A REPORT ON MARKETING PLAN: Star Software, Inc.

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This report is the marketing plan analysis of Star Software, Inc. Star Software, Inc. is a small, family-owned corporation in the first year of a transition from first-generation to secondgeneration leadership. Star Software sells custom-made calendar programs and related items to about 400 businesses, which use the software mainly for promotion. Stars ! employees face scheduling challenges, as Stars business is highly seasonal, with its greatest demand during "ctober, #o$ember, and %ecember. In other months, the e&uipment and staff are sometimes idle. ' ma(or challenge facing Star Software is how to increase profits and make better use of its resources during the off-season. 'n e$aluation of the companys internal strengths and weaknesses and e)ternal opportunities and threats ser$ed as the foundation for this strategic analysis and marketing plan. The plan focuses on the companys growth strategy, suggesting ways in which it can build on e)isting customer relationships, and on the de$elopment of new products and*or ser$ices targeted to specific customer niches. Since Star Software markets a product

used primarily as a promotional tool by its clients, it currently is considered a business-to-business marketer.

INTRO,/*TION
+arketing ,lan is a basic concept which is re&uired to make a product successful. It consists of companys strategy based on industry and targeted customers trends to make that product successful. +arketing plan analysis is done because companies want to distinguish the rele$ancy of their marketing plan in current scenario. This analysis comprises of -n$ironment analysis, company analysis, product analysis, competitor analysis and products 4,s. 's part of our academic work we ha$e to analysis a products marketing plan and we choose Star Software Inc. because its in soft drink industry in which e$ery youth is interested. Ob2ecti3e . To understand the concept of marketing and marketing strategy and market planning.

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To understand how key trend affects the product and industry and how consumer buying beha$iour affects the product.

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To understand the concept of market segmentation, market positioning and targeting by using a The main ob(ecti$e of this report is to understand how and what the strategies are used by Star Software Inc.to o$ercome the competitors. EN0IRONMENTAL ANAL1SIS 0ounded as a commercial printing company, Star Software, Inc., has e$ol$ed into a marketer of high-&uality, custom-made calendar software and related business-to- business specialty items. In the mid- 120s, 3ob +c4emore purchased the company and, through his full-time commitment, turned it into a $ery successful family-run operation. In the near future, +c4emores /5-year-old son, 6onathan, will take o$er as Star Softwares president and allow the elder +c4emore to scale back his in$ol$ement.

MARKETING EN0IRONMENT

Competitive forces. The competition in the specialty

ad$ertising industry is $ery strong on a local and regional basis but somewhat weak nationally. Sales figures for the industry as a whole are difficult to obtain since $ery little business is conducted on a national scale. The competition within the calendar industry is strong in the paper segment and weak in the software-based segment. 7urrently paper calendars hold a dominant market share of appro)imately 10 percent8 howe$er, the software- based segment is growing rapidly. The 0 percent market share held by ' software-based calendar is di$ided among many different firms. Star Software, which holds /0 percent of the software-based calendar market, is the only company that markets a softwarebased calendar on a national basis. 's software- based calendars become more popular, additional competition is e)pected to enter the market.

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Economic forces. #ationwide, many companies ha$e

reduced their o$erall pro- motion budgets as they face the need to cut e)penses. 9owe$er, most of these reductions ha$e

occurred in the budgets for mass media ad$ertising :tele$ision, maga;ines, and newspapers<. =hile o$erall promotion budgets are shrinking, many companies are di$erting a larger percentage of their budgets to sales promotion and specialty ad$ertising. This trend is e)pected to continue as a weak, slow- growth economy forces most companies to focus more on the >$alue? they recei$e from their promotion dollar. Specialty ad$ertising, such as can be done with a software-based calendar, pro$ides this $alue.

/. Political forces. There are no e)pected political influences or e$ents that could affect the operations of Star Software.

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Legal and regulatory forces. In recent years, more

attention has been paid to >(unk mail.? ' large percentage of specialty ad$ertising products are distributed by mail, and some of these products are considered >(unk.? 'lthough this label is attached to the type of products Star Software makes, the problem of (unk mail falls on the clients of Star Software and not on the company itself. =hile legislation may be introduced to curb the tide of ad$ertising deli$ered through the mail, the fact that more companies are di$erting their promotion dollars to

specialty ad$ertising indicates that most companies do not fear the potential for increased legislation.

@. Technological forces. ' ma(or emerging technological trend in$ol$es personal information managers :,I+s<, or personal digital assistants :,%'s<. ' ,%' is a handheld de$ice, similar in si;e to a large calculator that can store a wide $ariety of information, including personal notes, addresses, and a calendar. Some ,%'s e$en ha$e the ability to fa) letters $ia microwa$e communication. 's this trend continues, current software-based calendar products may ha$e to be adapted to match the new technology. 2. Sociocultural forces. In todays society, consumers ha$e

less time for work or leisure. The hallmarks of todays successful products are con$enience and ease of use. In short, if the product does not sa$e time and is not easy to use, consumers will simply ignore it. Software-based calendars fit this consumer need &uite well. ' software-based calendar also fits in with other societal trendsA a mo$e to a paperless society, the need to automate repetiti$e tasks, and the growing dependence on computers, for e)ample.

S4OT ANAL1SIS In this part we are going to analyses the strength, weakness, threats and opportunity of the Star Software Inc. STRENGT5S
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Star Softwares product differentiation strategy is the result of a strong marketing orientation, commitment to high &uality, and customi;ation of products and support ser$ices.

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There is little turno$er among employees who are well compensated and liked by customers. The relati$ely small si;e of the staff promotes camaraderie with coworkers and clients, and fosters communication and &uick response to clients needs.

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' long-term relationship with the primary supplier has resulted in shared knowledge of the products re&uirements, adherence to &uality standards, and a common $ision throughout the de$elopment and production process.

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The high percentage of reorder business suggests a satisfied customer base, as well as positi$e word-of-mouth communication, which generates some /0 per- cent of new business each year.

4EAKNESS . The creati$ity highly and centrali;ed growth. Too management few people hierarchy hold too :the much

+c4emores< and lack of managerial backup may impede knowledge.

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%espite the successful, long-term relationship with the supplier, single-sourcing could make Star Software $ulnerable in the e$ent of a natural disaster, strike, or dissolution of the current supplier. 7ontingency plans for suppliers should be considered.

/. The seasonal nature of the product line creates bottlenecks in producti$ity and cash flow, places e)cessi$e stress on personnel, and strains the facilities. 4. 3oth the product line and the client base lack di$ersification. %ependence on current reorder rates could breed complacency, in$ite competition, or create false sense of customer satisfaction. The de$elopment of a product that would make the software calendar obsolete would probably put Star out of business.

@. =hile the small si;e of the staff fosters camaraderie, it also impedes growth and new-business de$elopment.

2. Star Software is reacti$e rather than asserti$e in its marketing efforts because of its hea$y reliance on positi$e word-of-mouth communication for obtaining new business.

5. Stars current facilities are crowded. There is little room for additional employees or new e&uipment. OPPORT/NITIES
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'd$ertising e)penditures in the Bnited States e)ceed C /. billion annually. +ore than C.@ billion of this is spent on directmail ad$ertising, and another C.0 billion is spent on specialty ad$ertising. The potential for Star Softwares growth is significant in this market.

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Technological ad$ances ha$e not only freed up time for 'mericans and brought greater efficiency but also ha$e increased the amount of stress in their fast- paced li$es.

,ersonal computers ha$e become commonplace, and personal information managers ha$e gained popularity. /. 's B.S. companies look for ways to de$elop customer relationships rather than (ust close sales, reminders of this relationship could come in the form of acceptable premiums or gifts that are useful to the customer. 4. and 7omputer-based calendars are easily distributed nationally globally. The globali;ation of business creates an opportunity to establish new client relation- ships in foreign markets.

T5REATS
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Deengineering, right-si;ing, and outsourcing trends in management may alter traditional channel relationships with brokers, dealers, and distributors or eliminate them altogether.

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7alendars are basically a generic product. The technology, knowledge, and e&uipment re&uired to produce such an item, e$en a computer-based one, are minimal. The possible entry of new competitors is a significant threat.

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Theft of trade secrets and software piracy through unauthori;ed copying are difficult to control. TARGET MARKETS

3y focusing on commitment to ser$ice and &uality, Star Software has effecti$ely implemented a niche differentiation strategy in a somewhat di$erse marketplace. Its ability to differentiate its product has contributed to superior annual returns. Its tar- get market consists of manufacturers or manufacturing di$isions of large corporations that mo$e their products through dealers, distributors, or brokers. Its most profitable product is a software program for a ,7-based calendar, which can be tailored to meet client needs by means of artwork, logos, and te)t. 7lients use this calendar software as a promotional tool, pro$iding a disk to their customers as an ad$ertising premium. The calendar software is not produced for resale. The calendar software began as an ancillary product to Stars commercial printing business. 9owe$er, due to the proliferation of ,7s and the growth in technology, the computer calendar soon became more profitable for Star than its wall and desktop paper calendars. This led to the sale of the commercial printing plant and e&uipment to employees. Star Software has maintained a long-term relationship with these former employees, who ha$e

added capabilities to reproduce computer disks and whose company ser$es as Stars primary supplier of finished goods. Stars staff focuses on the further de$elopment and marketing of the software.

*/RRENT MARKETING O 6E*TI0ES AN, PER7ORMAN*E

Star Softwares sales representati$es call on potential clients and, using a template demonstration disk, help them create a calendar concept. "nce the sale has been finali;ed, Star completes the concept, including design, copywriting, and customi;ation of the demonstration disk. Specifications are then sent to the supplier, located about a thousand miles away, where the disks are produced. ,erhaps what most differentiates Star from its competitors is its high le$el of ser$ice. %isks can be shipped to any location the buyer specifies. Since product de$elopment and customi;ation of this type can re&uire significant amounts of time and effort, particularly during the products first year, Star deliberately pursues a strategy of steady, managed growth.

Star Software markets its products on a company-specific basis. It has an appro)imate 10 percent annual reorder rate and an a$erage customer-reorder relationship of about eight years. The first year in dealing with a new customer is the most stressful and time consuming for Stars salespeople and product de$elopers. The subse&uent years are faster and significantly more profitable. The company is currently debt free e)cept for the mortgage on its facility. 9owe$er, about !0 percent of its accounts recei$able are billed during the last three months of the calendar year. Seasonal account billings, along with the added tra$el of its sales staff during the peak season, pose a special challenge to the company The need for cash to fund operations in the meantime makes it necessary for the company to borrow significant amounts of money to co$er the period until customer billing occurs. Star Softwares marketing ob(ecti$es include increases in both re$enues and profits of appro)imately are e)pected to reach C ./ million. 0 percent o$er the pre$ious year. De$enues should e)ceed C4 million, and profits

MARKETING O 6E*TI0ES Star Software, Inc. is in the business of helping other companies market their products and*or ser$ices. 3esides formulating a marketing-oriented and customer- focused mission statement, Star Software should establish an ob(ecti$e to achie$e cumulati$e growth in net profit of at least @0 percent o$er the ne)t fi$e years. 't least half of this @0 percent growth should come from new, nonmanufacturing customers and from products that are no seasonal or that are generally deli$ered in the offpeak period of the calendar cycle To accomplish its marketing ob(ecti$es, Star Software should de$elop bench- marks to measure progress. Degular re$iews of these ob(ecti$es will pro$ide feed- back and possible correcti$e actions on a timely basis. The ma(or marketing ob(ecti$e is to gain a better understanding of the needs and satisfaction of current customers. Since Star Software is benefiting from a 10 percent reorder rate, it must be satisfying its current customers. Star could use the knowledge of its successes with current clients to market to new customers. To capitali;e on its success with current clients, benchmarks should be established to learn how Star can impro$e the products it now offers through knowledge of

its clients needs and specific opportunities for new product offerings. These benchmarks should be determined through marketing research and Stars marketing information system. 'nother ob(ecti$e should be to analy;e the billing cycle Star now uses to deter- mine if there are ways to bill accounts recei$able in a more e$enly distributed manner throughout the year. 'lternati$ely, repeat customers might be willing to place orders at off-peak cycles in return for discounts or added customer ser$ices. Star Software also should create new products that can utili;e its current e&uipment, technology, and knowledge base. It should conduct simple research and analyses of similar products or product lines with an eye toward de$eloping specialty ad$ertising products that are software based but not necessarily calendar related. MARKETING STRATEGIES

Target Market(s) Tar8et mar9et $: 4arge manufacturers or stand-alone

manufacturing di$isions of large corporations with e)tensi$e broker, dealer, or distributor networks

Example: 'n agricultural chemical producer, such as %ow 7hemical, distributes its products to numerous rural >feed and seed? dealers. 7ustomi;ing calendars with 7hicago 3oard of Trade futures or BS%' agricultural report dates would be beneficial to these potential clients.

Tar8et mar9et %:

#onmanufacturing, nonindustrial segments

of the business-to- business market with e)tensi$e customer networks, such as banks, medical ser$ices, or financial planners Example: Earious sporting goods manufacturers distribute to specialty shop dealers. 7alendars could be customi;ed to the particular sport, such as golf :with ,F', Eirginia Slims, or other tour dates<, running :with $arious national marathon dates<, or bowling :with national tour dates< Tar8et mar9et &: as 7oca-7ola %irect consumer markets for brands with

successful licensing arrangements for consumer products, such

Example: ,roducts with ma(or brand recognition and fan club member- ship, such as 9arley-%a$idson motorcycles or the 3loomington Fold 7or$ette 'ssociation could pro$ide additional markets for customi;ed computer calendars. 3rands with licensing agreements for consumer products could pro$ide a market for consumer computer calendars in addition to the specialty ad$ertising product, which would be marketed to the manufacturer*dealer.

Tar8et mar9et ':

Industry associations that regularly hold or

sponsor trade shows, meetings, conferences, or con$entions Example: #ational associations, such as the #ational %airy 'ssociation or the 'merican +arketing 'ssociation, fre&uently host meetings or annual con$entions. 7ustomi;ed calendars could be de$eloped for any of these groups. MARKETING MI. 1. Products. Star Software markets not only calendar software but also the ser$ice of specialty ad$ertising to its clients. Stars intangible attributes are its ability to meet or e)ceed customer e)pectations consistently, its speed in responding to customers demands, and its anticipation of new customer needs. Intangible

attributes are difficult for competitors to copy, thereby gi$ing Star Software a competiti$e ad$antage.

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Price.

Star Software pro$ides a high-&uality specialty

ad$ertising product customi;ed to its clients needs. The $alue of this product and ser$ice is reflected in its premium price. Star should be sensiti$e to the price elasticity of its product and o$erall consumer demand.

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istri!ution. Star Software uses direct marketing. Since its

product is com- pact, lightweight, and nonperishable, it can be shipped from a central location direct to the client $ia Bnited ,arcel Ser$ice, 0ed-), or the B.S. ,ostal Ser$ice. The fact that Star can ship to multiple locations for each customer is an asset in selling its products.

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Promotion. Since 10 percent of Stars customers reorder

each year, the bulk of promotional e)penditures should focus on new product offerings through %irect-mail ad$ertising and trade (ournals or specialty publications. 'ny remaining promotional

dollars could be directed to personal selling :in the form of sales performance bonuses< of current and new products

MARKETING IMPLEMENTATION

". Marketing #rgani$ation 3ecause Stars current and future products re&uire e)tensi$e customi;ation to match clients needs, it is necessary to organi;e the marketing function by customer groups. This will allow Star to focus its marketing efforts e)clusi$ely on the needs and specifications of each target customer segment. Stars marketing efforts will be "rgani;ed around the following customer groupsA : < +anufacturing group8 :.< #on- manufacturing, business-to-business group8 :/< 7onsumer product licensing group8 and :4< Industry associations group. -ach group will be headed by a sales manager who will report to the marketing director :these positions must be created<. -ach

group is responsible for the marketing of Stars products within that customer segment. In addition, each group will ha$e full decision-making authority. This represents a shift from the current highly centrali;ed management hierarchy. 0rontline salespeople will be empowered to make decisions that will better satisfy Stars clients. These changes in marketing organi;ation will enable Star Software to be more creati$e and fle)ible in meeting customers needs. 4ikewise, these changes will o$ercome the current lack of di$ersification in Stars product lines and client base. 0inally, this new marketing organi;ation will gi$e Star a better opportunity to monitor the acti$ities of competitors. %. "ctivities& 'esponsi!ility& and Timeta!les for

Completion 'll implementation acti$ities are to begin at the start of the ne)t fiscal year on 'pril . Bnless specified, all acti$ities are the responsibility of Star Softwares ne)t president, 6onathan +c4emore. G "n 'pril , create four sales manager positions and the position of marketing director. The marketing director will ser$e as pro(ect

leader of a new business analysis team, to be composed of nine employees from a $ariety of positions within the company. G 3y 'pril @, assign three members of the analysis team to each of the following pro(ectsA : < Desearch potential new product offerings and clients, :.< 'naly;e the current billing cycle and billing practices, and :/< %esign a customer sur$ey pro(ect. The marketing director is responsible. G 3y 6une /0, the three pro(ect groups will report the results of their analyses. The full business analysis team will re$iew all recommendations. G 3y 6uly / , de$elop a marketing information system to monitor client reorder pat- terns and customer satisfaction. 3y 6uly / , implement any changes in billing practices as recommended by the business analysis team. G 3y 6uly / , make initial contact with new potential clients for the current product line. -ach sales manager is responsible. G 3y 'ugust / , de$elop a plan for one new product offering along with an analysis of its potential customers. The business analysis team is responsible.

G 3y 'ugust / , finali;e a customer satisfaction sur$ey for current clients. In addition, the company will contact those customers who did not reorder for the .00 product year to discuss their concerns. The marketing director is responsible. G 3y 6anuary, implement the customer satisfaction sur$ey with a random sample of .0 percent of current clients reordered the .00 year. The marketing director is responsible. G 3y 0ebruary, implement a new product offering, ad$ertising to current customers and to a sample of potential clients. The business analysis team is responsible. G 3y +arch, analy;e and report the results of all customer satisfaction sur$eys and e$aluate the new product offering. The marketing director is responsible. G Deestablish the ob(ecti$es of the business analysis team for the ne)t fiscal year. The marketing director is responsible. product of the

E0AL/ATION AN, *ONTROL Performance Standards and (inancial Controls ' comparison of the financial e)penditures with the plan goals will be included in the pro(ect report. The following performance standards and financial controls are suggestedA G The total budget for the billing analysis, new-product research, and the customer sur$ey will be e&ual to 20 percent of the annual promotional budget for the coming year. G The breakdown of the budget within the pro(ect will be a .0 percent allocation to the billing cycle study, a /0 percent allocation to the customer sur$ey and marketing information system de$elopment, and a @0 percent allocation to newbusiness de$elopment and new-product implementation. G -ach pro(ect team is responsible for reporting all financial e)penditures, including personnel salaries and direct e)penses, for their segment of the pro(ect. ' standardi;ed reporting form will be de$eloped and pro$ided by the marketing director. The marketing director is responsible for adherence to the pro(ect budget and will report o$erages to the company president on a weekly basis. The marketing director also is responsible for any

redirection of budget dollars, as re&uired for each pro(ect of the business analysis team. G 'ny new product offering will be e$aluated on a &uarterly basis to determine its profitability. ,roduct de$elopment e)penses will be distributed o$er a two-year period, by calendar &uarters, and will be compared with gross income generated during the same period. %. Monitoring Procedures To analy;e the effecti$eness of Star Softwares marketing plan, it is necessary to compare its actual performance with plan ob(ecti$es. To facilitate this analysis, monitoring procedures should be de$eloped for the $arious acti$ities re&uired to bring the marketing plan to fruition. These procedures include, but are not limited to, the followingA G ' pro(ect management concept will be used to e$aluate the implementation of the marketing plan by establishing time re&uirements, human resource needs, and financial or budgetary e)penditures.

G ' perpetual comparison of actual and planned acti$ities will be conducted on a monthly basis for the first year and on a &uarterly

basis after the initial implementation phase. The business analysis team, including the marketing director, will report their comparison of actual and planned outcomes directly to the company president. G -ach pro(ect team is responsible for determining what changes must be made in procedures, product focus, or operations as a result of the studies conducted in its area. *ON*L/SION 'fter analy;ing and describing the whole marketing strategy of Star Software Inc. we can conclude that it is doing well in market. =e want to conclude that practices makes impro$ed but not ideal so we hope that this report will help Star Software Inc to impro$e results. =ith the best marketing plan a product cant be successful because outside forces will affect it but with the marketing plan process you can achie$e success because then you are also adopting conditions.