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Class ： Marketing ManagementGroup ： 2Team Member ：陳崇智 Chung-Chih Chen 9562511 余國守 Kuo-Shou Yu 9562508 詹信元 Hsin-Yuan Chan 9562509 謝志明 Chih-Ming Hsieh 9562526 陳海源 Hai-Yuan Chen 9562527 郭寶麟 Pao-Lin Guo 9562533 Director ： Professor Charles V. Trappey

I-Baby Mobile Business PlanI-Baby Mobile Business Plan

Dec. 20.2007

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Agenda

Forecast Product of Comparison & Competition SWOT Analysis Distribution, Communication and Promotion Brand Image & Custom Service Implementation and Marketing Organization Contingency Planning Pricing Strategy and Financial Forecast Conclusion

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Situation Analysis

I-BABY mobile phone know your requests!

Have you ever lost connection with your kid?

How should I do now?Looking for my kid by calling 911 or?

Kid’s safety is priceless!

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Kid’s Mobile Market Summary

Enormous growth opportunities for Enormous growth opportunities for Kid-Mobile in developed & Kid-Mobile in developed &

developing countriesdeveloping countries

Target on the top & Target on the top & intermediate income parentsintermediate income parents

Target on the top & Target on the top & intermediate income parentsintermediate income parents

Lead over other Lead over other competitors to competitors to

MarketMarket

Lead over other Lead over other competitors to competitors to

MarketMarket

Product & Service & Quality Product & Service & Quality DifferentiationDifferentiation

Product & Service & Quality Product & Service & Quality DifferentiationDifferentiation

Marketing Marketing communication & communication & financial strategyfinancial strategy

Marketing Marketing communication & communication & financial strategyfinancial strategy

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Demand Forecast

Target market ： 5~10 years old children ( 30~40 years old parents )

Purchases of transport equipment： 1 new handset per year ( about NTD10,000 )

Other communications expenditures: NTD 2,000 per month

Education and research expenditures： NTD 28,599 (30~34 years) ,NTD 55,099 (35~39 years)

Family income： 1,227,155 NTD/Yr (30~34 years) , 1,289,538 NTD/Yr

(35~39 years)

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Average Family Income & Expenditure Per Household　 2006 Unit： NTD

　 Under 30 30~34 35~39 40~44

　 years years years years

Purchases of transport equipment

8,924 10,995 10,030 11,139

Other communications 26,020 24,282 22,955 24,019

Education and research 21,023 28,599 55,099 75,499

Miscellaneous 49,755 56,899 59,733 56,983

Disposable income 850,241 969,135 1,014,173 969,634

Final consumption expenditure

670,069 743,436 786,490 792,289

Saving 180,172 225,699 227,683 177,346

Family income 1,061,577 1,227,155 1,289,538 1,235,374

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Market Forecast

Market Forecast ： 2004 population of 5~9 years in Taipei City & County ： 40

3,106 2005 population of 5~9 years in Taipei City & County ： 40

5,939 Target market forecast ：

5% population of 5~9 years in Taipei : 20,300

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Population by 5 Year Age GroupEnd of Dec., 2004

Age 0~4 Age 5~9 Age 10~14

Locality Years Years Years

Taiwan Area 1,239,602 1,517,011 1,617,943

Taipei County 189,634 246,481 268,947

Taipei City 133,010 159,458 171,870

End of May, 2005

Age 0~4 Age 5~9 Age 10~14

Locality Years Years Years

Taiwan Area 1,203,392 1,508,957 1,614,653

Taipei County 185,395 245,494 267,240

Taipei City 127,935 157,612 171,579

Source : Dept. of Household Registration Affairs, MOI.

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Product of Comparison & Competition

Category General Mobile phone

General Kid phone

GPS smart phone I-BABY MOBILE PHONE

GPS Fix N/A N/A YES YES

Price NTD 3,000~ NTD 5,000

Under NTD 2,000

NTD 20,000 Under NTD 2,000

Shape Not for Kid Charming design Not for Kid Charming design

Strength 1.Easy to acquire 1.Cheap2.Design for Kid

1.GPS fix function 1.Design for kid2.Safety & security3.Accuracy4.Cheap & customization

Weakness 1.High alternative2.No GPS function3.Not specific design for kid

1.High alternative2.No GPS function

1.Low battery life2.Expensive

1.Low battery life

!

Niles Baby 1.Design for Kid

2.safety & security3.Accuracy4.Cheap & customization

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!

Niles Baby

!

Carol Baby

Hole of ear phone, recharge, PC connection

Graphic interface

GPS system inside

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Mobile Phone Tariff

　 PlanMonthly

RentPreferential

Benefit

Mobile phone conversation tariff

Conversation with same system

Annotation

Peak timeOff-peak

timePeak time

Off-peak time

I-Baby

Free Month Rent

0 0 0.1 0.05 0.08 0.04 　

588 588 588 0.08 0.04 0.05 0.0410 Messages free

888 888 888 0.06 0.03 0.04 0.0320 Messages free

Each message costs NTD 5 (includes GPS position)

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SWOT AnalysisStrengthEasy to get R&D and manufacturing resources.Taiwan has mature cell phone manufacturing industry.Capital sufficent. Don‘t need too much capital.First-mover advantage

WeaknessThe birth rate is declining.Internal needs scale is too small.The ability of R&D and creativity can‘t compare with international mobile companies.R&D and manufacturing costs are higher than China.GPS searching expense may too high for some families.The difficulty of developing brand or service awareness as a start-up company.

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SWOT AnalysisOpportunity

The baby mobile selling price is low. Can arouse the parents needs.Some parents have high controllability toward their kids.The needs of safety are growing up.There are no such GPS searching service and baby mobile in domestic market.

ThreatenCompetition from low cost China company.The probability of international company enters baby mobile market.Creative speed can‘t reach the change speed of customers needs.The telcompany may charge high fees for using their devices.Entry barrier is low. Easy to replace.

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Marketing Distribution

Strategy: Cooperate with Telecommunication company

Location: Taipei City and Taipei Country Place: service centers 、 retailers, Kids’ shop

s …etc Service: Application 、 Sales 、 Repair 、 C

hange data 、 Bill Consultation …etc Warehouse and Logistics

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Mass Communication Cooperate with Telecom Cooperate with Outlets Mail (printer media) Catalogs Telemarketing Interactive TV Web sites Mobile devices Car dealers

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Promotion

Subject: to promote safety experience to parents Slogan: Kid’s safety is priceless!Event 1: To prepare free mobiles for 5 classes in 5 primary

school in Taipei city and try to associate with parents and teachers in school

Event 2: To prepare free mobiles in retailers, as long as

consumers deposit NTD 2,000, free mobile can be used 1 month (trail). If customers are unsatisfied the services, deposit can be returned .

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Brand Image Cheaper Safety & security Charming shape design Closed relationship

Perform

ance

Excellenc

e

˙ I-BABY Kid Mobile phone

˙GPS Smart phone

Normal

˙Normal Kid Mobile phone

˙Mobile phone

Low High

Price

Kid’s safety is priceless

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Brand Image

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!

Niles BabyGPS - fixed position

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Carol Baby

!

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Custom Service

Professional customer service Toll-free customer service number Technical staff to databases tracking individu

al customers' preferences

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Implementation

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept

Milestones

Concept

Marketing requirements spec

DevelopmentProduct specDevice design PrototypingProductizationManufacturingCertificationMarketingMarketing PlanMedia PlanTrial Launch Plan Distibution Plan & Trial SupportPre lanuch review

2008 Q32007 Q4TASK

2008 Q1 2008 Q2

LaunchPorject kick off Function acceptUnit test

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Chairman & CEO

.

PHS Business Mobile Business

Quality service

Kid’s Mobile Business

Business Center

Production center

Finance Human resource

Marketing Organization

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Contingency Planning

Difficulties & Risks :a.Already established market competitor !b. Marketing visibility unclear !

Worst Case Risks Include :a.Poor performance in operation !b. Liquidate equipments & intellectual capitals to cover liabilities !

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Pricing Strategy and Financial Forecast

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Pricing Strategy

Step 1: Selecting the Pricing Objective ─ Initial period → Maximize profit ─ After initial period → Maximize revenue

Step 2: Determining Demand─ Let marketing research department to survey─ Questionnaire ─ Price sensitivity analysis

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Pricing StrategyStep 3: Estimating CostFixed cost

Fixed costs are USD$50,000 with each batch. USD$5 per piece if each batch is 10K.Total estimated cost= USD$ 26+4+7+5= USD$ 42

If we use the same supplier for CPU, GPS and GSM, the electronic cost may decrease to $20~$25

Initial total cost will be USD $42.

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Pricing Strategy

Step 4: Analyzing Competitors’ Costs, Prices, and Offers

─ There is NO competitor in the baby mobile market in Taiwan so far. We are the first manufacturer targeting the age from 5 to 10.

Step 5: Selecting a Pricing MethodMarkup pricing

─ The estimated cost is USD$ 42 and added 30% margin rate equals USD$ 55 (or NTD$ 1,750).

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Pricing Strategy

Step 6: Selecting the Final Price─ Skimming pricing, odd pricing

─ Initial period, pricing at 50% markup rate which means the selling price would be USD$ 63 (or NTD$ 2,000).

─ After, pricing at 30% markup rate to increase the sales volume.

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Pricing Strategy - other considerations

A. Internal factors1. Cost

Curtail the cost to make selling price more competitive.2. Marketing strategy Target different customer groups comparing existing

mobile manufacturers.

B. External factors1. Marketing channels

If selling via department stores, we can increase the price. But if selling via retailers, we should maintain markup rate at 30%.

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Sales Forecast

2008 2009 2010

Taipei area 5-10 yrs children total amount 411,320 398,060 378,040 Potential buyers percentage 5% 6% 7%Potential buyers 20,566 23,884 26,463 Sales forecast (NTD$ 1,750 per unit) 35,990,500 41,796,300 46,309,900 Direct cost of sales (NTD$ 1,350 per unit) 27,764,100 32,242,860 35,724,780

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Expense Forecast

2008 2009 2010

Administrative (1.5% of sales) 539,858 626,945 694,649 Marketing (3% of sales) 1,079,715 1,253,889 1,389,297 Research and development (2% of sales) 719,810 835,926 926,198 Contribution margin 5,887,018 6,836,681 7,574,977

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Conclusion

QualityQuality

ServiceService

PricePrice Customization Customization

CustomerSatisfaction

CustomerSatisfaction

ExpenseExpense

Revenue Revenue

Kid’sMobile

Kid’sMobile

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