SmartDesign Appendix
Marketing Plan
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Organizational Mission Definition
Market Analysis
Competition
Strategy
Break-Even Analysis (Smart Design Team)
Return On Investment (customer)
1. Organizational Mission Definition
The Smart Design concept was derived as a result of combining several ideas
into one. The initial concept of Smart Design was to provide an alternative
method to aid design professionals in their efforts to get customer approval for
interior architectural design projects. The current methods of design do not allow
for the client to make an immediate decision on the project. The current methods
require a designer to gather information from the client and to give to CAD
specialists to develop a preliminary three dimensional rendering of the clients'
possible vision. This may take several weeks to develop, as the drafting
specialist must use room measurements to sketch the ideas and then develop
the rendered computer image of the client idea. On the average, an initial design
concept takes 1 – 2 weeks to get a prototype approved. The current process is
costing architectural design firms a great deal of time and money. Time is
wasted which means the designers are not being productive because they are
waiting to get approval of the initial design concept. Costs become significant
because architectural firms are spending a lot of money when very little is being
done. The project cannot get started until it is approved by the client. The longer
the delay, the more a firm is spending to get the idea right. After several failed
attempts to capture the clients' vision, the client may choose to go to another
firm; one which may be able to identify exactly what the client wants.
In order to reduce the initial design and discussion approval time, Smart Design
will integrate several hardware components that corresponds with the software to
provide "on the spot" three dimensional prototypes to eliminate the time required
for a Computer Aided Design specialist to develop the preliminary design
concept. The integrated hardware will also make Smart Design unique by
providing the ability to customize the database to allow the software to keep up
with current market trends in the commercial interior architectural design market.
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In an effort to reduce costs associated with waiting on a design concept to be
approved, Smart Design will offer the ability to use computer technology to
develop a design and render an architectural prototype "on the spot". This “on
the spot” prototype will help the client envision their raw idea and allow the
designer get approval for the project on that day. Providing same day approval
allows the commercial architectural design firms’ employees become more
productive and efficient in their line of work.
2. Market Analysis
There are 24,643 commercial architectural design firms in the United States,
according to Direct Media Incorporated. Despite the slow growth in recent years,
due to the September 11th terrorist attacks the interior architectural design market
has had a compelling increase over the last year. The 2005 top 100 Interior
Design Giants experienced a double-digit growth over 2004, earning
$1,610,057,477, a 10.19 percent increase in over the last year. The single
largest earner was office design which earned 35.49 percent of the total fees.
The double digit improvement is expected to boost the expected slower than
average growth through the next seven years. Although architectural firms are
expected to grow slower than average through 2012, specialized design services
will continue to seek rapid growth over the next several years. As figure 2.1
illustrates, the leading areas of specialty deal with the commercial design
development. The leading specialties in architectural firms are from the industrial
and arts facilities. Even though interior design is needed in all areas of
architecture, it can be seen that the most significant area of specialty is in the
commercial/industrial facilities.
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Although rapid growth is expected in specialty areas of architecture, US firms are
facing strong competition from international companies offering services at a
lower cost. To deal with the international competition, market trends in the
architecture industry have shown that more and more architectural firms are
creating their own interior design departments in an effort to streamline the
building processes and reduce design costs. With “in house” design
departments, architects are incorporating their knowledge of the building process
to alleviate the slight imperfections that can cost the firm a client and the pricey
cost of hiring consultants.
The current design process is inefficient in that it takes weeks to get a turnaround
for preliminary designs on a project. The current process contains a recurring set
of tasks be accomplished in order for customer approval. These recurring tasks
have shown to be a considerable part of the design budget. These unnecessary
costs are incurred though the initial discussion, expert consultation and design
approval steps. Figure 2.2 illustrates that on the average 36 percent of the
design budget is on the initial discussion, consultation, and approval periods.
This 36 percent can become significantly greater if the firm continues their
inability to satisfy their client with their imperfections and misunderstandings
toward design approval.
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Amy Yurko of American Institute of Architects explains, “Fees vary from project to
project, but can run anywhere from $1,000 to hundreds of thousands of dollars”.
36 percent of these fees are from the designer being unable to satisfy the clients’
needs on preliminary design. Smart Design will aim to reduce these costs by
targeting the initial discussion and expert consultation areas to generate a faster
method to get design approval.
Smart Design’s ambition is towards upscale architectural design firms. These
firms are the most compelled to invest in a product to help maintain their
prominence as a top tier architectural firm. Research indicates that these
upscale firms generally show improved performance in sales and services. One
upscale design firm in the Richmond Virginia area, Gwantley Flemming Inc. has
shown a lot interest in the Smart Design concept. Anne Orwig, Director of
Tidewater Operations for Gwantley Flemming Inc. has expressed great interest in
the idea. “I definitely feel there is market for such a product … You could market
it on several different levels, commercial design, architectural design and maybe
even real estate agents.” She has also expressed that a considerable amount of
time is spent in the initial discussion and expert consultation of the design
process. Along with Gwantley Flemming Inc., other high end architectural design
firms were selected as targets for Smart Design. The Red team research group
tried to identify architectural design firms which have showed considerable
earnings over the past several years. Three top architectural firms which have
shown growth and a steady market forecast within the past three years were
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chosen as a sample to which Smart Design is targeted towards. Figure 2.3
illustrates the continuous growth by Highland Associates, Daniel Frankfurt P.C.,
and Ted Moudis Associates. All have all proved to be regulars as some of the
top design firms of the year. Highland Associates has experienced annual
revenues of $13,000,000 in 2003 to up to $14,579,500 in 2004. Daniel Frankfurt
P.C remained consistent with revenues of $14,267,423 in 2003 to $15,715,005 in
2004. Ted Moudis Associates also showed growth with annual revenues of
$11,200,000 in 2003 to 11,950,000 in 2004. Each of these upscale firms
illustrates the recent growth trends in the interior architectural design market.
They have shown increased profits each year and remain part of the top 120
architectural design firms in the United States.
Smart Design is not targeted towards the residential design market. The purpose
of Smart Design is to help in commercial interior design development. There are
many easy to use software design products specifically for home design. These
products allow the home owners to create three dimensional renderings of there
own home and modify it as they see fit. The competition in the residential market
is very steep and software is affordable ranging from one hundred dollars up to
five hundred dollars. Figure 2.4 show a percentage breakdown of the specific
areas in architectural design. The figure shows that 13 percent of specialty firms
are of the residential segment. The affordable and user friendly software
products make the residential market extremely difficult to enter This is why the
initial target market chosen was the commercial segment which is 14 percent of
the market. As figure 2.4 illustrates, Smart Design's market does not just stop
at the commercial end. The Smart Design product can be used across any
segment except for the residential and urban design and planning markets. This
means that Smart Design is targeted for 75% of the market place. For this
reason, the target market for Smart Design is upscale commercial architectural
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design firms. Future endeavors with Smart Design will move on to target other
specialty areas of architectural design.
In conclusion, the Smart Design target market is primarily the commercial interior
architectural design firms. The greatest market is toward the commercial
segment of architectural firms. The goal of Smart Design is to help upscale
interior architectural firms save money by reducing costs in the initial discussion,
expert consultation and design approval steps of the design process. The
commercial architectural design market has shown growth and is expected to
show growth through the year 2012. As figure 2.3 illustrates, a sample of three
of the top design firms of 2005 have shown growth in the past three years. They
have shown revenues the past three years, remaining part of one of the top
design firms of the year. The target market takes up 75 percent of the specialty
segments, leaving out only residential and urban design/planning segments.
Smart Design does not target those markets since the residential segment is full
of competition and the urban design/planning segment focuses on urban renewal
projects. The target market for Smart Design has proved to make enough
revenues to invest in the concept. It also contains a large enough market to keep
Smart Design in business for a long time.
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3. Competition
Figure 3.1: Competition Matrix
The current software products in the industry provide a variety of features to help
make the design process experience simpler. Smart Design takes advantage of
the competition by providing some unique features not provided by the
competition. The most unique feature of Smart Design is that it offers a
customizable database which can be updated to contain the newest market
trends in commercial design. This also allows for instant prototyping in
renderings of 3 dimensional objects.
3.1 Description of Competition
3.1.1 Reals 3D Rendering and Animation
Kajima Corporation, a large General Contracting firm from Japan, are developing
rendering software, REALS , with the goal of making a software that has both
high end quality and easy operation in order for architects to use as a design
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tool. This product is used by architects only to develop 3D renderings. This
product cost $853.
3.1.2 Anark
Anark is a leading provider of large-scale Web-enabled 3D applications for the
aviation and aerospace industry. This is a graphics product tool geared toward
the aviation industry. The cost of this product is $995.
3.1.3 VectorWorks
VectorWorks is a Sophisticated CAD software product that provides variety of
tools and capabilities that regular CAD programs don’t offer. It also provides the
RenderWorks software to develop 3D images. Offers technical support and
targets all industries. The cost is approximately $2,045; however, they also
require classes be taken to become familiar with the product.
3.1.4 Maxon Cinema 4D
Maxon Cinema 4D is a software product which provides3D modeling, animation
and rendering. It has been used mostly in the film, television, science,
architecuture, engineering industries. It is targeted commercially; although, it
mainly does rendering. This software product cost $2995.
3.1.5 Punch Home Design Architectural Series 4000
Punch Architectural Series 4000 is a software product designed for developing
architectural models of homes and their interiors. Punch allows home owners to
develop 3D models of their potential ideas. It is designed specifically toward the
residential design market as it merely a tool to help home owners use for ideas of
remodeling. This product costs $249.99
3.1.6 Animazing 3D
Animazing specializes in 3D computer architectural animation. They produce
computer animations and renderings using CAD conversion. This product
company offers the most competition towards Smart Design; however, they do
not offer the customizable database and immediate feedback. Also, they are
typically used when firms contract out the work. This means their costs are very
expensive as they do the imaging for the firm. Smart Design will help firms save
money so they won’t have to contract out the work that they do.
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4. Strategy
Demonstration
Smart Design will solicit numerous commercial architectural firms with a free
demonstration as to how the product works. The goal is promote the idea
through architectural conventions where hundreds of top tier firms come together
for awards and for the outlook on trends in the industry. The software products
will demonstrate the prototype amid numerous firms to gain support as a
sophisticated software product in the industry. An effort will also be made to
promote the concept through several architectural publications. These efforts will
accomplish two main goals.
1: Test the purpose of the product. Confirm that the product does what it is
intended to do and that it does gather the interest of architectural firms.
2: Propose contracts with some interior architectural design firms to design
templates geared toward those firms.
Deployment
This section determines how the Smart Design product will be distributed. The
initial deployment will not target a wide range of firms because the costs may be
too great for a small company as Smart Designs to handle. The goal is to sell
the product nationwide. To accomplish this goal, the deployment will be broken
down into several phases. Each phase will target the metropolitan areas of
states. It will begin locally within the metropolitan areas of Virginia then move
north towards the New York and New England areas. Next, the city of Chicago
and other large cities of the Midwest will be targeted. After that, the big cities of
the West Coast will be able to receive the software product. Following that,
Smart Design will be available in the big cities of the south; Atlanta, Miami, Dallas
etc. The final deployment phase allows Smart Design to be offered anywhere in
the nation. Deployment numbers are expected to grow exponentially until the
production reaches the final phase. The biggest market is in phase two, since its
market contains more of the leading firms in the industry. After this phase sales
are expected to accelerate as other firms will works to keep up with the leaders
of the pack.
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5. Break-Even Analysis ( Smart Design Team)
6. Return On Investment ( Customer)
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