Marketing plan development and strategy

Marketing Plan Aimed at Launching the Biometric Fingerprint Door Lock on the Australian Market

ADEL Group (Shenezen IDEAL Microelectronics Co. Ltd.) was founded in 1993 and defined the profile of its security intelligent products through the following quality principle: "Exquisite design, exquisite manufacture, satisfy needs, shoot for the best." Despite having Chinese origins, ADEL provides its merchandise on an international scale and cooperates with several American companies like: ATMEL, BEL, Dallas Semiconductor Corporation, Veridicom. The company operates in the business environment according to its slogan "Wisdom, Ideal, Perfection" and proves the accuracy of this guiding principle through the 70 state, 8 invention, and 2 international patents it boasts. In what future perspectives are concerned, ADEL's expectancies are very high as the corporation aims at becoming "the largest security intelligent products provider in China and the pioneer of the global after-sales online service providers" (http://www.adellock.com/new/english/index.htm).

2. Situation Analysis

The products that the ADEL Group provides fall into three main categories: Hotel Lock System, Office & Home Lock Series, and ADEL Digital Patrol System.

The first group comprises four subdivisions: door locks, encoder for keycard, keycards and management software, and targets modern hotels wishing to ensure a safe stay to their clients. More than 2000 hotels use this system because of several features it takes pride in: maximum security, derived from the steel structure and the impressive memory capable of storing up to approximately 900 access records; keycard management system encompassing 14 types of keycards and five levels of authority with the possibility for the hotel's managers to change card authority; low running costs due to low power consumption (standard AA alkaline batteries) and maintenance costs; a software compatible to other systems that the hotel management might use; wireless system and standalone door clock allowing keycard operations to be the only link between locks. Moreover, the installation process is said to be very simple.

A second group consisting of office and home lock series offers viable solutions for protecting both homes and chambers containing confidential data within an organization (financial, documentation, computer rooms). The products are easy to operate and display a long life due to their anti-destructive cast-steel structure. Additionally, they take into account the consumers' aesthetic requirements by having a design which is practical and refined, at the same time.

ADEL Digital Patrol System is the most recent high-tech product that offers a clear picture of how patrolmen and security guards work in their areas. This electronic-computer system is provided with an internal clock which registers the time and the date when security employees arrive at the checking points. The company outlines that besides reducing the accident rate, this innovation corresponds to the customers' request for a distinct social effect. The main characteristics recommending the system are: large memory (stores up to 62 patrol sites), long life due to cast-steel structure and stainless steel surface, wireless operating principle, simplicity (all you have to do is touch the checker with a digital stick), waterproof, dustproof, shockproof, pressureproof characteristics, thermic resistance (accepts temperatures ranging from -25 to +800C), long-lasting lithium battery. An important subdivision of this category are the fingerprint locks developed on biometric principles which offer an indispensable help in terms of protecting scientific research institutes, army, police, villas, banks, public security departments and so on (http://www.adellock.com/new/english/index.htm).

After quickly summarizing ADEL's offer, one can easily infer that, within the framework of the Boston Consulting Group matrix, the cash-cows are represented by the Hotel Lock Systems and Office & Home Lock Series, as these have succeeded to deeply penetrate the market, while the star's role is played by ADEL Digital Patrol System which is newly introduced on the market and strives to gain a strong adherence.

In what prices are concerned, these are quite moderate and range from approximately $200 for home and office equipments to $350 for hotel and patrol systems. In other words, high prices apply especially to corporate buyers which afford to invest more in a sophisticated and complex security system (http://www.buyasafe.com).

Another "p" of the marketing mix refers to placement. At this chapter, the ADEL Group has opted for indirect channels represented by the websites of different retailers. Thus, the merchandise is distributed through online security stores like ASG's websites:

www.artemis-usa.com, www.biometricdoorlock.com, www.fingerlock.net, www.biometriq.comor other sites like: www.buyasafe.com, www.akmelock.com, www.safemart.com, www.alibaba.cometc.

Being given the virtual allure of ADEL's distribution network, the company's promotional policy makes use of electronic means like banners posted on the distributors' sites or e-mail newsletters, but also resorts to direct mailing or displays in newspapers and magazines read by the targeted market segment. The latter encompasses two major groups: the corporate segment, and the consumers' one. The former consist of organizations with high security requirements while the latter refers to individuals with medium incomes and superior level of education, who prove a strong preoccupation for the safety of their home and goods.

3. Problem and opportunity identification

Taking into account the company's desire to enter the Australian market, a snapshot analysis of the latter could prove extremely useful when trying to identify the main threats and opportunities to which the organization is exposed.

A survey carried out by Wolcott Research, in 2000, concluded that Australians are "security conscious." Their top three choices are (in descending order): back-to-base monitored security (consisting of an operator who calls and a guard who checks the home), dogs and deadlocks (used by almost 75% of the total population). In response to pointing out their tendency to embrace traditional methods, Australians argued that money was one of the major reasons which hindered them from upgrading their security systems (Brown, 2000). Still, although the debut of the third millennium found alarms in only 5% of the Australian homes (compared with 18% in USA), the security industry displays an impressive growing potential considering the $4.5 billion revenues it generates annually and the 150,000 personnel it employs (http://www.asial.com.au/default.asp?page=%2Fconsumer+information%2Fsecurity+industry+overview).

For the coming year, forecasts announce spending almost $30 billion on security, out of which 15% (approximately $4.3 billion) are due to the private sector. The annual grow rate amounting to 5.5% for the next five years is another item contributing to the optimistic overall perspective.

The products and services provided by the industry are grouped into three main branches: electronic (CCTV, video & audio intercom systems, alarms and alarm monitoring, biometrics etc.), manpower (crowd control, airport security, guard services, concierge, and mobile patrols), physical and barrier security (security grills, locksmiths, perimeter fencing, safes/records protection etc.). Referring to the biometric technology whose implementation represents the object of this case study, it should be outlined that Australians use such an innovation especially for government business application, health care, distance learning and computer networks. But although contract guarding seems to remain dominant, electronic equipments gain an increasing market share. This trend will soon lead to their supremacy over the manpower services.

The ascending tendency displayed by the Australian market is generated by the more effective and cheaper technologies, on one side, and by the high level of crime and its random nature, on the other side. According to a research carried out by the Australian Institute of Criminology in April 2003, the total cost of crime amounts to $32 billion per year. The highest costs are claimed by fraud ($5.8 billion), burglary ($2.41 billion), drug offences ($1.96 billion) and the lowest are generated by homicide ($930 million), vehicle theft ($880 million) and shop theft ($810 million). (http://www.asial.com.au/default.asp?page=/media%20centre/research+and+articles/environmental+scan+of+the+security+industry)

In spite of the fact that causes like the ones mentioned above play a major part in securing homes or organizations, the turning point which blew the right wind into the security sector's sail was September 11, 2001. This date expressed the terrorists' open threat to the entire world, and made people understand that safety could not be neglected anymore. The terrorist attacks from Bali or Djakarta that followed together with Australia's political and military decisions concerning Afghanistan and Iraq determined a significant demand for security products. This tendency offered a prolific ground to numerous companies which being inexperienced, have failed to keep their ambitious promises. Many of them collapsed in less than two years, after a business trajectory marked by dubious contracting arrangements. Obviously, the result was a crisis of confidence which negatively impacted the national industry's image (http://www.asial.com.au/default.asp?page=/media%20centre/research+and+articles/environmental+scan+of+the+security+industry).

Another hotspot is represented by the competitors that ADEL will encounter on the Australian market. Some of the most representative are: Chubb - Australia's leading provider of security and fire safety solutions, ADT Security, NRMA, and Securepro Security.

The brief description of the ADEL Group's range of products together with the summary of the Australian market's tendencies may lead to the following S.W.O.T. analysis:

Strengths the moderate prices that ADEL has established for its products the high quality of the company's products proven by the numerous users existing worldwide the cooperation with renown American companies which represents an additional guarantee for the high standards guiding the corporation's activity

Opportunities the Australians' desire to purchase effective security systems at affordable prices the poor implementation of biometrics on the Australian security market the competitors' portfolio doesn't focus on biometric technology fraud and burglary are the most highly quoted crimes in Australia; this implies that a fingerprint door lock would be an excellent precaution for preventing such accidents the increasing demand for security systems as a result of the terrorist attacks around the world

Weaknesses

ADEL's major weakness is its online distribution policy through indirect channels. On one hand, this may alter the consumers' trust in the company's products which are perceived as intangible compared with those goods that can be purchased from the shelves of specialized stores. On the other hand, resorting to intermediaries implies paying a certain commission which results in higher prices for the respective products. Moreover, the success of selling through indirect channels depends, to a great extent, on the distributors' efforts and knowledge. Although they receive tuition from the producer's technical staff, there may be several interests leading to a prominent discordance between the distributors' behavior and the company's expectations towards it.

Threats primary problem that ADEL could encounter is the Australians' lack of information on biometrics secondly, Australians have a favorable attitude towards traditional security methods based on patrolmen or alarm systems the Australians' misconception about prices (most of them think that the price of an effective security system exceeds $750) which hinders them from upgrading their home security systems the lack of confidence in the suppliers' offers as a result of the numerous security companies which have failed to keep their promises.

4. Marketing objectives

Considering the Ansoff matrix (which establishes four types of market growth strategies: achieving higher market penetration, finding new markets, developing new products for new customers or diversification, and developing new products for existing customers), the new Biometric Fingerprint Door Lock that ADEL intends to launch on the Australian market on September 1, 2007, falls under the incidence of the third category above. In other words, the overall marketing strategy consists of market growth through diversification.

The marketing objectives which subscribe to this managerial decision are:

increasing market share to 5% by December 2007 increasing spontaneous brand awareness to 7% and prompted brand awareness to 20% by December 2007

5. Marketing strategies and brief tactics

The market share is an indicator which emphasizes the ratio between the volume of purchases for a certain brand (Biometric Door Lock, in our case) and the total volume of purchases on the respective market (home security products, in this case). Thus, for its increase, there are 2 strategies that can be mentioned:

persuading a high number of people to buy the newly launched product persuading consumers to purchase a higher volume of products

The tactics subordinated to these two strategies include: offering special prices (price), offering a related product as a bonus when purchasing the new Fingerprint Door Lock (product), resorting to advertising and PR (promotion), achieving an increased number of websites capable of distributing the product (place).

The second objective that has been announced earlier - the increase of brand awareness (an indicator expressing the ratio between the number of interviewees who mention the ADEL brand - in the case of spontaneous awareness, or choose it - in the case of the prompted alternative, and the total number of interviewees) implies building an interface between the brand and the consumer through sustained communication. The tactics serving this strategy mainly focus on advertising and PR.

6. Tactical marketing programs

Before starting to delve into tactical programs, preliminary information on the targeted market is a sine-qua-non condition for developing pertinent solutions. Consequently, the segment to which the Biometric Fingerprint Door Lock is addressed to encompasses Australians living in the urban environment, with a superior level of education, and a level of income ranging from moderate to high, who are preoccupied by both the safety and the refined design of their homes. Thus, the new product will correspond to the second and third level of the Maslow hierarchy because it attempts to meet security needs from a pragmatic point-of-view, and respectively, social needs from a design perspective which tries to impact on guests through an outstanding opulence.

In terms of price policy, ADEL will adopt the penetration strategy. This consists of entering the market with low-priced products in order to gain market share. Thus, the company could offer a promotional price which is 10% lower than the usual one. Such tactics will surely influence the Australian consumers' decisions as one of their major buying criteria refers to affordable prices.

Secondly, the company may offer a gift (e.g. A smoke detector) from the same area of safety products or it may provide the customer with a free subscription for the Security Insider Magazine. This way, the consumer will have the opportunity to ensure the fire safety of his property, but also to receive more information which will confirm the good choice he has made. Moreover, the company could offer a 20% discount at indoor fingerprint door locks for each outdoor biometric door lock that a customer buys.

Advertising plays a significant role in both building awareness and increasing market share through encouraging product trial.

First of all, the messages conveyed should take into account the model drawn up by Petty and Cacciopo (1986). According to these two authors, when consumers buy a long-life product, the involvement rate is high and commercials should provide a significant amount of relevant and concise information. Therefore, the message must be mainly rational and announce some of the product's advantages: e.g. you don't need keys anymore because you can open the door by simply pressing the sensor with your registered fingerprints; you will never have to call a professional locksmith again because you'll not have what keys to lose anymore; fingerprints can be enrolled or erased on the lock directly with lock on door; duplication is impossible; the system is very easy to install and operate. The message may continue by presenting other concise technical specifications like: image capture time, response time, false acceptance rate, false rejection rate, voltage, current, humidity, type of batteries used (AA), user capacity and so on (http://www.norcoalarms.com/biometric_lock.html).

Obviously, the amount of information conveyed will be tailored according to the media used. For TV commercials, the message will briefly depict some advantages and, at the end of the spot, it will emphasize the website where consumers can find more information. For displays inserted in newspapers and magazines, the message may be transmitted under the masked form of an article which will be attentively read by highly-interested consumers.

Secondly, commercials should emphasize that this revolutionary innovative technology is brought to Australian homes at affordable prices and is as effective as other high-ranked security systems that Australians trust (for instance, the back-to-base system).

Thirdly, messages should state that the company is not a beginner in the security field and that other countries confidently use its products.

Fourthly, publicity should also include an innuendo regarding the elegant design of the Fingerprint Door Lock in order to meet the customers' social needs.

The media which may be used comprise: newspapers (the sections dedicated to lifestyle or interiors from the Australian, the Age, the Advertiser, the Australian Observer, Canberra Times which have a strong adherence to major urban areas like Sydney, Melbourne, Canberra, Adelaide); magazines (especially the Australia Magazine which is dedicated to various subjects, Electromagnetics focused on science, the Finishing Touch referring to interiors, and Security Insider - a bimonthly magazine with an audience exceeding 10,000 readers, owned by the Australian Security Industry Association - ASIAL); TV stations like ABC or National Nine Network Australia. However, most advertisements will appear online under the form of banners posted on home security websites and in newspapers and magazines as these allow individuals to re-read the articles or even keep them as a technical guide to purchasing a security product.