Research Proposal on "Promotion Plan Situation Analysis Promotional Strategy Communication"

Research Proposal 13 pages (4006 words) Sources: 6 Style: APA

[EXCERPT] . . . .

Promotion Plan

Situation Analysis

Promotional Strategy

Communication Media

Promotional Budget

ABC Company is a young company with five employees and one product that they are about to launch. The product is a silver bracelet with a tracking chip embedded, a REID tag that can be read by scanners when activated by law enforcement. The concept is that the bracelet is to be worn by children so that they can be located in the event they get lost or kidnapped.

The objectives of the promotional plan are to raise awareness of the product amongst law enforcement. The product will not have value for the end user (parents) without the help of the law enforcement community. The strategy must convince law enforcement of the merits of the product. From there, law enforcement will be able to convince parents of the merits - they will hold much more authority than will ABC when discussing the personal tracking devices with parents. The strategy employed will be to attend law enforcement conventions such as the IACP Conference, where many new products and techniques to assist law enforcement are introduced. This will be combined with an extensive mailing program designed to put information about the product in the hands of law enforcement decision makers.

The budget for the launch will be set at $1 million. Attendance at a series of law enforcement conventions will cost around $200,000 including travel, attendance fees, the booth, and product demonstrations. Of the remaining, the mailout will cost a further $200,000 to reach police departments around the country. There will also be a webpage, and some promotion in law enforcement media, for which $100,000 will be budgeted. The remaining $500,000 will be used to make face-to-face pitches to interested law enforcement agencies, including samples and travel. Once the product has reached a predetermined degree of saturation, such face-to-face promotion will no longer be required except for the largest accounts.

Situational Analysis

The strengths of ABC are that the company has great technological skills, strong marketing skills and is well-capitalized. Their team is small, but includes a marketing professional, a sales professional, a technology professional, and the company founder. The search for capital was a straightforward process, and ABC was able to exceed their initial capital requirements, allowing them to implement their launch plan in its entirety.

A key weakness is that it is highly dependent on a handful of key employees (there are 4 key employees and one administrator). There is only one salesperson, for example. Because of the need to attend trade shows as well as conduct face-to-face sales pitches, more will need to be acquired in order to properly implement our promotional strategy beyond the earliest phase.

The strengths of the product are that it is unique - there are no known competitors. It is relatively low-cost and it in tests has proven highly effective. The weaknesses are that it requires law enforcement buy-in and parental buy-in - two distinct groups with unique needs. The bracelet design is strength because it is not only fashionable but unlike microchips such as those implanted into cats, it is not permanent. The use of gold or silver, however, could be contentious as children may become targets for thieves seeking to acquire the bracelets for their metal value.

The external environment presents opportunities and threats. Parents are worried about their children, and about increased crime. This paranoia creates a viable market for the product. Law enforcement has proven responsive in the past to broad-based methods of finding missing children (i.e. Amber alerts), but as yet does not have a viable tracking device such as ABC is offering. In a marketplace where anything can and is tracked, the lack of such a program for the most coveted of all assets - children - indicates that this bracelet program is meeting a need that is as yet unfulfilled in the marketplace.

There are threats, however. One is the nature of law enforcement agencies, which sometimes suffer from poor decision-making chains, political infighting and underfunding that could make it difficult for them to decide to purchase our product. Moreover, the budgeting process for law enforcement agencies can be complex, balancing the needs of a myriad of competing stakeholders. As public sector budgets are being squeezed, and have always been heavily scrutinized, there is the risk that even if the key decision makers are sold on the product, they may not be able to find the money to pay for it in their upcoming budget cycles. This could in particular jeopardize ABC's two-year launch timeframe. Another threat are civil liberties advocates, who may protest such a product, viewing it as on the slippery slope to tracking all individuals. While there is an inherent privacy issue with tracking humans, it is hoped that the safety issue will override that. Another threat is that ABC may be seen as attempting to profit from missing children. While this is not the case, care must be exercised to ensure that this view is never projected in any way as it could dissuade decision-makers, many of whom are publicly elected, from involving their jurisdictions in the program.

Program Objectives

There are several different quantitative measures for the plan. The ultimate objective is to attain a presence in all markets in the United States. Initial penetration would ideally include 5-10 major markets, representing a number of geographic regions. Financially, the bracelets are low cost. Each bracelet weighs around five grams, so one Troy ounce of silver would produce six bracelets. The current price of silver is around $17.50 per Troy ounce. Each chip costs fifty cents, and the variable cost of the production process is $1.10 per bracelet, which was negotiated with the contract manufacturer. The contract includes a clause that will lower the production charge by ten cents per bracelet if we order over 1,000,000 units. This means the variable cost of each bracelet is $4.51. Fixed costs for the first year, including marketing, overhead and staff costs, totaling $745,000 ($500,000 of that from the marketing budget). The tracking machines will be offered to law enforcement at cost, as we feel that constrained public sector budgets are a significant threat to the adoption of the program and we need to minimize costs to law enforcement agencies to encourage their participation.

We feel that the ideal pricing structure will reflect the value of the product, but will hedge against the idea that ABC is profiteering on concern for children's safety. The price will be set at $20 per bracelet. This gives us a breakeven point of 48,096 bracelets in the first year. With a hurdle rate of 10% on the project, we will need to sell 52,905 bracelets to achieve an accepted return on our investment. Therefore, we have set a first-year sales objective of 75,000 bracelets, improving to 100,000 in year two.

Qualitatively, we wish to penetrate the abovementioned 5-10 major markets. This is because we feel that major market success will give us the exposure we need to take the bracelet program nationwide in year two. By penetrating multiple geographic regions, we will gain sufficient exposure around the country to facilitate more rapid growth, when the program reaches its third and fourth years. Our marketing plan should gain us the ears of key decision makers in those major markets and ideally with national law enforcement agencies such as the FBI and the Department of Justice as well. We feel the bracelet program is complementary to the Amber Alert program, which since 2003 has been coordinated by the DoJ.

The time frame for our objectives is two years. Right now, we have acquired sufficient capital to operate ABC and execute our marketing strategy for two years. Since law enforcement support is essential to the adoption of the bracelet program, we feel that rapid adoption is essential. Our preliminary research has indicated that the law enforcement community is responsive to the idea, but if we do not see this translated into action within two years, we will have no choice but to draw the conclusion that the idea is not as strong as our research indicated.

The first year we expect to spend six months without sales, simply getting the word out to our target market. The plan is that we hope to start securing trials of the bracelet program over the course of months 6-12. The second year we hope that the success of those initial trials will enable us to spread our geographic reach. If the program continues after this launch and evaluation period, we expect sales growth will be robust from that point forward.

Promotional Strategy

The personal tracking bracelets are a unique product. They represent an innovative new technology for the law enforcement field. This is the positioning we will seek, particularly in the beginning. We choose this for a couple of reasons. One, the uniqueness of the product will bring it more attention. Two, we have not yet properly explored any partnership, whereby we could position the bracelets… READ MORE

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