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Contents

1.0 Executive Summary ................................................................................................................... 4

2.0 Situation Analysis ...................................................................................................................... 4

2.1 Market Summary ...................................................................................................................... 5

Target Market and Demographics .............................................................................................. 6

Geographics ............................................................................................................................. 6

Demographics .......................................................................................................................... 6

Western Washington County Statistics ................................................................................... 8

Psychographics ........................................................................................................................ 8

Behavioral Segmentation ........................................................................................................ 9

2.1.2 Market Needs ..................................................................................................................... 9

2.1.3 Market Trends .................................................................................................................. 10

2.1.4 Market Growth ................................................................................................................. 13

2.1.5 Regulatory and Environmental Factors ............................................................................ 13

Regulatory and Environmental Compliance .......................................................................... 14

2.2 SWOT Analysis ......................................................................................................................... 14

2.2.1 Strengths .......................................................................................................................... 14

2.2.2 Weaknesses ...................................................................................................................... 15

2.2.3 Opportunities ................................................................................................................... 15

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2.2.4 Threats .............................................................................................................................. 15

2.3 Competition ............................................................................................................................ 16

Direct Competition .................................................................................................................... 16

Indirect Competition ................................................................................................................. 17

2.4 Product Offering ..................................................................................................................... 17

2.5 Keys to Success ....................................................................................................................... 18

2.6 Critical Issues ........................................................................................................................... 18

3.0 Marketing Strategy ................................................................................................................. 19

3.1 Mission .................................................................................................................................... 19

3.2 Marketing Objective ............................................................................................................... 19

3.3 Financial Objectives ................................................................................................................ 20

3.4 Target Markets ........................................................................................................................ 20

3.5 Positioning............................................................................................................................... 20

3.6 Strategies ................................................................................................................................ 21

3.7 Marketing Mix ......................................................................................................................... 22

3.7.1 Product ............................................................................................................................. 22

3.7.2 Pricing ............................................................................................................................... 24

3.7.3 Distribution ....................................................................................................................... 24

3.7.4 Advertising ....................................................................................................................... 25

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3.7.5 Promotion ........................................................................................................................ 25

Trade Shows .......................................................................................................................... 25

Social Responsibility .............................................................................................................. 26

Viral Marketing ...................................................................................................................... 26

3.7.6 Customer Service ............................................................................................................. 26

3.8 Marketing Research ................................................................................................................ 27

4.0 Financials ................................................................................................................................. 27

4.1 Sales Forecast .......................................................................................................................... 27

4.2 Expense Forecast .................................................................................................................... 29

5.0 Controls ................................................................................................................................... 29

5.1 Implementation ...................................................................................................................... 30

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1.0 Executive Summary

IVV Technology, LLC is a small technology company located in Seattle, Washington. IVV

Technology has developed a proprietary voice control technology that it intends to apply to

consumer electronic devices. The first product on these lines is the Kitchen Vo•A•Sys, which

functions as both a recipe reader and a video player. The product is entering an underserved

market by offering a product with technology that simplifies consumers’ lives. Consumers seek

a product to use in their everyday life that is maintenance-free and trouble-free. The product is

distinct from that of competitors in terms of technology, functionality and utility. Existing

products are easily destroyed in a kitchen environment and do not offer convenient features

such as hands-free operation.

The primary marketing objectives are to create consumer awareness and ensure our

role as a premier provider for this product category. We aim to achieve $5 million in revenues

by the end of 2011. Marketing strategies are based on achieving these objectives. The product

will be marketed through Internet advertising, trade shows and events and viral marketing to

reach the innovators and early adopters. Distribution channels will be consistent with the

premier quality positioning of the product.

The primary financial objective is to increase efficiencies at every step of the supply

chain to increase profitability. Breakeven will be achieved by mid-2011.

2.0 Situation Analysis

IVV Technology, LLC is entering its third year of operations. The corporation has

developed a proprietary conversational voice control technology for use in consumer electronic

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devices that serves as the core for all product offerings. During the first year of operations the

voice control technology was licensed to a leading GPS manufacturer and has been

incorporated into their industry-leading automotive system. This initial application has

demonstrated both the performance of IVV Technology voice control technology and the

willingness of consumers to utilize voice activated products.

The success of IVV Technology’s voice control system has encouraged the company to

develop the Kitchen Vo•A•Sys digital display and reader to serve a previously underserved

market. Current digital reader and display technologies designed for home or kitchen use

require touch screens or keyboards that are susceptible to damage and are inconvenient to use

when cooking. While the systems that are currently available are technologically sound

novelties they do not withstand the rigors of a typical kitchen environment. The Kitchen

Vo•A•Sys is designed to be a fun and practical tool will improve the cooking experience and

survive years of everyday use. The key to market success for the Kitchen Vo•A•Sys will be an

aggressive coordinated marketing and public relations campaign.

2.1 Market Summary

In order to determine a target demographic for Kitchen Vo•A•Sys, recent studies were

consulted to determine the desired characteristics of target consumers. Data compiled and

analyzed was taken from various Nielsen surveys, U.S. Census Data, and U.S. Department of

Commerce, National Telecommunications and Information Administration. Results show that

73.6% of Americans have a computer at home with internet access; this figure is up 12.1% from

the previous year (2007). This fact indicates that there is a growing market potential for

Kitchen Vo•A•Sys. The target consumer for Kitchen Vo•A•Sys is between the ages of 20 and 54,

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has at least one college degree, is employed full time and earns more than 50K annually, is

married and likely female.

Target Market and Demographics

Outlined below is detailed information pertaining to the target market and

demographics information as well as an outline of the research conducted thus far. In brief, the

target market for Kitchen Vo•A•Sys is middle to upper middle class innovators with an interest

in cooking. While not specifically targeted over men, it is expected that a larger proportion of

this market will be female.

Geographics

Kitchen Vo•A•Sys will first set Western Washington as a geographic target area.

Specifically, King, Snohomish, Pierce, Thurston and Clark counties will be targeted. These

locations were selected by proximity to the home office in Seattle, WA and are locations that

have William Sonoma retail stores. The target population is approximately 2.4 million people,

1.2 million of whom are female.

Demographics

Internet Availability - 60% of Americans ages 18 to 54 have High-Speed internet

Access at Home.

Kitchen Vo•A•Sys requires the end user to have internet access in the home, preferably

with a high-speed connection. According to a survey conducted by the U.S. Department of

Commerce, 75.3% of the population which falls into the age range 18 to 54 has internet access

at home. A 2008 Nielsen Home Technology Survey reported that 74.3% of the consumers who

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fall into the age groups which include consumers ages 18 to 54 not only have internet access

(all types), but that their connection is high-speed which would be advantageous to

performance of Kitchen Vo•A•Sys. Internet access of any kind drops sharply in the following

age group, 55 and over.

Internet and Educational Attainment - 65.9% of Internet users have attended college.

To further narrow to the target consumer, internet usage by educational attainment

was evaluated. According to Nielsen, “Those using dial-up service tend to be older with more

modest incomes and lower education levels than those using high-speed internet.” Reports

show that consumers who have attended college account for 65.9% of internet users. The U.S.

Department of Commerce has broken down the public into three categories: those who have

attended High School, those who have attended College, and those who have attended College

and beyond. The rates of internet usage are surprising in that those in the category which

includes the lowest educational attainment actually has a higher percentage of at-home

internet users than College graduates. This is good news for Kitchen Vo•A•Sys as this category

of consumers may grow into a future consumer for Kitchen Vo•A•Sys.

Internet and Employment / Income Levels - 61% of Americans Employed Full-time,

as well as those who earn 50k+ annually have internet access at home.

As college graduates are more likely to have internet access at home, it follows to

investigate by income level. Americans who earn less than 50k annually account for 30.4% of

home internet users, while those who earn over 50K annually account for 69.6%. It is no

surprise then that 61% of Americans Employed Full-time have internet access at home, while

only 12% of those working Part-time have internet access at home.

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Internet Access by Marital Status / Gender - Married individuals are nearly 3X more

likely to have internet access at home.

According to the U.S. Department of Commerce, National Telecommunications and

Information Administration, 63.3% of Married people have internet access at home; vs. 23.3%

of single people have internet access at home. Additionally, according to research compiled by

Contact Marketing LLC, 68% of subscribers to Food Connoisseur magazines are female.

Western Washington County Statistics

The Western Washington counties with large populations of consumers who are

between the ages of 20 and 54, have at least one college degree, are employed full time and

earn more than 50K annually, are married and likely female are King, Snohomish, Pierce,

Thurston, and Clark Counties.

Income statistics obtained from the U.S. Census shows that the income level of

individuals who had attended college but not yet earned a degree is $36.6K annually, while the

average for those who had obtained at least one college degree is 54.8K annually. Gender in

each county is split nearly evenly, although there are more females than males. The total

population in the five counties together who fall into the appropriate age and income

categories is 2.4 million, approximately 1.2 million of which are female. The median age for this

section of the population in the five counties combined in 36.5.

Psychographics

The target market for Kitchen Vo•A•Sys place a high value on products that increase

convenience, are environmentally friendly, and are on the cutting edge of technology. They are

innovators, thinkers and achievers. These represent groups with higher resources and therefore

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a greater ability to purchase the product. These consumers are likely to have the following

traits:

Watch cooking and food related programs on the Food Network and Travel Channel

Already have a paid subscription to cooking magazines and a variety of printed

cookbooks

Use technological applications to find recipes including internet searches conducted on

either a computer or smart phone application

Share the purchase of this product with friends and co-workers as a means to

emphasize their interest in “cool” new technology

Behavioral Segmentation

Since Kitchen Vo•A•Sys is positioning itself in an un-penetrated market, the behavioral

factors will be studied over the initial introduction of the product.

2.1.2 Market Needs

The company is providing consumers with a product that will allow the user to cook

conveniently without any hassle. The product is designed to provide the following benefits:

Consumers seek technology that is maintenance free and trouble free to use as part of

their everyday life. The product has well thought features that give the user the benefit

of easy maintenance and use.

Consumers do not find it valuable to buy cookbooks as it occupies too much space and is

too cumbersome to store them. This product will allow them to eliminate the storage

issue by providing the user with a one-stop recipe storage product.

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2.1.3 Market Trends

Kitchen Vo•A•Sys is part of the home entertainment and appliance market segment.

The current recession has had a negative impact on this industry with total sales revenue falling

in each of the past three years. This trend is expected to continue throughout the remainder of

the current recession. The reduction of sales revenue is expected to continue until mid-2010

when the industry is expected to bottom-out and enter a period of modest growth, please see

charts below. Growth in this market segment is largely based upon consumer confidence and

expectations of ability to generate income. Many of the products within this segment are

viewed as luxury goods whose purchase can be delayed during periods of financial distress.

While the entire home entertainment and appliance market is down during this

recessionary period, the market for some kitchen devices has improved. Consumers have

reduced the number of meals consumed in restaurants and are cooking more meals in the

home. IVV Technology believes that this trend in increased home meal consumption will tend

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to offset the effects of the recession and allow the introduction of a technologically advanced

device to improve the home cooking experience.

The home entertainment and appliance market segment is divided into four

product/service sectors, shown in the graph below. The Kitchen Vo•A•Sys is part of the “Other

consumer electronics products” segment. The total revenue in 2009 for other consumer

electronic products was $31,444 million. This market segment is both extremely large and

highly variable incorporating products ranging from MP3 players to Camcorders.

The majority of the products within the home entertainment and appliance market

segment are distributed through a small number of large retail chains. Currently 75% of the

sales revenue within this market segment is generated by large retail chain sales (see chart

below). The majority of internet sales are generated by the websites of the large retail chains.

This trend is expected to continue in the near term and new product success in this segment

will be closely related to presence of the product within a large retail chain.

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Traditionally the home entertainment and appliance market segment has been

characterized by a large number of suppliers operating at low margins. The barriers to entry in

this industry are low and new entrants are able to move freely into the market segment.

Product manufacture has low capital intensity further reducing the barriers to entry. The costs

associated with product approval are also low with limited regulation on low voltage

appliances. The low barriers to entry and large number of suppliers within the segment have

led to low profit margins and extreme price pressure for traditional products within the market

segment.

There are two major trends within this market segment that will directly impact the

acceptance and profitability of the Kitchen Vo•A•Sys. The first general trend is the

convergence of the home entertainment and appliance market segment with the computing

market segment and the home audio & video market segments. As the lines between these

market segments blur, products that straddle these markets will become more common place

and more readily accepted by consumers. The second general trend in this market segment is

the switch from analog devices to digital devices and from stand-alone products to integrated

products. As consumers move to a more integrated home environment, the ability to

differentiate a product based upon technology will steadily increase.

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2.1.4 Market Growth

The initial Western Washington niche market is expected to grow at the rate of growth

for products that are similar in the product category of home entertainment and appliances.

This is expected to decline in size until mid 2010, at which point it will begin growth again. This

growth is expected to continue through 2014 at a rate between 2.2 and 2.4%.

While the market will be declining in size for the first year of sales of Kitchen Vo•A•Sys,

this market is largely un-penetrated by products of its type. Available options do not compare

in capability and features with the Kitchen Vo•A•Sys. With the low degree of penetration by

similar products and existing options being far inferior in capability, Kitchen Vo•A•Sys will focus

on penetration of the existing market rather than growing the market.

2.1.5 Regulatory and Environmental Factors

Consumer electronic products are regulated for product safety, environment in which

the product can be used and environmental compliance. IVV Technology has elected to design

the Kitchen Vo•A•Sys to set a new industry standard for compliance with stringent US and

international standards in all three categories. The Kitchen Vo•A•Sys is the first digital display

device that is certified for full immersion in water and meets the safety requirements for use by

young children. By meeting requirements that exceed the industry standards the Kitchen

Vo•A•Sys is certified for use by a broad range of consumers throughout the United States,

Canada and the European Union.

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Regulatory and Environmental Compliance

UL certification to IP47 which certifies that the device is protected against foreign

matter larger than 1mm and temporary full immersion in water. Kitchen Vo•A•Sys is the

only digital display device that has achieved this level of certification.

Compliant with ASTM F 963; Standard Consumer Safety Specification for Toy Safety

Maximum altitude: –15m to 5048m (operating), –15m to 12192m (non-operating)

Shock 125g, 2ms, half-sine (operating) 200g, 2ms, half-sine (non-operating)

Compliant with 47 CFR 15.247 and 1.1307

Compliant to IEC 60950-1, EN 60950-1, and CSA/UL 60950-1 specifications

Compliant with UL 1310 and UL 498

The charging base complies with IEC, EN, and CSA/UL 60950-1

RoHS (Restriction of Hazardous Substances Directive – EU) compliant.

2.2 SWOT Analysis

The SWOT analysis captures the key strengths and weaknesses within the company and

describes the opportunities and threats facing Kitchen Vo•A•Sys.

2.2.1 Strengths

Expertise with voice activated software

Proprietary ownership of superior quality voice activated software for non-GPS

applications

Knowledge of integrating proprietary software into a small device with a screen display

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Pre-existing contacts with producers of LCD displays, speakers, microphone pickups, and

cases that will be utilized in the Kitchen Vo•A•Sys units whom are capable of meeting

our specifications

2.2.2 Weaknesses

Prior experience was with a GPS unit not sold or marketed under our brand name; will

need to build brand recognition

No experience utilizing Bluetooth or internet technologies in a final production product

Have yet to strike deals with retailers for distribution of our product

2.2.3 Opportunities

Early participation within a budding industry with competitors that are not well

established and also have little brand recognition

Easy and cost effective production outsourcing available

Product lends itself to upgradeability and product line expansion

Greater number of features and capabilities than existing competitors

Production costs far below market’s going rate for sale of comparable products

2.2.4 Threats

All but the voice recognition technology is easily copied, leaving the threat of low-cost

competition open

Future/potential competition from the few established market participants

Economic slump may deter a portion of potential buyers

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Existing alternatives such as cookbooks and internet searches are significantly lower in

cost

2.3 Competition

Kitchen Vo•A•Sys is creating a new need within the consumer appliances market. There

are only a few products in the market that bear resemblance to the product. Kitchen Vo•A•Sys

faces both direct and indirect competition.

Direct Competition

Verizon - It offers a home phone unit known as the Verizon Hub. It has Internet connection,

video capabilities as well as other features related mostly to phone use. The product requires

users to have a Verizon internet connection to use the product. Kitchen Vo•A•Sys has a voice

activated operating system, an easy interface, and is kitchen friendly. Also, the Verizon unit

fulfills another purpose and has a different target market from Kitchen Vo•A•Sys. Therefore,

we don’t anticipate Verizon Hub to have a huge impact.

My Demy - This device is similar to a palm pilot. It is a recipe organizer that features a splash

resistant touch-screen recipe organizer. The product requires access to the Internet and stores

up to 2500 recipes. It is only a reader and lacks video capability. It requires the user to use the

touch screen to operate rather than using a voice activated technology.

Under-the-Cabinet DVD Player - This is a sleek device that fits below the cabinet. The user

requires DVDs to view the videos of recipes. Also the user is allowed to only manually operate

the player rather than using voice activated technology. The user has to buy new DVDs to watch

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new recipes. This requires physical storage space for the DVDs. Kitchen Vo•A•Sys overcomes

these problems by providing better interaction between user and system.

Indirect Competition

The iPhone, G1 Phone, and other handheld devices have both paid and free

applications that serve as recipe organizer and cooking tutorials. There are even some video

applications that demonstrate how to make certain foods. Though these applications do pose

threats to the success of the product, they are still inferior in quality compared to Kitchen

Vo•A•Sys. The touch screen interfaces of these handheld devices are more difficult to clean

than Kitchen Vo•A•Sys. In addition, Kitchen Vo•A•Sys is far easier to use and navigate with

greater memory capacity. Finally the video screen makes viewing easier and more enjoyable.

The Internet, standard cookbooks, and recipe cards are other indirect competitors of

Kitchen Vo•A•Sys.

2.4 Product Offering

The Kitchen Vo•A•Sys is a unique voice activated digital display system that serves as

both a recipe reader and video player. The system is rugged and water-resistant to meet the

most strenuous kitchen applications. When not in use the Kitchen Vo•A•Sys rests in an

attractive base that serves as both the charging stand and provides connection to any personal

computer via a standard USB 2.0 port.

Product Specifications

Slim Profile: 7.5” X 7.0” X 0.625”(at thickest point)

Light Weight - 14 oz

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Linux Ubuntu version 8.04.1 Operating System

32 GB of solid state storage

24 WHr Li-Ion Battery providing 8 hours of continuous operation

Bluetooth 3.0 connectivity

7.6” OLED color screen

2.5 Keys to Success

The main key to success with Kitchen Vo•A•Sys is ensuring that product positioning

clear. Our initial target of innovators and early adopters will buy our product only if they are

convinced that owning Kitchen Vo•A•Sys sets them apart from others.

Another factor influencing success is to retain customers. This must be achieved by offering

good subscription options and customer support. Maintaining a good relationship with our

customers will allow us to expand product offerings in the future.

2.6 Critical Issues

Kitchen Vo•A•Sys is still in the exploratory stage as we attempt to create a new need in

the market. The company is venturing into new areas that require heavy investment in

manpower, suppliers, distributors and marketing specialists. Also, the rapid pace of

technological advancement demands that we remain at the forefront in this dynamic

environment. It is critical that we continually develop new and improved technology and new

products to ensure sustained growth.

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3.0 Marketing Strategy

Product differentiation will be the focus of the marketing strategy for Kitchen Vo•A•Sys.

The product will be sold to an innovative niche market with an interest in cooking. This market

is largely un-penetrated for a product of this type. Most existing alternatives are very basic,

including print offs of internet recipe searches and free applications to do internet searches

from a personal cell phone.

3.1 Mission

The company's mission is to simplify the lives of its customers by designing and selling

voice activated technology products that provide superior quality and operational features and

provides the company with sufficient profits to support desired company growth.

The product is developed on the same line. It aims to provide customers with a product

that helps them to make use of technology to simplify their cooking process. The product

provides customers the option of free recipes and subscription-based recipes. The company will

earn profits through advertisements from the former option and through subscription fees

from the latter.

3.2 Marketing Objective

Create awareness among the target market about our product

Achieve 15000 units in sales and $5 million in revenues by 2011

Ensure our role as the premier provider for this product category by early market

penetration

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3.3 Financial Objectives

Become profitable enough to set aside funding for research and development of the

next product without cutting deeply into retained earnings or borrowing external capital

Increase efficiencies at every step of the value chain to boost the profit margin

Increase sales exponentially on an annual basis

Position the company to be profitable enough for an equity event with 5 years

3.4 Target Markets

Stay-at-home mothers

Working professionals

Technologically savvy individuals that enjoy cooking

Do-it-yourselfers

3.5 Positioning

IVV Technologies will position Kitchen Vo•A•Sys as the industry leader for high-tech

kitchen recipe storage and viewing devices. This will be achieved through superior product

features which include proprietary software for controlling the device by voice, a large viewing

screen, and an entirely sealed, innovative case design that is washable, among other exclusive

features. Past experience and capital gained from a previous project involving a voice activated

GPS unit sold to a major player in that field will be used to push this product forward.

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3.6 Strategies

IVV Technology’s objective is to position Kitchen Vo•A•Sys as the premier high tech in-

kitchen recipe device. There is a budding market for a product of this type with few

competitors, all of which are offering products at a price below the costs of producing the

Kitchen Vo•A•Sys unit. The first market to be served will be Western Washington with the

product’s introduction at the Seattle Home Show. The aim is to create awareness and interest

in the product. Following this, sales will be conducted online through the company website and

later at William Sonoma retail stores.

The marketing message will communicate features of innovation and utility of Kitchen

Vo•A•Sys. The website will correspond to this message, targeting a market segment with the

financial means to purchase a high tech innovative good. Trade shows and special events will be

one of the tools used in marketing Kitchen Vo•A•Sys. The other mode of communicating will be

a viral video advertising campaign aimed at the major alternatives to our product. These videos

will be made available on YouTube. Online advertising will be the main supporting advertising

method used, with advertisement deals to be worked with epicurious.com, FoodNetwork.com

and by extension of the YouTube ad campaign. Magazine advertisements will follow, which will

likely feature ads in popular cooking magazines.

We will attempt to minimize advertising costs through cross-advertising arrangements

with distribution, magazine and television companies, allowing for them to advertise through

the Kitchen Vo•A•Sys product. These advertisements will be viewed by Kitchen Vo•A•Sys users

when they access the online database to download the recipes and a short advertisement video

introduction upon playing the video for the recipe. Non-video formatted recipes will also have

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advertisements that will show up as the file is first opened. Customers will also have the option

to pay for an upgraded monthly subscription to the recipe database, the funds of which would

also be applied to marketing.

3.7 Marketing Mix

Kitchen Vo•A•Sys will establish the marketing mix by approaching pricing, distribution,

advertising and promotion and customer service in the following manner:

3.7.1 Product

The system user can access all features through a proprietary conversational voice

interface. This proprietary voice interface permits the user to use common speech to access all

features and is not limited to highly specific commands. The Kitchen Vo•A•Sys adapts over

time to an individual user by learning how the user communicates.

There are times when a voice interface is not appropriate due to background noise and

of course some users will prefer a more traditional interface. The Kitchen Vo•A•Sys uses a

sealed induction touchpad and buttons to allow the user to conveniently access all features.

This system is intuitive and requires limited instruction which can be accessed on the unit. The

sealed induction controls are waterproof and washable.

A unique feature of the voice interface is the lookup and search function. When

accessing a recipe or recipe video any previous step, ingredient or clarification of a cooking

technique can be accessed by a simple question.

The Kitchen Vo•A•Sys is available with multiple levels of recipes and updates. Each user

has the ability to create and upload recipes using any standard web browser. Uploaded recipes

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can be kept private or shared across the community of Kitchen Vo•A•Sys users. Every customer

has access to the basic recipe library of over 12,000 existing recipes. The recipe library will be

provided in partnership with Epicurious.com. Customers can choose between free and

subscription fee based options to access these recipes. The free access option will be called

“Fast Food” and the subscription-fee based option “Gourmet”.

Fast Food users will be shown periodic advertisements when they access new recipes on

Epicurious.com. Gourmet users can purchase a monthly subscription that provides access to all

recipes on Epicurious.com without advertisements as well as automatic updates of premium

content including the monthly cooking magazine. All system owners can purchase popular

cookbooks for direct upload to the Kitchen Vo•A•Sys. Purchased cookbooks contain all of the

recipes present in print editions for less than half the cost of the print edition.

The Kitchen Vo•A•Sys case is fully sealed and water resistant. All parts of the unit can

be cleaned with a damp cloth. The screen is protected by a tempered glass panel that permits

access to the induction controls while protecting the unit from virtually any household

products. The screen is so durable that it may even double as a cutting board. It utilizes a low-

energy, high definition 7.6” OLED Screen with 800X480 resolution. This screen provides 16.7

million bright, vibrant colors.

The Kitchen Vo•A•Sys is the first consumer display system that requires no wires for

charging or data transfer. The system uses short range Bluetooth connectivity to the charging

base, any enabled computer or any other Bluetooth enabled device. By utilizing the newly

developed Bluetooth 3.0 technology with 802.11 radio protocol, the Kitchen Vo•A•Sys can

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rapidly transfer data with minimal power usage. Charging of the unit is accomplished via

induction and no power connection is required.

3.7.2 Pricing

Kitchen Vo•A•Sys will be priced at $299 per unit retail. This is based on an initial release

cost to the company of $160 and market positioning as a luxury item. With this pricing we aim

at positioning ourselves as a product-quality leader. We strive to be an “affordable luxury” by

offering a product of superior quality and convenience. Prices will be reduced in 2012 as new

models are introduced and economies of scale have been achieved.

3.7.3 Distribution

Initially, Kitchen Vo•A•Sys will debut at home shows and cooking expos. Retail and

online distribution will be achieved through contract agreement with Williams Sonoma in

Western Washington.

IVV Technology chose Williams Sonoma as a distribution channel due to its positioning

as premier home furnishings and gourmet cookware retail store. It has 627 retail stores and

seven mail-order businesses across the United States that attracts consumers who have the

financial resources to buy premium products offered by the store. Williams Sonoma also has a

six successful e-commerce sites that will be a good distribution channel for Kitchen Vo•A•Sys.

This is consistent with the positioning IVV wants to achieve for the product. By placing it on the

shelves of Williams Sonoma, IVV hopes to capture the desired target market.

Offering Kitchen Vo•A•Sys through our website will give consumers another means of

purchasing the product. Consumers that learn about our product through trade shows and

expos will be able to purchase the product through our website.

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3.7.4 Advertising

The product will be primarily advertised through our website and an internet advertising

campaign through Epicurious.com and foodnetwork.com. In later stages, promotion will also be

done in collaboration with celebrity chefs and advertising in select food connoisseur magazines

such as Food & Wine.

3.7.5 Promotion

Promotions will be in line with the strategy of creating awareness and targeting

innovators and early adopters. The following promotional strategies will be undertaken –

Trade Shows

Setting up stalls at trade shows with an actual kitchen setting will attract curious visitors

to visit the stall. The stalls will demonstrate the use of the product to consumers. The following

are some of the shows that we intend to participate in –

Seattle Home Show – Kitchen Vo•A•Sys will be introduced into the market through the

Seattle Home Show. The Seattle Home Show is the country’s oldest and largest home

show. The home show takes place during a week in the middle of February and October

and features more than 600 displays of home and garden products, model homes,

model kitchens and baths free seminars by experts, and even a wine tasting area.

People of all ages attend the event, and the event can host more than 300,000 people

annually. The people that attend are generally looking for new home ideas and products

along with a fun time. The Vo•A•Sys will likely be a well received addition to the home

show as the audience in attendance is seeking out new products and ideas just like it.

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The Food & Wine Classic, Aspen - The Food and Wine Classic in Aspen is an Annual

International Event that is sponsored by the Food and Wine magazine. This includes

cooking courses, demonstrations, food samplings and wine tastings directed at the food

connoisseur market. The event attracts consumers, chefs and industries from all over

the country.

Courses at the Food & Wine Classic, Aspen – The show attracts celebrities from all over

the world to offer culinary courses to visitors. These courses will be a good way to

promote the product by allowing celebrity chefs to demonstrate the use of Kitchen

Vo•A•Sys. This will induce visitors to buy the product.

Social Responsibility

Grow for Food – This is a charity program that was launched by Food & Wine to raise $1

million for a national initiative that supports local farms and encourages sustainable

agriculture. Kitchen Vo•A•Sys will donate 2% of the event profits towards this goal.

Viral Marketing

The viral marketing program will mainly be used as a promotion to create buzz about

Kitchen Vo•A•Sys. These videos will portray in different ways the unique features of the

product as compared to that of competitors.

3.7.6 Customer Service

Kitchen Vo•A•Sys will achieve 100% customer satisfaction through expedient product

repair or replacement services. A toll free number and email address will be provided for

consumers to get in touch with customer service representatives.

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3.8 Marketing Research

Market research conducted to date has included preliminary research as to the

attractiveness of this niche for potential profitability. Kitchen Vo•A•Sys is believed to be a

product far superior to anything currently available to this niche and is expected to be highly

profitable. This belief will be tested at the Seattle Home Show. We will collect customer

feedback for the product by surveys conducted in person. In addition, follow up information

about experience with the product may be submitted over the website by customers after the

show. Customer feedback will be an important means for collecting data on the product and

will be used to modify future product versions.

4.0 Financials

This section provides financial information of marketing activities by IVV Technology.

The following table shows the estimated profits and breakeven units for Kitchen Vo•A•Sys:

4.1 Sales Forecast

The 5-year sales forecast for Kitchen Vo•A•Sys is as follows:

Finan cia l An aly sis

20 09 20 1 0 2 01 1 2 01 2 2 0 13 2 0 14

A nn u al Sa le s U n its 1 ,00 0 4,8 00 1 8,6 57 4 7 ,8 8 9 12 2 ,9 2 4 3 15 ,52 7

A verag e Sale P ric e $ 29 9 $ 2 99 $2 99 $2 5 9 $2 5 9 $ 25 9

Sa le s Reve nu e $2 99 ,00 0 $ 1 ,4 3 5,2 00 $5 ,57 8,3 44 $ 12 ,40 3 ,2 2 5 $ 31 ,83 7 ,2 4 1 $ 8 1,7 21 ,48 0

V ariab le P ro d u ct Co s t/ U nit $ 18 5 .0 0 $ 1 65 .00 $1 55 .00 $1 4 5.0 0 $1 3 5.0 0 $ 13 5 .0 0

A vg. Va riab le Sel ling C o st/U n it $2 0 .0 0 $ 20 .00 $ 33 .94 $ 4 3.0 8 $ 6 0.3 9 $6 0 .3 9

To tal Va riab le Co s t $2 05 ,00 0 $8 8 8,0 00 $3 ,52 4,9 91 $9 ,00 6 ,9 4 5 $ 24 ,01 8 ,0 6 4 $ 6 1,6 50 ,81 1

C o n trib ut io n M argin $ 94 ,00 0 $5 4 7,2 00 $2 ,05 3,3 53 $3 ,39 6 ,2 8 1 $7 ,81 9 ,1 7 7 $ 2 0,0 70 ,66 9

C o n trib ut io n % 3 1% 3 8% 3 7% 2 7 % 25 % 25 %

T o ta l Fixed C os ts $9 90 ,00 0 $ 1 ,6 0 0,0 00 $1 ,60 0,0 00 $1 ,60 0 ,0 0 0 $1 ,60 0 ,0 0 0 $ 1,6 00 ,00 0

O pe rat in g Pro fit ( $8 96 ,00 0 ) ($ 1 ,0 5 2,8 00 ) $ 45 3,3 53 $1 ,79 6 ,2 8 1 $6 ,21 9 ,1 7 7 $ 1 8,4 70 ,66 9

A ve rage V ariab le C o sts $ 19 3

Fixe d C o sts $1 ,6 00 ,00 0

B reak ev en 1 5 ,0 8 9.5 9

YEAR

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Sales are expected to follow an exponential growth curve as seen above. The initial

stages of the product will experience slow growth as consumer knowledge and aware of the

product is increasing. Sales rise sharply by the end of 2012 as the more funds are pumped into

promotion and advertising.

0

100,000

200,000

300,000

400,000

500,000

600,000

20

09

Q3

20

09

Q4

20

10

Q1

20

10

Q2

20

10

Q3

20

10

Q4

20

11

Q1

20

11

Q2

20

11

Q3

20

11

Q4

20

12

Q1

20

12

Q2

20

12

Q3

20

12

Q4

20

13

Q1

20

13

Q2

20

13

Q3

20

13

Q4

20

14

Q1

20

14

Q2

20

14

Q3

20

14

Q4

Cu

mu

lati

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nit

s So

ldCumulative Sales

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4.2 Expense Forecast

The expense forecast shows the increase in the marketing expense budget over the first

5-years of the product. The initial stages will involve expenses to create awareness for the

product. The later stages show an increase in the expenses due to the addition of celebrity

endorsed models.

5.0 Controls

IVV Technologies has created a marketing plan which will direct the growth of the

company. Execution and overall performance will be measured with the following controls:

Revenue: monthly and annual

Expenses: monthly and annual

Trends in demand and sales

Customer feedback

Marketing Expense Budget 2009 2010 2011 2012 2013 2014

Web Site 200 120 120 120 120 120

Printed Materials 175 200 225 250 275 300

Video Production 0 15 0 0 175 175

Display Technology Build 0 100 100 100 400 600

Media Campaign 0 50 450 1,000 1,250 1,500

Total Sales and Marketing Expenses

375 485 895 1,470 2,220 2,695

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5.1 Implementation

Marketing program implementation will be accomplished by achieving the following

marketing milestones on time and within budget:

Milestones TargetDate

Budget Dept

Website phase one completion and initial launch 6/01/09 $200k Mktg.

Marketing for initial offering (Booth and materials for the Home

Show)6/05/09 $100k Mktg.

Seattle Home Show 10/22/09 Mktg. / SCM

Marketing for secondary offering (Booth upgrades and materials for the Apsen Classic)

3/01/09 $100k Mktg.

Aspen Food and Wine Classic 6/16/10 Mktg. / SCM

Viral Video Production for YouTube 6/16/10 $15K Mktg.

Marketing for retail offering (Display technology system for Williams Sonoma)

1/01/10 $100k Mktg.

Media campaign for collaborations (Epicurious and Celebrity Chef Endorsement)

1/01/11 $500k Mktg.

Totals $1.015m