Promotional strategy for ABC Company's child tracking bracelet launch

Promotion Plan

Situation Analysis

Promotional Strategy

Communication Media

Promotional Budget

ABC Company is a young company with five employees and one product that they are about to launch. The product is a silver bracelet with a tracking chip embedded, a REID tag that can be read by scanners when activated by law enforcement. The concept is that the bracelet is to be worn by children so that they can be located in the event they get lost or kidnapped.

The objectives of the promotional plan are to raise awareness of the product amongst law enforcement. The product will not have value for the end user (parents) without the help of the law enforcement community. The strategy must convince law enforcement of the merits of the product. From there, law enforcement will be able to convince parents of the merits - they will hold much more authority than will ABC when discussing the personal tracking devices with parents. The strategy employed will be to attend law enforcement conventions such as the IACP Conference, where many new products and techniques to assist law enforcement are introduced. This will be combined with an extensive mailing program designed to put information about the product in the hands of law enforcement decision makers.

The budget for the launch will be set at $1 million. Attendance at a series of law enforcement conventions will cost around $200,000 including travel, attendance fees, the booth, and product demonstrations. Of the remaining, the mailout will cost a further $200,000 to reach police departments around the country. There will also be a webpage, and some promotion in law enforcement media, for which $100,000 will be budgeted. The remaining $500,000 will be used to make face-to-face pitches to interested law enforcement agencies, including samples and travel. Once the product has reached a predetermined degree of saturation, such face-to-face promotion will no longer be required except for the largest accounts.

Situational Analysis

The strengths of ABC are that the company has great technological skills, strong marketing skills and is well-capitalized. Their team is small, but includes a marketing professional, a sales professional, a technology professional, and the company founder. The search for capital was a straightforward process, and ABC was able to exceed their initial capital requirements, allowing them to implement their launch plan in its entirety.

A key weakness is that it is highly dependent on a handful of key employees (there are 4 key employees and one administrator). There is only one salesperson, for example. Because of the need to attend trade shows as well as conduct face-to-face sales pitches, more will need to be acquired in order to properly implement our promotional strategy beyond the earliest phase.

The strengths of the product are that it is unique - there are no known competitors. It is relatively low-cost and it in tests has proven highly effective. The weaknesses are that it requires law enforcement buy-in and parental buy-in - two distinct groups with unique needs. The bracelet design is strength because it is not only fashionable but unlike microchips such as those implanted into cats, it is not permanent. The use of gold or silver, however, could be contentious as children may become targets for thieves seeking to acquire the bracelets for their metal value.

The external environment presents opportunities and threats. Parents are worried about their children, and about increased crime. This paranoia creates a viable market for the product. Law enforcement has proven responsive in the past to broad-based methods of finding missing children (i.e. Amber alerts), but as yet does not have a viable tracking device such as ABC is offering. In a marketplace where anything can and is tracked, the lack of such a program for the most coveted of all assets - children - indicates that this bracelet program is meeting a need that is as yet unfulfilled in the marketplace.

There are threats, however. One is the nature of law enforcement agencies, which sometimes suffer from poor decision-making chains, political infighting and underfunding that could make it difficult for them to decide to purchase our product. Moreover, the budgeting process for law enforcement agencies can be complex, balancing the needs of a myriad of competing stakeholders. As public sector budgets are being squeezed, and have always been heavily scrutinized, there is the risk that even if the key decision makers are sold on the product, they may not be able to find the money to pay for it in their upcoming budget cycles. This could in particular jeopardize ABC's two-year launch timeframe. Another threat are civil liberties advocates, who may protest such a product, viewing it as on the slippery slope to tracking all individuals. While there is an inherent privacy issue with tracking humans, it is hoped that the safety issue will override that. Another threat is that ABC may be seen as attempting to profit from missing children. While this is not the case, care must be exercised to ensure that this view is never projected in any way as it could dissuade decision-makers, many of whom are publicly elected, from involving their jurisdictions in the program.

Program Objectives

There are several different quantitative measures for the plan. The ultimate objective is to attain a presence in all markets in the United States. Initial penetration would ideally include 5-10 major markets, representing a number of geographic regions. Financially, the bracelets are low cost. Each bracelet weighs around five grams, so one Troy ounce of silver would produce six bracelets. The current price of silver is around $17.50 per Troy ounce. Each chip costs fifty cents, and the variable cost of the production process is $1.10 per bracelet, which was negotiated with the contract manufacturer. The contract includes a clause that will lower the production charge by ten cents per bracelet if we order over 1,000,000 units. This means the variable cost of each bracelet is $4.51. Fixed costs for the first year, including marketing, overhead and staff costs, totaling $745,000 ($500,000 of that from the marketing budget). The tracking machines will be offered to law enforcement at cost, as we feel that constrained public sector budgets are a significant threat to the adoption of the program and we need to minimize costs to law enforcement agencies to encourage their participation.

We feel that the ideal pricing structure will reflect the value of the product, but will hedge against the idea that ABC is profiteering on concern for children's safety. The price will be set at $20 per bracelet. This gives us a breakeven point of 48,096 bracelets in the first year. With a hurdle rate of 10% on the project, we will need to sell 52,905 bracelets to achieve an accepted return on our investment. Therefore, we have set a first-year sales objective of 75,000 bracelets, improving to 100,000 in year two.

Qualitatively, we wish to penetrate the abovementioned 5-10 major markets. This is because we feel that major market success will give us the exposure we need to take the bracelet program nationwide in year two. By penetrating multiple geographic regions, we will gain sufficient exposure around the country to facilitate more rapid growth, when the program reaches its third and fourth years. Our marketing plan should gain us the ears of key decision makers in those major markets and ideally with national law enforcement agencies such as the FBI and the Department of Justice as well. We feel the bracelet program is complementary to the Amber Alert program, which since 2003 has been coordinated by the DoJ.

The time frame for our objectives is two years. Right now, we have acquired sufficient capital to operate ABC and execute our marketing strategy for two years. Since law enforcement support is essential to the adoption of the bracelet program, we feel that rapid adoption is essential. Our preliminary research has indicated that the law enforcement community is responsive to the idea, but if we do not see this translated into action within two years, we will have no choice but to draw the conclusion that the idea is not as strong as our research indicated.

The first year we expect to spend six months without sales, simply getting the word out to our target market. The plan is that we hope to start securing trials of the bracelet program over the course of months 6-12. The second year we hope that the success of those initial trials will enable us to spread our geographic reach. If the program continues after this launch and evaluation period, we expect sales growth will be robust from that point forward.

Promotional Strategy

The personal tracking bracelets are a unique product. They represent an innovative new technology for the law enforcement field. This is the positioning we will seek, particularly in the beginning. We choose this for a couple of reasons. One, the uniqueness of the product will bring it more attention. Two, we have not yet properly explored any partnership, whereby we could position the bracelets as a complement to existing programs and products.

There are a few key points of differentiation that make the bracelet program unique. It is the first program that allows live tracking. Existing programs can do little more than identify a child once they have been found. The current systems in place for finding lost or kidnapped children still rely on eyewitnesses for success. The bracelets work even in the absence of such eyewitnesses. Another area where the bracelet program is differentiated is in the response time. In all missing persons cases, the speed at which an investigation is launched is critical to a successful outcome. According to many law enforcement sources, the first 48 hours after a person is noticed to be missing are the most important. The bracelets allow a child to be tracked and found well within the 48-hour period. This ability to deliver accurate, timely results is what differentiates the bracelet program apart from existing programs and services.

We will use several appeals in the marketing of the bracelets, since there are essentially two target markets that we must attract simultaneously. When evaluating whether or not to adopt the bracelet program, law enforcement officials will need to consider the potential response of parents. Many chiefs and sheriffs, for example, are publicly elected officials. Moreover, if they are to invest time, energy and money into setting up the bracelet program, they will want to feel comfortable that our appeal to the parents will be successful.

We will demonstrate a program that will appeal to parents on both an emotion and practical level. Parents are motivated by fear, and concern for their children's safety. One of the things the bracelets will do is help to alleviate that fear, since the parents will know that their child can be found quickly in the event of a disappearance. From a practical perspective, we will offer them the knowledge of how the product works, to give them an understanding of how it will help law enforcement to retrieve their child. When a child disappears, parents often panic because not only do they not know where their child is, but they also have no real sense of how their child will be found.

When appealing to law enforcement, we will appeal strictly on a practical level. We will outline the benefits of the product, its uniquenesses, and the value that it brings to parents. We will show them how simple the implementation process will be, so they understand not only the benefits of the program, but that the cost of these benefits is low enough that they can see the value of adopting the tracking bracelets in their communities.

Communication Media

In terms of media used to reach these audiences, the first target market will be approached initially. The strategy involves two parts. One is to gain an audience with key law enforcement decision makers at law enforcement conventions. These shows are where many new products for the field are introduced, and contacts between the company and key decision makers are made.

There are two reasons why the trade shows are a vital part of the process. First, this target audience is very limited, and the trade shows give direct access to this market. At the beginning stage of the marketing process, it is only key decision makers who need to be contacted. The product will require demonstrations in order to illustrate its effectiveness. Moreover, our physical presence will not only signal our seriousness to enter the business, but will allow our sales agent and other key staff to meet face-to-face with the target audience. A personal pitch is expected to be a requirement of any sale we make during the launch and proliferation stages. We expect to spend at least two years on the trade show circuit. We may need repeated pitches to each key decision maker in order to secure the sale. We also wish to expose the bracelet program to as many key decision makers as possible.

The trade shows will be supplemented with a two-part program involving mailouts of printed materials introducing the product to key decision makers around the country. We wish to build exposure to the product over the course of the first two years. The mailouts will begin six months into the program. There are two reasons for this. First, we hope that the mailout is directed to warm leads, those who have seen us at the trade shows. Second, we would like to incorporate some of the feedback we receive at the initial shows, both into our marketing and possibly even our product. The other component will be direct visits with interested decision-makers. These will require us to visit on-site, bringing our presentation to them. That part of the program is expected to begin immediately after the first trade show, and continue throughout the first two years of the program, and likely even further beyond that.

Reaching the parents will be something we rely on law enforcement for. Their endorsement is critical to reaching that market. We will provide information pamphlets for them, build a website and work to generate publicity in the form of news reports and public service announcements. By doing this we hope to, in concert with law enforcement, reach the parents of the communities as those communities become involved in the program. This work will begin when the first contract is signed, and continue through the life of the company.

Our initial promotional message will be visually stark and simple, reflecting the seriousness of the subject matter. Sensitivity will be taken to avoid potentially exploitative images - we want images that will stay in the minds of the decision makers but we do not intend to base the appeal on emotion. Copy will be critical - it must address each of the needs of the key decision-makers. There will be an information-dense section outlining the program's implementation and operation, so that the target market understands clearly how it works, why it will work, and how it will fit into their existing operations. Supplementary copy will include specific instructions, training programs and other such materials to help them see precisely how the implementation process will work, and to help them understand that the process is simple, well thought-out, and that ABC will be there to work with them to ensure a smooth transition to the bracelet program.

The Promotional Budget

Since this is a new product, we have structured our budget along the lines of the funding we feel is needed to successfully launch the product. We outlined a break-even point, conducted some preliminary research that indicated this target was reachable, and secured sufficient financing to implement our plan. In future, we will use percentage of sales as part of our budgeting process, but at present we are basing it around our projected return on investment.

The allocation process began with an examination of the costs of our plans. We wanted to determine first the costs that would be required to launch the product and see it through to profitability, before we secured financing. We first examined the cost of attending trade shows. We feel that for a product launch, we must have a high level of visibility, which comes at a premium price. A 20' x 20' booth at the 2008 IACP Conference and Exhibition, for example, costs $9,200. With booth production and transportation costs, the cost of materials, the cost of staff transport and accommodation and other ancillary expenses, one show can cost upwards of $40,000 to attend. We performed a similar bottom-up analysis of the mailout cost, beginning with the cost of the products in the mailout, multiplied by the expected number of mailouts we wish to conduct, plus the cost of follow-up materials such as reminder cards or more in-depth information packages.

Law enforcement media consists of a small handful of niche trade publications, such as Police Magazine, Justice Technology Network and American Police Beat. Advertising in these publications would run through the first two years. The prices are high - a four color 1/4-page ad in American Police Beat running for a full year costs $23,520 for example. We anticipate selection two magazines, each for a one-year run. The ads will be designed in house to reduce costs. After the first year, the ads will be evaluated for their effectiveness, resulting in either a second year or a switch to a different magazine.

We also estimated the cost of setting up a promotional website to be around $20,000. The website will contain product information, testimonials (when we get them), corporate information and a means by which to contact ABC to set up a meeting. The website should have all of our promotional materials readily available in.pdf format. Website design and layout will be outsourced, since ABC does not have sufficient expertise in house.

The largest component of the promotional budget is the face-to-face meetings. This will require not only travel and supplies, but additional staff as well. Our technology officer will accompany the salesperson initially, to better outline the product. Eventually we hope to have a training program in place so that the sales staff can conduct these meetings on their own. Eventually, we hope that we can have regional sales reps in order to reduce travel expenses, but our initial budget does not assume this.

Conclusion

ABC Company is launching operations with a bracelet intended to be worn by children, that has been implanted with a REID tag. If the child goes missing, law enforcement will activate the tag, allowing them to track the child's whereabouts. The product is unique, and offers a valuable benefit to both law enforcement and parents. Both of these stakeholders are the end customers, since law enforcement must essentially partner with ABC in order to administer the bracelet program and market it to parents.

We feel that ABC can execute this product launch within two years. The initial phase of the launch targets the law enforcement market directly. Once buy-in from law enforcement is gained, ABC will focus on the consumer market, and on geographical expansion. The financing that ABC has secured is estimated to last for the first two years of the project, after which time it is hoped that market penetration has been sufficient to finance further growth.

The objective of targeting a handful of major markets will allow the bracelet program to achieve maximum exposure in law enforcement circles. Mailouts, print ads and the website will supplement the trade shows and face-to-face product pitches. In doing this, we expect to move into our third and fourth years in a stage of rapid market proliferation.