Sample Marketing Plan

SAFEX® Product Line

Marketing Perspective and Plans

GOALS

! Establish a SAFEX® product line - Met! Set a framework for a SAFEX® design that

can form the basis of a product line – on-going

! Establish a continuing marketing approach to increase sales - Continuing

POTENTIAL SAFEX®

CUSTOMERS

! Utility Locators" Smaller businesses; need a cheaper price, less

features, Excavation depths 1 ft x 1 ft. x 3 to 20 ft. deep

" Regulations Permitting, can put dry materials back into hole

! Directional Boring Companies" Uses include utility locating but also have a

need to vacuum up and dispose of spoils

POTENTIAL SAFEX®

CUSTOMERS con’t.

! Utilities" Utility locating for purposes of repair and new installation" Must go into tight spaces such as backyards, substations" Unit needs to operate a distance from truck

! Municipalities" Can and will do some of the same jobs as locators and

utilities, like wet and dry capability

POTENTIAL SAFEX®

CUSTOMERS con’t.

! Others" Oil Companies" Cable Companies" Pipeline Companies" Construction Companies" Water and Sewage Companies

! Uses can include locating, trenching, vacuuming spoils

Air Excavation Competitors

! Vacmasters! Excavac! Vactron! Pacific Tek! Servac! Utilivac

COMPETITION for AIR Excavation

! Vacmasters" Wet or Dry truck" 80 to 200 gal storage" Recently introduced System 1000 to compete with SAFEX® 60

! Excavac" Dry Excavation " 200 gal to 1000 gal

! Vactron" Wet Primarily but uses Viper for air" 100 gal+

COMPETITION con’t.

! Pacific-Tek" Primarily water but will add air with under

the hood compressor" 100 gal to 500 gal storage

! SERVAC (Filtration Engineering)" Air excavation and has a patented handtool

with air and water" Has a product line of excavation equipment

and tools

COMPETITION con’t.

! Utilivac" Vacuum Unit driven off compressor" Cheap price for a unit that works" Attractive with a rental compressor

! OTHERS – Entries growing in air business as more competitors recognize that air is being recognized as a preferred method

! Low entry barriers to either air or water markets

CONCLUSIONS

! There is no one size fits all approach! Design needs to be expandable and have

different size storage for trenching and wet work

! One model should accommodate 150 scfm nozzle for hard dirt and larger excavations

! Should have a light and heavy duty version I.e. 3 inch and 4 inch vacuum hose

! Should have a water assist for harder soils or customer preference

Product Line Framework

! SAFEX® 30! Small machine suitable for UXO and

Demining, simple jobs where speed is not important

! SAFEX® 60! Primary usage utility locator and potholes

! SAFEX® 150! Larger excavator, used in heavier soils, dry or

wet storage capability, application such as horizontal boring and other jobs that require large storage

Market

! SAFEX® 30 – US Army and other foreign military, NGO’s

! SAFEX® 60 – Utility locators and smaller contractors, Utilities

! SAFEX® 150 – Larger contractors and Utilities

Marketing Approaches

! SAFEX® 30 " Finish Army contract" Extend contract for additional $; more additional units (I.e. 150)

and to fund international demonstration programs" Gain further participation in Army programs that allow SAFEX®

Jr. and AIR-SPADE® system to be stocked in the US Army’s arsenal.

" No competition exists" Look for a way to pursue foreign customers and NGOs I.e. State

Dept.

Marketing Approaches Con’t.

! SAFEX® 60" #1 commercial target unit" Significant market for this size unit as

regulations are requiring more potholing" Targets" Utility Locating Companies" Smaller Contractors" Some specialized utility work

Marketing Approaches Con’t.

! SAFEX® 150" Targets large customers such as contractors

who do horizontal boring" Medium size market…..Existing competitors in

this air market" Most competitors target this market I.e. large

units with significant storage for wet applications

Marketing Strategy

! Strategy" Emphasize advantages of dry excavation – Continue" Emphasize advantage of the superior digging power of AIR-

SPADE® to increase productivity" Discounts for a few 1st customers - Continue" Offer a service locally to gain experience and credibility with

competitive pricing service, brings in income from a demonstrator unit - Continue

" Teaming or strategic partners - Continue# Someone in the business – bring our air excavation

advantage while partner brings in marketing and distribution channels

Marketing Strategy Con’t.

! For better focus segment SAFEX® as a entity" Separate sales person" Better advertising

! Financing or Leasing alternatives –Implemented

! Increase margins

Marketing Plan – 2000 -2001

! Action Plan" Demo SAFEX® 60 by 1st Qtr 2001 – Completed 3rd Qtr. 2001" Start offering service with a SAFEX® 60 locally" Product Line Announcement at DPC Show in Dec. 2000 -

Completed" Establish a pricing Oct. – Nov. 2000 - Completed" Ads starting in 1st Qtr 2001 - Completed

# Trenchless Technology Magazine# Underground Focus# Utility Contractor

Marketing Plan – 2000 -2001 Con’t.

! Action Plan Con’t." Mailing to existing potential customer list and

follow up starting in 4th Qtr 2000 - Completed" New Commercial video required by 1st or 2nd Qtr

2001" Hire a product line/marketing manager (?)" SAFEX® split 3rd – 4th Qtr 2001" Get a SAFEX® in the Army ACT Test

Marketing Plan – 2002+! Demonstration unit is needed! Start offering service with a SAFEX® 60 locally in 2002! New Commercial video in 2002! Hire a sales person for demo unit! Follow up mailings to ~200 mailing list (from ICUEE, DPC, Mailing

Lists)! Follow-up phone calls to ICUEE and DPC list! Continue advertising in UGF, Utility Contractor, Trenchless etc.

! Exhibit at DPC as a minimum

Demonstrator Issues

! Lack of Demonstrator is hampering SAFEX®

sales! Can use demo unit to debug product, take to

shows, perform service and provide a lease product

! Demo unit will require the services of another sales person

! Demo unit will require additional marketing $ for exhibit space etc.

2002 Marketing Budget (without demo unit)

! Mailings - $500! Exhibit - $5,000! Advertising – $6,000! Video - $2,500 (if a unit is sold)

! 2002 Sales Potential - $60,000 - $100,000

Demonstrator Budget

$25,000Increase in Marketing $

$30,000Additional Sales Person

$1,000Annual Operating Maintenance Cost of Unit

$5,000Annual Operating Cost of Truck

$6,000Annual Lease Cost of Truck

$35,000Truck

$25,000SAFEX 60 Skid (Water Assist)

CostItem

2002 Marketing Budget (with demo unit)

! Mailings - $1,000! Exhibit - $5,000! Advertising – $6,000! Video - $2,500 (if a unit is sold) ! Demo Unit Budget - ~$100,000! Contingency - $10,000

! ~Sales Potential - $600,000