Marketing Plan for Sonic Essay Example

value added price, therefore, together with the marketing plan, we can assure for our market penetration as well as the development brand and product awareness.

2. 1. Market situation

Macroeconomics

Demographic

Demographic environment US market is the biggest market in the world, people who are living in US prefer to use single device to communicate, information store and exchange. Therefore, US market will be our first geographic target area. After that we will try to expand to the international market (North America, Europe) The total target population of both personal and professional users is 5 million PDAs and 22 million smart phones worldwide each year.

Economics

Income distribution: The economy of the United States is the largest national economy in the world. Over the past three decades, the rich have grown richer, the middle class has shrunk and the poor have remained poor. From 1973 t0 1999, earning for U. S households in the top 5% of the income distribution grew 65%, compared with -growth of 11% for the middle one of households during the same period. This affluent people able to buy expensive goods and working class people having more carefully, shopping discount stores and factory outlet malls, and selecting less-expensive store bands. This is a good opportunities for Sonic 1000 for focusing on Sonic’s market target. Maketing management- Phillip Kotler , Kevin Lane Keller, 2009)

Saving, debt and credit: Consumer expenditures are effected by savings, debt and credit availability. US consumers have a high debt-to-income ratio. Credit is ready available in the United States. Therefore, it creates more convenient for US consumer when they want to buy goods to meet their demand. (Marketing management - Phillip Kotler, Kevin Lane Keller)

Technological

Technological

is one of the most dramatically forces shaping people’s lives.

In the telecommunication market, this is probably the most important factor in effecting companies development of their marketing strategy as they must always keep up to date with every changes within the market. Therefore, in order to be successful in this market, we need to focus on the following points:  Accelerating pace of change : the PDA products were changed day by day. More ideals than ever in the works which mean we should care for the time between introduction and pick production => We have foreseen this matter and have already planned for our second product launching – Sonic 2000. Unlimited opportunities for innovation. Varying Research &Development budgets: Pay attention to R&D is one of the best way for the companies.

Behavior Factors

Consumer behavior is the most important factor which we need to concentrate. The more we understand this factor the more success for our business. In our case, we focus on the following elements:

• Users who want to enjoy a PDA with innovative and most up-to-date support services in order to perform their complicated tasks successfully while on the go.
• Users who willing to spend money on high-end and integrated products

Market Needs & Trends

“Trends Shaping the Business Landscape” - (Marketing memo-Philip Kotler and Kevin Lane Keller, 2009. We can see how important role to study about market need & trends. We can see the opportunities for our product but it does not guarantee success, even the product is technically potential, especially, for telecommunication product like PDAs. We are going to launch a new product to the existing market, therefore, we need to understand fully about

the needs and trend. Below are some of our main focuses:

• Customer satisfaction:Maximize the product quality, features and value
• Customer service: The patron will be impressed with the level of attention that they receive. Set up a department for after sales servives and customer support by proving telephone hotline, online services
• Competitive pricing: the price will be lowed competitively relative to the competition.

Microeconomics

The company Sonic, founded 18 months ago by two entrepreneurs with experience in the PC market, is about to enter the PDA market dominated by PalmOne. Overall, PDA sales have slowed and profitability has suffered. The emergence of multifunction PDAs and advanced cell phones has increased competitive pressures.

Estimated market size for multifunction PDAs and cell phones is $63. 7 billion, with 50% growth expected within 4 years. b. Marketing intermediaries Sonic-branded product will be distributed through the 2-level channel: Manufacturer, Wholesaler, Retailer, consumer aims to make use current network of distribution since Sonic is a new brand name. The development of Internet has create the in marketing intermediaries : Online retailers, it has shown the amazing effective of product distributions. We will use this for our Sonic 1000 product penetration as well.

Product Situation

As the market for PDAs and smart phones have become mature, the products price is going down due to competition by so many other well-known companies. The statistic of this market has shown that the growth of PDAs and smart phones is accelerating with nearly 30 million new users each year. Sonic 1000 was an innovation products (less vulnerable to attack by hackers and virus, large storage capacity, communication, and entertainment…. ) at lower price than other products of the competitors,

high standard of customer services (delivery, guarantee, supports…)

Competitive Situation

The number of PDAs and smart phones producers are increasing and the development of technology lead the market become more competitive. It is obvious that Sonic have a lot of competitors that many of them have firmed position in the market, they include: Palm, Hewlett-Packard, Samsung, RIM, HTC and Apple. With all of these competitors in the market, we must try our best in this big game by running successful marketing strategies, to do this we will focus on the principles of marketing in the terms: Customer satisfaction: Based on our market research, we will find out whether Sonic 1000 will meet the customer’s expectation or not.

• Customer perception: We are new set up company, unawareness products. However, we can build up our brand based on product quality, value, services…
• Customer needs and expectations: This term is vital to any organization if they wish to keep their entire current market share and develop more and our company is not exception. For this launching, we need to anticipate in the trends and forecast our sales. Generating income or profit: Although satisfying the customer is a big part of any companies. We have set up our financial target.
• Making satisfactory with progress: Technology is changing very quick and we have foreseen this matter and keep continue on our R&D for new product, be aware of market At the moment we -Sonic is weak brand name in the market, and we do hope that with our clear marketing principles, we will success.

Market Research

To help decide what aim market of our company, we look for the data and information of buying

habits.

In order to classify the want and the needs of the consuming population, and then make a decision on the new product, about what advertising should be use, promotional tactics, pricing and packing. We will need to do market research on the following: Consumer behavior:

• How do customer react to advertising?
• Whether they are partial to prize give-away or free gifts?
• What are their reactions to the new and developed product?

Buying patterns and sales trends: We will look at how buying trends and patterns are affected by age, gender, income, occupation and lifestyle.

We need to understand how buying patterns change over time and what markets are expanding worth to enter. In our case, we will first focus on U. S. market, then move to Canada => U. K=> Europe Consumer preferences: What customer are looking for in our product? For example: Style, color, technology, amount of outlets, customers services, and promotional... Activities of competitors in the market, We need to examine :

• How our rivals are adapting our price ? In this case we set a lower price than others.
• How well our competitors are selling?
• What are their marketing strategies?

Sources of marketing information: We use both quantitative and qualitative data

• Quantitative data: Presented numerical form usually fingers for example our sales, profit figures in the first 6 months.
• Qualitative data: We collect the information concerning the motives and attitudes of consumers, for example why more people buy iPhone recently... and we withdrawed to ourselves the lessons on this case.

We conducted the following methods: Collecting primary data:

• Face to face survey
• Open ended interview
• Observations

Collecting secondary data: Internal resources Existing reports

• Distribution data
• Sales persons
  

and shop keeper opinion External resources

SWOT Analysis

Strengths

We can build Sonic on three important strengths:  Innovative product: Sonic 1000 include a voice recognition system that simplifies usage and allows hands-free operation.

It also offers features such as built-in cell phone functionality wireless communications, and MP3 capabilities. Compatibility: One PDA can work with the hundreds of Palm-compatible peripherals and applications currently available such as : Microsoft and Symbian. Flexible OS system should be consider one of our products advantages. Pricing: Their product is priced lower than competing multinational models all of which lack voice recognition which give an edge with price-conscious customers.

Weaknesses

By waiting to enter the PDA market until the initial shakeout and consolidation of competitors had occurred. Sonic has learned from the successes and mistakes of others. Nonetheless, it was found they have two main weaknesses: Lack of brand awareness: Sonic has not yet established a brand or image in the marketplace, whereas PalmOne and other rivals have strong brand recognition.

This is an area we will address with promotion. Heavier weight: To accommodate the multifunction features, the Sonic 1000 is slightly heavier than most competing models. To counteract this, we will emphasize our multifunction features and value-added pricing, two important competitive strengths:

Opportunities

Sonic can take advantage of three major market opportunities: Increasing demand for multiple communication methods: The market for wireless Web-enabled PDAs with cell phone functionality is projected to grow faster than the market for non-wireless models.

There are more users with PDAs in

work and educational settings, which is boosting primary demand. Also, customers who bought entry-level models are now trading up.  Add-on peripherals: More peripherals, such as digital cameras and global positioning systems, are available for the Palm operating system. Consumers and business users who are interested in any of these peripherals will see the Sonic 1000 as a value priced device able to be conveniently and quickly expended for multiple functions. Diverse applications: The wide range of Palm- compatible software applications available for home and business use allows the Sonic PDA to satisfy communication and information needs.

Threats

We face three main threats at the introduction of the Sonic 1000: Increased competition: More companies are entering the US PDA market with models that offer some but all of the features and benefits provided by Sonic PDA. Therefore, Sonic marketing communications must stress our clear differentiation and value added pricing. 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 seem to be reaching the maturity stage of their life cycle more quickly than earlier technology products. We have contingency plans to keep sales growing by adding new features, targeting additional segments, and adjusting prices. Competition: Increased entry of established computer and cell phone companies has pressured industry participants to continually add features and cut prices. Competition from specialized devices for text and e-mail messaging, such as Blackberry devices, is also a factor. We are going to launch our product Sonic 1000 to the market,

so our purpose is to sell the new product to the existing marketing, to do this we need focus on:

• Change the price scheme
• Introduce discounting
• Start up different advertising campaigns

Marketing Strategy

Mission Statement

Our mission is to become the most successful PDAs and smart phones producer by offering high end products to our valued customers. “Beside you as always” is Sonic 1000 motto.

Objectives

Marketing objectives:

• Successful in market penetration.
• Build up Sonic brand

Financial Objectives

• First-year Objectives: We are aiming for a 3 percent share of the U. S. PDA market through unit sales volume of 240,000.
• Second-year Objectives: Our second-year objectives are to achieve a 6 percent share based on sales of two models and to achieve break-even early in this period.

Market Targeting

Market segmentation: A smart phone is an evolution from a cell phone to a device which resembles functions of a notebook. Although the market for PDA is now mature, but the market for such product like Sonic still very potential. Our marketing strategy will be based on the below major segmentation variables analysis: Age: As long as people still in the need of devices, sonic PDAs is still in their demand. We realize that the children as young as 16 years old start and need multifunction device a lot so do people as old as 45 so we aim at the group of consumer from 16 to 50 years old.

Source: Consumer behavior-8th edition, Hawkins Best Coney Gender: Male should be our main target market segment as they are interested in high-end products. In addition, as PDA is very convenient portable and integrated multifunctional features, so female students and professional are our other target also.  Income:

Our marketing strategy for Sonic 1000 is based on a positioning of product differentiation. The primary consumer target is middle- to upper-income professionals who need one portable device to coordinate their busy schedules and communicate with family and colleagues. Lifestyle: Sonic 1000 will enable the users to enjoy an unique combined features such as speedy, hand-free dual mode, Wi-Fi, music and video…etc.

However, the needs vary according to the person’s career, income, and so on). For example (Philip Kotler and Kevin Lane Keller, 2009): Professionals need a PDA to coordinate their busy tasks, note down information, stay in touch while on the go, and also to exchange information from anywhere. Students need a multifunction PDA to perform their complicated tasks without the assist of multiple gadgets. Business markets (contains of corporate users, entrepreneurs, and medical users) need a personal digital to record, conveniently store and exchange information while on the go as well as to key in, access, and update their critical data, contacts, and schedules.

So people who care for technology would be our target, also. We should use such variables for segmenting its market in order to offer not only the right mix of features in the product but also make it the most competitively priced product in the market.

Marketing Positioning

Using product differentiation, we are positioning the Sonic PDA as the most versatile, convenient, value-added model for personal and professional use. The marketing strategy will focus on the voice-recognition system as the main feature differentiating the Sonic 1000 (See the table 1-5- Needs and Corresponding Features/ Benefits of Sonic in the Appendix for detail information. )

Under the positioning elements, we will have to set up

the position of Sonic 1000 as the flexible, convenient and value added device for professional, students, corporation, entrepreneurs and medical use. However, Sonic itself is quite new brand in the market as the company has established 18 months ago, Sonic products are focused on new technologies and taking advance of the growing interest in PDA. This means that Sonic must carefully target specific segments, focus so much on the brand itself as well as focus more on how to promote Sonic 1000 by focusing on the convenience of having one device for communication, but also entertainment, Internet access and some other valued features. In addition, we should have carry out the R& D and have plan for a next generation product to keep brand momentum going.

Product Offering

The Sonic PDA 1000 offers all the standard features such as: voice recognition, hand free, digital music, color screen, camera, and memory driver…. Furthermore, nowadays buyers do not only want a PDA with basic features but also with advanced features such as:

• High-speed internet connection for immediately connect and browse the web, download web data, sharing files, access streaming media, and internet communication.
• High-speed Bluetooth technology to synchronize and transfer large amounts of data
• Buyers wanting a stylus and handwriting-recognition function to easily key in data.
• Digital camera for snapping pictures and email them while on the move.
• Window media player to play video and audio files while on the move.

Key to Success

The key to success of Sonic 1000 are product advanced features and low price that meet the market demand. In addition, we should focus on:

• Product quality management
• Customer relationship management
• Customer satisfaction management.

Our company will get

profit and sustainable as well as our Sonic brand will become an “evoked set” if these mentioned keys are achieved.

Strategies

Product

Consumer and business markets are willing to spend a lot of money on PDAs because they want a PDA with innovative and most up-to-date support services in order to perform their complicated tasks successfully while on the go (Matthew Broersma, 2001).

We tends to include all the latest technology and a lot of consumers favorite such as: a voice recognition system that simplifies usage and allows hands- free operation will be sold with a one-year warranty. We will introduce a more compact, more powerful high-end model (the Sonic 2000) during the following year, with GPS functionality and other features. Building the Sonic brand is an integral part of our product strategy. The brand and logo (Sonic’s distinctive yellow thunderbolt) will be displayed on the product and packaging and reinforced by its prominence in the introductory marketing campaign.

Pricing

Setting a price with regards to only internal factors as production is not enough. We should analysis the external factors as well, following are some of external effecting our pricing decision: Market conditions:

• How much are the customer willing to pay?
• Can our advertising program can increase the product image and price?
• What are our target get market segments ?

Production cost: Our selling price should cover the production cost otherwise our company will face closing Business objectives: As we are the first stage of product launching, so profit is not our priority objectives. We need to achieve the market share instead. Tax and subsidies: The recent U. S. government tax, customs duties and subsidiaries allows us to put a lower price.

After review all internal and external factor, our PDA-Sonic 1000 will be introduced at $250 wholesale, $350 estimated retail price per unit.

We expect to lower the price of this first model when we expand the product line by launching the Sonic 2000, to be priced at $350 wholesale per unit. There are many types of pricing strategies, below are some common ones:

• Cost based pricing
• Marginal cost pricing
• Demand based pricing
• Market skimming
• Price discrimination
• Penetration pricing

In our case, we are trying to establish ourselves in the market and gain the market share, so penetration pricing strategy should be our best choice. One problem with this strategy in telecommunication market is that the price wars will often develop with rival companies and this can limit to the amount of our profit, and also generate loss. We did market research and survey in order to set up the suitable price for Sonic 1000.

The analysis revealed that other products from competitors such as Samsung, HP, PalmOne, HTC, Nokia and Apple, our products are quite cheaper than theirs. The most updated on our competitor’s products and prices are shown in the below table.

Distribution

Selecting the most appropriate distribution channel is important, as the choice will determine sales levels and costs. The choice for a distribution channel for any business depends on numerous factors, these include:

• How far away the customers are;
• The type of product being transported;
• The lead times required; and;
• The costs associated with transport;

We did research and determine the distribution channel for our Sonic 1000. Its will be sold through 50 well-known stores and online retailers:

• Office supply superstores : Office Max and Staples
• Computer stores:
  

CompUSA and independent retailers

Each of distribution channels will have different distribution and promotion strategies:

• Office supply superstores : in stores, catalogues, and online
• Electronics specialty stores: in stores, online, and in its media advertising
• Online retailers: Amazon, eBay, promotion fee, give

Sonic prominent on its home page during the introduction. During the first year, we will add channel partners until we have coverage in all major U. S. markets and the product is included in the major electronics catalogues and Web sites. We will also investigate distribution through cell phone outlets maintained by major carriers such as Cingular Wireless.

In support of our channel partners, Sonic will provide demonstration products, detailed specification handouts, and full-color photos and displays featuring the product. We will also arrange special trade terms for retailers that place volume orders.

Promotion

In today’s competitive environment, having the right product at the right place at the right time may still not be enough to be successful. Effective communication with the target market is essential for the success of the product and business. Promotion is the process of the marketing mix designed to inform the marketplace about who you are, how good your product is and where they can buy it. Promotion is also used to persuade the customers to try a new product, or buy more of an old product.

The best way to reach the target of Sonic 1000 is integrating all messages in all media such as radio, local newspaper, and internet and so on. Research about media consumption patterns will help our advertising agency choose appropriate media and timing to reach prospects before and during

product introduction. Thereafter, advertising will appear on a pulsing basis to maintain brand awareness and communicate various differentiation messages. Advertising can be expensive but controllable. This step can be used to increase awareness, create interest and giving out information about Sonic 1000. Target market can be easily reached from this step by segmenting them and placing adverts in their target media.

To attract market attention and encourage purchasing, we will offer as a limited time premium a leather carry-case. To attract, retain, and motivate channel partners for a push strategy, we will use trade sales promotions and personal selling to channel partners.

Branding

Brand image plays a dominant part in our marketing strategy because, we are the newcomer in this market. Our products are less awareness, so we set our main objectives is promote our brand of Sonic. Most forms of our promotion are based around the ideal of having an imagine to go with the product. Because, we understand that people make a purchase they are not just buy a product, they are buying a lifestyle or imagine. In our branding strategy, we will try the following ways: Company logo and slogan reminder : “Always in touch” - Attached product motto in advertising : “Beside you as always” - Distinctive packaging : Yellow thunderbolt

Marketing research

When attempting to implement a new Marketing plan a business must address its target market and conduct the relevant information to insure the new marketing plan both differs from the old and is better for the business. When conducting market research a business must first define the problem and then gather the appropriate information to solve the problem. Using research, Sonic will identify

specific features and benefits their target market segments value.

Feedback from market tests, surveys, and focus groups will help them develop the Sonic 2000. We are also measuring and analyzing customers’ attitudes toward competing brands and products. Brand awareness research will help them determine the effectiveness and efficiency of our messages and media.

Marketing Mix

We will launching Sonic 1000 in February. The following are our action plans during the first 6 months.

January - Promotion program:

• Launching $ 200. 000 trade sales promotion campaign
• Attend industry trade shows to training the dealers and generate the channel supports
• Create buzz by providing the samples product reviewers, opinion leaders, influential bloggers and celebrities.

Support for product features explanation by sending a training staffs to work with sales personnel at major chain.

February – Advertising campaign:

• Integrated print/ radio/ Internet campaign to targeted customers. The advertisement was build up in order to show the innovations function of the product.
• The advert campaign was supported by point sale, online and video tours

March – Promotion and Advertising:

• Keep continue advertising program
• Add promotion such as: contest of Sonic features display such as pictures and video captures and post in our websites => Show how consumers use Sonic 1000 in a creative ways
• We distribute the new point of purchase display to support retailers

April – Product contest to motivate sales staffs and retailer:

• Hold a trade sales contest offering prizes for the sales person and retailers who can sales the most PDAs in 4 weeks period.

May – Advertising campaign:

• Toll out the new national advertising campaign
• Put the celebrity voice telling the Sonic PDA function performance.
• Stylized print and online advertising will features the avatars of
  

the celebrities => Plan to reprise the theme for next year Sonic 2000’s product launch

June – Advertising:

• Add a new voice over tag line promotion on radio advertisement.
• Exhibit the semiannual electronic trades shows and provide retailer competitive comparison handout as a sales aid.
• Analysis the result of customer satisfactions => Plan for future campaign and product development. Source: Sample of marketing plan - (Philip Kotler and Kevin Lane Keller, 2009)

Financial

This section will offer a financial overview of Sonic as it related to the marketing activities. Sonic will address break-even analysis. The primary financial objectives are to achieve first year sales revenues of $60 million, keep first-year losses to less than $10 million, and break even early in the second year. Total first-year sales revenue for the Sonic 1000 is projected at $60 million, with an average wholesale price of $250 per unit and variable cost per unit of $150 for unit sales volume of 240,000. We anticipate a first-year loss of up to $10 million.

Break-even calculations indicate that Sonic 1000 will become profitable after the sales volume exceeds 267,500, early in the product’s second year. Our breakeven analysis assumes per-unit wholesale revenue of $250 per unit, variable cost of $150 per unit, and estimated first-year fixed costs of $26,750,000. Based on these assumptions, the breakeven point calculation is: Break Even = Fixed Cost / (Unit Price - Variable Unit Cost)) = 26,750,000/ (250-150) = 267,500 units

Marketing Controls

Controls help management measure results and identify problems or performance variations that need correction.

Implementation

Implementation is the process of turning plans into actions, and involves all the activities that put the marketing plan to work.

Successful implementation depends on how

well the business blends its people, organizational structure and company culture into a cohesive program that supports the marketing plan. There is no planning without control therefore we are planning tight control measures to closely monitor quality and customer service satisfaction. This will enable us to react very quickly in correcting any problems that may occur. Other early warning signals that will be monitored for signs of deviation from the plan include monthly sales (by segment and channel) and monthly expenses.

Monitoring and Controlling

Monitoring and controlling allows the business to check for variance in the budget and actual.

This is important because it allows us to take the necessary actions to meet the marketing objectives. There are three tools we should use to monitor the marketing plan. They are the following:

Sales Analysis

The sales analysis breaks down total business sales by market segments to identify strengths and weaknesses in the different areas of sales. Our branded products will be distributed through a network of select store and network retailers in the top 50 U. S. markets. Distribution will initially be restricted to the United States. This makes customers inconvenient to order or buy our products when they live far.

Market Share Analysis

The primary marketing objectives of this plan are to achieve first-year U. S. market share of 3 percent and unit sales of 240,000. The primary financial objectives are to achieve first year sales revenues of $60 million, keep first-year losses to less than $10 million, and break even early in the second year. Target market various age groups and lifestyles from high school students to universities, and male or female professor.

Marketing Organization

Our team has 4 people. This is

our assignment for the Marketing Management course of our lecturer PhD Francis Piron. See below the Exhibit A-1- Our organization structure for details.

Conclusion

The key success of an organization is rely on the business plan, marketing plan, product plan... to target, positioning and segment of their products or services on the way reach their patrons. As a conclusion, we- Sonic is supposed to tag along the suggested and enlighten segmentation, targeting, and positioning strategies. With our above marketing planthe, we hope that we success in our business and reach the aim to become the producer of high value, high quality , convergent PDA products.