CUTTINGTON UNIVERSITY

SCHOOL OF GRADUATE & PROFESSIONAL STUDIES

P. O. BOX 10-0277

Monrovia, Liberia

MARKETING MANAGEMENT 601

TOPIC:
MARKETING PLAN

SUBMITTED BY:
JACKSON LIBERIA
ID #:
20129

SUBMITTED TO:
MR. JOSEPH B. SADYUE
COURSE LECTURER

DATE: NOVEMBER 24, 2021

LIBERIA WATCH MARKETING PLAN SUMMARY

Based on an evaluation of the watch market and our strengths, Jackson Inc. will introduce the

LIBERIA watch in Liberia. The head office of the company is located on 15 street Sinkor,

Coleman avenue adjacent the OSIWA office.

SITUATION ANALYSIS

Half the buyers of branded fashion watches are between 18 and 34 years of age. This group,

which purchases more watches per capita than those older, is our primary market segment.

Watch purchases are more likely by consumers in the northeast and Midwest. Many purchases

are expected to be impulse, requiring strong point-of-purchase support. Seventy percent of the

market is concentrated with strong competition from Swatch, Fossil, Guess?, and Anne Kline.

We have extensive experience in the manufacture of innovative, high-quality, precision plastics

and timing devices permitting us to offer the consumer value in a branded fashion watch.

Additionally, we have experience distributing products into 75 percent of the outlets for branded

fashion watches.

OBJECTIVES

The combination of a unique, cost-effective design allows us to establish a three percent market

share in the first year. The LIBERIA watch project will break even in 1998.

MARKETING STRATEGIES
General will introduce a new product, the innovative LIBERIA watch, using penetration pricing,

extensive advertising, and expanded distribution in-order to increase our revenues and growth

rate.

ACTION PLAN

The LIBERIA watch has strong product benefits compared to current market offerings. To

achieve our objectives we will offer our unique watch in a variety of designs at a suggested retail

price of $45. Our current distribution covers 75 percent of the market. At this time we will not

expand our distribution to access the jewelry store retail channel. We will increase our sales

force by 5 persons and add a sales trainer to support our market plan. Advertising of one million

dollars will emphasize the unique design of the watch and is weighted toward print and point-of-

purchase displays. This and television advertising will be scheduled two-thirds in the first six

months of the campaign. To achieve consumer awareness in the first year, our advertising voice

share will be considerably higher than that of the four market leaders.

FINANCIAL ANALYSIS AND EXPECTED RESULTS

We expect first-year sales of 8.5 million dollars and project break-even for the project in the first

year.

CONTINGENCY PLANS

If the competition increases advertising or our sales are less than expected, we are prepared to

add as much as $500,000 to our advertising budget.

LIBERIA - THE MARKET PLAN

SITUATION ANALYSIS

General's core business is industrial timing devices and consumer clocks, based on skills in

manufacturing high-quality timing movements and plastic casings. This market plan is based on

providing consumers with a high-quality, innovative watch. It will be offered in a variety of

styles for both men and women. The casing and movement have other potential applications not

discussed in this plan.

Our 1995 profits of 30 million dollars represent 7.5 percent of total sales. Sales growth has

slowed to a current level of 5 percent annually. Growth in current markets is expected to be

limited. The LIBERIA watch is one of several projects with the potential to improve General's

growth rate.

Market Analysis

The LIBERIA watch will compete directly with several other branded fashion watches. The

market size for branded fashion watches is forecast to be $524 million retail dollars in 1998,

growing to $721 million by 2002. Annual market growth is expected to exceed six percent

through 2002, exceeding our current annual sales growth.

Market Segments

Table 1: Market Segments by Age

 Those under 35 years of age purchase slightly
AG PERCE PERCENT RELATIV
E NT OF OF E
over 50 percent of all branded fashion watches as
WATCH POPULATI PURCHA
BUYER ON OVER SE
shown in Table 1. The highest purchase
S 17 INDEX

18- 19% 13% 1.46 prevalence is those from 25 to 34 who purchase

24
74 percent more watches per capita than those the
25- 33 19 1.74
34 average consumer. Purchase behavior is expected

35- 35 40 0.88 to differ among age segments and by gender.

54
Young females [18-24 years of age] are expected
55+ 13 29 0.45
to be intense purchasers. This group is likely to

be very styling conscious. Women in the 25 to 34 age group will be our second significant

segment, expected to buy more watches than any other age-sex segment.

Consumer purchases of branded fashion watches also vary by region as shown in Table 2. An

index of relative watch sales by region shows that sales are above average in Monrovia, Nimba,

Katata and Gbarnga, Grand Bassa, Maryland, Grand Gedeh, Bomi, and Cape Mount. Product

introduction is likely to be more successful in these counties. 

REGIO WATC POPULATIO INDEX

N H N OF Table 2: Watch Sales by Region
SALES WATC
% H
SALES Consumer Behavior
Monrovi 20% 15% 1.33
a
Swatch has changed watch buying habits by
Nimba 16 17 0.94
Kakata 15 13 1.15 encouraging ownership of multiple low-priced,
Gbarnga 15 21 0.71
carefully designed branded fashion watches. Brand
Grand 10 10 1.00
Ba switching and experimentation by consumers are
Marylan 8 7 1.14
d
Grand 6 5 1.20
Ge
Bomi 5 6 0.83
Cape Mt 5 6 0.83
easy for low-priced watches, assuming availability. Consumers are very design-oriented when

buying branded fashion watches. Watch attributes that we consider most important include watch

and brand design, packaging, price, and durability. Distribution and display are very important in

this market and can encourage impulse purchases for both personal uses and as gifts.

Consumers are reached through five types of outlets. We currently have access to four of these

channels, representing 75 percent of watch sales. Channel development is necessary to reach the

total watch market. A majority of branded fashion watches are currently purchased at department

stores. We will take advantage of our strong distribution through department, discount, and drug

stores to assure the widespread availability of LIBERIA watches. Jewelry store channel

development will be deferred until we are established in our traditional retail channels.

Competitive Analysis

Although there are fourteen competitors in this market, there is substantial concentration.

Swatch, Fossil, Guess? and Anne Kline is strong competitors, holding 70 percent of the market.

Swatch and Fossil have strong manufacturing and distribution skills, while Guess? and Anne

Kline has less extensive distribution networks but strong name recognition in fashion. Fossil and

Swatch are strong at the lower price lines. Branded fashion watches are a relatively new product

category. Although pioneered by Swatch, there is considerable opportunity for new entrants as

demonstrated by Fossil and Guess?.

Company Analysis

General currently distributes products through channels accounting for 75 percent of watch sales.

Branded fashion watch sales are growing faster than our current product lines. Our innovative
product, product design skills, strong manufacturing skills, and experience in distributing

consumer clocks provide an opportunity for entry and growth in this market.

SWOT Analysis

Strengths

·        Innovative production methods provide the potential for new designs

·        Experience in distribution channels for timepieces

Weaknesses

·        No experience in distribution to jewelry stores

·        No experience in marketing fashion products

Opportunities

·        Large market

·        Market growing faster than our current sales

·        Consumer demand for fashion goods creates a demand for innovative products

Threats

·        Strong competition with concentrated market shares

·        Possibility of new market entries

OBJECTIVES

 Market share of three percent of the branded fashion watch market in the first year [sales

of over 8 million dollars].

 Project break-even in 1998.

MARKETING STRATEGIES

General will introduce a new product, the innovative LIBERIA watch, using penetration pricing,

extensive advertising, and expanded distribution in-order to increase our revenues and growth

rate.

ACTION PLAN

Product

We will introduce between 30 to 40 different designs in the first year. One-quarter of these will

have a "metal" case, copying many of the traditional and modern metal designs. These are

targeted at consumers 25 and over. We will design a series including licensed characters and

unusual shapes for the market segment under 24 years of age. Swatch does not have exclusive

licensing/franchise for Disney and Warner Brothers characters or Coke. By using these and

others we will have a variety of product and character designs in our line. The most unusual

aspect of our line will be some very unusual shapes. Several of these will be geometric; hexagon,

trapezoid, oval, and diamond. For younger ages, our technology allows the design of watches in

the shapes of cartoon character faces.

Price
The LIBERIA watch will be sold for a suggested retail price of $45. We believe that we have

produced quality and feature advantages, encouraging the use of a price slightly exceeding

Swatch. This pricing strategy, coupled with our efficient production methods, aids in achieving

our relatively high market share for a new product entry.

Distribution

We will introduce LIBERIA in the northeast but within the first year sell to the national market.

With our current strong distribution channels nationwide covering 75 percent of watch sales, we

will limit our potential if we restrict our distribution to specific regional markets. Although we

do not currently have jewelry stores, our distribution will place watches in at least 75 percent of

locations in the United States. We will use current normal distributor markups.

Promotion

Five new sales representatives will be added to assist in the development of new distribution

outlets. A sales trainer will be hired to train the sales force in the new product. This will be

within our $500,000 sales support budget based on an average salary and benefits cost of

$100,000 for each position.

The advertising level for the four leading firms can be compared by determining the ratio of

voice share (% of total advertising dollars of  $20 million) divided by the market share as shown

in Table 3. Consumers will not know our brand; therefore, we will have to advertise more

aggressively to achieve brand awareness. Although our market share goal in 1998 is three

percent, we will set advertising at one million dollars. This will achieve an advertising

voice/market index considerably higher than our competition.

Table 3:  Fashion Watch Advertising and Voice

COMPAN MARKE VOICE VOICE/ ADVERTISIN

Y T SHARE SHARE G
MARKE

T MILLION $

SWATCH 20% 28% 1.4 5.5

FOSSIL 20% 24% 1.2 4.8

GUESS? 20% 21% 1.05 4.2

ANNE 13% 13% 1.9 2.5

KLINE

LIBERIA 3% 5% 5.0 1.0

PLAN [assumes

same level

of total

advertisin

g as last

year]

Media will be targeted to our major market segments; women between 18 and 24 and between 25

and 34. Smaller amounts will be directed to other segments.

FINANCIAL ANALYSIS AND EXPECTED RESULTS

As shown in Tables 1 and 2 of the financial appendix, we expect to achieve a market share of

three percent and sales of $8.5 million in the first year. The LIBERIA watch project will break-

even in the first year. We do not expect any watch technology breakthroughs during this period.

Competition is expected to be based on design, price, and achieving widespread distribution,

areas in which we expect to be very competitive.

In conclusion, we will invest one million dollars in the LIBERIA watch project. We can achieve

sufficient market share to achieve our financial and marketing objectives. During the next five

years, the market is expected to grow and our costs are expected to decline with experience

increasing unit contribution. Our greatest challenge will be tracking the market's tastes in watch

design and meeting and leading these with creative and innovative designs.

CONTINGENCY PLANS  

Table 4:  Impact of Advertising Levels on Financial Results

TOTAL AD BREAK NET It is not expected that there will be increased price
BUDGET EVEN YEAR PRESENT competition due to the entry of the LIBERIA
VALUE IN watch. Increased advertising, however, might lead

MIL. $ to an increase in industry advertising. A sensitivity

$2,500,000 1998 $35.8 analysis of the effect of increased advertising on

3,000,000 1999 34.0 our break-even year and cumulative profits appears

3,500,000 1999 30.4 in Table 4. Increases in advertising in steps of an

additional 500,000 dollars up to $4 million,

4,000,000 1999 28.6
assuming no additional gains in market share, have
a fairly limited effect on our performance. Therefore, if there is increased industry advertising,

we are prepared to increase our advertising by as much as $1,500,000 annually. Our increase

advertising also will allow us to react to lower than expected consumer awareness, fewer

distribution outlets than planned, or less than expected consumer acceptance of LIBERIA watch.

FINANCIAL APPENDIX

TABLE 1: PRO-FORMA INCOME STATEMENT AT $50 PRICE

 

CURRENT YEAR 1997

BEFORE
RESEARCH & DEVELOPMENT RELEASE $50.00 SUGGESTED RETAIL PRICE
INVESTIGATION COSTS $250,000 $12.50 LESS RETAIL DISCOUNT (25%)
DEVELOPMENT COSTS $750,000 $37.50 PRICE TO RETAIL
DISCOUNT RATE PER YEAR 12.00% $7.50 LESS WHOLESALE DISCOUNT (20%)
$30.00 MFG SELLING PRICE

ANNUAL COSTS AND SALES 1998 1999 2000 2001 2002

PRODUCER'S PRICE PER UNIT $30.00 $30.00 $30.00 $30.00 $30.00
VAR COSTS PER UNIT $15.00 $14.00 $13.50 $13.25 $12.00
FIXED COSTS PER YEAR $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000
RETAIL SALES FORECAST [MIL $] $524 $574 $616 $672 $721
INDUSTRY SALES PER YEAR [UNITS] 10,480,000 11,480,000 12,320,000 13,440,000 14,420,000
COMPANY MARKET SHARE [UNITS] 2.00% 4.00% 6.00% 8.00% 10.00%
COMPANY  SALES PER YEAR [UNITS] 209,600 459,200 739,200 1,075,200 1,442,000

BEFORE
INCOME STATEMENT RELEASE 1998 1999 2000 2001 2002
SALES REVENUES $6,288,000 $13,776,000 $22,176,000 $32,256,000 $43,260,000
VARIABLE COSTS $3,144,000 $6,428,800 $9,979,200 $14,246,400 $17,304,000
FIXED COSTS $1,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000
PROFITS ($1,000,000) $1,144,000 $5,347,200 $10,196,800 $16,009,600 $23,956,000
CUMULATIVE PROFITS $144,000 $5,491,200 $15,688,000 $31,697,600 $55,653,600
NET PRESENT VALUE $35,309,732

TABLE 2: PRO-FORMA INCOME STATEMENT AT $45 PRICE

 

CURRENT YEAR 1997

BEFORE
RESEARCH & DEVELOPMENT RELEASE $45.00 SUGGESTED RETAIL PRICE
INVESTIGATION COSTS $250,000 $11.25 LESS RETAIL DISCOUNT (25%)
DEVELOPMENT COSTS $750,000 $33.75 PRICE TO RETAIL
DISCOUNT RATE PER YEAR 12.00% $6.75 LESS WHOLESALE DISCOUNT (20%)
$27.00 MFG SELLING PRICE

ANNUAL COSTS AND SALES 1998 1999 2000 2001 2002

PRODUCER'S PRICE PER UNIT $27.00 $27.00 $27.00 $27.00 $27.00
VAR COSTS PER UNIT $15.00 $14.00 $13.50 $13.25 $12.00
FIXED COSTS PER YEAR $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000
RETAIL SALES FORECAST [MIL $] $524 $574 $616 $672 $721
INDUSTRY SALES PER YEAR [UNITS] 10,480,000 11,480,000 12,320,000 13,440,000 14,420,000
COMPANY MARKET SHARE [UNITS] 3.00% 5.00% 8.00% 10.00% 11.00%
COMPANY  SALES PER YEAR [UNITS] 314,400 574,000 985,600 1,344,000 1,586,200

BEFORE
INCOME STATEMENT RELEASE 1998 1999 2000 2001 2002
SALES REVENUES $8,488,800 $15,498,000 $26,611,200 $36,288,000 $42,827,400
VARIABLE COSTS $4,716,000 $8,036,000 $13,305,600 $17,808,000 $19,034,400
FIXED COSTS $1,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000
PROFITS ($1,000,000) $1,772,800 $5,462,000 $11,305,600 $16,480,000 $21,793,000
CUMULATIVE PROFITS $772,800 $6,234,800 $17,540,400 $34,020,400 $55,813,400
NET PRESENT VALUE $35,823,504