Marketing Phan: Phase IV
Michael Dendor, Kat Hall, Anna Evita Thompson, Erick Cobiskey MKT 421
Kim Wm. Houseman
Marketing Plan: Phase IV
As our product is being introduced into a very competitive market, we will need to make sure your margins are very thin so that we maintain a competitive advantage. As our product moves from the introductory phase to the growth phase we can expand our margins to ensure a larger profit, but during the introductory phase this is not preferred. In the beginning you should make an impact that helps your sustainability.
The first thing we need to pay for is research and development. This should account for about 20% of our startup costs. This will allow us to create a good product that will ensure our share of the market. Unlike the other pieces of the budget, this is primarily a one time cost as if you develop a product correctly you will not need to do this more than once. Our next step will be to pay for production. 30% of our startup costs will be set aside for production. We will need to keep up with the demand of our product. Any shortage of our product will cause our customers to look elsewhere for their energy drinks. Any issues in production could cause our product to die. If the production becomes efficient enough, we could lower the budget for this. The next and possible most important item is promotion of the new product. We should commit 40% of our startup costs to the promotion of our product. This will help get our name out to our customers. Any excess funds should be sent to promotion to make sure that our market share continues to grow. This only allows 10% of our startup costs for contingency. If we use the other pieces of the budget correctly, we will not need this money at all and it will turn into profit.
Our product is a simple product that should be easy to monitor its success. We can track sales very closely. The issue will be to track the demographic that is purchasing our...
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