Executive Summary
Far from being a simple business card, the E-card is an excellent marketing tool that can be tailored to fit the market being reached.
At present, the current situation offers E-Card Design Inc. an excellent opportunity to capture a significant market share. CD-ROM Business Cards being offered in the marketplace at present are offered as blank CD-ROMs or as part of an integrated marketing package. Products are standard throughout the marketplace, as CD-ROMs run on standard personal computers. Distribution channels employed by established manufacturers are direct. There is no need to go through wholesalers and retailers as it cuts into profit margins. Locally there is only one major competitor – The Rompus Group in Toronto, who packages their version of the E-Card, the i.d. rom as part of a larger marketing presentation. Most of the competitors are located in the U.S.
E-card Design Inc.’s aims its product solely at Canada’s technologically advanced big businesses located in the main commercial centers, namely Toronto, Calgary, Vancouver, Montreal and Ottawa. The intention is to be positioned as a leading content and design developer. By focusing on the service aspect of the product, this will help stand out from the competition.
The E-Card has an almost infinite number of uses, ranging from being a presentation tool, to delivering catalogues, company information, financial reports and substituting as a traditional business card . The E-Card is capable of holding between 32 and 100MB of information – up to 32000 pages of text or up to thirteen minutes of audio and video can be stored. Company information can be printed on the actual E-Card to enhance its visual appeal and it can also be cut into customized shapes.
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Pricing will vary according to quantity ordered and the amount of time spent on design and content development.
In order to promote the E-Card, sales forces will be employed in the major target cities to engage in personal selling. Furthermore, advertising in trade publications and business newspapers will take place, as CEOs, VPs and other department heads of major firms will be targeted.
Assessment of Current Situation
Product review
At present most business card sized CD-ROMs are being offered in the marketplace as part of a combined marketing package. The product is not widely used or acknowledged in Canada, as the concept of an electronic business card is still fairly new. This growing market offers E-Card Design Inc. the opportunity to capitalize on the current situation and capture a significant market share. The size, features and prices of the existing CD-ROM Business cards are fairly standard. E-card Design Inc.’s product will also fit this standard measurement, but the service being offered by its Design Team is what is anticipated to create demand for the product.
At present in the marketplace, the prices of blank CD-ROMs vary with the quantity ordered. They range from $3.00 per CD-ROM for less than 100 units to $0.70 per CDRom for orders over 50,000 units (Appendix E).
When bought from manufacturers, the CD-ROMs can be purchased for as low as $0.40 per unit, with prices varying upon quality. Thus, at present in the market, the Gross Margins per unit can vary from $0.30 to $2.60, again depending on the units purchased (See Appendix J).
This shows that there is a potential to earn large profits. Regardless of the units purchased, factoring in the $120 per hour design costs that E-Card intends to charge makes the market more lucrative.
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Research is the process of gathering, processing and analyzing information on markets. The scope of such research is limited to the study of markets and does not include studies on the brand or product to be marketed. Market research is a subset of marketing research. Marketing Research is the process of gathering, processing and analyzing information for the purpose of marketing a product. It ...
Review of Competition
A considerable number of competitors are situated in the United States and the United Kingdom. Of these, the only threat facing the E-card would come from the larger firms who may have the ability to enter the local market. These established companies possess the resources to promote to our local market and offer better prices due to economies of scale – which is a benefit they have due to the high volumes they are already selling. Their main objectives are to accomplish their profit margins by gaining market share rapidly. Examples of existing competitors in the U.S. include Back in the Day.
Locally there are only few competitors, a major one being The Rompus Group. This company is located in Toronto and creates marketing strategies for on-line businesses. Its i.d.rom™ (Rompus Group’s version of the E-Card) is just a small part of the company’s product suite, which includes other services such as e-marketing databases, website creation and management and marketing plan preparation. This company does not market its i.d.rom as an independent solution, but as part of a larger marketing strategy. However, they pose a threat to E-card because they are already an established business with a large client list. They can offer better pricing and a more complete marketing package.
Distribution Channels
At present competitors distribute their products through a direct marketing channel, as there are no intermediary levels. Shipping is dependent upon quantities ordered, urgency and destination. Courier companies like Federal Express and United Parcel Service, as well as companies own delivery vehicles are employed.
Market description
Presently, the major markets that are being targeted by the competitors include all types of businesses that require this type of marketing solution. Some of the major segments targeted within this market are large, profitable organizations such as Microsoft, Royal Bank and The Chicago Bulls. These organizations are targeted because they have large client bases that the CD-ROMs can be distributed to. Also, the cost of E-cards is lower if companies order in a large quantity, which is often what these companies do.
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Thus, the E-card market can be segmented according to geographic regions – provinces with the highest gross domestic product (Appendix A) and within those provinces, cities with the largest population (Appendix B).
Therefore, we have chosen Toronto, Vancouver, Ottawa, Montreal and Calgary as E-card Design Inc.’s target segments. The reason for segmenting the market in this way is to provide E-Card with its target markets – big businesses. Bigger businesses can utilize the E-card and it’s many uses in ways suitable for them, and they are likely to purchase large amounts. Furthermore, within the scope of big business, it is planned to target those companies that are innovative and more technologically advanced. They will be in a position to utilize and benefit from the E-Card to a greater degree. Examples include the banking, high-tech and automobile industries. These companies look for ways to differentiate themselves from competitors. They need to appeal to stakeholders and have to show they are innovative, environmentally responsible and cost conscious.. By using E-cards, they are able to save printing and postage costs. One E-card is able to store up to 32,000 pages of text (Appendix G).
The innovative advantages provide by the E-Card also serve to enhance the company’s image.
In the automobile industry for example, the E-Card can be used at trade shows, enabling consumers to enjoy audio and visual effects like virtual drives and 3D views of new models. Any company can enlarge its market size by offering information in numerous languages, which is one of many features of the E-card. In a multicultural country like Canada, information has to be presented in a variety of languages. The banking industry for example has customers of various ethnic backgrounds and the E-Cards containing specific languages can be targeted to each community. This application serves to enhance a firm’s reputation within society.
In relation to its competitors, E-card Design Inc. is a local provider that offers promotional and designing services along with the physical production of the E-card. By offering clients access to an innovative designing team that can build and present an attractive presentation, as well as the provision of personal consultation services that focus on customer satisfaction, E-card Design Inc. can set itself apart from its competitors.
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S.W.O.T. Analysis
The challenge facing E-card Design Inc. is to attract and retain customers. Constantly improving features and offering excellent services ensures clients will be retained and the company stays competitive
Strengths
In order to effectively market the E-Card and its services, it can capitalize on numerous strengths. Firstly, E-Card Design Inc.’s fundamental philosophy is to ensure customer satisfaction at all cost by providing more than what has been promised. By providing this extra value, we can retain most of our customers and differentiate ourselves from our competitors.
· Canada is a largely unexploited market. There are only a few local competitors, and those located in the U.S. do not target Canadians. As well, the relatively small current market has the potential to expand as businesses are informed and learn about this new technology.
· Canada was recently ranked number one in terms of computer usage per capita. (Appendix C) This makes the market for the E-card very promising as a population that embraces the technology the E-card employs is essential to reaching and maintaining high sales.
· The weak Canadian Dollar makes the E-Card more attractive to both local and foreign clients in comparison to U.S. and U.K. companies.
· Canadians are increasingly becoming aware of environmental concerns like paper wastage. Although not as rigorous as U.S. environmental policies, local businesses know that promoting an environmentally conscious image improves consumer confidence and boosts their image. Thus, stressing E-card’s paper saving advantages is another strength that should be utilized. The E-card can do away with huge amounts of paper lost in the form of financial reports, company data and other promotional material.
· Large businesses are increasingly concerned about their brand or company’s image. The hottest trend for businesses is to build an innovative image for their customers. E-card is one way in which they can do this.
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Weaknesses
There are a number of weaknesses that E-Card Design Inc. has to take into account.
· E-card Design Inc. is a smaller firm that lacks an established name in the minds of customers. This can result in slow initial growth. As well, lacking capital limits the ability to reach certain markets through expensive media like television.
· Production Costs of E-cards are higher in comparison to traditional paper products. This makes the product unattractive to smaller firms that are more concerned with the bottom line.
· Finally, E-card is a new product that many Canadian businesses are not familiar with. Getting them to try a new product is hard and it takes a lot of promotional energy. Much time and capital is necessary to make businesses receptive to this technology.
Opportunities
· The Internet can be utilized as a strong marketing tool to expand E-card’s market beyond the Canadian border. Since the United States is a huge market, the World Wide Web can be used to reach big businesses in the United States in order to add to the consumer base.
· E-card Design Inc. can expand their products and services to a more complete marketing solution package as the current business matures. In this way they will be able to compete with full-marketing service firms like Rompus Group.
· The high-tech sector is growing rapidly, and there are numerous smaller firms that will be receptive to E-card’s products and services. These tech savvy companies also provide excellent potential as a growing market.
Threats
· Increasing globalization aided through technological improvements like the Internet make it easier for foreign competitors to enter local markets. This adds pressure on E-Card Design Inc., as foreign competitors have been around longer, have more capital and experience. This improves their ability to move into the Canadian market.
· In-house design technicians employed by the businesses themselves may take away from the service aspect of E-Card Design Inc. Large companies can purchase blank CD-ROMs from manufacturers like Digigo in Montreal design their own content.
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· Full marketing service companies like Rompus Group may change their marketing strategy when E-Card Design Inc. enters the market. With the new threat posed by E-Card Design Inc., Rompus may switch from marketing its total marketing package to concentrating more on it i.d.rom product, which is in direct competition with the E-card.
Objectives
Tangible/Quantifiable
E-Card Design Inc. has the following objectives:
1. Total sales of $ 448,000 in first year and $1.08 million in second year. (Appendix D)
2. Gross margin increases from 75% to 84% in three years
3. Achieve 10% market share in first year, 25% in second year and 30% in third year.
Intangible
1. Build awareness of the service aspect of our firm.
2. Build strategic relationships with our client base as well as concentrating on developing loyal repeat customers
3. Remain Innovative – design and sales staffs should attend technological seminars and training sessions to keep abreast of changes and updates in technology.
Marketing Strategy
Product
The E-card is the newest innovation in communication, capable of presenting your message, data or other customized imagery to your client in a unique and efficient format. It is a round-edged CD shaped like a traditional business card that can be used on almost every computer in the world. There are innumerable uses for the E-card, ranging from providing business and financial reports, product catalogues, background information about a company as well as substitution for a traditional business card. The E-card can provide text, video and audio as well as animation. With these extra benefits it has a greater impact on the viewer, providing a great deal of information in an entertaining and user-friendly way. Furthermore, the E-card can also be offered in a variety of different shapes and sizes that can be tailored to the specifications of the customer. Imagine the reaction of clients or prospects when they open a package to discover a CD-ROM in the likeness of your logo, product or any other cool design. The shape becomes part of the message, supporting long-term branding and enhancing a company’s image. The capacity each card varies and depends on the size of the CD. Usually, the E-card can hold from 30MB to 100MB. The E-card is packaged in a transparent plastic sleeve, and our team according to specific customer needs designs the labeling of each E-card.
Place
Direct marketing channels will be used to bring custom made E-cards and its services to customers. No intermediary level will be used because direct interaction and communication is necessary in order to deliver a focused service above and beyond customers’ expectation. E-Card Design Inc. can deal directly with customers and in this way reduce expenses. The head office is located in Toronto, where the design team is situated. More salespersons are trained and retained in the Ottawa, Montreal, Calgary and Vancouver offices with the responsibility of handling their local clients. The design and production of the E-card will take place at our head office. Members of the design team may be required to travel if necessary.
Products will be distributed to clients through a variety of means. Depending on total product size, weight, location and time factor, delivery may be contracted out to external companies like Federal Express. For local orders, the company’s own delivery vehicle will be used. Sufficient blank E-card inventory will be stored at the head office location where production takes place.
Promotion
The promotional mix of E-card Design Inc. must be consistent with its innovative and customer priority position. First, target audiences have to be identified, which are the top management of large technologically advanced companies like CEOs, VPs and department heads. Since the E-card is a new product, building awareness is the primary objective. Rational appeal is used in the message content to show the features and additional value customers can gain from using E-cards. Media chosen include personal selling, the company’s home page and print media. The primary vehicle for E-Card’s message will be through personal selling, as it has the benefit of allowing better understanding of the needs of the customers. A mix of an affordable method and objective method is used to setting the promotion budget.
Primary media: Personal Selling
Well-trained salespeople can work to build and maintain long-term relationships with customers. Salespersons must be sensitive to customers’ needs and knowledgeable of E-card and its services. Salespersons are grouped in teams located in the five target cities. Samples of E-card and its information will be mailed to target companies with salesperson follow-ups afterward. Free price quoting and other enquiry services are provided. Commissions based on volume sold will be used in addition to regular salary in motivating salespersons. E-card design Inc. will also participate in trade shows attended by top management, which facilitates direct contact and communication with E-card’s target market.
Secondary media: Print Media and the Internet
Other than personal selling, more advertising must be used to increase consumer’s awareness and knowledge of E-card and its services. E-card will be advertised through print media and Internet. Print media provides an advantage of reaching a relatively large audience for a reasonable price. E-card will be advertised in industry trade publications and newspapers like The Globe and Mail and The National Post. (Appendix I) The Company’s home page is also a major tool for customers to search information and order products on the web. Interested parties can register on-line to receive information and free samples. Finally, a toll-free number will be set up for enquiry information.
Price
The pricing of the E-card service is based on two variables: number of hours of design work spent and quantity of E-cards order. Prices range from $0.70 to $3.80 for blank E-Cards and $1.90 to $5.50 for content added E-Cards. (Appendix J) Our design team charges a rate of $120 an hour to design E-card content. E-card Design Inc. prices are set slightly lower than the competitors at the beginning to encourage more sales. However, price-matching strategy will be used after E-card Design Inc. has established a position in the market place. Rather than price, excellent quality of service is promoted by E-card Design Inc. to differentiate itself from its competitors.
E-card Design Inc. will provide clients with a free estimate before providing its service. Because design fees are charged by the hour, an estimate of the length of design time is provided to the client. Like other consulting service firms in Canada, expenses such as courier and photocopying expenses will be charged back to the clients. E-card Design Inc. accepts cash, credit cards, money orders or cheques. Clients are required to pay the bills in full within 30 days after the invoice date or an annual interest rate of 12% is charged. E-card Design Inc. also offers clients a 2% discount for account settlement within ten working days of project completion.
