The Star Mobile Marketing Plan
The Star Mobile Marketing Plan
The Star Mobile Marketing Plan
M ARKETING P LAN
Marketing Management
“Malaysia’s very first Mobile Newspaper! Get your news on the go!”
CONFIDENTIALITY AGREEMENT
The undersigned reader acknowledges that the information provided by _______________ in
this business plan is confidential; therefore, reader agrees not to disclose it without the
express written permission of _______________.
___________________
Signature
___________________
Name (typed or printed)
___________________
Date
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TABLE OF CONTENTS
Content Page
1.0 EXECUTIVE SUMMARY 3
1.1 OBJECTIVES 3
1.2 MISSION 3
1.3 KEYS TO SUCCESS 4
2.0 MARKET ANALYSIS SUMMARY 4
2.1 MARKET SEGMENTATION 5
2.2 TARGET MARKET STRATEGIES 9
2.2.1 MARKET DEMOGRAPHICS 10
2.2.2 MARKET NEEDS 13
2.2.3 MARKET TRENDS 13
3.0 S.W.O.T ANALYSIS 13
3.1 STRENGTHS 13
3.2 WEAKNESSES 14
3.3 OPPORTUNITIES 14
3.4 THREATS 14
4.0 MAIN COMPETITORS 14
4.1 COMPETITIVE EDGE 15
5.0 PRODUCTS AND SERVICES 15
5.1 COMPETITIVE COMPARISON 16
5.2 FULFILLMENT 17
5.3 TECHNOLOGY 17
6.0 MARKETING STRATEGY 17
6.1 POSITIONING 18
6.2 MARKETING MIX 18
7.0 SALES STRATEGY 18
7.1 SALES FORECAST 19
8.0 FINANCIAL PLAN 22
8.1 START UP 22
8.2 START UP FUNDING 23
8.3 PERSONNEL PLAN 24
8.4 ASSUMPTIONS 25
8.5 KEY FINANCIAL INDICATORS 25
8.6 BREAK-EVEN ANALYSIS 26
8.7 PROJECTED PROFIT AND LOSS 27
8.8 PROJECTED BALANCE SHEET 29
9.0 CONTROL 30
9.1 MARKETING ORGANIZATION 30
9.2 CONTINGENCY PLANNING 31
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The primary marketing objectives of this plan is to achieve a new level of branding for The
Star and its mobile arm TheStarMobile using the analytical tools of Blue Ocean Strategy
(2005) by W.Chan Kim and Renee Mauborgne published by Harvard Business School Press
to analyze the market and devising a new plan to reach broader audiences opening a new
world of Blue Ocean for TheStarMobile.
1.1 OBJECTIVES
The objectives of TheStarMobile in the long run are to do the following:
Create a new blue ocean of customers while riding on The Star newspapers existing
readers.
To establish itself as a brand not just a part of The Star newspapers.
Canvass entire mobile market with a comprehensive full market coverage strategy.
To increase gross to more than 25%.
To increase sales by 50%
1.2 MISSION
The mission of TheStarMobile is to provide The Star newspaper readers and the mass of the
mobile market with a comprehensive, easy-to-use and hyped-up mobile news channel where
news comes in easy little bite sizes that better suit the generation of people on-the-go. SMS,
MMS, Mobile Content and Mobile Media Services including Premium SMS services are also
provided for the Star Publications (Malaysia) Bhd as a solution to their growing MIS needs
within the corporation. TheStarMobile also boasts a full range of telecom service facilities
including 3G Video, WAP infrastructure and a sophisticated billing system. This all means
that TheStarMobile is able to offer one-stop mobile solutions capability enabling our
customers to deal with one supplier that has the technology and international reach to fulfill
all their requirements. Our client list include some of the world's leading portals, national
broadcasters, national and regional publishers, international carriers and network operators
and hundreds of independent telecommunications companies, testifies to the company's
ability to deliver high quality services at the lowest total cost of ownership.
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Through our core technology Platforms - customers can use self-provisioning mobile and
telephony services and have access to a vast range of our readymade services. This is a
unique offering that sets TheStarMobile and our customers apart enabling them
communicate freely internally with staff, externally to contractors / suppliers and to generate
revenue quickly from their SMS/MMS campaigns utilizing unbranded content such as
competitions, quizzes, games, news and information services, presented as their own. Speed
to market is the key in the fast moving telecommunications sector.
TheStarMobile's core revenues will be generated from these core technology platforms-
access charges to retrieve premium information, use of platform and provision of technical
assistance.
Economic Value - Maximizing value through products and services while also
meeting our profit objectives
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compound annual growth rate (CAGR) of 16.1% for the five-year period spanning 2001-2005.
Asia-Pacific is the world's fastest growing region for this market. In the same period, the
European market grew with a CAGR of 12.8% and the Americas regional market with a
CAGR of 14.3%. Asia-Pacific had 808.3 million wireless telecommunications subscriptions in
2005: this is an increase of 16.8% over the previous year and represents a CAGR of 24.5% for
the five-year period spanning 2001-2005. This indicates that prices within this market are
falling in the Asia-Pacific region, as the technology becomes widespread, and competition
causes price erosion in the market.
TheStarMobile has identified the 19.5 million mobile subscribers in Malaysia including The
Star's readership of 1.4 million (source: Frost & Sullivan) as key target market for business.
The mobile market will be analyzed using new analytical tools provided by the Blue Ocean
Strategy opening up new uncontested markets where competitors wherever they maybe will
become totally irrelevant.
In respect to the service providers in Malaysia, Maxis takes the lead. Out of the total number
of mobile subscribers at 19.5 million as at 2006, the respective providers Maxis, Celcom and
Digi holds 42%, 31% and 27% respectively.
The market has just begun expanding here in Asia as the mobile subscribers penetration
rate has been increasing steadily over the years and have yet to show signs of slowing down.
Malaysia’s mobile market development has been quite remarkable compared to the selected
economies namely: China, United State of America, Malaysia, South Korea, Australia,
Taiwan, UK and Hong Kong. These economies were selected on the basis of the size of their
mobile market and the potential for growth.
The 3G market is still in a state of infancy but in the space of 1 year from 2005 to 2006 the
amount of 3G subscribers increased by close to 800% a remarkable feat for a developing
country.
The strategy canvas for TheStarMobile will canvass the other mobile companies in the
market including the 3 service providers. The market for mobile has been tremendously
diluted by the mobile content companies and SMS service companies. They have not only
saturated the market to a point that there is no longer any brand loyalty amongst the mobile
users but they have created a very bad reputation for a start-up mobile news channel on
WAP. Fortunately The Star is the leading English daily in Malaysia and that helps lend
more credibility to the product.
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27%
42%
Maxis
Celcom
Digi
31%
80
70
Penetration Rate (%)
60
50
40
30 Penetration
20 Rate
10
0
1998 1999 2000 2001 2002 2003 2004 2005 2006
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0 50 100 150
(source: MCMC, Q2 2007)
3G Subscribers
450000
400000
406717
350000
300000
250000
200000 3G
Subscribers
150000
100000
50000
45692
0
2005 2006 (source: MCMC, 2007)
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High
Mobile Companies
Low
High
TheStarMobile
Low
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7
6
(million)
5
Maxis
4
3 Celcom
2 Digi
1
0
2003 2004 2005 2006
(source: MCMC, 2006)
In the second phase of the plan after the first phase is executed, a new target market
strategy (Full Market Coverage) will be initiated to cover the entire mobile market in
Malaysia and abroad. This will comprise of a differentiated strategy in which separate
marketing mix is designed to cater to different target segments.
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Mobile Subscribers by State: Selangor continues to be the state with most subscribers 3
years in a row. It has 21% of the subscriber base in 2006 this is followed by Johor (13%) and
Federal Territory Kuala Lumpur (8.6%). Percentage distributions of other states are as
follows:
Percentage distribution of subscribers by broad age groups: Adults (ages 20-49 years as at
last birthday) continue to be the biggest contributing group accounting for 66.8% of the
subscriber base. Pre-teens and teens are the second largest group followed by seniors (aged
50 and above). Refer to the chart below:
20.5
12.3 13.1 9 8.7 12.6
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Percentage distribution of subscribers by gender: survey results show that males make for
most of the subscriber base by 58.3% and females 41.7%. The differences between the
percentages of the 2 sexes have narrowed down in the last 3 years. Refer to chart below:
60
50
40
Male
30
Female
20
10
0
2004 2005 2006
(source: MCMC, 2007)
Percentage distribution of subscribers by income category: About 90% of the mobile phone
subscriber base is from income groups of less than RM 3,000 a month and the remaining 10%
are from income groups of RM 3,000 or higher. Refer to chart below:
Percentage (%)
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Percentage distribution of subscribers by ethnicity: The Malay race accounts for 57.3% of the
subscriber base followed by the Chinese (28.9%) and the Indians (6.2%). The other ethnicities
are included in the chart below:
57.3
53.9
32.4
28.9
2005 2005
(source: MCMC, 2007)
Percentage distribution of mobile subscribers purchasing products with their mobile phones:
Percentage increase between 2005 and 2006 is not much but that does not indicate that the
market is going nowhere. Refer to chart below:
2005 2006
81.3 82.4
18.7 17.6
No Yes
(source: MCMC, 2007)
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Ease-of-use
Reliable and honest products
Mobile Business tools
Mobile Stock Options tools
New creative products
Low costs
Available anytime, anywhere 24/7
Broader reach and instant connectivity
Convenience and personalization
TheStarMobile is taking this opportunity to dive into this lucrative ocean and provide the
current mobile consumer market with better, reliable products and services at a cheap price.
3.1 STRENGTHS
TheStarMobile identified the following as strengths:
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3.2 WEAKNESSES
TheStarMobile identified the following as weaknesses:
3.3 OPPORTUNITIES
TheStarMobile identified the following as opportunities within the industry:
Strategic alliances offering sources for referrals and joint marketing activities to
extend our reach.
3.4 THREATS
TheStarMobile identified the following as threats within the industry:
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in China, and is the second largest mobile phone operator in the country. China
Unicorn is headquartered in Beijing, China and has approximately 39,000 employees.
For fiscal year 2005, the company reported revenues of $11.4 billion, an increase of
12.5% on fiscal 2004. Net income for the year increased by 15.3% and was recorded
at $645.6 million.
NTT Corporation
NTT (Nippon Telegraph and Telephone) Corporation functions as a holding company
for the NTT Group, which is the largest telecommunications provider in Japan. The
company is headquartered in Tokyo, Japan.
For the fiscal year ended March 2006, the company generated revenues of $96.6
billion, a decrease of 0.6% from the previous year. Net income was $4,529 million and
decrease of 29.8% from the previous year.
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5.2 FULFILLMENT
While the TheStarMobile platform technologies are an important part of the mobile
solutions, the information and actions generated from mobile transactions are equally
important.
Our solution includes a normalized database from which TheStarMobile and customers can
access and integrate TheStarMobile data into their own business processes. Access rights to
data will be closely held, and authorization routines will be implemented at the site,
database and device level.
5.3 TECHNOLOGY
TheStarMobile will sell complimenting products of the highest quality, and latest scientific
development.
A thank you note will be sent automatically after services have been performed.
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6.1 POSITIONING
TheStarMobile’s positioning statement:
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Direct Sales Team will manage the government agencies and business partners through
personal sales calls. This market is a long term, repetitive business where relationships are a
key component to success.
Sales will be targeted to The Star readers and TheStarOnline users in the early stages. Plans
to expand into the Asia-Pacific markets are scheduled for 2009.
The exponential growth of the access charge revenues is based on the cumulative volume of
the products and services sold. For every unit sold, TheStarMobile charges a monthly fee to
access or subscription fee of RM1.00 to RM3.00 depending on the product or service.
The table and graph below will project the sales of the first 3 years.
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Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Exclusive News Feed Service 525,265 875,442 919,214
Stock Exchange Service 700,354 1,197,318 1,257,183
StarJobs Service 632,706 1,054,510 1,107,235
Mobile News Streaming 376,089 843,608 970,150
TheStarMobile Subscription 3,979,282 7,958,563 8,356,491
Comics 421,804 843,608 885,788
Wallpapers 632,706 1,265,412 1,328,682
Games 843,608 1,687,215 1,771,575
Star Sudoku 843,608 1,687,215 1,771,575
Videos 843,608 1,687,215 1,771,575
Ringtones 632,706 1,265,412 1,328,682
Advertisement Service 795,856 1,591,713 1,671,298
Total Unit Sales 11,227,590 21,957,230 23,139,448
Sales
Exclusive News Feed Service $525,265 $875,442 $919,214
Stock Exchange Service $700,354 $1,197,318 $1,257,183
StarJobs Service $632,706 $1,054,510 $1,107,235
Mobile News Streaming $752,178 $1,687,215 $1,940,300
TheStarMobile Subscription $7,958,563 $15,917,127 $16,712,982
Comics $421,804 $843,608 $885,788
Wallpapers $1,898,117 $3,796,235 $3,986,046
Games $3,374,431 $6,748,862 $7,086,300
Star Sudoku $3,374,431 $6,748,862 $7,086,300
Videos $2,530,823 $5,061,646 $5,314,725
Ringtones $1,898,117 $3,796,235 $3,986,046
Advertisement Service $1,193,784,489 $2,387,568,978 $1,671,298
Total Sales $1,217,851,278 $2,435,296,036 $51,953,417
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1. We must at any cost stop the slide in inventory turnover and develop better
inventory management to bring the turnover back up to 6 turns by the third year.
This should also be a function of the shift in focus towards service revenues to add to
the product revenues.
2. We must also bring the gross margin back up to 30%. This too is related to improving
the mix between hardware and service revenues, because the service revenues offer
much better margins.
3. Create a brisk turnaround on our products, always creating new exciting products
8.1 START UP
The start up of this company will require the following expenses as listed in the table below:
Start-up
Requirements
Start-up Expenses
Legal $15,000
Stationery etc. $1,500
Insurance $10,000
Computer $150,000
Platform Technologies Trademark $200,000
Other $100,000
Total Start-up Expenses $476,500
Start-up Assets
Cash Required $100,000
Other Current Assets $100,000
Long-term Assets $250,000
Total Assets $450,000
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Start Up
$500,000
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
Expenses Assets Investment Loans
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Start-up Funding
Start-up Expenses to Fund $476,500
Start-up Assets to Fund $450,000
Total Funding Required $926,500
Assets
Non-cash Assets from Start-up $350,000
Cash Requirements from Start-up $100,000
Additional Cash Raised $0
Cash Balance on Starting Date $100,000
Total Assets $450,000
Liabilities
Current Borrowing $100,000
Long-term Liabilities $200,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $126,500
Total Liabilities $426,500
Capital
Planned Investment
Owner $200,000
Investor $300,000
Additional Investment Requirement $0
Total Planned Investment $500,000
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Personnel Plan
Year 1 Year 2 Year 3
Production Personnel
People 5 5 5
Average per Person $18,000 $18,000 $18,000
Subtotal $90,000 $90,000 $90,000
Total People 14 14 17
8.4 ASSUMPTIONS
The financial plan depends on important assumptions. The key underlying assumptions are:
4. We assume there will not be an economic crash that would greatly hinder our target
market's access to their personal luxury finds.
The following chart shows changes in key financial indicators: sales, gross margin
and operating expenses. The growth in sales goes above 20% for the second year in a row, but
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then settles. We expect to keep gross margin higher than before, but our projections show a
slight decline as we go into new product areas and anticipate new competition.
As shown in the Benchmarks chart below, our key financial indicators are:
Projected Sales: Projections are based on actual past performance, and are
conservative. We will increase sales at an average rate of 5-10% per year.
Gross Margins
Benchmarks
2.0
1.8
1.6
1.4
1.2 Y ear 1
1.0 Y ear 2
0.8 Y ear 3
0.6
0.4
0.2
0.0
Sales Gross Margin% Operating Expenses
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Break-even Analysis
Assumptions:
Average Per-Unit Revenue $108.47
Average Per-Unit Variable Cost $32.22
Estimated Monthly Fixed Cost $159,750
Benchmarks
$100,000
$50,000
$0
($50,000)
($100,000)
($150,000)
($200,000)
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Operating Expenses
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Profit Monthly
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
$0
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Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $662,260,419 $1,923,344,319 $1,825,799,159
Other Current Assets $100,000 $100,000 $100,000
Total Current Assets $662,360,419 $1,923,444,319 $1,825,899,159
Long-term Assets
Long-term Assets $250,000 $250,000 $250,000
Accumulated Depreciation $3,000 $6,000 $9,000
Total Long-term Assets $247,000 $244,000 $241,000
Total Assets $662,607,419 $1,923,688,319 $1,826,140,159
Current Liabilities
Accounts Payable $64,342,752 $128,581,840 $1,838,215
Current Borrowing $100,000 $100,000 $100,000
Other Current Liabilities $126,500 $126,500 $126,500
Subtotal Current Liabilities $64,569,252 $128,808,340 $2,064,715
9.0 CONTROL
TheStarMobile Marketing Plan serves as a guideline for the company and needs constant
monitoring using analytical tools in the following regards:
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De-Risk Model
31