Marketing Plan
Geographical Auto-Delivery System
Marketing Plan
Version:
Date:
Author:
Status:
1.0
13 December 2010
Rebecca Cooper
Final
Market Analysis
The customer base that is targeted is broken up into two specific groups. The first group is the
businesses that will provide the initial burst of money for the development and also the majority
of the money to cover maintenance charges. The second customer group is the end-user who will
provide smaller revenue as individuals, but grow as the Geographical Auto-delivery System
(G.A.S.) grows in popularity. Both groups are equally important to focus on for without
businesses, the end-user will have nothing to access in the application and without end-users,
businesses will lose interest in the software they run because of the lack of customers using the
application.
In the 2007 Economic Census, the United States had a total of 6,045,655 business firms and
7,705,018 business establishments. In Virginia alone, where the development will begin first,
there are 157,501 firms and 200,503 locations. If 1% of the business firms in Virginia agree to
join for the initial launch of the application, there would be 1575 firms that are associated with
G.A.S., not including the number of establishments the firm owns.
Because G.A.S. is designed to run on a smart phone, the target end-user right now makes up 21%
of the mobile subscribers in the United States. When taken into account that there were 285.6
million mobile subscribers at the end of 2009 that means there were 60 million smartphone users
across the United States. The number of smartphone users is also expected to increase to 50% of
mobile subscribers by 2011 based on data gathered by the Nielsen Company. That brings the
total potential end-user customers to 142.8 million by 2011, with the numbers still growing. If
G.A.S. can turn 1% of the potential customers into users, that will provide 1,428,000 end-user
customers.
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Marketing Plan
Geographical Auto-Delivery System
Product Package
G.A.S. is a mainly software product, though it is to be taken note that both customers will need
hardware order to use the application. There will be a website that both business customers and
end-user customers can access on their respective sides, as well as a phone application that the
end-users will receive information from based on their user profile. On the website, there will be
a section for businesses to register and update their information, such as pricing, services offered,
and hours. For the end-users there will be a section for them to log-in using information provided
from the phone application they downloaded to edit their user profile on the web if they so
choose. The end-user may also edit their user profile on their smartphone if they desire, but the
website provides a different place to access their information.
Customer Return on Investment
Business customers can expect to have an increase in visibility when they subscribe to G.A.S.
Along with increased visibility there is potential for increase in revenue. Businesses will also be
able to compare their information with other businesses subscribed to G.A.S.
For the end-user customers, they can expect more targeted information directed at them as they
travel. From these pushes of information there is the potential to decrease frustration due to
looking for a point of interest, as well as spending less money overall due to the potential for
wasting less time traveling.
Sales Plan
Beta Test
Developing a phone application means first beta testing in a small area where the number of endusers and business users can be controlled. The beta test for G.A.S. is planned for Old Dominion
University during parent’s weekend, where the parents of students come down and visit and
explore the campus and the surrounding areas. Businesses on and around the university will be
requested to participate. End-users will also be provided with a trial version of G.A.S. for any
parent or student who owns a smartphone. The business customers will also have to provide their
own computer with internet access so they can access the G.A.S. website and input their
information into the database.
The beta testing environment provides a place to test the G.A.S. database as well as gauge the
amount of traffic on the servers from real-time updates that the trial phone application will
provide. It will also test the website side of the product and provide a better look at what should
be provided to the businesses in order to help them register with the application.
Year One
Once the beta test is complete and the data is collected, the businesses that participated will be
thanked and requested to join the distributed product at a discounted price. This will provide us
access to information already inputted into the database as well as a number of business
customers. On the end-user side, those who participated in the trial phone application will also be
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Marketing Plan
Geographical Auto-Delivery System
offered the next version of the application at a discounted rate as a way to thank them for their
participation.
Backed with positive results from the beta test the marketing approach will broaden and large
corporations and chains will be approached and the proposal for them to join G.A.S. will be
made. Such large chains would be big food chains (McDonalds, Burger King, Chick-fil-a), gas
station chains (Shell, Exxon, BP), as well as large hotel chains (Best Western, Holiday Inn).
With the number of locations the chains have across the United States, national coverage will be
available for end-users as soon as the distribution of the phone application.
Along with targeting large corporations, small businesses will also be contacted and incorporated
into G.A.S. By the end of the first year of distribution, the entire state of Virginia with a large
percent of the 157,501 businesses should be subscribed to the application. G.A.S. will provide
not only information about large chains, but also provides the end-user with businesses
specifically targeted toward their interests.
Beyond Year One
As the years progress, G.A.S. will expand westward, branching out from the east coast, adding
small businesses to the database as well as gathering more support from the large chains. By year
ten, G.A.S. should encompass the entire United States, delivering service to both businesses and
end-users.
Profit Overview
Figure one shows the total anticipated cost results to $1,345,995; however since funding will be
received through the NSF SBIR program for Phase 1 and 2, the total cost for the company will
amount to $737,180. These estimates include the cost of hardware and staffing.
Phase
Staffing Cost
Resource Cost
Total Cost
1
$39,975
$3,570
$43,545
2
$601,640
$49,200
$650,840
3
$733,785
$3,395
$737,180
TOTAL $1,431,565
Figure 1 – Total Cost
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Geographical Auto-Delivery System
Business customers and end-users will be charged separate monthly fees. Businesses customers
are broken down into types of business customers, depending on the number of locations the firm
owns. Small businesses with less than ten locations will be charged $50 per month per location.
Large chain businesses will be charged a discounted rate in relation to the number of locations
they register with the application. For example, if the chain business decides to register ten
businesses, they will be charged $45 a month, fifty placations will be $30 a month, and 100 or
more locations will be charged $20 a month. These estimates are subject to change as
distribution dates approach as well as possible negotiations with the corporations.
For the end-user there will be an initial charge of $4.99 for the first three months of use. This
allows the end-user to try the application and experience the real-time push of information based
on their user profile. After the first three months, the application then has a monthly fee of $1.99.
For the start of distribution, consider that negotiations were made with one large business chain
and their subscription to G.A.S. was obtained for one thousand locations across the United
States. At $20 a month, that would provide revenue of $20,000 a month. Assume also that every
month 50 small businesses register with the application, giving another $2,500 per month.
For the end-user side, consider that .1% of all smartphone users in the United States decide to
buy the subscription for the first three months. 60,000 smartphone users paying $4.99 for the first
three months provides another $299,400. Assume that there is also a growth of 1000 new users
per month, providing $4,990 per month of revenue increase. It is prudent to factor in that some
end-users will not be interested in staying with G.A.S. and choose not to pay the extra $1.99 per
month after the first three months. If there is a loss of 17% from the initial group of 60,000 and a
10% from every 1000 group of end-users, then 10,000 users will not renew their subscription in
the fourth month of distribution, and 100 per month after that will not renew. Factor the loss into
the $119,400 made per month from the initial group that subscribes to the application as well as
the $1990 from the new subscribers.
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Marketing Plan
Geographical Auto-Delivery System
Figure two shows a detailed plan of the expected business that G.A.S. will have in the first eight
months.
Month 1
60,000 new end-users
1000 chain locations
x $4.99 per end-user
x $20 per location
$299,400
$20,000
Total = $319,400
Month 2
1000 new end-users
50 small businesses
1000 chain locations
x $4.99 per end-user
x $50 per business
x $20 per location
$4,990
$2,500
$20,000
Total = $346,890
Month 3
1000 new end-users
100 small businesses
1000 chain locations
x $4.99 per end-user
x $50 per business
x $20 per location
$4,990
$5,000
$20,000
Total = $376,880
Month 4
1000 new end-users
150 small businesses
1000 chain locations
50,000 returning end-users
x $4.99 per end-user
x $50 per business
x $20 per location
x $1.99 per end-user
$4,990
$7,500
$20,000
$99,500
Total = $508,790
Month 5
1000 new end-users
200 small businesses
1000 chain locations
50,900 returning end-users
x $4.99 per end-user
x $50 per business
x $20 per location
x $1.99 per end-user
$4,990
$10,000
$20,000
$101,291
Total = $645,107
Month 6
1000 new end-users
250 small businesses
1000 chain locations
51,800 returning end-users
x $4.99 per end-user
x $50 per business
x $20 per location
x $1.99 per end-user
$4,990
$12,500
$20,000
$103,082
Total = $785,679
Month 7
1000 new end-users
300 small businesses
1000 chain locations
52,700 returning end-users
x $4.99 per end-user
x $50 per business
x $20 per location
x $1.99 per end-user
$4,990
$15,000
$20,000
$104,875
Total = $930,542
Month 8
1000 new end-users
350 small businesses
1000 chain locations
53,600 returning end-users
x $4.99 per end-user
x $50 per business
x $20 per location
x $1.99 per end-user
$4,990
$17,500
$20,000
$106,664
Total = $1,079,696
Figure 2 – Profit Overview
Total Duration: 8 Months
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Total Income (Dollars)
Figure 3 shows that within the sixth month of distribution, the Phase 3 costs will be covered and
G.A.S. will begin to turn a profit using the scenario in Figure 2.
Month
Figure 3 – Break Even Graph in Months
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