Marketing Plan of Meta Technologies - Case Study Example

Marketing Plan of Meta Technologies General Company Description Our proposed company name is Meta Technologies and we will be engaged in the development of small software utilities for smart phones like Apple Iphone and other phones manufactured by companies like Nokia, Apple, and RIM. Our business will be a partnership initially however; later on we are planning to go public in order to fund our future expansion requirements. Mission Statement “ To be a leading small software utility development company in the world offering technologically innovative, sophisticated and environmental friendly products to our industrial as well as retail customers at affordable price” Our Business Philosophy, goals and Objectives Our aim is to be a leading developer of small software utilities that can be used in various intelligent electronic items most importantly cell phones. Our business philosophy will be based on simple principle of offering highest value to our customers at a price which is affordable. We consider ourselves as an active guardian of our environment therefore our product development will be done in a manner which can assist in achieving sustainable business development objectives. Our major goal is to grow by an average growth rate of 7% for next five years besides entering into major deals with large firms such as Apple, Microsoft, Nokia, Sony Ericson as well as Motorola to offer them our customized software to be embedded into smart phones developed by them. We believe that our business will grow steadily however, based on our core competencies i.e. providing least costly, robust and effective software to our retail as well as industrial clients. Our main strength will lie in our ability to deliver unique and innovative software utilities which can help our customers in their daily lives. It is because of this purpose that our focus will always remain on developing software for purposes such as weight management, tracking of expenses on various household items, Glucose and Hypertension monitors, social networking etc. Our considerations for the external financing will be mostly for external debt of long term nature as we aim to expand in the future. Our capital requirements however, will be met through a combination of equity as well as bank financing. Industry Overview Until recently, mobile computing industry was dying and as such producers of mobile software were very few. However, with the introduction of new Apple IPhone and other smart phones from companies like Nokia and Black Berry etc. Historically, this industry has been slow in growth due to lack of demand for smart phones. However, with the introduction of more innovative and all purpose smart phones, it is showing increasing trends as more and more youngsters are purchasing such phones. Over the period of time, however, this industry has resulted into loss of creativity as developing community was largely dependent on old models of mobile computing and often lacked the ability to combine business elements with the mobile computing platforms.1 The recent trends in the industry indicate that the mobile computing industry is heading towards a wireless revolution where robust and clean mobile software platforms will interact without getting connected through wires.2 With the development of Android platform by Google, a new breed of mobile phones will hit the market in near future thus opening up a whole new vista of opportunities for small mobile software makers to provide more compatible mobile software to support new hardware and OS platforms. The industry is going to show consistent growth in near future because of the renewed increasing trends of demands being witnessed owing to increase in demand for smart phones. Since business is becoming really mobile and more and more executives are travelling a lot therefore it is forecasted that the overall demand for software utilities such as those produced by us will greatly increase too. This industry is also going to witness a new trend in terms of mobile TV and video and as such streaming technologies will greatly emerge as most important contributions in achieving the objective of introducing mobile TV. By introducing technologically more superior softwares, those players which will focus on developing top notch products will gain more market space. Trends also indicate that more and more youngsters will prefer to purchase mobile phones with more software utilities embedded in them. With focus on more cheaper and higher quality phones, it is estimated that this market will grow further as more and more new customers are being attracted by the mobile phone makers. Products & Services Our products and services will be generic in nature however; we will focus on producing more robust and customized mobile software. Our Mobile Computing softwares are generally developed for following: 1. Laptops 2. Note Books 3. Cell Phones i.e. Smart Phones. 4. Tablet PCs. 5. Other Handheld devices Our products will initially be based on remote connection technology where we will be offering software products which can connect to different services to retrieve particular information. The most important feature of our products will be the fact that they will be based on combination of cloud computing as well as traditional mobile computing technologies. With the help of cloud computing, our propriety softwares will be able to hook to central servers and will retrieve the softwares and data directly from remote locations. This will help users to save storage on their devices and utilize them for other purposes and will also serve as our unique selling proposition. Pricing structure of our products will vary according to the exact requirements of the buyers. Since our product will sold to both retail as well as industrial customers therefore our pricing structure will also differ for each class of our buyers. The pricing of our products will be based on value-based pricing and will therefore vary depending upon value generated by our products. Value- based pricing is often depend upon the overall value proposition generated by our products to our customers and will depend upon how we deliver our services. This form of pricing is also considered as most suitable form of pricing for services and also allows vendors to vary the pricing of the products depending upon the overall utility delivered by these products. Marketing Plan Economics This industry is mostly dominated by large players that often attempt to buy out smaller and more efficient players in the market to offer customized softwares along with their hardware i.e. PCs, Cell Phones, PDAs etc. as such market often function on derived demand basis i.e. the demand for small utility softwares largely depends upon the aggregate demand Industry dynamics indicates there are more than 3 billion mobile phone users in the world and this figure is going to increase over the period of time. 3 It is also argued that the mobile phone penetration will increase by 50% during year 2008 with major concentration/improvement being shown by the emerging markets such as India and China. It is also important to note that the overall mobile subscriber’s base will go over 1.2 billions during the period of 2007-2012. However, most of this growth is going to come from 10 countries where most of the subscriber’s concentration resides.4 Most of the growth in terms of mobile phone services subscription is going to come from US which are believed to add more than 60 million new users and subscribers over next five years. Reports also indicate that there will be an enormous increase in the use of wireless technologies such as 3G These growth trends indicate that there is enough market growth to venture new projects serving special niche markets. Consumer trends As discussed above that the consumers prefer more variety in mobile computing therefore trends are obviously showing encouraging trends. The enterprise mobile computing is fast becoming one of the most important aspects of mobile computing as new breed of executives keep themselves connected to the flow of information. Employers are increasingly preferred to provide a seamless access to information to their employees so that their productivity can be efficiently improved. Next generation of change in the mobile computing therefore would be to rely mostly on the wireless access to data and it is because of this reason that our main focus will be on delivering value to our consumers by delivering software utilities which can efficiently increase their efficiency and help them to manage certain aspects of their lives during the period of extreme travelling as well as managing daily routines for achieving better harmony in their lives. Barriers to entry This industry i.e. mobile computing software industry is one of the most critical industries in the world owing to the fact that it is growing really fast. The most important barrier to entry in the market is technological skills and knowledge. The competitors often have the financial resource to kick start a company however; it is the possession and knowledge of technology which is one of the biggest barriers in this industry. It is critical to note that the technology plays a critical role in development of new and robust software platforms therefore in order to succeed a firm must have to keep a pace with the technological changes. In order to keep pace with the technological changes, we are aiming to focus on outsourcing our work to India and other locations where we can obtain different technological expertise along with different other resources such as obtainment of personnel who keep themselves abreast with the latest technological development etc. the outsourcing of work to India will also involve making third party arrangements for the development of softwares for our customers. Our business model is also unique in the sense that we will be taking care of the business aspects of the software development i.e. doing research and coming up business ideas and models which can be successful converted into small and robust softwares. The technological development which is also one of the most important and critical aspects of withstanding the barriers to entry not only to make a successful entry into the market but also obtain a sustainability into a market which changes really fasts. Further, in order to restrict infringement of our technology, we will also get our softwares patented and all our vendors will be using our products with our product name and as such we will be retaining the rights of our own products rather than selling them to our vendors. This will also help us to make an effort to get our brand recognized in the eyes of our retail customers. Marketing Plan Products and Services Our products and services will be generic in nature however; we will focus on producing more robust and customized mobile software. Our Mobile Computing softwares are generally developed for following: 1. Laptops 2. Note Books 3. Cell Phones i.e. Smart Phones. 4. Tablet PCs. 5. Other Handheld devices Our products will initially be based on remote connection technology where we will be offering software products which can connect to different services to retrieve particular information. The most important feature of our products will be the fact that they will be based on combination of cloud computing as well as traditional mobile computing technologies. With the help of cloud computing, our propriety softwares will be able to hook to central servers and will retrieve the softwares and data directly from remote locations. This will help users to save storage on their devices and utilize them for other purposes and will also serve as our unique selling proposition. A detailed description of our products is as under: Glucose Sugar Level Monitor This small software utility will be helpful in recording different glucose levels and will monitor the different glucose levels entered into it. This small software can be embedded into any smart phone and even in Note Books and Tablet PCs and will allow user to input Glucose sugar levels measured at various times. This will not only provide a quick snapshot of the history of glucose levels observed and measured over the period of time but software will also suggest as to when to contact the doctor for further management of the Glucose levels. This software will also store other information such as blood group so that in case of any emergencies patients can be provided quick and better treatment. Weight Monitors Weight Monitors will be small utility programs and can be embedded into smart phones such as Iphone and Black Berry. These small products will help customers to record their weights recorded over the period of time and monitor their progress towards loosing weight. Further, this software will also help to calculate Body Mass Index for customers in order to give them a better understanding of their bodies and weight loss management. Customers As discussed above that our customers will be based on two groups i.e. retail customers as well as industrial customers. For industrial customers, we aim to contract with companies like Nokia, Apple as well as RIM to offer them our products to be embedded into their products at relatively low prices. The demographical profile for our retail customers will be as under: AGE 35-60 years Gender Male/Female Location North America & Europe Income Level $20000 per annum Social Class Working Class Education Collage Education Other N/A The above demographic profile of our customers indicate that our customers will be largely based in North America and Europe and we aim to serve them through our website i.e. our retail customers can buy the product either by downloading it through their cell phones or through PCs and than install the same into their smart phones. Demographical profile of our business customers will be as under: Industry Mobile Computing Location North America & Europe Size of Firm Large Quality/Technology/Pricing Preferences Premium Pricing Other Our initial customers will be Nokia and Apple. Competition This industry is mushroomed with small players which are offering small softwares to different players. Most of the players are smaller in nature and as such to identify a particular player as a competitor will be difficult to relative obscurity of such players. Further, most of the players sell out their products to mobile phones manufacturer along with their rights and as such these mobile phone manufacturers can be considered as our direct competitors. In such situation, it is therefore extremely difficult to exactly define and identify our competitors. Marketing Strategy Our marketing strategy will be based on very simple philosophy of offering quality products at affordable price to our customers. Since our products will be based on derived demand patterns therefore we are aiming to develop a marketing strategy which is in-line with the industry patterns of the mobile computing industry as a whole. Promotion Our priority and focus will be on promoting our products to our business customers and as such for this purpose we will be using direct marketing as our main tool for promoting our products. Once our products are being bundled with mobile phones manufactured by our business customers, we than aim to start advertising and other tools for promoting our products to our retail customers. This strategy is based on the fact that we first aim to get brand recognition by utilizing the brand power of business customers and as such once our brand get enough recognition we will than start direct marketing as well as personal selling through our website to our retail customers. Pricing As discussed above that our pricing will be based on the value-based pricing therefore we are aiming to offer variable pricing for our products. Initially, for our Glucose monitoring software, we will be charging $5 per mobile phone set sold by our business customers bundled with our software. Similarly, for our weight monitoring software, we will charge $6 per mobile phone sold. This pricing however, will vary depending upon the overall demand for our softwares and will increase along with the overall increase in value generated for our customers. Distribution Channels Initially, we will be selling our products through direct marketing and for this purpose we will rely on our own sales force to make presentations and give technical specifications to our intended business customers. Initially, for our business customers, this strategy will continue however, later on we will further expand our distribution channels by contracting with manufacturers such as Motorola, Sony Ericsson etc. For retail customers, we aim to rely first on getting brand recognition and than based on this recognition we will than focus on using personal selling as one of our main tools to generate sales. Personal selling however will be done through our own sales force as well as through our website. Sales Forecast Our initial sales forecasts are based on simple assumptions that we will experience a very small and constant growth in our first years of operations. Sales in units are also based on the assumption that initially we will contract to provide our software for just an ordinary batch of 500 sets for experimental purposes. Operational Plan Production We aim to start with two developers and a sales force of five personnel in initial phase of our business. However, later on as our demand increases, we will start outsourcing our development work to India. Location Our Office will be located at Silicon Valley with in-house developers as well as other administrative and marketing staff. Our customer service personnel will also be in-house and as such all the post-sales queries will be handled internally by our own staff. Personnel We aim to employ ten personnel in total at the beginning however, as the scope of our business increases we will further increase our head count. Our pay structure will be based on performance for developers i.e. more creative and robust the softwares are, more will be paid out to our developers. Similarly, pay structure for our support staff including sales staff will be based on flat payment basis i.e. we will be paying fixed salaries to our staff. We will also obtain patents for our softwares produced and as such our business customers will only utilize our softwares as stand alone third party softwares embedded into hardware produced by them. Inventory Since product offered by us will be software and can be reproduced as and when required therefore we do not expect any inventory requirement. Suppliers Our suppliers will only provide us hardware required for programming purposes. Credit Policies We will be obtaining our hardware on leases whereas we will sale our products on cash basis. Management and Organization Since our start up business will be smaller in size therefore we do not expect to hire or develop an organizational structure which is too complicated to follow. Our aim is to keep our organizational set up as simple as possible and for this purpose we propose following structure: 1. One Chief Executive 2. Manager Development 3. Manager Marketing and Sales 4. Manager Accounts 5. Support Staff In order to get our business registered and complete other legal formalities, we will hire a legal consultant who will not only help us in initial phase of registration etc but will also help us to draft contracts concluded with our major business buyers. Personal Financial Statements Liabilities $ Assets $ Credit card liabilities 15000 Cash Savings 10000 Mortgage 5000 Gold 7000 Net Worth 7000 Equipments 10000 Total 27000 Total 27000 Financial History and Analysis As for as the personal financial history of sponsors is concerned, it has been observed that the sponsors have positive net-worth and have remained savers rather than avid spenders. It is also critical to note that the sponsors have also personal liabilities which may be settled through the cash flows generated by the business. The debt incurred is based on the reducing balance and except mortgage, credit card payments can be easily paid off as and when funds are sufficiently generated to pay off entire liabilities of credit card companies. It may also be possible that the main sponsors, in order to provide maximum liquidity at the starting phase of the business may borrow funds from the relatives and friends. These funds will be converted into the liabilities of the business later on. Historically, sponsors of the firm have remained self employed- doing freelance work- however, from now on, sponsors will also work as software developers also and will not charge any salary to the business. Financial Plan Profit and Loss Projections Assumptions While preparing the financial statements we assumed following: 1. Sales will be based on forecasts made under the heading of Sales Forecasts. 2. Expense figures are arbitrary in nature and reflect the best guess as there is general lack of data on financials of firms working in our industry. 1 2 3 4 5 6 7 8 9 10 11 12 Sales $0.00 $0.00 $6,500.00 $6,500.00 $6,500.00 $6,500.00 $6,500.00 $6,500.00 $5,775.00 $6,050.00 $6,050.00 $6,050.00 Cost of sales $0.00 $0.00 $975.00 $975.00 $975.00 $975.00 $975.00 $975.00 $866.25 $907.50 $907.50 $907.50 Gross Profit $0.00 $0.00 $5,525.00 $5,525.00 $5,525.00 $5,525.00 $5,525.00 $5,525.00 $4,908.75 $5,142.50 $5,142.50 $5,142.50 Operating Expenses $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 Operating Profit -$5,000.00 -$5,000.00 $525.00 $525.00 $525.00 $525.00 $525.00 $525.00 -$91.25 $142.50 $142.50 $142.50 Other Expenses $500 $500.00 $500.00 $560.00 $500.00 $650.00 $550.00 $550.00 $600.00 $600.00 $600.00 $600.00 Net Profit -$5,500.00 -$5,500.00 $25.00 -$35.00 $25.00 -$125.00 -$25.00 -$25.00 -$691.25 -$457.50 -$457.50 -$457.50 Projected Cash Flows Major Assumptions 1. All sales will be made on cash basis. 2. All expenses will be paid in cash. 3. No expenses will be paid in advance. 4. Opening Balance is cash introduced by Sponsors Cash Flows 1 2 3 4 5 6 7 8 9 10 11 12 Opening Balance $10,000 $4,500 ($1,000) ($975) ($1,010) ($985) ($1,110) ($1,135) ($1,160) ($1,851) ($2,309) ($2,766) Receipts Sales 0 0 6500 6500 6500 6500 6500 6500 5775 6050 6050 6050 Payments Operating Expenses $5,500 $5,500 $6,475 $6,535 $6,475 $6,625 $6,525 $6,525 $6,466 $6,508 $6,508 $6,508 Total Inflow/Outflow $4,500 ($1,000) ($975) ($1,010) ($985) ($1,110) ($1,135) ($1,160) ($1,851) ($2,309) ($2,766) ($3,224) Projected Balance Sheet Major Assumptions 1. Bank funding is equal to net cash outflows in respective months. 2. Capital will be introduced during each month Projected Balance Sheet 1 2 3 4 5 6 7 8 9 10 11 12 Equipment $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 Cash $4,500 $4,500 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Investment $0 $1,000 $11,000 $10,975 $11,010 $10,985 $11,110 $11,135 $11,160 $11,852 $12,309 $12,787 Total Assets $14,500 $15,500 $21,000 $20,975 $21,010 $20,985 $21,110 $21,135 $21,160 $21,852 $22,309 $22,787 Capital $14,500 $14,500 $20,025 $19,965 $20,025 $19,875 $19,975 $19,975 $19,309 $19,543 $19,543 $19,543 Bank Funding 0 $1,000 $975 $1,010 $985 $1,110 $1,135 $1,160 $1,851 $2,309 $2,766 $3,244 Total $14,500 $15,500 $21,000 $20,975 $21,010 $20,985 $21,110 $21,135 $21,160 $21,852 $22,309 $22,787 Break-even Analysis Total Sales Price per unit Glucose Monitor $5 Weight Monitor $6 Total Fixed Cost $2(Assumed) Total variable cost =10% of sales price Break Even= 2/ (1-0.5) 2 / (1-0.6) = 2 / 0.5 2/0.4 = 4 5 Read More