Page 86 - Marketing Management

DEVELOPING MARKETING STRATEGIES AND PLANS | CHAPTER 2 63

3.6 Strategies 4.1 Break-Even Analysis
The single objective is to position Pegasus as the premier skating The break-even analysis indicates that $7,760 will be required in
accessory manufacturer, serving the domestic market as well as the monthly sales revenue to reach the break-even point.
international market. The marketing strategy will seek to first create
customer awareness concerning the offered products and services
and then develop the customer base. The message that Pegasus
TABLE 4.1 Break-Even Analysis
will seek to communicate is that it offers the best-designed, most
useful skating accessories. This message will be communicated
through a variety of methods. The first will be the Pegasus Web site, Break-Even Analysis:
which will provide a rich source of product information and offer con-
Monthly Units Break-Even 62
sumers the opportunity to purchase. A lot of time and money will be
invested in the site to provide the customer with the perception of Monthly Sales Break-Even $ 7,760
total professionalism and utility for Pegasus’ products and services. Assumptions:
The second marketing method will be advertisements placed
Average Per-Unit Revenue $125.62
in numerous industry magazines. The skating industry is sup-
Average Per-Unit Variable Cost $ 22.61
ported by several different glossy magazines designed to promote
the industry as a whole. In addition, a number of smaller periodi- Estimated Monthly Fixed Cost $ 6,363
cals serve the smaller market segments within the skating
industry. The last method of communication is the use of printed
sales literature. The two previously mentioned marketing methods 4.2 Sales Forecast
will create demand for the sales literature, which will be sent out to
Pegasus feels that the sales forecast figures are conservative. It
customers. The cost of the sales literature will be fairly minimal,
will steadily increase sales as the advertising budget allows.
because it will use the already-compiled information from the
Although the target market forecast (Table 2.1) listed all of the
Web site.
potential customers divided into separate groups, the sales fore-
3.7 Marketing Program cast groups customers into two categories: recreational and
competitive. Reducing the number of categories allows the reader
Pegasus’ marketing program is comprised of the following to quickly discern information, making the chart more functional.
approaches to pricing, distribution, advertising and promotion,
and customer service. Monthly Sales Forecast
• Pricing. This will be based on a per-product retail price.
• Distribution. Initially, Pegasus will use a direct-to-consumer
distribution model. Over time, it will use retailers as well. TABLE 4.2 Sales Forecast
• Advertising and promotion. Several different methods
will be used for the advertising effort.
Sales Forecast
• Customer service. Pegasus will strive to achieve bench-
marked levels of customer care.
Sales 2011 2012 2013
3.8 Marketing Research Recreational $455,740 $598,877 $687,765
Competitive $ 72,918 $ 95,820 $110,042
Pegasus is blessed with the good fortune of being located in the
center of the skating world: Venice, California. It will be able to Total Sales $528,658 $694,697 $797,807
leverage this opportune location by working with many of the dif-
ferent skaters that live in the area. Pegasus was able to test all of Direct Cost of Sales 2011 2012 2013
its products not only with its principals, who are accomplished
Recreational $ 82,033 $107,798 $123,798
skaters, but also with the many other dedicated and “newbie”
Competitive $ 13,125 $ 17,248 $ 19,808
users located in Venice. The extensive product testing by a wide
variety of users provided Pegasus with valuable product feedback Subtotal Cost of Sales $ 95,158 $125,046 $143,606
and has led to several design improvements.

4.0 Financials
4.3 Expense Forecast
This section will offer the financial overview of Pegasus related to
marketing activities. Pegasus will address break-even analysis, The expense forecast will be used as a tool to keep the department
sales forecasts, expense forecast, and indicate how these activi- on target and provide indicators when corrections/modifications
ties link to the marketing strategy. are needed for the proper implementation of the marketing plan.