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Running Head: MARKET PLANNING ASSIGNMENT

MARKET PLANNING ASSIGNMENT Spring 2014 Marketing Report

Prepared by Jamie Dow, Daniel Kostiw Jennifer Petty, Arturo Solorzano

Report Distributed March 16, 2014

Prepared for Business 306 Fundamentals of Marketing

Professor Carol Davis

MARKET PLANNING ASSIGNMENT 2

Table of Contents

Situation Analysis…………………………………………………………………………………5

Market Summary………………………………………………………………………………….5

Geographics……………………………………………………………………………………….6

Demographics…………………………...………………………………...…...….………………7

Behavior Factors/Psychographics…………………………………………………………………7

Market Needs………………………………………...……………………………………………7

Market Trends…………………………………………………………...………………………...8

Market Growth……………………………………………………...…...………………………...9

SWOT Analysis…………………………………………………………...……………………..10

Competition…………………………………………..…………………...……………………...11

Product Offering…………………………………………………………...…...………………..12

Keys to Success………………………………………….………………...…...….……………..13

Critical Issues……………………………………………………………...…...….……………..14

Marketing Strategy………...……………………….……….………...…...….……...…………..15

Mission…………………..…………….……….………...…...….………………………………15

Marketing Objectives……………………………….……….………...…...….…………………15

Financial Objectives……………………………….……….………...…...….………………….16

Target Markets…...………………………….……….………...…...….………………………...16

Positioning……………………………….……….………...…...….……………………………17

Strategies……………………………….……….………...…...….……………………………...18

Marketing Mix……………………………….……….………...…...….………………………..18


Pricing……………………………….……….………...…...….………………………...18

Distribution……………………………….……….………...…...….…………………...19

Marketing Communications………………….……….………...…...….………………..19

Market Research……………………………….……….………...…...….……………………...20

Financials……………………………….……….………...…...….……………………………..21

Break-even Analysis……………………………….……….………...…...….……….…21

Sales Forecast……………………………….……….………...…...….…………………22

Expense Forecast……………………………….……….………...…...….……………..23

Controls……………………………….……….………...…...….…………………………….…24

Implementation……………………………….……….………...…...….……………………….24

Market Organization……………………………….……….………...…...….……………….…25

Contingency Planning…………………………….……….………...…...….………………..….26

References...…………………………………………….……….………...…...….……………..27

Bibliography……………………………………………………………………………………..29


Table of Figures

Figure 1 Market Growth Chart ...………………………………………………………………... 9

Figure 2 SCOTTEVEST, INC …………………………………………..………………………13

Figure 3 Cost Breakdown Chart ………………………………………………………………...21

Figure 4 Break-Even Analysis ……..……………………………………………………………22

Figure 5 Sales Forecast …………….……………………………………………………………23

Figure 6 Fixed Cost ...……………………………………………………………………………23

Figure 7 Variable Costs …………………………………………………………………………24

Figure 8 Market Organization Flowchart ……………………………………………………….28


Situation Analysis:

Aesthetically Pleasing Technologies (APT) offers the ability to charge mobile and

wearable technology through everyday attire with the use of solar panels. With a jacket that is

stylish and functional, users will be able to charge devices while taking care of daily tasks. Smart

phones and mobile computing power have been placed at an individual’s fingertips; as the world

grows, so does society’s use of technology. The technological, sociocultural, and environmental

dynamics of consumers are shifting in such ways that the needs of consumers are changing.

Companies are already addressing the next big change in the technology industry: wearable

technology. This has been shown recently with wearable devices such as the Jawbone, the

Metawatch, and the Galaxy Gear. However, more are to come; the most notable is the Google

Glass (Waisk, 2014). Expanding networks, syncing devices, and providing a functional product

helps pave the way for the expansion of wearable technology and society’s comfort with it. APT

focuses towards making these cultural changes possible, comfortable, adaptable, and

aesthetically pleasing. In other words, making a consumer “APT to adapt.”

Market Summary:

Advancement in technology happens daily. In addition, people are always looking to

integrate such devices into one device. Not only that, some of the devices coming out, such as

smart phones and tablets, have low battery life. According to the website Geek.com, the average

life span of a smart phone with 3G is five hours of talk time and about 150 hours of idle time.

These numbers drop significantly when people start using their phones to surf the web, play

games, and use for business. With APT, all these problems are addressed. The great integration

imbedded in the jacket uses solar powered technology that will help with poor battery life.

This solar jacket falls into the wearable technology category. As far as wearable

technology sales are concerned, fitness bands and smartwatch sales reached $1.6 million in the

second half of 2013 (Lovridge, 2014). Wearable technology is poised to sell 10 million units in

2014, which roughly translates to $3 billion (Deliotte, 2013). With those numbers in mind, the

demand for wearable technology is on the rise around the world. Wearable technology is not

restricted to a certain category but is used in the medical field, military, infotainment, and fitness

industry. For each category, APT has solar charging and Bluetooth capabilities. With that, APT

outclasses both the other jackets by having both capabilities built into one.


Geographics:

The main geographic areas that APT targets would be any Mediterranean climate where

the weather temperatures range from 50-75 degrees. Others would be around areas of mountain

ranges, that are often hiked, locations with many outdoor activities, as well as national parks.

North America would be a great place to start since it is home to such mountain ranges as the

Cumberland Mountains in Tennessee, Blue Ridge Mountains in Virginia, the Alleghenies in

Pennsylvania, and many more (Maps of the World, 2014). The climate that would be most

appropriate for APT is the Mid/South Rockies; these areas normally have dry summers and vary

from being chilly to warm. Aside from California having few areas where it snows, other states

tend to have lower temperatures and are better known for their snowfall and skiing (Path2USA,

2014). APT would do well in these areas and could be marketed in all the surrounding areas.

Demographics:

Age: 20 years+

Gender: Male and Female

Life Cycle: Young and single; Married with no children; Married with children;

Unmarried couples; Older, married, no children under 18

According to PRIZM: Blue Blood Estates, Movers & Shakers, Money & Brains, God’s Country,

Pools & Patios, Country Casuals, Suburban Sprawl, Red, White & Blues,

and Blue Highways (Neilson Company, 2014)

Income: Working Class, $50k+

Education: Some college +

Generation: Baby Boomer, Generation Y and X

Geographically Americas

The age range and gender that would be targeted would be both men and women who are

20 years and older. This was chosen because they are the ones who will most likely have the

income to support such purchases as APT’s clothing line. According to PRIZM, some of the

groups that would be marketed towards would be Blue Blood Estates, Movers & Shakers, Money


& Brains, God’s Country, Pools & Patios, Country Casuals, Suburban Sprawl, Red, White &

Blues, and Blue Highways (The Nielsen Company, 2014). This categorizes people who are in the

working class and make an annual income of at least $50,000. Those who make this much

money tend to have secondary educations and work full time. The two main generations that

would be focused on would be the Baby Boomers, because they have 67% of American wealth,

and Generation Y, because they are the most educated and environmentally conscious (Kotler &

Armstrong, 2014). To begin with, APT would mainly be marketed to those in North America,

then, depending on the company’s success, it would potentially be marketed to other areas.

Behavior Factors/ Psychographics:

With APT, psychographics become a large factor. Psychographics describe the social

class, lifestyle, and personality of potential customers (P. 93). Marketing an expensive jacket can

be challenging; there is a distinct social class that will be interested in purchasing this product

while not every social class will be able to afford it. This jacket is not so much a necessity, but

rather along the lines of what consumers want and need to fit their tech-savvy lives.

APT is incorporated with an individual’s lifestyle. Many people use technology to stay in

touch with the world and would like to take technology everywhere while engaging in outdoor

activities. The price tags for these products are steep and hold many issues that still need to be

addressed, but in a 2014 issue of Wired Magazine, author Bill Wasik wrote, “the wearable future

will be here someday. The only question is how soon you’ll be willing to put it on” (P. 93).

Market Needs:

Research for this product showed that individuals use their mobile devices an average of

one-to-five hours a day. As demonstrated, this is enough to deplete a smartphone battery life. It

is anticipated that these numbers will rise in the business and consumer market. The research

further indicated that individuals use their devices for both leisure and business matters. The

heavy computing demand for phones further reduces the battery life of the phone. This is

expected to continue; as demographics change, so will the use of technology from consumers.

For example, businesses begin to include more technical operations from teleconferencing to

information gathering (Draft, Pg. 58-60). While leisure time spent researching, playing games,

watching videos or strolling social media sites, consumers place a high demand for their

technological products to perform on a consistent basis.


Wearable technology is not limited to the business and consumer marketplace. Already,

wearable technology is used in our armed forces; heads-up displays, radio and navigation

equipment are only a few of these devices, and each one has shown to have a short battery life.

This situation forced soldiers to carry battery chargers and extra components to keep the devices

charged, leading to more weight for the soldiers to carry. So the army came up with a solution,

place portable solar chargers on infantry backpacks to charge these devices. This proved to solve

the problem of lightening loads for military men and women while addressing the problem of

short battery life (Wait, 2014). In the public arena, as new wearable technology pierces the

marketplace, consumers will be faced with similar issues, just in a different way. While

consumers won't be carrying heavy backpacks wherever they go, the short battery life and

numerous charging devices can be cumbersome. APT offers a solution to reduce the unnecessary

wiring and provide an organized space to store portable devices.

Market Trends:

People today want everything in the palm of their hands. Not only that, they also want to

be able to travel without worrying about their devices dying on them. Google glass aimed to give

people many tools at their disposal by integrating them into glasses. These tools include

Bluetooth, camera functions, and a recording feature. APT will add to this technology by using

solar paneling to charge such devices, allowing users to power their devices at all times. Other

jackets have been introduced to the market with the sole purpose of charging devices with solar

energy. In other terms, this technology is nothing new and is starting to pick up as more wearable

technology is introduced. Along with the jackets, Nike has introduced their own wearable

technology; one example is the Nike+FuelBand SE. This device tracks a user’s workout and

provides feedback with the use of Bluetooth technology. Not only that, but it also motivates the

user to keep working harder (Nike.com, 2014). This band shows that wearable technology is

useful and can be fashionable.

With these other products being available they can help improve our jacket. APT can

have a device that can monitor a user’s health, if that person is working out. Another thing is that

the jacket can incorporate some kind of recording device that works with the Bluetooth design

already present in it. There are many possibilities of integrating these other products into APT in

order to make it more user friendly and appealing.


Market Growth:

The wearable technology market has been on the rise with the availability of new

technology. Although wearable technology is growing, it only makes up a small sector of the

technology market, only capturing $1.4 billion in revenue in 2013 (Fitzgerald, 2013). These

numbers are low, but wearable technology is gaining traction in the market. People are becoming

more aware of it as the benefits come to light and, therefore, are starting to become more curious.

According to a survey done by NPD, consumer awareness of wearable technology is 52%. That

is an increase from what Fitzgerald had in 2013, which was 47%. Not only that, the survey also

states that one in three of those aware of the technology will buy it.

With the awareness in wearable technology growing, experts expect the market to grow

larger in the future. This can be illustrated in Figure 1, which shows the predicted growth of

wearable technology after 2014. An article written by Johanna Mischke also claims that the

revenue brought in by these devices will reach $19 billion in the year 2018. That is a significant

growth from the present $1.4 billion. APT’s arrival into the market at this time is perfect, for it is

catching the wave of interest brought by its predecessors. Not only that, it will help to expand the

market with its solar charging capabilities and other technologies.

Figure 1 Market Growth Chart (Rizzo. 2013, Table 1)


SWOT Analysis:

Strengths: Customizable, Adapts to technology, Sustainable, Convenient, Unique

implementation of solar technology

Weaknesses: High price (cannot sell to everyone), constantly changing technology, mainly

targets cool climates, Cannot sell in all places (like deserts and places with little

sunlight)

Opportunities: Make same product but more affordable to reach a different market, Adapt to new

technologies and trends, Different designs for men and women

Threats: SCOTTeVEST, Zenga Eco Tech, Clean Technica, and others adapting to our

design and making improvements,

Economic – another recession making vacations less frequent, causing

unemployment, and decreasing disposable income

Natural – global warming causing less cold/harsh winters

Technological – being unable to stay current with popular technologies

A SWOT analysis of APT goes into detail about the company’s strengths, weaknesses,

opportunities, and threats. The strengths for APT’s clothing is its customization, sustainability,

convenience, and technology that adapts to what is being used today and tomorrow. These

strengths show how APT is ahead of the market and is looking towards the future for further

advancements.

Weaknesses are also a very important aspect to take into account. One thing that might

hinder the success of APT is that it is a costly product and cannot be marketed to everyone. Only

people with a certain income level could purchase this. Also, APT would have to stay ahead of

competition and continue to update itself along with the ever-changing technological advances.

Since it is a jacket, the main target markets would be those in colder climates, therefore making

it difficult to sell in very warm places. Along with this, it needs to be taken into account that the

solar panels may not work as well when in foggy/overcast conditions.


APT also has some opportunities that they can take advantage of in the future. The same

product can be made but at a much more affordable price, which would be able to reach a whole

new demographic. With the changing technologies, APT needs to make sure they stay current

and adapt to the new technologies and trends. To also help further the success of APT, there can

be different designs made for men and women. These different designs will draw more interest.

The threats that need to be watched are competitors, such as SCOTTeVEST, Zenga, Eco

Tech, Clean Technica, and others, adapting to the design and making improvements. Some

economic threats include the possibility of another recession. In this case, it would most likely

make vacations less frequent, cause unemployment, and decrease disposable income. A natural

threat that could affect APT would be global warming causing less cold/harsh winters, therefore

making the jacket not as necessary. Finally, the main technological threat is that APT needs to

stay current with popular technologies. As new wearable/portable technologies become

prevalent, APT needs to make sure that advancements are made to incorporate these aspects.

Competition:

Some of the main competition that APT would face would be similar designs to that of

SCOTTeVEST, Clean Technica, and Zegna Ecotech. SCOTTeVEST carries a similar type of

product yet is bulky and unfashionable. The solar panels are placed in obvious locations, which

turns many people off to the idea. Clean Technica has developed solar powered clothing that

uses natural fabrics (Shahan, 2008). This is something that APT needs to watch, since one of the

main aspects of the company is to be renewable and sustainable. Clean Technica markets their

renewable aspect by using natural fabrics, as opposed to fabrics such as Gore-Tex, it is easy to

recycle and potentially used again. However, the aspect of durability comes into question and

may not have the longevity that APT will have. While natural fabrics are renewable, they also

need to be able to effectively deliver the expected benefits. Another competitor is Zenga

Ecotech, who markets their product by being the most fashionable solar equipped jacket on the

market as well as being produced from recycled plastic. They stand out because their jacket is

slim, stylist, and made from recycled goods, rather than new raw materials. One of their main

features is that the battery pack and solar panels are detachable, which allows for the consumer

to place them in the sun to charge if the jacket will not be used (Shahan, 2008). This jacket,

however, sells for a very high price of $750 and can exclusively be purchased at Saks Fifth


Figure 2 SCOTTEVEST, INC. (2010-2014)

Avenue (Shahan). While Zenga Ecotech has a lot of the similar features that APT does, APT

aims to create a more affordable jacket that is more accessible to the everyday outdoors

enthusiast.

Product Offering:

APT’s solar powered jackets are manufactured with the most weather resistant fabrics

available. Using a specific type of polymer known as polytetrafluoroethylene (PTFE), APT’s

jackets will be lightweight, waterproof, well-insulated, and extremely durable while still

allowing the wearer to feel like they can “breathe” (Gore-Tex, 2014). In short, the texture of the

jacket is similar to any type of waterproof jacket you would find from common brands such as

North Face, Gore-Tex, and Columbia. Typical jackets can be bulky and awkward. APT plans to

keep its jackets comfortable and stylish through four innovative design steps.

First and foremost is the Gore-Tex fabric used. Second, the location of the battery would

be lined throughout the jacket. This was shown possible through work by a team of Drexel

University engineers. The team was able to knit a series of yarns and fabrics into “textiles”

allowing energy to be stored in the lining of clothing (Faulstik, 2014). Using this type of

fabrication would allow APT’s clothing to be light and extremely pliable. In addition, the

extension of different charging locations throughout the jacket would be easily routed to each

pocket; this leads to the company’s third

design process.

Ergonomics are critical to the

company’s success. Not all consumers are

left handed; not all consumers place their

mobile devices or mount their wearable

technology in the same manner. It is for this

reason that APT has placed pockets with the

same functions on both sides. While each

pocket will serve a distinct purpose,

consumers will be able to put items in

whatever pocket they choose. Each pocket

will have a charging station for the item it fits.


For example, the bottom front pockets will be small enough for phone devices; interchangeable

charging adapters for Android or iOS devices will be provided to put into either pocket. Next,

inside the jacket will be places for tablets and larger items; similarly, these pockets will have

interchangeable chargers. Exiting the neck and sleeves of the jacket will be additional charging

stations for wearable technologies like wristbands, watches, glasses, and more. While APT is

attempting to distinguish itself from the market, it can’t avoid subtle similarities. SCOTTeVEST

has produced jackets that serve this same purpose. Pockets and utilities are placed in similar

locations and offer almost identical features. However, where APT excels is with its

customizable charging ports and ergonomic design for all consumers.

The final and most notable features of the jacket are the solar panels. Offering charging

on the go, the solar panels constantly harness energy and store it in the lining of the jacket.

Figure 2 shows a prototype developed by SCOTTeVEST back in 2004. This prototype has yet to

be expanded upon and APT intends to be the first to do so. Traditionally, the solar panels are

placed on the back and are dull, tacky, unattractive, and seemingly uncomfortable. APT will

change the location and coloring of these panels to increase effectiveness and style. The new

solar panels will be made out of the similar material used in the military, which is more pliable

and durable. Two strips will be placed down the arms of the jacket from shoulder to elbow

accompanied by an additional two over the chest. The new placement of these panels will allow

consumers to carry items on their back and not cover the panels. Furthermore, the panels will be

black which provides a more subtle appearance, making them more stylized.

Keys to Success:

There are eight different elements to the keys of success. The keys of success involves

defining the product or service, identifying the target market, knowing the target market, finding

a niche, developing awareness, building credibility, being consistent, and last but not least,

maintaining focus (Chance, 2014). All eight elements are crucial in the new business process. To

be successful, it is important to review each element.

APT’s logo needs to be memorable and clearly visible. The more distinct the logo, the

more likely people will be “APT” to remember it. This is why the APT logo is clearly labeled as

“APT.” This brand is simple and can easily be seen by those interested in the jackets. People


often want to be defined by their clothes and and others to recognize the brands that they are

wearing. Because of this, having a memorable logo is the best way for clothing to be advertised.

The market for APT jackets will be men and women around the age of 20 and older.

Open market competition will allow for the expansion and introduction of new products.

Furthermore, this forces APT to be innovative in design and implementation.

It is also important to develop awareness about APT jackets and advertising is one way to

do so. In order to build credibility, our jackets need to be reliable and trendy. This keeps

consumers coming back. It is important for customers to be happy by being consistent with the

product offered. Focusing on improving consumers experience with technology will help in the

company’s future success.

Critical Issues:

There are a few critical issues that surround APT. One of the main concerns is whether

wearing clothing that integrates solar technology would be harmful to the body. The constant

contact of human skin and technology can possibly cause some health concerns. While there may

be no instant reactions, research must be done to be sure that there is no long-term effect on the

body. Also, people with pace makers need to be sure that this technology will not interfere with

their health. In considering this, it might be useful to integrate solar powered technology into

other articles of clothing that do not surround vital organs.

Along with health concerns, the clothing needs to be wearable. The designs must not be

bulky but rather fashionable and functional. Many of the panels being utilized today are bulky,

boxy, and very noticeable. Therefore, the panels used in APT ought to be thoughtfully integrated

into the design, making it almost unnoticeable. The wear of the jacket needs to be comfortable as

well. It should not feel like people are wearing technology, full of wires and batteries, but should

fit like a normal jacket.

Since APT will be allowing people to use technology while away from the house, this

might promote an increase of technology. Surveys showed concern that with an increase in

technology, there may be a decrease of outdoor activities. If this is the case, assuming that an

increase in technology is directly related to a decrease of outdoor activities, then APT might be


setting itself up for obsolescence. If technology becomes so advanced that people start staying

inside rather than going outdoors, then they will not need the jacket to power their devices.

Finally, it is important for the functionality of the jacket that there be sunlight; there are

many places where the sun is often blocked by fog or even some places where the sun is not

shining for large parts of the day. In places such as these, it may be more difficult for people to

utilize the main aspect of the jacket, as it is supposed to make using portable technology a lot

more convenient. If people are in places where the sun does not shine often, such as Alaska in

the winter, or places with fog, like the Monterey Bay Peninsula, then it may not do so well in

areas like these. These issues must be researched in order to assure that APT has a chance in the

marketplace.

Marketing Strategy

APT’s biggest offer to consumers is convenience. Marking charging wearable and mobile

devices easy wherever one goes lets people stay connected despite their busy lives. this

convenience saves consumers time and lets them get done the tasks that are most important to

them. The company’s value proposition to consumers is, “APT will adapt to you and help you

adapt to life.”

Mission

Providing people the tools to adapt to sustaining wearable technology now and for the future.

Marketing Objectives

APT’s solar jacket is designed and manufactured to allow consumers to use their mobile

devices wherever they go. A survey concluded that out of 80 participants, 55% used their mobile

devices more than five hours a day and 25% use their devices over 11 hours. Additionally, of

those same participants, over 50% were familiar with wearable technology and named products

such as Google Glass, Samsung smart watch, Nike fit, Apple watch, solar backpacks, and other

Bluetooth devices. As wearable technology becomes more prevalent, APT has provided a way

for consumers to ensure their current and future devices can be used, stored, and charged in an

environmentally friendly way as they manage daily activities.


Financial Objectives

APT’s goal for the first year is to sell 1,000 units for the first year, 4,500 units for the

second year, and 10,000 for the third. APT plans on breaking even in the third quarter of the

second year by selling 4,338 units at a price of $299 each for each unit.

Target Markets

APT’s target market has been carefully chosen to ensure a profit. The age range and

gender that would be targeted would be both men and women who are twenty years and older.

This target market has been chosen because they are the ones who will most likely have the

income to support such phrases as APT as well as the wearable technologies that go along with

this product, therefore utilizing the jacket and its technologies. According to PRIZM, some of the

groups that would be marketed towards would be; Blue Blood Estates, Movers and Shakers,

Money and Brains, God’s Country, Pools and Patios, Country Casuals, Suburban Sprawl, Red,

White and Blues, and Blue Highways (The Neilson Company, 2014). These groups described by

PRIZM are in the working class and make an annual income of at least $50,000. To support this

annual income, it is almost understood that these people would have at least some college

education.

The two main generations that would be focused on would be the Baby Boomers,

because they have 67% of American wealth, and Generation Y. The reason for focusing on these

two generations is because they are environmentally conscious as well as most educated. APT

would start by focusing their target markets in North America; it would then be marked to areas

outside of this area.

With APT, psychographics does become a large factor. Psychographics describes the

social class, lifestyle, and personality of potential customers (Kotler and Armstrong, Pg.193).

Marketing an expensive jacket can be challenging; there is a distinct social class that will be

interested in purchasing this product while not every social class will be able to afford it. This

jacket is not so much a necessity, but rather along the lines of what consumers want and need to

fit their tech-savvy lives. APT is incorporated with an individual’s lifestyle. Many people use

technology to stay in touch with the world and would like to take technology everywhere

including while engaging in outdoor activities.


This jacket will be more affordable to those in the working class ($50,000+). The price

tags for these products are steep and hold many issues that still need to be addressed, but in a

2014 issue of Wired Magazine author Bill Wasik wrote that “the wearable future will be here

someday. The only question is how soon you’ll be willing to put it on.” APT jackets will be sold

in retailers such as Dick’s Sporting Goods, Big 5, Bass Pro Shops, Outdoor World, and REI. The

people that shop in these outlets are those mostly in the working class, making around $50,000.

The starting price tag of APT jackets are $299.00.

Positioning

APT’s solar powered jacket contains an array of attributes that are unique to the

competition. Gaining a strong position in the market is achievable due to these unique

characteristics. As described earlier, the jacket is designed with the latest technology and use of

solar panels. Additionally, the design is fashionable and practical for all users.

Among providing consumers virtually limitless power, APT’s jacket comes at a

reasonable price tag of $299.00. In relation to the competition the pricing is competitive, fair,

and provides a perceived inexpensive cost for a product that can pay for itself. Customers will

begin to feel ahead of the technology industry. The jacket adapts to wearable devices and once

again leaves customers “APT to adapt”.

However, the $299.00 price is for a “base model” of the jacket. Due to the jackets

customizable features APT believes that the ability to customize each jacket based on personal

preference provides a unique customization that has not yet been experienced in current

technology and clothing. From putting the design and customization into the hands of

consumers, APT has created a way to personalize with its market. Providing optional hardware

integrations and software updates implies that the jacket will never “grow old”.

Online blogs and forums providing tutorials and videos on how to modify and add to

jackets will be available. If need be, APT will provide free shipping via UPS for consumers who

want the company to make the additions for them. Ultimately, the jacket comes with a lifetime

warranty. Wear, tear, and/or defects in the solar panels will be repaired by the company at no

extra charge. This is how APT will show its appreciation to consumers and also position itself

ahead of the competition.


Strategies

Since the target market consists of both men and women who are 20 years of age and

older and are part of the working class while making $50,000 and up per year, direct marketing

and public relations and publicity are important in the beginning. Since the target market is so

large, getting maximum exposure and getting APT’s name known is the first step. After that is

done, APT wants to create an experience for customers to remember and get them emotionally

attached to the brand. Personal selling will help get the jacket into retail stores and make it easily

accessible to consumers. Sales promotions will encourage consumers to purchase the jacket since

they will be saving money. Finally, advertising with flyers in cold climates and at national parks

will reach the target market in the proper setting. As noted from the survey, 55% of those

surveyed used their mobile devices for more than five hours a day and 25% use their devices

over 11 hours. Therefore, APT would accommodate these consumers by making it possible for

them be on their phones the desired amount of time. All of this works together to deliver the

value proposition promised to customers; “APT will adapt to you and help you adapt to life.”

Marketing Mix

Pricing

Based on the prices of ScottEVest, Clean Technica, and Zegna Ecotech, APT will have a

base price of $299.00 for a jacket that incorporates solar panels, USB for mobile charging, and a

section for personal headphones. Different additions will have different prices. The charging

adaptors for Google Glasses would be between $100-$200, since these glasses are selling for

$1,500. Another example is that the addition of a charging adapter for a laptop would be $25-

$75. Also, if a customer originally purchased a basic model and later decided to add to their

jacket, this service will be available but will cost more than originally getting the jacket with the

specifications in the first place. These are just some examples of the varying costs for an APT

jacket. This relates to the chosen target market by letting the price vary as well as the function.

While most people will probably not have the funds to purchase Google Glasses, those

consumers will not want the charging adaptors for the product. Extra, unwanted adaptors will get

in the way and bother consumers. Therefore, making the jacket customizable meets the wants of

the middle class as well as the high upper class.


Distribution

The distribution channels for APT were determined by those similar to other clothing

companies. APT will start out at the factory where they are made, then be transported to different

warehouses. From there, the jackets will be shipped to retailers who will eventually sell the

product to the end consumer. For the jackets being sold in retail stores, such as REI and other

outdoor sporting goods stores, they will be the base model which will include the solar panels

(which will be received when purchased), USB adaptor, and headphone slot. The customizable

jackets will be sold strictly online. While consumers may make their specifications at any retail

store carrying the product, they must still submit their specifications online. Once the order is

sent, the jacket will be delivered to the customer’s home. Having APT’s basic model available in

stores makes it easier for consumers to acquire. For consumers who want a more specific

version, they can still get what they want but must wait a small amount of time.

Marketing Communications

APT would be used all of the marketing communication mix aspects which are

advertising, sales promotions, direct marketing, public relations and publicity, and personal

selling. These were chosen because they are all vital and helpful to the success of the jacket.

With the startup of this company and this product, it is important to get consumers to hear about

the product. Therefore, these forms provide knowledge to consumers and creates awareness.

For advertising, flyers would be made and placed in outdoor stores as well as at national

parks. Also, small ads could be created on cards that could be placed inside magazines and

distributed from there. This would allow for a wide exposure to many people. A sales promotion

would include APT giving a 10% discount to the first 100 people who purchase the jacket online.

This gives people an incentive to go to the website, check out the product, and potentially

purchase it. Creating a good attitude toward the jacket would be achieved through public

relations and publicity. A professional press release could be created and get people excited

about the product. APT could also get sponsored on the news and make positive relations with

the press.

Experiences are very important to the marketing communication mix. APT would find a

popular outdoor enthusiast who is well known and have them feature and wear the jacket at a


certain event or on their show. The featured person could video himself while camping or doing

some outdoor activity and he could use the jacket to charge his mobile device. This would create

excitement, engage customers, get customers emotionally connected, and give them something to

remember. Finally, personal selling would be utilized through trade shows and sales

presentations. This would allow prospective buyers to touch and feel the jacket and experience

the benefits for themselves. A first-hand experience is important for a new product.

Marketing Research

Based on the use of surveys and other research of similar solar panel jackets, APT has

found a way to market to consumers. Research that has been conducted for APT jackets include

surveys as well the research of similar, solar panel jackets. In APT’s online survey, it was

discovered that a large percentage of people used their phones throughout their day, from leisure

use to business use. One to Five hours may not be enough time to kill a smart phone battery, but

when analyzing the functions and use of mobile devices, it is anticipated that the amount of

mobile device usage will rise in the business and consumer market

What the survey concluded was that business and leisure uses of technology combined

significantly outnumbered the amount of time individuals used their devices for other reasons.

As demographics change, so will the use of technology from consumers. For example,

businesses begin to include more technical operations from teleconferencing to information

gathering (Draft, Pg. 58-60). While leisure time spent researching, playing games, watching

videos or strolling social media sites. Consumers place a high demand for their technological

products to perform on a consistent basis.

APT has researched information involving time spent using cellular devices, mp3

players, as well as outdoor activities through online surveys. If presented with more money and

time, APT would further research by creating a prototype for consumer feedback and surveying

improvements/modifications involving the jacket. Creating a APT prototype would allow a

concrete vision for what APT can offer, rather than just an idea on paper. Allowing consumers to

try APT jackets out, would allow for insight on improvements that could potentially be made to

better the product.


Financials

Break-even Analysis

Before finding the Break-Even point for which APT has to reach, the fixed and variable

must be presented first.

Average Price per Unit $299.00

Cost Break Down Fixed Marketing Cost monthly yearly

Advertisement $5,000 $60,000 Rent $44,500 $534,000

Research and development $10,000 $120,000 Salaries $6,667 $80,004

total $66,167 $794,004 Variable Marketing Co

Travel $1,000 $12,000 Advertising $3,700 $44,400 Sales reps $5,000 $60,000

total $9,700 $116,400

Total Costs $75,867 $910,404 Figure 3 Cost Breakdown Chart

This chart represents the fixed and variable cost associated with the marketing aspect of

APT. In order for APT to break-even, 4,338 units must be sold. APT will have to wait until the

third quarter of the second year in order to reach their break-even point.


Figure 4 Break-Even Analysis

As shown in the chart above the break-even point at which APT can cancel out the total

cost is when 4,338 units are sold.

Sales Forecast

As stated earlier in this report, wearable technology brought in $1.4 billion in 2013. This

market is only going to grow, for studies show that in 2018 revenues for wearable technology

will climb to $19 billion. For this reason APT is forecasting a sale of 1,000 units of the jackets.

The jackets will go for a price of $299 because other jackets such as, Zegna Ecotech Solar Jacket

goes for $750 (Chua, 2009) and the Scottevest jacket can be anywhere from $200 to 400$

(Hanlon, 2004). As the time progresses sales for APT are going to increases as buyer awareness

of the product increases.

Sales Forecast


Expense Forecast

Cost Break Down

Fixed Marketing Cost monthly yearly Advertisement $5,000 $60,000

Rent $44,500 $534,000 Research and development $10,000 $120,000

Salaries(4) $6,667 $80,004 Total $66,167 $794,004

Figure 6 Fixed Cost

The expenses forecast for the fixed cost of the marketing are as shown in the figure

above. As shown the rent of a building is the highest expense, followed by the research and

development. The starting salaries for the four employees is going to be $20,000 each and is

subject to increase every year depending on the sales forecast for the next year.

This next chart depicts the forecast expenses for variable cost that the APT is willing to

forgo. Travel expenses can increase or decrease depending on where APT wants to market the

jacket. Having advertisement can change depending on the medium used to get APT’s product

across to the consumer, from magazines to APT’s own website.

Year 1 Q1 Q2 Q3 Q4 Total Units Sold 160 240 280 320 1000 Revenue $47,840 $71,760 $83,720 $95,680 299,000.00

Year 2 Units Sold 4500 Revenue $1,345,500

Year 3 Units Sold 10000

Revenue 2,990,000

Figure 5 Sales Forecast


Controls

The controls that APT will be using to measure our progress throughout the year will be

the number of sales for a certain quarter or month. The jacket being offered at $299 is the base

model and add-ons will increase the price of the jacket, but give valuable information for us to

use in future sales. This information can give us an insight to what consumers want and do not

want to see in future products. In order to reach the goal of a 1,000 units sold by the end of the

first year, APT will focus on advertising through other websites, as long as APT’s own website.

APT will also rely on word of mouth to help further the buyer awareness of APT.

Implementation

Raw materials along with the production of gortex and electrical lining will imported to

the production facilities located in California. The jacket will then be manufactured and created

within the bay area. The U.S. production is designed to save time and money for consumers and

APT. Solar panels will be produced in the same facility the final jacket is manufactured. In case

of defects or insufficient materials APT will be able to place quick orders and utilize inventory

on hand. Once the finish product has been constructed it will be tested until it meets the six-

sigma quality set by APT. Due to the lifetime warranty, APT wants to ensure that each jacket is

fully operational and has a quality unmatched by the competition. After production and testing,

APT will begin to sell its products. Online retail locations and storefronts will be the main outlet

for selling the jacket.

The use of both market segments allows APT to sell its product from a business-to-

business (B2B) and business-to-consumer (B2C) basis. On the storefront, the jacket will be

showcased in a location that is well lit by natural light with a mobile device constantly running

Variable Marketing Cost monthly yearly

Travel $1,000 $12,000

Advertising $3,700 $44,400

Sales reps $5,000 $60,000

total $9,700 $116,400

Figure 7 Variable Costs


movies, music, or video feed. This would be to market the functionality of the jacket and show

that the mobile technology would not run out of battery life so long as it is plugged into the

jacket. Online, there will be videos demonstrating the functionality of the jacket. Jackets could

be purchased at each store location or ordered online. Direct shipping via UPS will be processed

in a 24 hour time frame with delivery ranging from one day to one week (depending on

geographic location).

Marketing Organization

As APT starts expanding product development and marketing teams will meet to train

sales representatives and online developers. The company will be quick to develop a website and

contact list for businesses and customers to call with any order, return, repair, or modification

needs. It is important that APT maintains communications with its stakeholder’s regardless of the

channel chosen by customers. Because of this, APT insists on calling back each emailed repair,

return, or modification order that wants to speak to a representative.

Once a communication network has been established, telemarketers will focus on

businesses while marketing teams will attend various festivals, events, fairs, and shows based

around technology. Here, business cards and contact information will be handed out to interested

customers. Our sales-team will be equipped with the jacket and wearable devices to demonstrate

to inquiring businesses or consumers. Coupled with these direct marketing strategies, web-based

advertising will be fully functional. APT plans to purchase web space through various companies

and organizations to direct consumers to the APT website where a final transaction can be

processed.

Once B2B and B2C operations begin to develop, inventory will move from production to

shipping. From here, the jackets will be transported to either retail locations or a desired location

chosen by the direct consumer. APT anticipates calls with questions or returns. Because of this,

the online website, email, and telephone communications will be available. This ensures loyalty

and a personal connection with the customer. Returns, repairs, and modifications would take an

estimated one-to-two week turnaround time (based on geographic location). The following figure

represents the flow of APT’s market organization.


Figure 8 Market Organization Flowchart

Contingency Planning

Being a technology based product, APT could face some difficulties and risks along the

way. Any problems with merchandise will be able addressed with return and shipping

departments with the issue at hand and then transferred to sales and return representatives to

discuss further. Because APT is involved with technology, the jacket may need maintenance

with any wiring malfunctioning. Short circuits happen frequently for one matter or another

involving electronics, which APT will have a “hotline” for incase of any issues. APT will offer a

lifetime warranty for their jacket, which will include free shipping and handling both ways. With

the lifetime warranty APT offers, some exclusions may be apply which include cleaning and

maintenance procedures clearly stated in the APT manual packet and warning labels.

Considering APT jacket is an article of clothing, APT may soon have similar

competitors. In the case APT has a competitor with a similar product, measures will have to be

taken to stay ahead of the game. APT will add value to the jacket by advertising quality over

quantity, ensuring quality that will last. Redesigning the jacket will be an action that will have to

be taken to have a competitive advantage over any competitors with similar products. Although

there are competitors with similar jackets in the market now, APT will offer more benefits that

cater to consumer’s busy lives.


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