MARKETING PLAN

Fenway

Mario Castro

Key Question• Can Connect market a low-price tablet to a low-middle class in Brazil

while being profitable?

Answer• Yes, Connect cannot only market a tablet for over 100 million

people in its target market (low-middle class in Brazil), but also recover its initial investment within 2 to 3 years.

A basic low-cost tablet that allows access to internet and use of electronic standard tools for an affordable price

It is a pure product company, assistance will be outsourced by partners in the country. Equipment will be produced by partners in China, India and Indonesia.Consists of a large scale economy to generate profits.

Our main target is Brazil. In the subsequent years, emerging countries such as India, Indonesia, South Africa, Mexico and other emerging countries will be considered.

Segment - Low-middle income class, ages 18 to 40; In the long-term, we will target educational institutions to extend the possibility to access Internet information

Price is $99.99 USD for the Connect Tablet for orders less than 1000; $89.99 for larger orders. Sales price is$149.99

Offer

Pure Product Production

Target Countries

Target

Price

Executive Summary

Executive Summary

First Year Sales Units

Revenues and Profits

First Year

Second Year

Third Year

Marketing Budget

Initial Investment

Our objective for the first year is to sell 1.13 million tablets.

Revenues will be $113 million and it will generate 13% net profit.

First year revenue will be $113 million with a net profit of $14 million.

For the second year our revenues will be $150 million with $19 million net income.

Third year revenue $200 million with $26 million net income.

Our marketing budget will be $8 million. We will start our business in Brazil; in the third year we will go to Mexico, Indonesia or South Africa.

Connect will need an initial investment of $10 million to pay marketing campaign and operations.

Customer Analysis – Persona and Purchase Process

Word of Mouth

Evaluation

Accessories

Price and Brand

App Store Access

Space and Speed

Processor

Source: Castro, Mario research in Best Buy, Cambridge, MA, USA, 2013

Persona: Low-middle class, male or female, between 18 to 40 years old and students (30%).

JoséMaria

For anyone that wants to learn, be informed, entertained and connected to the world, those who feel secluded and have no tools to join the information era, our accessible and indispensable, low-cost Connect tablet is the answer to your problems; it will allow you to socialize, network, play, learn and be Connected to the universe.

By selecting our Connect tablet you will experience technology at your fingertips, opening the possibility to be innovative, modern, informed and sociable. With the world’s information at your disposal, your life will change completely.

No other company will offer you an easier or more affordable way to step into the 21st Century: the virtual era.

Value Proposition

Brazil - PESTEL Analysis

PESTEL

EconomicBrazil’s GDP is growing 5% on

average 1

An open economyDemographicBrazil has 200

million people, 52% are middle

class3

Social and Cultural

Brazilians amply accept imported

technology products

Only 10% of the population is

illiterate

TechnologicalQuickly improving

in Brazil, population positively

responds to the growth

Political/LegalBureaucracy

makes process very slow

IndustryPeople are buying tablets and smart

phonesSecond highest in internet use with high social media

use

Source: 1. http://en.wikipedia.org/wiki/Demographics_of_Brazil 2. http://www.languageconnect.net 3. http://www.brasil.gov.br/para/press/press-releases/november-1/brazilian-middle-class-reaches-52-of-total-population/br_model1?set_language=en

Brazil in Social Media

SWOT ANALYSIS

Strengths* Connect is a low-cost tablet available in the market

* All basic accessories for the lowest price * Excellent sales staff with strong knowledge of the product

* More campaigns than any other competitor* Aggressive Media Campaign (TV, Radio, Magazines and

Newspapers)* Relational oriented company which fits Brazil profile

Weaknesses* Not an established brand

* People may not trust an unknown brand even if it is available at a low cost

* No friend recommendations at the beginning* Weak relationship with suppliers and vendors

* Low demand for the brand

Threats* Closed bureaucracy in Brazil to enter the market

* Insecure country creates losses (stealing)* Financial pressure for results* Low demand for the brand

* Easy to enter into the market

Opportunities* Fast growing economy

* Low and low-middle class improving and consuming* Untapped market

* No competitor at this price in this market* More than 100 million people within our target

* No other competitor takes such an aggressive media campaign in stores

SWOT

Target - Emerging Markets for Tablet

• People are buying more tablets at a cheaper price. 2,5

• Emerging markets have a higher growth

rate than mature markets. 6

Source:2. http://www.the-digital-reader.com/2012/01/27/kindle-fire-has-dethroned-samsung-galaxy-tab-as-most-popular-android-tablet/#.UTizlhxm_NM5.http://searchengineland.com/3-x-major-tablet-smartphone-seo-opportunities-for-multinational-websites-148967 6. NPD Display/Search Q4’ 11 Tablet Quaterly

Tablet Sales

In 2010, Brazil was the 12th ranking country for Ipad sales in Ebay.8

Brazil represented 3 % of total Ebay Ipad demand; world sales were 60 million tablets in 2011. Brazil should have sold at least 1,800,000 tablets.8

Souce: 4. NPD, Morgan Stanley Research, 2011 7. Ebay, Annual Report 2011 8. http://news.cnet.com/8301-13579_3-20049011-37.html

When comparing the first 5 years of unit sales for smart phones, tablets, notebooks, mp3, e-readers and gaming devices, tablets sold more. 4

Industry Analysis2010 2011 2012E 2013E 2014E

Growth 333% 250% 33% 25%

Profitability 60% 50% 45% 40% 30%

Global Units 18 60 150 200 250

Dollars 42B 90B 100B 110B

Brazil Units 600K 1,8 6E 10E 14E

Source: 10. http://www.itproportal.com/2012/08/07/olympic-mobile-searches-reach-new-records-google-says/8. http://news.cnet.com/8301-13579_3-20049011-37.html

Customer Analysis

• Low-middle class is growing in purchase power and need to interact socially.3

• Emerging markets are getting more demanding.3

• Price is very important during the decision-making process when buying a tablet; Internet access is available to most customers.3

80%

• Customer’s priority is Internet access: browsing, reading, emails.3

Source: 3. http://www.technobuffalo.com/2011/12/07/the-fire-to-kindle-ipad-sales/

Competitive Analysis – KSF Framework

Factors Connect Apple Acer Google Nexus Amazon Kindle Samsung Asus Importance to customers

Product Connect Mini Ipad Acer Nexus Kindle Fire Galaxy Asus

Price 150 400 250 300 250 350 250 5

Camera 4 5 3 4 4 5 5 4

Space 8GB 5 8GB 8GB 8GB 8GB 8GB 5

Speed 4 5 3 4 4 5 4 4

Screen Size 7” 7” 7” 7” 7” 7” 7” 4

Distribution Internet/Stores

Internet/Stores Stores Internet/Stores Internet/Stores Internet/Stores Stores 3

Reliability NA 5 3 4 4 5 4 4

Expertise 3 3 3 4 3 5 3 3

Stability 3 3 3 3 3 3 3 3

Reputation 3 3 2 5 4 5 3 3

Location USA 3 China USA USA Japan China 3

Credit Policies Financing 5 Financing Financing Financing 5

Advertising 5 3 3 5 5 5 3 4

Market Share 0 50 2 5 5 35 3

Score from 1 to 5, 1 the worst, 5 the best, 3 neuter

Source: Castro, Mario research in Best Buy, Cambridge, MA, USA, 2013

Marketing Objectives – Sales Forecast for the First Year

Total units: 1,130,000Total revenues: $113 million (US Dollars)Total Market Units: 14 MillionMarket Share: 8%

We expect to enlarge Brazil’s market for tablets in an untapped market (low-middle class).

Fiscal Year Begins jan/14

12-month Sales Forecast

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Annual TotalsTablet Connect units 15,000 40,000 50,000 60,000 75,000 85,000 90,000 110,000 120,000 135,000 150,000 200,000 1.130.000Sale price @ unit 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 99,99 Market share unit 1,39 3,71 4,64 5,57 6,96 7,89 8,36 10,21 11,14 12,54 13,93 9,29 8,07Revenues 1.499.850 3.999.600 4.999.500 5.999.400 7.499.250 8.499.150 8.999.100 10.998.900 11.998.800 13.498.650 14.998.500 19.998.000 112.988.700Total market 1.076.923 1.076.923 1.076.923 1.076.923 1.076.923 1.076.923 1.076.923 1.076.923 1.076.923 1.076.923 1.076.923 2.154.000 14.000.154

Marketing Budget

Promotional Material Public Relations Sales Prizes Advertising Research Suppliers Promotion Stores Campaign Newspaper Magazine

Totals by Month, Quarter & Year-

to-Date

Week of Proj Actual Proj Actual Proj Actual Proj Actual Proj Actual Proj Actual Proj Actual Proj Actual Proj Actual Proj Actual Proj

Jan Total $50.000 $0 $10.000 $0 $0 $0 $1.400.000 $0 $35.000 $0 $80.000 $0 $50.000 $0 $0 $0 $200.000 $0 $400.000 $0 $2.225.000

Feb Total $40.000 $0 $10.000 $0 $10.000 $0 $400.000 $0 $10.000 $0 $10.000 $0 $20.000 $0 $50.000 $0 $100.000 $0 $200.000 $0 $850.000

Mar Total $40.000 $0 $10.000 $0 $10.000 $0 $100.000 $0 $10.000 $0 $10.000 $0 $20.000 $0 $50.000 $0 $50.000 $0 $200.000 $0 $500.000

Total 1Q $130.000 $0 $30.000 $0 $20.000 $0 $1.900.000 $0 $55.000 $0 $100.000 $0 $90.000 $0 $100.000 $0 $350.000 $0 $800.000 $0 $3.575.000

Apr Total $40.000 $0 $10.000 $0 $10.000 $0 $200.000 $0 $10.000 $0 $10.000 $0 $20.000 $0 $50.000 $0 $50.000 $0 $200.000 $0 $600.000

May Total $40.000 $0 $10.000 $0 $10.000 $0 $100.000 $0 $10.000 $0 $10.000 $0 $20.000 $0 $50.000 $0 $50.000 $0 $100.000 $0 $400.000

Jun Total $40.000 $0 $10.000 $0 $10.000 $0 $100.000 $0 $10.000 $0 $10.000 $0 $20.000 $0 $50.000 $0 $50.000 $0 $100.000 $0 $400.000

Total 2Q $120.000 $0 $30.000 $0 $30.000 $0 $400.000 $0 $30.000 $0 $30.000 $0 $60.000 $0 $150.000 $0 $150.000 $0 $400.000 $0 $1.400.000

July Total $40.000 $0 $10.000 $0 $10.000 $0 $100.000 $0 $0 $0 $10.000 $0 $20.000 $0 $50.000 $0 $50.000 $0 $100.000 $0 $390.000

Aug Total $40.000 $0 $10.000 $0 $10.000 $0 $100.000 $0 $0 $0 $10.000 $0 $20.000 $0 $50.000 $0 $50.000 $0 $100.000 $0 $390.000

Sept Total $40.000 $0 $10.000 $0 $10.000 $0 $100.000 $0 $0 $0 $10.000 $0 $20.000 $0 $50.000 $0 $50.000 $0 $100.000 $0 $390.000

Total 3Q $120.000 $0 $30.000 $0 $30.000 $0 $300.000 $0 $0 $0 $30.000 $0 $60.000 $0 $150.000 $0 $150.000 $0 $300.000 $0 $1.170.000

Oct Total $40.000 $0 $10.000 $0 $10.000 $0 $200.000 $0 $0 $0 $10.000 $0 $20.000 $0 $50.000 $0 $50.000 $0 $100.000 $0 $490.000

Nov Total $40.000 $0 $10.000 $0 $10.000 $0 $300.000 $0 $0 $0 $10.000 $0 $20.000 $0 $50.000 $0 $50.000 $0 $100.000 $0 $590.000

Dec Total $90.000 $0 $10.000 $0 $20.000 $0 $500.000 $0 $0 $0 $30.000 $0 $20.000 $0 $150.000 $0 $50.000 $0 $100.000 $0 $970.000

Total 4Q $170.000 $0 $30.000 $0 $40.000 $0 $1.000.000 $0 $0 $0 $50.000 $0 $60.000 $0 $250.000 $0 $150.000 $0 $300.000 $0 $2.050.000

Total 2011 $540.000 $0 $120.000 $0 $120.000 $0 $3.600.000 $0 $85.000 $0 $210.000 $0 $270.000 $0 $650.000 $0 $800.000 $0 $1.800.000 $0 $8.055.000

Marketing Budget - First Year: $8 million Second Year: $9 million Third Year: $10 million

Implementation Plan

Jul Aug

Sept Oct

Nov Dec

Jan Feb Mar Apr Mai Jun Jul Aug Sept Oct Nov Dec

Selling at Sao PauloSelling at Rio de Janeiro

Hire People

Training

Research

Suppliers Contact

Stores Campaign

Magazines

News PapersPromotions

Marketing Strategy – 4P’s and Brand

• Product: Tablet • Price

• Promotion• Place

Internet access

CameraAndroid system8GB, 7” screen

Retail Price$150.00

Vendors Price$99.99

Larger Orders$89,99

OnlineTV, Radio, Magazine,

News PaperStore

Campaigns

Brazil Department

StoresSmall stores

Online

BRANDThe word connect, remember what we

want say, also the three people connected also reinforce our VALUE

PROPOSITION

Cheap but reliable tablet brand

Internet access

Connect you to

the world

Cheap

It works

Marketing Communications

Value Opportunity Discovery: Creating the Market Analysis• Customer research• Market segmentation and selection• Capabilities and experience scope

• Primary research: • Focus groups• 1000 surveys (both physically and online)• Social media (for listening and convening)• DILO for 4 days

• Secondary Research:

• Social Media• Basic research (literature and website)

In order to better inform ourselves about our client, we need to directly listen to the customer’s voice and have a better understanding of our persona or personas.

The tools we have chosen will allow us the insight into the lives of our customers, it will give us a wide range of samples, most of these methods are inexpensive to implement, and we can cover a large range of issues we need to address: price willing to pay, need and uses for the product, etc.

For example…

Social Media Research

• Listening It will be important to listen to our potential customers that are already active in the internet. This will help us conclude how many people are using internet and observe customer perceptions of our product.

• ConveningIn the same social media networks where we can observe and listen, we can actively convene a chat group to create important focus groups for valuable information about our potential customers.

• Gender, Age, Income, Level of Schooling

• Do you currently go to school? Yes/No

• At which level?

• Do you own a tablet? Yes/No

• If you had a tablet, what would you use it for? – Entertainment (Music, TV shows, Games)

– Connecting with other people (Social Media, Facebook, Twitter)

– Education (Reading, Excel, Word, PowerPoint)

– Work (Excel, Word, PowerPoint)

– Other (Please specify)

• Do you have access to internet? Yes/No

• How much would you be willing to pay for a tablet?– $60 - $80 USD

– $90 - $110 USD

– $120 - $140 USD

• Would you buy a tablet for $99.99 USD?

• Where would you buy a tablet?– Online

– In-Store

– Through a friend

Surveys

Sales Enablement

Sales People

Action Key Accounts Specialist Promoter

Promotional MaterialFocus on

profitability and our media campaign

Focus on profitability and our media campaign, as well as, our incentive

stores campaigns

Sales PitchProfitability and a media campaign will help with the

demand

Profitability and a media campaign that will help with the demand. Also

the relationship through focused campaigns

Training We will train sales people to be able to train store’s sales employees

Sales Championship Top 10 sales people will be given a prize each month

Bonus At the end of 6 months, a bonus based on units versus profitability will be paid to our top sales people

Stores Actions

Action Hyper Chains Super ChainsMedium and

Small

Pretend Customer

A pretend customer will approach a sales person and ask for a cheap tablet, if the sales person offers

a Connect tablet, sales person will receive $50, if he does not say Connect, the pretend customer will tell him he lost $50 and will explain the campaign

of offering Connect for random $50.

Sales Championship Championship in top stores

for the three top sales person will receive, $200, $150 and

$100.

Trainings Top StoresTop stores will receive training so the sales

peoplein the stores will be able to explain our product and our sales people will get closer to

sales team within top stores.

Coffee-BreaksSometimes our sales team and free lance promoters will offer a coffee break to give some trainings and relate to sales people.

Goals with an extra discount

Over a certain amount of purchase an extra discount

will be offered.

Budget and Pro Forma Income Statement

Manufacturing cost

Direct Material → 0

Direct Labor → $24/ unit

How much will it cost?

Budget: $ 500,000

Promotional Plan Cost

Budget: $ 200,000

→ Social Media

→ Build consumer confidence and trust

→ Cultivate new markets

Risk Analysis

→ Preparing for events such as equipment or technology failure, theft, staff sickness, or natural disasters

→ Planning for changes in your environment, such as new competitors coming into the market, or changes to government policy.

Income Statement for Break Even

Sales:

→ Gross Sales : $1,099,890

→ Less COGS: ($264,000)

Expenses:

→ $13,359

Net Profit: $822,531 /SHIFT

Breakeven sales

Fixed Cost: $5,500

Variable Cost: $24

Selling price: $99.99

BREAK EVEN: 73 UNITS/SHIFT

112.988.700,00 Total Revenues

28.247.175,00 COGS 25%

84.741.525,00 EBITDA

11.298.870,00 Operational Costs

1.000.000,00 Interest

56.494.350,00 Taxes 50%

1.694.830,50 Amortization and Depreciation 3%

14.253.474,50 Net Profit

Income Statement

Questions