Product_Launch_Plan

Product Launch Plan Executive Summary The business and marketing strategy for the PureSip product will be different in Australia and Indonesia. The market in Australia will consist primarily of business to consumer transactions, while the market in Indonesia will consist of business to business transactions. The target market for Australia will consist of primarily outdoor/ recreational consumers and some humanitarian relief organizations. The target market for Indonesia will consist of the government for disaster relief purposes. In Australia, the PureSip will be positioned in the moderate price, moderate quality product line market. Due to price sensitivity and lower economic conditions in Indonesia, the PureSip will be positioned in the lower price product line market by taking advantage of using local manufacturing operations and local labor to reduce costs. In Indonesia, the fixed and variable costs will be reduced in order to lower costs, but maintain or increase profit margins. For the Australia market, the company is anticipating a continued relatively low but steady growth rate and is forecasting the need for approximately 23,280 units per month. Therefore, the company will initially sell 279,360 for this next year and is projecting an increase in following years to 307,992. For the Indonesia market, based upon disaster occurrences and population in these areas, the company is anticipating an initial slow to moderate growth rate and is forecasting the need for approximately 46,560 units per month. Therefore, the company will initially sell 558,720 for the first year and is projecting an increase in following years to 615,984 units in the third year. The marketing budget will consist of 8% of total sales for the Australia and Indonesia markets. The marketing budget will be divided between website, advertisements, tradeshows, and public relations. The marketing strategy will concentrate on informational appeal and reinforce the attributes or benefits of PureSip as a life-saving product. If the sales goals are attained for the Australia and Indonesia markets, the company will realize a return on investment (ROI) of 10% to 12%. 1.0 Product Description PureSip a portable hand held water filtration system that used in recreational events, prepackaged survival containers and in disaster relief efforts to help people in need of clean water who cannot obtain easy access to clean drinkable water. PureSip simply takes unclean and dirty water and can remove 99.9% of waterborne bacteria, salt, and microbes that can harm people. PureSip can filter approximately 265 gallons per straw, which estimates to about one year’s worth of water per person. 2.0 Product Positioning Understanding who needs to be supported by the services that PureSip can provide and how PureSip can be presented effectively depends on the segment market. Answering the question of who is most likely to purchase the product and gathering other important information will result in a situation which the customer is confident that PureSip will provide exactly what the customer expects it to provide, clean water. The target markets on a worldwide stage include: • Recreational Survival Groups • Governments • Humanitarian-Based Businesses • Disaster Relief Groups • Ocean and Sea Transportation • Dooms Day Preparers 3.0 Targeting PureSip does not have one set location that it will market to, Australia, and Indonesia are the two main markets currently established, however; when disasters strike PureSip will be a major factor in providing instant relief to the lack of clean drinking water. Approximately 332 natural disasters take place around the globe and ensuring that PureSip is present when disasters strike is a main goal and an objective. What determines the target markets are geographic aspects, demographic aspects, behavioral factors, and social influences. Several of these factors are as follows: • Australia and Indonesia are the main target markets other markets include natural disaster areas. By using the Internet PureSip will leverage its ability to reach customers over the world. • Total target population in Indonesia is 46 million people. • Total target population in Australia is 28 million people. • For recreational survival use, ages range from 19-46 • The median income for users in Australia is $42,400; the media income in Indonesia is $5,000. • Most users in Australia are active and enjoy the outdoors and users will spend money on outdoor activity. Users in Indonesia are more on a need basis and will not have a large disposable income. 4.0 Market Needs PureSip will use the market strategy of catering to the holistic marketers and independent organizations by providing services that meet their needs by providing benefits important to customers. PureSip understands the importance of the breaking the language barriers within the global marketplace, and will conduct training session, and recruit local multilingual personnel to facilitate entry in both Australia and Indonesia markets. • Quality Craftsmanship. PureSip will provide durable high quality straws that provide a high quality name in PureSip products. Pure sip will also continue to improve design through research and development based on customer needs. • Well-thought-out design. PureSip will provide durable high quality straws that provide extended use of 2500 drinks and develop longer lasting filter systems. Casing will be of high-impact plastics and filtration system will provide long life. • Customer Service. Exemplary service between government agencies, humanitarian agencies in building a trusted name for PureSip products. Quick response to orders is crucial during emergency and governmental requests. 5.0 Market Potential and Market Growth for Australia With the increase in population for both Australia and Indonesia PureSip will market its-self as a needed commodity for these growing countries. Australia’s population has exceeded 23 million and projections show that population will increase to 40 million within the century. “We can say that Australia has world-beating population growth right now. The world is growing 1.1 per cent per annum and Australia [at] 1.7% is really out in front” (abc.au/news/2013). Australia has enacted the Comprehensive Aid Policy Framework and the Australia’s Humanitarian Action Policy. PureSip will create alliances with these organizations. 6.0 Market Potential and Market Growth for Indonesia Indonesia’s population is currently exceeds 242 million and growing, which represents 3.1% of the world’s total population. OCHA will focus on working closely with national Disaster Management Agency (BNPB). “OCHA will work with Government and partners to streamline humanitarian funding mechanisms for effective response. “OCHA will also continue to work towards expanding and strengthening partnerships with non-traditional humanitarian actors. Ongoing efforts target the private sector through the Disaster Resources Partnership (DRP) and the Indonesia Chamber of Commerce” (Unocha/Indonesia/ 2013). The market potential and growth for PureSip will be geared in establishing alliances with governmental and private humanitarian agencies. The development of a PR marketing strategy is also an important and the inclusion of 1% of each purchase into a fund for disaster recovery. Establishing a 3% market strategy will produce significant sales, and providing additional governmental incentives will also be profitable. 7.0 Company SWOT Analysis for Australia and Indonesia Australia • Strengths: Growing population and larger number of disasters. • Weaknesses: Larger lower income base. • Opportunities: Build alliance with government and humanitarian agencies. • Threats: Future and potential competition from established market participants. Indonesia • Strengths: Growing population and larger number of disasters. Civil wars dictate new rules and laws. • Weaknesses: Uncertain governmental economic support. Economic growth dependent on the countries President’s support. • Opportunities: Build alliance with government and humanitarian agencies. • Threats: Economic uncertainty can influence production a supply. 8.0 Competition PureSip is creating a market of its own, but there are several competitors out in the market that can affect sales. Customers have many choices to go with when choosing for recreational purposes. Many people enjoy hiking can choose from many portable filtration systems, such as the Katadyn Hiker Water Filter, the Platypus Gravity Works Water Filter, Sawyer Squeeze Water Filter and the MSR Sweetwater Micro Filter, to name a few of the completion. Some indirect competitors would be fresh water sources anywhere filtering water is not a necessity and places developed enough can provide their own sources of filtration that would not need PureSip services. In the humanitarian sectors, PureSip services will always be needed and wanted because when people are in dire situations these services can be valuable and priceless. 9.0 Marketing Strategy and Objectives Our marketing strategy must consider the five levels of product development. Each successive level adds values and consists of the core benefits. Benefits include basic, expected, augmented, and potential products. Our highly innovative PureSip is an augmented product that exceeds customer expectations. PureSip’s positioning and differentiation marketing strategy must consider the product life cycle for each country. In the Australian market, the product is in the growth stage and nearing the maturity stage. In the Indonesian market, the product will be in the introduction stage. Therefore, different marketing strategies must be implemented for the both Australia and Indonesia markets. The marketing and financial objectives for the Australia market and Indonesia market include the following: Australia • Dominate the water purification market • Increase sales/revenue by 15% per year • Reduce manufacturing costs by 5% • Use portion of sales to increase R&D to continue developing new products • After tax ROI of 12% Indonesia • Penetrate and steadily increase market share • Second and third year growth rates of a minimum of 30% • Reduce manufacturing costs by 20% with new plant • Reduce labor costs by 20% from Australian workforce using local labor pool • After tax ROI of 10% 10.0 Pricing PureSip’s holistic marketing approach to pricing considers a number of elements, including our marketing strategy, target markets, brand positioning, customers, competition, and marketing environment. Our company must select the pricing objectives, determine demands, estimate costs, analyze competitor’s costs and offers, select a pricing method, and select a final launch price. The Australia market and Indonesia market are dissimilar and will require different pricing strategies. Australia • Upgrading and modernizing manufacturing equipment to reduce costs • Maximize market share • Reduce wholesale price to attract high volume orders from retailers • Final price to cover fixed and variable costs • Stimulate demand through lower price and • Lower profit margins, increased sales volume and revenue Indonesia • Relatively low Gross Domestic Product (GDP) per capita • Price sensitive Government • Australian dollar strong in Indonesia economy • Establish local manufacturing plant to reduce manufacturing and distribution costs • Employ local labor workforce to reduce manufacturing costs • Low cost leader and patent to discourage competition entering market 11.0 Marketing Communication Marketing communications are the means by which our firm notifies, persuades, reminding customers about products and brands. The marketing communications mix includes advertising, sales promotion, public relations, events, and experiences, direct marketing, and personal selling. The result of an effective marketing communications plan indicates increased sales, and consumer product adoption. Developing effective communications involves identifying the target audience for each country; determine objectives, communications design, selecting the communications channels, establishing the budgets. Additionally, deciding on the marketing communications mix, measuring the communication results, and managing the Integrated Marketing Communications (IMC). Factors selecting the marketing communications mix consist of the advantages and costs, type of product market, customer readiness to make a purchase, product life cycle stage, and market rank. The marketing communications for Australia and Indonesia will differ based on their countries conditions and summarized below: Australia • Informational appeal and reinforce the attributes or benefits • Increase brand awareness, brand attitude, and brand purchase intention • Direct marketing through company website • Sales promotion to increase sales • Advertising in humanitarian, outdoor, and survivalist media and print publications • Product demonstration at disaster relief and outdoors trade shows • Personal selling for disaster relief organizations Indonesia • Informational appeal and reinforce the attributes or benefits • Public relations consisting of government officials visit to new factory • Public relations highlighting direct investment in economy and benefits to Indonesians • Gain influence and relationships with key government opinion leaders • Personal selling to the government • Product demonstration at government trade shows and conferences • Public relations campaign emphasizing “humanitarian benefit” • Up to1% of sales donated to disaster relief funds 11.1 Distribution Strategy Market channel and distribution strategy plays a very important role in meeting the needs of our business and target market. The distribution strategy should concentrate on the differences between the Australia and Indonesia markets, customers, and the appropriate marketing and distribution channel. The company has limited expertise and resources for distribution. Therefore, to maximize efficiency, the company should establish a value network that comprises a system of partnerships and alliances that source, augment, and deliver its offerings. The company should use a holistic marketing approach and take a value network approach of our business, examine the whole supply chain that links raw materials, components, and manufactured goods. Holistic and value network approaches can lead toward the final customer’s needs and wants. The distribution channels for each market are the following: Australia • Direct sales to end users through current website • Aggressively pursue large retail chain stores that specialize in outdoor sporting and camping equipment as an intermediary to supplying product to end users. • Indirect sales to humanitarian organizations, charities, and community groups through the Red Cross and other worldwide organizations • Sales through intermediaries at trade show and conventions Indonesia • Direct Sales to Indonesian government • Establish representation in Australia-Indonesian Business Council group promoting business relationships between the countries • Establish joint venture to take advantage or local expertise and knowledge • Retain a notary or local legal expert to assist in navigating through the legal and regulatory system • Open manufacturing operations in strategic location to reduce oversees distribution channel 11.0 Financial Information The following information provides an overview of financial data associated with PureSip’s initial marketing activities. Discussed below are PureSip’s break-even analysis, sales forecast, and marketing expense budget. 11.1 Break-Even Analysis The break-even analysis shows $23,280 in monthly sales revenue will be needed for PureSip to reach the break-even point. Break-Even Analysis: Monthly Units Break-Even 582 Monthly Sales Break-Even $23,280 Assumptions: Average Per-Unit Revenue $20 Average Per-Unit Variable Cost $7 Estimated Monthly Fixed Cost $19,089 11.2 Sales Forecast PureSip believes that sales will increase steadily over the next three years. This increase will be directly related to a “robust” advertising budget. This sales forecast also divides PureSip’s customers into two separate groups: Australia and Indonesia. For the Indonesia market, the sales forecast is based upon three disasters per year, population affected by a disruption in water supplies, and the filtration capacity of the PureSip. For the Australia market, a sales growth rate of about 5% was estimated based upon an increase in market share. Sales Forecast 2013 2014 2015 Australia $279,360 $293,328 $307,992 Indonesia $558,720 $586,656 $615,984 Total $838,080 $879,984 $923,976 Direct Cost of Sales 2013 2014 2015 Australia $55,872 $58,668 $61,596 Indonesia $111,744 $117,336 $123,192 Total $167,616 $176,004 $184,788 11.3 Marketing Expense Budget The below marketing expense budget will be used as target for PureSip’s Marketing Department. Any substantial variations from this plan will require approval PureSip’s senior leadership. Marketing Expense Budget 2013 2014 2015 Website $10,000 $10,000 $10,000 Advertisements $28,523 $30,199 $31,959 Trade Shows $28,523 $30,200 $31,959 Total $67,046 $70,399 $73,918 Percent of Sales 8.00% 8.00% 8.00% Contribution Margin $603,418 $633,641 $665,270 Contribution Margin/Sales 72% 72% 72% 12.0 Marketing Research PureSip’s origins can be directly traced to the outdoor survivalist’s need and access to safe drinking water in the Australian Outback. PureSip could work with many of Australia’s most renowned outdoor enthusiasts/survivalists to design a lightweight and easy to use water filtration system. Extensive product testing not only met the demands of this select group but also the demand of individuals new to the outdoor survivalist lifestyle. Testing also included working closely with Aboriginal tribes of the Australian Outback. This successful testing led PureSip to the conclude that not only would this product be indispensable to the outdoor enthusiasts, but it also had the potential to change the lives of the world’s population who do not have access to clean and safe drinking water. References www.projectdisaster.com (PDF report Annual Disaster Statistical Review) Kotler P., & Keller, K. L. (2006). Marketing management (12th ed.). Upper River, New Jersey, Pearson-Prentice Hall. https://www.cia.gov/library/publications/the-world-factbook/geos/id.html http://www.abc.net.au/news/2013-04-23/australia-to-top-23-million-today/4644974 http://www.ausaid.gov.au/Publications/Documents/ausaid-hap-dec-11.pdf http://www.unocha.org/roap/about-us/about-ocha-roap/indonesia