MBA PROGRAM MARKETING MANAGEMENT SONIC – PERSONAL DIGITAL ASSISTANT Marketing Plan INSTRUCTOR: Ph.D. FRANCIS PIRON GROUP MEMBERS : NGUYEN THI HONG DIEP TRUONG MINH HOANG VU QUYNH NGA JUNE 26, 2011
Jan 03, 2016
SONIC – PERSONAL DIGITAL ASSISTANT
MBA PROGRAM
MARKETING MANAGEMENT
SONIC – PERSONAL DIGITAL ASSISTANT Marketing Plan
INSTRUCTOR: Ph.D. FRANCIS PIRON
GROUP MEMBERS: NGUYEN THI HONG DIEP
TRUONG MINH HOANG
VU QUYNH NGA
J U N E 2 6 , 2 0 1 1
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TABLE OF CONTENT
Page
EXECUTIVE COVER MEMO ............................................................................................... 4
I. EXECUTIVE SUMMARY ...................................................................................................... 5
II. SITUATION ANALYSIS ........................................................................................................ 5
1. Market summary ................................................................................................................. 6
1.1. Consumer market ................................................................................................... 6
1.2. Business market ..................................................................................................... 7
1.3. Market needs .......................................................................................................... 7
1.4. Market trends ......................................................................................................... 8
1.5. Target market growth ............................................................................................. 8
2. Company analysis ............................................................................................................... 9
2.1. Strengths ................................................................................................................. 9
2.2. Weaknesses ............................................................................................................ 9
2.3. Opportunities ........................................................................................................ 10
2.4. Threats .................................................................................................................. 10
2.5. Market share ......................................................................................................... 11
3. Competitor analysis .......................................................................................................... 11
3.1. Market position .................................................................................................... 11
3.2. Strengths ............................................................................................................... 11
3.3. Weaknesses .......................................................................................................... 12
3.4. Market shares ....................................................................................................... 12
4. Climate .............................................................................................................................. 12
4.1. Political and legal environment ............................................................................ 12
4.2. Economic environment ........................................................................................ 13
4.3. Social and cultural environment ........................................................................... 14
4.4. Technological environment .................................................................................. 15
5. Product offerings ............................................................................................................... 16
6. Distribution ....................................................................................................................... 16
III. MARKET SEGMENTATION ............................................................................................... 18
1. Consumer market segmentation ........................................................................................ 18
1.1. Geographic segmentation ..................................................................................... 18
1.2. Demographic segmentation .................................................................................. 18
1.3. Behavioral segmentation ...................................................................................... 18
2. Business market segmentation .......................................................................................... 18
2.1. Demographic segmentation .................................................................................. 18
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2.2. Customer type ...................................................................................................... 19
2.3. Buyer behavior ..................................................................................................... 19
IV. MARKETING STRATEGIES ............................................................................................... 20
1. Mission .............................................................................................................................. 20
2. Objectives ......................................................................................................................... 20
3. Target market .................................................................................................................... 20
4. The product positioning .................................................................................................... 21
5. Marketing mix ................................................................................................................... 21
5.1. Product ................................................................................................................. 21
a. Brand name and logo .................................................................................... 22
b. Brand promise .............................................................................................. 23
c. Quality .......................................................................................................... 23
d. Scope of product line .................................................................................... 24
e. Warranty ....................................................................................................... 25
f. Packaging and labeling ................................................................................. 25
5.2. Pricing .................................................................................................................. 26
a. Pricing objective ........................................................................................... 26
b. List price ....................................................................................................... 27
c. Price adaptations ........................................................................................... 27
d. Price sensitivity ............................................................................................ 27
5.3. Distribution .......................................................................................................... 28
a. Channel levels .............................................................................................. 28
b. Channel members ......................................................................................... 29
c. Market coverage ........................................................................................... 30
d. Criteria for evaluating distributors ............................................................... 30
e. Market-logistics ............................................................................................ 31
5.4. Promotion ............................................................................................................. 32
6. Marketing research ............................................................................................................ 34
V. FINANCIALS ........................................................................................................................ 35
VI. CONTROLS ........................................................................................................................... 36
1. Implementation ................................................................................................................. 36
2. Marketing organization ..................................................................................................... 40
VII. SHORT AND LONG-TERM PROJECTIONS ..................................................................... 40
VIII. CONCLUSION ...................................................................................................................... 44
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EXECUTIVE COVER MEMO
To: Ph.D. Francis Piron
From: Nguyen Thi Hong Diep, Truong Minh Hoang, Vu Quynh Nga
Subject: Sonic Marketing Plan
Date: June 26, 2011
BACKGROUND
Currently, Sonic is a start-up company in PDA industry. In this area, there are many kinds of
PDA products such as multifunctional cell phones, e-mail devices, and wireless
communication devices provided for personal and professional use. Every year, more than 5
million PDAs and 22 million smart phones are sold worldwide. Consequently, the number of
competitor is increasing. Sonic’s primary marketing objective is to gain 3 percent market
share with 240,000 unit sales and to obtain $60 million sales revenues in the United State in
the first year after introducing the first product, Sonic 1000.
RECOMMENDATION
To obtain market share from the pioneer, PalmOne, in PDA market, Sonic accepts to lose and
tries to keep the first-year losses to less than $10 million and build a marketing plan to reach
the break-even point early in the second year. Sonic takes advantage of existing targeted
consumers who have awareness of PDA products to look for opportunities to build its strong
brand and brand equity.
NEXT STEPS
In the second year, Sonic is planning to introduce the second product, Sonic 2000, after Sonic
1000 provides consumers with brand awareness. During this period, Sonic tries to run its
business to reach break-even point early and tries to expand its market into Canada and
beyond.
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SONIC MARKETING PLAN
Sonic, a start-up company, is about to introduce its first product, Sonic 1000, a
multimedia, cellular/Wi-Fi-enabled personal digital assistant (PDA), also known as a
handheld computer. Sonic will be competing with Apple, Palms, Hewlett-Packards (HP),
Motorola and other well-established rivals in a crowded, fast-changing marketplace where
smart phones and many other electronics devices have PDA functionality as well as
entertainment capabilities.
I. EXECUTIVE SUMMARY
Sonic is planning to introduce a new multimedia, dual-mode PDA product, Sonic 1000, in
a very competitive and mature PDA market. Despite the intense competition from Palm, HP,
or other rivals, we can compete effectively because our product offers a unique combination
of advanced features and functionality at a value-added price. The major targeted segments
are the consumer and business markets, imposing upon the growing interest in single
equipment with benefits of communication, organization and entertainment.
The primary marketing purpose is to gain 3 percent of the US market share with unit sales
of 240,000 in the first year. The primary financial objectives are to obtain sales revenues of
$60 million, and keep losses to less than $10 million in the first year, and get break-even
point in the early second year.
II. SITUATION ANALYSIS
Sonic was established 18 months ago by two entrepreneurs with communications
experience. It is about to enter the today’s mature PDA market with increasingly intense
competition due to technology evolves, industry consolidation continues, and pricing
pressures squeeze profitability. To gain market share in this dynamic environment, Sonic
must carefully determine targeted segment with valued features and plan for next-generation
product to keep brand momentum going.
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1. Market summary
Sonic’s market covers consumers and business users who prefer to use a single device to
communicate, store and exchange information, organize and entertain when they are away
from home or office. Users in targeted segments during the first year include professionals,
college and graduate students, corporations, entrepreneurs, and medical practitioners.
1.1. Consumer market:
The economy of the United States (U.S) is the world's largest national economy. Its
nominal GDP was estimated to be nearly $14.7 trillion in 2010, approximately a quarter of
nominal global GDP. Its GDP at purchasing power parity was also the largest in the world,
approximately a 5th
of global GDP. Moreover, the U.S economy has maintained a very high
level of output per capita. In 2009, it was estimated to have a per capita GDP (PPP) of
$46,381, the 6th
highest in the world.
In addition, the U.S, the 3rd
most populous country globally, has accounted for about 4.5%
of the world’s population. The U.S population - currently estimated to have 308.7 million
people - has more than doubled since its 1950 level of 152.3 million. More than just being
double in size, the population has become qualitatively different from what it was in 1950. As
noted by the Population Reference Bureau, “The U.S is getting bigger, older, and more
diverse.”
In the consumer market, the primary targeted customers is middle – to upper – income
professionals who need one device to co-ordinate their busy schedules, stay in touch with
family and colleagues and entertain on the go. The secondary targeted consumers are high
school, college, and graduate students who want a multimedia, dual-mode device to organize
their school, work and personal schedules, to store needed documents and information for
access anywhere, and to communicate with family and friends. This segment can be
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described demographically by age (16 – 30) and education status (entering or in college or
graduate school).
1.2. Business market
In the business market, the primary target is mid-to-large sized corporations that want to
help their managers and staff to stay in touch and input access critical data on the go. These
buyers want durable, powerful, easy-to-use PDAs that can operate customized business
applications. This segment covers companies gaining more than $25 million in annual sales
and employing more than 100 staff. A secondary target is entrepreneurs and small business
owners who need to stay in touch and organize their busy schedules at all times. We also
target medical users, doctors and nurses who want to reduce paperwork and update or access
patients’ medical record quickly.
1.3. Market needs
Consumer and business users of PDAs primarily need to communicate and access
information when they use PDAs. Exhibit 1 shows how the Sonic 100 addresses the specific
needs of targeted segments within the consumer and business markets.
Exhibit 1: Needs and Corresponding Features/Benefits of Sonic PDA
Targeted Segment
Feature/Benefit Customer Need Corresponding Feature/Benefit
Professionals
(Consumer market) Stay in touch while on the go
Wireless e-mail to conveniently send and receive messages
from anywhere; cell phone capability for voice
communication from anywhere
Students
(Consumer market)
Record information while on the go Voice recognition for no-hands recording
Perform many functions without
carrying multiple gadgets
Compatible with numerous applications and peripherals
for convenient, cost-effective functionality
Express style and individuality Case wardrobe of different colors and patterns allows users
to make a fashion statement
Corporate users
(Business market)
Input and access critical data on the
go Compatible with widely available software
Use for proprietary tasks Customizable to fit diverse corporate tasks and networks
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Entrepreneurs
(Business market)
Organize and access contacts,
schedule details
No-hands, wireless access to calendar and address book to
easily check appointments and connect with contacts
Medical users
(Business market)
Update, access, and exchange
medical records
No-hands, wireless recording and exchange of information
to reduce paperwork and increase productivity
Our licensing arrangement with Linux-based system allows us to provide the unique
feature of voice recognition for hand-off operation. This is strong point of differentiation for
competitive advantage in satisfying market needs that makes the use of Sonic PDAs
convenient and easy.
1.4. Market trends
PDA purchasers can choose between models based on several different operating systems,
including systems from Palm, Microsoft, and Symbian, plus Linux variations. In addition,
other market trends relate to demand for technological advances such as the integration of
cell phone functionally and other capabilities; sharper and larger screen displays, speedier
processing of information, memory expansion; applications for specific customer and
business purposes, and more fashion-oriented accessories for PDAs. Moreover, PDA
manufacturers are using technology with lower costs but capabilities are increasing. This will
lead to lower selling prices.
For Sonic first product, we decide to use a Linux-based system because this system is less
vulnerable to be attacked by hackers and viruses. Furthermore, Sonic PDA is the first
product containing extra storage capacity of ultra-fast-20-gigabyte with lower price than that
of other competitors.
1.5. Target Market Growth
In general, market growth continues increasing in consumer and business PDA markets.
Sonic products will stimulate the market demand by concentrating on voice recognition
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system which may be imitated by other competitors within 6 to 12 months. Therefore, we are
targeting to create strong brand recognition, build sales and maintain brand loyalty among
targeted market segments in a short time.
2. Company analysis
SWOT analysis is an important part of the strategic planning process. It provides
information that is useful in matching our resources and capabilities to the competitive
environment in PDA field. Through SWOT analysis, we can identify our strengths to
develop, and discover our weaknesses to overcome. Besides, we are reveal new opportunities
for profit and growth to pursue as well as find out threats to our firm early to prevent.
2.1. Strengths
Sonic can build on three important strengths:
Innovative product - The Sonic 1000 offers a combination of features that would
otherwise require customers to carry multiple devices, such as speedy, hands-free
dual-mode cell/Wi-Fi telecommunications capabilities, and digital video/music/TC
program storage/playback.
Security - Our PDA uses a Linux-based operating system that is less vulnerable to
hackers and other security threats that can result in stolen or corrupted data.
Pricing - Our product is priced lower than competing multifunction PDAs – none of
which offer the same bundle of features – which gives us an edge with price-
conscious customers.
2.2. Weaknesses
By waiting to enter the PDA market until considerable consolidation of competitors has
occurred, Sonic has learned from the successes and mistakes of others. Nonetheless, we have
two main weaknesses:
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Lack of brand awareness - Sonic has not yet established a brand or image in the
marketplace, whereas Palm, Apple and other rivals have strong brand recognition.
This is an area the company will address with promotion.
Heavier and thicker unit - To accommodate the multifunction features, the Sonic
1000 is slightly heavier and thicker than most competing models and offers far more
storage capacity than the average PDA. To counteract this weakness, Sonic will
emphasize our product’s benefits and value-added pricing, two important competitive
strengths.
2.3. Opportunities
Sonic can take advantage of two major market opportunities:
Increasing demand for multiple communication functions - The market for
multimedia, multifunction devices is growing much faster than the market for single–
use devices. Growth is accelerating as dual- mode capabilities become main stream,
giving customers the flexibility to make phone calls over cell or Internet connections.
PDAs and smart phones are already commonplace in public, work, in work and
educational settings; in fact, users who bought entry–level models are now trading up.
Lower technology costs – Better technology is now available at a lower cost than ever
before. Thus, Sonics can incorporate advanced features at a value – added price that
allows for reasonable profits.
2.4. Threats
When launching Sonic 1000, we realize that we are facing three major threats as
following:
Increased competition - More companies are offering devices with some but not all of
the features and benefits provided by the Sonic PDA. Therefore, Sonic’s marketing
communications must stress our clear differentiation and value-added pricing.
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Downward pressure on pricing - Increased competition and market-share strategies
are pushing PDA prices down. Still, our objective of seeking a 10% profit on second-
year sales of the original model is realistic, given the lower margins in the PDA
market.
Compressed product life cycle - PDAs have reached the maturity stage of their life
cycle more quickly than earlier technology products. Because of this compressed life
cycle, we plan to introduce a media-oriented second product during the year following
the Sonic 1000’s launch.
2.5. Market share
Because Sonic is a start-up company in PDA market, we have not yet occupied a large
number of market shares that helps PalmOne become the PDA market leader. So increasing
Sonic’ market share is our top task to reinforce our brand. In the first year, Sonic market
share is expected to be 3 percent of PDA markets in U.S
3. Competitor analysis
3.1. Market position
The emergence of new multifunction smart phones, including the Apple iPhone, has raised
competitive pressure. In the PDA market, Palm is the market leader with a 34 percent share.
The second is HP with 22 percent of the PDA market and targets business segments with its
numerous iPAQ Pocket PC devices. Subsequent to HP, Motorola, Apple, RIM, and Samsung
are dividing the US PDA market.
3.2. Strengths
These competitors take advantages of the leading company with excellent distribution,
high ability in brand awareness and given market share. These strengths have been built for a
long time and the present companies will continue to take advantages effectively.
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In addition, the products of these companies also have many competitive features. Firstly,
the quality of these products is quite stable because they are produced by experienced
companies with high technology, skillful staff, and a given period to correct and perfect the
products.
Many competing products are well-known and widely used such as Apple iPhone, Palm’s
smart phone, Motorola RAZR2 and BlackBerry.
3.3. Weaknesses
In comparison with Sonic PDA, the competitors have two weaknesses as following:
Do not have voice recognition system - that is modern and convenient technology and
potential market. Non company of above has this function.
The safety of mobile operating system (OS) - These companies are applying mobile
OS that is less safe than that of Sonic.
3.4. Market shares
Palm is the market leader with a 34 percent share. HP ranks second in PDA manufacturers
when it holds 22 percent of market share and targets business segments with its numerous
iPAQ Pocket PC devices. Beside that, Motorola, Apple, RIM, and Samsung are dividing the
US PDA market together. If accounting for smart phone market, RIM and Apple are the
leading with 27 percent of market share for each.
4. Climate
4.1. Political and legal environment
The political/legal environment affects every industry and consists of the laws and
regulations in effect in all markets that a company has a presence in. In order to make sure
they are operating legally, businesses have to obey these laws and regulations. Political
environments are affected by politicians who in return are influenced by changes and
challenges in the social-cultural environment (language, immigration…) or economic
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environment (currency exchange rate). The rules and regulations created by politicians have
significant influences on the cost of running businesses and the way products and services are
marketed.
Mobile market in general and PDA market in particular are also highly affected by the
political and legal environment. We consider carefully all the rules and regulations related to
the industry. Here are some major Federal laws affecting Sonic’s marketing:
1936. Robinson–Patman Act: Prohibits prices discrimination in sales to wholesalers,
retailers, or other producer; prohibits selling at unreasonably low prices to eliminate
competition.
Sonic will avoid troubles from its competition.
1972. Consumer Products Safety Act: Created the Consumer Products Safety
Commission, which has authority to specify safety standards for most products.
4.2. Economic environment
The U.S economy experienced from a 2008 crisis that was led by a derivatives market and
subprime mortgage crisis, and a declining dollar value. On December 1, 2008, the National
Bureau of Economic Research (NBER) declared that the U.S entered a recession in
December 2007, citing employment and production figures as well as the third quarter
decline in GDP. The recession did, however, lead to a reduction in record trade deficits,
which fell from $840 billion annually during the 2006-2008, to $500 billion in 2009, as well
as to higher personal savings rates, which jumped from a historic low of 1% in early 2008, to
nearly 5% in late 2009. The unemployment rate rose to 10.6% in 2010.
The status of the economy has highly influenced on Sonic market. Due to the recession,
consumers tend to spend more cautiously. They will prefer using their existing mobile phone
to buying a new PDA model. The company must face the strict spending from their targeted
customers.
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However, in the recession, many U.S companies try to find effective ways to reduce paper
work and increase productivity. This is a good opportunity for Sonic. A PDA product like
Sonic 1000 or Sonic 2000 with striking functions is significantly useful for the studying and
working purposes so it will attract more customers.
4.3. Social and cultural environment
Social and cultural environment play an important role in consumer’s buying behavior
toward PDA. The U.S has been well-known as the country having the most modern
technology particularly in mobile technology with famous names such as Palm, HP, Apple
and so on. Therefore, the U.S citizens specially youths (14 – 30 years old) are familiar with
high technology and sensitive with a competitive PDA like Sonic 1000/2000. This makes
Sonic advantageous in entering the market.
The cultural factor can be narrowed by subcultures. The targeted customers in each
segments of Sonic market have many factors in common, for example, in the segment of
students, this group includes young, active people and has acquaintance with new technology.
They also want a smart phone that has multi functions for communication and relaxing
purposes. On the other hand, the segment of professionals consist of matures who are on the
go with their works and want many modern features in a PDA such as wi-fi, email, voice
recognition, organize time table and so on.
The second factor in social and cultural environment is social classes. The members who
come from same social classes tend to behave alike other members in the class. There is 7
social classes in the US including: (1) lower lowers, (2) upper lowers, (3) working class, (4)
middle class, (5) upper middle, (6) lower uppers, and (7) upper uppers (source: Kotler and
Keller). The targeted customers of Sonic are from middle to upper class, who would be in
favor of buying the PDA. The class members will copy what the others are doing. If an
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influenced person in the upper uppers is having a PDA, the others will also tend to own a
PDA
4.4. Technological environment
The U.S has the most successful innovators in the technology area generally and the
mobile technology area particularly. Platform of PDA bases on the developing of mobile
technology and takes many advantages from this industry:
Mobile operating system
There are widespread OS for mobile such as Symbian OS, Blackberry OS, Windows
mobile, Apple iOS, Google Android, Maemo and other embedded Linux distributions. Such
systems can be installed on many different phone models, they allow some level of
application to perform multifunction and provide a true file system with folder hierarchy and
a file manager utility. Our products apply Linux OS that can prevent attack from hackers and
viruses.
Data transmitting
The third generation of technology known as 3G was launched in 2001 and quickly
become popular technology in the mobile industry. The revolution in data transmission has
enhanced the ability to access data networks of mobile phones and PDAs.
Due to the 3G technology, consumers can experience more functions such as phone, media
streaming and more applications for instance email, surfing web, organizing contacts and
timetable interestingly through only a PDA.
Voice recognition
Voice recognition is a modern technology booming and the overall market for voice-
recognition technology is accounted for $1 billion for the first time in 2006, a 100 percent
increase in two years only according to Opus Research.
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By applying this technology, Sonic 1000 creates a significantly distinctive feature
compared to other competing products and makes our customers more comfortable when
using the product.
Other technologies
Wireless fidelity (Wi-Fi) - a type of wireless local area network technology that is
available widely in developed countries, enables mobiles to connect to the Internet
elsewhere to keep in touch with their family and work on the go.
Bluetooth - connects mobile devices wirelessly
5. Product offerings
The Sonic PDA 1000 offers the following standard features:
Voice recognition for hands-free commands and communication
Built-in cell phone functionality
Wireless Web access and e-mail capabilities
MP3 music downloading and player capabilities
Full organization and communication functions, including calendar, address book,
memo pad, Internet browser, e-mail program, and text and instant messaging
programs
Connectors to accommodate all palm One-compatible peripherals
6. Distribution
A company’s business will not be successful if it only develops and innovates its products
and services or looks for target markets without paying attention on how its business is going
to distribute and sell its products to potential consumers. So we are looking for potential
distributors to enhance sales for our first product, Sonic 1000.
Sonic products will be distributed via a network of retail stores and online stores in the top
50 U.S markets. We choose some of the most important channel partners as following:
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Office supply superstores: Our partner will be Office Depot and Staples. We are going
to put our advertisement of Sonic 1000 on their website. When consumers assess their
website, they can see the image of this product with its full feature details to consider
whether they want to buy. When they order, we will deliver immediately with free of
delivery charge. Office Depot and Staples also distributes Sonic products in stores and
in catalogs.
Computer stores: CompUSA and independent computer retailers are one of our choices
in distribution strategy. If customers decide to choose this distribution channel, stores’
staff can introduce and instruct our products’ functions so that customers can make best
choice for purchasing the product.
Electronic specialty stores: Best Buy is our choice for product distribution channel.
This is an useful channel because when a person wants to buy an electronic product, he
or she often comes directly to electronic stores in which he or she will have many
choices. Sonic 1000 is an electronic device, so in order to encourage customer to buy
this product, we will choose distribution channel through Best Buy. This channel also
helps Sonic reduce distribution costs. In the case consumers are busy, they cannot go to
the store, and then they can make purchasing choices via Best Buy’s website or its
media advertising.
Online retailers: Amazon.com is a well-known website. It allows us to place the
product advertisement on its home page with promotional fee when Sonic starts to
penetrate into PDA market.
Although our distribution channels are initially restricted in the United State, we plan to
expand our market into Canada and other countries depending on consumer demand. To
support our channel partners, we will provide Sonic products along with demonstration
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templates, detailed handouts, full-color photos and illustration to display product features and
design.
III. MARKET SEGMENTATION
1. Consumer market segmentation
1.1. Geographic segmentation
Initially, the Sonic PDAs are only distributed in the U.S, with appropriate sales promotion
support. Later, we plan to expand in to Canada and beyond
1.2. Demographic segmentation
Age and life cycle: PDA is modern electronic equipment so it is suitable for young
people. They tend to pay attention on such modern equipment and use PDA without
difficulties.
Income: The retail price of Sonic PDA 1000 is $350 and more than $350 for Sonic
PDA 2000. We will consider the average income of the targeted consumers.
Social class: There are 7 social classes in the US society, we classify and select suitable
social classes based on the income, hobby, desire, and other common features related to
buying and using Sonic PDA.
1.3. Behavioral segmentation
Sonic PDAs bring many benefits to the consumers. The company is considering what the
most attractive benefit to each segment is. For example, the benefits to students include
information record while on the go, many functions performance without carrying multiple
gadgets and style and individuality expression. By considering these benefits, we can reply
with many useful functions of the PDA.
2. Business market segmentation
2.1. Demographic segmentation
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Industry: we are seeking which industries could improve their efficiency by applying
PDA in the work.
Company size: Sonic PDAs can help businessmen and businesswomen enhance their
effectiveness. However, the price of the product is not very low and the function of that
is compatible with completing works. As a result, a small company can’t afford to
apply Sonic PDAs to its work. Therefore we plan to focus on the middle-to-large sized
corporations.
2.2. Customer type
The major business target is mid-to-large sized corporations that want to help their
managers and employees stay in touch and input or access critical data on the go. This
segment consists of companies with more than $25million in annual sales and more
than 100 employees.
The secondary business target is entrepreneurs and small-business owners. We are also
targeting medical users who want to reduce paperwork and update or access patients’
medical records.
2.3. Buyer behavior
Consumers often do a lot of brand switching. They can get experience from using the
previous product and choose to buy a newer product of the same brand without much
evaluation, and then evaluate that product during consumption. Brand switching occurs for
the sake of variety, rather than dissatisfaction.
Because of brand unawareness, we will encourage variety seeking by offering lower
prices, deals, coupons and advertising that tries to break the customers’ purchase and
consumption cycle and presents reasons for trying something new.
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IV. MARKETING STRATEGIES
Our marketing strategy is designed to support the company to create a successful entrance
to launch new PDA in a competitive market. We plan to build brand awareness and image
and to emphasize our unique product with high quality and low price. Using marketing mix
as well as service and internal marketing, we will educate our target segment about features
and benefits of our new PDA and give an impulse to first-time users to buy PDA as well as to
encourage PDA owners to buy the newer and more innovated products. We will use
television advertising to reach our target segments. However, because of the start-up budget
constraints, television advertising is limited so we also have to use radio, online and other
media to reach our target segment in a creative and effective way.
1. Mission
Sonic’s mission is to help our customers to organize their works and live better as well as
to enjoy the life throughout the technology advancements.
2. Objectives
We have set aggressive but achievable objectives for the first and second years of market
entry.
First-year objectives: We are targeting for a 3 percent share of the U.S PDA market
through unit sales volume of 240,000.
Second-year objectives: Our second-year objective is to achieve break-even on the
Sonic 1000 and launch our second model.
3. Target market
For individual market, the primary target market is middle- to-upper income professionals
who need one portable device to support their busy schedules and communicate with family,
friends and colleagues. These consumers prefer lower-priced PDAs with expandable memory
and functionality. The second targeted consumer is college and graduate students who want
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to organize their school work, and personal schedules, input and access information at any
time from anywhere, and stay in touch with family and friends.
For business market, the target market is mid-to-large sized corporations that want to help
their staff stay in touch and input or access critical data on the go. These purchasers want
durable, powerful, easy-to-use PDAs that can operate customized business applications. The
secondary business target consists of entrepreneurs and small business owners who need to
stay in touch and organize their busy schedules all the times. A possible tertiary business
target is medical users, doctors, and nurses who want to reduce paperwork and fast update or
access patients’ medical records.
4. The product positioning
We are positioning our first product, Sonic 1000, with the combination of the most
superior features such as more attractive design, faster speed, better quality and longer life to
make this product become the most versatile, convenient and enjoyable model for personal
and professional use. Other products of Sonic’s competitors do not have voice recognition
feature, hence we will concentrate on this unique feature of Sonic 1000, which is one of
major elements to differentiate Sonic from its rivals. Besides, we are going to develop
portability function that is very important to the target market, so that everyone can access
information and communication anywhere, anytime.
5. Marketing Mix
5.1. Product
a. Brand name and logo:
Since brands are realized to be very important for business survival, companies have to
create their own brands that are special and different from their competitors, protect unique
features or aspects of goods to help consumers find out which firm provides best products or
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services, which brands satisfy their needs and which ones do not. Sonic is no exception. We
established an own brand to make a difference between itself and its rivals.
We have created really special brand name and logo to differentiate our brand from others
because Sonic brand name and logo are usually displayed on its products and packaging.
Sonic logo (Figure 1) is designed as the yellow thunderbolt.
Figure 1: Sonic Logo
The brand name and logo’s specialty and prominence will consolidate Sonic brand in
marketing campaign. On the other hand, they help to establish brand equity and help
customers understand what the brand is and what makes the brand special compared to other
brands with the same type of products. Through that, marketers can sum up and explain the
intention of a marketing program.
Brand name is the first factor that is noticed and helps to affirm the brand existence.
Understanding this issue, we aim to build a strong brand by designing an impressive logo that
covers full meanings of our PDA products.
Sonic brand name is a memorable, meaningful, adaptable and protectable name. In English
dictionary, the term “Sonic” means sound. Sonic brand name is the strategic use of sound to
develop real auditory features of the brand. Conventional applications relating to the sound
such as features of voice recognition, music downloading and player, mobile phone functions
and so on appear in Sonic’s first product, Sonic 1000. Sonic brand name itself is able to help
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consumers to associate products referring to sound. This is the success of Sonic founder when
choosing the brand name.
b. Brand promise
When Sonic is established, it promises to provide consumers with best-quality products as
well as fastest customer support service.
People do not care what Sonic brand promise is, the new PDA can be manufactured with
lowest price or creative design, good quality or perfect customer support service. People care
about how Sonic implements that promise. Every aspect of marketing of Sonic’s new PDA
has to deliver Sonic brand promise to consumers.
c. Quality
We use ingredient brands to tout Linux-based operating system to make our products more
secure than others based on some other operating systems because ingredient brands try to
create enough awareness and preference for products, so customers will not purchase a “host”
product which does not involve the ingredient. In order to succeed, we will build a separate
identity to differentiate from other competitors.
There are several different operating systems for PDA buyers to choose such as Palm,
Microsoft, Symbian, and Linux. After considering carefully, we decide to tout the Linux-
based operating system for its products due to some reasons. As a start-up company, Sonic’s
profit is still not high yet. So the Linux-based system is a suitable choice because its
installation cost is low. Besides, another important factor to make Sonic license this system is
security factor. Compared to other systems, Linux is less vulnerable to attack by hacker and
viruses. Linux-based system can help users avoid other security threats that lead to stolen and
corrupted data. This system is also easy to use and install in the device.
d. Scope of product line
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After building our Sonic brand by launching Sonic 1000, we plan to introduce Sonic All
Media 2000, emphasizing multimedia communication, networking and entertainment
functions, especially voice recognition feature that makes Sonic 1000 succeed. We hope to
reduce Sonic 1000 price when Sonic 2000 is completed and sold to consumers.
When Sonic provides the second product, we will plan to retain the Sonic name due to
advantage of brand extension.
Currently Sonic brand reinforcement is necessary and urgent in order for people not only
in United State but also in the world to be able to know about this brand. The first product
names Sonic 1000. The second product that Sonic plan to launch following the appearance of
Sonic 1000 is Sonic 2000 with more superior features to attract consumers in competitive
markets. The objective of keeping Sonic name for its second product is to expand the brand
inside and outside of the country. Based on brand extension, we can facilitate new product
acceptance. Customers can be convinced easily to use Sonic new product relied on
information that they have already known about the brand when the first one is introduced
and the evaluation of relevant information to the second one. It is also easier to encourage
retailers to promote and develop Sonic brand extension because of increasing consumer
demand. Besides, retaining the Sonic name for its second product can help to deduct costs of
introductory launch campaign in the U.S marketplace.
Moreover, since the brand reinforcement by maintaining Sonic name, Sonic can clear the
meaning of its brand and major brand values, and enhance customer loyalty
e. Warranty
Because Sonic 1000 is the first model of the company, we expect to attract consumers by
selling this product along with one-year warranty. As our brand promise, we always supply
best customer support service to solve their dissatisfactions. Within one year since customers
buy Sonic 1000, if this product has any problem, we will come and fix it immediately. When
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the warranty is expired, customers have to pay fee charge for repairing but this fee will not be
high. We usually want to build consumer loyalty.
f. Packaging and labeling
Sonic brand and logo will be displayed on the product and its packaging. The packaging
will prevent the product from damage in transit and incorporate security functions, hence the
boxes can be displayed in store shelves and store showcases. Well-designed packages may
improve brand equity and drive sales. Therefore we will design the packaging to implement
lots of sales tasks such as attracting attention, describing our product’s features, creating
customers’ confidence and creating a favorable overall impression (Figure 2).
Figure 2: Sonic packaging
The use of labeling is to reinforce Sonic brand image by listing important and special
product specifications to indicate how advanced technology of PDA products can deliver to
consumers on the brand promise. This helps channel partners compare between Sonic
products and competing models so that they can persuade customers to buy the products. This
also helps consumers make the best choice of purchasing in the case Sonic sells directly to
industrial customers. The labeling promote the product by using attractive graphics and
provide enough information to describe the product.
Using packaging and labeling to support Sonic brand image includes an enlarged photo or
illustration of PDA highlighting main competitively-superior functions and its benefits.
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5.2. Pricing
a. Pricing objective:
The first step in conducting the marketing plan for our first product is the selection of
pricing objective. Our primary pricing objective we would like to obtain is to maximize
market share. PalmOne’s products are holding the greatest part of PDA market share in a
maturing market. Therefore we want to manufacture a product with specific features that
none of companies has at lowest price to gain market share from PalmOne. We believe that if
we launch a higher sales volume, it will lead to lower unit costs and higher long-term profit.
PDA market is price sensitive, so we will set our product’s price as low as possible with good
quality to build our brand and maintain consumer trust in a competitive market.
To adapt the market-penetration pricing strategy, we set a low price to stimulate market
growth and reduce production cost. We also cut intermediate to decrease distribution cost.
If we fail to reach a high market share, we will not be able to effectively compete with
other rivals who penetrated into the PDA market long time ago and lower unit costs via
higher volume. Many people suppose that an appropriate pricing objective is survival.
However Sonic has not been in trouble with survival yet. Sonic also does not need to
maximize current profit at this time. We accept to get losses to maximum market share to
build Sonic’s strong brand but we try to keep losses to less than $10 million.
b. List price:
We will launch Sonic 1000 at $250 wholesale and $350 estimated retail price per unit. We
hope to lower Sonic 1000 price when we manufacture new product, Sonic 2000, with more
superior and distinctive features and plan to sell it at $350 wholesale. Simultaneously, we are
going to write exciting software that can be installed into our products to attract more
customers and desirable channel partners and take market share from PalmOne.
c. Price adaptations:
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To convince consumer to try our products, will include price adaptations in the marketing
plan to reinforce our brand and attract more consumers. Price adaptations can be cash
discounts for resellers who have purchased PDAs in order to encourage early or on-time
payment of invoices. Besides we can consider providing our distributors with allowances to
encourage them to stock new PDA products. On the other hand, we can use promotional
pricing on a limited basis to stimulate early purchases. Promotional pricing strategy is often a
zero-sum game.
To complete sale promotion strategy, we plan to sell our products and add a free or low-
cost warranty or service contract. In first step to implement this strategy, we will provide free
one-year warranty for ones who buy our PDA products. We also offer cash rebates to
encourage purchase of manufacturers’ products during a specific period. This offering can
help to clear inventories without cutting the stated list price.
d. Price sensitivity
PDA consumers are likely to be fairly price sensitive because there are many well-known
brands providing a lot of PDA products that have already existed before Sonic penetrated into
PDA market.
Along with price sensitivity, consumers’ demand is relatively elastic. There are more
buyers who are willing to purchase a product if its price is substantially lower. Therefore,
Sonic has to set a price at low end of its acceptable range to perform its market penetration
plan. Setting our introductory price will be supported by other parts of marketing mix such as
mentioning the price or touting the value in advertisement and choosing distributors to be
suitable with its pricing. Demand will be elastic to a change in price; it forces sellers to lower
the price to have more competitive advantages. PDA purchasers can choose between models
from different brands relied on different operating systems such as systems of Palm,
Microsoft, Symbian and Linux at different prices that are suitable with their income.
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5.3. Distribution
a. Channel levels:
Because Sonic brand is new, it will not be successful in selling directly to final consumers
at zero-level channel.
In consumer marketing channels, Sonic will use a few intermediaries to promote its
product. This marketing plan uses a one-level channel and a two-level channel to generate
awareness and demand for its products. The one-level channel consists of one selling
intermediary only such as retailer to distribute Sonic product to consumers. In two-level
channel, a wholesaler and a retailer are two intermediaries used as distribution channels. Here
we will sell our products to the wholesaler and then the wholesaler will distribute it to the
retailer; finally the retailer will sell it to targeted consumers.
Apart from consumer marketing channels, Sonic also penetrates into industrial marketing
channels using business-to-business (B2B) marketing to expand its brand. In such channels,
we use a zero-level channel and one-level channel to promote our products. We can sell to
industrial consumers directly based on its sale force or can distribute its product to industrial
consumers through industrial distributors.
b. Channel members:
To be successful, we to decide on the number of distributions to use at each channel level.
According to current market situation, we plan for selective distribution, because – as a new
firm entering an established product category - we can not sign up all distributors as
expected. We are looking for suitable distributors who are willing to carry a particular
product. It is not necessary to worry about too many outlets to promote the products.
Selective distribution involves Sonic a limited number of outlets in PDA market to sell its
products. We may choose the most appropriate or best-performing distributors and focus its
effort on them.
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Selective distribution is commonly used with products in which customers are willing to
shop around and manufacturers would like to have a large geographical spread. Sonic PDAs
are such kind of products. When we decides to adopt selective strategy, we will choose a
distributor who has experience of handling similar products credible and is well-known by
targeted consumers. At the beginning period of market-penetration strategy, we target to
motivate retail support such as retailer promotional support. Besides, customer service also
plays an important role for brand awareness expansion.
Our distribution channel is to use selective distribution, marketing Sonic PDAs through
well-known stores and online retailers. During the first year, we will increase the number of
channel partners until we cover almost major U.S markets and the product is introduced in
the major electronics catalogs and large Web sites. In addition, we will investigate
distribution through cell-phone outlets maintained by major carriers such as Verizon
Wireless, T-mobile or AT&T. We will provide demonstration products, detailed specification
handouts and full-color photos and displays featuring the products to support channel
partners. We plan to arrange special payment terms for retailers that place volume orders.
Besides, we need a direct sales force to sell our products. Sonic 1000 PDA is our first
product so we need to have a direct sales force which is well-trained about the technology
and the way of using the product. In addition, we can also sell our products through agents
and other outside representatives. Our direct sales force can guide the retailers to familiarize
with Sonic PDA’s unique features and benefits so that they can understand and guides the
PDA’s use to customers fast and easily. Through the agents and other outside representatives,
we can quickly reinforce our brand awareness and create our positions in the target markets
so that there are more consumers knowing about our PDA and trying to use it and buying it.
c. Market coverage
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Sonic is a newly-formed company. So its brand is still unaware. Sonic has not created
brand loyalty yet. Applying push strategy makes use of Sonic sales force and trade promotion
activities to create customer demand for its new product. Because of broadly unawareness of
its brand, consumers often make their brand choices in response to displays in the stores in
which they come to buy a PDA product. We concentrate on pushing its product via
distribution channels. We promote our product to wholesalers, the wholesalers promote it to
retailers and the retailers promote it to customers. In this strategy, the retailers or resellers can
be required to display, demonstrate and offer discounts to sell the product. For new product,
we try to sell directly to consumers and decrease unnecessary distribution channels to reduce
cost.
d. Criteria for evaluating distributors
Because Sonic brand is still new in PDA market, our essential distributors are wholesalers.
They play an important role in our distribution strategy. They pay less attention to promotion,
atmosphere, and location because they are dealing with business customers rather than final
consumers. Wholesale transactions are usually larger than retail transactions, and wholesalers
usually cover a larger trade area than retailers. In addition, wholesalers are more efficient in
performing some functions. Firstly, wholesalers’ sales forces help manufacturers reach small
business customers at a relatively low cost. They have more contacts, and buyers often trust
them more than they trust a distant manufacturer. Secondly, wholesalers are able to select
items and build the assortments of their customers need, save them considerable work.
Thirdly, wholesalers hold inventories, thereby reduce inventory costs and risks for suppliers
and customers. Fourthly, wholesalers can provide buyers with quicker delivery because they
are closer to the buyers. Fifthly, wholesalers supply information to the suppliers and
customers regarding competitors’ activities, new products, pricing developments and so on.
Finally, wholesalers often help retailers improve their operations by training sales clerks,
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helping with store layouts and displays, and setting up accounting and inventory-control
systems. They may help industrial customers by offering technical services. Therefore, their
actions will directly affect customer awareness of Sonic PDAs.
e. Market-logistics:
Order processing: We try to shorten the order-to-payment cycle-that is, the elapsed
time between an order’s receipt, delivery, and payment. This cycle has many steps,
including order transmission by the salesperson, order entry and customer credit check,
inventory and production scheduling, order and invoice shipment, and receipt of
payment. The longer this cycle takes, the lower customer’s satisfaction is and the lower
the company’s profits are. Therefore, Sonic must consider to operate information
system that checks the customer’s credit standing upon receipt of an order and
determines whether and where the items are in stock. The computers issues of an order
to ship, bills to customer, updates the inventory records, sends a production order for
new stock, and relays the message back to the representative that the customer’s order
is on its ways-all in less than 15 seconds.
Warehousing: We consider the number of inventory stocking location so that we can
store totally finished goods until they are sold. In addition, we centralize our inventory
in one place and use fast transportation to fill orders because goods can be delivered to
customers more quickly but it also means higher warehousing and inventory costs.
Inventory: Sonic’s managers will consider the inventory cost so that the sales and
profits can offset with inventory costs. If the company carries larger inventories and
promising faster order fulfillment times, the managers will need to know how much
sales and profits are going to increase as the result of it, and then make a decision.
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Transportation: Sonic’s managers choose shippers depending on some criteria as speed,
frequency, dependability, capability, availability, traceability, and cost in order to
ensure the products’ state and on-time delivery performance.
5.4. Promotion
Free gifts, discounted prices, coupons offering: In Sonic 1000 introductory campaign,
we provide customers with sales promotion to obtain market attention and encourage
purchasing powers by offering free gifts such as leather carry-cases for people who are the
first ones to buy this product in a limited period. We will also offer discount for our software
which customers want to buy along with Sonic 1000. We need to step up sales promotion to
reinforce our brand. Apart from the form of offering free gifts, we will give coupons so that
customers can purchase other products of Sonic. Besides, we will provide free delivery
service if customers buy our products online.
Advertising: We attain its goal to create brand awareness and knowledge of its new
products. Moreover, we also aim to create liking, preference, conviction, and purchase of its
products. Then we can stimulate customers to repeat purchase of products as well as to
convince current purchasers that they made the right choice of using its products.
Consumer and trade sales promotion: We are continuing consumer and trade sales
promotion after the new product has appeared in the market for six months. The reason is that
after the new product has been in the market for six months, it will be in the growth period of
the product cycle life. In this period, sale promotion is especially important to increase the
sales of the products because sale promotion offers an incentive for customers to buy
products. In fact, consumer promotion includes samples, coupons, cash refund offers, prices
off, premiums, prizes, patronage rewards, free trials, warranties, tie-in promotions, cross-
promotions, point-of-purchase displays, and demonstrations and trade promotions consists of
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prices off, advertising and display allowances, and free goods. They will stimulate to try to
use the products and buy the products.
We organize a sponsor event that would be appropriate for the new product campaign. For
this event, sponsorship offers sustained exposure to Sonic’s brand, a necessary condition to
build brand recognition and enhance brand recall. For example, sponsorship can invest in the
stores which sell Sonic 1000 to attract customers to see and try Sonic products and form the
awareness of Sonic brand. Sponsorship also can exposure Sonic products in Technology
product exhibitions.
Websites: We design our own website that embodies or expresses Sonic purpose,
history, product, and vision. The website will be designed in an attractive way so it can attract
customers from the first viewing and encourage customers to repeat visits afterwards.
Internet-specific ads and videos: With user-generated content sites such as YouTube,
MySpace Video, and Google Video, Sonic marketers can upload ads and videos to be shared
virally by millions of people. These ads and videos may be introduction of new product,
guidelines to use the products, information about sales promotions and so on.
Display ads: Sonic can pay to place display ads or banner ads which are small,
rectangular boxes containing text and perhaps pictures in relevant Web sites so that when
customers travel the Web to find information related to PDAs, they can have opportunities to
reach and see Sonic products. The larger the audience, the more the placement costs.
Word-of-mouth: takes may forms online or offline. Word-of-mouth marketing has 3
characteristics as below:
- Credible: people trust others they know and respect, word-of-mouth can be highly
influential.
- Personal: word-of-mouth can be a very intimate dialogue that reflects personal facts,
opinions, and experiences.
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- Timely: it occurs when people want it and when they are most interested, and it often
follows noteworthy or meaningful events or experiences.
Therefore, we will use word-of-mouth to generate brand awareness and encourage
potential buyers to visit retailers to see the new PDA in person. In fact, Sonic can use opinion
leaders as the way to stimulate positive word-of-mouth communication in the targeted
consumers and business market segments.
6. Marketing research
PDA market is entering maturity stage of its evolution. Multifunctional cell phones, email
devices and wireless communication devices are increasingly popular. So there are more and
more competitors who are increasingly intense even as technology evolves, industry
consolidation continues and pricing pressures squeeze profitability. Heavy competition leads
to market fragmentation and, with the emergence of new attributes, market consolidation.
We try to reveal and focus on the most highly valued features and benefits of our product
to improve our brand image and create customer loyalty. We continue to measure and
analysis customers’ attitudes and performance toward the Sonic brand in comparison with
other competing brands. Simultaneously, we use customer satisfaction studies to gauge
market reaction.
V. FINANCIALS
The first year’s total sales revenue for the Sonic 1000 is projected at $60 million, with an
average wholesale price of $250 per unit and the variable cost per unit of $150 on unit sales
volume of 240,000. On a quarterly basis, we project sales of $8 million, $12 million, $11
million, and $29 million, based on cumulatively higher business sales and a spike in year-end
consumer PDA sales.
Heavy investments in product development, promotion, and channel support are expected
to contribute to a first-year loss of up to $10 million on the initial PDA model. However,
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longer term projections call for achieving 10% profit on the second-year sales of the original
PDA model, a realistic profit level given the lower margins in the PDA market. Break-even
calculation indicates that Sonic will begin to profit from the sale of the initial PDA product
once sales volume exceeds 267,500 early in the product’s second year. At that time, we plan
to lower the wholesale price of the first model – in line with standard industry practice – to
lower the retail price and increase sales volume.
Our break-even analysis of Sonic’s first PDA product assumes:
Wholesale revenue of $250 per unit
Variable cost of $150 per unit
Estimated first-year fixed cost of $26,750,000 (including investments in product
development and design, manufacturing setup and overhead, marketing, and other
fixed costs)
Based on these assumptions, the break-even point is:
500,267150250
000,750,26
units
Projections call for selling 240,000 units in the introductory year; therefore, we will reach
the break-even point early in the second year of sales, just when we will be lowering the
wholesale price as we launch the higher-end second product in our line.
VI. CONTROLS
We are establishing controls to cover the implementation and the organization of our
marketing activities.
1. Implementation
We are planning tight control measurement to monitor quality of the product and customer
service satisfaction with our products and services carefully and closely. This will enable us
to respond and react very quickly in correcting any issues that may happen. We also have
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measurement to monitor other early warning signals that derive from the plan including
monthly sales (by segment and channel) and monthly expenses.
In order to monitor and control marketing activities, Sonic can use four types of needed
marketing controls. They are annual-plan control, profitability control, efficiency control, and
strategic control. Exhibit 2 below describes clearly types of its control, its responsibilities, its
purposes and its approaches.
Exhibit 2: Types of Marketing control
STT Type of
Control
Prime
Responsibility
Purpose of
Control Approaches
1 Annual-plan
control
Top management
Middle management
To examine
whether the
planned results are
being achieved
Sales analysis
Market share analysis
Sales-to-expense ratios
Financial analysis
Market-based scorecard analysis
2 Profitability
control Marketing controller
To examine where
the company is
making and losing
money
Profitability by:
Product
Territory
Customer
Segment
Trade channel
3Order size
3 Efficiency
control
Line and staff
management
Marketing control
To evaluate and
improve the
spending efficiency
and impact of
marketing
expenditures
Efficiency of:
Sales force
Advertising
Sales promotion
Distribution
4 Strategic
control
Top manager
Marketing auditor
To examine
whether the
company is
Marketing effectiveness rating
instrument
Marketing audit
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pursuing its best
opportunities with
respect to markets,
products, and
channels
Marketing excellence review
Company ethical and social
responsibility review
In fact, we use three marketing metrics to determine marketing effectiveness and
efficiency, including financial results, external factors and internal factors:
Financial results (Exhibit 3):
Results
(in $million) Standard year First year Second year Third year
Total sale
Total cost
Manufacturing
Sales & Marketing
R&D
Administration
Net profit
Profit per total sale (%)
Total properties
Properties (% total sale)
Profit per properties
Sonic will determine marketing effectiveness and efficiency through the figures in the
financial report. The profit is the key index to measure the marketing results. The marketing
results are better, the profit is higher.
External factors
The following elements (Exhibit 4) are the outside factors coming from its customers and
partners.
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Awareness The level of popularity of Sonic brand in the customers’ mind
Market share
(Volume or value)
The percentage of market share of Sonic in the PDA market
Relative price The price of Sonic’s product in comparison with that of
competitor’s products such as Palm, HP, Apple
Number of complaints The level of dissatisfaction of targeted customers on Sonic PDAs.
Lower is better
Consumer satisfaction The level of satisfaction of targeted customers on Sonic PDAs.
Higher is better
Distribution/ availability The coverage of Sonic’s product on the market. Larger is better
Total number of
customers
Better marketing results, higher number of customers
Perceived quality/
esteem
Higher is better
Loyalty/ retention Higher is better
Internal factors (Exhibit 5):
Awareness of goals
(Goals of market share,
revenue, profit…)
From the employers of the company. Clearer is better
Commitment to goals Try to achieve the goals of all staffs. Stronger is better
Active innovation
support Higher is better
Resource adequacy Personnel, finance, technology, manufacturing
Staffing/ skill level
(Negotiation,
communication, sales,
analyzing… skills)
More skilful is better
Desire to learn Higher is better
Willingness to change Ability to react with the changes of the market. Higher is better
Freedom to fail Encourage staffs to carry out new methods, new thoughts. But the
level must be reasonable. Not too strict and free.
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Autonomy Ability to make decision in each class in the company. The level
of the autonomy should be considered to raise the sense of
initiative of each employer.
Relative employee
satisfaction An important basic factor to all above factor. Higher is better.
These are the inside factors coming from its managers and staffs who are internal
customers. If these factors are good, the marketing effectiveness and efficiency will be better
because these factors are the deciding elements.
2. Marketing organization
As chief marketing officer, Jane Melody takes overall responsibility for all marketing
activities of the company. She is in charge of marketing strategy and direction. She also
directs channel sales and all marketing communication and promotion activities. Reporting to
Jan Melody in the marketing organization are:
Tony Calella, sale manager, responsible for channel sales, sales training for retail
partner, and sales collateral. Reporting to Tony Calella are two regional sales, Tiffany
Thite and Viktor Chenkov.
Amelia Howard, advertising manager, responsible for supervising both message
development and media selection by the advertising agency. Reporting to Amelia
Howard is Carlos Dunn, advertising analyst.
Ron Hall, promotion manager, responsible for trade and consumer sales promotion
campaigns. Reporting to Ron Hall is Kate Mc Connell, promotion analyst.
The structure of the eight-person marketing organization is described clearly through
Exhibit 6 below.
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Exhibit 6: Sonic’s Marketing Organization
We have employed Worldwide Marketing to handle national sale campaigns, and public
efforts. In addition, the agency will prepare trade and consumer sales promotions to support
its product introduction campaign.
VII. SHORT AND LONG-TERM PROJECTIONS
Sonic has prepared a contingency plan to implement in case the PDA market begins to
experience severe downward pricing pressure which may be caused when a major competitor
initiates a price war or develops a lower cost technology. It also may be the result of
appearance of cell phone combinations which become more popular than PDA products. Our
contingency plan requires introducing a significant but short-term price promotion such as a
rebate or a discount to remain competitiveness while exploring the price sensitivity of
different targeted segments. Based on the results of this short-term promotion, we will be able
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to take long-term steps to reinforce our brand, defend our market share in PDA markets, and
retain the acceptable level of profitability.
In general, many companies prefer to sell to neighboring countries because they
understand these countries better and have ability to control their cost more effectively. In
fact, Canada and Mexico are the two largest U.S export markets. In the next year, we plan to
export our products to Canada. As a start-up company, Sonic can use indirect or direct
exporting to enter the Canadian market next year and other markets in future.
Indirect exporting is the case when Sonic works through independent intermediaries to
introduce its products to Canadian and other markets. We can sell our products to domestic-
based export merchants and then these merchants sell the products abroad. It also can pay
commissions for domestic-based export agents who seek and negotiate foreign purchases
Sonic’s products. Indirect exporting has two advantages:
First advantage is less investment: The firm does not have to develop an export
department, an overseas sales force, or a set of international contacts.
Second advantage is less risk: Because international marketing intermediaries bring
know-how and services to the relationship, the seller will make fewer mistakes.
Direct exporting: Another way for us to launch our products in foreign market is to carry
on direct exporting with greater investment and risk but potential return in several ways:
Domestic-based export department or division: This might evolve from a purely service
function into a self-contained export department operating as its own profit center.
Overseas sales branch or subsidiary: The sales branch handles sales and distribution
and perhaps warehousing and promotion as well. It often serves as a display and
customer-service center.
Traveling export sales representatives: Home-based sale representatives travel abroad
to find business.
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Foreign-based distributors or argents: These distributors and agents can hold limited
or exclusive rights to represent the company in that country.
The choices mentioned above are appropriate ways that Sonic can use to approach the
Canada and other foreign markets. We can not issue a license to a foreign company to use a
manufacturing process, trademark, patent, trade secret, or other item of value for a fee or
royalty because licensing has potential disadvantages. Sonic has less control over the licensee
than it does over its own production and sales facilities. And if the licensee is very successful,
the firm has given up profits, and if and when the contract ends, the company might find it
has created a competitor. Sonic also can not choose to join with local investor to create a joint
venture company in which they share ownership and control because in the long run, there
will may have conflict between the company and partner about the strategy to operate the
joint venture company. Moreover, Sonic cannot directly invest to own a foreign-based
assembly or manufacturing facilities because the firm will have to exposure a large
investment to risks such as blocked or devalued currencies, worsening markets or
expropriation that in fact, with a start-up company like Sonic, is not feasible.
We will start marketing our PDAs in other countries with straight extension strategy. With
this product strategy, we will introduce our products in the foreign market without any
change. This is an appropriate strategy for Sonic because Sonic is aware of a brand with
unique PDA with voice recognition for hands-free operation which has not been owned in
any PDA of other brands. Consumers in foreign countries will be more attracted by Sonic
products which have the same origin and same features and functions as products sold in the
U.S Therefore, the sales revenues will reach the potential point as expected.
In several years later, when Sonic PDAs are assembled in Mexico through a contractual
arrangement with a local factory but some of components are made in Asia, the country-of-
origin perceptions will be likely to affect Sonic marketing strategy. The main reason is that
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buyers hold distinct attitudes and beliefs about brands or products from different countries.
These country-of-origin perceptions can effect consumer decision making. In this case, when
the consumers knows that some components are made in Asia, for example, in China,
although the remaining components are made in Mexico, they still think that the Sonic
products are cheap, and they will satisfy with lower selling price. In this case, we has to
conduct a marketing strategy to confirm that all components of our PDAs have the same
quality although they can be made in different parts of the world, and the company will have
the same warranty for products sold all over the world.
Sonic company can be organized in a customer-management organization in which
employees, marketers and managers have to understand and deal with individual customers
rather than with the mass market or event market segments. All departments need to think
customers and work together to satisfy customer needs and expectations. Sonic can drive
customer-focused marketing and strategic innovation throughout the organizations by
coordinating the company’s internal marketing activities and by coordinating marketing with
finance, operations, and other company functions to serve the customers best.
In the short run, Sonic will drive a marketing strategy with high level social responsibility.
It will try to satisfy customer expectations about its PDAs, take care of customers, satisfy and
benefit its employees and stakeholders, comply with the government legislations and compete
fairly with other companies in the market.
In the long run, Sonic will drive a marketing strategy with higher level of corporate social
responsibility which is shown in rising customer expectations, evolving employee goals and
ambitions, tighter government legislation and pressure, developing investor interest in social
criteria, relentless media scrutiny, and changing business procurement practices.
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VIII. CONCLUSION
This Sonic marketing plan is conducted to introduce our first product naming Sonic 1000.
Through analysis of targeted market segmentations as well as evaluation of competitors in
competitive environment, we can prepare a comprehensive marketing plan to perform when
the PDA market begins to experience severe downward pricing pressure. Our plan calls for
introducing a significant but short-term price promotion such as a rebate to remain
competitive while gauging the price sensitivity of different targeted segments. Based on the
results of this short-term promotion, we can take longer–term steps to defend market share
while retaining a minimally acceptable level of profitability. We aim to build our brand
through performance, more than through promotion.
Sonic marketing plan offers a broad overview of the entire firm’s mission, objective,
strategy and resource allocation as the starting point. It helps our managers learn more about
our consumers’ requirements, expectations, perceptions, satisfaction and loyalty.
We build specific strategies to have on-time solution for the purpose of sales and market
share increase. The key success of an organization bases on the marketing plan of the
business. Therefore, we take into concentration of the analysis, suggestions and
recommendations above in order to prepare and design a perfect and accurate marketing plan
for our first creation.
Additionally, we also make some calculations to create strategies for short and long-term
projects in the future. Our objective is to achieve marketing excellence in the future that will
require new challenges and opportunities.
-The End-