Question 1

What customers should InvestorSoft pursue with its new service? Why?

Target Segment – Company SizeSegment CharacteristicsMicro Cap •59 % of companies in Canada Stock exchange

•CEO acts as the IR manager•Most potential to benefit from IR• High Sales cost since they have to target more number of customers

Small Cap •24 % of companies in Canada Stock exchange• Already invested some time & money for IR activities•No single method of IR management dominated

Mid Cap • 8 % of companies in Canada Stock exchange •Credibility & image quite important•Would prefer premium products

Blue Chip •9% of companies in Canada Stock exchange• Already concentrated heavily on IR • Separate team of professionals and operating staff

Target Segment - GeographicArea Characteristics

USA • Large base of potential clients

Canada • Companies more willing to subscribe according to the predictions•Concentrated only in a few cities (Toronto , Calgary)

Investorsoft should start targeting Small Cap and Micro Cap companies in Calgary city of Canada (20% of publicly traded firms in Canada)

Together comprises of 85 % companies listed in Canadian Stock exchange. Since the pricing doesn’t vary much volume plays an important role

Least challenging to sell the product as only the functionality is important to the Micro cap companies

Many of the firms does not have an effective solution (Almost 65 % of micro cap have very inadequate IR website)

Lack financial resource for in house development or hire an in house personnel

The CEO acts as the investor relationship manager in MicroCap. An interface of this kind would enable him to have free time to concentrate on expansion of sales and operations

Recommendations

Recommendations

The competitor penetration ( IntegratIR) in Micro segment is extremely low ( Less than 5 %) and the service provided (Eg. Being invisible to the end user) is much better

The proposed pricing of $295 to $395 (Investorsoft Standard) and $595 (Investorsoft Premium) is optimum for these two segments

Small cap companies can be used for brand building and micro cap companies will help in achieving the sales target

Concentrate on Calgary city of Canada (Approx 500 firms – 295 Micro Cap & 120 Small Cap) since the business centers are concentrated in a few major areas and Investorsoft will have the closer to home advantage

Question 2

What are the pros and cons of distributing through intermediaries? Does this make sense for InvestorSoft? Why or why not?

Pros and Cons of Distributing via Intermediaries:

ADVANTAGES DISADVANTAGES

1. Minimization of initial set-up cost 1. Need extensive training & familiarization with product

2. Can provide critical (or neutral) view about products

2. External sales force may not be aligned with Investorsoft’s objective

3. Beneficial when contacts with customers don’t exist

3. Shifts locus of control outwards

4. Capability to diversify product offering (multiple feature packaging), thus making proposition more attractive

4. Steep discount demands (when intermediaries have many customers)

5. May not create brand awareness for Investorsoft.

Factors affecting Choice of Distribution Channels:

DISTRIBUTION

TARGET CUSTOMERS

COMPANY STRATEGY

COLLABORATORSCOMPETITORS

PRICING

Does this make sense for InvestorSoft?

NO, because:

Brand awareness may be little, or may not be created at all Intermediaries would be useful when catering to US markets, &

Blue-Chip companies Discounting & Integration may result in diluting brand (Brand

Erosion) Adds extra layers of profit margins, thus reducing Investorsoft's

margins Conflicting strategies of web developers & InvestorSoft

Question 3

What promotional strategy would you recommend to Chris Bolivar? Be sure to specify how much you would spend, on what, and why.

Promotional TechniquesMedia Cost

Direct Mail • $5 for a regular envelop(letter + Brochure)•$20 for a large envelope(Folder package +Complete information)

Print Advertisements $500 – Very Small$750 – Small$1000- Medium$1450 - Large

Conference Exhibits $ 5000 for attending annual general conference$5000 for displaying investorsoft booth

Industry Promotion $150 per user for try outs

Personal Selling $150 per prospect for sending private links$600 per prospect personal demonstration

Brand Building Recognition Not to be tried without brand building

Marketing budget allocation(Total budget = $25000)

Micro Cap companiesDirect Mail (Assuming 20 % success rate) –> 295*5 = $1475Personal Selling(Private link and over phone) –> 150 * 60 = $9000

Small Cap companiesDirect Mail (Assuming 20% success rate)–> 120 *20 = $2400Personal Selling –> 350 * 24 = $8400

Print Advertisements Small advertisement in 7 issues of CIRI -> 7 * 750 = $5250

Proposed total Cost = $26525

Question 4

How should InvestorSoft price its service?

• Investorsoft should look at the value pricing option of $395 per month & the premium pricing of $595 per month

• For small cap companies who spend around $750 a month, Investorsoft would help save a minimum of $155 monthly