Marketing plan proposal for business growth

Marketing Plan

Ectaco is a company engaged in the marketing of pocket translators and other related products. For this marketing plan, a new product will be developed -- an Ectaco translating application for the iPhone. This product takes the functionality of the Ectaco family of translators and delivers that software to a hardware platform with a high level of market penetration. Ectaco has traditionally marketed its translators as stand-alone devices, but the multifunctionality of the iPhone and competing devices is changing the way that portable software applications are marketed. Ectaco is attempting to respond to this dramatic change in the technological and social environment with its new software.

Ectaco has marketed pocket translators as standalone products for approximately 20 years. The company's products, including the flagship iTravl line and the Lingvosoft software applications line, are generally held in high regard by consumers. However, there is little to differentiate Ectaco products from those of competitors as all have a relatively high level of performance. The company feels that its software is its strength, rather than the hardware, and this has helped to spur the move into the iPhone market. The firm competes against other pocket translators in addition to printed phrasebooks. The main markets for these types of products are frequent global travelers and businesspeople that travel in their work to foreign lands. The main benefit conveyed by the product is the ability to quickly and easily translate basic words and phrases into a multitude of other languages, including those in different alphabets, such as Mandarin.

SWOT

Ectaco has as its primary strength its software. The firm's existing products consist of both hardware and software. The software rates high on functionality; the hardware less so. The software is functional across many languages and is considered easy to use. While this is a strength, it is not a source of competitive advantage since competing software is also held is relatively high regard. Another strength is Ectaco's brand name. All major players in this industry have relatively unknown brands. Ectaco has been in the business for 20 years and the iTravl brand has become associated with some of the best products in the industry. Moreover, the name is well-suited for an iPhone application, having the same structure. Another strength is the company's longstanding associations with governmental agencies. These have included in the past NATO, the United Nations and a variety of U.S. agencies (FedSpending.org, 2010). These associations bolster the image of the company and can become the basis for long-lasting, profitable business relationships.

A weakness of the firm is its hardware, for two reasons. The first is that standalone hardware applications are falling out of favor with consumers due to the rise of iPhones, Blackberries and other multi-functional hardware platforms. The hardware is also a weakness because it is not especially well designed, nor is it robust. Another weakness is that the firm's products are not particularly well-marketed. When a consumer determines the need for such software, they can uncover information about iTravl, but there is little "pull" in the marketing of these products -- Ectaco fails to generate sufficient awareness, interest or demand from its existing marketing program.

There are a number of opportunities in this business. The first major opportunity is to the development of a software-only version that can be downloaded to mobile devices. This would leverage the firm's strength in software, work around its weakness in hardware, and deliver the product to a much wider customer base. There is only one major competing application available in the iPhone App Store (Mobile Glot) and it is an inferior product to the current iTravl product. There are also other opportunities in the broader market. For example, while translators are typically marketed in North America as travel devices, they are marketed elsewhere in the world to students to help them learn English. Many markets in Asia, for example, have a high demand for English language education and any supplemental products naturally have a high market demand.

There are a number of threats faced by Ectaco and iTravl. The first is with respect to mobile platforms. Consumers are transitioning from owning a multitude of different mobile devices to a singular device. There are established programs for a variety of hardware devices, including Palm and Smartphones (Translation.net, 2010). However, the greatest threat comes from other competitors. There are a wide range of products already on the market to compete with iTravl, many of which have performed very well in tests (Middleton, 2009). As standalone devices, the represent a threat to Ectaco's existing business; on mobile devices they could take first mover advantage away from Ectaco. Another threat is with respect to the global economy. Demand for translating devices can be expected to be correlated with the demand for world travel and the incidence of international business. Therefore, global economic slumps can impact on the demand for these products.

Internal Environment

Ectaco is a small, relatively stable privately-held company based out of Long Island. The company runs four different lines, including Lingvosoft, its most comprehensive package. This is available in software-only format for a number of mobile platforms and is the most likely candidate for adaptation to the iPhone platform. The company's stability and small size allows it to move quickly to develop new products and platforms. Ectaco has a global scope, with a development center in Hong Kong and strong ties to Saint Petersburg, Russia, from which its founder hails. The firm has sales offices around the world.

Internally, Ectaco is organized around products, rather than markets. This has allowed it to develop Lingvosoft for a number of applications, but may also be viewed as a detriment to marketing. For marketing purposes, an internal structure geared around markets (international vs. domestic, mobile devices vs. standalone devices) may be more ideal. However, the firm as a whole is well-suited to this expansion to the iPhone market, in part because of its prior experience with other mobile platforms and because its small size and focus on translating allows it to focus its efforts on new markets as they emerge.

External Environment

The external environment is marked by technological and social change, in addition to intense competition. The competition is driven by the relatively small market for translators compared with the number of firms in the industry. Because the software functionality is relatively standardized, there is a low degree of differentiation between major competitors in the industry. This removes a barrier to entry and thereby increases the intensity of competition.

Technological and social change is another key driver of the mobile translator industry. Prior to recent years, the industry was based around standalone translating products. These either rendered foreign languages visually or audibly. A major technological shift has occurred in the past couple of years, however. Devices such as the iPhone and other major PDAs have begun to provide consumers with a broad range of functionality in a single device. Consumers, faced with using several different single-purpose devices, have responded with great enthusiasm to the high convenience factor of this technological shift. This threatens to suppress demand for standalone translators as it increases demand for translation software applications for multi-function mobile devices (White, 2008).

Goals and Objectives

The market for such applications is relatively new and under-developed. First mover advantages are there for the taking. The first goal, therefore, should focus on establishing a strong market position. This involves building the market, building the Lingvosoft brand, and creating awareness for the product. Sales objectives should be set in line with current standalone sales and sales of Smartphone and Palm versions of Lingvosoft. The objective of the marketing plan should be to have Ectaco's Lingvosoft become the dominant translation application for the iPhone in both the near-term and the long-term. The potential size of the market is unknown at present, so objectives should be set with market share in mind first, and market size in mind second.

Target Market

The primary target market during the launch phase should be the travel market. This target is varied demographically, but consists of tech-savvy users between 25-55 who travel extensively outside of North America. This market has substantial disposable income, and business travelers may expense the purchase of the software application. They can be either male or female, and while most are expected to be Caucasian, this is not a given. This market is likely to share many demographic features of frequent travelers, including high education and above-average income (FrequentFlier.com, 2010). They are likely to be located along a coast, rather than the Midwest or South, areas where people travel less frequently. The secondary target market is the student market. However, the price point of existing Lingvosoft software is likely prohibitively expensive for this market, and the bulk of the student market is located overseas. Therefore, this market is a distant second and will receive little marketing attention.

Four Ps

The product is an iPhone application that translates a multitude of different languages. Multiple applications will be available, for individual language pairings (i.e. English-Mandarin) or for multiple packs (i.e. 12 language packs). There is only one competing product on the iPhone App Store and it does not have these capabilities. The product is a complement to the existing line of iTravl translators and Lingvosoft applications for other high-end multi-function mobile devices.

Because the product has a high-end position, it should be priced accordingly. The current prices for Palm OS for example range anywhere between $79 for single language packs to $199 for multiple language packs. The iPhone applications should be priced within a similar range. The current competitor Mobile Glot has their basic dictionaries priced for free, which reflects the low quality of their product relative to Ectaco's products.

The placement for this product will be the iTunes App Store. This is the sole outlet for such applications specific to the iPhone. The target market searches the app store for these products and would not expect to find them elsewhere. Within the store, the products should be placed in the travel section, in order to directly reach the primary target market. The products can be cross-referenced in the Education Store as well, to hit the secondary target market.