the actual car owner with respect to where to wash the car.

3.3.2 Sampling Method

This will be a quantitative research as numerous variables need to be loaded and discussed. The sampling method will be a random based sampling. Basically, this means that respondents will be gathered randomly without any specification, notification or division as long as the respondents meet the set criterion for participating in the research. The benefit of this approach is that it would offer all potential respondents equal opportunity of participating in the research and it will also increase the quality of the research as compared with selective sampling that can deny some respondents the opportunity of actually participating in the research process.

3.3.3 Population and size sample

Population of this study are registered car owners who reside in the Klang Valley area. Based on the statistics provided by the Road Transport Department, there are 646,323 cars registered at the end of 2012. (Department, 2012). The participating sample group will be calculated using the YAMANE equation. (Kasiulevičius, 2006).

                                                            n =  N / 1 + N ( e ) ²

Remark:           n = Sample size

                        N = 646,323

                        E = Significant level (0.05)

From the equation the sample size can be calculated as follows,

            n = 646,323 / 1 + 646,323 (0.05) ²

=  399.752

Therefore the sample size for this study will be 400 samples of registered car owners in the Klang Valley.

3.3.4 Survey Location

The survey will be conducted in Klang Valley, a suburb in Kuala Lumpur the capital of Malaysia. Thus, this is a region specific study. The main reason for choosing this location is because this is the place where the actual business will be located.

3.3.5 Collection Method

The data will be gathered through questionnaire, which is by far the most common and convenient way of gathering data. The variables will be measured with a 5-point likert’s measuring scales on the degree of 1 is “strongly disagree” and 5 is “strongly agree”, where the middle number 3 means that the respondent is “neutral” in that particular question.

Summated rating method will be applied using the RenisLikert in questionnaire development process because this process is simple to understand and administer. (Zikmund, 1996). There are 5 alternatives to choose from, very important, important, moderately important, slightly important and not important.  Each alternatives has a score weight/value to measure the information value. In positive statements, very important will be highlighted as highest value of 5 where else negative statements, not important will have the lowest value which is 1.

3.3.6 Ethical Issues   

Just as common in any research, a number of ethical issues exist with respect to this research. Thus, it is important to identify some of these issues as well as way to handle them. They are as discussed below.

1.      Influenced response – in the process of responding to the research, respondents might encounter problems and seek clarification from interviewers. In any case, unethical interviewers can influence the response pattern by actually suggesting to the respondents on what to do.

2.      Manipulated data – this is probably one of the most reoccurring ethical issues when it comes to primary research and it entails the researcher manipulating the data in order to fit it into set objectives and make the overall research process qualitative and capable of meeting the set objectives as well as providing stated hypotheses.

In any case, the researcher has already declared to be ethical in this research and the implication is that these issues will not be encountered in the research process.

3.3 Questionnaire Design

The questionnaire for this research is divided into two sections. The first is geared toward gathering demographic data as it relates to gender, age, income, education and race, which will be used to predict the potential market size and the projected revenue. The second section is geared towards testing numerous variables in the form of consumers’ perception on the conceptualized features, factors that influences consumers purchase and the level of loyalty in the industry. The findings will be used to predict chances for success in the industry.

Chapter 4

Data analysis

4.1 Introduction

Following the success of the data gathering section as described in the chapter 3 above, the focus of this chapter is to analyse findings from the research process. The purpose of this chapter in that case is to analyse the findings from the research and use these findings to measure chances of success in the new business.

4.2 Test of reliability

Table 4.1: Case Processing Summary
		N	%
Cases	Valid	400	100.0
	Excludeda	0	.0
	Total	400	100.0
a. Listwise deletion based on all variables in the procedure.

Table 4.2: Reliability Statistics
Cronbach's Alpha	N of Items
.067	25

Considering the highlighted ethical issues, it is important in this research, just as it is in any given primary research to test the reliability of gathered data. The finding from this test will then be used to determine is the data are of high quality and whether the findings from the research can be relied on. In the test of reliability, the Cronbach’s Alpha is the most common approach for such test and data is considered reliable is the test scores at least 0.50, in which the higher the score, the higher the reliability of the data. In the case of this research, the score is 0.67 and this exceeds the minimum level by a significant margin – further validating the reliability of this research.

4.3 Demographics analysis

Figure 4.1: respondents’ race

 The above figure is self-descriptive as it pictures out the races based on their percentage. As such, it can be seen that Chinese people make up the highest percentage of respondents as they represent 38% of the total respondents. This is followed by the Malay with 27%, the Indians with 23% and other races with 12%. This finding is significant, but it should not be confused with the understanding that Chinese people are the highest owner of cars in Malaysia as this is not the purpose of this research and the finding doesn’t have enough variables to make such claims. However, the case of this study clearly shows that out of the 400 respondents, Chinese people make up the highest percentage. Factors that might have influenced such outcome include time of research – e.g. the Malays will be at mosque on Fridays and conducting research within this people will mean that they will be lowly represented, place of research – some places in Malaysia are dominant by certain races and conducting research within this places will mean that the dominant race will win.

Figure 4.2: Gender of respondents

There is no much to be said in this section except for the fact that male respondents make up 66% of the total response, while female respondents make up 34% of the total respondents.

Figure 4.3: age of respondents

 In terms of the age analysis, majority of the respondents are aged between 26-35, the followed by those aged between 18-25; with people aged above 50 coming in third place and the last position is those aged between 36-50. From this finding, the target is now those aged between 18-35. In any case, the significance of those aged above 50 is very reflective and needs to be looked into. Maybe the reason for this is because they have acquired a number cars that their children now drive and even if they are no longer driving those cars, they are still the owners.

Figure 4.4: level of respondents’ education

From the analysis above, it can be seen that majority of the respondents have obtained a at least a degree or diploma. If this is added to the respondents with masters and doctorates, it becomes clear that a vast majority of the respondents are well educated. The importance of education in this case cans be reflected on the fact that it will measure the respondents’ competence and capabilities with e-Payment and POS features, as well as their understanding of the importance of the features that the new service aims to offer.

Figure 4.5: Income (per month) of respondents

Definitely, the income of respondents will reflect the frequency of usage of the service based on the fact that wealthier respondents are more capable of footing the bills. From the above analysis, 49% of the respondents earn monthly income that is higher than RM1, 000 but lesser than RM5, 000. If this is combined with the respondents that earn higher than RM5, 000 (26%), it can be seen that majority of the customers are wealthy. Even those that earn lower than RM1, 000 are still considered target market because lower pricing strategy is also part of the service scheme to be deigned.

Table 4.3: I use car wash for?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	washing car	97	24.3	24.3	24.3
	waxing car	60	15.0	15.0	39.3
	both	243	60.8	60.8	100.0
	Total	400	100.0	100.0

Another variable considered important is to understand the main services customers seek from car wash as such an understanding will be used to predict the most successful services that the new car wash service will need to focus in. From the above analysis, it can be seen that 60.8% of the respondents agree to make use of car wash services for both washing their cars and also waxing their cars. This makes combining these two services a necessity in order to ensure that the firm is better positioned to meet the individual needs of different customers.

Table 4.4: I prefer?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	steam wash	97	24.3	24.3	24.3
	liquid wash	142	35.5	35.5	59.8
	any of them is ok	161	40.3	40.3	100.0
	Total	400	100.0	100.0

While customers have been found to make use of car wash services for both washing and waxing, it was also considered necessary to measure their level of preference on washing style and it can be seen that 40.3% of the respondents make use of either liquid or steam wash, while 35.5% of the respondents prefer liquid wash and the outstanding 24.3% of the respondents prefer steam wash. On that ground, both steam wash and liquid wash will be provided for customers.

Table 4.5: I own a car?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	yes	379	94.8	94.8	94.8
	no	21	5.3	5.3	100.0
	Total	400	100.0	100.0

 Another variable that is necessary is to actually measure the number of respondents that own the car they were found with. 94.8% agree that it is their own car while the outstanding 5.3% made known that the car belongs to another person (e.g. parents, friends, colleagues or firm). These factors will then be used to analyse other variables below.

4.4 Consumers’ perception of new service features

Table 4.6: Do you think car washers should provide free Wifi?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	yes	368	92.0	92.0	92.0
	no	32	8.0	8.0	100.0
	Total	400	100.0	100.0

 Wifi is one of the added service features that the car wash service seeks to provide the customers with and 92% of the total respondents are of the view that providing such service is necessary as it would increase their level of satisfaction. This means that this feature will be added into the new service design.

Table 4.7: Would you like a mini-mart at the location of a car washing services so you could shop for your groceries at the same time?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	yes	358	89.5	89.5	89.5
	no	41	10.3	10.3	99.8
	11.00	1	.3	.3	100.0
	Total	400	100.0	100.0

Mini-Mart is part of the new business concept and it was loaded into the research. Interestingly, 89% of consumers made known that they would love a car wash service that features a minimart. The main reason for this have been highlighted earlier as to the convenience that it gives consumers with respect to the fact that they can shop for their groceries at the same time while washing their car. Therefore, this new feature will be retained in part of the business development.

Table 4.8: Would like to have a bar at the car washing service centre so you could relax while waiting for your car to be washed?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	yes	367	91.8	91.8	91.8
	no	33	8.3	8.3	100.0
	Total	400	100.0	100.0

By just working around the car wash centres in Klang Valley area, it is very easy to notice consumers that are sitting idle while waiting for their cars to be washed. This is what the new service concepts seek to address, but providing the consumers with entertainment and relaxation through the service of a bar. 91.8% of respondents agree with this view and it is very significant because of the fact that it clearly shows their desire to have such service.

Table 4.8: Would like to have POS and/or e-Payment in the car wash service centre to offer you payment convenience?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Yes	349	87.3	87.3	87.3
	No	51	12.8	12.8	100.0
	Total	400	100.0	100.0

POS and e-payment are other new features that are fast growing in the Malaysian SMEs industries. The idea of this concept is to actually persuade consumers to make payment at their very own convenience – with the view of increase revenue generation for the firm as consumers can actually pay for any given service online and bring their car with the printed receipt to obtain such service. This is also another feature that will be retained as the table 4.8 above clearly shows that consumers desire such service as well.

Table 4.9: Would you like a call-up services that will involve the car washer coming to your house to wash your car when you are not convenient enough to drive down to the service centre?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	yes	355	88.8	88.8	88.8
	no	45	11.3	11.3	100.0
	Total	400	100.0	100.0

Basically, the idea of call-up services is designed for big corporations like hotels; government and car dealer shops that might want to clean their fleet of cars but would not be able to move these cars to car wash centre. Thus, the new concept is that the staffs from the firm will move down to these customers and wash their cars at the various locations within Klang Valley. 88.8% of the total respondents agree that this new idea is needed and as such it services as a support to the idea and some sort of believe that it would be a success if introduced.

4.5 Summary of finding from data analysis

From the above analysis, a number of discoveries have been made with respect to what consumers’ desire from car wash service providers. The important thing from all these discoveries is that consumers like the new service features and it creates some sort of confidence with respect to the success of the new service features. This can be demonstrated from the table 4.11 and 4.12 below where it has been shown that consumers pledge their loyalty to car wash service providers that will offer them Wifi, POS, e-Payment, Mini-mart, and Bar as the new service concept intends to do.

Table 4.11:  I will use a car washing service more frequently if it can provide free Wifi, POS and e-Payment features.
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Yes	385	96.3	96.3	96.3
	No	15	3.8	3.8	100.0
	Total	400	100.0	100.0

Table 4.12: I will use a car washing service if it can offer Mini-mart and bar for relaxation and shopping while waiting for the car to be washed.
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Yes	351	87.8	87.8	87.8
	No	49	12.3	12.3	100.0
	Total	400	100.0	100.0

CHAPTER 5

BUSINESS MODEL TO BE ADOPTED – STRATEGIC POSITIONING AND COMPETITIVE ADVANTAGE

STRATEGY PYRAMID

Many authors have come to agree that the dynamics in the external environment of industrial in the modern era have witnessed a tremendous increase over the last decade or so. Some focus on the increased competition between firms, while others focus on the technological pressures firms are facing. As such, it has become clear that while first in the 1960s relied only on price and stable market conditions to survive, today’s firms have numerous factors that influence success such as price, market condition, innovation, competition etc. (Ansoff and McDonell, 1990; Womack et al., 1992).

Figure (7): V-car wash’ strategic Pyramid

 The strategic pyramid for this new concept is a reflectiom of how the firm intends to establish itself in the market as well as gain sustianable business. This will be done through a managemnet team that is rich and vast in the industry and understand the needs of customers. Them combined with strategic marketing design that will also revolve around competitive pricing in order to ensure that consuemrs’ loyalty is increase as a result of the firm’s ability to offer high quality services at a very competitive and affordable pricing. In terms of the quality of service delivery intended for the new concept, it has been reflected that it will features:

1.      POS and e-Payment;

2.      Call-up services;

3.      Mini-mart and Bar; and

4.      Free Wifi.

All of these addons have been found in the conducted research to influence consumers percetion of a brand positively as well as increase their loyalty toward that brand.

VALUE PROPOSITION

As a master of innovation, inculcating a value modelled around customer satisfaction and increase profitability through acquisition of huge market share is essential for V-car wash because the possible of imitation if high considering the fact that the basic requirement for this service revolves around web programming. Putting this into consideration, V-car wash has developed the following value proposition to ensure quick success.

Management – the management system is based on a resourcefully, friendly, reliable and efficient system. All members of the management team are self-motivated and result oriented because they are all direct investors in the firm. Thus, the management positivity and pledges to undertake any action within it capability to ensure profit maximization and growth of market share.

Product and Service offerings – the products and services offered in V-car wash provides efficiency by combining car wash services with Mini-mart, bar, Wifi and e-Payment to help consumers perform all their desired services at the same door while their cars was being washed. Consumers who can’t afford bring their cars down to the centre can also have the firm to their location and wash the car.

Investors – since the success of any business depends on the ability to generate profit, V-car wash will ensure high returns on investment through the above management and service values. This will be done through competitive pricing, quality service delivery and customer relationship management that are designed to increase the level of consumers’ loyalty.

COMPETITIVE ADVANTAGE

As already illustrated above, V-car wash has numerous competitive advantages and how these advantages will ensure success is described below.

All in one service – consumers coming to wash their car can expect to get more than just car wash as they have free Wifi at their disposal and can keep in touch with friends, perform their business transactions or even read through news at their own convenience will waiting for their cars to be cleaned up.

Mini-mart and bar at your delight – consumers will also have the services of a full-fledged mini-mart and a bar where they can relax and enjoy themselves while waiting for their cars to be washed. They can also socialize with other consumers or just hang out with friends. Thus, it creates the added spice of great ambience, comfort and relaxation that will also improve the consumers’ satisfaction.

CHAPTER 6

BUSINESS PLAN

Corporate value

The corporate value that shapes how business is undertaken in the firm is “high quality and affordable price.” This is based on the understanding that it is very difficult to differentiate quality in the industry because the service features are very similar and consumers view the core service as to obtain “car wash services.” Therefore, V-car wash aims to differentiate by creating a sense of higher quality and affordable price in the consumers’ mind.

Logo and slogan

Figure 6.1: designed logo and slogan

The designed logo and slogan has been explained earlier and the summary of the explanation is that the logo is designed out of water to demonstrate the main resource used in firm’s business. The classic car and model to rhyme it up is an illustration of the luxurious services that the new business concept aims to provide while the gold plated “-car was” letter is an understanding that the service will be based on pure quality.

The slogan basically mimic all the above discussions as it reads “very cheap… very clean…” This means that the services provided will be affordable when compared to other car wash service providers and the quality will be very high as there will not be any atom of dirt left once the firm is done with washing any given car.

Business structures

Figure 6.2 business structure

The business structure will be a centralized form of management in which one lone manager will be responsible for all the business activities in the firm. Since this is a new entrepreneurial establishment, there is no need to have numerous mangers because the firm doesn’t presently have the needed resources to make such a reality. Thus, one manger will be in control of all the business process with other people reporting directly to him. There won’t be supervisors as well. The management process will comprise of just the manager and the staffs and the reason for such is because the firm seeks to reduce the operations cost in order to increase its chances of success.

The advantage of a centralised management structure in this new business is that it puts everything under the control of a single manager and as such making it very easy to control all the business activities going on in the company.

List of services to be offered and prices

Car was services

Ultimate Wash RM36

1.      Includes Works Wash Plus:

2.      Seat Service

3.      Crevice Vacuum

4.      Wheel Deal

5.      Your choice of Doors; Dash & Console area cleaned or Vinyl Treatment applied

Protection PkgRM19   

1.      Includes Full Service Wash Plus:

2.      Clear Coat Sealer

3.      Undercarriage Wash - Rust Inhibitor

Works Wash 22.00

1.      Includes Full Service Wash Plus:

2.      Triple Coat Protectant

3.      Undercarriage Wash - Rust Inhibitor

4.      Tire Treatment & Air Freshener

Full Service RM17.00

1.      Vacuuming of Carpet & Seats

2.      Dash & Console Dusted

3.      Windows Washed Inside & Out

4.      Door Jambs Wiped Down

5.      Outside Towel Dried

6.      Exterior Washes

Exterior Supreme RM20.00

1.      Includes Exterior Plus Wash:

2.      RainCoat

3.      Inside Windows

4.      Tire Treatment

Ext Protection Pkg RM10.50

1.      Includes Exterior Only Wash Plus:

2.      Clear Coat Sealer

3.      Undercarriage Wash - Rust Inhibitor

Exterior Plus $12.50

1.      Includes Exterior Only Wash Plus:

2.      Triple Coat Protectant

3.      Undercarriage Wash - Rust Inhibitor

Exterior Only RM8.00

1.      Outside Wash Only

2.      Towel Dried

3.      Extras & Add-ons

Other car was services

1.      RainCoat with Vision Clear RM2.00

2.      Speed Wax RM10.00

3.      Oversized Vehicles RM2.00

4.      Mud Fees Min Charge RM15.00

Detailing services

Hand Wax

1. Cars - Light Trucks = RM 29.00
2. Vans - SUVs - Full Size Trucks = 39.00

It involves applying a high quality polymer protectant and cleaner especially formulated for modern clear coat finishes. Hand polished to a high sheen, this polymer protectant helps fight the effects of sun, salt harsh environmental conditions, and normal weathering on your car's finish.

Carpet Express

1. Cars - Light Trucks = 39.00
2. Vans - SUVs - Full Size Trucks = 49.00

Dirt and soil are extracted from your vehicle's carpets using a gentle, fast drying shampoo. Your carpets are left with a pleasant fragrance when dry. Includes up to 4 carpeted mats. Additional charges may apply for cargo area or other miscellaneous items.

 Upholstery Express

1. Cars - Light Trucks = 37.00
2. Vans - SUVs - Full Size Trucks = 47.00

Cloth upholstery is carefully cleaned with the same gentle, fast drying shampoo used for the carpets. Not recommended for headliners and side panels. Additional charges may apply for other miscellaneous items.

Seasonal Service

• Cars - Light Trucks = 42.00
• Vans - SUVs - Full Size Trucks = 52.00

Designed to give your vehicle an extensive cleaning. Vents, crevices and other hard to reach areas are dusted out or vacuumed and cleaned. Vinyl and plastic surfaces are cleaned and conditioned. Does not include leather.

Headlight Restoration

• per Set of Two = RM30.00

designed to get rid of the haze and discoloration that headlights get after a few years. We make them look showroom new again.

Analysis of the external environment – PESTLE

Political factors

Malaysia is a pseudo-democratic nation, with some of its leaders elected while the rest are selected based on cultural and family ties (Michelle, 2009). There is still a high case of Malay favouritism and authoritarianism in the country, and the past government have enacted certain policies to favour local (Malay) companies at the expense of their competitors. However, the political settings are very much stable and there have never been a case of political instability in recent years. This creates the right scene for continued business process and sustainable profit generation. On that ground, it will be stated that the political settings are very favourable for the new business especially with respect to the fact that it is owned by a Malaysian.

Economic factors

The level of GDP per capita of Malaysia is estimated to be US$ 8,118 per year by IMF (2008), US$ 7,221 per year by the World Bank (2008), and US$ 8,800 per year by CIA Factbook (2008) (Michelle, 2009). It also been argued that the country’s continue appreciation of democracy will further increase the per capital income. Considering the high value in terms of the GDP, it is expected that there will be huge financial residue in the economy and the implication is that consumers will not be so much worried about incurring the few tens of Ringgit as presented in the pricing list above. Thus, this is very favourable for the new establishment as it would allow for an increase in revenue generation.

Social factors

Malaysia is more of a socialist society, and group activities are well encouraged (Dalat, 2009; Communicaid, 2009). As such, families travel together and friends enjoy going out with each other. In the transportation industry, it increases the number of people flying by air as group travelling is encouraged. Additionally, there is a growing trend of adventures holidays, so most Malaysian doesn’t stay back at homes during holiday because of cheaper tourism and holiday packages. In terms of measuring the impact of this factor, it will come in the form of repeat purchase and recommendation for the services.

Technological factors

Malaysia is one of the most technologically advanced countries in South East Asia (Malaysian industries development authority, 2009; Hobday, 1995). Most production processes are usually automated, and this increased production efficiency for the new merger because they can easily access these technologies in Malaysia and use it to enhance their production process and capability.  This is favourable for the new business as it reduces the chances of having to import the needed equipment because these equipment are available in the country and under the highest level of technological advancement. This will also enhance the business process and meet the desired goal of quality delivery.

Legal factors

This business environment is also favourable to Mas-AirAsia because of the highly advanced business laws, patent right law, and other bylaws (Mida, 2011) established to protect the business operations of the new merger. Also given the fact that these companies have been operating in the company before, they will have quality lawyer that will legally protect all the company’s assets. The legal settings are right for protecting the company’s image and patent right. This is necessary to ensure that it will be able to trade the same brand throughout the country and not have it copied by other people in other parts of the country.

Environmental factors

Geographically, Malaysia is sparsely distributed and this means that some areas are either inaccessible by road or too far with road transportation (Malaysian Employment Federation, 2007; Chew, 2005; Chew and Basu (2005). This creates a favourable business condition for air transportation because people who want to access these areas or seek faster travelling means will turn to air transportation. The need to maintain a clean environment is also something that is very must the new note in the Malaysian system and as such it creates the right atmosphere for improved business performance.

Objectives of the New Start-Up

The following business objectives have been developed to help power V-car wash to an immense success in the near future.

1.      To reach breakeven even within 6 months from operation.

2.      To achieved at least 10 percent brand awareness in the market within 3 months from introduction.

3.      To control at least 30 percent of the Klang Valley car wash business within 5 years of operation.

Mission Statement

The mission of the new establishment is to offer customers high quality car wash services in a serene and welcoming environment – with a relaxing atmosphere.

Vision Statement

1.      To be the leader in customer value and satisfaction in Klang valley car was sector.

2.      To become the most popular car was service provider in Kland Valley.

3.      To successful expand the service offerings to other parts of Malaysia.

7.3 VALUE STATEMENT

In order to achieve the stated objectives, V-car wash will be operated based on a number of values that will include: integrity, openness, commitment, constructive self-criticism and dedication to the stakeholders. The company will be committed towards exceeding customer expectations and providing the market with high quality car was services.

Target Market and Market Segmentation

Target marketing is considered vital in the decision making process for organizations that undertake marketing and strategic planning (McDonals, 1995; Piercy, 1992). It is the part of market segmentation that groups consumers with similar needs and buying behavior together (Dibb et al., 1996). V-car wash’s target market is as described in the table (3) below.

Table 6.1: V-car washtarget market

CUSTOMER GROUP	PROMOTIONAL STRATEGIES	CUSTOMER CHARACTERISTICS
Individual car owners – includes all car owners that reside within Klang valley	Push strategy – the services will be pushed directly to them through the middlemen. Heavy advertisement is needed to communicate the values of the new products.	Their decision making process is highly influenced by the previous brand used and the price of brands of similar brands in the market.
Car dealers and hotels – the focus for the start is only on those residing within the Klang Valley area.	Pull strategy – this target market will pull the services directly from V-car wash. The marketing strategy will involve convincing them to purchase the products based on brand benefit.	This customer segments make purchase based on the price and quality of products. The quality will be communicated to them via brochures and the products will be competitively priced.

 Marketing Mix

The traditional marketing mix originated from marketing of goods for consumers and it is made of 4Ps as: Price, Promotion, Place and Product (Bitner, 2001).  Each of these elements will be discussed in relation to how the final goods will be made available to the market

Products Mix

Product features – for the mini-mart, all the products will be packaged in glossy-plastic bags, will the nutritional contents and expiry dates clearly displayed. Packaging will also be adopted as a means of differentiation, as such; the product will be packaged significantly different from other substitutes in the market. For the car wash, all the cars will be cleaned with neat water rinsed up very well to ensure that all dirt are removed in the completion of the cleaning process.

Positioning – the services will be positioned in the market in line with the corporate objective as “high quality” and “affordable”. This will help to attract customers, retain existing customers and offer the firm needed competitive advantage over other companies in the same industry.

Pricing Mix

Competitive pricing – competitive pricing involves pricing a product similarly with its substitutes. The choice of competitive pricing is because most of the products offered by V-car wash cannot be differentiated by pricing. Thus, competitive pricing is the right option to successful increase sales and maximize profit in return.

Promotional Mix

Advertisement – as a new brand in the market, heavy advertisement through different Medias will be adopted to create product awareness and persuade the market to make purchase. Without advertisement, the market will not be aware of the products and it will result in negative profit margin. Research supports the idea of repetitive advertising (Moorthy and Hawkins, 2005) as a means of increasing awareness because it makes customers to be more familiar with the product qualities (Machleit and Wilson, 1988).

Personal marketing–besides advertisement, marketers will also be directed to meet numerous car dealers and hotels in the region in order to discuss the potential for a partnership that will see V-car wash become the sole car washer for their cars. This is designed to fill in for the home-call services.

Public relation – the focal point of every business is finding ways to make the customers high as the numbers of customers a business have can directly influence its revenue generation. As such, a website will be created to maintain good public relationship with the customers by listening to their complaints about a specific service or suggestions on how to improve any of the services offered by V-car wash. A Facebook and Twitter fan page will also be created. These mediums will also serve as a Media for communicate the benefits of the products and new product developments to the customers.

Place Mix

Site and location – the firm will be located in Klang Valley, along the road, in an easy to locate area. Although the site has not been acquired yet, acquisition will be based on the following features described above. This is to ensure that consumers will be able to locate the site and that passerby can also drop by the site to relax in the bar or shop in the mini-mart.

Employees Required at Start-Up

Figure 6.2: Number of employees required at start-up

EMPLOYEES NEEDED	CORE COMPETENCES	SALARY (RM)
Car washers Note: this will increase with an increase in demand	The have the sole responsibility of undertaking the whole washing, waxing, detailing and cleaning services	600 per person Total: 3000 / month
6 bar attenders Note: 2 of them will be the chefs	The have the responsibility of taking order from consumers and preparing the foods ordered by consumers as well as serving the consumers.	1000 per person Total: 5000 / month
3 store keepers Note: one of them will be the cashier will other will take responsibility of helping customers out and ensuring that customers don’t shoplift.	They will be responsible for managing the Mini-mart	1000 per person Total: 3000 / month
1 Manager / CEO	This is the overall coordinator of the business	RM1 per month Note: the salary is because the manager is the owner of the business and all profits are owned by the manager

Stat-Up Cost

This section will discuss the amount of financial and human capital needed as well as how these capitals will be put into action. The financial analysis is based on primary data gathered on the actual costs of acquiring or renting the needed equipment for starting the new business in Malaysia.

Figure 6.3: start-up cost

The total required start-up cost is RM273, 000 and it is expected to be spent over the course of one year.The needed funds for this new start-up will be sourced from banks and investments. 

PROJECTED PROFIT AND LOSS

Since the company is presently in the early stages of its development, the projections contained in this paper are made on they will be able to achieve the figures stated below.

Pro Forma Profit and Loss
	Year 1 –RM	Year 2 -RM	Year 3 - RM
Sales	1,075,000	4,125,000	6,125,000
Direct Cost of Sales	100,000	1,500,000	3,000,000
Other	38,000	$570,000	600,000
Total Cost of Sales	138,000	$2,070,000	3,600,000
Gross Margin	937,000	2,055,000	3,525,000
Gross Margin %	87.16%	87.16%	92.02%
Expenses
Payroll	256,522	453,066	608,696
Sales and Marketing and Other Expenses	382,000	163,810	1,366,850
Depreciation	8,400	$0	0
Continued education	36,000	517,500	575,500
Utilities	3,600	4,000	4,500
Insurance	9,600	20,000	25,000
Rent	24,000	25,000	25,000
Payroll Taxes	38,478	67,960	91,304
Other	0	0	0
Total Operating Expenses	758,600	1,251,336	1,696,850
Profit Before Interest and Taxes	178,400	1,803,664	2,228,150
EBITDA	186,800	1,803,664	2,228,150
Interest Expense	0	0	$0
Taxes Incurred	42,564	170,916	360,488
Net Profit	135,835	1,302,748	1,967,662
Net Profit/Sales	12.64%	50.25%	60.87

Breakeven Analysis

Figure 6.4: Breakeven point analysis

The projected breakeven period is within 10 months and this is based on the understanding that losses in one segment will be leveraged by profits in another segment. For instance, if the car wash service is not performing well, it is expected that the poor performance will be leveraged by the good performance in the Mini-mart and Bar sector, which are also the main reason for the diversified business setting that the new business intends to undertake.

Implementation and Control

In order to ensure consistency and successful operation, the start-up should follow set patterns as discussed below.

IMPLEMENTATION STRATEGIES	CONTROL
First stage: Making enquiry about and renting the business center.	It is important that the price does not exceed the projected budget, but further negotiations should be undertaken to see if the price can further be reduced.
Second stage: Purchase of necessary goods and resources, and delivering them to the center.	The purchased goods will include those that will be sold at the mini-mar (groceries), at the bar (wines and foods), and used for the purpose of undertaking the car was services.
Third stage: interview and hiring of the workforce.	Extra step will be taken during the interview to ensure that the company is recruiting the best individuals enriched with high talents to drive the new start-up forward. Recruitment will be solely by merit.
Fourth stage: startup of operations and advertisement of the company’s products and corporate image.	With all needed tools and staffs in place, the production process will commence immediately and adverts will be placed on different medias to create brand awareness and persuade customers to make purchase. Extra measures will be taken to ensure that the products are produced at a very high quality standard in order to ensure survival of the brand in both short- and long-run.

Implementation schedule

Chart 5.1: Gantt chart for implementation and schedule

Critical success factors

In order to excel in this industry, a number of factors need to be considered with respect to the characteristics features of the Malaysian market as discussed earlier in this business plan and these factors will include:

High quality services – consumers will be very sensitive to the quality of services obtained from research. The implication is that consumers will be loyal to a brand if the brand will be able to offer them high quality services. On that ground, this factor is deemed necessary in order to ensure that sustainability is ensured in the new business.

Price – while quality is considered necessary, it is also important to understand that consumers are very sensitive to price as there is a certain level of price they are willing to incur. On that ground, price is a critical success factor in this industry.

Location and convenience – this is also another important factor as consumers would like to easily access the service center and perform their desired services in a convenient way. Thus, this is the main reason for the extra service features added in this new concept.

Risk mitigation / contingency plan

Although the business plan has been successfully and correctly mapped out, the risk in business undertakings are very much unpredictable and there is no guarantee for success in any given business. Thus, it is important that this business plan include a risk mitigation and contingency plan. They include:

Risk of low demand for the car wash service – since this is a new business concept, there might be lower demand and this can lead to low performance. On that ground, it is planned that if the demands for the services are lower than thought / expected, the approach will be to print flyers and distribute it to the potential customers.

Unhappy / unsatisfied customers – while extra measure will be taken to ensure that the staffs possess the necessary qualities that will ensure high quality service delivery, it is expected that the staffs might fault out in their service delivery approach and this can lead to low level of satisfaction on the customers side. In order to handle this issue, the plan will be to adopt a service recovery measure that will include discount or even free-of-charge services in new orders.

Employees’ turnover – this is a very serious issue and it can even lead to reduced performance, productivity and profitability of the new business concept. This is because the employees are the main factors behind the business process. In order to ensure that this doesn’t occur, a strategic reward system will be adapted in the view that employees will be rewarded for their performance.

CONCLUSION AND RECOMMENDATION

Entrepreneurship in business basically deals with gaining economic freedom by planning, starting-up and running a new business. However, success is not guaranteed in new business establishment and it becomes a major course for concern when considering the fact that huge capital investment are needed to start-up and run a new business successfully. Additionally, the sources of the needed funds can be banks – requiring the borrower to either repay with interest or lose the signed collateral. Thus, risking failure is never and opportunity and the business owner must at all cost implement whatever is needed in order to guaranteed success or at least have the glimpse of hope that success will be the outcome of the new venture.

One way of doing such is to have a detailed business plan that is based on primary research – information gathered from the intended audience in order to ensure that what the new business intends to offer is actually needed in the market. Thus, this paper was designed to develop a new form of car washing service provider (V-car wash). The new car wash service will feature: Free Wifi, Mini-mart, Bar, and call-up services to create new opportunities for leveraging the losses that might be coming from some parts of the business. The outcome of the whole business process is an expected increase in sales, customers’ loyalty, repeat purchase and good word-of-mouth (recommendation) as the research showed that the consumers would like to have these new service features.

In conclusion, business plan is necessary to ensure that the needed services are actually what the business owner intends to provide as this is the only way through which sales can be guaranteed, and business growth assured. Thus, it is concluded that if all the new business design features are followed and complied with as discussed in this business development plan, there is an expected positive outcome from the business.

Appendices

Appendix A: Designed questionnaire for the research

Objectives

1. To understand the needs of customers in the car wash industry.
2. To understand how the availability of Wifi, Mini-mart, Bar and Home-call services will influence the level customers’ satisfaction in the car wash industry.
3. To understand the competitive sphere in the industry and the factors that influences consumers’ preferences

Instruction

1.      Answer ALL questions.

2.      Fill _ in the box available based on the legend stated.

3.      All information will be treated as confidential. It will be used ONLY for academic purpose.

4.      All information will be on aggregated basis and no individual data will be published.

 A.        DEMOGRAPHIC

a.         Race                            : ……………………………………………………………………………

b.         Sex                               : ……………………………………………………………………………

c.         Age      .                       : ……………………………………………………………………………

d.         Education                    : ……………………………………………………………………………

e.         Income                        : ……………………………………………………………………………

Note: Please fill up this form. The information given will be treated as highly confidential

B. PURPOSE OF USING A CAR WASH

1. I use car wash for?

         Washing my car

         Waxing my car

         Both

2. I prefer?

         Steam wash

         Liquid wash

         Any of them is ok

3. I own a car?

4. If yes, how often to do wash it?

         Every day

         2-3 times per week

         4-6 times per week

         once per week

5. How many years have you owned the car?

6. Do you make use of a car wash service?

7. How many years have you been making use of a car wash service?

8 Why do you make use of a car wash service?

         Its difficult to wash a car on my own

         Its affordable and better cleaned that when I wash myself.

         Its more convenient

         All of the above

9. Do you think car washers should provide free Wifi?

10. Would you like a mini-mart at the location of a car washing services so you could shop for your groceries at the same time?

11. Would like to have a bar at the car washing service centre so you could relax while waiting for your car to be washed?

12. Would like to have POS and/or e-Payment in the car wash service centre to offer you payment convenience?

13. Would you like a call-up services that will involve the car washer coming to your house to wash your car when you are not convenient enough to drive down to the service centre?

14. Low price is very important when making decision to choose a car washer

15. Quality is very important when making the decision to choose a car washe

16. I would be loyal to a car washing service that offers lower price and higher quality

17. I will recommend a car washing service if I am satisfied with the service obtaine

18. Presently, I think a lot more need to be done with respect to the quality of service available in the industry.

19. I will use a car washing service more frequently if it can provide free Wifi, POS and e-Payment features.

20. I will use a car washing service if it can offer Mini-mart and bar for relaxation and shopping while waiting for the car to be washed.

References

Bitner, M.J. (2001), “Self-service technologies: what do customers expect?”, Marketing Management, Vol. 10 No. 1, pp. 10-11.

Dibb, S., Simkin, L. and Bradley, J. (1996), The Marketing Planning Workbook, ITBP, London.

Machleit, K.A. and Wilson, R.D. (1988), ‘‘Emotional feelings and attitude toward the advertisement: the roles of brand familiarity and repetition’’, Journal of Advertising, Vol. 17 No. 3, pp. 27-35.

McDonald, M. (1995), Marketing Plans, Butterworth-Heinemann, Oxford. Mani, Sunil, 2000. Policy Instruments for Stimulating R&D in the Enterprise Sector: The Contrasting Experience of Two MNC Dominated Economies from Southeast Asia. Maastricht: United Nations University, Institute for New Technologies.

Miranda Y.P. Lee, Daniel W.C. So, (2007),"Corporate-slogans of corporations operating in Greater China", Corporate Communications: An International Journal, Vol. 12 Iss: 1 pp. 58 – 74.

Moorthy, S. and Hawkins, S.A. (2005), ‘‘Advertising repetition and quality perceptions’’, Journal of Business Research, Vol. 58 No. 3, pp. 354-60.

Piercy, N. (1992), Market-led Strategic Change, Butterworth-Heinemann, Oxford.

Wandlinglaw.com (2012), “Advantages and disadvantages of partnership business.” Available at: http://wandlinglaw.com/userfiles/fck/file/Practice-Areas/Business-Formation/Sub-Business-Formation/GP.pdf [Accessed on: 13/11/12].

REFLECTIVE EASY

Marketing is interesting. That is the first word I would like to start this easy with because I have experienced the field of marketing one-hand within this study and I see it as an interesting area of business.

For a very long time now, marketing has been hitting headlines for numerous reasons that can easily be avoided. 72 years ago, Paul Mazur and Malcolm McNair made the suggesting that marketing is the new way to create and deliver standard of living. 22 years later, Drucker (1958, p. 252) supported this argument by stating that marketing is the process through which a nation’s economy is integrated into the society in order to satisfy human wants. Since then, marketing have been accorded with numerous expectations of meeting such claims. However, certain changed now mean that marketing is currently being seen as the driving force of unwanted and undesirable social and cultural metamorphosis.

As a result of the current image marketing is represented with, critiques now argue inter alia that marketing plays a contributory role in destruction of intergenerational cultural values and tradition, and excessive consumptions which is damage the health of people in the society and causing changes in climate. Additional criticisms have also been bestowed to marketing by linking it to social vices such as obesity and the recent global financial crisis, which is a result of selling of inappropriate financial products to customers who didn’t really understood the risks of such products (Roger, 2011).

Discontentment with marketing doesn’t end in only social criticisms. For many years now, there has been a process of integrating marketing theme to represent a business process which is mainly concerned about creating, communicating and delivering value to customers in order to improve the economic performance of a company. These emphases have resulted in broadening scope of research and studies in everyday practice. This trend has also resulted in the emergence and growth of subfields such as relationship marketing, quality management, service marketing, supply and value chain management, and innovation management.

The reality is that no business process is clean in practice, and that is why the subject of ethics is applicable in all fields such as ethical management, accounting ethics, ethical research, ethical leadership etc. Therefore, the inappropriateness of a business process should not be linked to a field of undertaking, but should instead be addressed to the company that performed such. There are new subjects that also aim to address such issues like corporate social responsibility, stakeholders’ management and workforce relationship management. As such, marketing should not be hold to blame for disastrous business undertakings; instead the company should focus on their production process and seeks ways to mitigate the negative impacts they are having on communities where they operate in.

The importance is very much evident when it comes to developing new products and services as it is only through marketing that the brand will be able to deliver higher value to the customers and then higher value to the shareholders through the purchases made by the customers. Just as marketing is important, business development is also very much important because the success of the company depends on developing powerful business that will reflect what the consumers need and how the company intends to provide such needs.

This is the basic foundation from which this new concept was developed, as a business designed to meet the changing demands of consumers in the modern day car washing service. Traditionally, car washing service providers have focused on providing just the service of keeping the consumers’ cars clean, but research from this paper shows that there are numerous opportunities which such services can adopt as a means of leveraging the losses incurred due to low demand. Such include supporting the services with other services such as Mini-Mart and Bar for consumers to relax while also washing their car and also shop for the groceries. It would offer the consumers needed convenience and flexibility as they would not have to move around after washing their car. Additionally, home-call was also deemed necessary for the major car dealers in the city and also for hotels that might be seeking the service of car washers to come and clean up their cars without having to moves these cars down to the washing center due to the fact that it would be so easy to do such. All these discoveries serve as the foundation, from which the concept was developed as the concept is designed to offer mini-mart services, bar and restaurant services, free Wifi, online payment and orders, and POS services as well. All these new services are designed with the intention to increase consumers’ brand loyalty and preferences through the new added services that will offer more convenience than what is obtainable from other car wash service providers.  

Branding has widely been recognized as source of competitive advantage in both domestic and international markets (Biel, 1992; Calderon et al., 1997; Chaudhuri and Holbrook, 2001; de Chernatony, 2001; Farquhar, 1994; Moore et al., 2000; Mosmans, 1996; Mosmans and van der Vorst, 1998; Rubinstein, 1996). A brand in its whole sense is a representation of effects of synergetic marketing efforts that creates and develops a corporate image in customers’ mind and contributes to the success of a business by increases financial performance and business value for shareholders (Yovovich, 1988). This is exactly what I think of marketing after the completion of my task.

Branding as discussed above is a very important aspect of the marketing process as it provides the company needed prestige and power of recognition that will also allow them to differentiate its services form that of other car wash service providers. This is the same case of V-car wash services, as the brand was strategically created and positioned in the market based on the values of “quality” and “affordability.” These values reflect the real essence of the company with respect to the understanding of what it intends to offer the consumers.

In view developing the business concept, the first approach involved critically thinking of the business format to be adopted with respect to its uniqueness, availability and acceptability. Under the SAF mode, a business should be suitable for the market, accepted by the market and also feasible in terms of delivering the needed demands from the market and also delivery needed financial performance from the shareholders. Thus, this was behind the conception of the new services, which is designed to offer more addons to the conventional car wash services. This ideas wasn’t hard to develop in any case, as I have always conceptualized something of this nature long before the assignment was even issued out. My future plans is to open numerous entrepreneurial services and products in view of gaining financial sustainability. Thus, I am used to finding a way within my mind to redesign existing services in order to make it more professionally and add more values to it – with the view of increasing consumers’ demand for such services and also increasing potential for competitiveness.

Although the idea was not that difficult to conceptualize, there was difficulty with respect to determining how the idea will be packaged and presented to the consumers in order to ensure that it will be welcomed as thought. This is because it is only when the idea is welcomed that the company will actually be able to excel. This was not easy because traditionally, car wash services are not so packaged and as such the packaging could create a sense of expensiveness to the consumers’ mind and might deter them from adopting the new services. In view of that, a research was conducted and I also experienced difficulties with conducting the research. This is because I had to convince numerous drivers (a total of 400) in order for them to participate in the study. This was very stressful as it was not so hard to see the intended number and some of the drivers are not so welcoming.

Once the research has been completed, the next phase was to analyze the findings from the research. The analysis was done with SPSS software. Although I have previously used SPSS in the past, some of the analyses were new to me. Thus, there was also difficulty experienced in the case of the analysis but the whole purpose was to prove that the new services will be acceptable by the consumers – thus, I had no choice but to learn these new approaches and then develop the concept from it.

Following the analysis, the next step was to develop the marketing plan. In reality, I didn’t object because in its trueness, I am capable of developing the whole business plan on my own, so I didn’t mind the area I would be designated to undertake. However, the business plan has proven to be that no matter your level of confidence, business growth and general success in life is all about commitment and planning, and not about gut feelings. It look simple to be, but I was about to discover the more challenging academic task of my life.

Firstly, I have to sit back and relax, as well as recuperate on ideas about the task. Nothing looking forthcoming initially, so I had to look for extra help from the library. Fortunately for me, I am studying in one of the most outstanding colleges in Malaysia, with a rich library filled with books for all fields. Thus, I couldn’t help grabbing a marketing text book and glancing through them. I went through three different textbooks but all offers similar and yet differing methods for developing a marketing.

Although I have all the necessary guidelines for developing a marketing plan, the task was far from solved because of the company involved. Marketing car was service centers have no be so much undertaken in the Malaysian setting to the best of my understanding. Therefore, it was difficult to actually determine how the new product will be presented to the consumers in such a way that the consumers will be willing to accept it. This is because; it is only through acceptability that the brand can actually become so successful in the Malaysian market.

As this point, the most reoccurring difficult was data gathering. Since this is an imaginary business, there were no actual facts related to such. Thus, data had to be coined out from personal experience. Also, unlike accounting where you just have to deal with figures, marketing actually involve defining new theories and approach, and designing and strategies to meet set objectives. Additionally, I had to develop new slogan, logo, market, marketing mix, budget, implementation plan, and evaluation plan all on an imaginary scene. This was really difficult and challenging as it required critical thinking, creativity and innovation to be fully achievable.

I had to make use of the internet to study more about brand assets management and how to create a new business through merger and acquisitions. All I learned from the internet helped me towards undertaking the task. Thus, I started by presenting an introduction into what the topic will be all about, researched more about the markets and service delivery systems of car washing service providers. I combined all these ideas to form the internal aspect of the marketing plan in terms of creating a new corporate image and aligning it properly to ensure sustainability and financial growth for the new merger.

With the internal business environment fully developed, the new approach was to design the way the marketing plan will be communicated to the external environment (stakeholders) in terms of presenting the corporate value to customers, informing the current customers that the new service will offer more convenience, quality delivery and lower price when compared with other service providers in the industry.

In order to achieve the marketing objectives, I undertook another research to study all the communication Medias in Malaysia. This section is really fantastic because I had the opportunity of speaking with some of the marketers in these industries and they gave me all clear view of what advertising is all about, how to go about it, and Medias to adopt for the best results. As a result of that, I can proudly say that I am now familiar with all elements that constitute a quality marketing plan, and ways to develop marketing plan. From this study, I can to understand the industry more easily, with respect to how they offer their services, negotiate with customers and the kind of services they provide. Such an understanding helped me to develop the right communication plan for this work.

I also had the issue of interact with people during the survey. The main issue I faced is in the area of intercultural competence and teambuilding. It has been identified by research that the most common issues facing a team is cultural diversity and rationalism, communication, and cultural orientation differences (Young, 1998). It has also been stated that an effective member of a team is able to establish interpersonal relationship with other members of the team through effective exchange of both verbal and nonverbal behavior (Dinges, 1983; McCroskey, 1982; Spitzberg, 1983). Some of the characteristics that constitutes intercultural competences and aid quality performance of a team has been described in modern literatures (Kealey and Protheroe, 1996; Moosmu¨ ller, 1995; Podsiadlowski and Spiess, 1996) as the ability to establish and maintain relationship and effectively share information with others, as well as personal traits such as inquisitiveness (Black and Gregersen, 2000; Mendenhall, 2001).

The reason for this issue is because some of the responders were not so welcoming and it meant that I had to endure the pain of having to convince them. This delayed the whole research period as I had to retry numerous days before I could actually get to the figure intended for this research. Such a retrial also came with added stress, fatigue and emotion. Maybe the conceptual issue in this area is that the responders were not of the same view as me when it comes to freely participating in an open study. Research as far as I am concerned is necessary for the purpose of developing a more sustainable and welcoming environment. This is because it is only through research that managers will actually meet the demands of the consumers and this will also reflect on the delivery speed with respect to meeting these demands. If managers and businesses don’t undertake research, they will find it difficult to actually understand what the consumers need and the effect will be delivering products and or services that don’t meet these respective needs, which will also lead to poor service delivery and wastage due to lower demand. Therefore, I think people should be more open to participating in research as it would enable the researchers to determine how they will be best served.

This is a weakness on my side because I am an emotional person and I easily get pissed off when I see people not doing what I expected them to do. I don’t know if I should attribute this to my culture or just concede it as a personal attribute and characteristics. Whatever is the case, the fact is that I had difficulties convincing some of the responders to participate in the study and it meant that I had to forego some of the responders at some point – leading to actually ignoring responders that could have offered potential response in the process. The reason is because I was afraid of suggesting embarrassing ideas or having my idea being turned down by the group. Thus, I had to revert to keeping my thoughts with myself. This also had negative effects on me in relation to idea sharing. I was extremely reluctant to seek ideas from my colleagues as I sorted to finding the solutions to my own problems by myself.

In any case, this level of emotionality has both advantages and disadvantages. The advantages are that it made me innovative and less dependent on people. Because I am shy to ask, I always seek new ways to solve my problems and usually I end up with new and innovative ideas that have never been adopted by other students before. Additionally, I am not the type of person that keeps asking and seeking for help, and it’s a quality most of my friends have complimented. All are down to my shyness and reluctance to ask for help. On the negative side, this reduces my level of socializing and learning as there are things I would have learned by being close to people, opening up my challenges in search of solution from all the corners, and making friends that would potentially help me in the future. All at that, I still believe the disadvantages overweigh the advantages. Whichever is the case, I was not cheated on or mistreated in any way by group members, so I must commend their efforts towards the growth of our group, and I did my best in that case as well my performing my own designated tasks in time and efficiently.

As such, I went through the internet seeking new ways and ideas to improve my group communications skills and how I interact with people around. I learned new approaches and I have been adopting as well as applying theme. Subsequently, these approaches have been enhancing my communication ability and I now feel comfortable interacting with people around me. Thus, this work has had numerous impacts on my life as student and my future as a human being.

From this study, I have learned that communication is important in group performance and finding solutions for a problem. My lack of communication initially hindered me from getting necessary helps because I found it difficult communicating my problems to people. However, with my keen interest to improve in this area and help from psychologists online, I now find it easier to communicate with people and this is helping me in terms of providing solutions to my problems through group meetings and opening up the challenges I am facing,

This paper also helped me in understanding new theories, strategies and applications used in marketing, promotion and advertisement. On a personal level, it helped me to make friends with come corporate executives in the advertisement industry. I also learned many things about interpersonal development, cognitive thinking, building self-esteem, and strategic planning.

Thus, I will conclude this paper restating that marketing is interesting because it’s a field that combines application of other fields into one, and it offers opportunity for people to grow academically, exponentially, and individually in all aspects of life. Therefore: I am happy that I have worked with my group in undertaking this sort of work; I appreciate their care and concern towards the overall growth of the group; I appreciate my lecturer for designating this enormous and interesting work; I appreciate my university for her wonderful library which helped me; and hope that I will be able to do this kind of work in the near future.

Evidently, this paper is a clear demonstration that the concept of developing new business is not easy, as is also the actual running of the business. When new businesses are to be developed, the developer will have to think from scratch with respect to the ideas that will be adopted in the development process in order to ensure that what is actually being developed is needed in the market and it would be able to return the expected financial performance once it is made available to the market. This is not easy as it requires a great deal of innovation and creativity from the side of the business developer. In any case, this is why we are entrepreneurs. Entrepreneurship is defined as “total perseverance in absolute dejection.” Therefore, when things fall apart, entrepreneurs don’t give up, instead they keep on fighting and pushing ahead for greater success. This was experienced during the data gathering section. Some of the respondents are not so welcoming and I was so much pissed off by their lack of intention to respond. However, I still had to push ahead with the research in order to make such that I gathered the needed amount of data and it is the clear demonstration of what it takes to actually be a successful entrepreneur.

Thus, the conclusion here is that business development is not easy as there will be a number of ups and downs in the business development phase. However, the business developer should not be deterred by the fact that these ups and downs exist; instead the developer should focus more on the success that lies ahead following the successful development of a new business. Additionally, for any given situation that presents difficulty in the course of developing new business, expected profitability exist with respect to learning new things. Thus, this should also be a form of encouragement to the business developer when facing difficulties as the business developer will be able to learn new things from such development. Thus, business development can be described as an encouraging and rewarding experience that will help the business developer to gain new skills and also put to practice gained and previously possessed skills.

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