RUNNING HEAD: Market Planning Project: HUD

iZ

Tomorrow’s Technology in Today’s Cars

Presented By

Thomas Bozeman, Patricia Lamothe, Jonathan Petrovich

2 May 2013

Market Planning Project: HUD Page 2

Table of Contents

List of Figures & Tables................................................................................................................................4

Executive Summary.......................................................................................................................................5Situational Analysis.......................................................................................................................................7

Marketing Summary......................................................................................................................................7Geographics...................................................................................................................................................7

Demographics................................................................................................................................................8Behavior Factors/Psychographics..................................................................................................................8

Market Needs.................................................................................................................................................9Market Trends................................................................................................................................................9

Market Growth.............................................................................................................................................10SWOT Analysis...........................................................................................................................................10

Strengths...................................................................................................................................................................................10

Weaknesses............................................................................................................................................................................. 11

Opportunities.......................................................................................................................................................................... 11

Threats...................................................................................................................................................................................... 11

Competition..................................................................................................................................................12Product Offering..........................................................................................................................................12

Keys to Success............................................................................................................................................13Critical Issues...............................................................................................................................................14

Marketing Strategy.......................................................................................................................................15

Marketing Strategy...............................................................................................................................................................15

Value Proposition..................................................................................................................................................................15

Mission.........................................................................................................................................................15

Marketing Objectives.......................................................................................................................................................... 16

Financial Objectives.............................................................................................................................................................16

Target Markets:............................................................................................................................................16

Positioning...............................................................................................................................................................................17

Strategies.................................................................................................................................................................................. 17

Marketing Mix.............................................................................................................................................17

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Pricing....................................................................................................................................................................................... 17

Distribution............................................................................................................................................................................. 18

Marketing Communications..............................................................................................................................................18

Marketing Research.....................................................................................................................................19Financials.....................................................................................................................................................19

Break-even Analysis....................................................................................................................................20

Sales Forecast.........................................................................................................................................................................21

Expense Forecast................................................................................................................................................................ 21

Controls.................................................................................................................................................................................... 22

Implementation............................................................................................................................................22

Marketing Organization...............................................................................................................................22Contingency Planning..................................................................................................................................23

References....................................................................................................................................................25Appendix 1: CSUMB Market Survey: March 1, 2013................................................................................26

Appendix 2: Financial Calculations.............................................................................................................30

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List of Figures & Tables

Figure 1: Hours a Week Survey Respondents Drive………………………………………….... 8Figure 2: SWOT Analysis……………………………………………………………………… 10Figure 3: A basic view of the distribution system……………………………………………… 18Figure 4: The break-even point of the 20/20…………………………………………………… 20Figure 5: General outline of iZ’s marketing structure………………………………………….. 23Table 1: Contribution income analysis (Break-Even Point)……………………………………. 20Table 2: Projected sales and revenue of the 20/20 over 3 years………………………………... 21

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Executive SummaryiZ Incorporated (iZ) is a new start-up in the automotive electronics industry. iZ’s launch

product will be the 20/20 Heads-Up-Display (HUD). The 20/20 will represent a significant step

forward for the market in terms of functionality and integration. iZ’s initial markets will be large

city centers in California such as Los Angeles and San Jose.

As a new start-up, iZ will be able to adapt to changes in the business environment quicker

than a larger company. Also, the entirety of the company is centered on making the 20/20 a

superior product. iZ has few direct competitors, and current offerings are very basic in nature.

Public attention is currently focused on driver safety and finding ways to safely integrate

technology into the driving experience. This presents an unique opportunity for iZ, where the

public is being actively encouraged to use products that simplify the driving experience.

The 20/20 will be sold for $200. The break-even point for iZ will be sales of 309 units

per quarter, with quarterly revenues of $61,800. iZ expects to reach this sales goal in the fourth

quarter of year one. It will be sold in national auto and electronics retailers such as Best Buy,

Pep Boys, and Autozone. iZ will use high-quality suppliers for the 20/20s components and do

the final assembly in-house. Distribution of the 20/20 will also be handled internally.

There are three significant threats to iZ’s success. A second recession would be a

significant hurdle for iZ to overcome. During the Great Recession, the auto industry was

suppressed, and it is expected this would be repeated. In this situation, closing iZ and liquidating

its assets could be the only viable option. Also, large volume automakers such as Ford and

Toyota beginning to offer a factory-installed HUD would be a major threat. This would put us

into direct competition with some of the world’s largest corporations for customers. This

situation would impact both immediate and long-term sales projections significantly. An interior

threat to iZ could be that market research done before launching the 20/20 proves inaccurate, and

our price of $200 is untenable. While the sell price could be dropped to $175, it would

significantly affect the company’s profit margins.

iZ will have a small team of dedicated marketing staff, headed by a Chief Marketing

Officer (CMO). Two print advertising specialists, three online/social media specialists, and two

business-to-business marketers will answer to the CMO.

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iZ will focus its marketing on the safety element of the 20/20. By displaying vital

information directly onto the front window, the driver never needs to remove their eyes from the

road. This makes the driving experience safer for them and the drivers around them. As iZ and

the 20/20 will be entirely new to consumers, the campaign will be geared heavily towards

creating buzz and awareness quickly. A website and online presence in social media will be

established three months prior to the 20/20’s launch, and will serve to educate consumers on the

product and help them find a point-of-sale. iZ will purchase two-page advertisements in print

media such as Motor Trend, Road & Track, and Car & Driver to reach out to the car enthusiast

community. Along with the company’s own website, iZ will have banner ads on automotives-

related websites such as jalopnik.com and autoblog.com. Three months before going on sale, iZ

will deliver press cars to auto journalists to test the 20/20 system for themselves.

Our primary target markets are the Bohemian mix, Fast-Track families, and the Up-and-

Comers. These segments represent tech-savvy, medium to high-income earners, who appreciate

high-quality products. The Bohemian and Up-and-Comers in particular are typically early

adopters of new technology. Younger, single and older, married people will be interested in this

product. The youth will be attracted to the new, cutting edge technology and luxury

connotations, and parents will appreciate the safety element of the 20/20.

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Situational AnalysisThere are several heads-up display (HUD) items for cars in the market today. Most of

them only show speed and revolutions per minute (RPM). The most advanced types of HUD

products, which come as a factory option from a dealer, include: navigation, speed, fuel status,

audio information, and sometimes the ability to auto-adjust to the brightness of the environment.

These top-of-the-line HUD products display the information onto the windshield of the vehicle

for the driver to make it more easily accessible than looking in several different places. The goal

of iZ (pronounced “eyes”) is to bring the luxury of the factory options of cars such as Lexus,

Cadillac, and BMW at an after-market price and compatibility with just about any type of car on

the market.

Marketing SummaryThe market in which we are entering has very little financial information which makes

the problem that our product, 20/20, will address very difficult to quantify. Research for this

portion is ongoing, and information will be added as it is found.

The markets that we intend to target first, according to the Claritas PRIZM model, are

going to be the Bohemian Mix, the Fast Track Families, and the Up-and-Comers. These are the

groups that appear to be the ones who go for the new technology on the market, and who would

have the disposable income to purchase our product (Marketing).

GeographicsWhen a product is introduced into the market, the market must be divided up into

different geographical areas since not all markets are the same. We have decided to operate in all

geographical areas and look for differences in their needs and wants. The HUD must be able to

be marketed globally since cars are a global product. Car sellers have many different brands that

operate globally; therefore we want the 20/20 to be compatible with international cars.

In the future, if the product is introduced successfully in the United States, a possible

extension of our market may be Portugal and Luxembourg since they have some of the highest

numbers of cars per capita on the earth (Pentland).

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Demographics Based on the findings in the survey we distributed, the most responsive age group was the

18-24 year-olds who accounted for 70% of the respondents (J. Petrovich, Aftermarket Heads Up

Display, 03 01, 2013). These are the people who have cars that are likely “new” to them, and are

more of an expression of them. Not all of those in this age group, however, have the disposable

income for a high-end car accessory, so those who are the parents of this age group should be

considered as well since they do have the buying power.

The survey respondents were split virtually down the middle in terms of gender, 47.5% male and

52.5% female (J. Petrovich, Aftermarket Heads Up Display, 03 01, 2013). No distinction can

really be made in those terms since the product being offered is gender neutral.

Behavior Factors/PsychographicsA survey was launched on March 1, 2013. Its purpose was to get an idea for the

demographic and psychographic information about people and how they view their cars.

Figure 1: Hours a Week Survey Respondents Drive

How Many Hours a Week Do You Drive?

0-2 hours3-5 hours6-8 hours9-11 hours12-14 hours

(J. Petrovich, Aftermarket Heads Up Display, 03 01, 2013).

The target behavior of customers for the 20/20 would be driving their car around five to

fourteen hours per week, which is still quite a bit of driving. We would like to market to the

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person who spends more time in their car since they are going to be the ones more likely to buy

our product.

Market NeedsFrom what we have looked at so far, the market does not have an option for consumers

who do not have an up-to-date car (2013 or later) and want the same HUD capabilities that

luxury brands offer. The gap in this market is for the after-market product that can offer the

same, at least similar, qualities that the luxury factory options do and make it compatible with

older vehicles. This gap would make our product, 20/20, the only one within this segmented

area. This gives iZ an advantage with the 20/20 because it will have minimal competition.

This product would not satisfy a need as much as a want. A digital HUD system is not

required by law to have in a car. The HUD would only be bought at the discretion of the

consumer if they felt like they would benefit more from a digital HUD than an analog one. What

this product does is give consumers an option of whether they want to technologically advance

their car beyond the manufacturing date.

Market TrendsThe 20/20 will have two primary markets. The first one is young adults in their mid to

late twenties and the second market will be parents buying our product for their children or

themselves. Our target market will be the youngest adults and that is the reason why we focused

about market trends for this generation.   

A popular trend now is to put newer technology in older cars. It is possible to put gadgets

like an MP3 player and a GPS system in a car that was manufactured before those items? were

available (Seredynski). New technology trends because many people love to buy the latest and

greatest thing, and to stay current with the market. The HUD will permit our customers to

bringing new technology into their existing car, instead of waiting until they purchase a brand

new car.

Security is also trending because so many accidents occur on the roads. We want to be able to

provide our customers with all the information they need while driving, while minimizing the

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risk of an accident. Giving parents the peace of mind that their child is safe while driving with

our product is a priority as well.

Market GrowthThe 20/20 is coming into a new segment of the market that no other company has

considered. The fact that it addresses the “every day” car, but gives the customer a luxury feel of

a high-end accessory is a great spot in a market. With the introduction of the 20/20, we believe

that the market will grow because the 20/20 is the only product in this market that offers the

same luxury as a factory option. If the product is introduced successfully, then there will be other

companies that will enter the market and increase competition. This is why we must not become

complacent and must continue to innovate our products.

SWOT AnalysisFigure 2: SWOT Analysis

Strengths

As a small company, iZ can be nimble when adapting to changes in the market. There is

a single group of people in charge instead of a large bureaucracy. Another benefit of the smaller

StrengthsSmall, Adaptive CompanySingle Product Focus

WeaknessesLittle Known Product NicheProduct is Not Necessary to Driving

OpportunitiesFew Direct CompetitorsLarge Automakers Not CompetingGov't/Social Pressure for Safe Driving

ThreatsRecession suppresses MarketEntry-Level Automakers Enter Market

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size tof iZ is the lower operating costs of the business. As a single-product company, our entire

focus is on the 20/20, and making it the absolute leader in HUDs.

Weaknesses

The major weakness for the iZ 20/20 is that it is not a necessary component for driving.

It is an aftermarket accessory, and one whose technology is relatively unknown in the general

marketplace. Due to this lack of exposure, iZ expects to execute a significant marketing strategy

to increase awareness for the product. Also, our single-product lineup makes us vulnerable if the

20/20 becomes obsolete.

Opportunities

Currently there are few direct competitors in the HUD market, and none have a

significant advertising presence in car-related media. This shows us the market is weak, and

with a strong entry into it, iZ has an opportunity to take a large market share. Another positive

aspect of the market is most automakers don’t have a factory alternative for our product. This

points to a significant range of automakers whose buyers we can target, as well as the

automakers themselves in the future.

Also, the current political and social landscape lends itself to our product. Recent laws in

California push for regulating the distractions that drivers are exposed to. The laws include

outlawing talking on the phone without a Bluetooth device and texting while driving (Text

messaging). The laws that are in effect to minimize drivers’ distractions can lead to products

similar to the 20/20 becoming mandatory in the future.

Threats

Another recession in the United States would be a crippling blow to iZ. During the

previous recession, the auto industry, both manufacturers and aftermarket companies, was

weakened severely. Sales of cars and aftermarket parts dropped. We expect that if another

recession were to occur, there would be similar effects. Furthermore, since we expect the United

States to be our sole market initially, our exposure to its market fluctuations is very high.

A potential threat to iZ would be automakers such as Ford, Nissan, Toyota and GM offering

factory-installed HUDs on their entry- and mid-level cars. Currently most cars that offer a HUD

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as an option are above a $50,000 price point. If that price point was to drop to $30,000, more

customers will have the option to get such a system stock. This would both impact our

immediate sales and our long-term sales, as there would be an increasing number of older cars on

the road that already have HUDs.

CompetitionThere are currently only two known aftermarket HUD producers, ADD and SEI. These

companies have very basic solutions for a HUD system. One of the ADD systems requires a

tinted screen to be put onto the front windscreen so the data can be seen (ADD). This obscures

the driver’s view of the road, especially at night. ADD’s other option, as well as SEI’s, projects

a basic speedometer and mph readings, and can be customized to show other information.

Our indirect competitors are primarily luxury automakers: Audi, Cadillac, Lexus,

Mercedes Benz, and BMW. These luxury brands all have a HUD system as an option or

standard in parts of their lineup. Audi has just unveiled a new HUD system for the A7 sedan,

base price $60,1000. It is a substantial leap forward in the technology, providing Google Earth

integration with the GPS and HUD, as well as more fluid graphics. This system is in the

prototype phase; therefore it will be several years before it is released in its production form.

The most notable product in this market is the HUD that comes with the Lexus GS. This HUD

system displays a wide variety of information about the car, including: “speed, a bar showing the

eco performance of the car, sport mode which displays information which can improve manual

gear shifting, and collision detection which will display ‘BRAKE’ on the HUD if you are about

to crash”(Top 5).

Product OfferingThe iZ 20/20 will be a simple, yet elegant design. The unit is comprised of a rectangular

box containing an LCD screen, and the circuitry necessary to take in the car’s data. There will

be three wires leading out of the housing, one for tapping into the car’s power lines, one for

connecting into the engine control unit, and one that can be used to sync with a car’s built-in

navigation system. Framing the screen will be “soft-touch” plastics to give it a high quality look

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and feel, while the rest of the construction will be high-grade automotive plastics. The screen

itself will meet the same quality standards for the LCD screens on most smartphones.

Installation will require some alteration of the interior of the car. A hole the same size

as the unit housing will be cut behind the gauge cluster. From there an electrician will be able to

easily splice the HUD’s wires into the appropriate power and information wires. The whole unit

will then be sealed onto the dash, creating a seamless, stock appearance. The screen frame will

be offered in several different colors to match standard interiors.

In the current market, there are several products that provide basic information with a

dull appearance. iZ aims to create a hybrid of the luxury factory option HUD, but at the price that

other car owners can afford. The screen will initially be able to display navigation, speed, rpm’s,

and an “eco-mode.” Future product offerings may add increased functionality, such as Bluetooth

integration or wireless sync with handheld devices. This device will be the way to get the most

out of a car that is pre-2013, and put that car ahead of the others on the road in terms of

technology, and efficiency behind the wheel.

Keys to SuccessThe biggest key to success for this product is not to become complacent with what is

already offered to the customer. The technology in any product is never always up-to-date. The

way that companies stay on top of their respective markets is to continue to progress their

technology, and what is offered in their products.

For this product to be successful there needs to be extensive research on what is done

with the HUD systems of luxury cars such as Cadillac, Lexus, and BMW. This, combined with a

continual research and development process, will allow for us to keep up with the state-of-the-art

quality, and provide the best product for our customers that we can.

Another factor that would greatly help the success of this product would be the legal

aspect of regulating distractions on the road. With increased discussion about what is and is not

permitted behind the wheel of a moving vehicle, it is not out of the question to say that a digital

HUD for cars may be required sometime in the future. If law mandates products like these, then

many people would want the top-of-the-line product that we are set on marketing.

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Critical IssuesThe most critical issues to iZ are the possibility of automakers making our technology a

factory-standard option, or a recession in the U.S. suppresses the auto industry as a whole. We

expect our early adopters to have cars in the $20,000 - $35,000 range, and currently there are no

factory HUD options in that range. We intend to offer the 20/20 as a product for the people who

have these cars, but still want the cutting edge automotive technology. If Ford or Toyota put a

HUD on the options list for their more basic cars, we would suddenly find ourselves direct

competitors with some of the largest corporations in the world. We would be outmatched in

terms of staff, funding for both research and marketing, and brand recognition.

A second recession would have similar, if not worse, effects on the auto industry than the Great

Recession. The industry was hit hard, with sales of new and used cars, as well as aftermarket parts of all

varieties suppressed for several years. Some of the larger automakers have become stronger companies

due to the recession, but smaller aftermarket companies do not have the ability to bounce back as

successfully. In a second recession, consumers would be even more wary of spending on non-essentials,

and our sales would take a dramatic downturn.

Market Planning Project: HUD Page 15

Marketing Strategy

Marketing Strategy

The value we will offer to our target market is safety. By keeping their eyes off of the

gauges and other information in the car, the driving experience will be safer for them and others

on the road. We want to make sure that our customers have all the information on our product

that they need to make the right purchasing decision. A website for the product will be set up to

clearly state all things associated with the company and product including: where to buy it, the

price, reviews from other customers, and videos that show the product in use so that customers

can see what it will look like and how it will function before they make the purchase. We also

want to be able to show customers that even if they don’t have a brand new Mercedes or BMW

they can have similar luxury in their own car.

Value Proposition

For anyone that wants to keep themself or their family safer on the road, or give their car

a more luxurious feel with a projecting HUD. The projecting HUD will decrease the time spent

looking at GPS, speed, fuel level and other things that take the driver’s attention away from the

road.

MissioniZ Inc.’s objective is to become a leader in the automotive electronics sector, and

synonymous with quality and cutting edge automotive technology.  Our product will offer

customers a significantly improved HUD compared to HUDs on sale today, at a competitive

price.  Our objective with the 20/20 HUD is to bring a level of quality previously only expected

from high-end luxury vehicles.  Currently this sector is not overcrowded with competitors, and

iZ expects to fight strongly for market share from introduction.  iZ is a North American

company, and our initial market will be the western coast of the United States, focusing on cities

with large commuter populations, such as Los Angeles and San Jose.  As the business grows, iZ

will continue to expand its product lineup, adding more features to the HUDs to fit the changing

needs of the modern driver. At that point it will also need to expand on its geographic reach.

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Marketing Objectives

Since iZ is an entirely new company and is introducing a new product into the market, all

of the customers in the target market are unaware of its existence. The objective of this

marketing campaign will be to move as many of those potential customers into the awareness

stage of the buyer readiness process, and all the way through to the purchasing stage.

To move consumers through this process it is imperative that the value and safety aspects

are brought to the consumers’ attention, and that traffic to the company product website is

increased so that customers can obtain more information about the product outside of the

advertisements.

Financial Objectives

As with any other product that is introduced in any market, the financial objective for the

20/20 will be to make a profit. Since this will be an entirely new product to consumers, it is

understood that generating the profit will take some time. The 20/20 will need time to reach

consumers and create the conviction that purchasing requires. With a price point of $200, it is

expected that iZ will break even by the beginning of the second year of production.

Target Markets:We targeted three segments. The first segment is the Bohemian mix that includes diverse

residents like young singles, couples, and families ranging from students to professionals. They

are early adopters who are quick to check out the latest technologies. Their demographic traits

include a moderate income, typically younger than 55, a family mix, and a college degree.

The second segment is the Fast-track families. This category involves people with high

incomes, numerous children and spacious homes. These parents, 35 to 54 years old, want the

best for their children and they have the disposable income and make informed purchases.

The third segment is the Up-and-Comers. This category involves younger, unmarried individuals

with active lifestyles. They are recent college graduates who are into the latest technology and

have a moderate income.

Technology is important to those who make up these segments, which is why they

comprise our target market. HUDs have two primary markets. First are young adults in their mid

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to late twenties buying the product for themselves. The second market is a parent buying the

product for their children or themselves. These families will want to buy safety products for their

children and have the income to buy them. The Bohemian mix segment is a blend of these two

markets; including younger married and unmarried individuals who have a preference for new

technology. Young adults who can’t yet afford a luxury car will be drawn to the 20/20 for its

high-tech, luxury connotations.  

Positioning

iZ will market the 20/20 from a position of “more for much more”. While there are other

indirect competitors that have HUDs that simply display the car’s speed, there are no other

products on the market outside of car manufacturers that offer the same quality for the price that

iZ does.

One of the competing products sells for just over $100 (GPS heads up). Consumers who

are in the market looking for a HUD will be able to pay a higher price for the 20/20, and have a

much higher quality product and more features to it aside from speed.

Strategies

To give the public an idea of how the product would perform when installed, we plan on

having our product installed in cars and show them at trade shows and conventions. Many car

enthusiasts and people who are interested in technology attend these shows. It would be an

excellent way to make people aware of its existence.

In addition to this, we also plan to market the 20/20 to rental car companies such as

Budget, Enterprise, and Hertz. The 20/20 will allow those companies to keep their fleet of cars

up to date, which will greatly appeal to them, and also gives the customers who rent from them

an opportunity to test how the 20/20 works in action. This plan markets to a group of people after

a business-to-business sale has occurred.

Marketing Mix

Pricing

The iZ 20/20 HUD will be priced at $200. We have determined that the costs of

production per HUD will be $110, allowing us a profit margin of $90. The survey we conducted

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showed that 30% of respondents were willing to spend $150-$200 on enhancing their car.

Current HUDs on the market retail between $80 and $140. The 20/20 will command a higher

price because it represents a significant step forward compared to its competition.

Distribution

The 20/20 will be sold in auto and electronics shops, such as Best Buy, Pep Boys, and

Autozone. iZ will work closely with suppliers to ensure only high-quality components go into

every HUD. The individual components will be ordered from international suppliers and

assembled in-house. This way management can personally ensure the highest standards of

construction.

iZ will use a three-tier distribution system to ensure quality control and an efficient

manufacturing process. iZ will work directly with suppliers to build strong relationships and

ensure clear communication lines. Initially, the HUDs will be assembled at and distributed from

our headquarters. As iZ grows, production and distribution processes will either be expanded or

outsourced as the situation dictates.

Figure 3: A basic view of the distribution system.

Marketing Communications

iZ will use a combination of push and pull strategies to build interest in the 20/20 and

bring it to the customer. In the early introduction stages of the 20/20, iZ will build a substantial

advertising presence online and in print media. Magazines such as Motor Trend, Road & Track,

and Car & Driver will have two-page advertisements introducing both iZ, as a new competitor in

the market, and the 20/20 HUD. Online marketing will be in the form of banner advertisements

Man

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iZ In

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on high-traffic automotive websites such as jalopnik.com and autoblog.com. To generate buzz

before the launch, iZ will send press cars, with the 20/20 installed, to auto-journalists for

weeklong trial periods. This will give us a final field test before launch, as well as give opinion-

shapers for our target demographics a chance to see our product before the public. Before

product launch, iZ will have a fully functioning website with helpful information on the 20/20

and where interested consumers can research it. At stores such as Best Buy and Autozone, iZ

will set up informational booths at major entrances with a sample of our product. This sample

would be would be comprised of a steering wheel, gauge cluster, and the dashboard leading to a

small section of glass to display information. The display would fit on a small 3 ft. by 3 ft. card

table. Product representatives will be on hand to answer customer questions and demonstrate the

20/20’s features and benefits.

Marketing ResearchThe primary research done was a survey to determine demographic and psychographic

traits of potential customers, as well as gauging enthusiasm for automotive technologies. The

survey was ten questions in length, and there were 42 responses.  This data was used to define

the age range of consumers who will buy a HUD product. Also, our survey helped to determine

how much consumers are ready to pay for this product.   Insert graph re: survey question re:

price for enhancing car.

Secondary market research was conducted primarily online, researching brand websites

to determine competitors, newspaper and journal articles regarding car electronics and

government studies on distracted driving. In the future we will continue our market research in

stores that sell electronic products like Best Buy, Pep Boys, Autozone and smaller independent

retailers. iZ will also have a customer feedback form on the website, where we can make note of

trends in customer comments and concerns and adapt to these changes.

FinancialsThe following sections will break down the financial portions of the 20/20’s introduction

and production.

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Break-even AnalysisTable 1: Contribution income analysis (Break-Even Point)

Price Per Unit $200.00

Number of Units Sold 309

Total Sales $61,800 100%

Less: Variable Production Costs $9,270 15%

Less: Variable Selling Costs $0 0%

Total Variable Costs $9,270 15% $30 Per Unit

Contribution Margin $52,530 85%

Less: Fixed Production Costs $52,500 99%

Less: Fixed Selling and Administrative Costs $0 0%

Total Fixed Costs $52,500 99% $169.90 Per Unit

Income Before Taxes $30 1% $.09 Per Unit

Figure 4: The break-even point of the 20/20

1 2 3 4 5 6 7 8 9 10 11

(100,000.00)

(50,000.00)

0.00

50,000.00

100,000.00

150,000.00

200,000.00

250,000.00 Breakeven Analysis Chart

Fixed costs per period

Total costs

Total sales

Net profit (loss)

Sales Volume (Units)

Dol

lars

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In order for iZ to break even with this product, the sales must be at 309 units a quarter. This

would put the revenue at $61,800.

Sales Forecast

The sales numbers we generated were based on a conservative estimate since this product

is brand new and has no initial following. We plan that there will be approximately 150 units

sold with a sales revenue of $30,000 in the first quarter. The projection is a gradual growth in the

first year quarter-quarter, and then a slightly steeper increase of sales by the second year at 1,250

units, which will generate revenue of $300,000.

Table 2: Projected sales and revenue of the 20/20 over the next 3 years

Measurement of Time Beginning on: Units Sold Sales

1st Quarter January 1, 2014 150 $22,500

2nd Quarter April 1, 2014 250 $37,500

3rd Quarter July 1, 2014 300 $45,000

4th Quarter October 1, 2014 375 $56,250

2nd Year January 1, 2015 1,250 $187,500

3rd Year January 1, 2016 2,000 $300,000

Expense Forecast

Not all of iZ’s final costs are included in this report. There are some that can be

unforeseen, and others that will not apply until later in the business cycle. Below are a few of

other costs that iZ will incur:

Fixed Costs:

Company website creation

Debt service to pay off start-up loan

Variable Costs:

Website Maintenance

Advertising costs

Market Planning Project: HUD Page 22

Controls

The controls that will be used to measure the success of this marketing plan will be both

the sales of the product, and how much traffic has been directed to the company’s website.

The sales are an obvious indicator of how many consumers have been moved all the way

through the buyer decision process. The amount of traffic to the website shows how well our

messages are being received by the market and how effective the advertisements and

communications are at creating interest in the minds of the potential customers.

ImplementationiZ will begin the process of introducing the 20/20 by finding high-quality suppliers for

the HUD’s components. We expect very high standards of build quality and customer relations

from our suppliers. After a vetting process with several candidates for each component, we will

order an initial three month supply. One-year contracts with our suppliers will be made after a

six-month trial period. HUD production and packaging will take place in our facilities, as will

distribution.

In the three months before the 20/20 is available to the public, iZ will send press cars

with the HUD installed to auto-journalists and auto shops to demonstrate the 20/20’s

effectiveness. This will coincide with a strong advertising push in print and online media to

generate buzz before launch and direct traffic to the 20/20’s website.

Marketing OrganizationiZ will employ a Chief Marketing Officer (CMO) to oversee all aspects of iZ marketing

operation. This individual will be ultimately responsible for iZ’s public persona and getting the

message out about our product. Under the CMO will be three online/social media advertising

specialists who will handle the day-to-day functions of the website, online advertising, as well as

online chatter about the 20/20. Two marketing specialists will be hired to work in print media

advertising, creating advertisements in magazines for our product. iZ will also have a dedicated

business-to-business marketing team to inform businesses on the 20/20 and the benefits it brings

to their car fleets.

Market Planning Project: HUD Page 23

Figure 5: General outline of iZ’s marketing structure

Contingency PlanningIntroducing a new product with a high cost like the 20/20 carries some risks. There is the

risk that market research was misleading and the price point of $200 is too high. In this

situation, a reduction in price to $175 could be implemented; however this would significantly

affect our profit margins. If the 20/20 does not have steady sales growth in the first year of

production, running out of capital becomes a significant concern. In this case, production would

have to be slowed until either sales pick up, or the determination is made to liquidate the

company.

The most critical threat to iZ is the possibility of a large-volume automaker such as Ford

or Toyota making a similar technology a factory-standard option. A factory standard HUD,

with similar functionality, would represent a difficult challenge for our marketers to overcome.

If such technologies start to become widespread at a lower price point than they are at present, iZ

would have several options available. One is the company reduces production to account for the

increase in factory HUDs being installed, and continues on as a niche product manufacturer. IZ

could also sell its technology to one of the larger automakers looking for an instant response to

another automaker’s HUD. Rather than spend the resources and time to R&D their own bespoke

Chief Marketing Officer

Online Marketing/Social Media: Website

traffic, banner ads, social media

Print Marketing: Magazine

advertisements

Business-to-Business Marketing:

Demonstrate to car fleet managers the

benefits of HUD

Market Planning Project: HUD Page 24

HUD, iZ could sell its intellectual and physical properties to the larger corporation and cease

independent operations.

Another recession in North America is iZ’s worst-case scenario. The auto industry was

significantly suppressed during the Great Recession, with even Detroit’s Big 3 struggling to

remain in business. Another recession would be a toxic environment for a start-up company,

especially in the automotive industry. Consumer spending on add-ons or luxury items could

drop significantly, affecting our sales. In this situation, a temporary slow-down or full stop of

production could see iZ survive, if weakened financially. If the recession proved to be severe, iZ

could possibly be close down and liquidate assets.

Market Planning Project: HUD Page 25

References

ADD. (n.d.). Add speed cluster head up display speedometer hud mph rpm/speed/water

temp/volt. Amazon. Retrieved April 17, 2013, from http://www.amazon.com/ADD-Speed-

Cluster-Display-Speedometer/dp/B005L2OXVE

GPS heads-up vehicle speed display. amazon.com automotive. (n.d.). Retrieved April 20, 2013,

from http://www.amazon.com/GPS-Head-Up-Vehicle-Speed-Display/dp/B0035ZU64C

Kotler, P. & Armstrong, G. (2012). Customer-driven marketing strategy: creating value for target

customers. Principles of marketing (188-215). New Jersey: Pearson

Marketing segmentation, Claritas. Retrieved March 30, 2013, from

http://www.claritas.com/MyBestSegments/Default.jsp?

ID=30&menuOption=segmentexplorer&pageName=Segment%2BExplorer&id1=1027

Pentland, W. (2008, July 30). The world’s top car-owning countries. Forbes. Retrieved April 12,

2013, from http://www.forbes.com/2008/07/30/energy-europe-automobiles-biz-energy-

cx_wp_0730cars.html

Seredynski, P. (n.d.). Old car, new tricks: how to get the coolest new tech in your current ride.

Msn. Retrieved April 12, 2013, from http://editorial.autos.msn.com/article.aspx?cp-

documentid=657578

(n.d.). Text messaging law effective January 2009 cellular phone laws effective july 1 2008.

California dmv. Retrieved April 15, 2013, from http://www.dmv.ca.gov/cellularphonelaws/

Top 5 HUDs in modern cars today. (2012, August 28). TechRadar. Retrieved March 9, 2013,

from http://www.techradar.com/us/news/car-tech/top-5-huds-in-modern-cars-today-

1092312

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Appendix 1: CSUMB Market Survey: March 1, 2013

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Appendix 2: Financial Calculations

Breakeven AnalysisiZ 20/20 HUDAmounts shown in U.S. dollars

SalesSales price per unit 200.00Sales volume per period (units) 1,000 Total Sales 200,000.00

Variable CostsCommission per unit 0.00Direct material per unit 30.00Variable costs per unit 30.00 Total Variable Costs 30,000.00

Unit contribution margin 170.00 Gross Margin 170,000.00

Fixed Costs Per PeriodRent 52,500.00Other fixed costs Total Fixed Costs per period 52,500.00

Net Profit (Loss) 117,500.00

Market Planning Project: HUD Page 31