TR2201 Entrepreneurial Marketing Final Marketing Plan Chief Executive Officer Chan Yuen Mun U058975H Chief Operation Officer Oliver Koh Chief Communication Officer Tay Su-Hui Fiona U060543X Chief Technical Officer Huang Aijia Chief Creative Officer Lee Junlin Chief Financial Officer Kiran Narwani Chief Marketing Officer Nandini
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TR2201 Entrepreneurial Marketing
Final Marketing Plan
Chief Executive Officer Chan Yuen Mun U058975H
Chief Operation Officer Oliver Koh
Chief Communication Officer Tay Su-Hui Fiona U060543X
Chief Technical Officer Huang Aijia
Chief Creative Officer Lee Junlin
Chief Financial Officer Kiran Narwani
Chief Marketing Officer Nandini
[2]
Contents
1. Executive Summary ---------------------------------------------------------------------------(3)
2. Our Company ----------------------------------------------------------------------------------(5)
3. Market Outlooks -------------------------------------------------------------------------------(7)
a. Laptop Industry -----------------------------------------------------------------------(7)
b. Market Size and Potential ---------------------------------------------------------(8)
c. Market Trend ---------------------------------------------------------------------------(8)
4. Current Problem -------------------------------------------------------------------------------(9)
5. SWOT Analysis ---------------------------------------------------------------------------------(10)
6. Key to Success --------------------------------------------------------------------------------(13)
a. Uniqueness ----------------------------------------------------------------------------(13)
b. Scalability ------------------------------------------------------------------------------(13)
c. Sustainability --------------------------------------------------------------------------(14)
7. Market Positioning ---------------------------------------------------------------------------(15)
8. Target Market ---------------------------------------------------------------------------------(16)
9. Marketing Mix ---------------------------------------------------------------------------------(17)
a. Product ---------------------------------------------------------------------------------(17)
b. Price -------------------------------------------------------------------------------------(22)
c. Place ------------------------------------------------------------------------------------(25)
d. Promotion ------------------------------------------------------------------------------(28)
10. Financials ---------------------------------------------------------------------------------------(31)
a. Sales Forecast ------------------------------------------------------------------------(31)
b. Operating Expense -----------------------------------------------------------------(34)
c. Profit-Loss Analysis ------------------------------------------------------------------(36)
d. Break-even Analysis ---------------------------------------------------------------(38)
11. Implementation Plan and Contingency Plan ------------------------------------(39)
12. Summary of Survey Result ----------------------------------------------------------------(42)
[3]
Executive Summary
Based on official statistics, there is an increasing trend of laptop ownership in
Singapore, with the majority of laptop owners coming from individuals in
professional, managerial and administrative positions. This is partly due to the
rising trend of working away from the office, and the increased coverage of
wireless technology across the island. Consequently, statistics have indicated a
rising trend in the number of laptops that are being stolen. In light of the above,
TrackLabs aims to provide the solution to this problem of stolen laptops and the
need to secure the data stored in laptops by providing a tracking device to be
placed in the laptop itself as well as a service to recover the laptop in the event
of theft.
TrackLabs is a company with the mission of providing a total security solution to
recovering electronic devices and data while ensuring utmost privacy. Our main
offering is to be able to track a lost device using the latest Global Positioning
System (GPS) Technology. As there are a variety of substitutes in the market
currently offering either insurance coverage services or software tracking which
requires the thief to go online before he can be tracked, we are unique as this is
an enterprise which combines the best of both offline and online tracking as well
as providing an additional recovery service in Singapore.
Our target market group primarily comprises those in Professional, Managerial,
Executives & Technical positions, as they comprise just over half the workforce in
Singapore.
[4]
Hence, we will be positioned as a B2B (Business to Business) enterprise. However,
as we recognize that the students today will also be the workforce of tomorrow,
we will also be targeting to a lesser extent the tertiary student market (i.e. NUS,
NTU and SMU students) so as to expose our brand name to them before they
move into the workforce.
We aim to attract our target market group through a unique mix of press
exposure, print advertisements in major corporate publications, bus stop
advertisements as well as through our very own website. More importantly, we
will offer two reasonably priced packages aimed at the two different market
segments according to their needs and purchasing power. In the long run, we
envision extending our services to other electronic devices other than the
laptop with the added possibility of embedding our tracking device within these
electronic devices to further increase security.
In this marketing plan, we will present our situational analysis, followed by an
insight into the marketing strategies used. Lastly, we will analyze the costs and
profits of this enterprise.
[5]
Our Company
Mission
TrackLabs’s mission is to offer a total security solution to recovering electronic
devices and data while ensuring utmost privacy. We aim to achieve this through
privacy, competency, teamwork, passion for providing quality services and
empowering our customers.
Vision
TrackLabs aims to be the market leader in providing security solution and data
security using best available cutting edge technology.
Our Team
[6]
About Our Service
We are introducing the product known as LapTracker, a Global Positioning
System (GPS) tracking device that can allow you to track the position of your
laptops indoors and outdoors with the additional function to transfer or to delete
of your data remotely in the event of a theft. In addition, we will also provide a
recovery team to track the laptop in the event that it is stolen and pass on this
information to the relevant authorities to take action. This therefore represents a
one-stop solution to the tracking needs of the user.
[7]
Market Outlooks
As of 2006, the laptop industry is largely dominated by 7 major players: Lenovo,
Dell, HP, Acer, Apple, Fujitsu and Toshiba, which make up 83% of the market.
(See Appendix A for a detailed breakdown of market sizes). Of the number of
people who own laptops, Professionals (34.2%) and Administrators/Managers
(30.2%) take up 64.4% of laptop ownership
Laptop Industry
1 in Singapore.
Market Size and Potential
The current market size based on total number of laptops sold is about 354,000
units as of 2007. In 2007 alone, total laptop sales volume was about 52,400 units,
which represented an increase of 4,400 units sold from 2006.
1 (Singstat 2003) released in 2005. (http://www.singstat.gov.sg/pubn/hhld/hes2003.pdf)
[8]
In addition, laptop sales volumes are expected to increase by about 3-6% per
annum over the next 4 years, hence reflecting a substantial market potential in
the laptop market.
Market Trends
As corporations become more I.T. enabled and efficient, laptops increasingly
become a necessity for employees. Further, the ease of working online for
employees has also resulted in “work from home” programs that benefit the
productivity of companies. This has implications as employees are no longer
required to work in the office physically, thus making them more mobile and
hence increases the need for portable devices such as laptops. In addition,
there has also been a recent increase in Internet accessibility in most places in
Singapore due to the advent of wireless technology and subsequently hot spots
in various parts of the island.
[9]
Current Problem
There has been a rising trend of stolen and misplaced laptops as a result of the
above trends. Unfortunately, due to the inaccessibility of the exact laptop theft
figures as a result of gatekeeping issues by the Singapore Police, we can only
gauge a reasonable estimate as to the number of laptops actually stolen in a
year based on newspaper reports. In 2000, 396 laptops 2were stolen from cars
alone in total, and from January to June 2008, there have been a total of 1713
2 The Straits Times, 14 May 2001 3 SPF Website (http://www.spf.gov.sg)
such cases reported so far – compared to 96 cases in the same period last year.
Therefore, from these figures, we can reasonably estimate that there could be
about 400-500 laptops that are reported to be stolen in total every year,
disregarding those that go unreported. Hence, we see that there is an unmet
need in the laptop market in the form of a laptop tracking and recovery system.
[10]
SWOT Analysis
Strengths
TrackLabs’ strengths lie with the fact that we will be the first mover and the sole
supplier of laptop tracking devices in Singapore. Further, our patented product
will protect us from possible competitors through the institution of high barriers to
entry. Our competitive advantage also lies with the fact that we have a
dedicated recovery team and more importantly provide offline tracking via
Global Positioning System (GPS). This is something which most of the competitors
in the market are unable to offer, as most of them are software based with no
recovery teams, and which require the thief to log into the Internet before
tracking can take place.
Weaknesses
Our weaknesses lie with the fact that there is currently a wide variety of
substitutes, such as companies which provide software tracking as well as
insurance companies which provide coverage for laptop theft. In addition, as
the product is a new product, manufacturing cost would be high. Further, our
company would be labor intensive as we would rely extensively on the call
centre and recovery team as a main service provider. More importantly, as our
product is a new product, and due to the variety of substitutes available,
consumers might not be convinced of the merits of our product, therefore
reflecting a low education level towards our product. This is further magnified by
the fact that we are also a newly established brand. Also, a dependency on
technological trends which are volatile would also result in a direct impact on
our company’s business.
[11]
Opportunities
Based on the market trends, there is huge market potential due to the
increasing number of laptop users in the market. Further, as more executives
work offsite, we would expect to see a further increase in the market size.
Technologically, as hard disk capacities increase and more important data is
being increasingly stored in a single hard disk, greater emphasis would be
placed on the protection of data. This is to our advantage as we provide a
service to remotely transfer or wipe out data using software. Further, as the GPS
technology matures, the cost would decrease further and there will be a
possibility that this technology will expand to other portable electronic devices
such as watches, handphones and PDAs etc, therefore expanding the
scalability of our company.
Threats
Threats include the possibility that bigger players in the laptop industry may
come into the market, such as laptop companies for example who wish to
expand their scope of warranty services. Further, due to the volatility of
technology, the possibility that GPS technology might become obsolete in the
future is very real and hence eroding our competitive advantage. Linked to this
point, there could also be more sophisticated security encryption technologies
to protect laptop data which are developed by companies, and therefore they
might not find the need to engage our services.
[12]
Our indirect competitors are mostly insurance based companies like the NUS
Notebook Insurance Scheme and laptop companies like Dell and Fujitsu which
do not solve the problem of stolen data in laptops as they simply reimburse the
claimant in the event of theft.
Competition
As a new start-up company, we face great competition largely from insurance
companies as well as software based tracking companies. Upon analysis, we
discover a service gap between that of the insurance companies as well as the
software based tracking companies.
Our direct competitors, who are mostly software-based tracking companies like
PCHome, XToolTracker, LoJack for Laptops, Unistal and MyLapTopGPS requires
the thief to log into the Internet before the stolen laptop can be tracked. This is
done by alerting the laptop owner of the location through IP address, or wireless
hotspots.
This is impractical as most laptops nowadays are equipped with a primary
security function where the user has to log in his user name and password before
he can even access the contents of the laptop, let alone go online. Further, the
thief is expected to be interested in either the laptop itself or the data inside it,
and not to use it to go online. In addition, some of these companies also provide
a recovery service, but it is mostly left to the authorities to take action, whereby
the tracking company simply reports the theft to the police and not assist in any
recovery action taken. But an important point is that all the software
competitors do not provide a one-stop solution to the tracking needs of the
user, some provide just online tracking, or just have a recovery service, or just
providing data transfer / wipe services etc.
[13]
Keys to Success
Uniqueness
We are unique as we will be the first tracking company in Singapore that
provides a one-stop solution to keep data/laptop safe and retrieve/delete
stolen data by merging the best of offline and online tracking capabilities, as
well as specializing in retrieval service using advanced, patented and secured
technology. In addition, we provide flexible solutions to cater to needs and
preferences of different market segments.
Sustainability
Besides segmentizing our market to ensure stable revenues, our patented
technology will ensure that there are barriers to entry in the early stages of our
company’s life cycle. This protection will aid us in expanding and building our
brand name in the Singapore market through the maintenance of excellent
customer relations and post purchase services such as a Call Centre Helpline. In
addition, in the long run, we seek to collaborate with computer manufacturers
to ensure that we have exclusive rights to embed our product into their laptop
productions. To cope with the changes in technology, we would also have a
dedicated research team to make sure that we stay ahead in terms of making
use of the best available cutting edge technology in our products and services.
[14]
Scalability
In the future, we expect to be able to make our products even more cost-
efficient and affordable when manufacturing costs reduce due to the
maturation of the GPS technology as well as through economies of scale. In
addition, our long term strategy is to expand our operations regionally, with the
ultimate aim of becoming a global brand. With the maturation of the GPS
technology, we are also looking into making the device available for other
digital devices in the electronics industry, such as cameras, iPods, Playstation
Portables (PSPs) and possibly even on pet collars.
[15]
Market Positioning
In our positioning map, our premium package offers additional GPS hardware
tracking which provides extra security compared to the nearest competitor,
MyLaptopGPS. The cost of the Premium Edition is higher due to the
manufacturing of physical GPS module in contrast to MyLaptopGPS which
engages in software tracking only.
On the other hand, our Standard Edition, which has the same features as
MyLaptopGPS, is priced lower to ensure that our price is competitive to laptop
insurances. By doing so, we hope to make the package more appealing to the
student market.
[16]
Target market
Tracklabs has two main target markets and we will offer two different packages
to fulfill the need of each market.
Our main target market is the corporate users. This group of users carries
important data in their laptop and travel with them more frequently. Losing their
clients and company data is their main fear as they might be drawn into
lawsuits. In response to this, we will provide a total laptop security solution which
is able to track their laptops using GPS tracking and provide data transfer and
data deletion service.
Our second target market is the tertiary students’ market. We will offer a
standard package which consists of basic security solution comprising just the
software along and our professional recovery team service. From our survey, we
found out that students are more price sensitive and value their laptops more
than the data. Due to the need of students to ensure their laptops are safe
rather than the data, the need to secure their laptop would therefore be a
lucrative option to them. In order for Tracklabs to capture this group of students
before they turn into corporate executives after graduation, we will price our
product competitively and offer just what they need.
[17]
The marketing mix
Product
TrackLabs offers a Global Positioning System (GPS) tracking solution, which is
able to track the location of a laptop both indoors and outdoors. Laptops will
be loaded with the software program which provides the Internet Protocol
address of the stolen or misplaced laptop. Besides, we will also have a GPS chip
which will be fitted to the laptop’s PC card slot. This chip would enhance the
security level of the laptop because we will be able to track down the location
of the laptop even if the thief does not log on to the internet, with the help of
the GPS technology.
An irremovable LapTag sticker warns potential laptop thieves that the laptop is
secured and it is designed with the purpose of deterring thefts as potential
thieves become aware of the increased possibility of getting caught. Since most
laptops are sold on auction sites such as EbayTM, this feature makes reselling
more difficult.
[18]
Even if the laptop gets stolen, our GPS solution would be able to locate the
laptop. Assistance from the police would be sought to act upon the information
collected by our recovery team, with regards to the location of the laptop. Our
company is adopting this three pronged approach “Deter, Locate, Act” in
providing a comprehensive laptop security solution.
On the other hand, competitors are providing only the software tracking
services. Thus, they would not be able to locate the thief if he does not log in to
the internet. In comparison, Tracklabs offers a quality product which is able to
track both indoors and outdoors, as well as online and offline. This extensive
coverage of our product LapTracker differentiates us from our competitors, as
shown in the table below.
Features PC Home Unistal MyLaptopGPS Laptracker Premium
Tracking via software
GPS Tracking
GPS Indoor Tracking
Recovery Team
Remote data transfer
Remote data wipe
Web Access
Location reporting
24-hour Call Center Support
[19]
For users who are concerned with the loss of important data, a remote data
wipe and data transfer can be performed. Only the user can authorize the
feature, via our web based system or over the phone. The web based system
also provides the user with the current location of the laptop. Data privacy is
maintained as our privacy policy would be strictly adhered to. The tracking
system is activated only upon authorization from our clients and only authorized
IT personnel will be in charge of the whole tracking process as well as data
deletion and transfer. This feature would be especially appealing for those who
value the information in their laptops.
Our certified technical team would be in charge on the installation of both the
software as well as the device into the laptops for B2B clients. Thus, the warranty
of the laptop would not be void. The software would be applicable for any
window based or linux based laptops and any Macbook. We also support
Window Vista, both 32bits and 64bits. PC card slots would be required so that
our technical team can embed the GPS chip into the laptop, which is not easily
removed without dismantling the laptop. Installation will take place within three
working days once the order has been confirmed. Thereafter, companies will be
required to make a 20% down payment and the remaining amount will have to
be paid within 90 days upon the completion of the installation of our LapTracker
on all laptops.
LapTracker will be covered under a one-year guarantee. The existence of a 24-
hour call simplifies the process of reporting laptop thefts and the call centre staff
also provides technical assistance to users over the phone.
[20]
Once the user discovers the loss or theft of the laptop, he can immediately
contact us via the call centre. The user is thus able to seek assistance from us
around the clock and advice on what should be done would be provided by
our call centre staff. The users would be urged to make a police report. Also,
they would be informed of the availability of data transfer and/or wipe. The
details would be explained by our staff to assist the users in making sound
decision. Users would feel more assured as the level of anxiety is reduced with
TrackLabs, a reliable third party assisting in their laptop recovery. The function of
the call centre is essential as it is able to provide a step by step guide for users,
especially for those who are clueless about the whole recovery process.
Once the theft has been reported, users can then pass on the responsibility of
retrieving the laptops to our recovery team. Our team is made up of ex-police,
ex-army officers and private investigators who are well trained and experienced
in tracking and working with authorities. The dedicated recovery team would be
gathering information about the location of the stolen laptop using our GPS
tracking solution. The location of the laptop would be sent periodically to us via
the GPS chip embedded in the laptop. Using our web based system, the real
time location of the laptop would be known. Our experienced team would then
be able to ascertain if there is a particular trend in the movement of the laptop
and pinpoint the possible locations of the laptops, thus providing the local
police with the relevant information so as to conduct a raid to retrieve the
laptop. Our recovery team would be working hand in hand with the local police,
therefore improving the rate of successful recovery.
[21]
However, in the event whereby we are unable to retrieve the stolen laptop
within 30 working days, the Service Guarantee feature ensures that users would
be compensated up to a maximum of SGD1,000 per laptop. The user would be
compensated the amount of subscription they have paid, provided that a
police report was made immediately upon the theft of the laptop. TrackLabs
would only be able to guarantee payment for laptops stolen in areas where a
recovery team is present. Currently, the Service Guarantee feature is valid only
in Singapore.
[22]
Price
As LapTracker has two target markets, we will be offering two different
packages – Standard and Premium, to cater to students and corporations
respectively. We will adopt a subscription-based payment for both packages.
The following table summarizes the features offered by the packages and their
price:
Features Standard Premium
Irremovable Laptag
Sticker
√ √
Laptracker software √ √
Software Tracking √ √
LapGuard Recovery
Team
√ √
GPS-assisted
indoor/outdoor tracking
√
Remote data wipe √
Remote data transfer √
Service Guarantee √
Target Market Student Corporations
Price SGD30/year SGD120/year
Our Standard Package for students is set at S$30 a year. We have competitively
priced it against laptop insurance which on average comes up to about S$40 a
year. Hence, LapTracker will be relatively more affordable and attractive to our
target market.
[23]
The rationale behind targeting the student population is that they are likely to be
our future Premium Package customers when they enter the workforce after
graduation. By targeting them early, we hope to create confidence in our
product and perhaps form a certain degree of brand loyalty to woo their
continued support.
The cost of one GPS chip is estimated to be around S$95.
GPS Module SGD 35
Battery SGD 15
Laptracker Software SGD 10
Silicon Chips SGD 30
Packaging SGD 5
Total SGD 95
Our Premium Package for corporations at S$120 a year is determined by cost-
based pricing. We are expecting customers to be subscribing for at least 2 years
as this is the average lifespan of a laptop.
The key difference between these two packages, other than price differentials,
lie in the availability of features. Standard Package customers will receive the
tracking software which only tracks indoors, whereas Premium Package
customers will have a GPS chip embedded in their laptop which allows both
indoor and outdoor tracking.
[24]
We also recognize that for most companies the data in the laptop is usually
more important than the laptop itself. The data often includes critical
information on clients’ profiles, tender project biddings, financials and
passwords. Losing clients’ confidential information might invite legal issues and
costly lawsuits. This can lead to a blow on the company’s reputation as a result
of careless management of IT assets. Furthermore, most computers within the
corporation are linked by networks. If one of the mobile computers falls into the
wrong hands, the whole network security will be threatened and compromised.
Therefore, we have included remote data wipe and data transfer to meet our
customers’ needs by enhancing data security for our Premium users.
Above all, our main target market is essentially the corporations and whether
our business becomes sustainable and profitable, is dependent on this target
group.
[25]
Place
As a startup, it is vital that our distribution strategy fulfil the functions that allow
TrackLabs to reach out to our target market and foster long lasting relations with
our customers. In order to maximize market penetration, we will be utilizing both
direct and indirect selling.
Our Indirect marketing strategy involves the employment distributors to serve
both our corporate and student market. We will employ a business to business
distributer for example Diversitec Distributors to sell our Premium package to
corporations. Our corporate distributor also specializes in IT products and has
experience in handling and promoting technical products. As the corporate
market is our main focus, we chose a well established distributor with ample
contacts to reach out to our target market.
The Laptracker’s standard package is directed towards the tertiary students in
Singapore. Therefore, we will liaise with the tertiary institutions NUS, NTU, and SMU
and sell our standard package via their respective notebook schemes. These
include NUS Notebook ownership Scheme, NTU Notebook Tender Lineup and
SMU Computer Corner.
Our Direct marketing channel will be our TrackLabs website (shown in picture
below). The website will allow both companies and individuals to place orders
for our standard and premium packages online. Online selling will not be our
main distribution channel; rather it is a platform to establish direct contacts with
customers and provide information about our product directly to them.
[26]
In the second phase of our product (expansion plan), we intend to joint venture
with laptop manufacturers to permanently embed the Laptracker GPS chip into
laptops. For this expansion plan, our distribution strategy will be altered to sell our
products directly to laptop manufacturers. We will be capitalize on our brand
name and reputation (after successful implementation of in phase 1) and
market our product directly to laptop manufacturers such as Lenovo, Acer and
Fujitsu.
[27]
Logistics
Our Company will utilize a virtual office for our startup phase. The
virtual office proposed address is 20 Maxwell Road, #09-17 Maxwell
House, Singapore 069113. Since Maxwell house is located in the central
business district, it reflects on our company’s professional image and is
in close proximity to our corporate customers.
TrackLabs also employs a call center (for reporting lost laptops and technical
support) which will be located at Paya Lebar. The call center will host 5-6
employees in two office spaces measuring 300 square feet. The office space will
be fully equipped with computers, servers and telephones to provide quality
service.
[28]
Promotion
Marketing Objectives
Tracklabs has 3 marketing objectives during the first year of operation. We plan
to review our marketing strategies annually to gauge the performance of each
marketing activity so that resources can be allocated in the most effective
manner. We will develop measurable goals using information from our sales
forecast as our marketing objectives.
1. Annual sales of SGD 400, 000 during the first year of operation.
2. At least 60% of our standard packages subscribers continue their
subscription after the first year.
3. At least 70% of our premium package subscribers continue their
subscription after the first year.
Month 1-2
Product-launch
Objective: Generate media attention and building reputation
• Product launch in IT Trade show such as CEBIT 2009 or COMEX PC FAIR
2009
• Review units will be given to various newspaper and magazines editors
such as The Straits Times, Business Times, PC.Com. We predict most of the
journalists will welcome our complimentary review units as they frequently
use their laptops for working.
[29]
• Track-Me competition will also be held during the tradeshow. 3
participants will sign up for the competition and we will give them a GPS
installed laptop to bring home. The challenge is for Tracklabs to relocate
the laptop within 3 days or the laptop will be given away. We expect
media will be attracted and this will further boost our reputation and
introduce more media coverage when the competition is over.
Month 2-4
Glass-Box Campaign
Objective: Generate word of mouth advertising and media attention
A Laptracker installed laptop will be placed into a sealed, thick glass container.
The glass box will be placed along bus stops of Orchard Road with the message
stating “Smash the glass and take the laptop, we will track you down in 3 days.”
[30]
We hope that this will generate enough curiosity from the public and media.
Another advantage of this campaign is that it will also remind the public of our
previous Track-Me competition.
Mouth 6-12
Video-ads campaign
Objective: Reinforce the credibility of Tracklabs using success stories
After almost half a year of operation, there will be numerous success stories from
our clients. We will then advertise ourselves using their video testimonials on our
websites, Channel News Asia’s website and Business Times’ Website. This will
further reinforce our reputation and reliability and prove that we are available
to deliver to the prospects.
Month 2-12
Objectives: Increase sales volume and maintain subscribers’ retention rate.
• For every new laptop sold through NUS, SMU and NTU notebook schemes
will come with one year of free standard package.
• Ads will be run in various newspaper and magazines such as The Business
Times, The Edge*, The Executive, The peak*.
*Subjected to budget availability
• For subscribers who renew the subscription before the expiry date, we will
offer a 5% discount.
• Bulk discount will be given to large volume purchase.
[31]
Financial Budgets and Forecast
(a) Sales Forecast
Year 1 Year 2 Year 3
Unit Sales of Standard
Package
7453 13,651 15,661
Sales Revenue from Standard
Packages (S$30/year)
223,590 409,530 469,830
Unit Sales of Premium
Package
6750 11,094 15,000
Sales Revenue from Premium
Packages (S$120/year)
810,000 1,331,280 1,800,000
Total Sales Revenue 1,033,590 1,740,810 2,269,830
Table 1: Overview of Projected Sales over 3 years of operation
Table 1 shows the overview of our projected sales units and revenue for 3 years.
The breakdown of sales per month will be displayed on the next page (Table 2).
[32]
Table 2: Break down of projected sales volume and revenues on monthly basis
Month
1
Month
2
Month
3
Month
4
Month
5
Month
6
Month
7
Month
8
Month
9
Month
10
Month
11
Month
12
Unit Sales of
Standard
Package
0 25 70 115 178 215 305 425 655 1,175 1740 2550
Unit Sales of
Premium
Package
0 30 60 100 120 160 260 380 590 950 1600 2500
Total Unit Sales 0 55 130 215 298 375 565 805 1245 2125 3340 5050
[33]
Brief methodology of calculation of projected sales volume
(a) Standard Package
From the total population of SMU + NUS + NTU, we estimate how many
students own a laptop and how many purchased them from the
notebook scheme in their universities respectively using our survey result
(Refer to summary of survey result). We then estimate how many of them
will continue their subscription (retention rate about 60%) based on survey
response and how many units will be sold to freshmen the following year.
(b) Premium Package
From Singstat data, we discovered that 65% of Singapore laptop users are
executives and the total number of laptops in that particular segment. We
then use our survey response to estimate how many units will be sold per
year. For the second year, we took into the consideration of predicted
growth of laptop sales provided by Singstat to estimate number of new
units sold and estimate how many of our subscribers will stay (retention
rate about 70%) based on our survey result.
[34]
(b) Operating Expenses
Fixed Cost (Equipments) One Time Fixed Cost
Servers Purchase: SGD5,000 x 2 = SGD10,000 (One for backup)
Computer Purchase: SGD 2,200 x 5 = SGD 11,000
Patent Registration: SGD 2,000
As data security is one of our core businesses, we will purchase a good and
secure to keep our clients’ data. We will also purchase an identical server for
backup purposes.
Recurring Fixed Cost
First year - Project Development Cost (R&D) = SGD 50,000
We will allocate a fixed amount dedicated for R&D purposes for our future
expansion plan of developing embedded technology and expanding our
product to other categories.
Items Price Total Price Office Space (Physical Virtual Office) SGD 850 x 2 SGD 1700/Month 3 Call Centre Staffs SGD 1600 x 3 SGD 4800/Month 2 Ex-Police Officer as Recovery Team experts (Team Leaders)
SGD 2200 x 2 SGD 4400/Month
5 Recovery Team Staffs SGD 2000 x 5 SGD 10000/Month Salary for Management SGD 1500x7 SGD 10500/Month Rental of Manufacturing Plant SGD 150000/yr SGD 12500/Month Advertising Cost SGD 100000/yr SGD 8500/Month TOTAL SGD 52,400/month Utilities are included in office spaced rented.
[35]
Variable Cost
GPS Module SGD 35
Battery SGD 15
Laptracker Software SGD 10
Silicon Chips SGD 30
Packaging SGD 5
Total SGD 95
The cost of production of one manufacturing will be around SGD95. We expect
the cost will reduced due to economic of scale. We will not manufacture a full
year of inventory but purchase them gradually to minimize inventory cost.
From the graph above, Tracklabs will only enjoy positive cash flow on the last 2
months of the first year of operation. This is due to the high start up cost.
[36]
(c) Profit and Loss Overview
Profit and Loss (3 Years) Year 1 Year 2 Year 3
Unit Sales
Sales of Standard Package to NUS students 3,115 6,051 6,940 Sales of Standard Package to NTU students 3,115 6,051 6,940 Sales of Standard Package to SMU students 1,223 1,549 1,781 Unit sales of Standard Package 7,453 13,651 15,661 Unit Sales of Premium Package 6,750 11,094 15,000 Total Unit Sales of Packages 14,203 24,745 30,661
Sales Revenue / Gross Revenue Unit sales of Standard Package 7,453 13,651 15,661 Sales Revenue from Standard Package 223,590 409,530 469,830 Unit Sales of Premium Package 6,750 11,094 15,000 Sales Revenue from Premium Package 810,000 1,331,280 1,800,000
Total Sales Revenue 1,033,590 1,740,810 2,269,830
Operating expenses Cost of goods sold (624000) (544450) (715646) as % of Premium Package Revenue sales 65% 65% 65% Depreciation (4200) (4200) (4200) Research and Development (50000) (55000) (60500) Selling, general, and administrative expenses (629000) (562,000) (524480)
Total Operating Expenses (1,307,200) (1,165,650) (1,304,826)
Earnings before income taxes (273,610) 630,160 1,025,504 Provision for income taxes 0 (113,429) (184,591) Income tax rate 18% 18% 18%
Profit after taxes/ Net Income (273,610) 516,731 840,913
In the first year of operation, we will be making losses due to high start-up cost.
[37]
Profit and Loss Sheet (First Year of Operation)
Profit and Loss Sheet Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Unit Sales
Sales of Standard Package to NUS students - 10 30 50 75 90 130 180 280 500 720 1,050
Sales of Standard Package to NTU students - 10 30 50 75 90 130 180 280 500 720 1,050
Sales of Standard Package to SMU students - 5 10 15 28 35 45 65 95 175 300 450
Unit sales of Standard Package - 25 70 115 178 215 305 425 655 1,175 1,740 2,550
Unit Sales of Premium Package - 30 60 100 120 160 260 380 590 950 1,600 2,500
Total Unit Sales of Packages - 55 130 215 298 375 565 805 1,245 2,125 3,340 5,050
Sales Revenue / Gross Revenue
Unit sales of Standard Package - 25 70 115 178 215 305 425 655 1,175 1,740 2,550
Sales Revenue from Standard Package - 750 2,100 3,450 5,340 6,450 9,150 12,750 19,650 35,250 52,200 76,500
Unit Sales of Premium Package - 30 60 100 120 160 260 380 590 950 1,600 2,500
Sales Revenue from Premium Package - 3,600 7,200 12,000 14,400 19,200 31,200 45,600 70,800 114,000 192,000
300,000
Total Sales Revenue 0 4,350 9,300 15,450 19,740 25,650 40,350 58,350 90,450 149,250 244,200 376,500
Operating expenses
Cost of goods sold (1,800) (4,680) (8,640) (13,200) (15,120) (17,280) (24,960) (38,760) (56,640) (88,920) (144,000) (210,000)
as % of Premium Package Revenue sales 130% 120% 110% 105% 90% 80% 85% 80% 78% 75% 70% Depreciation (350) (350) (350) (350) (350) (350) (350) (350) (350) (350) (350) (350)
Research and Development (4,167) (4,167) (4,167) (4,167) (4,167) (4,167) (4,167) (4,167) (4,167) (4,167) (4,167) (4,167)
Selling, general, and administrative expenses (64,000) (45,000) (52,000) (52,000) (52,000) (52,000) (52,000) (52,000) (52,000) (52,000) (52,000) (52,000)
Total Operating Expenses (70,317) (54,197) (65,157) (69,717) (71,637) (73,797) (81,477) (95,277) (113,157) (145,437) (200,517) (266,517)
Earnings before income taxes (70,317) (49,847) (55,857) (54,267) (51,897) (48,147) (41,127) (36,927) (22,707) 3,813 43,683 109,983
Provision for income taxes 0 0 0 0 0 0 0 0 (686) (7,863) (19,797)
income tax rate 18% 18% 18% 18% 18% 18% 18% 18% 18% 18% 18% 18%
Profit after taxes/ Net Income (70,317) (49,847) (55,857) (54,267) (51,897) (48,147) (41,127) (36,927) (22,707) 3,127 35,820 90,186
[38]
Break Even Analysis
From our calculation, we will break even at the 20th month with 19887 units.
[39]
Implementation Plan
Milestone Period Person-In-Charge
Equipment Purchase and
office setup for Startup
October 2008 –
December 2009
Chief Operation Officer
Chief Logistic Officer
Product Manufacturing October 2008 –
January 2009
Chief Technological Officer
Chief Logistic Officer
Chief Executive Officer
Hiring of Staffs October 2008 –
February 2009
Chief Technological Officer
Chief Communication Officer
Printing of Marketing
Materials
February 2009 Chief Marketing Officer
Chief Creative Officer
Training of Staff February 2009 Chief Communcation Officer
Product Launch at CEBIT
2009
March 2009 All Staffs
Track-Me Competition March 2009 Chief Marketing Officer
Chief Communication Officer
Glass-Box Campaign April 2009-Jun
2009
Chief Marketing Officer
Chief Communication Officer
Video-Ads Campaign July 2009 –
December 2009
Chief Marketing Officer
Chief Communication Officer
Chief Creative Officer
Newspaper and Magazine
Ads
April 2009-
December 2009
Chief Marketing Officer
Chief Communication Officer
Chief Creative Officer
[40]
Performance Review of
Marketing Strategies
December 2009 Chief Executive Officer
Chief Financial Officer
Product Performance
Review
December 2009 Chief Executive Officer
Chief Technological Officer
R&D Project Plan April 2009 –
December 2009
Chief Executive Officer
Chief Technological Officer
Chief Financial Officer
Refinance and Funding October 2009 –
December 2009
Chief Executive Officer
Chief Financial Officer
[41]
Contingency Plan
Recovery Rate
Our company depends heavily on how effective and successful is our ability to
relocate and if possible recover the stolen laptop. As our company progress, we
will train our recovery team to use their newly gained experience to relocate
laptops is a quicker and effective methods. We will achieve this by cooperating
and working closely with the local police to identify any new trend of criminal
activities so that we are more prepared.
Product Development
As GPS is the main technology that we incorporated into our products, we will
explore any possible alternative technology to prepare for technological
change in the future.
Marketing Effectiveness
Marketing effectiveness is reviewed annually by the management team. In the
event of ineffectiveness, we will plan for new marketing strategies and test the
market response using guerilla marketing and flanking strategies.
Subscription Number
If our number of subscriber does not achieve our preset target, we will consider
alternative strategies such as joint venture with antivirus software and insurance
companies. In worst case scenario, we will explore the possibility of being
merged and acquired by larger companies.
[42]
Summary of Survey Results
(a) Student Market
[43]
[44]
(b) Corporate Market
[45]
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