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Nanyang Polytechnic
School Of Business Management
Principles of Marketing (BM0019)
2004/2005 Semester 2
Done By:
Ng Ban Hock.....................(042306D)
Lee Yi Ting........................ (040727T)
Selvia Meliana Chandra ... (040370W)
Chong Wei Li ................... (042465Q)
Tutor’s Name:
Tutorial Group: AF0402(AB)
TABLE OF CONTENTS
Executive Summary ............................................................. 3
Introduction .......................................................................... 4
Background of company....................................................... 5
History and background ..................................................... 5
Management team info ...................................................... 5
Marketing philosophies ........................................................ 6
Marketing mix of osim ......................................................... 7
Product ............................................................................... 7
Price ................................................................................... 7
Place .................................................................................. 7
Promotion ......................................................................... 8
Research Methodology ..................................................... 8
Research instrument and Sampling size ..................... 8
Sampling Procedure ....................................................... 8
Other research means .................................................... 9
Findings and Analysis ........................................................ 10
Conclusion.......................................................................... 14
Recommendation ................................................................ 15
Appendices ......................................................................... 16
Executive Summary
In the following report, a details of OSIM’s varies marketing strategy would be
stated.
First of all in the Introduction, you would be looking at all the market research of our
project. The purpose and scope of our research would be stated in our introduction.
In addition, there would also be a brief description of our research methodology.
After the introduction, it would be followed by the Background of company. In this
section, the History and background of the company would be highlighted. The
Management team infomation would also be presented. Number of
outlet/branches and offices and number of staff would be mention in this section
too. Finally there would be the mission statement and motto of OSIM.
Next the Marketing philosophies that OSIM has adopted would be identified. The
right Marketing mix of osim that OSIM has adopted would then be identify and
analysis. The report would also have a section dedicated to explaining in details
our research methodology. The sampling plan and sampling procedure would be
mentioned.
In our section, it would focus on the analysis of all the questions asked in the
questionnaire of the market research. There would be analysis and interpretation
of all data gathered. Charts of all questions asked in the questionnaire would also
be included.
In the Conclusion section, conclusion of all the research findings would be shown.
Recommendation to the conclusion of the marketing research would then be
provided.
Finally in the Appendices, a clear piece of our questionnaire would be attached
and also a copy of the webpage of OSIM.
3
Introduction
Due to the alarming advancement of technology in today’s world, people are more
prone to look forward on a higher standard of living, at the same time, placing
more focus on their well-being. Hence, they are showing more concerns and
awareness on their health. Health products like Extrim, low-fat yoghurt and even
health equipment like massage chair from OSIM are often sought after.
However, one might have overlooked the fact that “hot” products like the above we
have mentioned, are actually made appealing to our purchaser by the enthralling
packaging and marketing strategies done by the companies. Therefore, our group
will be doing a project on OSIM, to find out more on their marketing concept,
strategies and so on.
In this report, you will find out the results of our marketing research done on the
brand OSIM. Our marketing research objectives are focused on 4 areas: (1) The
main target market of OSIM products (2) How is the OSIM product market
segmented (3) The market positioning of OSIM products and (4) What
motivates/influence consumers to buy OSIM products. From the research, we
would be able to find out more about the customers of OSIM products. After
gathering and analyzing the findings of the above research, we will provide
recommendations on how to further improvise their marketing strategy. With our
suggestions OSIM would be able to manage a more successful customer relation
to attract and retain more customers. A brief conclusion stating the current
satisfaction level of customers is also included.
The information we gathered came from both primary and secondary information.
Our main source of information will consist of (1) family and friends, (2)
advertisements and salesperson, (3) personally using the product and (4) we
would greatly rely on the information we found on the Internet. We will be putting in
our descriptive research i.e. surveys that are done on the consumers of OSIM
products to gain primary information. The primary information collected will thus
entitle us to a better understanding of the consumers’ buying behaviour.
4
Background of company
History and background
The Company was originally established in Singapore in 1980 by Ron Sim, as an
electrical and household appliance company under the name of R Sim Trading.
With a small start-up capital, the company was mainly involved with the marketing
of household products such as knives, knife sharpeners and mobile clothes drying
rods. In 1989, the company registered the name Health Check and Care, and saw
a shift in focus to home healthcare and related products. The period following this
saw tremendous growth for the company, and it developed outlets including
Malaysia and United Arab Emirates.
1993 the company officially launched the OSIM brand name and its distribution
network expanded to 60 point-of-sale outlets in Asia. In 2002, OSIM opened its
global business headquarters in Singapore. The Economic In 1993 awarded the
Business Headquarters Status (BHQ) to OSIM. The company opened its first
concept shop in Shanghai, in the People’s Republic of China.
Currently, OSIM has established an extensive distribution network of more than
500 strategically located stores and shop-in-shops in Singapore, China, Hong
Kong, Malaysia, Taiwan, Australia, Brunei, Canada, Indonesia, Ireland, Kuwait,
Macau, Philippines, Saudi Arabia, South Africa, South Korea, Thailand, Ukraine,
UAE, UK and USA.
Management team info1
☺ Mr Ron Sim Chye Hock (Chairman & Group Chief Executive Officer)
o Responsible for the overall strategic and marketing directions, and
management policies of the Group
☺ Mr Charlie Teo (Executive Director and Chief Operating Officer (HQ & South
Asia)
o Responsible for managing the Group's operations in Singapore and South
Asian counties
☺ Mr Tan Kia Tong (Chief Technology Officer)
o Responsible for formulating, planning, developing R&D strategies and
managing the Group's R&D activities.
☺ Mr Peter Lee Hwai Kiat (Chief Financial Officer and the Company Secretary)
o Responsible for financial and accounting control, investor relations and
corporate secretarial functions.
Mission
Vision
1
: Bringing healthy lifestyle to society.
: To be a global leader in relaxation and healthy lifestyle
products.
For a complete list of the management team’s information visit www.osim.com.sg
5
Marketing philosophiesa
1) The Marketing Concept is one of OSIM’s main philosophies.
 OSIM products are very focused on the customer’s health needs.
 Introducing different kinds of massage chair e.g. Imedic 200, Noro Bliss
chair, Noro comfy chair and Isymphonic AV is a good example of catering
to the customer’s needs and wants.
 Emphasis on building strong customer relationship e.g. offers free online
OSIM store account.
 Latest product information is send to customers through e-mails.
 Strongly encourage customer’s feedback. Feedback forms are provided in
both online store and physical outlets.
2) The Societal Marketing Concept is also being mildly followed.
 Being a company that offers healthcare product, it’s hard not to consider the
customers long-term welfare and interest although they do make money
from selling the products.
 The four aspect of OSIM’s product: health, nutrition, fitness and hygiene
ensure customer good future health condition.
a
The set of concepts that a company adopted to suit their operation.
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Marketing mix1 of osim
Product2 (customer solution)
Osim was originally established as an electrical and household appliances
company. After 9 years, there is a shift in focus to home healthcare and related
products to bring healthy lifestyle to the society. They came up with many more
varieties in their products, such as, iSqueeze, iPulse, iDesire, iSymphonic and etc.
Let’s take for example OSIM iSqueeze product; it has 4 pairs of kneading discs
that firmly squeeze, energizing your calves, ankles and feet . It also comes with a
soothing vibratory sensation that improves blood circulation and eases tension of
your lower legs. iSqueeze has a power consumption of 35W and it has a
dimension of 51 (L) x 39 (W) x 44(H) cm. It is also design in a very unique way that
offers you flexibility and variation, with 4 different applications targeting various
therapeutic massage needs. It comes with an innovative packaging.
Osim provide a 1-year warranty for their customers and they are delivering the
products right at your doorstep.
Price3 (customer cost)
Osim’s products offer wide range of prices to the market. Their massage chairs
are price around the range of $6000 to $8000 and their household appliances are
value in the range of $1000 to $3000. Hand held massager have more economical
prices which range from $100 to $500. OSIM Nutrition products are mostly priced
below $100. On average the overall prices of OSIM products are slightly higher
than most of their close competitors like OTO.
As for the payment mode, customers can choose to pay with the 12-months
installment plan, the 24 months installment plan or the 36-months installment plan
depending on the price of the product. All installment plan comes with interest rate
of 8%.However due to periodical promotions consumers can sometimes pay with
installment plan at 0% as long as they uses credit card. Payment through credit is
also accepted by OSIM, and they would be able to make payment online with their
credit card.
Place4 (convenience)
1
The set of controllable tactical marketing tool
Anything that can be offered to the market for attention
3
The amount of money charged for product or service
2
7
Osim currently have a total 63 shops all over Singapore. 20 of the stores sell
health products which include massage chairs and the rest of the shops sell
hygiene, fitness and nutrition products which include household appliances.
They have 12,000 over staffs working in OSIM. With a large number of Osim
shops located all over Singapore it is very convenient for consumers to get their
OSIM products. Upon purchasing OSIM products that cannot be hand carried,
Osim will provide delivering services where they deliver by truck. The products will
reach the consumer’s houses within 10 to 14 days depending on the individual
items that they had purchased. Road shows are also held by Osim at least once in
every three months to create awareness and attraction the attention of consumers.
Osim offers online shopping as well. This mainly caters to businessman and
women. Through online shopping, consumer will find it easier and less timeconsuming.
Promotion (communication)
Osim advertise their products through newspapers advertisements, magazine
advertisements, online advertisements, television advertisements as well as radio
advertisements. They hope to reach out to all consumers regardless of their age
and gender. OSIM also frequently involve in the sponsorship of charity events to
further boost their reputation.
They also occasionally make use of opinion leaders and aspiration group to
promote their products. Osim has maintained good customer relationships by
delivering superior customer value and satisfaction. During festive seasons, Osim
will have promotion of 5-15% off for all their products. On the OSIM online store,
current promotions are also listed down. Discount is their most common form of
promotion.
Research Methodology
Research instrument and Sampling size
In our research, we choose to use the questionnaire as our research instrument.
We have gathered a sampling size of 100 for our survey. We safely assume that
having a sampling size of 100 is enough to help us draw a generally reliable
conclusion that would represent the population of OSIM consumers.
Sampling Procedure
For our sampling procedure we have decided to use stratified random probability
sampling-the population is divided into mutually exclusive groups. The people
chosen for the survey are only those who had purchased and experienced using
OSIM products at least once for the past 1 year. Accurate data can only be
obtained if those surveyed have a certain degree of understanding of current
OSIM products. We also choose to have an equal number of males and females
surveyed so that we would be able to do cross tabulation analysis.
8
Other research means
Further research on the company is also done online. We surf through OSIM’s
official web pages have a better knowledge on the products and background of
OSIM’s products. We also did a short phone interview with an OSIM staff to seek
more accurate information.
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Findings and Analysis
(Refer to the appendix for the full Questions and Answers)
First introduced from which source
50
40
40
30
30
20
Percent
15
10
10
5
0
Radio/Tv ads
Websites
Friends/Family
New spaper/Mag ads
Salesperson
First introduced from which source
 40% and 30% of the above survey results are deriving from the radio or television ad
and newspaper or magazines respectively. Hence, we can gather the immerse power of
what advertisement has exerted on products.
Which OSIM product own
70
66
60
50
40
30
Percent
20
16
10
12
6
0
health
hygiene
nutrition
fitness
Which OSIM product own
 66% of the OSIM products purchased by our surveyed sample belong to the health
category. Such can be seen by the mass understanding of the significance of health in
every individual. Thus, attributed to the enacting of increasing health equipment.
10
Difficulty of locating OSIM product
80
69
60
40
26
Percent
20
5
0
very easy
easy
dif f icult
Difficulty of locating OSIM product
 The above results suggest those OSIM products are widely available in Singapore.
Place of purchase
roadshows
official OSIM shop
departmental stores
electronic stores
10
6
49
35
 Results have shown that 49% of the survey reports actually purchased the OSIM
products in road shows. This is because much talks and demonstrations are illustrated
during the road shows, thus leveling the confidence level of consumers.
11
Reason for buying OSIM product
60
57
50
40
30
Percent
20
22
21
to relieve stress
filial piety
10
0
health aw areness
Reason for buying OSIM product
 59% of our consumers purchased the product out of health awareness. This has been
highlighted in our earlier graph.
Most Attractive factor of OSIM
40
33
30
27
20
19
15
Percent
10
6
0
cheap pricing
durablity
reputable brand
Attractive promo
cusotmer friendly
Most Attractive factor of OSIM
 OSIM is known for its durability and user-friendliness. It is no wonder why it turns out
to be the most popular brand name amongst others.
12
 Due to high technology and the high research costs that Japan has invested, it results in
the high charging of OSIM product. Therefore, consumers see this as the major cons.
What is the next best alternative for OSIM?
Valid
OTO
panasonic
Total
Percent
62.4
Valid Percent
63.0
Cumulative
Percent
63.0
89.0
26
25.7
26.0
iJoy
5
5.0
5.0
94.0
Others
6
5.9
6.0
100.0
100
99.0
100.0
1
1.0
101
100.0
Total
Missing
Frequency
63
System
 OTO is found to be the next most popular product, which make them to be OSIM’s
closet competitor
13
Respondent's satisfaction with OSIM
60
53
50
40
39
30
Percent
20
10
6
0
very satisfied
satisfied
dissatisfied
very dissatisfied
Respondent's satisfaction with OSIM
 Needless to say, OSIM is a well-received product from every household. It is a desired
“masterpiece” which every household would want to own. All this can be gathered by
the genuine testimonials of OSIM customers.
Conclusion
OSIM has established a household name for itself. It has a defining advantage over other
brand of product due to various reasons. Firstly, OSIM is able to punch in appropriate
marketing strategies to arouse the interest from the consumers’ field. In addition, they
possess the suitable market positioning such as devising strong marketing mix. This can be
suggested by the high of the availability of OSIM products. OSIM have targeted largely
the high-income and middle-income consumers setting prices of their products relatively
high. Such actions definitely contributed to their annual revenue. Furthermore, the modern
consumer of today had acquired the facts that health is the primary concern in every being.
As stated earlier, this sole reason (health awareness) attributes to the escalating
consumption of OSIM products. All in all, OSIM focused on bringing a better service and
creation for the mass and is building better public relation simultaneous. Not only it
appears as a health-building form, it also serves as an excellent from of relaxation to ease
the tension in our hectic life.
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Recommendation
From the results of the primary data we have obtained much earlier, we found out that the
major disadvantage that OSIM has is its high cost. An average OSIM armchair will easily
cost up to $2,000 to $3,000. This might be an extravagance to the public who intend to
invest in health equipments.
Therefore, our group has come up with several suggestions. To reduce the cost price of
OSIM equipment, OSIM headquarters in Singapore can actually manufacture more of the
massage chairs instead of importing most of it directly from Japan. In this way, it can save
both time and financial resources. Not all consumers are particular about the “Made in
Japan” tag, cheaper price will appeal to a larger portion of the Singapore population.
Combining cheap pricing and with a reputable brand would no doubt generate higher
revenue. However, OSIM should continue to manufacture some of their chairs from Japan
to maintain their position as a high quality product company and to provide for consumer
in the higher income group.
OSIM should also keep up to date of their close competitors. OTO is currently the
strongest competitor of OSIM. Although OTO may still not have a larger market share
compare to OSIM, they are catching up fast. OSIM must always be aware of their
competitor’s progress and ensure that they are not lagging behind in any introduction of
new products by their competitors.
Improvising the products to make it more customers orientated would also be useful.
Having equipments can be easily operate would be beneficial to consumers. Thus OSIM
should research on the common operating difficulty that their customers are facing and
improve on the area. Consumers would greatly appreciate the convenience of the product
and through word of mouth, OSIM would be able to build excellent customer relation.
With the enacting of the above suggestions we have mentioned, OSIM will definitely carve
out a broader horizon in the health and care line.
15
Appendices
16