Therefore, company will no longer have to send their electrician to install the alarm system. His presence within the company is however compulsory for he will have to attend any complaints and additional services required by the buyers.
The distribution will be a direct one, no intermediaries interfering in the process. The client will be able to pick up the product form the company's location, reducing as such the company's logistic expenses.
4.3 Promotion Plan
The PortaAlarm will be promoted both directly and indirectly. The direct strategies imply that Starlet Alarms will present the new product to their customers with the aid of their sales representatives. The telesales staff will contact the past customers they have in the company's database and will inform them of the new product. They will emphasize on the benefits of the PortaAlarm as a product combining the benefits of the smoke and burglar detector.
The indirect promotional strategies imply that Starlet Alarms will implement a marketing campaign through which they will advertise their products. These could include television advertisements, radio announcements, street banners and fliers, as well as online advertisements. The need for additional promotional strategies is obvious even if it's estimated to increase promotional costs by 12% during the first year of selling the PortaAlarms.
Other promotional strategies could refer to the free instalment of the alarm system at the domicile of the buyer, by the company's electrician.
4.4 Pricing Strategy
The retail price to the final consumer will have to be established...
In addition, it will have to ensure a profit for Starlet Alarms. They initially purchase the PortaAlarm for a cost per unit of $300 and the manufacturer has established a recommended retail price to the end-consumer of $600. This amount should be sufficient to sustain Starlet Alarms in reaching their financial goals.
The pricing strategy should be the variable price strategy, meaning that the price to the final consumer will modify when any change occurs in the prices of commodities or other factors of influence.
5. Projected Income Statement 2008/2009
Starlet Alarms expects to increase their total revenues for 2008/2009. But the promotion of the PortaAlarm will also generate increased expenditures. Here is how the income statement for 2008/2009 could look like:
SALES
Traditional alarm systems 740,000
PortaAlarm systems 360,000
Parts and services 40,000
COST of GOOD SOLD 430,000
GROSS PROFIT 710,000
OPERATING EXPENSES advertising and promotion commissions 110,000 travelling and allowances 35,000 telesales staff salaries 66,000 admin. staff salaries 66,000 electrician salary 50,000 directors' salaries 88,000 office and warehouse overheads 70,000 general admin. expenses 25,000 depreciation 14,000
NET PROFIT BEFORE TAX 176,000
References
Starlet Alarms
2002-2007, the Marketing Mix (the 4 P's of Marketing), Net MBA, http://www.netmba.com/marketing/mix/,last accessed on February 6, 2008
