Marketing Principles

STRATEGIC MARKETING PLAN

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MISSION STATEMENT

Blue Star Recyclers provides Southern Colorado businesses and residents the most convenient

and affordable electronics recycling services available — as a way to serve, sustain and create

community. Blue Star Recyclers recycles electronics in order to create jobs for people with

autism and other disabilities. By choosing to recycle your electronics with Blue Star Recyclers

you help our economy, our environment, and enable our business to produce positive triple

bottom-line results People, Planet and Profit.

EXECUTIVE SUMMARY

Blue Star Recyclers is a non-profit e-waste recycling company based in Colorado Springs,

Colorado. It is estimated that land-filling or illegal dumping of e-waste is over 3 million pounds

in Southern Colorado. This demonstrates that the potential for e-waste recycling in this area is

large, especially when the trends in electronics purchasing are continuously rising.

There are two separate market segments that Blue Star Recyclers must focus on to make

this expansion a success: business customers and residential consumers. It is important to note

that business customers bring in the majority of the revenue for BSR. The company recently

received a grant to focus on residential customers.

To gain market share in both of these segments Blue Star Recyclers will need to

concentrate on customer needs. The customer needs include: education about the importance of

recycling e-waste, convenience of recycling, and receiving rewards and feedback. This plan will

outline how BSR will align the four P’s with the customer’s needs to create a balanced, strategic

marketing plan.

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MARKET OPPORTUNITY ANALYSIS

Market Summary Recycling of electronic waste (e-waste) has become a necessity due to the mass consumption of

millions or new televisions, computers, cell phone and electronic devices. Although recycling of

food & beverage waste in the food and beverage industry has become widely practiced and its

disposal widely available through service providers, only an estimated 15-20% of used

electronics are collected (Resources, 2010). Materials collected through traditional waste

disposal processes are sent to landfills.

In Southern Colorado, the scope of this market analysis, it is estimated that land-filling or

illegal dumping of e-waste is over 3 million pounds including over four hundred thousand

pounds of toxic metals found in the components (Recycling Resources Economice Opportunity

Fund Grant Program 2011-2012 Project Applicaton, 2011).

Market Needs and Demographics The markets targeted for Blue Star Recyclers for e-waste recycling are businesses and

consumers. Although recycling is becoming more popular and accepted, there are still several

needs required by those wanting to recycle electronics: convenience and consistency.

The market requires that recycling be as easy as throwing the away the electronic device.

This means that locations for dropping off waste be nearby, picked up from their residence or

located in a place of frequent travel. The market requirement of consistency means that the

services are predictable such as pick up at residences or deposit locations. In addition, if

recycling events are related to community events they should be repeated to build familiarity and

confidence to bring recyclable items to the event.

There are three rural counties that need recycling services for e-waste: La Junta, Pueblo

and Canon City. This plan is focused on expanding services to those areas.

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In general the median age in Colorado is 36 with the average household size being 2.49

people per household. Housing was 65.5% owned compared to 34.5% rented (Census, 2010

Interactive Population Search, 2010).

Pueblo County’s total population is 160K with 126K being white 3K being African

American and 19K of other races. Total housing units are 69K with 42K being owner occupied

and 20K being renter occupied. Housing with minors constituted 17K of total homes. Males were

78K and females are 80K of total population. 85K of the total population is over 35 years of age

with 32K being between 50 and 64 years of age (Census, 2010 Interactive Population Search,

2010).

Business in Pueblo County total 2.8K firms and 3.2K establishments employ 47K people.

Firms and establishments employing more than 500 people are 320 and 594 respectively

employing 22K people (Census, Statistics of U.S. Businesses, 2008).

La Junta, within Otero county total population is 18K with 14K being White. Total

housing units are 8K with 5K being owner occupied and 2.7K being renter occupied. Housing

with minors constituted 2K. Males are 9K and females 9K. 10K of the total population is over

the age over 35 with 3.8K being between the 50 and 64 years of age (Census, 2010 Interactive

Population Search, 2010).

Business in Otero county total 460 firms and 493 establishments employ 4.8K people.

Firms and establishments employing more than 500 people are 42 and 55 respectively employing

982 people (Census, Statistics of U.S. Businesses, 2008).

Canon City, within Fremont county, total population is 46K with 42K being White. Total

housing units are 19K with 12K being owner occupied and 4K being renter occupied. Housing

with minors constituted 3.8K. Males are 27K and females 19K. 28K of the total population is

over the age over 35 with 10K being between the 50 and 64 years of age and 10K being between

the ages of 35 and 49 (Census, 2010 Interactive Population Search, 2010).

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Business in Fremont county total 905 firms and 940 establishments employ 8.5K people. Firms

and establishments employing more than 500 people are 71 and 93 respectively employing 2.4K

people (Census, Statistics of U.S. Businesses, 2008).

Market Trends & Market Growth Consumer Perspective According to the Consumer Electronics Association (CEA), consumers were expected to

purchase $211 billion in consumer electronics in 2014 and there are now over 24 electronic

products per household.1

E-Waste Perspective Although electronic waste is less than 10% of the current solid waste stream, it is growing 2-3

times faster than any other waste stream. In 1998, of the 20 million computers taken out of

service, only 2.3 million, which is slightly more than 10%, were recycled (EPA, eCycling).

Coloradans currently throw away between 40,000 and 161,000 tons of electronic waste a year -

while they recycle about 8,000 tons of waste. (Denver Post, 2012)

Industry Perspective As an industry, BCC Research (http://www.bccresearch.com) in a June 2010 report estimated

that the global market for revenues from electronic waste materials recycling is projected to grow

from $8.5 billion in 2009 to nearly $13 billion in 2014, a compound annual growth rate (CAGR)

of 8.9%.

Southern Colorado Region Perspective It is estimated that the entire population targeted is over 275K with 209K of e-waste ready to

recycle. The corresponding weight is 3.3M lbs and over 429K lbs of toxic materials (Recycling

Resources Economice Opportunity Fund Grant Program 2011-2012 Project Applicaton, 2011).

1 Consumer Electronics Association. Market Research Report: Trends in CE Reuse, Recycle and Removal. April 2008.

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External Environment Political Colorado has enacted some state laws regarding recycling including SB133 which makes

dumping of electronics in landfills by consumers or businesses illegal.

Socio-Cultural Recycling electronics creates jobs and is well suited to individuals that have found it difficult to

find work such as the disabled. Rural areas in southern Colorado have an unemployment rate of

over 90% for individuals with disabilities.

Internal Environment Company Overview

Blue Star Recyclers is an electronics recycling company that specializes in end-of-life recycling.

They are based in Colorado Springs, CO and are locally owned and operated. Because Blue Star

Recyclers is the only community based e-waste recycling program in Colorado Springs, they

offer a benefit that all profits remain within the community and therefore help to improve the

local economy. The company does much more than that to improve the Colorado Springs

community; they also support many local organizations with fundraising and donations.

Market Type Blue Star Recyclers participates in both business-to-business (B to B) markets and business-to-

consumer (B to C) markets. This is evident through the many different programs they provide.

As far as business-to-business, Blue Star Recyclers offers a business pick up program that

allows businesses to schedule a onetime pick up or regular pickups depending on their needs. By

choosing this option companies request Blue Star to come to them and handle all aspects of the

e-waste removal process. Also, as part of this program they offer two payment options: flat rate

by item, and pay by weight.

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Core Competencies • Offer many different options to both businesses and residential customers (i.e. drop off

sites, scheduled pickups, and collection events • Have the ability to securely destroy data containing devices • Have many partners within the community • Are locally owned so the revenue stays within the community, strengthening its economy • Give back to the community to maintain status as a nonprofit

SWOT Analysis Strengths

1) Employs with people with disabilities to take apart electronics 2) Community Relations – Building strong partnerships with other local business 3) Nonprofit status

Opportunities 1) Growing market –Has large growth potential around Colorado 2) People are upgrading devices at a record pace. This can positively impact the amount of

products that BSR can recycle 3) Increased Social Pressure to Recycle – The country is moving forward with sustainable

resources and the movement is growing. Growth plans for this market of recycling is starting to take hold all over the country.

Weaknesses 1) Small time operation – Need to gain products to recycle so they can employ more people. 2) Startup Marketing budget –With a smaller budget, they need to be creative to gain market

share.

Threats

1) Competition from Denver market – Much larger network/ A Denver group could move into the Co Springs area and with size under cut and over market this small group.

2) Other companies that offer daily or quarterly interaction to business customers. (Paper Shredder companies, Document solutions, IT support groups)

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COMPETITIVE LANDSCAPE ANALYSIS

Competitor Profile: ForeRunner Recycling

ForeRunner Recycling is based in Kansas City and has been operating in Pueblo, CO for nearly

15 years. They provide electronics recycling services to both businesses and residential

consumers. For business customers, they offer a pickup service; for their residential customers

they have a mail in service for added convenience. In most cases, the services ForeRunner

Recycling provides are free because they make money by reselling usable equipment. However,

they do charge minimal fees to recycle copiers, large printers, battery backups (UPS), and any

item that contains a monitor (CRT or LCD).

ForeRunner Recycling does its part to help the Pueblo, CO community by making many

charitable contributions each year. They many donate usable computer equipment and other

electronic devices to nonprofit organizations that serve the community. ForeRunner Recycling

will become a main competitor for Blue Star Recyclers as they expand into other regions in

Southern Colorado, mainly Pueblo. ForeRunner Recycling has a few advantages over Blue Star

Recyclers: they are already established in the community, services are inexpensive, and they

offer a mail in service. Another advantage ForeRunner has is that they already have relationships

with local nonprofits; which may make it difficult for Blue Star to carry out their current

business model that relies on partnerships with this type of organization.

Competitor Profile: BETTR Recycling BETTR Recycling is a small, women owned business that offers education and consulting on

sustainability. They also provide consultations for businesses on how and where they can recycle

unwanted items, including computers and other electronics. While BETTR Recycling does not

actually recycle items themselves, they do recommend companies that provide these services.

This company can be considered a competitor for Blue Star Recycling for a few reasons: they

may be eligible for many of the same grants that Blue Star Recycling is and they advocate for

other recycling companies because of the partnerships that they have with those companies and

organizations.

One advantage or strength that BETTR Recycling has over Blue Star Recyclers is that

they provide education to their customers on a variety of issues that surround sustainability. This

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means that they can provide all-inclusive services to their customers who strive to make their

own business more sustainable.

Competitor Profile: Waste Connections Colorado Springs

Waste Connections Colorado Springs is a public company (WCN) with subsidiaries in 29 states

that provides solid waste collection, transfer, disposal and recycling services in mostly secondary

markets in the Western and Southern U.S. The Company serves more than two million

residential, commercial and industrial customers. In Colorado, Waste Connections Colorado

Springs (WCN), has recycling services in the regions pertaining to this marketing plan. They

provide Residential, Commercial and Construction Recycling services. They have hauling

locations in Canon City and Pueblo. To entice residential customers, WCN has created a loyalty

and rewards program to motivate households to recycle. In this program, called Recycle Bank,

participants earn points for their efforts and can redeem them at restaurants like McDonalds or at

retailers such as Sam’s Club. WCN provides a calendar detailing recycling pickups from

residences. In addition customers have an option for online bill payment. This provides both

convenience and consistency.

A significant weakness of is that WCN does not collect e-waste. However, if consumer

demand of e-waste services rise, WCN, with strength of 1.34 billion in revenue and 144 million

in net income it is entirely feasible that they could expand operations to include e-waste.

With the convenient and consistent recycling services and programs provided by WCN,

consumers may feel they are doing “enough” recycling and may be more difficult to persuade to

do “more” by recycling e-waste.

Competitor Profile: Waste Management (AKA the Trash Can) Waste Management is the largest waste removal company in the area; they are often referred to

as “the garbage man.” Waste Management is a competitor in two different aspects: often people

improperly dispose of e-waste by just throwing it in the garbage and they also offer convenient

recycling services.

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Waste Management has a solution for this; they also provide convenient recycling

services for just about any type of recyclable materials. They pride themselves on being the

nation’s only coat-to-coast electronics recycler.

Competitor Matrix

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Conclusions about Competition The purpose of this competitive landscape analysis is to identify the competition that Blue Star

Recyclers faces, gather information about the competition’s strengths and weaknesses, and

ultimately come up with a marketing strategy that positions Blue Star Recyclers favorably

against their competitors.

A strength that is common among multiple competitors is that they offer mail in

recycling. This is an option that Blue Star Recyclers will either have to match or at least address

to stay in line with these competitors.

There are a few weaknesses that are apparent when analyzing the competition. One,

many competitors offer e-waste drop off sites; however they do not have many so they are not as

convenient for customers as they might think. Another issue that arises is that many of the

players in the electronics recycling industry do not do much to build awareness of their programs

or the need for disposing of e-waste properly.

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CUSTOMER ANALYSIS

Customer Needs

The customers for Blue Star Recyclers are recycling individuals and businesses within the target

geographic counties, mainly in Southern Colorado. Because e-waste recycling is a specialized

and new category of recycling, it requires a higher level of Recycling Competence (Robert

Pocock, 2008). Recycling Competence is a consumer behavior model of the conceptual barriers

individuals face to becoming highly motivated recyclers. The lowest levels (1-2) {Table 1} are

individuals with little or no desire to recycle. The highest levels (5-7) are motivated and

committed recyclers. The qualitative study found that to move up the Recycling Competence

scale individuals needed certain “messages” and “actions” to overcome barriers in attitudes and

perceptions about recycling. The learning about Recycling Competence will be used to develop

Blue Star Recyclers’ service and communications that meets the needs of the recycler whether

they are a business or individual. From a needs perspective the level targeted should be level 5

or above which is defined as a rate of recycling as “A fair amount” to 100% from competency

level of “Trying their best” to “The complete Recycler”. Levels 5 through 7 constitute an

estimated 71% of individuals that recycle. (Robert Pocock, 2008).

Businesses are made up of individuals. In many cases corporations adopt recycling

behaviors because of the motivation of recyclers within their organization. These individuals are

also high on the Recycling Competence scale. A key target of Blue Star Recyclers would be to

target these individuals in companies and organizations to sponsor initiatives. The needs of all of

these customers are the same throughout the area. The customers for BSR need safe, reliable,

and friendly e-waste recycling. BSR has a great model to deliver these three items to help satisfy

these needs for both businesses and residential customers. Table 1

Description Level

Super Committed Recycler 7

Committed Recycler 5-6

Not a Committed Recycler 3-4

Non Recycler 1-2

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Explanations & Education

Customers, whether they are individuals, corporations, governments or other organizations need

to know why it is important to recycle e-waste and why it requires a separate effort to collect.

They need to understand the impact on the environment above and beyond traditional

recyclables. They need to know exactly what e-waste is with lists of specific e-waste named.

They also need to know what happens to the recyclables. BSR can help these groups of people

and business more effectively once they have some basic knowledge of the service and good

BSR is delivering with their services. Customers, who BSR target, have s basic knowledge of e-

waste recycling. By educating this group, they will become better recyclers and advocates for

BSR in the future.

Convenience

Customers need to be able to dispose of e-waste in locations that are located near their home or

where they frequently travel. Ideally, they would expect to use their current recycling services

so having to go through another process and location could be seen as inconvenient.

Depositories need to be large enough to dispose of all of their e-waste recyclables. Business

users also need to have access to easy recycling, just like residential consumers. Business pickup

service is a great way to meet a business and service them on their own terms. Currently BSR

has a business route that makes its way weekly around Colorado Springs to help out business

users.

Rewards & Feedback

Customers need to know about the impact their recycling efforts are making and how their

county compares to other parts of the Colorado. They also need to be thanked for participating in

collection activities to keep them motivated. Recording, ranking and reporting individual and

organizational contributions to e-waste disposal can serve to motivate and create a competitive

environment to drive more recycling.

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Other Needs

Governments support the needs of individuals with developmental disabilities. These individuals

are supported by tax dollars. With employment, these individuals can be productive and lesson

the taxes required for their care.

The Southern Colorado Region has a limited electronic waste collection sites. This

presents a significant need because many electronic components contain lead, cadmium,

beryllium, mercury and other toxic metals that can leak into soil and water if not disposed of

properly. BSR is providing a solution for the target customers by having more accessible drop

off locations for residential and business customers

Most of the collection of e-waste is done through annual events. This limited availability

only decreases the amount of electronic waste that is disposed of properly. Local and consistent

locations are needed.

Current Customers

Currently, Blue Star Recyclers operates in the Colorado Springs area. They cater to both

businesses and residential customers. According to estimated information pulled from current

drop off locations and from management, customers who use the drop off locations travel from

all around the area to deposit e-waste. They are generally between the ages of 25 to 40 and their

average household income is just over $49,000 per year.

Blue Star Recyclers provides e-waste pick up service to businesses in the Colorado Springs area,

but according to our contact at the company they also have “accounts as far north as Denver and

Aurora, as far south as Trinidad, east as Lamar, and west as Cripple Creek.” This means that they

have been able to reach out to customers in a large area of the state as far as their pickup service

is concerned. In general, Blue Star Recyclers has over 200 business clients. These business

customers are businesses with anywhere from 1 to 250 employees. Businesses who utilize Blue

Star Recyclers have a need to recycle e-waste. This is due to the laws in Colorado around e-

waste and recycling of office equipment.

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Potential Customers

When expanding their business to Pueblo, La Junta, and Canon City Blue Star Recyclers will

need to focus on two different types of customers: businesses and residential consumers. To

ensure success in these new markets it s important that Blue Star Recyclers narrow their target

markets to strengthen their impact and generate awareness.

To identify potential business customers in the expansion area (Pueblo, La Junta, and

Canon City) Blue Star should focus on small to mid-sized businesses (by pay rolled employees)

that utilize multiple electronic items to conduct their business because they are most likely to

replace these devices often and have a greater need for and e-waste recycler to pick up their

unwanted equipment.

As far as the residential market is concerned, Blue Star Recyclers should target a similar

audience in the expansion area as the segment that currently recycles e-waste with Blue Star

Recycling in Colorado Springs. From the data that we collected on drop off sites, this group is

between the ages of 25 and 40 years old and lives near the drop off sites. This also correlates

with information from the WRAP study that indicates that members of this age group are already

avid recyclers.

A secondary group that should be targeted is consumers between the ages of 18 and 25.

This segment is very in tune with technology and is likely to upgrade their electronics more often

than older members of the population because they tend to be early adopters of technology. They

are also more likely to have multiple forms of electronics that will eventually become e-waste

such as computers, cell phones, MP3 players, e-readers, video game consoles, and more. An

added benefit to targeting a group of younger people is that they are likely to continue to be

customers for many years to come.

When targeting these segments it is necessary for Blue Star Recyclers to narrow their

target audience even further to make the most impact with their marketing efforts. The company

should begin by targeting consumers who are passionate about the environment and

sustainability efforts. They should also look for consumers who realize the importance of

employing and giving opportunities to disabled citizens. In many cases these may be people who

know someone who is disabled or work with other organizations that support disabled citizens.

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OBJECTIVES & GOALS

Through the grant to help the expansion into the cities of Pueblo, Canon City, and La Junta, Blue

Star will have the following goals:

• Surplus: Create enough revenue to remain self-sufficient and sustain four drop-off

locations, 1 in La Junta, 1 in Canon City, and 2 in Pueblo.

• Share: Increase recycling efforts throughout the communities by 15%

• Social: Create 3 new jobs in co-operation with CI and other community partners to help

employee adults with DD.

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PRODUCT STRATEGY & TACTICAL PLAN

Product Rationale

Blue Star Recyclers (BSR) has two main services they provide the residential consumer and

business customers. The service overall is e-waste recycling. However for the consumer it

would be more of a specialty product. The business consumers see the service as more of a

professional service that is needed to fill a need that the business cannot do for itself. Most

businesses produce e-waste in bulk every year. Having an outside company that can assist in the

safe removal of that waste allows for the business to focus on their own strengths. BSR provides

many different ways to help companies who call on them for e-waste recycling. BSR uses a

standard pick up route and a convenient pick up service to help businesses.

Product Tactical Plan

Product Attributes

BSR’s product attributes fall with the two primary attributes preferred by customers, recycling

capabilities and social impact. BSR brings services that are unique in many ways; therefore they

must play on these features to gain business in the expansion area. The main product sub-

attributes within recycling capabilities that BSR services provide are: secure data destruction,

environmentally friendly disposal of e-waste, convenient pick up services for businesses and

drop off services for residential consumers, jobs for adults with developmental disabilities, and

support for the local economy.

The first product attribute that BSR needs to educate their customers on is the secure data

destruction. This is because it is a key benefit to consumers who recycle e-waste over disposing

of it in other ways, such as throwing it in the garbage. BSR’s website states: “Data containing

devices sent to Blue Star Recyclers are securely shredded on our premises. As noted in recent

news stories, wiping drives and disks does not ensure that data cannot be accessed. Only

completely shredding these devices will keep your information secure.” It is important for the

company to emphasize that when electronics are improperly disposed of it is possible for other to

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retrieve the data that is stored on them, which can lead to identity theft or other personal safety

issues.

Another unique attribute of BSR services is that they offer convenient e-waste pick up to

businesses and local drop off locations to collect e-waste from individuals. Many of the

competitors in the area either do not handle the recycling of e-waste or do not offer convenient

methods of disposing of it. For example, Waste Management offers a mail in service to

customers, but they have to purchase expensive mail-in kits, pack their unwanted electronics, and

then take the box to the post office. This process can be an inconvenience for consumers and

many do not want to put in the extra effort to participate in e-waste recycling via this method.

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PRICE STRATEGY & TACTICAL PLAN

Price Strategy for Businesses

The current model of billing the business customers by product weight is a great way to

create basic business model. However, as new recycling rules are created and enforced

politically and with the expected increase of recycling volume at BSR, a premium needs to be

placed on the products that are being touched by BSR. Moving BSR to a flexible pricing

structure is best for the growth of their business service line. Using this new type of price

strategy will allow for the company to process customers at a rate that is more in line with the

distance traveled to pick up the product and the amount of product being processed by BSR. A

flexible price model will also make the rates for business customers competitive for all sized

companies. Using a flexible price strategy will also help complete more sales transactions and

will make the sales better in terms of profit or break even points for BSR.

Price Tactics for Businesses

The price structure today consists of per pound weight management after the product is

collected from the business client. The current cost per pound is .29 cents for most business

users. However the company does use a .19 cents price for some customers. Moving forward,

the business users will have a more fluid pricing structure where repeat business, distance, and

pickup weight will all be calculated to generate a price for the customer. This flexible pricing

model will allow for BSR to make sure they are competitive and profitable in the long run to

continue providing service.

BSR will start with the distance they are sending the trucks to pick up the product from

the company. Distance will be calculated and a fixed dollar price will be expected and charged

for companies in certain ranges of travel distance; $5-7 charge for every 30 miles of travel.

Companies inside the first 30 miles would not have a charge and then each additional 30 miles

will incur the charge. This will help offset the costs and labor of moving the trucks outside the

home area of the company.

Secondly, repeat customers will have .02 cents removed from their total per pound

weight. This will show how BSR wants to be a partner with that company for life. If BSR can

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continue to work with existing customers, as much as possible, any discount will be offset by the

sales that don’t have to be completed by the company. Finally, weight should also be tracked on

a rate range. For more poundage, a lower weight cost should be levered to the customer. It will

mean starting the pound price higher for smaller loads, but overall the pound costs will need to

increase to make sure people are employed by the company. It is approximated that the business

customers will need to pay towards .35 cents per pound/average to make sure BSR continues to

grow employees at the goal rate. Starting smaller load pickups at .39 cents a pound inside the 30

mile loop would be the best way to start the flexible pickup pricing. Here are some examples of

the flexible pricing structure.

Distance Cost Weight cost per pd Repeat Total Client 1 25 miles $ - 300 $ 0.39 n $ 117.00 Client 2 50 miles $ 10.00 500 $ 0.29 n $ 155.00 Client 3 15 miles $ - 1000 $ 0.29 -0.02 $ 270.00

Using this new model, BSR is poised to help position their enterprise as a superior

community, business, and environmental company who using price strategy to compete for

tomorrows’ competitive business.

Price Strategy and Rationale for Consumers

The second market segment that BSR is focusing on is residential consumers. The pricing

strategy for this group is different from the pricing strategy that best fits the business segment.

For the residential segment BSR will utilize the cost-plus pricing strategy. This strategy means

that the company will take the price that they will sell the broken down electronics for and then

add a margin for administration and profit, or surplus.

This pricing strategy makes sense for BSR because it is aligned with their goal, or

objective, to earn enough in the expansion area (Pueblo, La Junta, and Canon City) to hire three

additional employees with developmental disabilities. By utilizing this strategy, BSR will be able

to better forecast their profit; and therefore better identify when they will be able to hire new

employees.

Another reason for this pricing strategy is because it will help BSR gain customers in the

expansion areas by not overpricing their service. Consumers in this area are not currently

educated on the importance of recycling e-waste and would not be likely to spend much money

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on this service. The cost-plus method will help to ensure that BSR’s prices are not excessive, but

will allow for enough profit to achieve their goals.

Price Tactical Plan for Consumers

Blue Star Recyclers currently has a list of items that they will take for e-waste recycling;

however there are no prices listed. The first step in the pricing tactical plan is for the company to

develop a list with rates listed for specific items, or at least a fair rate range. Along with this list

they will include information about what the consumer’s money will be used for in terms of

helping the community and hiring citizens with developmental disabilities. Statements like “X

number of recycled flat screen TVs can help BSR employee an adult with developmental

disabilities for one year.” Can be very motivational for consumers and add value, which will

encourage consumers to spend the money on e-waste recycling. Also, the list of prices will help

Blue Star Recyclers illustrate to customers that recycling e-waste is very affordable.

Another part of the tactical plan is measuring profit and sales. This is an important step

for Blue Star Recyclers because they need to be able to determine the effectiveness of this

pricing strategy; if this strategy is not effective they will need to reassess the situation. At the end

of every quarter BSR will assess how much money they have earned and the benchmark earnings

for the rest of the year. They may find that they are not on target with their earnings projections;

in this situation BSR will partner with more community organizations and have e-waste

recycling events to bring in more revenue.

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PLACE STRATEGY & TACTICAL PLAN

Place Strategy and Rationale for Consumers

BSR provides a service, e-waste recycling; therefore the distribution strategy that they

will utilize is direct distribution. This method means that services will be delivered directly to the

consumers. One advantage to a direct distribution channel is that changes can be made to the

tactical plan or any element of the marketing mix more quickly than in an indirect distribution

channel.

One benefit of a direct distribution channel is that it enables BSR to have direct, or face-

to-face contact with consumers. This will assist BSR in meeting multiple needs of their

customers including: education about e-waste. The ability to manage what the customer sees as

part of BSR’s e-waste recycling service is a huge part of the education process. One way that the

company will reach consumers directly is through the collection events that they sponsor with

other community organizations.

Place Tactical Plan for Consumers

In terms of the marketing mix, the place tactics refers to the logistics of operating the

business, or selling the product. There are many components that BSR will consider in regards to

place tactics, including: the locations of drop off sites, the size and space of drop off sites,

signage, and customer service/ interaction with customers. With the grant BSR will expanding

into newer markets. These newer markets have both businesses and consumers who are close to

the demographics as their current home market of Colorado Springs. Even though they are

similar, BSR needs to view this new area with open minds and ideas. Businesses and consumers

might react differently that their neighbors to the north. Using a strong place tactic is important

to make sure that BSR is a strong consideration for e-waste recycling in the new area.

The first tactic that needs to be considered as BSR expands into Pueblo, La Junta, and

Canon City is where to place the new drop off sites in order to best serve this segment of the

target market. To do this, Blue Star will examine the demographics of each town in the

expansion area and then place the drop off sites in the part of town the most closely aligns with

their primary customer in Colorado Springs. As stated previously, these new drop off sites will

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be placed in high-traffic areas such as grocery store parking lots or a local Wal-Mart, etc.

Especially in the smaller towns, La Junta and Canon City, these are places that everyone

patronizes and will be highly visible to all consumers in the towns. It might be difficult for BSR

to arrange to have permanent drop off depots in these stores; so the other possibility is to arrange

to have monthly or bi-weekly pick-ups at these locations.

Another element BSR considers to be part of the place tactical plan is signage. This is an

important part of the plan because signage is the main way that Blue Star Recyclers will attract

consumers to their drop off locations. The signs at each location should be large and visible from

the street.

The new markets will still utilize the BSR headquarters in Colorado Springs. The places

in the new markets will all have a new relationship with this central processing plant. All

products will be processed and moved through this location. This location needs to be able to

handle new and old volume of product while maintaining customer service levels. If BSR grows

too fast they will need to find or open a new processing location. With all of the primary

services being completed in Colorado Springs this headquarters needs to be easy to access and

secure.

Place Strategy for Businesses

The current and future place strategy for the business unit within BSR is onsite pickup, or

direct distribution. Onsite pickup is currently working extremely well for their business clients.

Businesses use BSR services to help remove and dispose of equipment from their offices. Onsite

pickup is a great way to make an impact service call with these customers. BSR’s first impact is

made by being flexible enough to pick up the products on the schedule of the client. The second

impact is the safety and concern for the data or equipment that BSR is removing. This value

added service is great for a business who doesn’t know what it will take to dispose of all the

equipment. Being a direct distribution service, BSR will make sure their brand is fully integrated

with their trucks, uniforms, and communications with the business customers.

Place Tactics for Businesses

BSR uses direct to business-to-business selling and distribution. This allows for BSR to

maintain their place for business purchasers as anywhere they could possibly go throughout the

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state of Colorado. This overall place model for BSR uses a recycling truck to help set the

company brand and logistically move product from the onsite pickup to the holding and tear

down facility in Colorado Springs. With estimated growth and expansion to other markets, BSR

will apply for a grant to purchase two new branded trucks (Ford Transit). Moving into the newer

markets will mean that the current truck will need to expand its current usage. The truck today

currently has two functions, one it runs a known business route picking up product, and two it

does the on call onsite pickups. With the place strategy being fully integrated into onsite pickups

at random locations; the truck is the visible company on wheels.

Downtime for a truck would mean the company cannot service anyone else at that same

time. This would be devastating for a company who is growing. Opening up the fleet (maybe

two sizes) will allow for the company to make better decisions on which customers receive

which truck, due to size of the pickup or distance of the pickup. With business making up the

bulk of the sales and forecasted sales, having another van is very important to help create a safe

and reliable transportation option for the company. It will also allow for 6 or 7 day a week

service to companies throughout the region. This service availability is paramount to keeping the

place strategy moving forward towards growth. Another way to help improve the place strategy

is to make sure every business pickup has up to date BSR handouts and documents on the

recycling process. This will make sure the business who is getting service from BSR

understands everything that BSR will be doing for them over the next few days. The dress code

will be a BSR logoed polo shirt with dark or black slacks or blue jeans. Providing information is

very important to keep the clients educated about the process. Along with a well-dressed

uniformed driver, a handout will help seal the brand; which BSR is working so hard to keep

updated.

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PROMOTIONAL STRATEGY AND TACTICAL PLAN

Marketing and Communication Objectives

• Create brand awareness among businesses and residential consumers in the expansion

area – Pueblo, La Junta, and Canon City. This objective will be measured by the number

of searches online, visits to the website, and attendance at promotional events.

• Gain 20 new businesses pick up customers within one year.

• Increase residential consumer participation in e-waste recycling. This will be measured

by the amount (in pounds) of e-waste that is collected between the community collection

events and the drop off depots.

Promotional Strategy and Rationale

Expanding the business into new markets: Pueblo, La Junta, and Canon City means that Blue

Star Recyclers will need to ramp up promotions in these new markets. There is a lot of area to

cover in this new market and the funds are fairly low; therefore BSR will need to think outside

the box with the promotional strategy.

Promotional Tactical Plan & Budget

Search Engine Optimization

Search Engine Optimization is the process of improving the visibility of a website in search

engines via un-paid search results. The months of March and April where unique users visiting

the site spiked to 865 and 1637 respectively. This demonstrates the importance of referring links

(embedded links on web pages of reputable sites) can drive traffic to BSR website. However

once the web pages are no longer current, as with news articles, the traffic returns to normal

levels.

Page Rank is an important indicator with search engines. It indicates the “reputation” of

the site for search engines. The higher the page rank the higher it will show up on search results

for certain keywords.

Purchasing Truck Wraps

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Moving into the new markets will put a stress on Blue Star Recyclers with their pickup service

for businesses. Also the consumer side of the business that supports community events will need

proper transit for the products that are collected. The last section stated that BSR will purchase

two new transit trucks through a grant, if possible. Wrapping the trucks in the BSR logo, mission

statement and/or slogan will help build the brand and promotion of the company while these

trucks are on the road. Through all the business pickup trips, planned and special run, along with

community events for residential customers BSR will be able to service three different groups at

the same time.

• Wrap two Ford Transit Trucks – Cost $3,000 a truck, $6,000 total

Business Lunch and Learns with Local Chamber of Commerce

Blue Star Recyclers makes the majority of their profit from their business pick up services;

therefore they will focus mainly on businesses in the expansion area. One way that they will

reach out to business owners is through lunch and learns in partnership with the local chambers

of commerce. All three main cities in the expansion area, Pueblo, La Junta, and Canon City, have

well-established chambers of commerce to help support local businesses.

Hosting these lunch and learns is a fairly inexpensive way to reach out to business

owners and also provide a chance for networking and mingling, which is one of the main

purposes of local chambers of commerce. The expenses that BSR would incur with these events

are: room rental, meal costs, and invitations. The following chart represents estimated costs for

each event.

Room Rental $500.00 Meals $750.00 Invitations (direct marketing) $800.00 Total $2,050.00

Consumer Direct Mail

Blue Star Recyclers will spend the majority of the promotional budget on gaining new business

customer because this market segment generates most of their revenue. However, they cannot

ignore the residential consumer. In addition to the community collection events, BSR will send

out a direct mail piece to consumers who reside in specific zip code areas in each of the cities in

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the expansion area (Pueblo, La Junta, and Canon City). BSR will send out mailers announcing

the new drop off locations in these towns. The mail piece will also contain a few simple facts

about why recycling e-waste is important and what Blue Star Recyclers does to support the local

community and the fact that they provide jobs for developmentally disable citizens. This tactic

will help BSR achieve their goals of educating the consumer on e-waste recycling, gaining new

customers, and will exhibit their community involvement.

Promotional Costs

Promotion Planning Grid

Objective Target Audience

Promotion Tactic and Positioning

Cost Implementation Dates

Results

SEO Optimization for Website

Core Customers and new Customers

Direct Web Marketing / Brand Identity Online

$3000 to $7,650

July - October with Quarterly Updates

Website Hits will Track the progress

Truck Wraps

Consumer and Business Clients

Brand Identity and Professionalism

$6,000 July Customer Comments on Vehicles

Event Sponsorship

Residential Customers

Public Relations $4,000 Throughout the year Increased awareness

Business Lunch and Learns

Business Customers

Direct Marketing $4,600 One a Quarter Goals for New Clients

Consumer Mailer Residential Customers

Direct Marketing $2,500 August See who brings in the mailer with their product

TOTALS $20,100 to $24,750

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CUSTOMER KNOWLEDGE AND MANAGEMENT

Control Plan

Throughout the year Blue Star Recyclers will need to monitor their progress of this plan and

determine whether it is successful. If the plan seems to be failing they will make adjustments to

get it back on track. BSR will utilize multiple forms of measurement to determine success

depending on the customer group. For business customers they will initiate focus groups.

Customer surveys are the most feasible option for residential customers. In order to stay true to

BSR’s plan and get the most accurate information, BSR will collect data from both businesses

and residential consumers on a semi-annual basis (twice per year).

Blue Star Recyclers has a more direct relationship with their business customers;

therefore focus groups are the best way for them to monitor progress with this particular market

segment. There are businesses that request multiple pick-ups per year and these are prime

candidates for focus groups discussions.

BSR will also create ROI reports for market share increase in the grant area using a

spreadsheet to track the pounds that they have recycled in the new area. BSR will use grant

metrics to baseline the market share over the coming year.

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FINANCIAL REPORTS

Projected Profit and Loss Statement Over the next 3 years, it is the goal of BSR to reduce the deficit required by operations thus

lowering the current BSR contribution of 46K to 20K (see P&L Spreadsheet). Currently BSR

requires an investment of 136K from to fund operations.

BSR charges $.29/lb of e-waste. BSR estimates that each customer recycles 12lbs of e-

waste per visit. Year 1 of marketing and promotion via events, internet marketing and signage

will drive 23,900 customers (a 15% population conversion rate) to recycle 286K lbs of

recyclable e-waste for revenue of $94.7K. Cost of goods (COGS) consisted of labor and

materials of $28K in year 1 for a gross profit margin of 69.8%. Selling and operating expenses

totaled $111k resulting in a net income deficit of $46K. Continued investments in marketing will

produced an estimated 15% increase in revenue of $108K and $125K in year 2 and 3

respectively due to growing awareness of BSR via promotional activities. This increase also

includes Salary increases of 5% in variable labor and administration can occur without additional

headcount.

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Blue Star Recycling P & L Statement Year 1 Year 2 Year 3

Revenue: Gross Sales 94,733 108,943 125,284 Less: Net Sales 94,733 108,943 125,284

Cost of Goods: Materials 9,319 9,319 9,319 Variable Labor 19,200 $20,160 $21,168 Misc. 28,519 29,479 30,487 Less: Cost of Goods Sold 28,519 29,479 30,487 Gross Profit (Loss) 66,214 79,464 94,797

Selling Expenses Advertising 24,750 24,750 24,750 Admin/Sales/marketing Payroll 19,600 20,580 21,609 Payroll Taxes and Benefits Sales Commissions Professional Fees Operating Supplies Travel 11,168 11,726 12,313 Communications

Operating Expenses: Permits and Licenses Interest *Depreciation 1,744 1,744 1,744 Property Taxes Rent 27,600 27,600 27,600 Insurance Utilities Other 26748 26748 26748 Bank Service Charges Amortization Total Expenses 111,610 113,148 114,764 Net Operating Income -45,396 -33,684 -19,966

Net Income (Loss) -45,396 -33,684 -19,966 Taxes

Net Income (Loss) after taxes -45,396 -33,684 -19,966

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*Capital Purchases 3 locations $8719 depreciated over 5 years

P&L Drivers (Year 1) Default Plan Customers Recyclables(lb

) Revenue ($0.29/lb)

La Junta 3,274 39,288 $11,394 Canon City

6,621 79,452 $23,041

Pueblo 14,005 168,060 $48,737 Total 23,900 286,800 $83,172

Material Separation

Revenue $11,561

Total $11,561

Payback Analysis BSR marketing and promotional budget is currently $24,750 for year 1 Sales Estimated Sales for period without promotion: 7.5% conversion rate = 11,950 customers x 12lbs x $.29 = $41.5K Estimated gross margin dollars for period without promotion: ($41.5K – 28.5K(COGS))/$41.5K = 31% Estimated Sales with this promotion: 15% conversion rate = 23,900 customers x 12lbs x $.29 = 94.7K Estimated gross profit margin sales dollars with promotion: ($94.7K – 28.5K)/$94.7K = 69% Expenses Estimated ongoing advertising and media costs without promotion: $3,900 Total Advertising and media costs with promotion: $24,750 Payout Incremental gross profit margin sales minus incremental advertising and media expenses: $66.2K - $13K = $53.2K See Spreadsheet for 3 year projections

31

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