sonic marketing plan - nguyen thi hong diep, truong minh hoang, vu quynh nga

SONIC – PERSONAL DIGITAL ASSISTANT

MBA PROGRAM

MARKETING MANAGEMENT

SONIC – PERSONAL DIGITAL ASSISTANT Marketing Plan

INSTRUCTOR: Ph.D. FRANCIS PIRON

GROUP MEMBERS: NGUYEN THI HONG DIEP

TRUONG MINH HOANG

VU QUYNH NGA

J U N E 2 6 , 2 0 1 1

June 26, 2011

MBA Troy 4G

SONIC MARKETING PLAN

TABLE OF CONTENT

Page

EXECUTIVE COVER MEMO ............................................................................................... 4

I. EXECUTIVE SUMMARY ...................................................................................................... 5

II. SITUATION ANALYSIS ........................................................................................................ 5

1. Market summary ................................................................................................................. 6

1.1. Consumer market ................................................................................................... 6

1.2. Business market ..................................................................................................... 7

1.3. Market needs .......................................................................................................... 7

1.4. Market trends ......................................................................................................... 8

1.5. Target market growth ............................................................................................. 8

2. Company analysis ............................................................................................................... 9

2.1. Strengths ................................................................................................................. 9

2.2. Weaknesses ............................................................................................................ 9

2.3. Opportunities ........................................................................................................ 10

2.4. Threats .................................................................................................................. 10

2.5. Market share ......................................................................................................... 11

3. Competitor analysis .......................................................................................................... 11

3.1. Market position .................................................................................................... 11

3.2. Strengths ............................................................................................................... 11

3.3. Weaknesses .......................................................................................................... 12

3.4. Market shares ....................................................................................................... 12

4. Climate .............................................................................................................................. 12

4.1. Political and legal environment ............................................................................ 12

4.2. Economic environment ........................................................................................ 13

4.3. Social and cultural environment ........................................................................... 14

4.4. Technological environment .................................................................................. 15

5. Product offerings ............................................................................................................... 16

6. Distribution ....................................................................................................................... 16

III. MARKET SEGMENTATION ............................................................................................... 18

1. Consumer market segmentation ........................................................................................ 18

1.1. Geographic segmentation ..................................................................................... 18

1.2. Demographic segmentation .................................................................................. 18

1.3. Behavioral segmentation ...................................................................................... 18

2. Business market segmentation .......................................................................................... 18

2.1. Demographic segmentation .................................................................................. 18

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2.2. Customer type ...................................................................................................... 19

2.3. Buyer behavior ..................................................................................................... 19

IV. MARKETING STRATEGIES ............................................................................................... 20

1. Mission .............................................................................................................................. 20

2. Objectives ......................................................................................................................... 20

3. Target market .................................................................................................................... 20

4. The product positioning .................................................................................................... 21

5. Marketing mix ................................................................................................................... 21

5.1. Product ................................................................................................................. 21

a. Brand name and logo .................................................................................... 22

b. Brand promise .............................................................................................. 23

c. Quality .......................................................................................................... 23

d. Scope of product line .................................................................................... 24

e. Warranty ....................................................................................................... 25

f. Packaging and labeling ................................................................................. 25

5.2. Pricing .................................................................................................................. 26

a. Pricing objective ........................................................................................... 26

b. List price ....................................................................................................... 27

c. Price adaptations ........................................................................................... 27

d. Price sensitivity ............................................................................................ 27

5.3. Distribution .......................................................................................................... 28

a. Channel levels .............................................................................................. 28

b. Channel members ......................................................................................... 29

c. Market coverage ........................................................................................... 30

d. Criteria for evaluating distributors ............................................................... 30

e. Market-logistics ............................................................................................ 31

5.4. Promotion ............................................................................................................. 32

6. Marketing research ............................................................................................................ 34

V. FINANCIALS ........................................................................................................................ 35

VI. CONTROLS ........................................................................................................................... 36

1. Implementation ................................................................................................................. 36

2. Marketing organization ..................................................................................................... 40

VII. SHORT AND LONG-TERM PROJECTIONS ..................................................................... 40

VIII. CONCLUSION ...................................................................................................................... 44

June 26, 2011

MBA Troy 4G


EXECUTIVE COVER MEMO

To: Ph.D. Francis Piron

From: Nguyen Thi Hong Diep, Truong Minh Hoang, Vu Quynh Nga

Subject: Sonic Marketing Plan

Date: June 26, 2011

BACKGROUND

Currently, Sonic is a start-up company in PDA industry. In this area, there are many kinds of

PDA products such as multifunctional cell phones, e-mail devices, and wireless

communication devices provided for personal and professional use. Every year, more than 5

million PDAs and 22 million smart phones are sold worldwide. Consequently, the number of

competitor is increasing. Sonic’s primary marketing objective is to gain 3 percent market

share with 240,000 unit sales and to obtain $60 million sales revenues in the United State in

the first year after introducing the first product, Sonic 1000.

RECOMMENDATION

To obtain market share from the pioneer, PalmOne, in PDA market, Sonic accepts to lose and

tries to keep the first-year losses to less than $10 million and build a marketing plan to reach

the break-even point early in the second year. Sonic takes advantage of existing targeted

consumers who have awareness of PDA products to look for opportunities to build its strong

brand and brand equity.

NEXT STEPS

In the second year, Sonic is planning to introduce the second product, Sonic 2000, after Sonic

1000 provides consumers with brand awareness. During this period, Sonic tries to run its

business to reach break-even point early and tries to expand its market into Canada and

beyond.

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Sonic, a start-up company, is about to introduce its first product, Sonic 1000, a

multimedia, cellular/Wi-Fi-enabled personal digital assistant (PDA), also known as a

handheld computer. Sonic will be competing with Apple, Palms, Hewlett-Packards (HP),

Motorola and other well-established rivals in a crowded, fast-changing marketplace where

smart phones and many other electronics devices have PDA functionality as well as

entertainment capabilities.

I. EXECUTIVE SUMMARY

Sonic is planning to introduce a new multimedia, dual-mode PDA product, Sonic 1000, in

a very competitive and mature PDA market. Despite the intense competition from Palm, HP,

or other rivals, we can compete effectively because our product offers a unique combination

of advanced features and functionality at a value-added price. The major targeted segments

are the consumer and business markets, imposing upon the growing interest in single

equipment with benefits of communication, organization and entertainment.

The primary marketing purpose is to gain 3 percent of the US market share with unit sales

of 240,000 in the first year. The primary financial objectives are to obtain sales revenues of

$60 million, and keep losses to less than $10 million in the first year, and get break-even

point in the early second year.

II. SITUATION ANALYSIS

Sonic was established 18 months ago by two entrepreneurs with communications

experience. It is about to enter the today’s mature PDA market with increasingly intense

competition due to technology evolves, industry consolidation continues, and pricing

pressures squeeze profitability. To gain market share in this dynamic environment, Sonic

must carefully determine targeted segment with valued features and plan for next-generation

product to keep brand momentum going.

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1. Market summary

Sonic’s market covers consumers and business users who prefer to use a single device to

communicate, store and exchange information, organize and entertain when they are away

from home or office. Users in targeted segments during the first year include professionals,

college and graduate students, corporations, entrepreneurs, and medical practitioners.

1.1. Consumer market:

The economy of the United States (U.S) is the world's largest national economy. Its

nominal GDP was estimated to be nearly $14.7 trillion in 2010, approximately a quarter of

nominal global GDP. Its GDP at purchasing power parity was also the largest in the world,

approximately a 5th

of global GDP. Moreover, the U.S economy has maintained a very high

level of output per capita. In 2009, it was estimated to have a per capita GDP (PPP) of

$46,381, the 6th

highest in the world.

In addition, the U.S, the 3rd

most populous country globally, has accounted for about 4.5%

of the world’s population. The U.S population - currently estimated to have 308.7 million

people - has more than doubled since its 1950 level of 152.3 million. More than just being

double in size, the population has become qualitatively different from what it was in 1950. As

noted by the Population Reference Bureau, “The U.S is getting bigger, older, and more

diverse.”

In the consumer market, the primary targeted customers is middle – to upper – income

professionals who need one device to co-ordinate their busy schedules, stay in touch with

family and colleagues and entertain on the go. The secondary targeted consumers are high

school, college, and graduate students who want a multimedia, dual-mode device to organize

their school, work and personal schedules, to store needed documents and information for

access anywhere, and to communicate with family and friends. This segment can be

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described demographically by age (16 – 30) and education status (entering or in college or

graduate school).

1.2. Business market

In the business market, the primary target is mid-to-large sized corporations that want to

help their managers and staff to stay in touch and input access critical data on the go. These

buyers want durable, powerful, easy-to-use PDAs that can operate customized business

applications. This segment covers companies gaining more than $25 million in annual sales

and employing more than 100 staff. A secondary target is entrepreneurs and small business

owners who need to stay in touch and organize their busy schedules at all times. We also

target medical users, doctors and nurses who want to reduce paperwork and update or access

patients’ medical record quickly.

1.3. Market needs

Consumer and business users of PDAs primarily need to communicate and access

information when they use PDAs. Exhibit 1 shows how the Sonic 100 addresses the specific

needs of targeted segments within the consumer and business markets.

Exhibit 1: Needs and Corresponding Features/Benefits of Sonic PDA

Targeted Segment

Feature/Benefit Customer Need Corresponding Feature/Benefit

Professionals

(Consumer market) Stay in touch while on the go

Wireless e-mail to conveniently send and receive messages

from anywhere; cell phone capability for voice

communication from anywhere

Students

(Consumer market)

Record information while on the go Voice recognition for no-hands recording

Perform many functions without

carrying multiple gadgets

Compatible with numerous applications and peripherals

for convenient, cost-effective functionality

Express style and individuality Case wardrobe of different colors and patterns allows users

to make a fashion statement

Corporate users

(Business market)

Input and access critical data on the

go Compatible with widely available software

Use for proprietary tasks Customizable to fit diverse corporate tasks and networks

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Entrepreneurs

(Business market)

Organize and access contacts,

schedule details

No-hands, wireless access to calendar and address book to

easily check appointments and connect with contacts

Medical users

(Business market)

Update, access, and exchange

medical records

No-hands, wireless recording and exchange of information

to reduce paperwork and increase productivity

Our licensing arrangement with Linux-based system allows us to provide the unique

feature of voice recognition for hand-off operation. This is strong point of differentiation for

competitive advantage in satisfying market needs that makes the use of Sonic PDAs

convenient and easy.

1.4. Market trends

PDA purchasers can choose between models based on several different operating systems,

including systems from Palm, Microsoft, and Symbian, plus Linux variations. In addition,

other market trends relate to demand for technological advances such as the integration of

cell phone functionally and other capabilities; sharper and larger screen displays, speedier

processing of information, memory expansion; applications for specific customer and

business purposes, and more fashion-oriented accessories for PDAs. Moreover, PDA

manufacturers are using technology with lower costs but capabilities are increasing. This will

lead to lower selling prices.

For Sonic first product, we decide to use a Linux-based system because this system is less

vulnerable to be attacked by hackers and viruses. Furthermore, Sonic PDA is the first

product containing extra storage capacity of ultra-fast-20-gigabyte with lower price than that

of other competitors.

1.5. Target Market Growth

In general, market growth continues increasing in consumer and business PDA markets.

Sonic products will stimulate the market demand by concentrating on voice recognition

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system which may be imitated by other competitors within 6 to 12 months. Therefore, we are

targeting to create strong brand recognition, build sales and maintain brand loyalty among

targeted market segments in a short time.

2. Company analysis

SWOT analysis is an important part of the strategic planning process. It provides

information that is useful in matching our resources and capabilities to the competitive

environment in PDA field. Through SWOT analysis, we can identify our strengths to

develop, and discover our weaknesses to overcome. Besides, we are reveal new opportunities

for profit and growth to pursue as well as find out threats to our firm early to prevent.

2.1. Strengths

Sonic can build on three important strengths:

Innovative product - The Sonic 1000 offers a combination of features that would

otherwise require customers to carry multiple devices, such as speedy, hands-free

dual-mode cell/Wi-Fi telecommunications capabilities, and digital video/music/TC

program storage/playback.

Security - Our PDA uses a Linux-based operating system that is less vulnerable to

hackers and other security threats that can result in stolen or corrupted data.

Pricing - Our product is priced lower than competing multifunction PDAs – none of

which offer the same bundle of features – which gives us an edge with price-

conscious customers.

2.2. Weaknesses

By waiting to enter the PDA market until considerable consolidation of competitors has

occurred, Sonic has learned from the successes and mistakes of others. Nonetheless, we have

two main weaknesses:

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Lack of brand awareness - Sonic has not yet established a brand or image in the

marketplace, whereas Palm, Apple and other rivals have strong brand recognition.

This is an area the company will address with promotion.

Heavier and thicker unit - To accommodate the multifunction features, the Sonic

1000 is slightly heavier and thicker than most competing models and offers far more

storage capacity than the average PDA. To counteract this weakness, Sonic will

emphasize our product’s benefits and value-added pricing, two important competitive

strengths.

2.3. Opportunities

Sonic can take advantage of two major market opportunities:

Increasing demand for multiple communication functions - The market for

multimedia, multifunction devices is growing much faster than the market for single–

use devices. Growth is accelerating as dual- mode capabilities become main stream,

giving customers the flexibility to make phone calls over cell or Internet connections.

PDAs and smart phones are already commonplace in public, work, in work and

educational settings; in fact, users who bought entry–level models are now trading up.

Lower technology costs – Better technology is now available at a lower cost than ever

before. Thus, Sonics can incorporate advanced features at a value – added price that

allows for reasonable profits.

2.4. Threats

When launching Sonic 1000, we realize that we are facing three major threats as

following:

Increased competition - More companies are offering devices with some but not all of

the features and benefits provided by the Sonic PDA. Therefore, Sonic’s marketing

communications must stress our clear differentiation and value-added pricing.

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Downward pressure on pricing - Increased competition and market-share strategies

are pushing PDA prices down. Still, our objective of seeking a 10% profit on second-

year sales of the original model is realistic, given the lower margins in the PDA

market.

Compressed product life cycle - PDAs have reached the maturity stage of their life

cycle more quickly than earlier technology products. Because of this compressed life

cycle, we plan to introduce a media-oriented second product during the year following

the Sonic 1000’s launch.

2.5. Market share

Because Sonic is a start-up company in PDA market, we have not yet occupied a large

number of market shares that helps PalmOne become the PDA market leader. So increasing

Sonic’ market share is our top task to reinforce our brand. In the first year, Sonic market

share is expected to be 3 percent of PDA markets in U.S

3. Competitor analysis

3.1. Market position

The emergence of new multifunction smart phones, including the Apple iPhone, has raised

competitive pressure. In the PDA market, Palm is the market leader with a 34 percent share.

The second is HP with 22 percent of the PDA market and targets business segments with its

numerous iPAQ Pocket PC devices. Subsequent to HP, Motorola, Apple, RIM, and Samsung

are dividing the US PDA market.

3.2. Strengths

These competitors take advantages of the leading company with excellent distribution,

high ability in brand awareness and given market share. These strengths have been built for a

long time and the present companies will continue to take advantages effectively.

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In addition, the products of these companies also have many competitive features. Firstly,

the quality of these products is quite stable because they are produced by experienced

companies with high technology, skillful staff, and a given period to correct and perfect the

products.

Many competing products are well-known and widely used such as Apple iPhone, Palm’s

smart phone, Motorola RAZR2 and BlackBerry.

3.3. Weaknesses

In comparison with Sonic PDA, the competitors have two weaknesses as following:

Do not have voice recognition system - that is modern and convenient technology and

potential market. Non company of above has this function.

The safety of mobile operating system (OS) - These companies are applying mobile

OS that is less safe than that of Sonic.

3.4. Market shares

Palm is the market leader with a 34 percent share. HP ranks second in PDA manufacturers

when it holds 22 percent of market share and targets business segments with its numerous

iPAQ Pocket PC devices. Beside that, Motorola, Apple, RIM, and Samsung are dividing the

US PDA market together. If accounting for smart phone market, RIM and Apple are the

leading with 27 percent of market share for each.

4. Climate

4.1. Political and legal environment

The political/legal environment affects every industry and consists of the laws and

regulations in effect in all markets that a company has a presence in. In order to make sure

they are operating legally, businesses have to obey these laws and regulations. Political

environments are affected by politicians who in return are influenced by changes and

challenges in the social-cultural environment (language, immigration…) or economic

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environment (currency exchange rate). The rules and regulations created by politicians have

significant influences on the cost of running businesses and the way products and services are

marketed.

Mobile market in general and PDA market in particular are also highly affected by the

political and legal environment. We consider carefully all the rules and regulations related to

the industry. Here are some major Federal laws affecting Sonic’s marketing:

1936. Robinson–Patman Act: Prohibits prices discrimination in sales to wholesalers,

retailers, or other producer; prohibits selling at unreasonably low prices to eliminate

competition.

Sonic will avoid troubles from its competition.

1972. Consumer Products Safety Act: Created the Consumer Products Safety

Commission, which has authority to specify safety standards for most products.

4.2. Economic environment

The U.S economy experienced from a 2008 crisis that was led by a derivatives market and

subprime mortgage crisis, and a declining dollar value. On December 1, 2008, the National

Bureau of Economic Research (NBER) declared that the U.S entered a recession in

December 2007, citing employment and production figures as well as the third quarter

decline in GDP. The recession did, however, lead to a reduction in record trade deficits,

which fell from $840 billion annually during the 2006-2008, to $500 billion in 2009, as well

as to higher personal savings rates, which jumped from a historic low of 1% in early 2008, to

nearly 5% in late 2009. The unemployment rate rose to 10.6% in 2010.

The status of the economy has highly influenced on Sonic market. Due to the recession,

consumers tend to spend more cautiously. They will prefer using their existing mobile phone

to buying a new PDA model. The company must face the strict spending from their targeted

customers.

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However, in the recession, many U.S companies try to find effective ways to reduce paper

work and increase productivity. This is a good opportunity for Sonic. A PDA product like

Sonic 1000 or Sonic 2000 with striking functions is significantly useful for the studying and

working purposes so it will attract more customers.

4.3. Social and cultural environment

Social and cultural environment play an important role in consumer’s buying behavior

toward PDA. The U.S has been well-known as the country having the most modern

technology particularly in mobile technology with famous names such as Palm, HP, Apple

and so on. Therefore, the U.S citizens specially youths (14 – 30 years old) are familiar with

high technology and sensitive with a competitive PDA like Sonic 1000/2000. This makes

Sonic advantageous in entering the market.

The cultural factor can be narrowed by subcultures. The targeted customers in each

segments of Sonic market have many factors in common, for example, in the segment of

students, this group includes young, active people and has acquaintance with new technology.

They also want a smart phone that has multi functions for communication and relaxing

purposes. On the other hand, the segment of professionals consist of matures who are on the

go with their works and want many modern features in a PDA such as wi-fi, email, voice

recognition, organize time table and so on.

The second factor in social and cultural environment is social classes. The members who

come from same social classes tend to behave alike other members in the class. There is 7

social classes in the US including: (1) lower lowers, (2) upper lowers, (3) working class, (4)

middle class, (5) upper middle, (6) lower uppers, and (7) upper uppers (source: Kotler and

Keller). The targeted customers of Sonic are from middle to upper class, who would be in

favor of buying the PDA. The class members will copy what the others are doing. If an

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influenced person in the upper uppers is having a PDA, the others will also tend to own a

PDA

4.4. Technological environment

The U.S has the most successful innovators in the technology area generally and the

mobile technology area particularly. Platform of PDA bases on the developing of mobile

technology and takes many advantages from this industry:

Mobile operating system

There are widespread OS for mobile such as Symbian OS, Blackberry OS, Windows

mobile, Apple iOS, Google Android, Maemo and other embedded Linux distributions. Such

systems can be installed on many different phone models, they allow some level of

application to perform multifunction and provide a true file system with folder hierarchy and

a file manager utility. Our products apply Linux OS that can prevent attack from hackers and

viruses.

Data transmitting

The third generation of technology known as 3G was launched in 2001 and quickly

become popular technology in the mobile industry. The revolution in data transmission has

enhanced the ability to access data networks of mobile phones and PDAs.

Due to the 3G technology, consumers can experience more functions such as phone, media

streaming and more applications for instance email, surfing web, organizing contacts and

timetable interestingly through only a PDA.

Voice recognition

Voice recognition is a modern technology booming and the overall market for voice-

recognition technology is accounted for $1 billion for the first time in 2006, a 100 percent

increase in two years only according to Opus Research.

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By applying this technology, Sonic 1000 creates a significantly distinctive feature

compared to other competing products and makes our customers more comfortable when

using the product.

Other technologies

Wireless fidelity (Wi-Fi) - a type of wireless local area network technology that is

available widely in developed countries, enables mobiles to connect to the Internet

elsewhere to keep in touch with their family and work on the go.

Bluetooth - connects mobile devices wirelessly

5. Product offerings

The Sonic PDA 1000 offers the following standard features:

Voice recognition for hands-free commands and communication

Built-in cell phone functionality

Wireless Web access and e-mail capabilities

MP3 music downloading and player capabilities

Full organization and communication functions, including calendar, address book,

memo pad, Internet browser, e-mail program, and text and instant messaging

programs

Connectors to accommodate all palm One-compatible peripherals

6. Distribution

A company’s business will not be successful if it only develops and innovates its products

and services or looks for target markets without paying attention on how its business is going

to distribute and sell its products to potential consumers. So we are looking for potential

distributors to enhance sales for our first product, Sonic 1000.

Sonic products will be distributed via a network of retail stores and online stores in the top

50 U.S markets. We choose some of the most important channel partners as following:

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Office supply superstores: Our partner will be Office Depot and Staples. We are going

to put our advertisement of Sonic 1000 on their website. When consumers assess their

website, they can see the image of this product with its full feature details to consider

whether they want to buy. When they order, we will deliver immediately with free of

delivery charge. Office Depot and Staples also distributes Sonic products in stores and

in catalogs.

Computer stores: CompUSA and independent computer retailers are one of our choices

in distribution strategy. If customers decide to choose this distribution channel, stores’

staff can introduce and instruct our products’ functions so that customers can make best

choice for purchasing the product.

Electronic specialty stores: Best Buy is our choice for product distribution channel.

This is an useful channel because when a person wants to buy an electronic product, he

or she often comes directly to electronic stores in which he or she will have many

choices. Sonic 1000 is an electronic device, so in order to encourage customer to buy

this product, we will choose distribution channel through Best Buy. This channel also

helps Sonic reduce distribution costs. In the case consumers are busy, they cannot go to

the store, and then they can make purchasing choices via Best Buy’s website or its

media advertising.

Online retailers: Amazon.com is a well-known website. It allows us to place the

product advertisement on its home page with promotional fee when Sonic starts to

penetrate into PDA market.

Although our distribution channels are initially restricted in the United State, we plan to

expand our market into Canada and other countries depending on consumer demand. To

support our channel partners, we will provide Sonic products along with demonstration

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templates, detailed handouts, full-color photos and illustration to display product features and

design.

III. MARKET SEGMENTATION

1. Consumer market segmentation

1.1. Geographic segmentation

Initially, the Sonic PDAs are only distributed in the U.S, with appropriate sales promotion

support. Later, we plan to expand in to Canada and beyond

1.2. Demographic segmentation

Age and life cycle: PDA is modern electronic equipment so it is suitable for young

people. They tend to pay attention on such modern equipment and use PDA without

difficulties.

Income: The retail price of Sonic PDA 1000 is $350 and more than $350 for Sonic

PDA 2000. We will consider the average income of the targeted consumers.

Social class: There are 7 social classes in the US society, we classify and select suitable

social classes based on the income, hobby, desire, and other common features related to

buying and using Sonic PDA.

1.3. Behavioral segmentation

Sonic PDAs bring many benefits to the consumers. The company is considering what the

most attractive benefit to each segment is. For example, the benefits to students include

information record while on the go, many functions performance without carrying multiple

gadgets and style and individuality expression. By considering these benefits, we can reply

with many useful functions of the PDA.

2. Business market segmentation

2.1. Demographic segmentation

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Industry: we are seeking which industries could improve their efficiency by applying

PDA in the work.

Company size: Sonic PDAs can help businessmen and businesswomen enhance their

effectiveness. However, the price of the product is not very low and the function of that

is compatible with completing works. As a result, a small company can’t afford to

apply Sonic PDAs to its work. Therefore we plan to focus on the middle-to-large sized

corporations.

2.2. Customer type

The major business target is mid-to-large sized corporations that want to help their

managers and employees stay in touch and input or access critical data on the go. This

segment consists of companies with more than $25million in annual sales and more

than 100 employees.

The secondary business target is entrepreneurs and small-business owners. We are also

targeting medical users who want to reduce paperwork and update or access patients’

medical records.

2.3. Buyer behavior

Consumers often do a lot of brand switching. They can get experience from using the

previous product and choose to buy a newer product of the same brand without much

evaluation, and then evaluate that product during consumption. Brand switching occurs for

the sake of variety, rather than dissatisfaction.

Because of brand unawareness, we will encourage variety seeking by offering lower

prices, deals, coupons and advertising that tries to break the customers’ purchase and

consumption cycle and presents reasons for trying something new.

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IV. MARKETING STRATEGIES

Our marketing strategy is designed to support the company to create a successful entrance

to launch new PDA in a competitive market. We plan to build brand awareness and image

and to emphasize our unique product with high quality and low price. Using marketing mix

as well as service and internal marketing, we will educate our target segment about features

and benefits of our new PDA and give an impulse to first-time users to buy PDA as well as to

encourage PDA owners to buy the newer and more innovated products. We will use

television advertising to reach our target segments. However, because of the start-up budget

constraints, television advertising is limited so we also have to use radio, online and other

media to reach our target segment in a creative and effective way.

1. Mission

Sonic’s mission is to help our customers to organize their works and live better as well as

to enjoy the life throughout the technology advancements.

2. Objectives

We have set aggressive but achievable objectives for the first and second years of market

entry.

First-year objectives: We are targeting for a 3 percent share of the U.S PDA market

through unit sales volume of 240,000.

Second-year objectives: Our second-year objective is to achieve break-even on the

Sonic 1000 and launch our second model.

3. Target market

For individual market, the primary target market is middle- to-upper income professionals

who need one portable device to support their busy schedules and communicate with family,

friends and colleagues. These consumers prefer lower-priced PDAs with expandable memory

and functionality. The second targeted consumer is college and graduate students who want

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to organize their school work, and personal schedules, input and access information at any

time from anywhere, and stay in touch with family and friends.

For business market, the target market is mid-to-large sized corporations that want to help

their staff stay in touch and input or access critical data on the go. These purchasers want

durable, powerful, easy-to-use PDAs that can operate customized business applications. The

secondary business target consists of entrepreneurs and small business owners who need to

stay in touch and organize their busy schedules all the times. A possible tertiary business

target is medical users, doctors, and nurses who want to reduce paperwork and fast update or

access patients’ medical records.

4. The product positioning

We are positioning our first product, Sonic 1000, with the combination of the most

superior features such as more attractive design, faster speed, better quality and longer life to

make this product become the most versatile, convenient and enjoyable model for personal

and professional use. Other products of Sonic’s competitors do not have voice recognition

feature, hence we will concentrate on this unique feature of Sonic 1000, which is one of

major elements to differentiate Sonic from its rivals. Besides, we are going to develop

portability function that is very important to the target market, so that everyone can access

information and communication anywhere, anytime.

5. Marketing Mix

5.1. Product

a. Brand name and logo:

Since brands are realized to be very important for business survival, companies have to

create their own brands that are special and different from their competitors, protect unique

features or aspects of goods to help consumers find out which firm provides best products or

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services, which brands satisfy their needs and which ones do not. Sonic is no exception. We

established an own brand to make a difference between itself and its rivals.

We have created really special brand name and logo to differentiate our brand from others

because Sonic brand name and logo are usually displayed on its products and packaging.

Sonic logo (Figure 1) is designed as the yellow thunderbolt.

Figure 1: Sonic Logo

The brand name and logo’s specialty and prominence will consolidate Sonic brand in

marketing campaign. On the other hand, they help to establish brand equity and help

customers understand what the brand is and what makes the brand special compared to other

brands with the same type of products. Through that, marketers can sum up and explain the

intention of a marketing program.

Brand name is the first factor that is noticed and helps to affirm the brand existence.

Understanding this issue, we aim to build a strong brand by designing an impressive logo that

covers full meanings of our PDA products.

Sonic brand name is a memorable, meaningful, adaptable and protectable name. In English

dictionary, the term “Sonic” means sound. Sonic brand name is the strategic use of sound to

develop real auditory features of the brand. Conventional applications relating to the sound

such as features of voice recognition, music downloading and player, mobile phone functions

and so on appear in Sonic’s first product, Sonic 1000. Sonic brand name itself is able to help

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consumers to associate products referring to sound. This is the success of Sonic founder when

choosing the brand name.

b. Brand promise

When Sonic is established, it promises to provide consumers with best-quality products as

well as fastest customer support service.

People do not care what Sonic brand promise is, the new PDA can be manufactured with

lowest price or creative design, good quality or perfect customer support service. People care

about how Sonic implements that promise. Every aspect of marketing of Sonic’s new PDA

has to deliver Sonic brand promise to consumers.

c. Quality

We use ingredient brands to tout Linux-based operating system to make our products more

secure than others based on some other operating systems because ingredient brands try to

create enough awareness and preference for products, so customers will not purchase a “host”

product which does not involve the ingredient. In order to succeed, we will build a separate

identity to differentiate from other competitors.

There are several different operating systems for PDA buyers to choose such as Palm,

Microsoft, Symbian, and Linux. After considering carefully, we decide to tout the Linux-

based operating system for its products due to some reasons. As a start-up company, Sonic’s

profit is still not high yet. So the Linux-based system is a suitable choice because its

installation cost is low. Besides, another important factor to make Sonic license this system is

security factor. Compared to other systems, Linux is less vulnerable to attack by hacker and

viruses. Linux-based system can help users avoid other security threats that lead to stolen and

corrupted data. This system is also easy to use and install in the device.

d. Scope of product line

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After building our Sonic brand by launching Sonic 1000, we plan to introduce Sonic All

Media 2000, emphasizing multimedia communication, networking and entertainment

functions, especially voice recognition feature that makes Sonic 1000 succeed. We hope to

reduce Sonic 1000 price when Sonic 2000 is completed and sold to consumers.

When Sonic provides the second product, we will plan to retain the Sonic name due to

advantage of brand extension.

Currently Sonic brand reinforcement is necessary and urgent in order for people not only

in United State but also in the world to be able to know about this brand. The first product

names Sonic 1000. The second product that Sonic plan to launch following the appearance of

Sonic 1000 is Sonic 2000 with more superior features to attract consumers in competitive

markets. The objective of keeping Sonic name for its second product is to expand the brand

inside and outside of the country. Based on brand extension, we can facilitate new product

acceptance. Customers can be convinced easily to use Sonic new product relied on

information that they have already known about the brand when the first one is introduced

and the evaluation of relevant information to the second one. It is also easier to encourage

retailers to promote and develop Sonic brand extension because of increasing consumer

demand. Besides, retaining the Sonic name for its second product can help to deduct costs of

introductory launch campaign in the U.S marketplace.

Moreover, since the brand reinforcement by maintaining Sonic name, Sonic can clear the

meaning of its brand and major brand values, and enhance customer loyalty

e. Warranty

Because Sonic 1000 is the first model of the company, we expect to attract consumers by

selling this product along with one-year warranty. As our brand promise, we always supply

best customer support service to solve their dissatisfactions. Within one year since customers

buy Sonic 1000, if this product has any problem, we will come and fix it immediately. When

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the warranty is expired, customers have to pay fee charge for repairing but this fee will not be

high. We usually want to build consumer loyalty.

f. Packaging and labeling

Sonic brand and logo will be displayed on the product and its packaging. The packaging

will prevent the product from damage in transit and incorporate security functions, hence the

boxes can be displayed in store shelves and store showcases. Well-designed packages may

improve brand equity and drive sales. Therefore we will design the packaging to implement

lots of sales tasks such as attracting attention, describing our product’s features, creating

customers’ confidence and creating a favorable overall impression (Figure 2).

Figure 2: Sonic packaging

The use of labeling is to reinforce Sonic brand image by listing important and special

product specifications to indicate how advanced technology of PDA products can deliver to

consumers on the brand promise. This helps channel partners compare between Sonic

products and competing models so that they can persuade customers to buy the products. This

also helps consumers make the best choice of purchasing in the case Sonic sells directly to

industrial customers. The labeling promote the product by using attractive graphics and

provide enough information to describe the product.

Using packaging and labeling to support Sonic brand image includes an enlarged photo or

illustration of PDA highlighting main competitively-superior functions and its benefits.

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5.2. Pricing

a. Pricing objective:

The first step in conducting the marketing plan for our first product is the selection of

pricing objective. Our primary pricing objective we would like to obtain is to maximize

market share. PalmOne’s products are holding the greatest part of PDA market share in a

maturing market. Therefore we want to manufacture a product with specific features that

none of companies has at lowest price to gain market share from PalmOne. We believe that if

we launch a higher sales volume, it will lead to lower unit costs and higher long-term profit.

PDA market is price sensitive, so we will set our product’s price as low as possible with good

quality to build our brand and maintain consumer trust in a competitive market.

To adapt the market-penetration pricing strategy, we set a low price to stimulate market

growth and reduce production cost. We also cut intermediate to decrease distribution cost.

If we fail to reach a high market share, we will not be able to effectively compete with

other rivals who penetrated into the PDA market long time ago and lower unit costs via

higher volume. Many people suppose that an appropriate pricing objective is survival.

However Sonic has not been in trouble with survival yet. Sonic also does not need to

maximize current profit at this time. We accept to get losses to maximum market share to

build Sonic’s strong brand but we try to keep losses to less than $10 million.

b. List price:

We will launch Sonic 1000 at $250 wholesale and $350 estimated retail price per unit. We

hope to lower Sonic 1000 price when we manufacture new product, Sonic 2000, with more

superior and distinctive features and plan to sell it at $350 wholesale. Simultaneously, we are

going to write exciting software that can be installed into our products to attract more

customers and desirable channel partners and take market share from PalmOne.

c. Price adaptations:

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To convince consumer to try our products, will include price adaptations in the marketing

plan to reinforce our brand and attract more consumers. Price adaptations can be cash

discounts for resellers who have purchased PDAs in order to encourage early or on-time

payment of invoices. Besides we can consider providing our distributors with allowances to

encourage them to stock new PDA products. On the other hand, we can use promotional

pricing on a limited basis to stimulate early purchases. Promotional pricing strategy is often a

zero-sum game.

To complete sale promotion strategy, we plan to sell our products and add a free or low-

cost warranty or service contract. In first step to implement this strategy, we will provide free

one-year warranty for ones who buy our PDA products. We also offer cash rebates to

encourage purchase of manufacturers’ products during a specific period. This offering can

help to clear inventories without cutting the stated list price.

d. Price sensitivity

PDA consumers are likely to be fairly price sensitive because there are many well-known

brands providing a lot of PDA products that have already existed before Sonic penetrated into

PDA market.

Along with price sensitivity, consumers’ demand is relatively elastic. There are more

buyers who are willing to purchase a product if its price is substantially lower. Therefore,

Sonic has to set a price at low end of its acceptable range to perform its market penetration

plan. Setting our introductory price will be supported by other parts of marketing mix such as

mentioning the price or touting the value in advertisement and choosing distributors to be

suitable with its pricing. Demand will be elastic to a change in price; it forces sellers to lower

the price to have more competitive advantages. PDA purchasers can choose between models

from different brands relied on different operating systems such as systems of Palm,

Microsoft, Symbian and Linux at different prices that are suitable with their income.

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5.3. Distribution

a. Channel levels:

Because Sonic brand is new, it will not be successful in selling directly to final consumers

at zero-level channel.

In consumer marketing channels, Sonic will use a few intermediaries to promote its

product. This marketing plan uses a one-level channel and a two-level channel to generate

awareness and demand for its products. The one-level channel consists of one selling

intermediary only such as retailer to distribute Sonic product to consumers. In two-level

channel, a wholesaler and a retailer are two intermediaries used as distribution channels. Here

we will sell our products to the wholesaler and then the wholesaler will distribute it to the

retailer; finally the retailer will sell it to targeted consumers.

Apart from consumer marketing channels, Sonic also penetrates into industrial marketing

channels using business-to-business (B2B) marketing to expand its brand. In such channels,

we use a zero-level channel and one-level channel to promote our products. We can sell to

industrial consumers directly based on its sale force or can distribute its product to industrial

consumers through industrial distributors.

b. Channel members:

To be successful, we to decide on the number of distributions to use at each channel level.

According to current market situation, we plan for selective distribution, because – as a new

firm entering an established product category - we can not sign up all distributors as

expected. We are looking for suitable distributors who are willing to carry a particular

product. It is not necessary to worry about too many outlets to promote the products.

Selective distribution involves Sonic a limited number of outlets in PDA market to sell its

products. We may choose the most appropriate or best-performing distributors and focus its

effort on them.

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Selective distribution is commonly used with products in which customers are willing to

shop around and manufacturers would like to have a large geographical spread. Sonic PDAs

are such kind of products. When we decides to adopt selective strategy, we will choose a

distributor who has experience of handling similar products credible and is well-known by

targeted consumers. At the beginning period of market-penetration strategy, we target to

motivate retail support such as retailer promotional support. Besides, customer service also

plays an important role for brand awareness expansion.

Our distribution channel is to use selective distribution, marketing Sonic PDAs through

well-known stores and online retailers. During the first year, we will increase the number of

channel partners until we cover almost major U.S markets and the product is introduced in

the major electronics catalogs and large Web sites. In addition, we will investigate

distribution through cell-phone outlets maintained by major carriers such as Verizon

Wireless, T-mobile or AT&T. We will provide demonstration products, detailed specification

handouts and full-color photos and displays featuring the products to support channel

partners. We plan to arrange special payment terms for retailers that place volume orders.

Besides, we need a direct sales force to sell our products. Sonic 1000 PDA is our first

product so we need to have a direct sales force which is well-trained about the technology

and the way of using the product. In addition, we can also sell our products through agents

and other outside representatives. Our direct sales force can guide the retailers to familiarize

with Sonic PDA’s unique features and benefits so that they can understand and guides the

PDA’s use to customers fast and easily. Through the agents and other outside representatives,

we can quickly reinforce our brand awareness and create our positions in the target markets

so that there are more consumers knowing about our PDA and trying to use it and buying it.

c. Market coverage

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Sonic is a newly-formed company. So its brand is still unaware. Sonic has not created

brand loyalty yet. Applying push strategy makes use of Sonic sales force and trade promotion

activities to create customer demand for its new product. Because of broadly unawareness of

its brand, consumers often make their brand choices in response to displays in the stores in

which they come to buy a PDA product. We concentrate on pushing its product via

distribution channels. We promote our product to wholesalers, the wholesalers promote it to

retailers and the retailers promote it to customers. In this strategy, the retailers or resellers can

be required to display, demonstrate and offer discounts to sell the product. For new product,

we try to sell directly to consumers and decrease unnecessary distribution channels to reduce

cost.

d. Criteria for evaluating distributors

Because Sonic brand is still new in PDA market, our essential distributors are wholesalers.

They play an important role in our distribution strategy. They pay less attention to promotion,

atmosphere, and location because they are dealing with business customers rather than final

consumers. Wholesale transactions are usually larger than retail transactions, and wholesalers

usually cover a larger trade area than retailers. In addition, wholesalers are more efficient in

performing some functions. Firstly, wholesalers’ sales forces help manufacturers reach small

business customers at a relatively low cost. They have more contacts, and buyers often trust

them more than they trust a distant manufacturer. Secondly, wholesalers are able to select

items and build the assortments of their customers need, save them considerable work.

Thirdly, wholesalers hold inventories, thereby reduce inventory costs and risks for suppliers

and customers. Fourthly, wholesalers can provide buyers with quicker delivery because they

are closer to the buyers. Fifthly, wholesalers supply information to the suppliers and

customers regarding competitors’ activities, new products, pricing developments and so on.

Finally, wholesalers often help retailers improve their operations by training sales clerks,

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helping with store layouts and displays, and setting up accounting and inventory-control

systems. They may help industrial customers by offering technical services. Therefore, their

actions will directly affect customer awareness of Sonic PDAs.

e. Market-logistics:

Order processing: We try to shorten the order-to-payment cycle-that is, the elapsed

time between an order’s receipt, delivery, and payment. This cycle has many steps,

including order transmission by the salesperson, order entry and customer credit check,

inventory and production scheduling, order and invoice shipment, and receipt of

payment. The longer this cycle takes, the lower customer’s satisfaction is and the lower

the company’s profits are. Therefore, Sonic must consider to operate information

system that checks the customer’s credit standing upon receipt of an order and

determines whether and where the items are in stock. The computers issues of an order

to ship, bills to customer, updates the inventory records, sends a production order for

new stock, and relays the message back to the representative that the customer’s order

is on its ways-all in less than 15 seconds.

Warehousing: We consider the number of inventory stocking location so that we can

store totally finished goods until they are sold. In addition, we centralize our inventory

in one place and use fast transportation to fill orders because goods can be delivered to

customers more quickly but it also means higher warehousing and inventory costs.

Inventory: Sonic’s managers will consider the inventory cost so that the sales and

profits can offset with inventory costs. If the company carries larger inventories and

promising faster order fulfillment times, the managers will need to know how much

sales and profits are going to increase as the result of it, and then make a decision.

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Transportation: Sonic’s managers choose shippers depending on some criteria as speed,

frequency, dependability, capability, availability, traceability, and cost in order to

ensure the products’ state and on-time delivery performance.

5.4. Promotion

Free gifts, discounted prices, coupons offering: In Sonic 1000 introductory campaign,

we provide customers with sales promotion to obtain market attention and encourage

purchasing powers by offering free gifts such as leather carry-cases for people who are the

first ones to buy this product in a limited period. We will also offer discount for our software

which customers want to buy along with Sonic 1000. We need to step up sales promotion to

reinforce our brand. Apart from the form of offering free gifts, we will give coupons so that

customers can purchase other products of Sonic. Besides, we will provide free delivery

service if customers buy our products online.

Advertising: We attain its goal to create brand awareness and knowledge of its new

products. Moreover, we also aim to create liking, preference, conviction, and purchase of its

products. Then we can stimulate customers to repeat purchase of products as well as to

convince current purchasers that they made the right choice of using its products.

Consumer and trade sales promotion: We are continuing consumer and trade sales

promotion after the new product has appeared in the market for six months. The reason is that

after the new product has been in the market for six months, it will be in the growth period of

the product cycle life. In this period, sale promotion is especially important to increase the

sales of the products because sale promotion offers an incentive for customers to buy

products. In fact, consumer promotion includes samples, coupons, cash refund offers, prices

off, premiums, prizes, patronage rewards, free trials, warranties, tie-in promotions, cross-

promotions, point-of-purchase displays, and demonstrations and trade promotions consists of

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prices off, advertising and display allowances, and free goods. They will stimulate to try to

use the products and buy the products.

We organize a sponsor event that would be appropriate for the new product campaign. For

this event, sponsorship offers sustained exposure to Sonic’s brand, a necessary condition to

build brand recognition and enhance brand recall. For example, sponsorship can invest in the

stores which sell Sonic 1000 to attract customers to see and try Sonic products and form the

awareness of Sonic brand. Sponsorship also can exposure Sonic products in Technology

product exhibitions.

Websites: We design our own website that embodies or expresses Sonic purpose,

history, product, and vision. The website will be designed in an attractive way so it can attract

customers from the first viewing and encourage customers to repeat visits afterwards.

Internet-specific ads and videos: With user-generated content sites such as YouTube,

MySpace Video, and Google Video, Sonic marketers can upload ads and videos to be shared

virally by millions of people. These ads and videos may be introduction of new product,

guidelines to use the products, information about sales promotions and so on.

Display ads: Sonic can pay to place display ads or banner ads which are small,

rectangular boxes containing text and perhaps pictures in relevant Web sites so that when

customers travel the Web to find information related to PDAs, they can have opportunities to

reach and see Sonic products. The larger the audience, the more the placement costs.

Word-of-mouth: takes may forms online or offline. Word-of-mouth marketing has 3

characteristics as below:

- Credible: people trust others they know and respect, word-of-mouth can be highly

influential.

- Personal: word-of-mouth can be a very intimate dialogue that reflects personal facts,

opinions, and experiences.

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- Timely: it occurs when people want it and when they are most interested, and it often

follows noteworthy or meaningful events or experiences.

Therefore, we will use word-of-mouth to generate brand awareness and encourage

potential buyers to visit retailers to see the new PDA in person. In fact, Sonic can use opinion

leaders as the way to stimulate positive word-of-mouth communication in the targeted

consumers and business market segments.

6. Marketing research

PDA market is entering maturity stage of its evolution. Multifunctional cell phones, email

devices and wireless communication devices are increasingly popular. So there are more and

more competitors who are increasingly intense even as technology evolves, industry

consolidation continues and pricing pressures squeeze profitability. Heavy competition leads

to market fragmentation and, with the emergence of new attributes, market consolidation.

We try to reveal and focus on the most highly valued features and benefits of our product

to improve our brand image and create customer loyalty. We continue to measure and

analysis customers’ attitudes and performance toward the Sonic brand in comparison with

other competing brands. Simultaneously, we use customer satisfaction studies to gauge

market reaction.

V. FINANCIALS

The first year’s total sales revenue for the Sonic 1000 is projected at $60 million, with an

average wholesale price of $250 per unit and the variable cost per unit of $150 on unit sales

volume of 240,000. On a quarterly basis, we project sales of $8 million, $12 million, $11

million, and $29 million, based on cumulatively higher business sales and a spike in year-end

consumer PDA sales.

Heavy investments in product development, promotion, and channel support are expected

to contribute to a first-year loss of up to $10 million on the initial PDA model. However,

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longer term projections call for achieving 10% profit on the second-year sales of the original

PDA model, a realistic profit level given the lower margins in the PDA market. Break-even

calculation indicates that Sonic will begin to profit from the sale of the initial PDA product

once sales volume exceeds 267,500 early in the product’s second year. At that time, we plan

to lower the wholesale price of the first model – in line with standard industry practice – to

lower the retail price and increase sales volume.

Our break-even analysis of Sonic’s first PDA product assumes:

Wholesale revenue of $250 per unit

Variable cost of $150 per unit

Estimated first-year fixed cost of $26,750,000 (including investments in product

development and design, manufacturing setup and overhead, marketing, and other

fixed costs)

Based on these assumptions, the break-even point is:

500,267150250

000,750,26

units

Projections call for selling 240,000 units in the introductory year; therefore, we will reach

the break-even point early in the second year of sales, just when we will be lowering the

wholesale price as we launch the higher-end second product in our line.

VI. CONTROLS

We are establishing controls to cover the implementation and the organization of our

marketing activities.

1. Implementation

We are planning tight control measurement to monitor quality of the product and customer

service satisfaction with our products and services carefully and closely. This will enable us

to respond and react very quickly in correcting any issues that may happen. We also have

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measurement to monitor other early warning signals that derive from the plan including

monthly sales (by segment and channel) and monthly expenses.

In order to monitor and control marketing activities, Sonic can use four types of needed

marketing controls. They are annual-plan control, profitability control, efficiency control, and

strategic control. Exhibit 2 below describes clearly types of its control, its responsibilities, its

purposes and its approaches.

Exhibit 2: Types of Marketing control

STT Type of

Control

Prime

Responsibility

Purpose of

Control Approaches

1 Annual-plan

control

Top management

Middle management

To examine

whether the

planned results are

being achieved

Sales analysis

Market share analysis

Sales-to-expense ratios

Financial analysis

Market-based scorecard analysis

2 Profitability

control Marketing controller

To examine where

the company is

making and losing

money

Profitability by:

Product

Territory

Customer

Segment

Trade channel

3Order size

3 Efficiency

control

Line and staff

management

Marketing control

To evaluate and

improve the

spending efficiency

and impact of

marketing

expenditures

Efficiency of:

Sales force

Advertising

Sales promotion

Distribution

4 Strategic

control

Top manager

Marketing auditor

To examine

whether the

company is

Marketing effectiveness rating

instrument

Marketing audit

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pursuing its best

opportunities with

respect to markets,

products, and

channels

Marketing excellence review

Company ethical and social

responsibility review

In fact, we use three marketing metrics to determine marketing effectiveness and

efficiency, including financial results, external factors and internal factors:

Financial results (Exhibit 3):

Results

(in $million) Standard year First year Second year Third year

Total sale

Total cost

Manufacturing

Sales & Marketing

R&D

Administration

Net profit

Profit per total sale (%)

Total properties

Properties (% total sale)

Profit per properties

Sonic will determine marketing effectiveness and efficiency through the figures in the

financial report. The profit is the key index to measure the marketing results. The marketing

results are better, the profit is higher.

External factors

The following elements (Exhibit 4) are the outside factors coming from its customers and

partners.

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Awareness The level of popularity of Sonic brand in the customers’ mind

Market share

(Volume or value)

The percentage of market share of Sonic in the PDA market

Relative price The price of Sonic’s product in comparison with that of

competitor’s products such as Palm, HP, Apple

Number of complaints The level of dissatisfaction of targeted customers on Sonic PDAs.

Lower is better

Consumer satisfaction The level of satisfaction of targeted customers on Sonic PDAs.

Higher is better

Distribution/ availability The coverage of Sonic’s product on the market. Larger is better

Total number of

customers

Better marketing results, higher number of customers

Perceived quality/

esteem

Higher is better

Loyalty/ retention Higher is better

Internal factors (Exhibit 5):

Awareness of goals

(Goals of market share,

revenue, profit…)

From the employers of the company. Clearer is better

Commitment to goals Try to achieve the goals of all staffs. Stronger is better

Active innovation

support Higher is better

Resource adequacy Personnel, finance, technology, manufacturing

Staffing/ skill level

(Negotiation,

communication, sales,

analyzing… skills)

More skilful is better

Desire to learn Higher is better

Willingness to change Ability to react with the changes of the market. Higher is better

Freedom to fail Encourage staffs to carry out new methods, new thoughts. But the

level must be reasonable. Not too strict and free.

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Autonomy Ability to make decision in each class in the company. The level

of the autonomy should be considered to raise the sense of

initiative of each employer.

Relative employee

satisfaction An important basic factor to all above factor. Higher is better.

These are the inside factors coming from its managers and staffs who are internal

customers. If these factors are good, the marketing effectiveness and efficiency will be better

because these factors are the deciding elements.

2. Marketing organization

As chief marketing officer, Jane Melody takes overall responsibility for all marketing

activities of the company. She is in charge of marketing strategy and direction. She also

directs channel sales and all marketing communication and promotion activities. Reporting to

Jan Melody in the marketing organization are:

Tony Calella, sale manager, responsible for channel sales, sales training for retail

partner, and sales collateral. Reporting to Tony Calella are two regional sales, Tiffany

Thite and Viktor Chenkov.

Amelia Howard, advertising manager, responsible for supervising both message

development and media selection by the advertising agency. Reporting to Amelia

Howard is Carlos Dunn, advertising analyst.

Ron Hall, promotion manager, responsible for trade and consumer sales promotion

campaigns. Reporting to Ron Hall is Kate Mc Connell, promotion analyst.

The structure of the eight-person marketing organization is described clearly through

Exhibit 6 below.

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Exhibit 6: Sonic’s Marketing Organization

We have employed Worldwide Marketing to handle national sale campaigns, and public

efforts. In addition, the agency will prepare trade and consumer sales promotions to support

its product introduction campaign.

VII. SHORT AND LONG-TERM PROJECTIONS

Sonic has prepared a contingency plan to implement in case the PDA market begins to

experience severe downward pricing pressure which may be caused when a major competitor

initiates a price war or develops a lower cost technology. It also may be the result of

appearance of cell phone combinations which become more popular than PDA products. Our

contingency plan requires introducing a significant but short-term price promotion such as a

rebate or a discount to remain competitiveness while exploring the price sensitivity of

different targeted segments. Based on the results of this short-term promotion, we will be able

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to take long-term steps to reinforce our brand, defend our market share in PDA markets, and

retain the acceptable level of profitability.

In general, many companies prefer to sell to neighboring countries because they

understand these countries better and have ability to control their cost more effectively. In

fact, Canada and Mexico are the two largest U.S export markets. In the next year, we plan to

export our products to Canada. As a start-up company, Sonic can use indirect or direct

exporting to enter the Canadian market next year and other markets in future.

Indirect exporting is the case when Sonic works through independent intermediaries to

introduce its products to Canadian and other markets. We can sell our products to domestic-

based export merchants and then these merchants sell the products abroad. It also can pay

commissions for domestic-based export agents who seek and negotiate foreign purchases

Sonic’s products. Indirect exporting has two advantages:

First advantage is less investment: The firm does not have to develop an export

department, an overseas sales force, or a set of international contacts.

Second advantage is less risk: Because international marketing intermediaries bring

know-how and services to the relationship, the seller will make fewer mistakes.

Direct exporting: Another way for us to launch our products in foreign market is to carry

on direct exporting with greater investment and risk but potential return in several ways:

Domestic-based export department or division: This might evolve from a purely service

function into a self-contained export department operating as its own profit center.

Overseas sales branch or subsidiary: The sales branch handles sales and distribution

and perhaps warehousing and promotion as well. It often serves as a display and

customer-service center.

Traveling export sales representatives: Home-based sale representatives travel abroad

to find business.

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Foreign-based distributors or argents: These distributors and agents can hold limited

or exclusive rights to represent the company in that country.

The choices mentioned above are appropriate ways that Sonic can use to approach the

Canada and other foreign markets. We can not issue a license to a foreign company to use a

manufacturing process, trademark, patent, trade secret, or other item of value for a fee or

royalty because licensing has potential disadvantages. Sonic has less control over the licensee

than it does over its own production and sales facilities. And if the licensee is very successful,

the firm has given up profits, and if and when the contract ends, the company might find it

has created a competitor. Sonic also can not choose to join with local investor to create a joint

venture company in which they share ownership and control because in the long run, there

will may have conflict between the company and partner about the strategy to operate the

joint venture company. Moreover, Sonic cannot directly invest to own a foreign-based

assembly or manufacturing facilities because the firm will have to exposure a large

investment to risks such as blocked or devalued currencies, worsening markets or

expropriation that in fact, with a start-up company like Sonic, is not feasible.

We will start marketing our PDAs in other countries with straight extension strategy. With

this product strategy, we will introduce our products in the foreign market without any

change. This is an appropriate strategy for Sonic because Sonic is aware of a brand with

unique PDA with voice recognition for hands-free operation which has not been owned in

any PDA of other brands. Consumers in foreign countries will be more attracted by Sonic

products which have the same origin and same features and functions as products sold in the

U.S Therefore, the sales revenues will reach the potential point as expected.

In several years later, when Sonic PDAs are assembled in Mexico through a contractual

arrangement with a local factory but some of components are made in Asia, the country-of-

origin perceptions will be likely to affect Sonic marketing strategy. The main reason is that

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buyers hold distinct attitudes and beliefs about brands or products from different countries.

These country-of-origin perceptions can effect consumer decision making. In this case, when

the consumers knows that some components are made in Asia, for example, in China,

although the remaining components are made in Mexico, they still think that the Sonic

products are cheap, and they will satisfy with lower selling price. In this case, we has to

conduct a marketing strategy to confirm that all components of our PDAs have the same

quality although they can be made in different parts of the world, and the company will have

the same warranty for products sold all over the world.

Sonic company can be organized in a customer-management organization in which

employees, marketers and managers have to understand and deal with individual customers

rather than with the mass market or event market segments. All departments need to think

customers and work together to satisfy customer needs and expectations. Sonic can drive

customer-focused marketing and strategic innovation throughout the organizations by

coordinating the company’s internal marketing activities and by coordinating marketing with

finance, operations, and other company functions to serve the customers best.

In the short run, Sonic will drive a marketing strategy with high level social responsibility.

It will try to satisfy customer expectations about its PDAs, take care of customers, satisfy and

benefit its employees and stakeholders, comply with the government legislations and compete

fairly with other companies in the market.

In the long run, Sonic will drive a marketing strategy with higher level of corporate social

responsibility which is shown in rising customer expectations, evolving employee goals and

ambitions, tighter government legislation and pressure, developing investor interest in social

criteria, relentless media scrutiny, and changing business procurement practices.

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VIII. CONCLUSION

This Sonic marketing plan is conducted to introduce our first product naming Sonic 1000.

Through analysis of targeted market segmentations as well as evaluation of competitors in

competitive environment, we can prepare a comprehensive marketing plan to perform when

the PDA market begins to experience severe downward pricing pressure. Our plan calls for

introducing a significant but short-term price promotion such as a rebate to remain

competitive while gauging the price sensitivity of different targeted segments. Based on the

results of this short-term promotion, we can take longer–term steps to defend market share

while retaining a minimally acceptable level of profitability. We aim to build our brand

through performance, more than through promotion.

Sonic marketing plan offers a broad overview of the entire firm’s mission, objective,

strategy and resource allocation as the starting point. It helps our managers learn more about

our consumers’ requirements, expectations, perceptions, satisfaction and loyalty.

We build specific strategies to have on-time solution for the purpose of sales and market

share increase. The key success of an organization bases on the marketing plan of the

business. Therefore, we take into concentration of the analysis, suggestions and

recommendations above in order to prepare and design a perfect and accurate marketing plan

for our first creation.

Additionally, we also make some calculations to create strategies for short and long-term

projects in the future. Our objective is to achieve marketing excellence in the future that will

require new challenges and opportunities.

-The End-

sonic marketing plan - nguyen thi hong diep, truong minh hoang, vu quynh nga

Documents

market summary

consumer market

business market

market needs

market trends

market position

market shares

target market growth