Marketing Strategy

VRDC2

STRATEGIC MARKETING PLAN

Presented to

Dr. Bruce Lammers

Department of Marketing

California State University, Northridge

Team C2

Alim Kamat

Industry: C

November 24, 2004

I. Executive Summary

VRDC2's aim is to offer the best quality VRD(Voice Recognition Device) products at a reasonable and affordable price. There were high expectations for VRDC2 throughout all ten periods but unfortunately, VRDC2 failed to meet any of the expectations. VRDC2 came out with a net contribution of (-2.985,147.50), the lowest in Industry C. VRDC2 came out with a loss in every of the ten decision periods. However despite the negative net contribution, the future looks bright for VRDC2.

One major reason why VRDC2 failed to meet expectations is because it did not set one consistent market throughout all ten periods. In Period 1, VRD targeted the Modern Students and came out with a reasonably high market share at 34.1%. However, it was seen that the market share in the home users was even higher at 39.8%, highest of all firms in that segment. As a result, VRDC2 decided to target the home users during Period 2 and Period 3. That move backfired as its major competition, firm BCBG also started targeting that segment and by period 3, VRDC2's overall market share plummeted from 26.1% in period 1 to 7.7% in period 3 and only had a market share of 12.9% in the home users segment. VRDC2 hit an all time low in Period 6 when its total market share was only 4.3%. The situation for VRDC2 could only get better and could not get any worse.

Since Period 9, VRDC2 has finally found itself a consistent target, known as the Modern Students. As a result in Period 10, VRDC2 has the best product positioned in the student segment with a distance of 1.3. VRDC2 has excellent profit potential in the future and it is up to you to continue to add to the products features and to continue keeping the prices affordable for the students. By continuing to improve the product and its positioning, I have faith that you will make VRDC2 extremely profitable in the future.

TABLE OF CONTENTS

I. EXECUTIVE SUMMARY............................................ Page 2

II. SITUATION ANALYSIS............................................. Page 4

1. Total Industry Market Situation.................................. Page 4

A. Total Industry Unit Sales: Figure 1........................ Page 4

B. Total Industry Sales($): Figure 2........................... Page 4

2. VRDC2's Current Marketing Situation......................... Page 5

A. Target Market: Figure 3, Figure 4, Figure 5, and Exhibit 1. Page 5

B. Sales and Profits: Figure 5, Figure 6....... ....................Page 8

C. Costs: Figure 7.............................................. Page 9

D. Distribution: Figure 8....................................... Page 10

E. Competitors: Figure 9....................................... Page 11

3. Strengths-Weaknesses-Opportunities-Threats................... Page 13

A. Strengths: Figure 10..............................................Page 13

B. Weaknesses: Figure 11.......................................... Page 14

C. Opportunities................................................... Page 15

D. Threats.......................................................... Page 15

III. NEW MARKETING OBJECTIVE.................................Page 15

IV. NEW MARKETING STRATEGY............................... Page 16

V. CONCLUSION........................................................... Page 17

Exhibit 2: Proforma for Decision Period 11.................... ....... Page 18

II. SITUATION ANALYSIS

1. Total Industry Current Marketing Situation

A. Total Industry Unit Sales:

As shown in Figure 1 below, unit sales increased methodically from Period 1 to Period 10. From Period 1 through Period 3, unit sales surprisingly declined by 6%. It looked like Industry C was going to become a major disappointment due to a steady decline in unit sales during the first three periods. However from Period 4 through Period 9, the things took a turn for much better. During those periods, unit sales shot up by 27% and the number of unit sales hit its peak during period 9. However, there was a slight decline in unit sales during period 10 but overall unit sales between period 1 and period 10 increased by 17%.

B. Total Industry Sales($):

As shown in Figure 2 below, the industry retail sales($) started growing slowly from Period 1 through Period 3. Period 4 and Period 5 saw a huge increase in industry retail sales($) and as a result retail sales($) hit its peak during period 5. Period 6 saw a somewhat steep decline in industry retail sales($) and that became a sign of what was to come in the latter periods. The downward spiral continued from Period 7 through Period 10 as industry retail sales($) have continued to decrease slowly but surely. Despite the recent and continuing downward spiral, industry retail sales($) have increased overall by 15%. Due to the continuing downward spiral of retail sales($) in the industry, the market appears to be in the Decline Stage of the Product life cycle. Despite the recent decline, retail sales have gone up by 15% between Period 1 through Period 10.

2. VRDC2's Current Marketing