Promoting Smoke Detectors in Chile - Assignment Example

Report 3-Smoke Detectors in Chile Promotion Introduction For a product that has just been introduced in the market to meet its targeted sale, there is a need to make promotions for that product. Therefore, promoting our product that is the smoke detectors in Chile is greatly advised, since we have a competitor in the industry. The main means that will be used for advertising a product is TV stations, radio, use of internet and print media (Schumann and Thorson 127). On a general note, the main objective since it is a new product in the industry from our organization is to effectively make the product known to the targeted group and let them know how they can be able to get the product. We will make sure that all our ads will comply with the Chilean laws (Shaver and Soontae 67). The ads will be in English targeting the right group to use smoke detectors in their home; however, I would prefer using Spanish because most of Chilean speaks it. Television Media Most of our advertising budget will go the Television whereby we will want to increase the number of times a commercial will be aired per week. Therefore, allocating much of the budget to television is because it is the most effective medium for advertisement and will be $1,750,000 per year (Warc n. pag). The viewers cannot ignore an advert that comes as they watch a program they love, thus making it more effective (Shaver and Soontae 71). Our commercial will be aired in one major television station, which is Channel 4. The commercial will be aired in the evening hours, mostly when the news is ready in order to target the more mature customers twice a week. The television advert emotionally highlights the importance of having a smoke detector in the house, with fireman ready to come to the rescue. It will highlight the catastrophe fire can cause if a house does not have a smoke detector and the losses one can get. The commercial will finally show how a person with the burned house is going to our store to buy a smoke detector and goes home happy. Radio Our team also discussed using the most listened radio stations in Chile by the targeted consumers with a budget of $200,000 annually. After doing a statistical analysis on the most listened national radio stations, we decided that we would advertise with RCN La FM. It is the most listened radio stations by mature people who the major targets of our product. The advert will be aired on the morning hours while people are going to work in the La ½ Manὰnὰ. The advert will be aired three times a week. In Santiago alone, 97% of the population listens to a radio station. The radio commercial will be of testimonies from people who have used our smoke detectors and the benefit of having them in their homes. Towards the end of the ad, a child’s voice will be heard directing the customers to where they can get a smoke detector in order to prevent their family from accidental fires. Print Media The less of our advertising budget will be allocated to the print media in which we will use El Mercurio newspaper, which is $70,000 annually. We chose to use El Mercurio for our advertisement because it targets all people regardless of age or gender. Using the El Mercurio newspaper, every group that we want to target in the ad will be reached. Also, for the fact that it distributes approximately 300, 00 to 450,000 copies in Santiago alone. We estimated the number of copies distributed and bought in the country, we came to the conclusion that El Mercurio is the perfect adverting print media and because most Chileans are well educated. The ad will be of a house that did not burn because the family had used to detect the smoke before the fire became hostile. In the background of the house, we will show our company logo, and how affordable the smoke detector is from our company. The commercial will be put on Monday, Wednesday and Friday newspapers. Internet Advertising The major objective of advertising our smoke detectors through our website and the company’s Facebook page will be an effective way to get the attention of millions of users who are potential customers (Schumann and Thorson 84). Customers will have full information about our product and consult on the Facebook page. It will be cheaper to take through our customers on how to install the detector once they have bought it. Through the website or Facebook page, our team will conduct competitions; in that people can answer questions correctly or who participates more in the conversations with being given a smoke detector. The budget for internet advertising will be $5,000 per month, which is $60,000 a year. Personal Selling Our smoke detector being new in the market and much competition, personal selling will be required. The marketing strategy will be used in order to give the potential customers experience of using a smoke detector in their houses. Personal selling included educating customers on how the product is used and its importance of visiting almost all homes in the country (Stafford and Faber 65). Our sales team for this task which will be made up of three people will be allocated a budget of $2,000 a month. Publicity The main objective of doing publicity is to sure that our product is in all the supermarkets, shopping malls, hypermarkets and all the stores in Santiago. Hence, there will be a need to make road trip promotion in order to familiarize the public with our new product and its benefits. The road trips will be targeting both genders of ages 20 to 35 years. Our team decided to allocate $80,000 for this task per year. When customers hear about the benefits of having smoke detectors in their houses they will be motivated by the testimonies of others to buy them. Pro Forma Financial Statements and Budgets Income Statement Year 1 Year 2 Year3 Year 4 Year 5 Target Market 10,970,900 10,970,900 10,970,900 10,970,900 10,970,900 Actual Target Market Obtained 1,097,090 (10%) 1,316,508 (12%) 1,535,926 (14%) 1,755,344 (16%) 3,839,815 (25%) Units Sold 1,097,090 1,316,508 1,535,926 1,755,344 3,839,815 Gross Income $142,621,700 $171,146,040 $199,670,380 $228,194,720 $499,175,950 Cost of Goods Sold $27,427,250 $32,912,700 $38,398,150 $43,883,600 $95,995,375 Net Operating Income $115,194,450 $138,233,340 $161,272,230 $184,311,120 $403,180,575 Advertising $2,160,000 $2,160,000 $2,160,000 $2,160,000 $2,160,000 Salaries $102,000 $102,000 $102,000 $120,000 $130,000 In Stores Advertising and Promotion $140,000 $140,000 Distribution Cost $1,347,987 $1,876,345 $2,400,568 $3,001,546 $3,968,145 Net Income $113,604,463 $133,954,995 $135,004,962 $179,029,574 $396,922,430 Units Sold The calculations for unit sold are achieved by multiplying the target market by the percent of obtaining actual target. Year 1 10% of 10,970,900 = $1,097,090 Year 2 12% of 10,970,900 = $1,316,508 Gross income It is achieved by multiplying the units sold at the selling price of each smoke detector. Putting the price of one smoke detector at $130 Year 1 1,097,090 x 130 = $142,621,700 Year 2 1,316,508 x 130 = $171,146,040 Cost of Goods Sold Calculated by multiplying units sold by manufacturing cost Year 1 1,097,090 x 130 = $27,427,250 Year 2 1,316,508 x 25 = $32,912,700 Net operating Income To get this, we subtracted the cost of goods sold with Gross Income. Year 1 $142,621,700 - $27,427,250 = $115,194,450 Operating Experience This consists of advertising, salaries, in stores advertising and promotion and distribution cost Year 1 $115,194,450 – ($2,160,000 + $102,000 + $140,000 + $1,347,987) = $113,604,463 Financial Conclusion On our first year, we obtained an actual target market of 1,097,090 and we evaluated that it should continue to grow as more customers get to know about our product. By the analyzing the financial expenses, we concluded that our business will continue making profits. However, we had focused our sales on a very few cities, but plan to expand as the years go by. Conclusion After analyzing all the factors that can affect the success of introducing smoke detectors in the market in Chile, we came to a submission that it will be the most successful business. It will yield us a lot of profits after formulating and following all the marketing strategies we have put up. Using all the advertising mediums, the products will be known to all the Chilean owning a house. Works Cited David W. Schumann, and Esther Thorson- Internet Advertising: Theory and Research Business and Economics: - Lawrence Erlbaum Associates, 2007. Pp.516 -529 Mawla R. Stafford and Ronald J. Faber - Advertising, Promotion, and New Media; Business and Economics: , M.E. Sharpe, 2005. Print Shaver M., A. and Soontae A., - The Global Advertising Regulation Handbook; Business and Economics: M.E. Sharpe, Pp 256 – 63, 2013 Warc. (2013). Media costs rise in emerging markets. Retrieved from "http://www.warc.com/LatestNews/News/Media_costs_rise_in_emerging_markets.news?ID=32207" Read More