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External analysis of Loonies marketing plan for period 1 revealed that during mentioned and further periods, the economic situation on the market is predicted to be stable with a low inflation rate (2-3%) which is expected not to cause any significant changes in company’s function. In general term, Loonies’ performance is very successful and the company is mostly favoured by Juliet market’s customers and investors. However, Sonite product market is highly competitive, where Loonies’ projects such as Loop (high-ended, Professionals and High Earners targeted product) and Lock (low-ended, Savers and partially Shoppers targeted model) take the 2nd and the 6th places respectively in terms of popularity and profitability. One more valid point analysed in current market situation is Loonies main competitors. Loop faces threats from ROCK and TONE, which have a similar set of features and functions but slightly more expensive then Loop. At the same time, Lock is under a pressure of SOFT and MOST products with significantly higher brand awareness and more superior features than Lock. All mentioned above characteristics are important for all segments of consumers.

Thus, apart from affordable price, customers are interested in power, display, design of the product. Furthermore, shoppers will have a biggest average growth rate over the next 5 period and currently no product in the Sonite market has been able to satisfy shoppers with the ideal characteristics and suitable price. SWOT Matrix analysis indicates that by consolidating Loonies’ strength in the market, taking care of its financial, production and resource allocation issues and keeping an eye on major competitors’ movement, there is a potentially large spectrum of opportunities which can be achieved in short term and long term. Action plan is based on the assumptions that activities will be fully funded by authorized budget, need of LOOP and LOCK will continue to grow and the relatively little competition in the Vodite market.

With the clear marketing objectives (Loonies to remain as market leaders in the Sonite, clear position of LOCK towards Savers segment, and the market leadership in Vodite, etc) and strategies (clear positioning of all products, efficient resources allocation, etc), Loonie plan to launch POLO (Sonite) and PEER (Vodite), increase production estimation, target LOCK to savers, and further cost cutting programme for Polar to be launched in Period 4 (Sonite). Finally, in order to make sure that all projects may be issued in planned time, Loonie requires a budget excluding production budget of $9,143,000, 3.7% less than the authorized budget in period 2. In addition, further deviation from the original plan objectives needs to be carefully examined and thus the plan needs to be re-evaluated.

Environmental Analysis
Economic Analysis
In Markstrat, the economic variables are relatively stable with the current inflation rate of 2% and GNP growth rate of 3% in Period 1. These variables are expected to remain unchanged for the next period. It is unlikely that the inflation rate will reach much higher levels in the future; therefore, the effect on production, advertising, commercial and market research costs of the company should be reasonably small.

The table above shows information relating to the stock market in Period 1. Here, we see that the Loonies (firm L) has delivered stellar performance and is the most favoured firm in the Juliet industry among investors; this is evidenced by the fact that Loonies tops the SPI chart when compared to other competitors within the same industry. In addition, our company is one of the market leaders in the industry, having the highest shares in both value and unit market shares (see Figure 1 in Appendix). However, it is clear that the competition in the industry is fierce as all firms, except from S, have close stock price indices as well as market shares. Currently, LOOP has the second highest market share in the Sonites market (16%) with only 2% behind MOST, while LOCK sits in the sixth position with the total market share of 7% (see Figure 2 in Appendix)

Product Analysis

The company currently has two Sonite products in the market:

1. LOOP is a high performance product targeted towards Professionals and High Earners (see Figure 3). The main competitors are ROCK with only 1% behind LOOP in market share and TONE, 3% behind (see Figure 2). These two are LOOP’s direct competitors since they both operate within the same customer segments. 2. LOCK, on the contrary, has only 7% of market share and the most competitive competitor is MOST, who has the highest market share in the Sonites market. SOFT is also another competitor with the market share of 11% (see Figure 2). These three brands operate mainly in the Savers segment and partially Shoppers segment (see Figure 3).

These two products each contribute to the company revenue at different levels. Up until Period 1, the main driver for the company revenue is LOOP, which contributes almost 90% of the company total revenue and contribution after marketing (see Figures 4 and 5). This information is helpful particularly in terms of decision making such as production level for each product as well as identification of the company key driver product (LOOP) and improvement for the remaining product (LOCK) so that it can contribute more towards revenue generation and therefore, maximising the company profit. In addition, it would be wise for the company to launch a new product that will help drive company revenue to minimise the possibility of company crisis in case of unexpected events in the sales of LOOP. Market Analysis

According to the market forecast for Sonite market, the average market growth rate in five periods is 15.5% (see Figure 6). The use of market forecast is crucially important as it can influence the decision relating production level of the product in the market. In Period 1, our company did not produce enough LOOP and LOCK to satisfy the existing demand as all products were sold out. The opportunity for creating a higher profit is lost here.

The market forecast also reveals information relating consumer segment growth rates and it can be seen that there are high growths in Shoppers and High Earners in the next period (see Figure 7). LOOP product should benefit from the growth in High Earners as its main customers are High Earners and Professionals. However, the company might want to consider launching a new product targeted towards Shoppers because not only it has the highest growth rate in the next period but also in the next 5 periods. This could potentially become an additional main source towards the company revenue apart from LOOP. At the moment the company only have LOCK, which is targeted mainly towards Savers and partially towards Shoppers.

Competitor Analysis:
1. LOOP’s Competitors
ROCK is a fierce competitor that we should keep a very careful eye on as it outperforms LOOP in every characteristic but its price is only 1$ more while the base cost is only $6 higher (see Figure 8). It is likely that the customers may switch to ROCK in the future. TONE is another dangerous competitor as the product is slightly better than LOOP in most characteristics. However, its high price at $520 (see Figure 8) may be the reason why the sales are not as high as ROCK and LOOP. However, TONE has the lowest base cost, which means that it has a very high margin and can afford to cut prices in the future in order to encourage sales. 2. LOCK’s Competitors

MOST is the strongest competitor against LOCK and probably all products in the Sonites market at the moment. This is mainly because it captures the Savers segment, which is one of the biggest segments in the market. The performance of MOST is fairly the same as LOCK but its price is much higher (36% higher). The reason for its success can be explained by the brand awareness. MOST has brand awareness by Savers segment of 63%, while LOCK has only 33%. A possible action that LOCK can undertake against MOST is pricing given that LOCK has a much lower base cost. Since Savers are price sensitive they will be more attracted to LOCK once they find out that LOCK offers similar characteristics to MOST. This could be achieved through a more intense advertising towards the Savers segment. SOFT is another aggressive competitor for LOCK. Similar to MOST, SOFT has similar characteristics to LOCK but a higher price and brand awareness by the Savers segment. Therefore, similar approaches can be taken to steal customers from SOFT. Customer Analysis:

Understanding what customers want play a crucial part in the success of all businesses. Figure 9 gives the ideal values most customers desire in each characteristic as well as price. Figure 10 shows how much value the customers give to each characteristic. Here, price is the most desirable characteristic in customers’ perceptions, followed by power, display and so on. High Earners are particularly interested in power, display and design, therefore the characteristics of LOOP should match the High Earners requirements for promising sales. On the other hand, LOCK is targeted towards Savers, therefore, they are not particularly obsessed with functions such as display, power, features and battery. They are mostly interested in price as they are price sensitive customers and are also attracted to design (see Figure 10). As part of the marketing mix it is equally important to know where the products should be sold in order to maximise the profit. Figure 11 shows the customers shopping habits for Sonites products in Period 1. It is evidently clear that Higher Earners and Professionals tend to shop in specialty stores as they are not only after good products but also good customer services, hence, the majority of LOOP products should be sold in the specialty stores. Also, Figure 11 shows that Savers tend to shop at mass merchandise for low priced products, therefore, it would make sense for LOCK products to be sold here. SWOT ANALYSIS

Strengths| Weaknesses|
1. Exceptional overall performance. Revenue growth 31% YoY and market share rose from 22% to 24%. 2. LOOP: Strong brand awareness among all segments LOOP is one of the most popular brand purchase intentions in Sonite market 16%, driven largely by High Earners and Professionals. 3. Large market share in high earners and professionals. Period 1 45% of high earners and 29% of professionals. 4. LOCK is able to capture the growing Savers segment. Although LOCK may not currently be a competitive Sonite product, it has to some extent helped us capture a degree of growth among Savers segment.

As this demographic continues to grow and we enhance our advertising, sales, and production efforts we expect to develop a leading presence in the near future. 5. Early entry into Vodite market. With the launch of PEER as the pioneer into vodite market targeted towards Innovators, Loonie will be the first to go along experience curve and try out the new market. As Followers will be partially influenced by Innovators (and Early Adopters), the launching of PEER will later have a big impact on followers as well. | Vulnerabilities 1. Weak brand awareness for LOCK. 2. LOOP is the only main source of revenue.Fi Financials 3. Limited budget to allocate among maintaining the existing advertising and commercial activities for LOOP, LOCK and new launch of PEER and POLO. 4. High cost for PEER R&D and difficulties to gain extra funding for the project.Operations 5. Underproduction of LOOP and LOCK led to loss of potential sales. 6. Inefficient allocation of commercial teams led to loss of potential sales.| Opportunities | Threats |

SONITES 1. New Sonite product targeted towards the growing segment of Shoppers. Market gap in the Shoppers segment. Shoppers segment will be one of the highest consumer segments in the market in the next five periods and so far, there is no product that is targeted directly towards the Shoppers’ needs. 2. Opportunity to increase sales revenue through sufficient production level for existing demand for LOOP and LOCK. There was unfulfilled customer need at the end of Period 1. This allows for space to improve for estimates for production level for the next period. 3. Optimisation of distribution channels. There is an opportunity to significantly increase the performance of both the Loop and Lock brands by increasing the efficiency of how the commercial team are allocated to distribution channels. This would involve activating the previously under-utilised ‘Speciality Stores’ channel for Loop and ‘Mass Merchandisers’ for Lock (see Figure 12) 4. Product cost reduction possibility for POLAR.

The product will be launched to compete against TONE. The production cost reduction will allow POLAR to have a higher margin and become more competitive.VODITES 5. Be the first to establish a brand product in Vodite market. The Vodite market is expected to grow by 641% over the next 5 periods so it is in the interests of the long-term health of the company to establish a commanding presence ahead of our competitors by successfully launching a brand which remains front-of-mind.| Overall Obstacles 1. Sustainable financial banking SONITES 2. Threats from ROCK, ROLL and particularly TONE as it has a lower base cost than Loop (196:192) and higher price, while having an overall better performance product than LOOP. TONE can become very competitive if they have the right pricing strategy due to its high margin. 3. LOCK has similar performance levels to MOST and SOFT but is a lot cheaper. Again, with a lower margin LOCK is price vulnerable to MOST and SOFT.VODITES 4. Competitors might start taking market share of Early Adopters if they have the right product targeting adopters. (next period Vodite consumer segment: Innovators: Adopters: Followers=80:40:13) 5. New requirement of environmental protections (carbon footprint) as one of the measuring features. 6. Vodite market is still an unknown entity. |

1. Actual authorized budget for Period 3 will be more or equal to forecasting budget and there is no need to shelve certain projects. 2. The growth rate of LOOP and LOCK needed in the market in period 3 will continue to be at least the same level as period 2. 3. POLO will be the unique Sonite product in the market which is specifically tailored to satisfy the need of shoppers. 4. Only a few competitors will enter the
Vodite market.

5. TONE is not likely to lower the price by a great extent in the next period. 6. The average price of a Vodite product retails at approximately $900 (+/-15%)

* Loonies to remain as market leaders in the Sonite market with the total market share reaching potentially 30% (currently, Loonies and Monites are joint market leaders with the total market share of 23%). * To be able to capture a range of consumer segments. At the moment, LOOP is capturing High Earners and Professionals while LOCK is capturing Savers. Future products should be launched to capture Savers (one of the fastest growing segments in 5 period time). * Take the advantage of LOOP’s brand awareness towards upscale customers to launch yet another advanced and high performance product that is superior to all the Sonite products in the market at a premium price * Clearly position LOCK towards Savers segment

* To enter and establish as a well-known brand in the Vodite market (mainly towards Innovators in the first period of market entry) with an optimistic aim of capturing 30-35% market share. * To be able to capture the Early Adopters and Followers in the latter periods once Vodite market becomes well established.

1. Clear positioning of all products.
LOOP is positioned towards High Earners and Professionals. LOCK is positioned towards Savers. A new Sonite product (POLO) will be launched directly targeting the demand surging segment, Shoppers. Another new Sonite product (POLAR) will be launched towards the high end segment similar to LOOP but with a higher performance and price. The first Vodite product to ever enter the market (PEER) will be targeted towards Innovators in the first period, capturing the majority of the market share. 2. Cost leadership on LOCK and POLO

The main selling point for LOCK and POLO is decent quality products (complying to the customers’, Shoppers and Savers, ideal values) at an affordable price. Since the Shoppers and Savers are fairly price sensitive consumers, having the right pricing strategy will allow the products to become very competitive against the competitors within the same segment. 3. Product differentiation for POLAR

The strategy for launching the new product POLAR targeted towards High Earners and Professionals lies on the principle of uniqueness and product differentiation. The product offers exceptional quality and performance, which is superior to all Sonite products available in the market. POLAR is expected to appeal particularly to High Earners who are price sensitive and are willing to spend for exclusive products. 4. Exploiting advantages of market leaders position in the Vodite market One of the main objectives of the company is to explore the new Vodite market and hopefully become one of the market leaders in the coming periods. This is mainly because of the advantages that will follow as a result of being market leader, which includes having economies of scale, going up the experience curve before the competitors and being able to take advantage of double jeopardy or customer loyalty. 5. Efficient resources allocation

One of the most important strategies in any business is the efficiency in resources allocation. In Loonies, the launching of new products is in response to the emerging demand from customer needs (as can be seen by the launching of POLO to satisfy the growing Shoppers segment). The budgets for marketing are allocated to targeted customer segment for the most effective outcomes in terms of brand awareness and sales revenue. The commercial teams are allocated in accordance to the serving of customer needs. More teams are assigned to products with high growth rates so as to maximise sales.

Based on the results of the previous financial periods our overall strategy can be considered successful owing to our strong performance in terms of high market share, revenues, retail and market sales data. However, in order to continue this momentum it is vital that we retain a heavy focus on substantial investments in R&D which will facilitate the future product launches which will maintain our positioning as a provider of cutting-edge technology. This approach will also be supplemented by an aggressive advertising push and long-term expansion of our commercial teams in order to capture new and maintain existing consumer segments for both Sonites and Vodites. Our key actions therefore include but are by no means limited to: 1. Launch of POLO Sonite:

The fruits of our R&D efforts will enable us in period 3 to release an affordable but exceptional quality POLO Sonite model in response to surging demand of Shoppers in the near future. The product is expected to fiercely compete with and aggressively win shares from our close rivals SOLO and MOST in the ‘Shoppers’ and to a lesser extent ‘Savers’ segments. The details regarding price and promotion of POLO can be found in the latter Budgets and Forecasts section. 2. Increase in Production:

One of the company’s weaknesses is the underproduction of LOOP and LOCK, which resulted in a failure to sufficiently meet demand in the previous period and consequently, a loss in revenue. Therefore, we plan to increase production of both platforms by as much as 50% for both LOOP and LOCK going forward; with a view to ramping this up further in Period 3 if successful. The increase in production level should contribute towards the potential success of the company reaching the total market share of 30%, given the sales of both LOOP and LOCK remain aggressive as in the past periods. 3. Entry into Vodite Market:

One of our most prioritised action plans is to enter into the new Vodite market. The launch of PEER is aimed at the Innovators segment in Period 3. The product is of exceptional quality as they are tailored in accordance to the customers’ (Innovators and Early Adopters mainly) ideal values for characteristics. Therefore, PEER will be sold at a relatively high price (initial retail price is $999) with the anticipation of high profit margins. (see Budgets and Forecasts for resources allocation for PEER) 4. LOCK Sonite Advertising:

In order to successfully position LOCK in the Savers segment investment in the marketing of LOCK to raise the brand awareness towards the Savers segment is required. The resources allocated to the marketing of LOCK have not been increased. Instead we focus on the resource segment allocation, where all the advertising budgets for LOCK are allocated to Savers (see Budgets and Forecasts). The brand awareness is expected to reach the level close to our main competitors MOST and SOFT. As already mentioned in the Competitor Analysis, LOCK has a similar performance level as MOST and SOFT and even at lower price, however, the lack of customer awareness of the brand let the sales down.

5. Launch of POLAR Sonite:
Consolidating our leading presence within the upscale consumer segment remains the cornerstone of our commercial strategy. As such we plan to begin some additional research work entitled ‘Project POLAR’, which will enable us to launch a technologically advanced Sonite product with capabilities that are almost inconceivable based on today’s standards. This strategy will ensure we remain the favoured choice for both ‘High earners’ and ‘Professionals’ for years to come. However, in anticipation of increasing competition within this space, we will shortly embark upon another R&D project which will allow us to reduce the base cost of the POLAR model from $210 to the minimum cost of $159 in Period 3. We have therefore identified cost-cutting measures as a key weapon in our arsenal to ensure we limit the impact of any new or existing models produced by Tomahawk. Nonetheless we may have to delay the launch of the POLAR model to as late as Period 4 owing to the liquidity issues the company currently faces.

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