BUSINESS PLAN OF TVIE WATCHES INNOVATIVE ASSINGMENT

Date of submission: 29 OCTOBER 2011.

Submitted to MISS UZMA By Marium anwer Muneezah abid Anila ali Huma fateh

ACKNOWLEDGEMENT

First of all I would like to thank Almighty God for giving me the strength and courage to accomplish all small and big tasks and the will power and patience in making this report possible. To develop this report. It was a laborious task for me and I couldnt have accomplished this without the help and support of many people.

I would like to thank our Teacher Miss Uzma Rasool, who gave me lot of guidance and advice in making this report possible. I am grateful for her help and co-operation.

I would also like to thank all the people for the information they provided me because without their co-operation this report can not be possible.

In the end I hope and pray that this report meets the criteria, which I was asked to adhere to.

TABLE OF CONTENTS
S. No. TOPIC 1 Introduction 2 Business plan 3 4 Executive summary Major Aspects Of The Business Plan Goals Objectives Strategy Situational Analysis : SWOT Analysis Business Strategies : Segmentation Target Market Product Positioning Marketing Mix Page No. 03

04 06 , 07

5 6

08 11 ,13, 14, 15

20 ,21 7 Product/Market Watch : Target Customer Profile Competitive analysis Financial Projections and Budget 22 CONCLUSION 24

8 9

EXECUTIVE SUMMARY
This business plan has been designed for TUVIE WATCHES. The core benefit of this product is to make teen age of people happy. We guarantee extra-ordinary advancement and entertainment in your life through which you will also enjoy less tension regarding charging the battery of he product. Over the past few years, the number of appearance conscious people in Pakistan has grown considerably resulting in the introduction and popularity of many such products. We have identified the variables like region, density, age, income group, education, lifestyle, personality, social class and user status that will affect the purchase of our product. We combine these variables and give them values in order to arrive at our target market. We then evaluate the segments and then decide how many and which ones to target. The appropriate market coverage strategies are then implemented in order to serve the respective segments.

The market can be divided into three consumer profiles. The first is the actualizer, an affluent person who gives much importance to image for the extension of their taste and character. The second is the achiever, a successful well-off person who favors products that show off their success, and finally comes the striver, a competitive person for whom style is extremely important. The product shake mp3 is differentiated from the competitors products and thus the chosen position is then communicated and delivered to the target consumers. Throughout the business process we will stick to our primary objective of increasing sales, earning high profits and to make a modern nation.

INTRODUCTION
A business plan is a blueprint that provides structures of a firms activities, including the implementation and control of those activities. The major sections in this business plan include the executive summary, situation analysis, strengths and weaknesses, opportunities & threats, desired outcomes, business strategies, product/market match, controls and evaluation and financial projections.

Keeping in mind that there are several different formats that can be used to describe the components of business plan, we have used this format for our term report.

The business strategy and its key elements are put down in writing in rather broad terms which are not suitable for implementation, neither are they meant to be. The business plan is the action document. Developing a business plan is a creative effort to provide vision and direction for business implementation.

This report provides a business plan developed for a new product called Shake mp3, which is more of an advanced watch. It is virtually safe and full of innovation by which when used regularly will result a great difference in your lifestyle.

Our focus lies in creating an interest among eventually convinces the user of this product.

building

awareness

and

people for Shake mp3, and customers to become a regular

Product and key features

Shake is a mp3 player that can be charged by shaking when the HOLD function is on. With HOLD off, the user shakes the player for PLAY/PAUSE. The action of shaking the player to play or charge it is similar to shaking a pocket watch to wind it. The similar semantics provide an interesting yet familiar experience of giving life to an electronic device.The form of Shake was developed based on the language of a pocket watch, not only through the operation of shaking but also visually. Using the form from an established typology, Shake provides a comforting familiarity in a sea of electronics with foreign shapes and forms.

The use of kinetic energy to charge the battery not only solves an environmental issue, but also a more personal one. In situations like a long commute home, the user can enjoy personal audio without worrying about the battery dying out.

An electromagnetic coil is connected to the battery, converting kinetic energy into electrical energy that charges the battery. The player connects to the computer via a USB cable through the headphone jack, facilitating the transfer of songs as well as the conventional method of charging.

Shake would utilize kinetic energy generation technology developed by start up company M2E Power. M2Es micro-generator technology delivers 300% to 700% more power than existing kinetic energy solutions (according to the companys website), harvesting sufficient energy from normal daily and mechanical motion to power a wide range of mobile electronic devices. This technology allows Shake to charge even in the users pocket while he/her is walking around.

MAJOR ASPECTS OF THE BUSINESSPLAN

Goals:

The decision to purchase Shake mp3 is a series of yes or no questions. These are as follows:

Step1: Is the customer aware of Shake mp3? Yes: Proceed to step 2. No: Customer must be educated about Shake mp3. Step 2: Does the customer understand the benefits of Shake mp3? Yes: Proceed to step 3. No: Customer must be educated about the benefits of Shake mp3. Step 3: Does the customer see the price/ benefit ratio as a good value? Yes: Proceed to step 4. No: Customer must be educated on the value of Shake mp3. Step 4: Will the customer purchase the product? Yes: A sale has been made and the objective achieved. No: Any remaining obstacles must be removed. The goal of this plan is to remove all obstacles that lie in a customers way of a buying decision for the product. Objectives:

making

To achieve the above goals we have to establish certain objectives, which are: Objective 1: Increase customer awareness of Shake mp3. This applies to those customers who do not know about the product. This objective will aim the first goal listed above. Objective 2: Increase benefits awareness of the customer who perhaps does not understand the value of Shake mp3 (steps 2 and 3). to achieve

Strategy: and

To accomplish these objectives, geographic, demographic, psychographic

behavioral information was used to develop a target customer profile. A promotional campaign shall be developed that will incorporate the theme: Some things are worth waiting for; surely they are even better when you get them right away. Our strategy centers on product differentiation whereby we differentiate our physical product. This is possible in the case of Shake mp3 since it is different from the others. We have differentiated the product in terms of its performance, and the formula of the product.

Image differentiation includes relating the benefits of Shake mp3 strips to the target market. For the actualizer, Shake mp3 represents an extension to their entertainment and activeness. For the striver, Shake mp3 represents a tool to achieve liesure. Whereas for the achiever, Shake mp3 is vindictive of the level of success that he has achieved. The strategy will be implemented through four main channels: 1) Creative television advertisements designed to appeal to the target market. 2) Frequent advertisements in the newspaper and magazines to persuade the customer. 3) Billboards and posters will be used in the metropolitan areas to keep reminding the customer. The promotional campaign will create brand and benefits awareness for Shake mp3 right from scratch. The final result of which will hopefully be increased trial and subsequent sales.

SITUATIONAL ANALYSIS

We will now discuss the various internal and external elements of the business environment surrounding Shake mp3. Substantial opportunities exist to tap into the market of individuals who are either image or status oriented. In order to take advantage we first need to critically analyze all factors that affect the product- the strengths and weaknesses along with the opportunities and threats.

SWOT ANALYSIS:

We use the SWOT analysis to carry out a detailed study of the strengths, weaknesses, opportunities and threats of Shake mp3. Regardless of the position of the product in the product life cycle, SWOT gives you the clear picture of where the product stands in the market and what actions to take. It also gives a comparative outlook of how a product weighs against other similar products.

The SWOT Analysis enables us to match the opportunities with our strengths in order to increase our capabilities and output. We can also convert our weaknesses into strengths by identifying those weaknesses and rectifying them. Similarly, it also allows us to convert our threats to opportunities.

Strengths:
Shake mp3 is an innovative product with unique features and different from the competitors product. In a style and image conscious society like this, there is a high chance that Shake mp3 is tried at least once by a big part of the target market. Shake mp3 works much quicker and effectively available because it is free of bad rays from technology and bacterias. Shake mp3 is also a technically advanced and tested technology which is superior to its substitutes. They are hassle free and easy to use. Shake mp3 can be use anytime and anywhere, as they can be worn like watches. Shake mp3 is small in size and portable.

Weaknesses:

Shake mp3 is much more expensive than the competitors product. It can only be afforded by the well off.

Customers need to wear the shake mp3 pack regularly in order to charge it as it gets charged by kinetic motion.

A small percentage of people may not get the same accessible benefits. Since the idea is very innovative people may take considerable time to accept such a product.

Opportunities:
Over time people have become more style conscious. They give importance to new and improved technologies like the shake mp3. After people have tried this product once it will be easier to encourage repeat purchases as the product guarantees satisfaction. People have now become more value-conscious to the extent that he/she will not mind paying a little more for the high quality which the shake mp3 offers.

Threats:
Competitive products are relatively cheaper. It may be difficult to penetrate the market because of the fact that the mp3 are already established products. People may take time to realize that Shake mp3 is what they actually need. People might have a misconception that product usage might result in harmful side effects. If economic conditions do not flourish in the near future then there are chances that people will reduce their spending on accessories like this product. Cheaper products offering lower quality may appear in competition to weaken our customers confidence in the product.

WHEN YOU USE AN ORDINARY MP3 PLAYER:

BUT WHEN YOU USE SHAKE MP3 PLAYER

BUSINESSSTRATEGIES:
SEGMENTATION:
Markets consist of buyers who differ in one or more ways. They may divided into broad classes of buyers who differ in their wants, resources, location, buying attitudes and practices. Thus, the seller must prepare separate business programs for each class in order to satisfy their separate needs. Hence following are the segmenting variables that we think are most applicable; in this context Shake mp3. There are several bases for segmentation but we shall only make use of those that we think apply best.

Variable Geographic

Typical Breakdowns

Region:

Karachi, Lahore, Islamabad, Hyderabad, Rawalpindi.

Density:

Urban

Demographic

Age: Income: Education:

18- 30 Rs.400, 000 and up primary/high School, college/university graduates.

Psychographic

Social Class: Lifestyle: Personality:

Upper middle, upper uppers. Modern, Social, and Outgoing. Extrovert, image conscious Sense of appearance.

Behavioral

User Status:

Non-user, potential, regular user.

According to geographic segmentation we can segment our market on the basis of region and density. As we plan to use the resources available to us in the best possible manner, we will not cater to the nation as a whole. Instead, we define key regions where the product has the potential to acquire a considerable market share. By density we mean the areas that are Urban or Suburban because of the fact that people in these regions tend to be more image conscious and are willing to take up such kind of a product.

When it comes to demographics, Shake mp3 can be segmented on the basis of age, income and education. We must specify the age groups between the range of 18 to 30 years as these are the people who might need such kind of a product. We also want to differentiate between different incomes groups who can afford such kind of a product, as Shake mp3 is an moderately expensive product. The target customers should at least be primary/high school college/university graduates, as they should understand the importance of liesure.

Using psychographic segmentation we have segmented buyers on the basis of

social

class, lifestyle, personality. Shake mp3 is more likely to appeal to customers who belong to the above-mentioned social class because of their different preferences. Lifestyles affect peoples interest in various goods, and the goods they buy express their lifestyle. Thus, people with a modern way of living can be easily lured by Shake mp3. By personality, we mean a person, who is an extrovert, having a sense of appearance will be interested towards using a product such as Shake mp3.

Lastly, behavioral segmentation of Shake mp3 was done using the variable, user status. It is vital to segment on the basis of user status as it can help the firm build up the product usage. Different users require different business appeals.

TARGET MARKET:
Now we need to evaluate the various segments identified above in order to decide how many and which ones to target. After combining the appropriate variables we arrive at a relatively small market segment with a high growth rate. The factors that affect the long run structural attractiveness are in our favor because there are very few competitors, meaning there are very few substitute products available. There is also a slim chance of segment rivalry.

Concentrated Market Coverage Strategy Segments

After evaluating different segments, comes the decision of which segment to serve. We have planned to use a concentrated business coverage strategy, as we cannot differentiate our product for different market segments. Instead of having a small share of a large market it is wiser to go for a large share of one or a few of the sub-markets. Moreover through this strategy we aim to achieve a strong market position in the segment because of greater knowledge of the segments specified, and earn a high rate of return on the investment.

PRODUCT POSITIONING:
A products position is how that product is defined by the consumers on important attributes - the place that the product occupies in consumers minds relative to the products offered by competitors or any other traditional products. We have positioned our product according to its attributes, benefits and also against a competitor. Shake mp3 though expensive is still cheaper than its other substitutes. It provides easy, safe, quick and effective improvement in the amusement of people.

We plan to differentiate our product through product differentiation. Since Shake mp3 is a technically advanced, high quality product, we are justified to charge a high price. Customers are bound to see the positive difference between Shake mp3 and the other substitutes in the market.

In order to strengthen our positioning strategy we need to discover the potential competitive advantages. Only then can we choose the ones that we should promote. We can safely say that our product delivers a highly valued benefit to target buyers. Moreover, the tetra pack is also a distinctive in nature and superior in quality.

MARKETING MIX:
The marketing mix will be a blend of the four Ps, product, price, promotion and place set according to the target market. The marketing mix is basically used to influence the demand for our product. We will now consider each of the Ps individually.

The Product:
Shake mp3 is a breakthrough in providing pure entertainment. The core benefit of this product is to make all ages of people happy. Shake mp3 contains full range of songs and time catalog. In fact, Shake mp3 can provide songs 10 times better than any other mp3 player. Shake mp3 is actually flexible, which only need to be worn for twice a day to get it completely charged.

Packaging is considered to be the last chance to convince the customer to make the purchase. The gift pack will be sold in packaging nice looking and attractive for it to be noticeable. The packaging will scream out our message to inform the customer; moreover it will also be appropriately labeled so that the customer has no problems comprehending the instructions and other related information concerning watch.

Price:

The approach to pricing in the first year of introduction will be in accordance to the market-skimming pricing strategy. Since Shake mp3 is a new and innovative product we will charge a high price in order to skim maximum revenues layer by layer from the segments willing to pay the high price. After a year of its launch the price will be reduced slightly to encourage increased sales.

The product mix pricing strategy used in the case of Shake mp3 will be psychological pricing. We will build a perception in the minds of our target customers that causes them to match the high quality of the product with a high price. The customers will not mind paying more for a product that is of high quality. So the psychological effect is that people will think that because it is priced highly it will be a high quality product.

The general pricing approach used will be cost plus pricing where we add a standard mark-up of 40 % - 50 % to the cost of the product. The retail price of the watch comes down to approximately Rs.3000 .This is a premium price for the product and will serve to build the perception of quality and value in the minds of the consumers.

Promotion:

Modern marketing calls for more than just developing a good product, pricing it attractively and making it available to target customers. Companies must also communicate their message with the customers and what they communicate should not be left to chance. For most companies, the question is not whether to communicate, but how much to spend and what media to use.

First of all we need to decide on the basic message content that will produce the desired response. The message should relate to the audiences self interest and show that the product will produce the claimed benefits, for e.g. product quality and performance.

Wear shake mp3, and enjoy music limited to the time you want to enjoy.

One of the most difficult decisions in business is to decide how much to spend on promotion. In the first year of launch we shall carry out aggressive promotion in order to capture the larger part of the market. After that we intend to follow the percentage-of-sales method whereby setting the promotion budget as a percentage of current or forecasted sales. We will employ various communication channels to make people aware of our product its features and its application. Television: The advertisements will show in moderate detail how to use the product along with useful information about the uniqueness of the product. Even the benefits of the product can be discussed in the sense that it can be compared with looks. Billboards and Posters: The advertisements will be used to make people aware that something new is about to arrive. Catchy captions will be placed on these billboards to get people to notice it. This will build anticipation in the potential customers. We plan to keep these teasers running on display for an estimated 4 weeks.

After this time duration we will place more descriptive and informative advertisements on the billboards that talk about the actual product and the benefits of using the product. These billboards will be located in metropolitan areas such as Clifton, Defence, Gulshan and Shahrah-e-Faisal.

Magazines: In order to attract our target market we intend to use appropriate magazines that are read by our potential customers like Time, Extra, Herald, etc. The magazines will feature full-page length color advertisements with greater detail about the features of the product along with its application and purifying methods.

Newspapers: The newspaper advertisements will feature appropriate sized advertisements like quarter page and they will appear with an interval of a week. They will clearly state the message to be conveyed to the potential customers. The newspapers will be The Dawn, The News, etc.

Place:
Distribution channels are basically a means of getting the product from the manufacturer to the final customer. In the case of our product we will use established distributor to distribute the product to the retailer. We intend to use retailers in locations like Clifton, Gulshan and Defence to make our product available to the consumers. We will have a direct link with the distributor on a contractual basis. Moreover a sales representative from the company will visit the retail shops on a regular basis. In this way we will build long-lasting relationships with our retailers as well as the distributors.

PRODUCT/ MARKET WATCH

TARGET CUSTOMER PROFILE:

The local Shake mp3 target market has been defined using intrinsic factors such as social class, lifestyle and personality. This approach helps in increased understanding of what motivates the customer. Three customer profiles have been created; the actualizer, the achiever and the striver.

The actualizers are people with the highest incomes who can indulge in any or all self orientations. Image is important to them, for status, as an extension of their taste and character. They tend to buy the finer things in life.

The achiever is affluent and has attained considerable career success. This individual has style and is an opinion leader, one who sets the standard of the successful and well-dressed person. An individual of discerning taste who appreciates status and quality.

The strivers are people with an active lifestyle and not so much free time. They are motivated to succeed in their career and personal life. They aspire to a higher level of income, social status, career success. They are interested in changing styles and trends and feel that appearance is important.

COMPETITIVE ANALYSIS:

The basic purpose of competitive analysis is to conduct a thorough overview of the competitive market. Cover not only the directly competing companies you face (those who offer a very similar product with similar attributes), but also other product variations you may be competing with.

In the market we operate there is not much competition.

Although there are other product variations that we have to compete with such methods are not as effective or convenient to use as Shake mp3. Other watches are expensive but they do not guarantee the effectiveness.

FINANCIAL PROJECTIONS AND BUDGET

The following costs are estimates based on rates we have gathered from different sources of media management. Media Channel Television Billboards Magazines Newspapers TOTAL Per Unit Cost in Rs. 250,000 80,000 12,000 15,000 No. of Units 12 months 5 40 65 Total Budgeted Cost in Rs. 12,729,000 3,400,000 1,480,000 1,975,000 19584000

From the budget above we expect our total promotional expenditures to be around Rs. 19, 584, 0000. It can be approximated that the expenditure for the first year would come down to Rs. 19, 584, 0000. Our initial estimate of production was approximately 900, 0000 watches a month or 10, 800, 0000 products a year. The annual production cost comes down to Rs. 412, 416, 0000. In order to find the per unit cost of selling a product we add the annual promotional and production costs and divide the result by the number of products produced annually: Rs. 412, 416, 0000 + Rs. 19, 584, 0000 = Rs. 432, 000, 0000 Rs. 79,884,000 / 432,000,000 000= Rs. 4000 per unit.

We can now simply add a markup to the cost price of the product to arrive at the retail price. For example, we can add a 50% markup: 500/1000 * Rs. 40 = Rs. 2000 Rs. 4000 + Rs. 2000= Rs. 6000

In order to round it up we have specified above that the price for a watch will cost Rs. 4000. In the first year if the promotional strategies are successful, the expected sales will be 10, 800, 0000 packets. This means revenue of Rs. 6480,000,000 in the first year. The profit will thus be Rs. 216, 000, 0000.

This is a satisfactory return given that the product will be the first of its kind in the market. This level of profitability has only been possible because of the strong business program that we have developed for providing Shake mp3 with the promotional support that it requires.

CONCLUSIONS

It is vital to monitor and measure the results of the plan at various different stages. To determine the product launchs success in achieving the objectives of increased awareness and intention to purchase, the following steps will be taken.

Closely observe sales and store traffic during the product launch to mark the initial response from the potential customers about the product.

A survey should be conducted about whether or not people have heard about the product. If they have heard about it have they made the purchase or not. If they have purchased it did they like the results or not.

Have ghost shoppers ask shopkeepers questions about the product. In this way any misconception about the product will be removed before they spread too far.

Compare the campaign measurement results with the campaign expenditures to determine the success of the overall business effort.