Strategy and Implementation Summary
We must differentiate ourselves from the box pushers. We need to establish our business offering as a clear and viable alternative for our target markets, to the price oriented sales pitch to which they are accustomed.
From the standpoint of the office equipment (copier) industry the paradigm has been:
- Copier centric – if they're not in the market for a copier, they're not a prospect.
- Price, price, price – must save prospect money in order to gain interest.
- Box movers – selling features.
- Calling on influencers – office managers and purchasing departments.
- 30-day sales window – war with competition mainly on price.
The industry's cheese has been moved. In order to shift to a more contemporary paradigm, our marketing and sales efforts will need:
- A new attitude – we are at the beginning of a product/technology convergence.
- A new approach – total account management and control.
- A new set of behaviors – solution selling, joint prospecting, systems auditing.
- A new marketing concept – customer oriented, profit oriented, integrated efforts.
5.1 Competitive Edge
Our competitive edge is our positioning as a strategic ally with our clients, who are clients more than customers. By building a business based on long-standing relationships with satisfied clients, we simultaneously build defenses against competition. The longer the relationship stands, the more we help our clients understand what we offer them and why they should both stay with IMH, and refer us to other businesses. In close-knit communities like the Neighbor Islands, reputation is extremely important, and word-of-mouth advertising is invaluable.
5.2 Strategy Pyramid
Our main strategy will be placing emphasis on service and support, and our main tactics are networking expertise, systems training, and implementing a customer relationship management system (CRM) from e-automate. Our specific programs for networking include mailers and internal training. Specific programs for end user training include direct mail promotion, and on-site customer programs. Implementing the CRM software and training will be coordinated with the e-automate Corporation.
Our second strategy is emphasizing relationships. The tactics are marketing the company (instead of the products), more regular contacts with the customer, and increasing sales per customer. Programs for marketing the company include new sales literature, and direct mail. Programs for more regular contacts include call-backs after installation, direct mail, and sales management. Programs for increasing sales per customer include upgrade mailings and sales training.
5.3 Value Proposition
IMH offers its clients peace-of-mind by being a vendor who acts as a strategic ally, and delivers quality products backed by premium service and support, at a premium price.
5.4 Sales Strategy
We will sell the company and its ability to act as an ally. We will sell IMH, and the reputation of the industry-leading manufacturers it represents.
We will sell our service and support. The hardware is like the razor, and the support, service, software, and training, are the razor blades. We need to serve our customers with total solutions, and not just product features. The products are a means to arriving at end solutions.
The Yearly Total Sales chart summarizes our conservative sales forecast. We expect sales to increase from $3.1 million in the first year to more than $4 million in the third year of this plan.
5.4.1 Sales Forecast
The important elements of the sales forecast are shown in the following Chart, and Table 5.4.1. Non-hardware sales increase to almost $2 million total in the third year, or 47% of total sales.
The following table lists important program milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation. The most important programs are the sales and marketing programs listed in detail in the previous topics.
5.6 Marketing Strategy
The marketing strategy is the core of our main strategy:
- Emphasize service and support
- Build a relationship business
- Develop specific programs for each target market segment:
- SOHO - cost effective service/product "turn key" packages, wireless LAN systems
- Medium to Large Businesses - customer recovery incentives, uptime guarantees, workflow/process surveys
- Corporate Hawai'i - workflow/process surveys, uptime guarantees, LAN installation and administration
- Government Offices - workflow/process surveys, uptime guarantees, GSA rates and incentives
5.6.1 Sales Programs
Specific sales programs will be included in our new Marketing Plan, and will be included in this Business Plan as they are finalized. In general however, our sales programs will be centered around conducting workflow and information distribution analyses, direct mail, and placing an emphasis on the benefits which IMH and its manufacturers will be able to offer its clients through "total care" service and support.
5.6.2 Positioning Statement
For businesses who want to be sure their information distribution systems are always working reliably, IMH is a vendor and trusted strategic ally who makes certain their systems work, their people are trained, and their down time is minimal. Unlike the product/price oriented vendors, it knows the customer and goes to their site when needed, and offers proactive support, service, training, and installation.
5.6.3 Pricing Strategy
We must charge appropriately for the high-end, high-quality service and support we offer. Our revenue structure has to match our cost structure, so the salaries we pay to assure good service and support must be balanced by the revenue we charge.
We cannot build the service and support revenue into the price of products. The market can't bear the higher prices and the buyer feels ill-used when they see a similar product priced lower with the competition. Despite the logic behind this, the market doesn't support this concept.
5.6.4 Promotion Strategy
We will employ the following general promotional strategies for the various market segments:
- SOHO: We will depend on periodic local newspaper advertising, to reach new buyers in this segment. We will also utilize direct mail and and the resources of the local Chambers of Commerce and other affinity groups to reach this segment. The message will emphasize service first, and "complete product and service packaging" as a secondary theme.
- Medium to Large Businesses: Direct face-to-face contact (direct sales) will continue to be our primary strategy for this market segment. Direct selling will be supplemented by periodic promotional direct mailings and personalized system upgrade opportunities.
- Corporate Hawai'i: This segment will be handled by direct contact and relationship building only. We will make personal presentations to the decision makers in this group, and stress our service and technical benefits and advantages.
- Government Offices: We will utilize a combination of direct mail and face-to-face promotional strategies with this segment, and the message will be the local service and technical advantages of IMH. We will produce an attractive RFQ/RFP response package to accompany our submissions.
5.6.5 Distribution Strategy
IMH is first and foremost a direct sales organization, meaning that we must present our services and products directly to the majority of our customers and clients. Having said that, for our planned penetration into the SOHO market, we will need to establish a presence as a Value-Added Reseller (VAR) for certain low-end product lines which don't carry the margins necessary to sustain the costs of direct sales. We will plan our new locations accordingly.
5.6.6 Marketing Programs
As we work to complete this Business Plan, we are simultaneously working on our Marketing Plan. As you can see from the milestones table, we anticipate completion of our detailed Marketing Plan by 9/30/01, or one month from start-up. Because we are acquiring an on-going business, the shift to our vision of customer- and market-focused strategies will not happen overnight. We must plan this shift carefully, and implement it judiciously, so as not to disrupt our immediate operations. We have budgeted for, and will utilize, marketing advisors and consultants (including our manufacturers) in the design of our Marketing Plan.
5.7 Strategic Alliances
Our alliances with our manufacturers, and especially Canon USA, will be the most pivotal to our success. We will remain a Canon Authorized Dealer, and continue to enjoy all of the benefits of this long-standing relationship.
We will form alliances with other locally-based VARs and computer network providers to enable us to provide complete turnkey packages for our clients. These relationships will be included in our Marketing Plan.