Marketing Plan 2008

1. HISTORYSolar-Max has a long history of serving Pakistani customer base with a variety of hi-tech product lines including transformers, motors and circuit breakers. With a dynamic leadership and customer focused business approach, the company witnessed phenomenal growth in its business in each successive years of its operation. This successful operation encouraged the management to venture into new yet related avenues of technology based products. This led to various visits abroad to search for manufacturers of power equipments and components.

On one such visit to Beijing Chamber of Commerce, Solar-Max management board had the opportunity to interact with China’s Xing-Fu Ltd. Manufacturers of low-cost solar panels. In their interaction, both Solar-Max and Xing-Fu directors could find the common grounds where they could join hands and bring a viable product that could result in win-win situation for both partners.

As Solar-Max management was inspired by the stability of the Xing-Fu’s manufacturing operations in China, equally inspired was Xing-Fu’s management about Solar-Max’s dynamic and visionary leadership and the vast business opportunity in Pakistani market. This synergy ultimately resulted in the joint business agreement in Oct 2007 with commitment that both companies will work together to bring a viable product in Pakistani market inline with technical expertise of both companies.

Solar-Max having expertise in the Electric Products marketing and sale contacted its other partners in the region including Power GEN Pvt. Ltd. Manufacturers of large scale generators. Both agreed on developing a small scale solar powered UPS for home based and small business customers.

Thus the joint consortium of Solar-Max, Xing-Fu and Power GEN signed a memorandum of understanding to jointly work toward product manufacturing and its marketing, starting with the market feasibility study to identify product line, its pricing and after sale support services. 4.1. MARKET CONDITIONSMarket nowadays is influenced by high economic reduction, electricity outage for longer hours than usual, inflation, and demand of different products is so high that it gets unable for businesses and companies to provide according to the demand and there supply chain and power of supply has decreased. The generators currently have major market share, but UPS now are gaining grounds. We compete by bringing out solar energy powered UPS so the cost of either electricity usage or oil prices is not of any concern with our product. It is free of these overhead costs. So I discuss some main aspects of electric powered UPS…

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Marketing Plan 2008

4.2. PRICE COMPETITIONThe technology used in UPS has been existent for around 40 years. Thus, problems of product differentiation have occurred leading to price pressure among the competitors. In the fight to lead competition, prices of UPS products need to be reduced. The extent of competition prevailing in the market is in terms of:

Pricing

Features of the product

Availability

Support for the UPS operations after sale.

To match competitors in relation to the above parameters, vendors are focusing on newer offerings to satisfy customers’ needs and for better market penetration.

The existing technology in UPS is being replaced by many alternative technologies such as the flywheel and digital signal processors. Solar UPS systems are also gaining in significance. The UPS product on the whole is classified into hardware, software, and accessories. If only the vendors satisfy the requirements in all the three segments, the product can succeed amidst the stiff competition prevailing in the market. It is not necessary that products coming in competition specifically the newly developed products should be cheaper than the existing market leaders. If the new product is a bit expensive than the existing others, it should be able to justify its pricing strategy in terms of features, availability and customer support.

4.3. ECONOMIC INFLUENCEThe market nowadays is under high economic pressure of inflation, high commodity rates, less income power of people, and more over, the electricity outage hours have disturbed the public. Electricity tax rates have been increased to 75% and also the issue of banks financing schemes getting closed is making the market and the stock exchange vulnerable to more harm as well as harming the economies of sale.

2. MARKET SUMMARYSolar-Max focuses on home users and small businesses in the local market, with special focus on the high end home users of UPS due to severe electricity outage rate and the small businesses with daily on goings and requirements. We also make use of the concept of high rates of petroleum by which users are being affected. We have broken our market into group according to standard classifications used by market research companies: home users and small businesses.

We know our home users tend to be the ones that have an average family size of 5-7 people. They want high end UPS systems that can provide either online or offline supports with acquiring value addition of services to entertain them 24/7.

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Marketing Plan 2008

The small business users will improve their needs by installing our hi-tech low running cost charging UPS, and are more likely to pay for it.

3. MARKET DEMOGRAPHICSThe small businesses are incredulously growing due to different reasons, either the entrepreneurship is increasing, or the competition level is rising. Nation wide, the small businesses either shops, stores or small offices that require small scale use of UPS are growing largely. Our estimate in this plan for the home and small businesses users in market service area is based on the analysis done by the market survey through a questionnaire.

6.1. HOME USERS: In home use, several types of usage come in context and the weather condition is also important in discussing it. Summers are about to end and winter is on its way to start. Our extensive market plan informs about the need of customers with respect to coming season and in the next 6 months when again the season will change to summers. Every one will require a high featured, high quality UPS that can serve for maximum hours per day and is maintained at a very low price. Fans, tube lights, bulbs, Splits and AC’s etc that are much necessary should be in working condition even though the electricity outage is for hours and hours long.

4. MARKET NEEDSOur target customers for home and small business use are as sane as any one else. They will rely on the best quality producers, best features providers and best availability of their desired products with in their income range. UPS, technically becoming a strong necessity from being just a commodity in everyday lives should be easy to use, acquiring less maintenance and long lasting. It should regulate voltage levels to provide feasibility so that short circuiting does not take place.

Our product provides online and offline services, gives out additional warranty apart from other UPS available in the market, and also regulates the voltage levels better than any other UPS. It saves the electric charging cost of battery and solar cells technology makes it easy to maintain the UPS easily.

5. MARKET TRENDSThe market is directing towards buying of more and more UPS as electricity outage hours are increasing and more and more people are coming into the UPS manufacturing and supplying businesses. Also, people even when cannot afford generators are trying to buy them too, which are much costly when used in small businesses. UPS are gaining grounds in small businesses and home users segments. Usually the normal UPS provides enough capacity for households and small businesses as it is gaining grounds in these segments. Costumers rely more on the technology providers apart from their own expertise. They can choose to deal

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Marketing Plan 2008

with us. We can provide much reliable customer support and quality UPS. Generally, UPS market trends are:

8.1. HARDWARE MAKES THE CORE BODY OF THE UPS:A UPS may provide clean and steady power seamlessly in order to prevent equipment damage apart from supplying reliable back-up power in case of a black-out. This necessitates an online or a line interactive UPS for supplying useful power during power fluctuations.

8.2. SCALABILITY:Scalability is an important requirement of any UPS hardware. Scalability refers to the upgrade of the UPS systems’ power rating wherein it does not require hardware to be installed when the load increases.

A few hardware models are available, which can support multiple voltages.

8.3. COMPOSITION OF HARDWARE:Hardware comprises various topologies, shapes, sizes, its scalability, and redundancy factors.

The various topologies available are:

Standby/Offline: Standby UPS systems do not regulate the incoming power. In times of change in frequency or voltage, they become active and run the system.

Online: They continuously regulate and produce clean AC power. They save battery time by compensating for under- and over-voltage without using a battery.

Line Interactive Systems: In times of over- and under-voltage, they regulate the voltage by increasing or decreasing it depending on the necessity.

The shapes of UPS systems vary as:

Desktop models

Rack mount

Tower

The variation in sizes of UPS devices is in accordance with the number of components connected to the UPS system. Sizes vary as:

One to one

Clustered protection

Integrated protection

Facility-wide protection

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Redundancy and scalability are two major concepts, which have gained much significance in designing UPS hardware. A redundant UPS unit is one, which is made up of two or more UPS units. If one of the units fails, the other can manage to carry out a safe shutdown process. Scalability refers to upgrading the power rating of a UPS system with firmware. This avoids the problem of hardware replacement.

8.4. SOFTWARE TO PROVIDE EARLY SIGNS OF POWER FLUCTUATIONS

Software devices are employed in all the UPS systems to provide early signs of power outages to carry out a safe shutdown process. They have the ability to monitor network power conditions in real time. They identify problems even before they occur, thereby precluding the possibility of sudden interruption of power. They help in early detection in order to take up preventive measures. They are also useful in testing the reliability and integrity of the battery themselves.

Advanced features that software provides in UPS are:

Security features: In case of any unauthorized computer usage, this feature powers on all the devices

Identical support for all servers: This facility is useful when the same software needs to be applied in different servers

Managing notification features: In case of a network power problem, the software should be capable of notifying the users about the problem as well as informing the administrator

Environmental monitoring: There are a few software brands that are capable enough to monitor temperature, humidity, and smoke that could cause any unforeseen shutdown.

8.5. ACCESSORIES TO CARRY OUT THE ADDITIONAL FUNCTIONS FOR POWER PROTECTION

The industrial infrastructure requires power for continuous operations. In providing continuous power, it is required to apply all the state-of-the-art equipment apart from redundant UPS systems. Accessories are required to provide this benefit in maintaining continuous power.

8.6. STATIC TRANSFER SWITCH FOR REDUNDANCY AND HIGH AVAILABILITY OF NETWORK

A static transfer switch switches between two independent AC sources for an electronic equipment to carry out an uninterrupted operation. It provides a faster load transfer ensuring uninterrupted operations for sensitive electronic equipment. Instantaneous load transfer is provided to the required input source.

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Marketing Plan 2008

Digital static transfer switches are gaining much importance in the recent period. They can monitor two or three connected sources, and the load is automatically transferred to the qualified source when there is a degradation or total failure of power. In times of power failure, the switches make use of the alternate source and get back to primary source when the power returns to the normal range.

8.7. DIGITAL STATIC TRANSFER SWITCHES:They have the capacity to monitor two or three connected sources and the load is automatically transferred to the qualified source, in times of degradation or total failure of the entire source. They are gaining more importance in the recent period. They move to alternative source in times of power failure and get back to primary when the power gets back to its qualifying range.

8.8. POWER DISTRIBUTION UNIT:A power distribution unit has an electrical input and several outputs, which are electrical, as well. They can enable multiple devices in providing power. Their advantages include protection of UPS equipment features and configuration features. They can be used in circuit breakers and transient voltage surge suppression.

8.9. CONCLUSIONPower reliability in critical data processing and operations center requires solutions to detect, decide, and react in real time. Hence, the components that are attached to a device in protection against power outages need to be configured to meet all forms of outages. The major requirements of a UPS are simple installation and configuration, superior performance, rack mount versions to save space, and affordable price. Thus effective functioning of the UPS system can be brought about only through bundling with the proper peripherals and accessories.

6. MARKET GROWTHOver all we see a starting market of 67% in UPS customers in the home and small businesses users. This is just a simple calculation on the basis of our geographic and customer feed back. We see a more interesting market opportunity in expanding our target market to people who can start using solar powered UPS 24 hours a day to fulfill their electricity requirements and not use the expensive electricity. This way they can accommodate their electricity bills to just maintaining the solar powered UPS.

According to our survey almost 67% people are using electric UPS and almost 29% want to acquire a UPS either at their homes or in their businesses. The demand for UPS has increased incredulously because of the high power outage frequency. Our survey indicates a 20% rise in the growth in sales of UPS all over Pakistan.

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Marketing Plan 2008

7. COMPETITIONOur research and development team searched the market and our questionnaire predicts that consumers will buy anything that comes with quality if the offerings were positioned correctly. Price is something they get exposed to again and again. They have been trained to shop on price. We have very good indications that many would much willingly pay 20-30% more for a relationship with a long term vendor who provides more years of guarantee with the product and the features are perfect than any other product. They usually end up in the same category of usual buyers who do not know about the perfect alternatives.

Availability is also very important. The home users intend to have immediate solutions to their problems. So they can be subjected to high pressure, undertrained sales persons who may not be able to factor in all of the customer’s needs.

Those who buy UPS are aware of its use and understand the concept of service and support and are more likely to pay for it when they are clearly explained the features of our UPS.

We have a competitive advantage and that is: According to Pakistani government, the government statistics say that electricity demand is more than the supply of around 200MW difference and there is a 75% increase in the electricity expenses. Although it is bad for the whole of Pakistani public, it is an advantage for us in a sense that we use solar cell technology that does not require electricity in any case and in that case people will switch more to solar powered UPS than using electrical UPS.

12.1. PRICE PER UNIT:The cost per unit is calculated on the basis of the cost of per solar cell imported from Xing-Fu. It accounts for 10 Rs per cell. The battery and the inverter are provided by power-Gen. on the basis of the cost of per solar cell, our UPS per unit costs are calculated as under:

Solar cell=10 Rs.

With each product’s battery power, 10 is multiplied with the value of power.

Online UPS accounts for 20% cost of the total price of the offline UPS.

12.1.1. Value additions: With the value addition of lightening protection, 200 Rs are charged.

With each value addition of Timer, UPS display, an extra amount of 500 Rs is charged. According to the increased size of the UPS, 500 Rs are added to the value added price of Timer, and Display, and 100 Rs for the bag.

Solar powered battery carrier bag

Apart from all these value ads, a free beeper installed in every product will start beeping when the UPS use is over loaded with electric usage.

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Marketing Plan 2008

Solar powered battery carrier bag

12.2. COSTS PER UNIT:The following cost is paid for the UPS products we will market:

Xing-Fu gets 15% of the total price.

Imports account for 10% paid to Karakoram importers.

Power-GEN is paid 30% usual and 15% if the product if an online UPS. Also, for the value additions, we pay 70% of the total value added prices.

Operating Cost (marketing, office expenses, customer support officials, government taxes, salaries) account for 15%.

United distributors are paid 5% of the total.

Our company profit for Solar-Max accounts for 25% and 20% for the online UPS and 30% from the value added services.

13. KEYS TO SUCCESSThe main key of our success is the place of our product in the minds of the customers and also its position in reach for customers easily. Also our next key is to market our product efficiently enough that its position gets clear. Many potential buyers will prefer solar powered UPS from chain stores, emails, mail orders, online bookings etc if they have adequate information to conduct a cost benefit analysis.

Word of mouth is critical in this situation. We have to see to it that when we gain customers, we retain them. For this purpose we will have to work on customer relations by providing them with values good enough to encourage them to keep buying our product and be satisfied with it too. We must also note down that we are selling our company and not our product. Costumers have to understand they are starting a long term relationship with SOLAR MAX and not just buying UPS.

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Marketing Plan 2008

14. CRITICAL ISSUES The most important critical issue is if we can get over the price-oriented competition

and sell our costumers the idea of comparing us for the reliability, quality and security we provide with extensive customer support. Will they be willing to pay for what they need, or they will be shedding off by the price orientation.

The other main issue is if we can motivate our customers that we will be able to fulfill their needs and get their value in return. Can we stop focusing on price and move our context to the product more.

What if we fail to fulfill our promise? None of it is good if we fail to deliver what we have promised. Do we provide excellence in customer support, technical expertise and value adds. We are promising to be strategic and successful…are we?

15. MACRO ENVIRONMENTOur macro environment is very interesting. We have acquired the services of the most famous importers and distributors all over the market who are loyal to us, who are contract based, and who would never show disregard or disloyalty to us till they are attached to us.

The demand of UPS is high and rise and we have the advantage of providing very useful and now become a necessity for people-UPS.

Though economy is not in a boosting state and the unemployment rate is higher, but even then as customers want a necessity, they would want UPS too.

16. MARKETING STRATEGYSolar Max focuses on differentiating itself from the usual Electric UPS and producers by satisfying the need of small business and home users for reliable and long term service and relation. We will have to differentiate ourselves from them in terms of our product features, services, support, and by providing value additions to customers. We need to establish our business as a viable and clear alternative for our target market with the help of extensive services and value additions.

17. MISSIONOur mission is to provide customers with loyal service and support. We will serve our clients as trusted ally, providing them with their requirement in the best possible manner. We will make sure that our costumers get what they need and what they desire with maximum efficiency and reliability. We will give our clients the assurance that we will be there when they need us 24/7.

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Marketing Plan 2008

17.1. MARKETING OBJECTIVEWe need to offer our products to the small businesses and home users as the key market segment we should own. Our values; product availability, service, support, knowledge are more clearly differentiated in this segment.

We do not want to compete people who go to chain stores or order through a third party, but we definitely want to be able to sell individual UPS products to smart buyers whether home or office users in small businesses who want a reliable service and product for long lasting supply of electricity.

17.2. TARGET MARKETWe cannot survive by just waiting simply for the costumer to come to us. We should be efficient and active enough to provide our product to customers where ever they are. E must get better at attracting specific market segments whose needs match what we have to offer. Focusing on the target market is the key to our future because the costumer is our boss. We sale what he wants.

Therefore we need to carefully craft and tailor our target market message and our product offerings. We need to communicate our tailored messages according to the need of the customer, through traditional marketing ways and through mobile mediaries and make good on it to get extra ordinary value level from the customer.

17.3. POSITIONINGFor local and nationwide small businesses who cannot afford the electricity outage hours, and for home users who cannot retain themselves when the lights are out and cannot afford the rising level of electricity bills. SOLAR MAX is their strategic ally. Unlike the different UPS providers who sell low cost, un reliable, difficult to maintain products, SOLAR AMX is an ally to our costumers’ business and homes and offers them a full range of dynamic UPS products with value additions more than any other competitor in the field of UPS and s.

18. MARKETING MIXA core element of our marketing strategy is a change in the market. In terms of promotion, we need to sell our company as a differentiated ally in strategies, not just our UPS products. In pricing, we need to remain higher than the competition and we need to be able to justify that. Our product marketing has to recognize more that our services and relationship is the key to our future product marketing. We will sell a relationship more than our products.

18.1. PRODUCT:Solar Max provides products that make themselves very useful for small businesses and homes. We are specially focused in providing high customer service hours with easy to handle products, with such value ads that costumers will be more than satisfied with us and as we predict, they will also provide us with the best value they can give.

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Marketing Plan 2008

Our products come with an additional electric battery to charge with as an alternative for non sunlit days.

We provide products with increasing battery power each with different number of solar cell panels.

a) 1000 watts UPS:

It includes a 1000 watt battery with 30 solar cells in one panel priced for Rs 10,000.

a) 2000 watts UPS:

It includes a 2000 watt battery with 60 solar cells in two panels priced for Rs 20,000.

b) 3000 watts UPS:

It includes a 3000 watt battery with 90 solar cells in three panels priced for Rs 30,000.

c) 5000 watts UPS:

It includes a 5000 watt battery with 120 solar cells in four panels priced for Rs 50,000.

d) 8000 watts UPS:

It includes an 8000 watt battery with 150 solar cells in five panels priced for Rs 80,000.

Battery and solar powered UPS with different sizes.

12.1. PRICING

We must charge appropriately for the high end, high quality 24/7 service and support that are needed by our customers. Our revenue structure ahs to match our cost structure so the salaries we pay to assure good services and support can be balanced by the revenue we charge.

We cannot build the service and support in our prices that we charge. The market right now cannot bear high prices and the buyer feels ill-used when they see the products with no such comparison. The market also does not support this concept.

W must be sure that we deliver what the consumer wants and doesn’t what he never needed. Everything must be readily available and in reach.

12.2. PROMOTION

We will reach the target market with news papers, and visual ads. Also our website will be promoting our product. Out banner ads on yahoo will be able to support our products marketing. Our message should be excellently stated as trends nowadays predict pure price messages.

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Marketing Plan 2008

Radio is also a good potential opportunity. Sponsoring a technology talk based show, call-in talk or documentary is an opportunity.

Road shows, seminars are also good opportunities with our product.

12.3. PLACE

Our products will be available with local retailers and also our own showrooms and go downs.

12.4. CHANNELS OF DISTRIBUTION

our one and only most reliable and famous channel of distribution is united distributors, sharing us an advantage of having the most reliable and famous distributors to be availed through out Pakistan.

13. CSR

Our social responsibility has never been away from our minds. We plan to give out 10 free solar powered UPS on the start of every New Year to schools and colleges in remote area. Also our product is environment friendly and does not cause pollution usually done by generators and electric powered UPS.

14. CONTINGENCY PLANNING

We need to watch our results very carefully. We might want to drop our sales if our margins are not up.

We plan to become dependant by the moment we start increasing and maximizing our profits by creating an individual company.

We also plan to develop higher scale of solar powered technology in use for larger businesses. We do not do it now as we are tactfully originating our business, and it is very strategic to launch business in parts rather than as a whole.

Annexure A: Questionnaire used for survey

Market Evaluation for Solar Powered UPS

DEMOGRAPHICS

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Q1: What is your electricity usage category? Select an option from below

o Home User

o Business User

Q2: Specify your Address

o Name

o City

o Phone Number

Q3: How many users will get benefit from the UPS? (Number of users)

Q4: Nature of business (Incase of business user)

AVAILABLE BUDGET

Q5: What is your estimated budget to purchase UPS? Select one option from below

o Not Sure

o Less than 5000

o Less than 10000

o Less than 15000

o Less than 20000

o Less than 25000

o Less than 30000

o Less than 35000

o Less then 40000

o Less than 45000

o Less than 50000

o Above 50000

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Q6: Do you already use a UPS? If yes please answer the following questions

Q7: Specify what type of UPS is it

o Solar

o Non-Solar

Q8: What were the initial Prices of UPS?

Q9: What is the UPS monthly running cost?

Q10: Any warranties available for the UPS?

MINIMUM USAGE (USER REQUIREMENT)

Q11: What are your usage requirements?

o Not Sure

o No. of Bulbs / Tube lights

o No. of Fans

o No. of Computers

o No. of A/Cs

o No. of TVs

o No. of Fridges

HOURS OF OPERATION

Q12: How long is your electricity usage operation every day?

o 24 hrs

o 15 to 24 hrs

o 5 to 15 hrs

o Less than 5 hrs

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ELECTRICITY OUTAGE HOURS

Q13: Approximately how long is the Electricity outage every day?

o Less than 2 hrs

o Less than 8 hrs

o Less than 15 hrs

o Less than 24 hrs

Q14: Is the Electricity outage scheduled?

(If it is scheduled, additional feature of UPS timer control can be given so that it goes to sleep mode when not in use)

AVAILABILITY

Q15: How soon you want the UPS

o Immediately

o Within Next one month

o Within Next three month

o Within Next 6 month

o

VALUE ADDED SERVICES

Q16: Do you require value added features

o Timer controlled Sleep mode

o Lightning Protection

o UPS Display (Input / Output voltage / power)

o Etc (specify)

Q17: What type of UPS operation you prefer?

o Online

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o Offline

Q18: Yearly warranty for the UPS costs 10% of the UPS cost as a part of the initial purchase. We are offering an optional second year warranty at only 5% of the UPS cost if booked in advance at time of purchase. Do you want 2nd year warranty at reduced rates?

Q19: How much of your power requirements are expected to grow in next one year time

o No change

o Less than 10%

o Less than 30%

o Less than 50%

o Less than 75%

o Less than 100%

Q20: How extensive customer support you require?

o 8/5 : From 9AM to 5AM every day from Monday to Friday

o 8/7: From 9AM to 5AM every day from Monday to Sunday

o 12/5: From 9AM to 9AM every day from Monday to Friday

o 12/7: From 9AM to 9AM every day from Monday to Sunday

o 24/7: 24 hours a day from Monday to Sunday

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