Marketing Plan for new new product

Shaking Pillow

Manage your time to a better life

I.

Executive Summary ...3

II. Industry and competitor analysis 2.1 Industry Overview 2.2 Competitor Analysis III. Company and Product Description 3.1 Company Description 3.2 Opportunity 3.3 Strategy 3.4 Product Description IV. Marketing Plan 4.1 Overview 4.2 Target Market 4.3 Marketing Communication 4.4 Marketing Mix 4.5 Pricing V. Operations 5.1 Location 5.2 Facilities and Equipments 5.3 Insurance 5.4 Employees 5.5 Suppliers VI. Development Plan 6.1 Development Time Line 6.2 Trademark 6.3 Competitive Advantage 6.4 Growth Plan 6.5 Growth Factor

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...6

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6.6 Risks in Development VII. Team 7.1 Management Team 7.2 Advisors VIII. Critical Risks IX. Financial Plan

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I. Executive Summary Nowadays, many people have difficulties in managing their time because of their tight schedules and so on. Therefore we have created an innovation that could possibly help people to overcome their time managing difficulties. Shaking Pillow is an innovation that was created to accompany costumer in their daily life. Shaking Pillow is a pillow with a built in alarm clock. What is unique about this innovation is when the Shaking Pillow rings, it would also shakes. This innovation is hoped to be helpful for those who could not be on time to their appointments. II. Industry and Competitor Analysis 2.1 Industry Overview The industry in specific can still be seen as quite new, or rather untouched. As alarm clocks are generally used as a tool for waking up, there have been few innovative or hybrid products out in the market that combines both a wake up device and a pillow in one. So instead of comparing our product with other similar products that are hard to come by, making a comparison with the general alarm clocks would be a better choice. Sales of alarm clocks, aware by all, are considered to be steady, if not increasing. Not to mention with the invention of new gadgets that implements the alarm function as well, it is indeed a difficult market to break into. On the other hand, the

difficulty may also turn out to be our advantage as it shows there are users out there who are willing to try out new ideas and product innovations. 2.2 Competitor Analysis Technically, there are no exactly similar products out in the market up until now but there are several similar products that me be of concern to how well our products may sell in the market. For example the conventional alarm clock, as mentioned before, are our main competitor. There is also a new innovative product called Snore Pillow made by France Bed, which is scheduled to be released for sales in April 2009. Its functions include having a sensor inside the foam pillow, which will wake the user through vibration when it detects snoring. The similarity may complicate the sales of our product. III. Company and Product Description 3.1 Company Description Our company is company which produces Shaking Pillow. Our company profit by selling our special pillow direct to the super market like Wall Mart and Cosmos. On the other words, our company is a pillow manufacturing company. At first we will target in students in Stamford University and Dhaka city also. If the business goes well, we will consider expanding our business to the whole Bangladesh. 3.2 Opportunity Although pillow manufacturing is not a now business, we have our special characters. A lot of students in Stamford University have getting up problem especially when they have 1st period. If you get up late, probably you will miss the Class. And if you live in Jattrabari and Uttra because there heavy traffic jam, you will miss the first period. People may buy a alarm clock to solve this problem. But on the contrary, alarm clock does not work well usually. According to the survey, students always ignore the alarm clock or they will turn it off and continue to sleep. But our Shaking Pillow is different from traditional (details will be provided in the following sections) alarm clock. Because of the pillow is shaking, you can not ignore it, even you want to turn it off, it is not that easy. So you just have one option actually, that is getting up. So in this market, our product is a totally new product. I can say our Shaking Pillow is quite competitive.

3.3 Strategy Our selling strategy is put our products direct in the super market. If we build up our own storeto sell our pillow, we need invest more money and much risky. But putting our pillow in the super market means stable customer and less risk.

3.4 Product Description Basically, our product is a pillow which is modified in to a wake up alarm pillow. It consists of three parts, which are the battery part, the machine part and the pillow itself. R L
Cable

Cable Alarm Set Vibrate

R
12:00 Lock Battery

Front

Back

The battery is positioned on the right side of the pillow. It is using 2 small batteries (batteries usually for watch) and connected to the machine part through 2 slender cables. The battery part is kind of small and covered by a hard plastic so the batteries can not be easily shifted. The machine is composed of a set of buttons, a digital LCD, a lock key, and a speaker. The buttons are the alarm, the set, and the vibrate button. They are made of a plastic (like the buttons of a washing machine) so the buttons can not be easily pushed, especially when the owner is sleeping and unconsciously touch them. The alarm button is basically to activate the alarm function, while the set button is to adjust the clock, and the vibrate button is to activate the vibrate function. The LCD is the normal one, not a touch-screen type. We attach the lock key for the security reason so the already set preferences can not be changed unless the owner unlocks it. The machine part is quite sizeable and takes roughly 1/8 of the whole size of the pillow. The pillow itself is a space where the owner can sleep at ease. It is obvious that this part is the main component of this so-called shaking pillow. If we analyze the strength and weakness of the Shaking pillow, we can conclude that the strength is that the pillow simply looks like the normal pillow but it can give the consumer more benefit. The consumer will not have to worry that they could not wake up in the morning anymore since we guarantee it. The weakness of the pillow is about the price. It costs more expensive than the average price of normal pillows available in the market. IV. Marketing Plan 4.1 Overview Many people might have difficulties in managing time especially when they cannot get themselves up in the morning. To proof this, we had distributed a short questionnaire. The result of the short questionnaire will be an indicator to commercialize and to develop our innovation.

4.2 Target Market (YOUR TARGET MARKET) To find out our target market, questionnaires had been distributed to approximately 100 potential customers, mostly students in Stamford University. Below are purposes of the questionnaire: To know with the number of people who have difficulties to wake them selves up in the morning To know if people are actually using alarm clock or not To know whether the usage of alarm clock is effective or not To be familiar with the main reasons of why their current alarm clocks are not effective enough

4.3 Marketing Communication All the promotions that are made are executed through the Marketing department. The marketing department is divided into 5 sections, which are Public Relations, Online Marketing, Advertising, Direct Marketing and Event Marketing. According to the financial statement planning for the first year, advertising and promotion budget given is $3700. First of all, the announcement of our product will be through the local newspaper and some local television channels to attract a large quantity of demand. This is the first move that will be done, when shaking pillow is launched for the first time. Then, pamphlets, brochures, and billboard will be the next advertising will be done. A quite big billboard will be installed in front of the main office. The color will be the same with our companys logo (will be describe below) and the size will be quite big XX x XX. Pamphlets and brochures are going to be printed and distributed 10.000 sheets monthly. Additionally, an official website will be released for the convenience of the customers to be able to access the site and buy shaking pillow only by clicking from their own home. However, this website is the online marketing sections short term project, which is currently in progress for initial introduction and is planned to be completed within 2 years.

4.4 Marketing Mix (4P) Products Shaking pillows logo will have a hipper and less formal style, using brighter and marketable colors. The colors will be green (olive) and sky blue. Green describes the relaxed circumstances of grass dessert and sky blue describes the peaceful. The name and the logo will be combined altogether and will also define the company colors and style. All upcoming products will have a packaging that is in line with the enhanced company and product positioning. All upcoming packaging should: Clearly state what they do in their title and tag lines The product name and key message needs to be located on the upper half of the package so it can be seen if placed on the shelves in retail stores. The packaging should have an average of three seconds to attract and sell a consumer as he passes the shelf. The size of the product is the same with the normal pillow. The dimensions are XX x XX inches. Price The explanation about the price will be explained on the next point. Placement (Sales and distribution) With the introduction of a product aiming at the mainstream category, the supplier will be an Indonesian company that produces normal pillow with low cost. Knowing that the raw material cost and labor cost in Indonesia are cheap, it is thought that it will be better to use the raw materials from Indonesia.

Going after the regional alarm clock and pillow manufacturing companies chains (e.g.: Seiko, Casio, France Bed, etc.) that successfully compete with the national chains in their respective areas and because of the price point is still on the average, it is believed that shaking pillow is able to and will get into the low end selling locations (stores) such as Nondon and Agora. Promotion Our promotions are designed to create demand. The explanation about the promotion has already been discussed on the previous point (marketing communication). 4.5 Pricing The cloth and cotton, alarm, and vibrator will be ordered from other manufacturing companies at the price $12.8, $5.5 and $11 per item, respectively. Then, assuming the indirect cost, direct labor, and direct material cost $3.7 per unit, the total production cost of each item would be $33. Assuming also the profit for each item is $6, the total will be $39. At this point, shaking pillow will be offered at the price of $39 (much or less 2700 Tk). According to our research on the local stores in Dhaka, price for a pillow varies from 2200tk up to 2500 taka Here, it can be seen that our shaking pillows price is still on the range and at this point it is believed that our shaking pillow still can compete on the market. The price might be a little bit expensive but with extra capabilities and above-the-average quality standard, for sure the price would not be the same as the normal one. V. Operations 5.1 Location Below are the choices of location to develop our company; Dhaka Chattagong Rajshai Sylhet

We conducted several researches about these items; chattagong is the best location because there are a lot of transportations (Chattagong station, buses, taxis). It is very convenient in transportation to work. One more reason, we do not have to pay much money to rent the land for opening our new company. 5.2 Facilities and Equipment Facilities water fee electric fee internet fee telephone fee gas fee fax fee

Equipment copy machine / fax machine printer furniture computer

5.3 Insurance Employment Insurance Workers accident compensation insurance Unemployment insurance Health insurance Employees' pension insurance

Having been injured while working, the company will use the workers accident compensation insurance (industrial accident). As for the accident on the commuting road, the worker is caught in that accident or death. As for the commuting disaster, a necessary insurance supply is done to the bereaved family with the workers' compensation insurance. As for the unemployment insurance, (supply like unemployment etc.) it is provided, and the child-care leave is acquired or the family-

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care leave is acquired, necessary insurance is provided for a constant period to gaining re-employment if losing one's job. Moreover, Training and Education Benefits System is provided for many people recently. The workers' compensation insurance is worker's strong view. Company Insurance General liability insurance It is also called the 'Facilities liability insurance', used for cover the damage suffers by bearing a juridical liability for damage to others. When the safety of sole proprietor's facilities is maintained, the injury and the thing are damaged to the others due to the accident because of the accomplishment of work, the use of the accident, incompleteness of management and a constructional defect and facilities. There is 'Constructor's liability' that covers a defect of facilities to do the contract work such as accidents and the material depositories accomplishing the contract business and an incomplete accident, etc. for management. Engineer works, building operations, and the contract business are accomplished. This system is a system to support the unemployed independence to the product pole when becoming the entrepreneur of the business category of the employing unemployment insurance as for the employee who employs it the recipient own of the unemployment insurance establishing, and continuously within one year establishment. Social insuranceGovernment pension plan, National health insurance Entrepreneur comprehensive insurance system

5.4 Employees part-time employment, hourly wage: 700 permanent employment, Seniority type and Ability type welfare / bonus: Salary increases and six months bonus for permanent employment 5.5 Suppliers Materials needed: cotton cloth vibrator and alarm

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We will order this kind of materials from Vietnam which is cheaper than Japan. It will help to decrease the cost of production and tend to an important factor in development plan and competitive advantage.

Operation Cycle

Operation Cycle

14 days 7 days 7 days 10 days

7 days

Order materials

Receive Material s

Make Product

Pay Supplier

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Customer Order Received

Pick/Shi p Product

Collect Money From Customer Bill to Customer

Order Entered

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VI. Development Plan Product: Shaking Pillow Markets: First, selling to retailers such as convenient store in Dhaka and expanding to the other prefectures of Bangladesh. Time: One year of operation 6.1 Development Timeline As for the development timeline, we spend time about one year to complete our business plan, and open the company which located in Dhaka. We do not open our own store because we will sell it though the department store which starts in Sylhet, Rajshai or Chittagong first then expands the market trends to the other parts of Bangladesh.

Activities Product design Pre-Marketing Business plan finalize Business plan review Register rights to business name Seek funding from appropriate sources Initial contact with retailers Create e-commerce site Confirm funding Open bank account Operation development

Date 2009/02/10 ~16 2008/10/01 ~ 05 2008/11/15 ~ 26 2008/11/01 ~ 31 2009/09 ~ 10 2009/10 ~ 11 2009/01 2009/01 ~ 2008/01 2008/12 2008/01 Sales Sales Design

Dept.

Marketing All staffs GM Law Finance

Finance Finance

Finalize marketing plan 2008/02 Marketing As and train staffs Japans Recruitfor the operation development, if we can expand our products in theHuman Resource 2008/02 markets, we have to develop our time spending in operation as well for improvement in Distribution of products to Retailers 2008/03 Logistics well-operated process. Moreover, if we can manage less time in operation, it will lead to the satisfaction of the customers.

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Operation development

14 days

7days 7 days 5 days 10 days 7 days 7 days 5 days

7 days 5 days

Order material s

Pay Supplier

Receive Material s Customer Order Received

Make Product Pick/Shi p Product Collect Money From Customer Bill to Customer

Order Entered

6.2 Trademark

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Subject of protection of trademark The subject of protections of trademark is letters, diagrams, symbols having the effect of identifying the subject of various products or services. Trademark is a mark used by a manufacturer, dealer or service provider in respect of goods or services in order to differentiate them from goods and services offered by other parties which are of the same or a similar type. Procedures for obtaining a trademark right in Bangladesh In order to obtain a trademark right in Bangladesh, one must submit an application for trademark registration to the Bangladesh Patent Office in the set form prescribed by the ordinances. A set of prescribed requirements must be fulfilled in order to obtain a trademark registration. An examiner will check whether an application meets these requirements. Trademarks which do not enable consumers to differentiate the applicant's goods or services from those belonging to other parties, and which are not able to register for reasons of public interest or for the protection of private interests will be refused as they are deemed not to meet the substantive requirements. The whole procedure from filing to registration in Bangladesh is shown in the flow chart below.

6.3 Competitive Advantage

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 New design
The companys designer team can release the new designs of pillow products such as bolster and produce it to be bolster shaking (bolster+ alarm+ vibrator)

Cheap Price High quality Good Location As for the location, the company is located in the countryside of Bangladesh (Dhaka) which has more competitive advantage in rental fee. Low price suppliers As we import the materials in production from low-cost countries (Vietnam and Indonesia). It can reduce the production cost comparison to use materials in Bangladesh 6.4 Growth Plan Strategy

1. Create a friendly supportive service

Establish the costumer service center to answer all the questions (problems) of the product (for 24 hours) Train employees to always be helpful and make the customers satisfaction the main motivating factor

2. Working environment
Encourage employees to work hard and efficiently

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Make them feel comfortable and consider the company as their family Achievers are rewarded

3. Fulfillment of quality and reliability

Promise to produce high-quality products all the time

4. Guarantees
Fix all the problems of our products within 1 year for free After 1 year, we can provide the same service at a low price

5. Improvements
Always keep improving the qualities and skills of our employees are the order of the day in our regular training sessions and meetings. Keeping a close watch on technological change will allow us to stay state-ofthe-art with our products.

6. Promotions
Order from online website, sale 10%. Order from online website at the end of the season, free logistic cost and sale 10 -50%

6.5 Growth Factors 1. Profit

If the company gains much profit, it can be the capital for developing products. 2. Advertisement Advertisement is an important key to present the customers about our products.

3. Service
Good services can response to the satisfaction of customers. New trend design can be a competitive advantage.

4. Design

6.6 Risks in Development

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1. Employment problems The employment problems are one of the most significant problems that happen in the world of business today. This problem can happen due to the lack of discipline in work especially, the part-time job workers, they can work only for a short time, often absent as well. 2. Pillow and Alarm clock Company The pillow and alarm clock company is an important competitor. If they produce such high innovative technology, our shaking pillow company absolutely gets a hard time and high risk in this kind of business. 3. Small Market Scale Pillow and alarm clock are the products which can use for a long time. The customers do not buy the products everyday like a food business. It shows that the market scale seems so small. This kind of products cannot be sold in only one location, but it has to expand by selling in the large market in the big city of Bangladesh, and spread to foreign countries as well.

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VII. Team 7.1 Management Team The lead entrepreneur and one of the members of the CEO in our company would be XXX as she came out with the product idea. She will supervise the research and development of our product and make sure it is compatible with our company ideals. XXX and XXX will also be appointed as CEO to help in further company management. Having had experience in several business related fields before, it is expected that their promotion will help in a better team management experience. 7.2 Advisors XXX will be promoted to help XXX to as Product Development Advisor and help in product research development. XXX has had experience in technical related fields, so this skill will be of use when it comes to technical problems faced. The head of our Finance Department, Marketing Department, and Distributing Department would be XXX, XXX, and XXX respectively. As each member has had previous experience with handling the specified fields, smooth management with a relatively low amount of setbacks in management are expected. VIII. Critical Risks Research and Development As our product is considered as a relatively new idea, a somewhat large amount of investment would be needed to perfect the way our product works. Deciding on which companies to collaborate with as our outsourcing supply may be a risk as well. Collaborating with well known alarm clock and massage machine suppliers may help us boost our image but on the other hand, they may also charge a heftier amount of supplying the needed components as well. 2. Funding Starting out on a business is never easy as a significant amount start-up fund would be needed. Our initial amount of fund needed estimates up to XXX and convincing collaborators to invest in our product may also be a problem initially.

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3. Public Acceptance A survey done in Stamford University reveals that most students would be interested in our product. However, getting them to truly accept and buy our product may prove otherwise. Launching a new product in markets requires extensive research and development, marketing strategies and proof that the product works and is truly useful. This again, adds to our funding problem. 4. Threats from Competitors Our products biggest threat would be none other than the traditional and well known alarm clock. It has been widely accepted and used as a conventional tool to help people wake up in the morning. Although our product is a new innovative invention that ideally should work better than an alarm clock, getting buyers to change from the regular alarm clock to our product may not be an easy task. Snore Pillow from France Bed, may also end up being one of our competitors due to its similarity with our product. Although not as big a threat compared to the conventional alarm clock, it may still end up a hindrance in sales of our product. Another threat would be a company that is alleged to be producing a device that enables user to wake up to their favorite drink in the morning. Although technically our products work in separate ways, the basic idea is still the same helping people to wake up in the morning. This may again prove to be another threat to our new product

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IX. Financial plan Sales forecast: Revenues are calculated separately for our product and for maintenance. The product included in this forecast is shaking pillow. Chart-1, Sales budget: Year Sales budget ($) 2008 30,000 2009 35,000 2010 42,000 2011 50,000 2012 60,000

The prospected sales budget of or product is 30,000$-60,000$ items respectively from 2008-2012 within these five years.

Chart-2, Direct expense budget:

Sales (Amount in US $) Cloth and cotton Alarm Vibrator Others Total expense 2008 7000 3000 6000 2000 18,000 2009 7500 3400 6600 2500 20,000 2010 9000 4600 8400 3000 25,000 2011 11000 5500 10000 3500 30,000 2012 12800 6500 11500 4200 35,000

We have ordered for the cloth and cotton, alarm and vibrator at the price Respectively 12.8$, 5.5$ and11$ per item. Assumed expense for manufacturing would be overhead (known as indirect cost), direct labor and direct material 3.7$ per unit. So the total production cost of each item would be 33$. For example for the total expense of year 2008 has been mentioned above.

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Chart-3, marketing expense budget:

(Amount in US$) Advertising and promotion Others Total sales and marketing expense % Of sales 2008 3,000 700 3,700 12.33% 2009 3,700 800 4,500 12.86% 2010 4,500 1,000 5,500 13.1% 2011 5,500 1,100 6,600 13.2% 2012 6,600 1,400 8,000 13.33%

Chart-4, Total fixed cost budget:

(Amount in US $) Marketing cost Administration cost Maintenance and depreciation Total 2008 3,700 2,300 1,000 7,000 2009 4,500 2,500 1,000 8,000 2010 5,500 2,500 1,000 9,000 2011 6,600 2,800 1,100 10,500 2012 8,000 3,000 1,500 11,500

Chart-5, Income statement

2008 30,000 18,000 2009 35,000 20,000 2010 42,000 25,000 2011 50,000 30,000 2012 60,000 35,000

Sales Direct cost of Sales Contribution margin Fixed cost Operating profit

12,000

15,000

17,000

20,000

25,000

7,000 5,000

8,000 7,000

9,000 8,000

10,500 9,500

11,500 13,500

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Sales turnover

16.67%

20%

19.1%

19%

22.5%

Chart-5 is the summery of income statement that give us a vivid view of trend of the net profit. We can see that for the first four years (2008-2011) net profit has been increased smoothly. The reason behind that in the manufacturing company it is very difficult for earning profit at the very beginning. On the other hand we can see that from the 5th (2012) year net profit has increased bit steeper than last four years. The reason behind that is the opening new branches and will be becoming well known among the people.

Revenue VS Expense

70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

Revenue Expense

60,000 50,000 42,000 35,000 30,000 25,000 28,000 34,000 40,500 46,500

2008

2009

2010

2011

2012

As we are prospecting to have the revenue crossing over the total expense, so each and every year we might have some profit to reach our break even point gradually. From the above chart we can observe that, we are surpassing the total expense with our revenue in a very smooth way. From the above graph we can see that the net profit of the year 2008-2012 will be changed respectively 5,000$, 7,000$, 8,000$, 9,500$ and 13,500$ per year

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Break Even Analysis:

Chart-6, Break Even sales:
2008 7,000 40% 17,500 2009 8,000 42% 19,000 2010 9,000 40% 22,500 2011 10,500 40% 26,250 2012 11,500 41.67% 27,598

Fixed cost ($) Contribution margin (average) Break even sales ($)

Cost

Total Revenue Total Cost

17,500

7000

Fixed Cost

17,500 BES Sales

According to the investment per year the break even point would have to be changed accordingly. From the above chart it is clear that we would have reached the

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break even point while we will have 17,500$ expense in the year of 2008. So as it will be 19000, 22500, 26,250, 27,598$ respectively in the year of 2009-2012.

Explanation of balance sheet:

Assets
Cash and Bank Inventory Account Receivable 3000 4000 2000 5000 50000 10000 3000 3000

Liabilities and Owners equity Bank loan (A/P) Friends and Family O.E
20000 20000 40000

Rent Premium Machinery Furniture Permits and license Insurance Total asset

80000

Total

80000

As a manufacturing business, we think that inventory control is very important. From the table we can see that there are inventories of 4000$ for the inventories of opening date. The price of machineries is mentionable in respect of their cost (50000$).Because we have to buy all new machineries for the production. And the rent premium is only 5000$, because we wont buy the land instead of it we will borrow the land from the local property owner. The largest portion of our investment (40,000$) will come from the owners themselves.

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