KnaelHaed ASPware, Inc.
Strategy and Implementation Summary
KnaelHaed ASPware has clearly defined the target market and differentiated itself by offering a unique solution to the industry today. KnaelHaed ASPware’s sales and marketing strategy will be a combination of targeted mass marketing techniques as well as a focused direct sales team approach. Reasonable sales targets have been established with an implementation plan designed to ensure the goals set forth below are achieved.
5.1 Strategy Pyramid
For placing emphasis on service and support, KnaelHaed ASPware’s main tactics are networking expertise, excellent training, and developing own network administrative system.
Our second strategy is emphasizing relationships. The tactics are marketing the company (instead of the products and services) — the vision of the company — to subcontractors and builders to use the service.
5.2 Value Proposition
Software delivered as a service improves the customer experience by making a product easier to use for a customer and evolving it as quickly as possible to meet the customer’s needs. Software delivered as a service enables that and packaged software does not.
Customers are tired of buying expensive software products with large up-front licenses; expensive hardware to purchase, manage, and maintain; followed by expensive professional services to get the product up and running. From this backdrop, it is easy to see why reducing complexity and simplifying technology for customers is a big driver to more rapid adoption of products. It is also easy to see why reducing complexity for the customer also helps reduce complexity for the vendor, lowering the friction to sell and deliver its product. This means a more capital efficient business model, one which would hopefully scale much quicker and cost less to build product, sell, and support customers.
For the software vendor, it makes it:
- Easier to sell
- Shorter sales cycle-do not have to test extensively in a customer’s environment.
- Lends itself to telesales, can demo over phone and Web, do not need a huge sales infrastructure to close deals (just need quote bearing reps without a huge staff of sales engineers and professional services guys to get the job done).
- Not a capital expense, usually sold as monthly or annual subscription which can many times be taken out of business budget as opposed to IT budget.
- Easier to install
- No messy installation process, long testing process, or even waiting for hardware to be delivered to customer.
- Can leave a customer and simply point them to a URL, train them over the phone, and get them up and running.
- All of this means that the business can scale rapidly.
- Cheaper to support
- Browser-based delivery and richer client interfaces like DHTML make it easy to use for the customer=less training=less customer support costs.
- Easier to integrate
- Standard APIs make it easier for software delivered as a service to integrate disparate systems.
- Once again, reduces costs to deliver product to customers and also removes obstacles to getting customers.
- Cheaper to build
- Versus a few years ago, bandwidth, storage, servers, and software are much cheaper.
- Think Linux, Intel boxes, cheap bandwidth, commodity software stacks, and smarter entrepreneurs changing the economics of building and delivering software as a service.
- The economics speak for themselves.
5.3 Marketing Strategy
The first strategic move for KnaelHaed ASPware must be to create its website and identity. An amount of $5,000 has been set aside for this image boosting purpose. The site must have all the features running as planned to maintain the credibility of the business.
It is essential that care be taken to cause the most important search engines to find KnaelHaed ASPware’s website using a variety of keywords. While the above work is being done, KnaelHaed ASPware must immediately take steps to enter the home construction industry. With the largest growth in the segment, home construction market is surely ready to take advantage of the system and services provided by KnaelHaed ASPware. From there, the commercial and institutional segment will follow.
5.3.1 Pricing Strategy
KnaelHaed ASPware’s pricing strategy will be to enter the market with our products and services set much lower than the competitors’ current offerings. Membership fees for subcontractors and builders are $50 per month, and instead of charging $5,000 per 3D model, KnaelHaed ASPware offer $1,000 for a customized 3D model job.
5.3.2 Marketing Programs
KnaelHaed ASPware’s marketing program will position the company as both an ASP and a service hub to the construction industry in general. The service will be marketed to builders and subcontractors that wish to outsource some of their work to be more cost efficient. Visitors to KnaelHaed ASPware’s website will first be “lured” to try the service for free by filling in the main info of who they are, what company they are with, how to get in touch with them, and so on. There will be limitations on KnaelHaed’s free service, and these visitors will, at some point, desire to become members in order to enjoy the benefits of the full service.
5.3.3 Positioning Statement
KnaelHaed ASPware is a “referral plus” service, meaning that the company acts as a hub for builders and subcontractors to interact and collaborate. In the meantime, KnaelHaed ASPware itself is a producing entity, where it offers various products to complement the relationships of the clients.
5.4 Sales Strategy
KnaelHaed ASPware is targeting both home and commercial segments of the construction industry that currently do not have enough resources and networking capabilities to better implement their projects. Sales to these market segments will be conducted through strategic partnership with local subcontractors in all counties of the US.
KnaelHaed will develop a secondary market segment comprised of large corporate users for more premium services following the success of the initial launch.
5.4.1 Sales Forecast
The table below outlines the sales forecast and cost of goods sold. The forecast is based on reasonable sales projections within this very large market.
| Sales Forecast | |||
| Year 1 | Year 2 | Year 3 | |
| Unit Sales | |||
| Paid Membership | 37,400 | 40,392 | 43,623 |
| Customized Model | 1,129 | 1,200 | 1,400 |
| Advertisement | 67,300 | 70,900 | 72,000 |
| Total Unit Sales | 105,829 | 112,492 | 117,023 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Paid Membership | $50.00 | $50.00 | $50.00 |
| Customized Model | $1,000.00 | $1,000.00 | $1,000.00 |
| Advertisement | $1.32 | $1.32 | $1.32 |
| Sales | |||
| Paid Membership | $1,870,000 | $2,019,600 | $2,181,150 |
| Customized Model | $1,129,000 | $1,200,000 | $1,400,000 |
| Advertisement | $88,836 | $93,588 | $95,040 |
| Total Sales | $3,087,836 | $3,313,188 | $3,676,190 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Paid Membership | $10.00 | $10.00 | $10.00 |
| Customized Model | $200.00 | $600.00 | $600.00 |
| Advertisement | $0.26 | $0.26 | $0.26 |
| Direct Cost of Sales | |||
| Paid Membership | $374,000 | $403,920 | $436,230 |
| Customized Model | $225,800 | $720,000 | $840,000 |
| Advertisement | $17,767 | $18,718 | $19,008 |
| Subtotal Direct Cost of Sales | $617,567 | $1,142,638 | $1,295,238 |
5.5 Strategic Alliances
KnaelHaed ASPware will establish strategic partnerships with network service and infrastructure providers that can provide high performance access to network facilities. The focus of KnaelHaed ASPware’s strategic alliances is on start-up software houses that are currently targeting the industry, as well as offshore companies specializing in outsourcing call centers and knowledge workers. These offshore companies to be named later.
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