Sample Marketing Plan for Xenthon Wooden Switch

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Sample Marketing Plan for Xenthon Wooden Switch

Prepared ForBashir Hussain

Course InstructorIntroduction to Marketing (MKT202)

School Of BusinessNorth South University

Prepared By

Names ID #

Mehnuma Hasnath 071537030Farisa Parveen 071463530Sumayia Hassan 072779030Kamrul Hassan Sunon 073460030

Date of Submission: 15th April, 2008

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Acknowledgment

We are solemnly grateful to Almighty Allah who has given us this opportunity to carry

out such an interesting term paper and enabled us to finish it for MKT-202. We would

like to add a few hearty words to the people who helped us in numerous ways.

Special thanks goes to Mr.Bashir Hussain,Course Instructor, School Of Business,

North South University , and Mr. Mehedi Hassan, the Course Instructor, for giving us the

opportunity to prepare this term paper and gain new and practical knowledge in the

process. Their valuable advice, guidelines and continuous monitoring have made this task

possible.

We have thoroughly enjoyed our term paper and hope it will be appreciated.

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Table of Contents

Executive Summary

Portfolio

Current Marketing Situation

Market Description

Product Review

Market Segmentation

Competitive Review

SWOT Analysis

Objectives and Issues

Marketing Strategy

Positioning

Product Strategy

Pricing Strategy

Distribution Strategy

Marketing Communication Strategy

Marketing Research

Marketing Organization

Action Program

Budgets

Income Statement

Break Even Analysis

Controls

Limitations

Marketing Plan Tools

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Executive Summary

Xenthon Wooden Switch is planning to launch a new variety of wooden

switch, consisting of 1 Gang, 2 Gang, 3 Gang, 2 pin combined and 3 pin combined. We

are offering our consumers a combination of high quality and value-added price. We tend

to target specific consumer market segment but hope to capture and retain the rest by

providing intrinsic quality at value-added prices. Though the market of home appliance

product in Bangladesh is in a growing stage, the growing demand for stylish and trendy

home appliances is an advantage and opportunity for Xenthon Wooden Switch

. By providing superior quality, safety and a completely new idea, we hope to get a

competitive edge in the market.

The objectives of the sample marketing plan for the Xenthon Wooden Switch

were to analyze the current market situation for the five products, plan and position those

products for the market keeping in mind its other competitors, carry out its SWOT

analysis, plan and prepare the marketing strategies and through action programs,

objectives and budget preview the projected Income Statement and Break Even from the

sales of the products.

In short, the primary objectives were:

To identify consumer needs and endeavor to satisfy them in all aspects like quality,

price, quantity etc.

To achieve ROI of 20% in the Dhaka market in the first year and a unit sales of 42000

for all the five products.

In order to do so, it has planned an effective marketing mix and positioning for the

products.

To achieve first-year sales revenue of Tk.1,41,54,000 and maintain our profitability.

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XENTHON’S PORTFOLIO

1 GANG SWITCHES

2 GANG SWITCHES

3 GANG SWITCHES

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2 PIN COMBINED 3 PIN COMBINED

Current Marketing Situation

Xenthon Wooden Switch was founded by four entrepreneurs. They are about to step into

the home appliance business with a product which is new in Bangladesh. Competition is

quite intense with the other established brands, however Xenthon’s concept is different

and it has certain benefits which increases the possibility of enlightening the customers.

With careful segmentation and targeting Xenthon is about to enter the home appliance

market with the promise of providing something different for its customers.

Market Description

Our initial target market segment are business users and consumers who are looking for

safe, stylish and posh switches which will also serve as a home decorator in addition to

its qualities as an appliance. This can be segmented according to geographic,

psychographic (social class & lifestyle). After the initial launch, long-term goals include

continuing to provide customers with quality product and establish the brand name.

Xenthon Wooden Switch plans to offer its customer high quality product at value-added

prices and assures that the product is 100% safe, processed in a highly technological

environment and provides superior taste. As Xenthon targets both the upper and upper

middle class, it offers its customers high quality and value.

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Product Review

Our first product, Xenthon Wooden Switches, offers the following features:

They come in 5 different varieties, ranging from 1-3 gang and 2 & 3 pin combine.

Superior quality with trendy designs.

Shock proof, as wood is a bad conductor of electricity.

Besides serving the purpose of a home appliance product, it acts as a decoration

piece which also brings a trendy look to a home.

The switches are environment friendly, as wood can be recycled and reused.

They are offered in different hand painted designs so that our customers can

purchase it according to their taste and moods of their rooms, for which they

could express their personal style.

First year sales revenue is projected to be Tk. 1,41,54,000, based on 42,000 units of 5

types of switches per year at the following selling prices:

Sl No. Product Description MRP. (Tk)

1. 1 Gang 1 way Switch 289.00



4. 2 pin combine 349.00


During the second year we plan to introduce more wood made products along with

wooden switches. They will be high quality and beautifully designed home appliances

such as:

Hand painted wooden lamp shades.

Wooden tissue paper holder.

Wooden curved and designed Chandeliers.

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Wooden wall shelf.

Market Segmentation, Solution and Benefits of Xenthon Wooden Switch

CONSUMER MARKETBases of

SegmentationTargeted Segment

Customer Solution Benefits

Psychographic(Social Class)

Upper Class

Ready to pay a little

higher price, but

want quality

We are providing

quality Switch at

different varieties,

and different prices.

Upper Middle Class

Geographic(Dhaka)

City DwellersAvailable in the

nearest superstores

Distribution of our

products will make it

accessible to the city

dwellers in retail

stores and in our own

office.

Psychographic( Life Style)

Corporate UsersLess time

consuming

It’s very easy to set.

Since it is made of

wood, it will give a

stylish and elite look

on various wall

colors reflecting their

lifestyles.

Households

Easy to set, no

helping hand

required and hassle

free

Elite Restaurants and Hotels

Fashion and

decoration

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Competitive Review

The two major competitors of Xenthon Wooden Switches in Bangladesh are SANCH

Switches and M.K. Switches. It is to be mentioned that their switches are made of plastic

whereas ours are made of wood. However, the competition is mostly based on price.

SANCHII

These types of switches are made in Hong Kong. The company is a joint venture of Japan

and China.

Sl.No. Product Description MRP (Tk)







M.K.

These particular types of switches are made in Singapore.

Sl.No. Product Description MRP (Tk)






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Distribution Review

Xenthon Wooden Switches will be distributed through selective retailers in Dhaka. The

retail shops will be mainly in Dhanmondi, Gulshan and Uttara areas. The switches will be

mostly kept in:

Home Appliances shops.

Lighting Stores like Emma Lighting Store in Gulshan-2.

Furniture Showrooms like Studio-45, Aristrocrat and Athena in Gulshan,

Dhanmondi and Uttara.

Initially distribution will be restricted to Dhaka. We will also be doing personal selling

and Trade Show promotions in the first year. From the second year we plan to expand our

business into Sylhet and Chittagong, based on our demand. Moreover, we will have our

own showroom from the second year of business, as we plan to import new and variety of

products.

SWOT Analysis

STRENGTHS

There are four major strengths of Xenthon Wooden Switch over others:

1. Safety: Wood is usually safer than plastic. Wood is a bad conductor of electricity

whereas plastic is a good conductor. So wood absorbs less heat than plastic.

2. Stylish and Decorative: Wooden switches can be used to stylize and decorate the

home. It will give a very classy and traditional look at home. Moreover, wood

gives a feeling of more at home.

3. Innovative: Plastic switches are old fashioned and boring. Wooden switches will

bring a new and fresh look at home.

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4. Security: Wood is shock proof.

WEAKNESS

The three major drawbacks will be:

1. Completely New in Market: Over the years the market has been occupied by

plastic switches, it will be difficult to launch a completely new type of switch in

the market.

2. Lack of Brand Awareness: All the other plastic switches like SANCH, M.K., and

others have occupied a brand image in the market, but XENTHON has not yet

established as a brand.

3. Lately Accepted: As it is a completely new type of switch made of wood, it will

be initially difficult for consumers to accept it.

OPPORTUNITIES

Xenthon Wooden Switch can take advantage of two important market opportunities:

1. Increased Demand for Trendy products: Nowadays consumers prefer those products

which makes them feel their houses as homes. They also prefer giving a cultural and

traditional touch to their homes. Due to these two factors the demand for wooden switch

will rise over the period of time.

2. New and Different: Since the concept of wooden switch is completely new and

different in Bangladesh, it will provide a strong platform for Xenthon to attract the

market.

THREATS

Xenthon Wooden Switch will face three major threats at its introduction:

1. High Competition: There are already a lot of existing switches in the market,

including switches made in Japan, Singapore and others, so Xenthon Wooden

Switches has to position itself strongly in consumers’ mind.

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2. Chinese Product: Most of the consumers assume that Chinese products have

lower quality than others and they should have lower prices.

3. Decrease in Price: Due to high competition and since it is a Chinese product,

Xenthon Wooden Switch will have a lot of pressure in lowering its price.

Objectives and Issues

We have set aggressive but achievable objectives for the first and second years of market

entry.

FIRST YEAR OBJECTIVES

During the Xenthon Wooden Switches initial year on the market, we are aiming to sell

42,000 units in order to make a profit of 20% upon sales.

SECOND YEAR OBJECTIVES

Our second year objectives are to introduce new products, and to make a profit of 25% on

sales.

ISSUES

In relation to the product launch, our major issue is to establish a well regarded branded

product with a meaningful positioning. We must invest heavily on marketing to create a

memorable and distinctive brand image projecting innovation, quality and value. We will

also measure and response so we can adjust our marketing efforts as necessary.

Marketing Strategy

Xenthon Wooden Switch’s marketing strategy is based on a positioning of product

differentiation, which will be based on Psychographic and Geographic Segmentation.

Our primary consumer target is upper class, upper middle class, posh and elite

consumers, who will be consuming 30% of our annual sales.

Our business customer target will be our primary corporate consumers, real-estate, and

interior designing firms who will be consuming around 45% of our annual sales. They

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may use these switches in order to impress their foreign delegates or other business

associates by giving them a more traditional and homely feel.

Our secondary business target consumers will include restaurants as well as hotels, who

will be consuming 25% of the annual sales.

POSITIONING

Using product differentiation, we position our product as a brand new product in the

market, switches made of wood, which would bring a refreshing and artistic look to one’s

home. Not only will the product be new, but also of high quality, new innovative style

that is hand painting on a switch with wooden plates. In addition, we will be displaying

our product prototypes on one of the billboards at Sheraton for the first time, for stronger

positioning.

PRODUCT STRATEGY

Xenthon Wooden Switch, including all the above features mentioned earlier will be sold

with one year warranty. We will introduce more types of wood made products from the

second year of our business. The brand name and logo will be displayed on the product

and its packaging and reinforced by its prominence in the introductory marketing

campaign.

PRICING STRATEGY

We will be following Cost Based Pricing Policy for our wooden switches. We will also

be following Discount and allowance pricing. During the first year of the business, we

will be providing retailers with a 10% discount on the prices we charge. And with the

business consumers, we will provide 3% discount, and remaining 7% discount to their

retailers. Moreover, we will give 4% discount on our products during the Trade Fairs. In

addition to that we will also be giving the offer of buy 3 and get 1 free twice a year.

These policies reflect:

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Attracting new channel partners and taking share from other established brands in the

market.

DISTRIBUTION STRATEGY

Our channel strategy is to use selective distribution, marketing Xenthon Wooden Switch

through well known stores like Athena and Studio-45. Initially it will be imported from

China to Chittagong port. From there it will be brought to Dhaka to our warehouse in

Tejgaon. From there it will be distributed to various retailers and other showrooms,

mentioned earlier, by a manual van, owned by us. In support to our product Xenthon

wooden switch will have various means of advertisements displaying the product. We

will also arrange special trade terms for retailers like 10% discounts that will place

volume orders.

MARKETING COMMUNICATION STRATEGY

By integrating all messages, we will reinforce the brand name and the main points of

product differentiation. We will be communicating with the people to make them aware

of the new brand and product. We will advertise our product through a billboard which

will carry the prototype of our product at Sheraton. We will also be doing paper

advertisement for the first two months, and special ads will be given for special

occasions. Moreover, we will be giving out brochures and leaflets with the papers

throughout the year. These will help us to increase consumer’s awareness of a new

product in the market. To attract, retain and motivate channel partners for a push strategy,

we will use trade sales promotion and personal selling. Until the Xenthon brand name is

established, our communications will encourage the purchase through channel partners.

MARKET RESEARCH

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Using research, we will identify what benefit and value consumers seek from our

product. After every six months, the four managers will personally go to different outlets

to check for any problem. It will also be checked through various market tests and

survey, whether the consumers are comfortable with the new product, are they aware of

the brand. It will help us to determine the effectiveness and efficiency of our message and

media. Finally we will use customer satisfaction studies to gauge market reactions.

Marketing Organization

One of our directors will work as chief marketing officer and she will hold the overall

responsibility for all the company’s marketing activities. We will have 05 marketing

executives who will carry out the order of the chief marketing officer and they will work

mainly for personal selling. The following figure shows the structure of 6 persons

marketing organization. Xenthon will recruit the most talented and energetic executives

who will carry out their duties with full concentration.

Action Programs

Xenthon Wooden Switch will be introduced in July. Following are summaries of the

action programs we will use during the first six months to achieve our stated objectives.

June We will import half of our total amount of annual forecasted sale that is 21,000

units and distribute the amount that may be sold in first three months that is 10,500 units

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Chief Marketing Officer

Marketing Executive 1





Figure: Marketing Organization Structure

to some selective shops. The rest of the amount will be kept in our ware house. Our

marketing executives will work with sales personnel to explain Xenthon Wooden

Switch’s features, benefit and competitive advantage.

July We will start integrated campaign to our target customers using billboard, paper ad,

and leaflet. The campaign will show the features of the product and how it is distinctive

from others. We will also use our marketing executives for personal selling.

August As our advertising campaign continues, we will add corporate sales discount

which will be up to 3% and it will continue over the following year. We will then

distribute again to our selective shops and also to some new shops depending on the

response of the customers.

September Our customer sales promotion tactics will be continued only to our corporate

customers. Retailers will also be given some Eid gifts.

October We will do a market survey about our product and depending on the response,

we will again order to import more 21,000 units at the end of this month. We will stop

frequent paper advertisement and will give it occasionally. In this month, we will offer a

special discount that is buy 3 get 1 free.

November We will distribute again for the next 3 months and will try to increase some

more distribution points depending on the response. We will also survey the markets in

Chittagong to see whether we can introduce our product to that market or not. In addition,

we will analyze the results of customer satisfaction surveys for use in future promotions

and to provide feedback for product and marketing activities.

Budgets

The total first year sales revenue for Xenthon Wooden Switch is projected at 1,41,54,000 with a sales volume of 42000 units where 1 Gang is 7800 units, 2 Gang is 9000 units, 3 Gang is 9000 units, 2 pin combined is 8400 units and 3 pin combined is 7800 units.

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We anticipate a profit of BDT 20,10,900 for the first year. Break even calculations indicate that Xenthon Wooden Switch will reach its Break even point in the first year.

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XENTHON WOODEN SWITCHIncome Statement

For the year June 01, 2008 to May 31, 2009

Sales RevenueLess: Sales DiscountNet SalesImport Cost (Including Tax & Freight Cost)Gross Profit

Operating Expenses:Fixed Cost Ware House Computer (60,000 / 5) Furniture (1,00,000 / 5) Supply Van (8,000 / 4) Trade License Advertisement Cost Paper Ad. Billboard Leaflet Salaries Marketing Executive (10,000 X 5 persons X 12) Supervisor (7,000 X 1 person X 12) Technician (10,000 X 1 person X 12) DriverTotal Fixed Cost

Variable Cost Electricity Cleaning Items Conveyance Brochure Packaging Sticker C&F Agent Miscellaneous ExpensesTotal variable Cost

Total CostNet Profit

BDT BDT

1,80,00012,00020,0002,0001,500

6,36,8006,00,0007,00,000

6,00,00084,000

1,20,00026,000

29,82,300

24,000500

60,0001,00,000

3,00014,000

2,83,4844,84,984

1,41,54,000(21,43,100)1,20,10,900(65,32,716)

54,78,184

(34,67,284)20,10,900

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Break Even Analysis

Break-Even Point Calculation

For the year June 01, 2008 to May 31, 2009

Item Price /

Unit (P)

BDT

Variable

Cost / Unit

(V) BDT

V/P 1 - (V/P) Annual

Total Sales

BDT

% of

Sales

(W)

1 – (V/P)

X W

1 Gang 289 127.55 0.44 0.56 22,54,200 0.159 0.089

2 Gang 319 156.45 0.49 0.51 28,71,000 0.203 0.104

3 Gang 349 177.15 0.51 0.49 31,41,000 0.222 0.109

2 Pin 349 177.15 0.51 0.49 29,31,600 0.207 0.101

3 Pin 379 196.47 0.52 0.48 29,56,200 0.209 0.100

Total Annual Sales 1,41,54,000 ∑ [1 –

(V/P) X

W]

0.503

Therefore,Break-Even Point (BEP) =

=

= BDT.59,29,025

Controls

We are planning to tight control measures to check the quality very closely and customer

satisfaction. We will also monitor whether the customers are getting the proper after sales

service or not. This will enable us to react quickly in solving if any problem occurs. We

will also monitor our marketing executives’ performance and the other job holders as

well. Finally, we will monitor our each step whether it is working properly or not and will

monitor the response of the customers. Depending on the response, we will take the next

steps so that there will be a lower risk. Other early warning signals that will be monitored

for signs of deviation from the plan include monthly sales and monthly expenses.

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Total Fixed Cost

∑ [1 – (V/P) X W]

29,82,300

0.503

Limitations

While preparing the report, some of the problems faced were:

Lack of practical work experience and proper knowledge in the relevant area.

Competitors held back vital information needed to asses and review the market

situation and planning the marketing mix and positioning.

Market research, industrial research, feasibility research proved complex and due lack of

time and willingness of the other-side to provide information , maybe not give an exact

picture of the analysis

Marketing Plan Tools

1. Principles of Marketing 11th Edition Philip Kotler & Gray Armstrong

2. Marketing Management, 11th Edition Philip Kotler

3. Bashir Hussain, Faculty of Introduction to Marketing

4. Mehdi Hassan, Faculty of North South University

THE END

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Documents

Sample Marketing Plan for Xenthon Wooden Switch