Analogue Cable (new LHD) Marketing Plan

by James Jiang + Calvin Yip

Version 2.3 (2007.7.17)

2

Marketing StrategiesBackground

• Chinese approvals are mandatory for legitimate sale of LHD products into the PRC market. We must get approvals ASAP.

• Kidde old LHD can’t fit China new standard. We must find a solution to continue the approval.

Why Sureland

• We choose to cooperate with Sureland because they have new products can meet new standards. With their new products, it becomes fast and easy to pass the new approval test.

• Sureland has good relationship with Leader and the cooperation would be smooth.

•There are mutual benefits between Sureland and Kidde. We negotiate to Sureland to ensure Kidde is the only distributor (apart from its existing System Sensor, TianYu, & Sureland internal sales/project team)

Why Leader

• We cooperate with Leader to finish the product while we buy the key components from Sureland. Finished products by Beijing Leader are China local made and they can be forwarded to the Shenyang Test Center for local made approval.

• Another benefit to have product finished and approval via Leader is to reduce test time from 6 months to 3 months. Also this can cut the test cost down from USD 5000.00 per type to RMB 5000.00 per type.

• We can remain saying that this product is “made by Kidde” when Leader is a part of UTCFS/Kdde family.

3

Market Analysis

AnalogueCable30%

DigitalCable70%

AnalogueCable70%

DigitalCable30%

Market by volume Market by value

Sureland25%

Consider35%

Tian you5%

GST5%

Other5%

Protectowire

10% Kidde 15%

Analogue Market Share by volume

2005 Total Market Volume 20,000 km

4

Analogue Cable Price Analysis (2006)

33

26

1815 15

12

0

5

10

15

20

25

30

35

Protectowire

Kidde

Sureland

GST

Tian You

Consider

Price (RMB)

Price to Contractor

5045

35 35

28 28

0

5

10

15

20

25

30

35

40

45

50

Protectowire

Kidde

Sureland

GST

Tian You

Consider

Price (RMB)

Price to End User

5

New A-LHD benefits

• Kidde LHD products has long history in Chinese market, and have been sold to a lot of successful projects.

• One of imported brands can meet new Chinese standard. (Other imported LHD brands are rare, only Protectowire, GSI)

• Have two types: Fixed temperature and Rate of rise temperature.

• Price will set below other imported brands.

6

Product

Remark: -This is the first rough sample (e.g. for testing mould)-Already plan & actions to improve the quality in terms of plastic materials, printing method, new color, box surface design, etc.)-Improved samples and some new design options can be ready next week (mid Apr)-Two model types:

-K82017F (fixed temp.)

7

New Product Design

• New design layout on the outer box• Differentiate from Sureland’s product• Upgrade the box quality, color, logo printing, etc.• Use the same color of HSSD• Change “lights” lining from horizontal to vertical• Require to modify the mould and PCB

8

New A-LHD Orientation

Approach

• We buy cable and control unit PCB from Sureland and assemble unit box in Leader. So the new LHD is a local product.

• We do new test in Shenyang, and Leader will be the manufacturer and Kidde be the “report owner” in the test report.

How the customer feel

• Kidde is an old import brand in Chinese LHD market, focused for high level customer.

• Chinese customer will know Kidde new LHD major parts are from Sureland.

Solution

• We will publicize the new LHD is a JV product, and “made by Kidde”.

• Price to contractor is a bit sensitive since Sureland has “ambition” on the market

• Kidde will maintain the target of high level market based on market demand

9

Maintain current channel and distributors to secure the sales at product launch

Kidde China

1st-tier DistributorE-Tech (Hong Kong)

2nd-tier DealersP.R. China (e.g. ASD)

Market Development

Strategy for Current Situation

10

Maintain E-Tech, but in parallel building new channels and distributors by Kidde China sales teams

KiddeChina

NORTH CHINASALES OFFICE

EAST CHINASALES OFFICE

SOUTH CHINASALES OFFICE

WEST & MID CHINASALES OFFICE

2-3 Distributors 2-3 Distributors 2-3 Distributors 2-3 Distributors

Future Market Development

Distribution Channel (planning 2008 onwards)

11

Kidde Current Distribution/Logistic

Kidde

E-Tech

Contractors

End User

Leader

.

Sureland

PCB and Cable

Assembly products

12

Kidde Future Distribution/Logistic(planning 2008 & onwards)

Kidde

Distributor

Contractors

End User

Leader

Leader Salesoffices

.

Sureland

Contractors

PCB and Cable

Assembly products

13

Road Show (Seminar) Plan

Q3/07 in East China, (Shanghai, Nanjing or Hangzhou)

Q3/07 in South China, (Guangzhou, Shenzhen or Fuzhou)

Q3/07 in North China, (Beijing, Tianjin, Dalian, Shenyang or Qingdao)

Q1/08 in Middle & west China, (Chengdu, Chongqing, Wuhan or Xi’an)

Need in-depth discussion with Sales team.

14

Marketing Promotions

We will do

New brochure, manual, presentation, price list, etc.

Exhibition & Forum

Seminar & Training

Advertisement

15

Sales hints: Capture Key projects as Kidde reference projects

Key project will be very useful for competition.

Direct sales is helpful for Key Project.

Complete solution documents are prerequisite.

Flexible price for key project is necessary (spot pricing is allowed)

16

Sales Channel

Kidde

Etech (Preferred Distributor)

North China Distributors

South China Distributors

East China Distributors

JV Partners

Tsingdao YangGuang

Tianjin LuYang

Beijing WeiGen

Tianjin HuaAo

Guangzhou HuiNeng

Guangzhou HaoXin

Xiamen YaoXin

Shanghai Tiande

Jiangsu XinshiDai

Beijing Leader

Nanjing Fire

CFENanjing GaoKe

Hangzhou NengMei

Ningbo Deli

17

Price

Part Number Product Description UnitList Price

(RMB)

Standard discounted (RMB)

(50% off)

Large Volume prices (RMB)

N < 100km200km >N

≧100kmN ≧ 200km

JTW-LD-K82017FFixed temperature

analogue cablem 68 34 30 26

JTW-LD-K82012F Control unit box ea 6,500 3,250 3,000 2,800

JTW-LD-K82013F Terminal box ea 380 190 160 140

CIF Shanghai

18

Agreement with Etech• Appoint Etech as preferred distributor for new LHD sales in

Mainland China for a period of 1 year starting from Q4 07

• Etech enjoys additional 10% off the floor price for the 3 products as listed in page 17 i.e. RMB23.4/m for the analogue cable, RMB2520 ea for the control box & RMB126 ea for the terminal box

• Etech will purchase 1.2M meter of analogue cable breakdown in 4 equal installments of 300k meter. First P.O to Kidde HK 2 weeks after signing of agreement. Subsequent 3 P.O. in the first week of Dec 07, Mar 08 & Jun 08

• Sales budget of USD3.6M (control box and terminal box not included)

• Agreement will be terminated if Etech fails to place order in any of the agreed date

• Etech will provide a list of customers to be “protected”

19

Sales Process

• Selling price will be fixed and controlled as indicated in the price list. No entertainment of special pricing

• All P.O. will be placed direct to Etech. Copy regional sales manager for sales credit

• Etech will acknowledge P.O. Delivery leadtime 6 to 8 weeks

• All appointed distributors in China will be managed by the respective regional Kidde sales managers

• Etech will be the first line of support for customer service and quality complaints