Professional Computer Services 2006 Strategic Marketing Plan & Recommendations

PCSs Best Opportunities in the Small Business Sector

Presented by Nicolle Ross Women of Means Marketing & Communications February 2006

PCS: Table of Contents I. II. Executive Summary ............................................................................................................................. 3 Professional Computer Services (PCS) ............................................................................................ 5 A. Company Background .................................................................................................................. 6 B. Ownership & Management .......................................................................................................... 6 C. Situational Analysis: Capabilities & Services............................................................................. 6 III. SWOT Analysis .................................................................................................................................... 7 A. SWOT Summary ............................................................................................................................ 7 IV. Market Conditions............................................................................................................................... 8 A. Target Market Segment Strategy ................................................................................................. 9 B. Market Trends ................................................................................................................................ 9 C. Computer Service Business Analysis Summary...................................................................... 10 V. Competition ........................................................................................................................................ 11 A. Competitive Overview ................................................................................................................ 11 B. Competitive Summary ................................................................................................................ 13 C. Strategic Recommendations ....................................................................................................... 14 VI. Strategic Marketing Plan .................................................................................................................. 15 A. Marketing Program Overview ................................................................................................... 15 B. Goals & Objectives ....................................................................................................................... 15 C. Marketing Strategies.................................................................................................................... 15 D. Sales Strategies ............................................................................................................................. 16 E. Promotion Strategy ...................................................................................................................... 17 F. Strategic Considerations ............................................................................................................. 17 G. Positioning Strategy..................................................................................................................... 17 H. Strategic Alliances........................................................................................................................ 17 I. J. VII. Next Steps ..................................................................................................................................... 18 Marketing Program Summary ................................................................................................... 19

Conclusions & Summary .................................................................................................................. 20

I. PCS: Executive Summary Professional Computer Services (hereafter known as PCS) is a sole proprietorship with over 300 clients as of 2006. Owned by Charles Toliver, PCSs goal is to expand its current target market to include small businesses in southern California through the provision of exemplary computer consulting, repair and maintenance services, with an expectation of increasing its customer base by 25 small business clients in 2006. This strategic marketing plan is written as a guide and for the current and fiscal year 2006 (FY06) and specifically addresses the immediate needs of PCS growth in this industry. Following is a summary of the main points of this plan:

The objectives of PCS are to generate a profit and grow at a challenging and manageable rate. The mission of PCS is to provide fast and reliable technical assistance to small office computer users. The keys to success for PCS are marketing and networking, responsiveness and quality, and generating repeat customers. The initial primary service offered will be technical aid, although retainer contracts and projects will be considered in the future growth. The local market for this business, while not new, is wide open for new and expanding consulting firms. An initial financial analysis of the viability of this venture must be completed to affirm that this venture will be successful. However, it is noted that given PCS position as a service provider to individuals, a computer consulting business would be easier to start, requiring little up-front capital, and has the potential to be quite lucrative.

The objectives of this marketing plan are:

To provide a written guide for starting and managing this computer consulting business; a strategic framework for developing a comprehensive tactical marketing plan. The intended audience is the owner of this business only; this plan is not intended to obtain financing from outside sources. The next step in this plan is to determine detailed monthly projections for the current plan year and yearly summaries for the following year.

The objectives of Professional Computer Services are:

Profit To generate sufficient profit to finance future growth and to provide the resources needed to achieve the other objectives of the company and its owner. GrowthTo grow the business at a rate that is both challenging and manageable, leading the market with innovation and adaptability.

An in-depth SWOT and situational/competitive analysis of PCSs reveals its strong market position in its geographical location. Some key findings include:

Strengths: Good tag, brand position, few competitors are located in Carson, ten years of experience Weaknesses: Minimal sales effort in southern California Opportunities: Capitalize on geographic location, established client relationships Threats: Keeping up with technology, competition locally and with established leaders

One key strategy will be to help PCS through:

Target Market Segmentation

Action items and responsibilities for PCS include:

Targeted sales effort Creation and implementation of marketing communications Development of an ongoing promotional campaign

Professional Computer Services mission is:

Purpose: PCS exists to provide fast, reliable technical assistance to local business/small office/home office computer users. PCS sells solutions & results! Vision: By providing fast response, informed expertise, and consistently high quality solutions, PCS generates enough satisfied repeat customers to provide a stable retainer base. This generates sufficient profit to provide significant revenue for the owner. Mission: The short term objective is to start this venture quickly and inexpensively, with a minimum of debt. The long term objective is to grow the company into a more stable and profitable entity that the owner can easily and comfortably manage. Marketing Slogan - "One Source Only Source Solution"

The keys to success for Professional Computer Services are:

Marketing and Networking (getting the name out there) Responsiveness (being an on-call computer paramedic with fast response time). Quality (getting the job done right the first time, offering 100% guarantee). Relationships (developing loyal repeat customers - retainers).

II. PCS: Company Overview

A. Company Background Professional Computer Services has provided top quality computer services since 1997, with a focus on custom built PC Workstations and Services, operating systems (Microsoft Windows 9X, Windows NT, Windows 2000, Windows ME and Windows XP) and networking services which include DSL/Cable installation, network installation/troubleshooting and network upgrades and additions. PCS participates in the Microsofts System Builder Program and uses many Microsoft OEM products. B. Company Ownership & Management Professional Computer Services was created as a sole proprietorship, owned and operated by Charles Toliver in Carson, California. Mr. Toliver has been an entrepreneur for over 30 years, with PCS being his latest venture. PCS has two technicians, an office manager and several on-site workstations. C. Capabilities & Services Professional Computer Services is currently engaged in computer repair services for individual users. Beginning in 2006, PCS will offer small office business owners a quickresponse, reliable source of technical help for their computers. The focus will be how a small business can benefit from PCSs services by not having to fund a full IT dept. Suggestions for PCS offerings:

Hourly Technical Aid (a short term assignment helping companies solve a software or hardware related problem. Includes both emergency and non-emergency service) Retainer Contracts (for specific skills or systems, including regular system maintenance, software and hardware upgrades, and server/network administration) Project Consulting (long-term development projects in which consulting and expertise of PCS is needed, with or without implementation)

III. PCS: SWOT Analysis Following is a brief SWOT summary of the overall position of PCS in current market conditions:

Strengths Opportunities Central Carson location Business park location Develop new target market (small business) Development of consulting capabilities Expertise in server installation/maintenance 330 Existing customers 10 years in business Good tag: "One Source Only Source Solution" Very Few Competitors are located in Carson Quality as brand used by most of competition Need for further differentiation of service strengths

Weaknesses Low presence in community Low media presence No aggressive sales or marketing effort Underutilized tag line/brand image

Threats

Similar or larger companies share same territory, even if they are not located in Carson area

A. SWOT Summary Given its experience in the industry, PCS naturally wants to expand upon its position as a service provider to individuals into the small business sector. Based on the SWOT analysis, there is an impending need to increase sales and marketing efforts in order to position PCS as the "One Source Only Source Solution" for small businesses.

IV. PCS: Market Conditions

Given Professional Computer Services tenure and owner Charles Tolivers experience in the field, an in-depth analysis of the marketplace is not included here. Nevertheless, the expansion of PCSs target market into the small business segment follows the trend in which services in this segment are growing (and will continue to grow) 9-10% annually (Source: Entrepreneur Magazine). Below is a snapshot with general assumptions about customer demographics in the IT computer service industry:

Customer Demographics

Income Level Middle Class and above Small-tomidsized businesses

Will Drive 10-20 miles

Age/Gender 30-40 M/F (50/50)

Preferences Appreciate and support smaller tech businesses with good customer service. Prefer itemized bills Want you to come to them Word of Mouth (Small businesses enjoy supporting a PEER) Small businesses are unwilling to pay the fixed costs of salaries and choose instead to treat computer upgrades and repairs as variable costs.

According to Google research of the computer service market, the top 5 tech calls include: a. b. c. d. e. Computer slowness/locking up (usually spyware/adware issues) Internet connectivity problems Software Installations (Antivirus, etc) Network installations Hardware installations

A. Target Market Segment Strategy PC may choose to adopt six market segments as a starting point, focusing on the most appropriate: 1. 2. 3. 4. 5. Businesses not using computers Small entrepreneurial businesses using one or more computers Small to medium sized corps using computers on networks Large corps seeking problem-solving assistance (trouble-shooting) with specific projects Government agencies, corporations, and other organizations in search of computer training 6. Businesses in search of custom computer programming services Experts in the consulting industry have identified three different opportunities that exist for computer consultants: 1. Temporary Technical Aid: Short term assignments finding solutions for businesses - this is noted as the largest market; 2. Specific Skill: The largest area is software specialty, the second largest area system setup & purchasing guidance, systems reengineering/optimization, Network Admin, Training, Repair, Database/Application development, Data Storage, Disaster Recovery, Security/Data Protection, Telecommunications 3. Bail-Out (Trouble shooting) B. Market Trends Three primary market trends seem to be most important in this industry: 1. Most important -rapid growth in technology, need for continuous upgrades in both hardware and software. 2. Moderately important -predicted continued growth in consulting/ outsourcing companies being unwilling to pay fixed costs of salaries, choosing instead to treat computer upgrades and repair as variable costs. 3. Least important - rapid growth in ratio of SOHO businesses to traditional medium sized businesses.

These trends are predicted by industry experts to continue indefinitely. C. Computer Service Business Analysis Summary Small business computer consulting for the local area is already well established, yet still allow significant opportunity for entry and growth for new participants. This is supported by the following points:

While a large number of consultants populate the marketplace, there are also a wide range of sizes and specialties. This leaves plenty of opportunity for PCS to find and develop a particular niche.

Customers in this industry tend to be loyal, relying on the same consultant for future needs once a relationship has been established.

The following analysis of PCS's main competitors shows that PCS will have to strengthen his brand and aggressively pursue its new target audience in order to gain market share and a competitive edge. Identifying competitor weaknesses will illuminate several areas that PCS can target as marketing strategies.

In short, this business arena, while no longer brand new, continues to hold opportunity for a sole proprietor. By utilizing a logical and comprehensive marketing approach, PCS should find success over the next year.

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V. PCS: Competition A. Competitive Overview A search of the online Yellow Pages in the local area revealed the following: Under the heading Computer Repair serving Carson, CA- there were a total of eight listings, including Professional Computer Services. All of these smaller businesses were based in Carson, with no website listing. Under the heading Computer Consultants serving Carson, CA- there were a total of four listings. The remaining 24 were listed as serving the Greater Los Angeles area. Below is a summary of these findings:
Company/Brand Name/Tag Line/Position Americom Consulting Corp. Technology and Insight at the Speed of Light!! americomconsulting.com Focus DESIGN/IMPLEMENTATION: Americom Consulting specializes in computer, network and web solutions. We will design, implement, and maintain your entire network, focusing on small and medium business network solutions and home solutions, using the latest products and technologies available. SERVING ALL SIZED BUSINESSES: Brands: Microsoft Certified Partner Citrix Solutions Network Silver, Symantec, 3com, Cisco Systems, Calnet Technology Group, Amenities: Fully Managed I.T. Support Solutions, Local And Wide Area Network Design And Installation, Computer And Network Troubleshooting Network Administration, Recurring Network Maintenance, Hardware And Software Sales And Upgrades, Microsoft Certified Systems Engineers And Trainers, EMERGENCY RESPONSE: Based in the Los Angeles area, we provide onsite support for your small to medium sized business and remote offices 24 hours a day, 7 days a week. Strength/Weakness SF Valley/LA locations w/ 800# Publishes rates online Offers computer audits Targets home and business users

Cal Net Technology Group Your #1 Source For Computer Networking Services (Note: Larger company with sales department) www.calnettech.com/small/

800# Northridge location Offer case studies Branded NetManage program

Techmedics We Rescue Computers & Networks www.techmedics.com

Core service includes server install and repair Wilshire location Account managers handle client inquiries Online request form

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Velocity Network Solutions 20% Discount for New Customers. Design, Deployment, Support! www.velocityns.com

CUSTOMER ORIENTED: Do you hate your computer? Many people think they do. But maybe the problem isnt your computer. Velocity Network Solutions runs computer systems for small businesses. Well build and manage your network, support individual desktops and take care of everything you need to keep your computers healthy and functioning. So you can spend more time being productive. And less time being angry.

Online request form SF Valley location Businesses only

Under Computers - Service & Repair serving Carson, CA there were 19 total listings, many with 800 or 866#s, including all of the above, as well as:
Company/Brand Name/Tag Line/Position Complete Computer Cure Quality, Service & Excellence www.cccla.com Focus Established in 1985 as a computer service company. Over the years, C.C.C. has grown into a multi-faceted computer support company. C.C.C. has diversified its original field of computer maintenance to many other fields of the computer industry to provide an entire computer service. Presently the company consists of five major divisions: SALES & MARKETING / HARDWARE AND PARTS/ SUPPLIES/ NETWORKING AND CABLING/ TRAINING and SERVICE. FAST/NEW: Network Specialists can take your current slow bottle necked network and transform it into blazing fast data stream pipes. If you are just starting a new network then let our network specialists plan and executes the best network for your needs. ONLINE INTERACTIVE: We believe that high quality tech support Strength/Weakness Claim 10,000 clients, mostly through referrals. Sherman Oaks location Computer rental and web design are part of service offering.

Zero Tech Premium Services For Not So Premium Rates www.zero-tek.com

800# 1-page website, very well done, but doesnt take you anywhere or inspire customer interactivity.

Techs 4 You Onsite Computer Repair

Serve business and home Comprehensive website

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Just $19.95 Sends a Tech to Your Door - 24 hours a day, 7 days a week. techs4you.com SKY IT Support & Computer Repair Affordable Networking Support and Computer Repair that you can trust www.skyitsupport.com

shouldn't cost a fortune! Compare us to CompUSA, Geeks on Call, and other leading on-site service providers. We offer the best value today! The best technicians at the best price! ON DEMAND: we provide complete IT outsourcing solutions for small and medium size businesses. We also provide a wide range of vendor solutions and equipment procurement services though our network of partners. For seven years, we have been providing comprehensive networking support and successfully implementing technology projects for a wide range of industries.

with online tech scheduling feature Remote service (based in CT, of all places, but has independent IT techs in LA) LA location at Overland Offer business Solutions as opposed to straight services Feature customer testimonials on the website

B. Competitive Summary The conclusion is that while there a fair number of competitors serving Carson and the Greater Los Angeles area, they are widely specialized and widely sized. Further, the majority of the larger companies are not located in Carson, leaving a great opportunity for PCS to step in and capture some of the business in this market. As noted above, the local computer consulting industry is fragmented, with a wide variety of sizes and specialties. Two general factors of competition immediately show up in the analysis:

Direct Competitors: Professional Computer Services direct competitors seem to be grouped into two main categories: those who provide solutions (including design and consulting expertise) to various-sized companies and those that offer computer repair and maintenance services specifically to small businesses.

Indirect Competitors: Conversely, many of the smaller sized competitors who compete directly with PCS do not have a strong web presence. Therefore, it difficult to determine their customer orientation. Assuming these smaller companies serve individuals and not

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small businesses (or very few), we can consider them competing directly with PCS on the service repair side, but indirectly on the small business side of the industry. C. Strategic Recommendations Based on the above competitive analysis, while it appears that the larger, established consultants and computer repair operatiosn serving small businesses aspire to serve this territory through Yellow pages listings, it is not clear that they do. Therefore, as PCS moves into the small business arena, there is an excellent opportunity for the company to market to this segment as a consulting company that is based in the area it services, which can add many benefits to the customer, such as proximity, convenience, increased response time, flexibility of service and expertise.

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VI. PCS: Strategic Marketing Plan A. Marketing Program Overview Marketing strategies for PCS will include market segmentation, with a program that specifically focuses the target market by type (small businesses), geographic location (Carson and beyond) and type of service (contract, emergency usage, consulting). Given that PCS is a new entrant into this market, an aggressive market share strategy (strategies aimed at gaining more of the business from PCSs competitors) is not proposed at this time due to the amount of capital investment required to generate new business. However, should sales exceed expectations in 2006, it would be advisable to revisit the current recommendations and move into a more aggressive sales strategy to ensure the future of this business. In keeping with the company philosophy of avoiding the use of debt, the goal is to initiative a marketing program as inexpensively as possible, with no debt financing at the Carson, CA location. Total marketing expenses for PCS will be financed through owner investment. B. Goals & Objectives The primary goal is to increase PCSs annual fiscal year (FY06) with estimated sales of $150,000 based upon 10 server and 15 maintenance sales priced at $6,000 per project. Secondary goals include:

Identifying and targeting specific business segments Increasing market share Establishing and implementing a marketing communications program Creating a selling strategy geared toward small businesses Developing an ongoing promotional campaign for 2006

C. Marketing Strategies PCS has had positive results in developing a client base of individual users. However, with other similar consultants competing for in similar markets and the companys new target market, PCS must begin to consistently develop new marketing programs that attract new customers and encourage repeat business. Marketing strategies should focus on product

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services as discussed earlier, placement of service (where it will take place), with a heavy emphasis on promotion and sales. In helping to grow its business, PCS should concentrate on the following main promotional strategies:

Networking and Referrals: Using existing contacts and clients to build a larger network of potential clients. Web Promotion: Develop a web-based, online customer service presence using a web page to showcase PCSs skills and knowledge, providing an "electronic brochure" as well as useful technical information. Advertising: Efficient, low-cost advertising in Yellow pages, online, trade magazines, local computer conference advertising Direct Marketing & Promotion: Using email, incentives or coupons that include a value proposition of timely and practical solutions, at a reasonable rate, coupled with a 100% guarantee.

D. Sales Strategies The sales strategy for PCS is simple and straightforward: customer satisfaction. Happy customers will be repeat customers, and they will provide referrals to new customers. Sales forecast figures must be based on the typical growth of a consulting business and reflect repeat business generated through meeting customer needs. Sales programs must be based on the notion that business is driven on customer demand when problems or the need arises. While some business can be generated by soliciting customers to upgrade their systems and software, it is understood that many businesses will call for emergency technical aid. Without access to PCS current sales and revenue data, sales projections and a breakeven analysis are not included in this plan.* However, it should be noted that projections should be based solely on hourly rate consulting during the first year of servicing this market. Yearly figures for subsequent years will include the growth of retainer and project consulting income as business grows.

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*Please note that this proposal, while it touches upon the businesses current financial status, does not include any sales/profit ratio information or a break-even analysis. In order to determine how much of the budget or initial investment in these programs will assist in generating desired sales, we would have to do a comprehensive assessment of your financial records, which is not included in this proposal.

E. Promotion Strategy The primary promotion strategy for PCS will be directly in line with the strategies outlined mentioned previously. The lead strategy will be to focus on cultivating existing relationships, using known networking techniques to develop referrals and new customer leads, along with a blend of web based marketing and traditional public relations and media marketing. The ultimate promotion strategy, however, will be in guaranteeing customer satisfaction: happy customers will generate repeat and new business. F. Strategic Considerations

Cost of reaching this segment Accessible with respect to advertising and promotion? Is this segment substantial enough? Further segment heavy users of services vs. emergency or light users of services

G. Positioning Strategy One Source Only Source Solution differentiates PCS from its competitors and speaks to the local geographical segmentation strategy. This statement is also broad enough to cover more than one segment. The next step is for PCS to deliver on its promise which implies that it has a leg up on its competitors. H. Strategic Alliances PC will need to focus on networking with local computer stores and local business organizations (such as Chamber of Commerce and Microsoft) to develop strategic alliances. Such organizations, which may not be customers in themselves, will be valuable in providing leads to new customers, as well as products and product info that would enable PCS to pass along these benefits to its clients.

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I. Next Steps: Spread the Word! The most important element of a marketing program for PCS is to get the word out. Some ideas to consider:

Sending a 2006 New Year promotional offer to all existing contacts and customers with incentives for referrals. A public relations campaign (press releases, ad or announcements, etc.) in conjunction with a holiday, event or small business function (i.e. Black History month, church function, City of Carson) Media placement (traditional/non-traditional)

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J. Sales & Marketing Program Summary In order for PCS to meet its goals for FY06, the company must aggressively put into place a program within the first two quarters of 2006 (Q1, Jan-Mar & Q2, April-Jun) and sustain this activity throughout the rest of the year.
Program Sales Concept/Rationale Targeted sales effort throughout the year to build relationships within market. Development of brochures, sales kits and other branded materials Electronic brochure/resource site for client base and new clients with response template for interactive communication. Media buying/placement in appropriate industry trades Timeline/Resources Q1-Q4: 1 dedicated sales person during designated peak periods. Q1: 1 print piece with product inserts as a sales tool. Measurement/Evaluation Goal: 25 projects Budget Description PT/commission

Marketing Communications (Marcom)

For use as a leave behind when making appts. with prospective clients.

Web Development

Q1 & Q2: Updating of current website and promotion of new services for small businesses.

PCS website to be promoted to current and prospective customers featuring promotions and benefits

TBD-with PCS resources, much of this could be done inhouse to cut down on printing costs. PT/web developer or in-house resources.

Media Buying

Q1: ID and placement of PCS information

Promotions & Direct Marketing

Strategic Alliances and Software Solutions Public Relations

Targeted communications with discounts, offers and promotions for new and existing clients Develop relationships with outside vendors, Chamber of Commerce and outside IT support. Campaign in conjunction with church, event or other business

Q1-Q4: Promoting PCS quarterly helps keep company top of mind for customers. Q2-Q3: Bring in resources of others in areas where PCS may not have the time or resources to implement. Q3-Q4: Sponsorship or holiday campaign, press release or announcement

Buys have to be done with seasonal market in mind as well as those outlets which provide year-round exposure (web, Yellow pages, etc.) in order to see results. # of referrals, new business Should be done in conjunction with sales effort

Budget TBD, dependent upon which areas PCS wants to advertise.

Continuing referral/WOM with companies and individuals who can directly assist PCS in spreading the word. Participation in community or business event for additional exposure

E-mail is costeffective. Snail mail campaign or mailed announcements can run $500-1000. Barter/commission

TBD

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VII. PCS: Summary & Conclusions Professional Computer Services is in a good position to enter the small business market. Given current market conditions, the experience and background of owner Charles Toliver and his staff, as well as ongoing developments in the computer consulting and service repair industry, with focus and consistent effort, PCS has an excellent opportunity to grow its business and meeting its professional and financial goals in the coming year.

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