Marketing Project FINAL - School of Computer Science Student

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MARKETING PLAN

PROPOSAL AND MARKETING PLAN

Dyson’s new innovative HFC-free Server Cooling System

Our Best Opportunity to Dominate the Market in Server Cooling Systems

Group 3

William, Melinda, Ethan, Kevin, Merick

Lab N29

Dyson Canada

200 Adelaide Street West, Suite 100

M5H 1W7

Toronto, Ontario

Phone:

1-877-397-6622

E-mail: service@dysoncanada.ca

MARKETING PLAN

Executive Summary:

Our Dyson Air Multiplier is a bladeless fan that is the pinnacle of environmentally friendly décor. This new twist on the average rotating-blade fan derives from Dyson’s Airblade Hand Dryer. The science behind the product is that the base contains a conventional motor and a fan blade. The air then flows from the base into the upper ring structure. However, the ring structure is designed to flow the air out of a slit in the front edge of the ring. Utilizing the

Coanda effect (“What is the Coanda Effect?”, 2011), the air is amplified 15x; hence the name, “Air Multiplier”.

Our plan is to cater to businesses a safer, cleaner, simpler, and greener way to cool down. With this product, server rooms’ temperatures can be maintained without any hassle. There are other alternatives such as liquid nitrogen, air conditioning systems, or ordinary blade-fans. The problems with these options are that they are dangerous, costly, and not as efficient as a Dyson fan. With the Dyson fan, businesses can cool down efficiently without using a lot of energy and paying a ton in hydro bills.

Our target market will be the Information and Communication Technology

(ICT) sector, mainly companies with server rooms i.e. TELUS, Microsoft. Industry

Canada states that the ICT Sector consists mainly of small companies. It also states that about 31,500 companies comprise the ICT sector, that of which

78.6% are in the software and computer services industries

MARKETING PLAN

(“ Canadian ICT Sector Profile”, 2011). The ICT also generates the most revenue in Ontario. This means we can market to a very large sector and increase our revenue. This sector is in need of a greener solution to cool down, and with our product, they can promote environmentally friendly technology and save money while doing so.

Product Summary:

Our most popular product, the Dyson Airblade, is a device which is used commercially as a hand dryer. This technology is also used in a fan called the

Dyson Air Multiplier, which is the model that we will use to power our server cooling system. The Air Multiplier uses state of the art technology to create a steady stream of air unlike normal fans with blades, preventing buffeting. The Air

Multiplier is able to amplify the stream of air flow which allows it to be more energy efficient, more effective than regular fans and safer due to its bladeless nature. In addition, we plan on integrating the technology found in refrigerator systems into our fan models to improve their effectiveness.

Normally in refrigerators, the coolant used to lower internal temperatures is an HFC (HydroFluoroCarbon) or an HCFC (HydroChloroFluoroCarbon) stored in compressed liquid form (“How do Refrigerators work?”, 2011). When the liquid is released into the air, a physical endothermic reaction occurs in which the refrigerant absorbs heat, cools the area around it and precipitates into vapour.

We intend to incorporate the vapour produced from this reaction by jettisoning it through one side of the Air Multiplier and through the other. Experiments

MARKETING PLAN conducted with the fan have shown that this is possible with balloons, so it is feasible with vapour (“ Balloons and Dyson Air Multiplier Fans”, 2011).

In addition, to reduce the effect of HFC’s and HCFC’s on the environment

(they are considered greenhouse gases), we have invested some time cooperating with GE and its plan to create an HFC-free refrigerator (GE plans HFCfree Refrigerator, 2011). We hope to implement the technology later in 2011.

This is crucial in a market with a growing trend of environmentally conscious consumers. These changes will not only benefit the environment but will open up more shareholder opportunities for businesses.

In terms of our competitors, many of the coolant systems that are offered are based off of a liquid cooling system, in which metal pipes filled with cold water or coolant (i.e. Liquid nitrogen) are run around the servers and the heat produced is absorbed through the metal and consequently the coolant, costing somewhere between $3000 to $4000 ( 42u, 2011). Some competitors such as

42u also using an air conditioning system at the expense of a high electric bill.

The disadvantages of these two systems are clear: in the metal coolant system, rust could be an issue, producing high replacement costs along with the risk of leakage which could damage the highly sensitive server equipment. The air conditioning system consumes large amounts of power producing high utility bills. Dyson solves these problems by introducing energy efficient cooling with no risk to machinery. According to our Preference Analysis and Perceptual Mapping

MARKETING PLAN

(See Figure 1 and Figure 2), our suggested new system would be most ideal for our market.

Analysis of Target Market:

As shown in Figure 2 (See Appendix), our ideal target market is geared towards businesses in the ICT sector of Canada, with a mix between small businesses and large corporations. This relates mostly because of what our product is addressing, that is a “need” in the ICT market. In today’s “Information

Age”, there has been an increased usage of technology, networks, information storage and computers in general. This has led to companies using servers stored in large server rooms to store data rather than using paper, and with the most prominent users in the ICT sector. Due to the sensitivity of the equipment, temperature must be maintained at a very precise range or there is a risk of losing valuable data in the company, which is where Dyson comes in with its technology to protect that sensitive data.

Using market research (Figure 2), we have understood that regular consumers would not be a profitable option since the cost of installing our systems would far exceed what consumers demand. In terms of small business, although they do have the capacity to purchase our products, the need for server room protection is not as great as those in the ICT sector as business not in ICT do not have a general need for large sever rooms when they can store data on just a network of computers. We decided to go with a mix between small companies and large corporations because, according to Industry Canada,

MARKETING PLAN most of the companies in ICT are small corporations while keeping corporations, like Microsoft and Google, in mind because they are potentially a large source of revenue.

A couple statistics that give an indication of the size of the market can be seen in Figures 3 through to 7. Specifically, we can see that most ICT companies deal in Software and Computer Services and that most companies have very few

(1-9 usually) employees, both of which indirectly imply that expenses are mainly from usage of computers, servers, and what is beneficial to us, server protection.

In addition, we also see that the ICT is a very profitable market in terms of GDP

– Industry Canada states that the rate of growth of the sector was almost twice as much (4.7%) as the economy’s growth in 2008 (2.4%) ( Canada ICT Sector

Profile, 2011) – and spends more money into R&D than the economic average.

This is ideal for our product to flourish as it is exactly what the ICT sector needs and in upcoming years, that “need” will continue to expand and grow.

Our Marketing Mix:

Advertising:

There are many places and different media outlets that you can possibly use to promote and spread product awareness about our product. The most logical way to promote this product successfully and efficiently is with the methodology of using print advertisements. There would be specific places to

MARKETING PLAN publish these advertisements such as in Magazines like the economist; MacLean’s magazine and other tech magazines such as wired which appeals to the computer savvy. You must advertise to your target market and the niche in the market, which is the programmers, and people who work for large corporations showing them the benefits of using a fan that utilizes less energy and is more efficient and powerful for larger companies with massive computers for their infrastructure. These specific advertisements should be put into the magazines when related technology is advertised, unveiled or discussed and reviewed as this will allow the advertisements to be as effective as possible and create brand recognition in the customers minds so that further on they will have bran recall when deciding on efficiencies for companies information and technology sectors of a business enterprise.

Dyson could use multiple other outlets such as billboard advertisements on various transportation mediums such as busses in the financial districts or the billboard that run adjacent to the highways and freeways. This way of advertising would be ineffective because it does not penetrate the target market aggressively enough, making it a very broad method.

Radio- The radio is another outlet that can be used to promote the new

Dyson concept. Yet this method is very hit and miss depending on the specific radio station that you chose to advertise on an ideal station would be CFRB 1010 am would be a good station to promote on because it is a business oriented station where as a top 40 station like Z 103.5 would not appeal to the target

MARKETING PLAN market for your product. A big problem with using radio ads is the same with television listeners are capable of changing the station during commercials to enhance their listening experience overall. This method is the least productive method and will not help to improve your products marketability.

Television is a reasonable way to advertise the product except people who are geared to this market and with the increase in technology have devices such as TiVo that allows them to skip through commercials making television advertisements increasingly ineffective to the general public. What Dyson should do is use the more discreet method of product placement. The key with product placement though however is in order for it to be effective and the public to remember it is for the product to have meaning to the plot of the movie or television show. That way it will create brand recall.

An example of excellent product placement is the Reese’s Piece in the movie of E.T since it was incorporated into the plot line it helped boost sales astronomically. This is what the company of Dyson should do in order to promote their products using the television as the medium.

It is clear that the best way to advertise the new cooling system is to go through print, such as magazines, newspapers or their online counterparts with their online content. Using these sources at peak times throughout the business year especially when a new product or innovation in the field of computers is introduced can be extremely effective. The advertisements have to link and connect to the same topic and field in order to be successful. The advertisement

MARKETING PLAN itself should show factual information about the advantages of the bladeless fan cooling system versus a conventional cooling system as well it should explain briefly how it works and sum up why it is a necessary product.

To completely ensure that companies will understand the benefits that come with our product, we can also take advantage of agents who will go through business and personally take the time to point out faults in their current system while promoting our own. Again, the key to product promotion lies within routine reminders and slowly winning over your audience with patience.

Closing Remarks:

Please take your time to consider integrating a Server Room Cooling

System into our line of Dyson products. The advantages and opportunities outlined in this report should clearly show that this would be both a wise and profitable decision. I wish Dyson the best in its future endeavours and hope to continue developing new, innovative ideas for the company.

MARKETING PLAN

Appendix

Figure 1 – Perceptual Map

(Created in Microsoft Visio)

Figure 2 – Preference Analysis for Computer Cooling Systems

(Created in Microsoft Word)

Segment

Name

Consumers

Small

Business

Small ICT

Businesses

Benefit

Sought

State-ofbeing

Cheap, functioning system

Low income relative to businesses

Cheap, functioning system

Low to mid income

Functioning system with value

Mid income

Large ICT

Corporations

Quality system

High Income

State-of- mind

Conservative Conservative

Need, but not desperately sought out

Desperate

Product

Usage

Long-term effectiveness

Long-term effectiveness

Long-term and very low maintenance

Long-term with low maintenance

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Figure 3 – Distribution of Services in the ICT Sector, taken from: http://www.ic.gc.ca/eic/site/ict-tic.nsf/eng/h_it07229.html

Figure 4 – Employee Sizes in the ICT Sector, taken from: http://www.ic.gc.ca/eic/site/ict-tic.nsf/eng/h_it07229.html

Figure 5 – GDP in the ICT Sector, taken from: http://www.ic.gc.ca/eic/site/ict-tic.nsf/eng/h_it07229.html

Figures 6, 7– R&D in the ICT Sector, taken from: http://www.ic.gc.ca/eic/site/ict-tic.nsf/eng/h_it07229.html

and http://www.ic.gc.ca/eic/site/ict-tic.nsf/eng/h_it05385.html

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Figure 8 – Product Life Cycle

(Created in Microsoft Visio)

Introductory

Stage

Growth

Stage

Time

Maturity

Stage

Decline Stage

Total

Market

Sales

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References

What is the Coanda Effect?. (n.d.) Retrieved March 17, 2011 from WiseGeek website:

< http://www.wisegeek.com/what-is-the-coanda-effect.htm

>

Canadian ICT Sector Profile. (n.d.) Retrieved March 17, 2011 from Industry Canada website:

< http://www.ic.gc.ca/eic/site/ict-tic.nsf/eng/h_it07229.html

>

How Does A Refrigerator Work?

. (n.d.) Retrieved March 17, 2011 from Energy Quest website:

< http://www.energyquest.ca.gov/how_it_works/refrigerator.html

>

Balloons and Dyson Air Multiplier Fans. (n.d.) Retrieved March 17, 2011 from YouTube website:< http://www.youtube.com/watch?v=4WNcjkZ6d0w >

42u.

(n.d.) Retrieved March 17, 2011 from 42u website: < http://www.42u.com/ >

GE plans HFC-free Refrigerator. (n.d.) Retrieved March 17, 2011 from cnet website:

< http://www.cnet.com/8301-13553_1-10078495-32.html

>

Canada ICT Sector Profile. (n.d.) Retrieved March 17, 2011 from Industry Canada website: http://www.ic.gc.ca/eic/site/ict-tic.nsf/eng/h_it07229.html

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