Mobillite
Satellite phones
Aron Butler
Caitlin Allard
Kristina Cole
Jill Buote
John Gordon
Why Choose Mobillite?

These phones provide communication in even the most secluded
areas of the planet, including oceans (1)

They are small, light, and durable. perfect for any type of business
or leisurely travel

Made with nalgene plastic (high-density polyethylene) which is
stronger than other plastics and is environmentally friendly (2)

Uses LEO (low earth orbit) satellite technology



Provides worldwide wireless coverage with no gaps
Orbit the earth at high speed, low altitude orbits
Must fly complete orbits, further guaranteeing complete coverage over
every area by at least one satellite at all times (3)
The Target Market

People whose jobs require travel and
unrestricted communication with the rest
of the world including:

Professional/ scientific (researchers)
(A)



Financers/insurance companies
(B)




Size of segment (1,729,992)
Total average income (31,781)
Foresters
(D)



Size of segment (5,575,813)
Total average income (46,297)
Agricultural management
(C)


Size of segment (6,125,13)
Total average income (60,327)
Size of segment (1,249,000)
Total average income (26,146)
Miners
(E)


Size of segment (480,992)
Total average income (51,207) (4)
A
B
C
D
E
Product Demand

In areas where there is a high risk for natural disasters (specifically
hurricanes such as Katrina) there is a strong demand for satellite
phones

In 2005 alone, one company alone sold over 1000 phones during
the month of September


This remained the same during the first half of the 2006 hurricane
season
2007 is expected to be the same with purchases and activations of the
satellite phones (5)
NAICS Code

334220
(6)
Market Size and Growth

In the last five years there has been a tremendous growth in the satellite
phone market




30% average sales growth each year for the past five years
Demand for rental units have almost doubled every year for the same period
Public awareness for satellite phones has increased due to terrorist attacks and
natural disasters
There has been an increased interest by business and government agencies (7)

However, many leading satellite phone companies have suffered great dept
and bankruptcy due to lack of subscribers, even though there has been
increased awareness people still are not purchasing satellite phones

Globalstar’s stock is down more than 90% from a year ago (8)

The estimated market size for 2002 was 42 million users, but the market
never reached that size, there is not much of a demand (9)
Product Life Cycle

Satellite phones have very low
growth and profits due to the
lack of interest in satellite
phones

When satellite phones first
came out, the company lost
money rather than earn money
due to lack of public
knowledge and need

Sales increase during
hurricane seasons and times
of other natural disasters
(10)
Competitors

The main competitors for Mobillite are:




Inmarsat
Globalstar
Iridium (11)
Mobillite is a better product!

Cheaper to rent or buy




Made of a stronger plastic (more durable)
The smallest of all satellite phones


Dollar per minute calling fees
Receiver of the call pays nothing
attachable antenna
Uses LEO satellite technology which is far more dependable than the
commonly used geostationary services
Start Up Costs

Mobillite could take out a $500,000 loan to start off with from a
federal bank which would cover the costs of:






Office equipment and supplies- $25,000
satellite equipment-$125,000
rent for the building- $100,000
utilities and salary for workers-$ 200,000
advertisements- $50,000
We could also raise capital by offering stocks and shares to the
general public
Test Marketing Plan

In order to make Mobillite known to the public we intend to advertise on radio
stations and billboards in major cities

We will test Mobillite in Monterey, California.
 Not a major city
 May be subdued to earthquakes and forest fires.
 Fairly wealthy city with people that could afford to use our phone
Reduce, Reuse, Recycle

With toxic elements like lead and mercury found in each mobile unit,
it is important to keep satellite phones out of landfills and
incinerators. (12)

There are a number of Charities that accept the donation of old
mobile phones (including cell phones and satellite phones)

Wireless Foundation’s cell phone recycling programs



Donate A Phone recycles phones to raise funds for a number of charities
Call to protect collects retired phones to give to victims of domestic violence
for use as a lifeline (13)
If the user of a Mobillite satellite phone returns they old, used phone
to us at the end of use, the user will receive a check reward of $25
Channel Type

Mobillite will use C1 (direct marketing) and C3 (producer to
wholesaler to retailer to customer)


We will be using a merchant wholesaler who will store our satellite
phones for us
Mobillite will be sold both online and in stores, so to avoid any pricing
conflicts, Mobillite will be sold to the merchants at a discount price, who
will sell to the retailers at a discount price. The online price will match
the prices of the phones in the stores

Mobillite will use selective market coverage, focusing on areas
where there are high risks for natural disasters

Mobillite will not be franchising
Location

Mobillite will be located in Monterey, California

California has a population of 36,457,549 (14)

Eighth wealthiest state, so most of the people should be able to afford
our phone

High risk for natural disasters
Inventory Management

The merchants will be warehousing Mobillite phones for us

Mobillite will increase production during the summer and winter to
prepare for hurricane seasons which generally happen in the fall
and spring

Mobillite will use air as its method of transportation because it is
quick and we want our product to be readily available to our
customers in case of sudden natural disasters.

Air is the best method of transportation for small objects
Projected Income Statement Process

Step A:
# of units for the 1st year = 95,000 units

Step B:
Labor = 45
Materials = 90
Benefits = 20
Total = 155 units
•
Step C:
L = 45 x 95,000 = 4,275,000
M = 90 x 95,000 = 8,550,000
B = 20 x 95,000 = 1,900,000
Total = 14,725,000
Process Continued

Step D:
OPERATING EXPENCES
Administration = 95,000 x 5 = 475,000
Lease/rent costs = 65,000
Insurance = 35,000
Total operating expenses = 575,000
•
Step E:
ATC = average total cost
ATC = (total cost of goods sold + total operating expenses)
expected # of units sold
(14,725,000 + 575,000) = 15,300,000 = 161
95,000
95,000
ATC = $161
Continued……….

Step F:
Markup based on selling price
Selling price= ATC per unit
1- markup desired
$ 161 = $ 460 per unit
1 - .65
•
Step G:
Gross Profit = sales – cost of goods sold
44,175,000 – 15,175,000 = 29,000,000
Net income before taxes = gross profit – total operating
expenses
29,000,000 – 575,000 = 28,425,000
Tax Amount = net income before taxes x taxes(40%)
28,425,000 x .40 = 11,370,000
Net income after taxes = before taxes – tax amount
28,425,000 – 11,370,000 = 17,055,000
Breakeven Points

•
Breakeven point in units = total fixed costs/unit contribution margin
contribution margin = unit sales price – unit variable cost
CM = 460 – 155 = 305
BP = 575,000 = 1,885 IN UNITS
305
Breakeven point in dollars = breakeven x unit sales price
BP = 1,885 x 460 = $867,100 IN DOLLARS
Mobollite Satellite Phones
Projected Income Statement
Years 2008 - 2012
10% Growth each year
Year
2008
2009
2010
2011
2012
$44,175,000
48,592,500
53,451,750
58,796,925
64,676,618
4,725,000
5,197,500
5,717,250
6,288,975
6,917,873
Materials
8,550,000
9,405,000
10,345,500
11,380,050
12,518,055
Benefits
1,900,000
2,090,000
2,299,000
2,528,900
2,781,790
15,175,000
16,692,500
18,361,750
20,197,925
22,217,718
29,000,000
31,900,000
35,090,000
38,599,000
42,458,900
475,000
475,000
475,000
475,000
475,000
lease/Rent costs
65,000
65,000
65,000
65,000
65,000
Insurance
35,000
35,000
35,000
35,000
35,000
575,000
575,000
575,000
575,000
575,000
$28,425,000
31,325,000
34,515,000
38,024,000
41,883,900
40%
40%
40%
40%
40%
Tax amount
11,370,000
12,530,000
13,806,000
15,209,600
15,209,600
Net income after taxes
17,055,000
18,795,000
20,709,000
22,814,400
26,674,300
Sales
Costs of goods sold:
Labor
Total cost of goods sold
Gross profit
Operating expenses:
administration
Total operating expenses
Net income before taxes
Taxes
Pricing Strategy

We will first use Reference pricing by looking at our competitors
prices in order to mark our cost down in hopes of attracting more
costumers

Penetration will then be our main strategy by setting a lower price to
attract buyers to our satellite phone company instead of our
competitors

By setting a lower price we hope that our satellite phone will become
further globalized and create a higher demand, which we intend to
meet!

Our price has been determined by mark up based on selling price,
which will leave our company with a good profit
Selling price = ATC Per unit
1 – Mark – up desired
•
Selling Price = $460
$161 = $460
1 - .65
Concerns

Our pricing strategies are not to raise any concerns other than that of
the reactions of our competitors, which may result with them trying to
lower their price as well.

However, other satellite phones cost about $200 more than ours and
will only create competition if other companies rethink and execute
new strategies.

When and if this does occur our company will have plenty of warning
and time to rethink our strategy as well. Considering the fact that they
would have more steps to take than us because our satellite phone is
already unique and costs a lot less
Discounts & Shipping

Cash discounts and quantity discounts will not be an issue because
our product is expected to be needed almost as soon as it is ordered,
and in small quantities.

If we were to give a cash discount almost all buyers would meet the
standards, plus we are also selling our product online, which must be
paid the minute its ordered

Our shipping prices will only have an effect on the buyer depending
on their location in comparison to our shipping stations.

We would like standard shipping to cost about $4.95, but if more than
3 satellite phone are purchased for the same shipping location then
shipping will be free. However, we do not expect this to occur often.
Public Relations Campaign
•
•
•
•
Objective: Through our campaign we aim to build strong relations among
our costumers, the media, and communities creating awareness about our
product and exactly what our product can and will provide, that being
assistance to attain or feel relief.
Channel: We will be using sponsorship to support NPR (National Public
Radio), which is a non-profit internationally acclaimed producer and
distributor of noncommercial news, talk, and entertainment programming.
We will also sponsor KPBS and WJCT.
By sponsoring them we will receive a 10 second on air acknowledgement
for our financial support during these programs.
Sooooo, with this we are getting our message across while generating
community goodwill.
Public Relations Campaign

Target: We would like our campaign to target those who can benefit
and receive the most assistance from our product when and if
needed. Meaning to say, that by distributing our product we would
like the consumers to be fully aware that we are providing a
“reliable” form of assistance for various situations as well as
location.

Our target audience will therefore include customers as well as the
communities which are more apt to being surrounded by natural
disasters, such as hurricanes, earthquakes, brush fires, etc.
Customers will therefore be those who are part of these
communities, or those who travel, taking on the environment by
means of hiking, white water rafting, or anything else that may call
for immediate assistance.
Public Relations Campaign

Our Message: As a satellite phone provider we are trying to convey the
message that our phone is a 100% reliable source for attaining assistance
or relief at any time and place, while still being light, compact, and
convenient.

Our message will be released before and after the times of occurrence for
natural disasters based on location. For example, the months in which
hurricane season occurs. Yet, our phone will still be available at anytime for
those who need it for reasons of comfort on trips or adventures.

Evaluating PR: In order to evaluate we would compare our sales in year 1
to what we predicted for year 1, then from there make the proper
adjustments needed. We would also monitor the internet to see how many
users checked out the product and web site. This can help us discover why
possible consumers may have turned away. We could also check out other
satellite phone companies to see if their sales jumped at any point in time
when our product may not have been doing well. Yet, we only predict
success!
Advertising

•
Advertising budget = (unit sales price x # of units for yr.1) x 5%
($480 x 95,000) x .05 = $2,280,000mil
Media forms:
Radio- We will be using a few different radio stations, those being ( NPR,
WERZ, KPBS, and, WJCT ). We feel that these stations will target a variety of
generations and not just the youth of today. This radio advertisement will consist
of our general message and where you can find further info.
Billboard- Our billboard will be eye catching and straight to the point, so it
catches the eye when travelers are driving by. Anything to wordy wouldn’t make
an impact.
Billboard
Provides the ability to communicate
any time, anywhere,
with anyone,
under any circumstance.
For more information visit us at Mobillitephones.com
or tune into NPR, 107.9, 89.5, OR 89.9
Scheduling

Radio adds will be launched morning, noon, and night during prime hours
morning – 6-9am
Afternoon – 11am–1pm
Night – 4–7pm

Our billboards and radio adds will be launched before and after disastrous
seasons.
These are the seasons:
Southwest (brushfires)
December– June
Atlantic & Central Pacific (hurricanes)
June – November
Cost of Advertising
Audience
Cost per ad/
add slots
Cost per
Thousand
Households
(CPM)
NPR
(Nation Public Radio
Sponsor)
40,000,000
$650,000 $16.25
WERZ- 107.9FM
(Portsmouth)
15,000,000
KPBS- 89.5FM
(San Diego Sponsor)
21,000,000
$300,000 $14.29
WJCT- 89.9FM
(Jacksonville
sponsor)
18,000,000
$400,000 $22.22
Billboards
(Fl, CA, NE area)
65,000,000
$125,000 x 6 $11.54
= 750,000
$60,000 X 3 $12
(three time slots)
= 180,000
Advertising

Theme: Our theme will consist of making it know that our product is fully
reliable and convenient in any situation or location providing assistance to
attain or feel relief.

Types of Advertising:
Competitive- We will be competing with our characteristics, being that
our satellite phone is smaller and compact.
Pioneer- Through pioneer we will be educating our consumers about
our product because many are uneducated when it comes to satellite
phones.

Evaluation: We will evaluate by sending and taking a pole from our
costumers, but also by looking at our sales.
Sales Objective

Mobillite will have a trial period of 30 days to sample our
product for FREE! If our phone is not purchased, the
consumer must return our phone with a required
questioner explaining why they didn’t want the phone.

To ensure reliablity, we will take down all consumers credit
information to protect us from theft through this trial. If the phone
is not returned or bought after 30 days, we will charge their
account, otherwise, this trial period is free of charge!
Sales Promotion

In order to promote our phone, we will set up a demo in
the retailers we intend on selling our phone in, directing
specifically towards the consumer





Circuit City
Radio Shack
Best Buy
Dicks Sporting goods
We will also use price reduction. If our phone is
purchased during the trial period, the cost will be
reduced from $460 to $400
Promotion Scheduling

Since Mobillite production is increased during the
seasons before common natural disaster seasons
(summer and winter), our promotion will also take place
during this time since it is leading up to the most
important and crucial time to have our satellite phone
Promotion Survey

To tell how well our demos went, people will be offered a
survey rating what they thought of our phone

We will also hand out cards with our website, monitor
how many people are accessing our website
Key Points of Mobillte

Strong and dependable

No limit to service

Smaller and significantly cheaper than our competitors
phones
Consumer Objections

Since many people don’t know a lot about satellite
phones, some concerns or complaints may be:

Consumers might feel that our phone is too large
compared to the standard cell phone size

Our phone does not offer extra features such as
cameras, music, and internet that cell phones offer
Overcoming these objections


Our phone offers around the world service that
normal cell phones cannot provide without a
service fee
The point of our phone is not to use as a toy, its
purpose is to be a reliable tool in reaching help
in case of natural disasters, car accidents in
remote areas, and as an aid to workers who are
often placed in remote areas



Miners
Forestry/ agricultural workers
scientists
Type of Close

Mobillite will use an urgency close, regarding the end of
our trial period. We will use our 30 day trial period and
the discounted price during this time as motive to buy
our phone, because it wont last forever!
Follow Up Procedures

In order to avoid post cognitive dissonance Mobillite will offer those
who purchase this product a charger, an extra battery, a water proof
hard case, a portable antenna for use in a car, and a one year
warranty, all for free!

We will also provide a Referral rewards program: if a consumer tells
a friend about Mobillite and they too purchase our product then both
will receive a free Mobillite gift


Stock in the Mobillite company is also available
If Mobillite is purchased during expected hurricane seasons,
we will provide a free hurricane emergency kit

useful for any natural disaster
Sales Force


Product line will be the way we structure our sales force.
The salespeople of Mobillite will be fully knowledgeable
about our product, in order to provide help and answers
to the consumers
Our sales force will be compensated and motivated by
salary commission. Our employees will have a set
salary, however, bonuses will be given based on how
many phones the salespeople are selling



Mobillite is a very pleasant environment filled with people who care
about our product
Our hours are flexible depending on the employees personal situation
Opportunities to advance in the workplace are available to those with
outstanding sales records
Resources
1. Ezine Articles. (2007)
http://ezinearticles.com/?Satellite-Phone-Benefits-and-Information&id=382575
2. Wikipedia. High density polyethylene
. Last updated 9 Oct. 2007
http://en.wikipedia.org/wiki/HDPE
3. Wikipedia. Satellite Phone. Last updated 9 Oct. 2007
http://en.wikipedia.org/wiki/Satellite_phone
4. U.S. Census Bureau. (2006) American Community Survey.
http://prudence.franklinpierce.edu/exchweb/bin/redir.asp?URL=http://factfinder.census.gov/ser
vlet/STTable?_bm=y%26-geo_id=01000US%26-qr_name=ACS_2006_EST_G00_S2404%26ds_name=ACS_2006_EST_G00_%26-_lang=en%26-redoLog=false%26-CONTEXT=st
5. Global Com. Are You prepared for 2007? (2006)
http://www.globalcomsatphone.com/globalcom/2007.html
Resources (cont)
6. U.S. Census Bureau. Retrieved Sept. 17 2007
http://www.census.gov/cgi-bin/epcd/srchnaics07defs
7. Global Com. The Future of satellite Phone Market Looks Bright. Retrieved Oct. 9 2007
http://www.globalcomsatphone.com/articles/future.html
8. Dow Jones & Company Inc. Retrieved 9 Oct. 2007
http://proquest.emi.com
9. New York Times. Planet Earth Calling Iridium; Can the Satellite Phone Service Achieve a Soft
Landing? Retrieved Oct. 9 2007
http://query.nytimes.com/gst/fullpage.html?res=9C0DE1DD1E3AF934A3575AC0A96F958260&se
c=&spon=&pagewanted=2
10. Product Life Cycle. Retrieved Oct. 9 2007
http://images.google.com/imgres?imgurl=http://www.atkinson.yorku.ca/~lripley/zchtplc.jpg&imgrefurl=http://www
atkinson.yorku.ca/~lripley/imUproduct.htm&h=325&w=500&sz=14&hl=en&start=7&um=1&tbnid=6eRAnmgzF1j
EM:&tbnh=85&tbnw=130&prev=/images%3Fq%3Dproduct%2Blife%2Bcycle%26svnum%3D10%26um%3D1%
6hl%3Den%26sa%3DN
Resources (cont)
11. Mackay. Retrieved 17 Sept. 2007
http://www.mackaysatellite.com/
12. NBC Newschannel. The Environment and You. Retrieved 17 Sept. 2007
http://www.kpvi.com/global/story.asp?s=6619867
13. Technobabble. Cell Phone Recycling Makes Good Cents. Retrieved 17 Sept. 2007
http://www.lockergnome.com/nexus/technobabble/2005/01/26/cell-phone-recycling-makes-good-cents/
14. US Census Bureau. Retrieved 25 Oct. 2007
http://quickfacts.census.gov/qfd/states/06000.html