Strategic Marketing Plan

11/17/2011 MKTG 497 Ryan Dowling & Amber Brokaw

Executive Summary There has been a new business opportunity with the development of personal computers. We Provisions have decided to enter this market along with a number of other competitors such as Infidel, KG, RDF, and Brand Face. This market started off in the introduction section and is now heading into growth. Product markets are the lower end Costcutter and Workhorse. The higher end of the Innovators and Mercedes, and also a division for people who are on the road called Travelers. Companies are starting to expand in multiple markets throughout the world. There is NORAM, MEA, LATAM, EUROPE, and APAC. All with consumers wanting different product needs. Our WH1.2 is made for everyday computing usage. When creating it we based our decisions on the highest ranking wants and needs of the consumers. We equipped it with high computing power and an ultra-capacity speed. We also gave it the largest screen size. This market is currently in the growth stage. Our T100 is designed for the business man who is on the road. Like before we use are market research and built it on the customers wants and needs. We included a portable design, high speed and power and networking with a battery for road usage. When designer these products if we didnt have the highest brand judgment we would look at the competition to gather ideas, and use similar features while also trying to either add or subtract some to find the right mix to increase the brand judgment. Our marketing objectives are to increase market share 25 percent per quarter and to finish quarter nine with 25 percent total market share. We also want to acquire 25 percent market share per brand segment. We plan on finishing with a profit of 14million dollars which is a 100% return on investment. We need to make 9 million dollars in revenue per quarter. Also by quarter 9 we will be a global company with offices in each region. We are predicting to sell a minimum of 38,850 total units by quarter 9. For quarter 7 we plan on introducing three new computers. A new WH, Traveler, and introducing an Innovator to our product portfolio. All will be equipped with new technologies. The new technologies we have purchased are slim design which would be an upgrade to our Traveler where consumers in that market are seeking a slim, portable, and able to use on the road computers. The other is video conferencing which will be added to all three new computers. In each of those segments it was ranked at least a 115 to be able to use live video. We picked that technology because it allows us to upgrade each of our computers. The current product markets we are in our WH and Traveler with a release this quarter in Costcutter. We are creating the cost cutter to differentiate it from our WH which was grabbing 26 percent of that market share. With a defined cost cutter we are able to tailor the product specific to that segment as well as lower the price substantially. Our initial strategy was we offered our products a little lower than what consumers are willing to pay and we were

lower than our competitors. But because our last to price judgments were still at 100 we have decided to increase our product prices. The WH is now priced at 3,350 and the Traveler at 3,550 which were previously at 3,150 and 3,450. As mentioned previously we will have be releasing new products in quarter 7 with new technologies. Will the release of these new products we believe they will help us move toward our goal of 25 percent market share. For our budget we expect the COGS to increase as we sell more units. We plan on opening two new offices every quarter, which will cost us an average of $300,000 for set up costs each quarter. Parallel to that our sales office lease is at $430,000 and will increase 100,000 per qtr. Our operating expense is at $3million and will increase around $1million each of the next quarters (See appendix). We must spend this kind of money to expand and grow our business. We need to spend money on ad placement and hire more sales personal to help increase brand awareness compared to our competitors. These expenses will help grow sales and make us more money to reach our objective of $14million. Are R&D expenses are based on the upgrades of Slim Design and Video Conferencing. In the next two quarters we will also invest in an upgrade in networking and professional office. Will all these expenses will help us continue to grow and be successful in our objectives. Situation Analysis The Industry We, Provisions, are a new business entering the micro computing business. We will be dealing with selling personal computers to consumers around the world. This is an emerging market with great opportunity. There are a number of competitors competing in this market. They are Infidel Industries, Brand Faced Computers, RDF Computers, and KG Corporation. Current operating norms are businesses entering new cities every quarter while modifying products and ads to find the superior product for the market. Every quarter the PC market continues to grow in demand and new technologies are being developed to add more beneficial features to suit consumers wants and needs. This makes competition stiff and marketing efforts crucial to being successful. The Target Markets Definition, Location, Size The first 2 markets we entered were Toronto and London. We selected these to start off with because they were ranked in the top six in willing to pay and potential demand for the WH and Traveler. For the WH the price willing to pay was the highest at 3,331 for Toronto and London had the highest demand at 4,721. For the traveler both cities were ranked in the top six for both categories. Our strategy was to pick cities that fit both

products and that were not the major cities most competitors would enter. From there we continue to enter two cities per quarter and are now in LA, Paris, and soon to be Tokyo, and Moscow. When choosing those we again looked at the averages of demand and willing to pay for the WH and Traveler, as well as the CC and Inn, because we are planning to build those products in the future. We are now in the top three cities for WH and Traveler based on demand. Customer Characteristics Workhorse o The main characteristics for the WH are they are looking for a product that is easy to use and can be used for a number of things. They want it to be low priced. They want the screen to be easy on the eyes and be capable of using word process and bookkeeping software. Traveler o The main characteristics for the Traveler are they want the product to be portable, easy to carry, with the capabilities to connect and communicate with networks and people while on the road. They want to use it for business and be able to make presentations with business quality graphics. CC o The cost cutter like the WH wants the product to be easy to use. They want their information and actions to feel safe and secure. They want computers that are the cheapest. They want it to have word, bookkeeping, and communication device. Innovator o The innovators want a high end product. They are not price sensitive and are willing to pay a lot. They want a high performance and fast product with networking capabilities. They want it to have technical graphics, be able to design website, and use it to calculate stats.

The Products WH100-1.2 Description Recently modified workhorse desktop computer. Costs $1,722, and includes high speed computing power, ultra capacity hard drive, standard networking, rewritable optical drive, auto backup, 21-inch high resolution monitor, professional operating system, professional office software, and many other software applications. o In the growth stage of the product lifecycle.

o This is a quality computer because of its computing power and hard drive space, 21-inch high res monitor for easy viewing and multi-tasking, and a wide array of software applications. o When designing the WH100-1.2, we took into consideration what the market was looking for in a workhorse computer based on the wants and needs of the consumer. o Our price structure is based on the cost to make the computer, as well as the price the consumer is willing to pay for the computer in the particular market. o The WH100-1.2 will be used for everyday computing and business work. T100-1.2 Description Recently modified traveler laptop computer. Costs $1,522, includes high speed computing power, high capacity hard drive, standard networking, expansion slots, professional operating software, professional office software, and many other software applications based on the needs in the traveler market. o In the growth stage of the product lifecycle. o This is a quality computer because of its portability, high speed, and networking capabilities, along with the desired software applications wanted by the target market. o When designing the T100-1.2, we took into consideration what the market was looking for in a traveler computer based on the wants and needs of the consumer. o Our price structure is based on the cost to make the computer, as well as the price the consumer is willing to pay for the computer in the particular market. o The T100-1.2 will be used by consumers who are frequently on the road for work or leisure, and looking for a computer to communicate back to the office.

See Sales Per Segment in the Appendix. The Competition Identification of competitors RDF Corporation KG Computers Infidel Industries Brand Faced Computers

Marketing activities of competitors

RDF Corporation and Infidel Industries are currently our biggest competitors for our Workhorse computer because we have similar prices and features. Our advertising method is also very close. KG Computers and Brand Faced Computers are our biggest competitors for the Traveler market. Our prices are between both of theirs, and our features and advertising is also very similar.

Marketing Objectives Market Need Objectives We will continue to base our decisions on what the consumers wants and needs are to obtain our goal of 25% market share and 100% return on investment

Sales Objectives Increase total market share at a rate of 25% each quarter. Earn $9 million more in revenue per quarter, and $14 million by the end of quarter 9. Sell 38,850 total units by quarter 9. To become a global company by entering all regions by quarter 8. Increase individual market share by a rate of 25% each quarter in the WH, Trav, CC, and Inn markets. Invest in the slim laptop case and video conferencing to increase the quality of our computers in each market.

Share of Market $14 million/100% ROI 25% total market share

See Sales Per Segment in the Appendix for a detailed spreadsheet of future sales Marketing Strategy General Strategy Positioning o Our general strategy was to enter the Workhorse and Traveler market. We picked these two because the WH had the highest potential demand and the TV was a notebook which was different than the other markets. Another reason to target these markets was we felt we did not have the resources or technologies

to initially target the Innovators or Mercedes in the beginning. Our plan is to enter two new cities every quarter and eventually go global. Differentiation o We pick cities that suit the product markets we are in based on the demand and price willing to pay, as well choose places that have high demand, but have none or limited competitors. We originally were pricing our products as some of the lowest but have started to increase them to deal the price judgment.

Specific Market Strategies WH100-1.2 o ProductWhen looking at the WH wants, the highest rankings where in safety, easy to use and on the eyes, low price, and to have word processing and bookkeeping. In order to fill these needs, we built the WH100-1.2 with a security suite to help with safety of information; we added medium range processing and hard drive to keep things simple along with adding the biggest screen which was 21-inch high resolution to make objects clear. To deal with the low price, we priced it at $3,350 which was right at the range they were willing to pay. To complement what they wanted to use it for we gave it professional office software as well as a bookkeeping application. o PriceThe WH100-1.2 is priced at 3,350 to deal with the low price that segment is willing to pay. o PlaceThis product is being sold in all cities we are in and will be in the future. Currently we are in LA, Toronto, London, Paris, Tokyo, and Moscow. o PromoWe are advertising in all regions and cities we are in and will be in the future. We have split up our local media inserts and regional media ads according to demand of the product and consumers wants in each city or region. For instance, London has a high demand of 4,710 workhorse units, so we will have a higher amount of local ads placed in that city. Same goes for any other city, but the number of ads will be fewer unless we see a reason for advertising the same amount. As for the regional media, we used a similar method, choosing the media that rated higher for the workhorse market. For instance, General Business Magazine was rated 127 for workhorse consumers, which was the highest in the market. Therefore, we put more ads in that magazine to start with. We used the top three rated media for each brand to decide how many ads to place. We will continue to add advertisements using this method for the remaining quarters, as we open new offices and create new brands. Please see the Local Media Advertising and the Regional Media Advertising in the Appendix for a detailed spreadsheet of what we did.

T100-1.2 o ProductThe main features the traveler market wanted was ability to connect on the road while networking. They want a slim, portable design. Also, they want safety and business applications. So when creating our T100-1.2 we built it as a notebook to allow people to transport it easily. We gave it networking and a battery, so it can communicate with other people and it does not need to be plugged in to use. Users would mainly use it for business purposes, so we supplied it with professional office software, professional OS, presentation and business graphic applications. o PriceThe price is at $3,550 which is slightly above or at what consumers are willing to pay. We figure we can get away with a small increase price because this market is not as price sensitive. o PlaceLike the WH, the Traveler will be sold in all cities o PromoWe are advertising in all regions and cities we are in and will be in the future. We have split up our local media inserts and regional media ads according to demand of the product and consumers wants in each cit y or region. For instance, Tokyo has a high demand of 3,441 traveler units, so we will have a higher amount of local ads placed in that city. Same goes for any other city, but the number of ads will be fewer unless we see a reason for advertising the same amount. As for the regional media, we used a similar method, choosing the media that rated higher for the traveler market. For instance, New Venture Magazine was rated 125 for traveler consumers, which was the highest in the market. Therefore, we put more ads in that magazine to start with. We used the top three rated media for each brand to decide how many ads to place. We will continue to add advertisements using this method for the remaining quarters, as we open new offices and create new brands. Please see the Local Media Advertising and the Regional Media Advertising in the Appendix for a detailed spreadsheet of what we did. CC o ProductWe decided to create the cost-cutter because our workhorse had captured 22% of that market, and we thought it would be smart to make a specific product for that category to differentiate the two, and allow us to offer a lower price. The features the cost-cutter consumers want was very high on ease of use and security. They want a very low price and to have smart sales service and tech support. So we created a product that had all basic features, such as OS, capacity, lite office, and hard drive. We equipped it with a security suite to provide safety. We selected a low price to sell it at and will offer a rebate.

o PriceThe price is at $2,350, this will allows us to separate our WH and the extreme low cost of Infidels WH. o PlaceWill be offered in all cities we operate in. o PromoWe will advertise in all regions and cities in the future. We will split up our local media inserts and regional media ads according to demand of the product and consumers wants in each city or region. For instance, Paris has a high demand of 4,138 cost-cutter units, so we will have a higher amount of local ads placed in that city. Same goes for any other city, but the number of ads will be fewer unless we see a reason for advertising the same amount. As for the regional media, we will use a similar method, choosing the media that rated higher for the cost-cutter market. For instance, Sports Magazine was rated 140 for cost-cutter consumers, which was the highest in the market. Therefore, we will put more ads in that magazine to start with. We also will use the top three rated media for each brand to decide how many ads to place. We will continue to add advertisements using this method for the remaining quarters, as we open new offices and create new brands. Please see the Local Media Advertising and the Regional Media Advertising in the Appendix for a detailed spreadsheet of what we did. Innovator o ProductThe innovators are very into new technologies with fast and high performance. They want to be able to tie into many networks and have security. Programs they want are web designs, technical graphics, and stats. To comply with these wants we will equip our products with the largest hard drive available and ultra-capacity performance. To tie in the networks we will give it networking capabilities, professional software and OS, with security. o PriceThe price will be $3,800 which is competitive to our competitors. o PlaceWill be offered in all cities we operate in. o PromoWe will advertise in all regions and cities in the future. We will split up our local media inserts and regional media ads according to demand of the product and consumers wants in each city or region. For instance, Chicago has a high demand of 3,370 Innovator units, so we will have a higher amount of local ads placed in that city. Same goes for any other city, but the number of ads will be fewer unless we see a reason for advertising the same amount. As for the regional media, we will use a similar method, choosing the media that rated higher for the innovator market. For instance, New Venture Market was rated 148 for innovator consumers, which was the highest in the market. Therefore, we will put more ads in that magazine to start with. The innovator brand actually rates some media significantly different from the other three markets,

such as, high ratings in the Computer Magazine and Science and Technology Magazine. This will be interesting to see how well these media options will work for us, while the other three markets typically share the same kind of media. We will still use the top three rated media for each brand to decide how many ads to place. We will continue to add advertisements using this method for the remaining quarters, as we open new offices and create new brands. Please see the Local Media Advertising and the Regional Media Advertising in the Appendix for a detailed spreadsheet of what we did. New Technologies Slim Case for laptop o We would like to invest in this technology to make our traveler product more superior, and felt the slim case can improve on a number of the consumers wants. Some of their highest wants were to use on the road, portable, slim design, and light weight. All of those are rated at a score of 120 except the weight which is stay rated a high 114. A slimmer design would improve on all these needs compared to the standard casing. We feel that if our competitors in the traveler market (Infidel and KG) do not invest in this technology that it would give us a competitive advantage and a way to differentiate our product. o The second piece of technology we want to invest in is video conferencing. We picked this technology because it was something we could add to our WH, Traveler, and when we develop our Innovator. Across all three, consumers live video usage was ranked at a 116, 117, and 118. By adding the video conferencing it is a new feature to apply to all markets making them a higher quality. o When we get these new technologies we will introduce a new workhorse, traveler, and come out with an innovator that will all be applied with the video conferencing and the traveler also with a slim design. We will promote our new products and plan on them helping us increase sales and gain market share. Marketing Budget All marketing expenses are made for future investments and revenues. We expect to increase revenues by over $9 million per quarter to gain our ultimate goal of $14 million in net profit. Our COGS will continue to increase over time as we add and alter products. The future COGS were estimated based on current COGS, so these will increase. We will also continue to open two sales offices each quarter and fill them with an appropriate amount of salespeople to cover the market. The future sales offices and sales force is expected to fluctuate once we open new offices in new regions and introduce our new target market, as well as decisions to increase or decrease sales force later on. The advertising

expenses came from expected ad placement based on the demand of product in certain locations, and our method described in the Promotion section of the Marketing Strategy. The research and development costs are based on the two technologies we want to invest in, slim laptop case and video conferencing. In quarter six and seven, we also plan to implement more technologies, high speed networking and professional upgrade office software. Implementing all of the above puts us in good position to successfully hit our goals. Please see the Division Profitability and Cost of Goods Sold in the Appen dix for detailed spreadsheets. Also note that these numbers are based on estimates and will not be completely accurate.