The Industry, The Market, and The Marketing Plan Assignment By the end of this week your team should have completed the following sections with all subsections as listed at the end of Chapter 8 in the Timmons and Spinelli textbook, starting on page 256.

UCanDoIt! Marketing Plan

Marketing Management MBA 661-D5B6

Professor Maribeth Fencl, MA PMP

June 26, 2016

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Running head: UCANDOIT!

UCANDOIT! 2

Table of Contents

A. Executive Summary 3 B. Product/Service Introduction & Description 4 C. Strategic Initiatives (Goals) 7 D. Situation Analysis & Competition 9 E. Strategies/Tactics 12 F. Marketing Program 13 G. Financial, Budget, Forecasts 15 H. Product/Service Evaluation 18 Conclusion 19 References 21

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Running head: UCANDOIT!

UCanDoIt! Marketing Plan

The purpose of this marketing plan is to demonstrate in detail how launching a DIY video tutorial application can earn a high return on investment in a short period. The whole concept is intended to be eventually funded by sponsors and/or partnerships with major hardware stores and manufacturers. The market continues to grow at a rapid pace with each passing generation and introduction of the first dedicated DIY video application can have significant potential for a healthy long term investment. Existing formats such as YouTube leave much to be desired for those looking for a particular type of result due to the sheer amount of media available with little regulation regarding quality and relevance. Use of such alternative search engines can result in irrelevant search result creating frustrating and fruitless results. UCanDoIt! is concentrating on the niche market of video applications used for tutorial purposes where consumers will be able to comfortably search for relevant video tutorials free of the clutter of those inaccurately tagged.

Revenue

The YouTube advertisement based model is suitable as typical free software offerings are maintained by ad revenue and paid subscribers. Instead of attempting to challenge the big industry dominators, such as Facebook and YouTube, we are simply going to try to embed our product within existing platforms and avenues. Partnerships and sponsors are going to be critical to the long-term success of this application. Hardware stores and YouTube are already full of consumers who do not hesitate to learn how to take on their own repair projects. These groups of consumers, Do It Yourselfers (DIY) who readily research online, are the target market for our product. The business is targeting at least 1,000,000 daily views and a 1.5% click-through-rate which is expected to result in greater than $1,000,000 in annual profit.

Platforms

Our video library will be accessible via Android, iOS, Windows and Blackberry ecosystems. Consumers will have the opportunity to use our application on their mobile devices as well as their laptops and desktops to access our entire catalog of DIY tutorials. Instead of basing our whole library on amateur self-uploaded tutorials, our real goal is to create partnerships with key hardware stores and manufacturers to provide a first class experience for all our users. UCanDoIt!’s partnerships, providing high quality relevant information, will offer a unique experience designed to create long term loyal users. The other concept of a partnership with hardware stores and manufacturers is to allow them to prepare and provide expert in-person demonstrations. The in-person demonstrations by experts will support our effort to increase brand recognition and uniqueness from several other video-based applications.

UCanDoIt! is a video streaming mobile application that is freely provided to consumers for use in finding detailed how-to videos with enabled smart search capabilities. Similar to YouTube and other streaming applications, the UCanDoIt! application will be available on many platforms including but not limited to Windows, iOS and Android. This can range from appliance repair, car repair, basic installation of products, or virtually any “how to” category. Our ultimate goal is to capitalize on the DIY market which spends over $20+ billion annually at Home Depot alone. The UCanDoIt! target market will consist of e-book purchasers, book shoppers, and YouTube viewers that are researching how to fix things on their own and to be connected with a source of needed parts. The UCanDoIt! application will fulfill these needs using a single application instead of having to use several different sources.

For product differentiation purposes, we will be using our servers to be able to control all the content being uploaded to the searchable database. Every video uploaded by the UCanDoIt! staff will be highly vetted to keep the database free of “junk” videos which contain inaccurate information and/or may be poorly developed. Also, to grow our database offerings consumers, we will give provide users the ability to upload their UCanDoIt! videos. By allowing users to upload their content, it does increases the chance of having inaccurate or irrelevant content that that users have already experienced from past use of alternates such as YouTube. We will combat this by allowing users of the application to give videos virtual thumbs down or thumbs up feedback, as well as flagging content for review by UCanDoIt! headquarters. Once a video declines to a certain pre-defined consumer satisfaction level due to inappropriateness or poor relevance, UCanDoIt! staff can review and remove the video if it is found to fall short of company established quality standards. If a user is found to have violated our quality standard policy multiple times, they could lose privileges for any future uploading submissions.

Target Market

The DIY consumer profile varies because the buyers are from multiple generations, incomes, and geographical regions. The market is expansive ranging from repairing or altering automobiles, homes, electronics, gardens and appliances. The DIY consumer can be a parent that is creating crafts and projects with their children to a middle aged person seeking to build an airplane. For the DIY application, the primary age range for the DIY market is between 24 to 44 years old with 76% of consumers making less than $ 100,000 annually. The accessibility of the internet has allowed 71% of DIY to download materials and watch how-to videos for information or help, and 58% owned a smartphone in 2013 (Google: thinkinsights, 2013).

DIY activity has been described as a man’s world when in fact nearly 50% of DIY consumers are female (Williams, 2013). The DIY market segment for housing projects revealed that the consumers are digitally savvy, and 72% of the users are married where almost half are settled in their first home (Google: thinkinsights, 2013). People are driven to DIY projects because of the challenge, want to personalize the project, and generally out of the satisfaction the experience provides. Of DIY consumers that review related tutorial videos, only 30% do so to save money rather than hire a professional.

There are very few psychographic research studies for the DIY market segment. In one such study titled Consumer Behavior: Concepts and Applications , the DIY group segments are characterized as reluctant, dedicated, discretionary, transitional and active (Loudon & Della Bitta, 1984). The following chart taken from the 1984 study outlines these five DIY groups.

According to a 2015 Statista report, the Home Improvement Market value in the U.S. has an annual growth rate of 5% with $300 billion in total revenue. A few large related retailers such as Home Depot and Lowes realized more than half of the $300 billion in 2015 Home Improvement market, and more than 68% of associated consumers is visiting home improvement related websites (Statista, 2016). UCanDoIt! expects to capture a portion of this internet traffic putting customers together with helpful DIY information and those that can provide necessary products for DIY projects. Revenues for startup company UCanDoIt! will be realized from paid for advertising by businesses serving the DIY market on the UCanDoIt! app and from cost per click revenues where UCanDoIt! users click on topically related links leading to DIY company websites carrying product information or merchant sites for procurement by the consumers. Nonfinancial strategic goals for UCanDoIt! covered in this section include those that address app delivery, increasing consumer awareness of the product driving increased market penetration, increasing the breadth of DIY categories covered and expansion of target market segments driving revenue growth. Financial goals included address growth of revenues from the two primary streams and growth.

Nonfinancial goals:

1. To ensure UCanDoIt! app is available for delivery via the company website and app stores for mainstream mobile device operating systems Apple iOS and Android immediately in year 1

2. To increase consumer awareness of the UCanDoIt! by ensuring mainstream search engines provide links to the company website on page 1 of related DIY queries in year 1

3. To develop in-store and online promotions with at least one major retailer serving the DIY market positioning UCanDoIt! as an online DIY consumer resource by year 2

4. To increase the number of DIY categories covered by 20% per year for a total of 100% at the end of year 5

5. To develop business expansion plan and related revenue potential for development of a premium service offering serving DIY related training/educational needs for small to medium businesses and vocational institutions by year 2

Financial goals:

1. To increase featured DIY company advertising revenues by 5% per year over each of the 5 years

2. To increase DIY customer cost per click revenues by 5% per year over each of the 5 years

3. To realize additional company revenues from new source such as premium subscription service serving institutional and small business needs by year 3

4. To grow overall company revenues by 30% at the end of 5 years

5. To increase profitability by 5% per year over each of the 5 years

Positioning Statement

For any DIY user who desires an efficient, user-friendly experience, UCanDoIt! is a free platform that offers the most robust solutions to everyday problems.

Strengths

Convenience is one of the primary advantages of UCanDoIt!. With the mobility market share showing continual growth year over year, this app will offer market accessibility to virtually any person with a mobile connected device such as a smartphone, tablet, or PC. By 2017, there are a projected 2.6 billion smartphones estimated to be in use globally (Statista, 2016). These figures do not include other mobile devices such as tablet sales.

The breadth of topics covered is the second compelling strength of UCanDoIt! . The topics covered can continue to expand with areas covered such as an appliance, auto, home repair, PC repair, HVAC, plumbing, electrical, and so on. With any new demand for DIY topics, the market for this app grows. There would be a strong focus on the technical side of repair, maintenance, and construction at initial outset.

The user interface is the third strength of UCanDoIt!. With easy to search abilities for videos, referencing things such as model number, topic, keywords, results could be sorted and provided based on the highest ratings given by users. Barcode scanning is envisioned to be leveraged allowing users to scan product serial numbers to allow searching on the correct model also returned relevant parts lists and manuals.

Weaknesses

The hosting solution can be an internal bottleneck based on the scope and volume of data required for a video based platform. Such platforms indexing large high quality video files, links, and providing streaming can be taxing on internal operations. The hosting may need to be outsourced provided scalability necessary for product usage growth.

App development can seem like an easily achieved goal. However, there are several factors to address. The app must run efficiently and be bug-free, while also visually appealing and user-friendly. The need to continuously update the app will require either third party support or staffing of a dedicated highly effective team.

Brand Recognition can be one of the most difficult areas to tackle. Brand recognition will be accomplished via UCanDoIt!’s logo and through word of mouth advertisement. Leveraging social media and even television campaigns, along with paid search engine results and sponsorship on high visibility targets, will be crucial to driving brand recognition.

Opportunities

Worldwide market with translated language will be at the top of UCanDoIt!’s opportunity list. This unique opportunity will allow growth into markets outside of those native to production of the video expanding the user base that would otherwise simply have to refer to translated instruction manuals.

The educational market, targeted for eventual expansion offers the ability to sell premium content or services to non-profit school districts as well as vocational centers. This opportunity opens up an additional market to UCanDoIt! for growth and competitive differentiation.

Growth in mobility markets can be a primary focus for smartphones and tablets, but the overall design of app development can also include smart TVs and streaming devices such as Apple TV, Roku, and Smart Blu-ray players.

Threats

YouTube is the number one threat externally for UCanDoIt!. This is a Google-owned service that has name recognition, app stability, market share, and the financial support of a massive company.

Continuity or failover is the need to have the stability of the hosted solution. This being an internet reliant service needs to have redundancy and the ability to overcome system errors and outages within minutes if not faster.

Content quality as a threat could require the most labor-intensive management to address and will have a set of standards to help automate management. Content quality is achieved through software design and user feedback that is flagged and worked on an hourly basis. As a primary value of the service, the videos must be of the highest relevance to the topic and with the best audio and video quality.

Competition

YouTube- The best name recognition and market share in the DIY space.

Howcast- Offers a streamlined website with a vast selection of topics, however, no current app (Ueland, 2013).

MonkeySee- Also offers a wide variety of subjects with an easy to navigate the site. The videos are also all shot in HD (Ueland, 2013).

SWOT Summary

The overall outlook for UCanDoIt! is stable given all of the internal and external factors listed. There will be of course some factors that evolve and come up as UCanDoIt! launches which we will need to forecast as well as address based on reactive measures. The key points in this analysis are the strengths related to the depth of market potential and breadth of topic coverage. The areas to remain focused on are giant established competitors such as YouTube and the need to stay nimble with our data hosting and provide continuity of the service for all users. These areas will be our primary focus in our first year and continue to evolve over time.

To accomplish our financial and nonfinancial goals previously mentioned, we need to start our marketing campaign before the application launches. The more exposure and excitement we can generate beforehand will help the application have a strong launch with maximum downloads. Also, establishment of a homepage allowing mobile and PC users to download a prelaunch beta version of the application will be done to facilitate finding of bugs in the application not caught during initial development. Use of various social media outlets will be essential in achieving our long-term financial and non-financial goals.

The UCanDoIt! homepage will provide prelaunch blogs/updates of the application’s key features, purpose and even allow users to download a beta version after registering. Those who successfully register for the beta download will have submitted a valid email address which will be used to follow up with the user to receive critical feedback needed about their experience. Also, a launch kit will be in place to ensure that all download methods are functioning as described and that the download speeds from the server are acceptable. The server speeds will be gauged based on user feedback from the beta program that will inform us of whether they used Wi-Fi or a cell phone network. This information will allow us to know if we need to modify our server set up or if a prospective downloaders is better off using their cellular network versus available wireless to get the app. This sets the proper expectation when downloading the application and avoids an adverse experience a user might have blamed on the app vs. their available data speeds.

An official YouTube channel, Facebook page, Twitter handle, and SnapChat account will be created to increase UCanDoIt!’s exposure. Different departments will be encouraged to post to the various accounts intending to give the application a face that users can relate to and increase their loyalty to the application and company in case of more growth in the apps market segment under that brand.

The marketing program incorporates the four P’s of the marketing mix. A marketing program is a cohesive approach to establishing the marketing plan by clearly defining the strategies for product, price, promotion and placement (Kerin, Hartley, & Rudelius, 2013). The marketing strategy is the strategy by which a marketing goal is to be achieved and will be evaluated to ensure the marketing effort is moving forwarded as discussed in this plan. The strategies involved in the marketing program for UCanDoIt! are as follows:

· Product Strategy: A user-friendly video-based mobile phone application that will allow the consumer to find solutions to everyday problems.

· Price Strategy: Revenues are anticipated to be realized from paid for advertising from businesses serving the DIY market. The strategy of income will allow consumers to promote their videos at no cost to the consumer.

· Promotion Strategy: Introduce the product through a pre-launch campaign and general promotional strategies through social media and media outlets; an example would be YouTube, Facebook, DIY Channel, etc. An additional campaign would take place where we would have live in-person demonstrations and video kiosks in strategic locations throughout the United States; such as New York, Chicago, Houston, Denver, and Los Angeles.

· The in-person demonstrations and kiosks would be through a partnership with Home Depot, Habitat for Humanity, Autozone, Car Shows and Home and Garden shows. The goal would be to have the individuals sign up with their email address or download the application at the kiosk or demonstration location. UCanDoIt! would offer promotional items such as a hammer, tire pressure gauge, hat or shirt upon signing up from the kiosk or downloading the application during the in-person demonstration.

· The following advertisement will be used for print or social media:

· Place Strategy: UCanDoIt! is an application that is available throughout the entire United States with a target market between the ages of 24 and 44 years old.

Initial annual revenues from the UCanDoIt! app is generated from advertising fees generated from browser views of featured ads and videos on the app itself as well as from DIY product and service providers who receive traffic on their respective websites from app users who click through. Key revenue based assumptions include an expectation of 1,000,000 views per day and an expected click-through-rate of 1.5% (Chaffey, 2016). Conservative advertising rates per thousand views is $0.53 (Butner, 2013). A similarly conservative pay per click rate for clicked on advertising links are $0.30 (Proximity Marketing). The following narrative in this section uses these key assumptions to provide a breakeven analysis for the business which incorporates forecasts for promotional activities along with sales.

Table 1: Breakeven Analysis

The above table provides an analysis of estimated costs and revenues associated with development and offering of the UCanDoIt! mobile app. The breakeven point that is the quantity of daily app views expected to result in sufficient revenue to cover relevant fixed and variable costs for the business appears to occur when the app realizes 381,710 views per day. The business is targeting at least 1,000,000 daily views and a 1.5% click-through-rate which is expected to result in greater than $1,000,000 in annual profit. App development costs, while appearing widely variable when conducting research, were conservatively estimated from survey information of corporate CIO’s and app developers (Formotus, 2016).

The profitability of the UCanDoIt! app critically relies on the number of views that the app receives. Consequently, promotion of the app to increase viewership is warranted. The table below contains a list of promotional ideas for the app with associated costs; the aggregated costs become utilized in the breakeven analysis above for the promotional costs.

Table 2: Promotional Expenses

Upon development of the app, it will be registered and made available for both iOS and Android mobile platforms representing less than $200 annual cost (Mackenzie, 2012). A key promotional tool will be the UCanDoIt! website. This website will promote the app while providing access for computer and mobile device users at an estimated cost of $10,000 (Beckett, 2016). Additional online promotional methods will include optimizing linkage to the UCanDoIt! website with major search engines with a goal of being listed on the first page of the search along with pay per click marketing on select retailer websites which cater to DIY consumers with costs rounding out the total promotional budget of $30,000 (Beckett, 2016).

Finally, the sales component driving revenue bears discussion. The app itself will initially be given away to average consumers to drive penetration and exposure. Rather, the revenues will be generated based upon the frequency of views of DIY goods and service provider advertisements and videos as well as additional revenues when consumers click through to DIY vendor websites. The forecast is one million daily views in operating year 1 with a 1.5% click through rate expected. The 1.5% click-through rate, or CTR, is estimated based on those experienced by internet platforms such as Facebook (Chaffey, 2016). The traffic goal of one-million views daily is conservatively estimated because well-established platforms, such as Facebook and YouTube, experience more than one billion of daily interactions (YouTube, 2016). The sales forecast table below reflects the year over year goals of growing advertising sales revenue by 5% for the next five years.

Table 3: Sales Forecast

As previously stated, the goals of UCanDoIt are to connect DIY markets to the needed sources of information and required materials in an efficient, user-friendly, and credible way. Evaluation of our processes and service will be done to evaluate progress versus our goals. Click through percentages will be one of the methods to measure the number of users that click on the link that’s embedded in the videos. We strive for a CTR of 1.5% and will be able to measure this in our platform analytics. The foundation for this goal is based on industry statistics from platforms like Facebook, which boasts a 1.28% (Chaffey, 2016). Additionally, the goal of overall traffic will to meet or exceed 1 million views daily. This access goal is based on the current internet trends from companies like YouTube, and Facebook with users interacting in the billions daily (YouTube, 2016).

The second method used for evaluating our service will be the use of surveys. These surveys will be delivered in all markets and will be offered 1 for every 500 views. This is done to get a large enough sample size based on survey fallout (failure to complete). Upon completion, the user will be rewarded with a coupon for 10% off their next purchase at one or our retail partners such as Home Depot or Lowes. Below is a sample of the survey that will be delivered to the user through a popup dialog that will ask to access the user email to provide a coupon. The user demographics are accessed via user phone info that can log location via IP addresses.

The $300 billion video platform market for the DIY market segment continues to grow. Adhering to the marketing plan will ensure success to meet the financial obligations of UCanDoIt! stakeholders while providing a credible, professional, user friendly, and easily searchable web/IOS application.

The initial investment for year one of $672,000 will place UCanDoIt! in a position for brand recognition, business development through partnerships and to attain the first year goal of 1,000,000 views. The marketing pricing strategy of realizing revenues from paid for advertising by businesses serving the DIY market allows professionals to promote their videos at no direct cost to the consumer. The advertisement expected click-rate of 1.5% is a very conservative goal compared to that experienced by other larger platforms allowing UCanDoIt! to achieve a breakeven point of at a relatively low 381,710 views per day. The market segment has significant capacity as the three largest competitors achieved over 1 billion views per day; achieving a mere 1,000,000 daily views in the first year results in just over $1,000,000 annual profit.

UCanDoIt! expects a 5% year over year growth rate during the initial five years, which results in an increase of $700,000 annual profit respectively. Consumer retention and growth is necessary to ensure the success of the business. Key performance indicators and surveying will be used to evaluate the services and to ensure the information is relevant. A reward coupon to one of the partners will be issued upon completion of a survey.

We anticipate UCanDoIt! web based and mobile application will explode once the consumer learns about the services through the execution of this marketing plan.

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