INITIAL STRATEGIC PLAN

MARKSTRAT
TEAM- #9

INDUSTRY- BACH
TEAM- TALENT

Fernando Almeida
Kartik Maheshwari
Shaurya Sharma
Shiyu Yan
 MARKETING ANALYSIS
Our company TALENT has three brands-TONE, TOPS and TOSS. In the overall market, the brand
TONE, which is targeted at the economic and price-sensitive segment (Shoppers and Savers) is
responsible for generating sales by volume and unit market share. After a few periods, we realized
that there was an untapped market in the Explorers consumer segment and no company had an
exclusive product targeting this segment. Thus, we decided to release a new product TOSS in the
Sonites market targeting Explores in the period-2. Exhibit-1 and Exhibit-2 show Brand
Awareness by consumer segment and the purchase intention of consumer segments at the
period-3 respectively.

From Exhibit-1, it is clear that the TONE enjoys a high awareness and decent purchase intentions
in the Shoppers and the Savers, as we planned. For period-3, TOSS performed well and achieved
our expectations. When taking the marketing forecast into account, we could observe that the
most potential segment is the Savers, which will grow into the largest customer base in five years
and is followed closely by the Shoppers (Exhibit-3). Both the Savers and the Shoppers are very
sensitive to the price, therefore we decided to launch a new product with a price lower than all
the brands operating in the Shoppers and Savers category and set the metrics of other product
attributes between the preferences of the Shoppers and the Savers, closer to the Savers.

Exhibit-4 also helps us understand the shopping habits of the customers which helps us allocate
the resource to commercial team. Exhibit-2 shows that the competitors for TONE are MOST, ROCK
and SOFT and the competitors of TOPS are MOVE, ROLL and SOLO. For TOSS is a new product
targeting the Explores, there is no competitor for now. According to the reports, the closest
competitor to TONE is MOST and the closest competitor for TOPS is MOVE.

As of now, the MOVE has the better product attributes than TOPS which will attract more
professionals and also it is less expensive. The MOST and the TONE have very similar attributes
and price in the market. For our company, TONE and TOSS are our strengths. Although the Sonites
market looks saturated, these products can still help us yield more profits and market share just
by making a couple of modifications. Also, it appears that all our competitors are going to enter
the Vodites market in the upcoming periods because the competitive intelligence of the latest
period shows that their expenses in advertising are significantly low, signalling towards our
chance to capture the Sonites market (refer Exhibit-5). If at all, we enter the Vodites market at
least two periods later when we have the market picture based on our competitors’ performance.

MARKETING STRATEGY
As the company’s marketing team, the major objective of the strategies that we will present is to
increase the profit of the company. Our profits are currently on 36% of the revenues, and by our
projections it will end the game on 59% of revenues (refer Exhibit 6). This will be realized mainly
by the launch of a new product exclusively for the Savers and the Shoppers in the Sonites market
and at the same time by the effectively focusing on advertising for existing product range.

In order to realize our major objective, the team voted in favour of reducing and increasing the
selling prices for our products TONE and TOPS respectively, operating in Savers - Shoppers and
Professionals - High Earners consumer segment respectively. However, after the first period upon
careful analysis of market, the team realized that other teams are leveraging on relatively smaller
margin for the product operating in premium consumer segment [TOPS], we also decided to
follow the trend of reducing the selling prices for both the products respectively. The selling price
for TONE and TOPS is 194$ and 448$ respectively (this will come into effect from Period 4). Also,
we have successfully launched a new product priced at 300$ targeted for the Explorers consumer
segment (the selling price was calculated based on semantics-based regression tools). As the
market is highly volatile, it is very difficult to come up with sales growth figures. However, our
forecast is that the market will follow a bell curve, i.e., in the beginning we experienced small
growth and in the coming periods including the last period, our growth was significant and will
be significant. However, in the periods Seven and Eight it will die-down.

Talent’s approach has always been to set a firm foot in the Sonites market by gaining the
maximum market share at the current market moment (Period-3 and next two periods). The team
has decided at this point to not invest on the Vodites market, although this decision may be
revisited on period 4 or 5. We believe that we will gain market share launching products specific
for each segment of the market. Our target will be focused on first, the Savers and the Shoppers
due to their increased growth projections.

According to the marketing surveys and reports, we have figured out that the team Rocket and
Team Stark will probably launch a new product. Also, the timing of their new product launch and
their spending on advertisements makes it more obvious that they will launch the product in the
Vodite market. Also, the team Money is doing great and they have a bigger budget and with a
possibility of taking a loan, they might launch a new product in the Vodite market. So, our team
has decided not to venture into the Vodite market for now. Instead focus our budget and
resources on conquering the competitor’s customer base and make the best of out of this situation
where the other companies are fighting on two fronts.

Upon careful analysis of the competitive intelligence report, and as mentioned earlier, most
probably all the other companies will be launching a new product and specifically into the Vodites
market which makes the saturated Sonites market up for grabs. Furthermore, the team Rocket
and the team Stark which are low on budget cannot advertise effectively in both the markets, that
gives us competitive advantage to conquer their consumer base. Though team Money has a bigger
budget and good standing in Sonites market, they are also prone to poor sales because they are
launching a product in different market and will have to spend a huge sum on advertisements to
stand out top. And we are not planning to launch a new product in the near future in the Vodite
market, so we can control the Sonites market. This is a competitive advantage for us.

According to the consumer survey and panel report, our products TONE and TOPS enjoy a
significant brand awareness, but our newly launched product TOSS has a low brand recognition.
Our average purchase intentions for the TONE is decent but for the TOPS and the TONE are not
up to the mark. As a result of this, we may increase the advertisement spending on our range of
products. Also, to maximise the sales and to increase the average purchase intentions, we may
invest on our commercial team based on the selling habits of the respective products. According
to the market forecast report, the Savers and the Shoppers are the combined largest customer
base and have the highest growth rate in the existing consumer base. Followed by the
Professionals and the High-Earners having decent growth rate. Our product advertisements are
heavily targeted towards the respective segments. In essence, the advertisement spending on the
TONE will be targeted towards economic consumer segment with a small chunk of spending on
the Explorer consumer segment. On the other hand, the advertisement spending on the TOPS will
be targeted towards premium consumer segment with a small chunk of spending on the Explorer
consumer segment. Also, we have launched a new product that is exclusively targeted towards
the explorer market because this consumer market had the potential to spend but no company
catered to them. For now, we don’t have any preference on prioritizing the consumer markets. All
the consumer markets seem promising that is why are equally allocating resources to all the
markets.

As discussed earlier, we are not planning to launch a new product in the Vodites market, therefore
we will almost spend our entire budget on the Sonites market. Though we will order market
studies for the Vodites market, so that we can understand how aggressive the teams in Vodites
market are.

Positioning of products;
TONE: Currently has the lowest price among competing products, the characteristics perception
of customers are very similar compared to competitors. The strategy is to keep the price
competitive since this is crucial for customer buying intention. Growth/rate matrix strategy: Tone
for Savers segment is moving towards star are of the matrix, therefore we plan to invest more on
advertisement to gain market (refer Exhibit 6).
TOPS: The product that generate more revenue for the company so far, it is well positioned on
the brand maps reports, has increased it market share from 8% on period 2 to 14% on period 3.
Still lacks adjustment in product characteristics to leverage buying intentions. Growth/rate
matrix strategy: the position on the dog area clearly shows our strategy for the future: reposition
the brand through semantics for advertisement that will take place on Period 5 or 6 (Exhibit 6).
TOSS: A product launched exclusively to Explorers segment. The growth forecast for this segment
is currently negative, and that was the reasoning behind launching this product. We believe that
introducing a product exclusively to this segment will increase this segment potential.
Growth/rate matrix strategy: it was predicted to be a cash cow due to the low segment growth
rate. Our expectation is that it gradually moves towards the star area (see Exhibit 6).
NEW LAUNCH (TONE 2): We will launch a product on Period 5 specifically targeted for Savers,
that will have entry level characteristics than our current TONE product but with a lower and
competitive price. The plan is to keep this product along through the following periods and
increase market share.

We do not believe it is worth to enter the Vodites market for the following reasons: first, the R&D
cost involved is between $8 million and $12 million dollars, this amount of budget allocated in
R&D can compromise our current advertisement positioning on the Sonites market. Second, we
believe our competitors will launch Vodites on Period 4, and slowly increase through periods
until the maturity of the market, which we expect to be around Period 7. Due to that we believe
the accumulated loss in sales on the Sonites market along with the R&D investment will end up
being a loss for the company by the end of Period 8. This decision may be revisited on Period 4.

The competitive intelligence report (Exhibit 7) shows that we have allocated almost twice the
number of commercial team compared to the second company that allocated the most salesforce
(Money). The action we took out of that for the following periods were to order reports related
to the Commercial team’s performance and sales. Based on these reports we will elaborate a
strategy to implement on Period-5. We expect to take out of this report, insights of the
contribution of commercial teams to sales and how to adjust that to leverage our brand and
increase market share.

The strategy for R&D is to modify our product TOPS in order to better align our positioning as
mentioned above. Also, we have decided to not start a new R&D for Vodites due to budget
constraints, but we have ordered market research studies (see Exhibit8) for Vodites market in
order to decide on Period 4 the feasibility of a new Vodite project based on the market potential.

Almost our major chunk of budget is spent on advertising the product because our products have
poor average purchase intentions. Talking about the advertisement split, we have maintained the
ideal split (85-15) between Media and Research. And we generally target our products to the
specific consumer market as discussed earlier. Apart from that, we implement perceptual
objectives in our Media spending, i.e., the media for TOPS revolves around convenience, the media
for TONE revolves around economy and the media for TOSS revolves around performance. This
is our approach towards advertisement spending.
Exhibit-1

Exhibit-2

Exhibit-3

Exhibit-4
Exhibit-5

Exhibit-6
Company Profit & Loss Statement Growth Rate 12% -4% 63% 112% 112% 111% 107% 104%
Period 0 Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8
Revenues 38,561 43,172 41,493 67,773 75,905 85,014 94,366 100,971 105,010
Cost of goods sold -19,675 -19,675 -19,675 -19,675 -19,675 -19,675 -19,675 -19,675 -19,675
Inventory holding costs -50 -136 -55 0 0 0 0 0 0
Inventory selling costs 0 0 0 0
Contribution before marketing 18,836 18,836 18,836 18,836 56,231 65,339 74,691 81,296 85,335
Advertising media -3,840 -4,080 -3,920 -8,100 -8,140 -9,402 -10,664 -11,926 -13,188
Advertising research -160 -720 -980 -1,281 -1,691 -2,053 -2,416 -2,778 -3,140
Commercial team costs -1,224 -1,536 -1,528 -2,629 -2,781 -3,202 -3,623 -4,044 -4,465
Contribution after marketing 13,612 18,682 17,546 20,229 43,618 50,682 57,988 62,549 64,542
Market research studies -245 -328 -334 -390 -435 -479 -523 -567 -611
Research and development 0 0 -1,170 0 -585 -702 -819 -936 -1,053
Loan reimbursed 0 0 0 -140 -140 -182 -224 -266 -309
Loan received 0 0 632 5,000 1,787 1,000 1,000 1,000
Interests paid 0 0 -51 -451 -476 -616 -756 -897 -1,037
Exceptional costs or profits 0 0 0 0 0 0 0 0 0
Earnings before taxes 13,367 18,354 16,623 24,248 43,770 49,703 56,666 60,883 61,533
All numbers in thousands of dollars 35% 43% 40% 36% 58% 58% 60% 60% 59%

Exhibit-8

Exhibit-9
Exhibit-7