Marketing

1.0 Executive Summary

Our new marketing focus, made explicit in this plan, renews our vision and strategic focus on adding value to our target market segments, the small business and high-end home office users, in our local market.

American Technology will change its focus to differentiate itself from box pushers and improve the business by filling the real need of small business and high-end home office for reliable information technology including hardware, software, and all related services. Our marketing challenge is to position our product and service offerings as the high-quality, high value-add alternative to box pushing in a vacuum.

Product 1997

GEN $1,372,500

Systems $3,293,500

Service $380,000

Software $799,250

Training $113,000

Totals $5,958,250

1.1 Vision

AMT is built on the assumption that the management of information technology for business is like legal advice, accounting, graphic arts, and other bodies of knowledge, in that it is not inherently a do-it-yourself prospect. Smart business people who aren't computer hobbyists need to find quality vendors of reliable hardware, software, service, and support. They need to use these quality vendors as they use their other professional service suppliers, as trusted allies.

AMT is such a vendor. It serves its clients as a trusted ally, providing them with the loyalty of a business partner and the economics of an outside vendor. We make sure that our clients have what they need to run their businesses as well as possible, with maximum efficiency and reliability. Many of our information applications are mission critical, so we give our clients the assurance that we will be there when they need us.

1.2 Objectives

1. Increase sales by 20%

2. Increase gross margin to more than 25%.

3. Increase our non hardware sales to 65% of the total.

2.0 Target Markets

AMT focuses on small business in the local market, with special focus on the high-end home office and the 520unit small business office.

Market 1997 1998 1999 2000 2001 Total

Home Office $25,000,000 $27,500,000 $30,250,000 $33,275,000 $36,602,500 $152,627,500

Small Business $50,000,000 $52,500,000 $55,125,000 $57,881,250 $60,775,313 $276,281,563

Totals $75,000,000 $80,000,000 $85,375,000 $91,156,250 $97,377,813 $428,909,063

2.1 Market Definition and Segmentation

We have broken our markets into groups according to standard classifications used by market research companies: home offices and small business.

Exact definitions of these market segments is not necessary for our marketing planning purposes here; general definitions will suffice. We know our home office customers tend to be heavy users, wanting high-end systems, people who like computing and computers. The low-end home office people buy elsewhere. We also know that our small business customers tend to be much less proficient on computers, much more likely to need and want handholding, and much more likely to pay for it.

2.2 Target Market Segment Strategy

We cannot survive just waiting for the customer to come to us. Instead, we must get better at focusing on the specific market segments whose needs match our offerings. Focus on targeted segments is the key to our future.

Therefore, we need to focus our marketing message and our product offerings. We need to develop our message, communicate it, and make good on it.

2.3 Target Market: Home Office

The home offices in Tin town are an important, growing market segment. Nationally, there are approximately 30 million home offices, and the number is growing at 10% per year. Our estimate in this plan for the home offices in our market service area is based on an analysis published four months ago in the local newspaper.

Home offices include several types. For our plan, the most important are the home offices that serve as the only offices of professional firms. These are likely to be professional services such as graphic artists, writers, and consultants, also some accountants and the occasional lawyer, doctor, or dentist. There are also individuals who maintain home offices for part-time use, including "moonlighters" and hobbyists. This segment is not who AMT wishes to sell to; our marketing focus consists of professionals and entrepreneurs who maintain a full-time office. In this plan, we will refer to customers in the home office segment as HOs.

2.3.1 Needs and Requirements

Our target HOs are on average as dependent on reliable information technology as any other businesses. They care more about reliable service and confidence than about the rock-bottom lowest price. They don't want to rely solely on their own expertise, so they choose instead to deal with us with our promise of service and support when needed.

Our standard HOs will be one system installations, no networks, much more powerful systems than the average small business. Fax modems, voicemail, and good printers are likely. They tend to be interested in desktop publishing, accounting, Internet, and administration software as well as their job specific software needs.

It's important that we realize we won't be selling to the price oriented HO buyers. We'll be able to offer an attractive proposition to the service oriented and security oriented buyers only.

2.3.2 Distribution Channels

Unfortunately our HO target buyers may not expect to buy with us. Many of them turn immediately to the superstores (office equipment, office supplies, and electronics) and mail order to look for the best price, without realizing that there is an option that provides greater value for dollars.

2.3.3 Competitive Forces

Our focus group sessions indicated