Erika Jackson250595892

December 8th, 2010Eric Silverberg

007

Executive Summary

Roger Mills, the founder of Kiai Marketing Group, has a marketing challenge to start up his new business. Mills' idea is to sell advertising space on the laminates for the back of ten Western students' laptops over the 8 month academic year. He wants to make $5,000 in profit over an eight month fiscal period while at the same time establish his company name and brand as a credible ad agency. In order to create a foundation for his company to grow, Mills will need to decide where to promote his company, how much to charge his clients, and what market to target.

The budget for Kiai will be tight because the start up costs will all have to be be cover by Mills' personal savings so all marketing and promotion must be efficient and effective. Kiai's main competitive advantage is the innovative idea behind marketing on the back of students' laptops. It is a new and untested market, but shows promise. Mills will run the business on his own and employ ten involved Western students to advertise and gain basic knowledge of the business being represented to present a casual pitch when approached. Since Mills is a full time student, Kiai will be serving one client over the eight month academic year. Since laptops are becoming increasingly present in university classrooms while newspapers are slowly becoming more irrelevant, there is a huge gap in the market for this type of advertisement. This market is unpenetrated and has a high likelihood of success with the current external environment.

The main direct competition for Kiai is The Gazette student paper and the immobile posters in Western washrooms and restaurants. The Gazette sells advertising space for a CPM of $32.50 for a full page which is higher than Kiai's which is at $22.37. Newspapers are also less appealing to university age students. The posters are a minor threat with a CPM of $180.00. This is much higher than both Kiai and The Gazette. Both forms of advertising are traditional and proven which may be the only real threat to Kiai. Mills will have to show that Kiai's impressions will be legitimate and more impressionable on university students than the standard method of advertising at Western.

The choice to target either small businesses or the University Student Council is a fairly easy consumer analysis. Small businesses hold a lot more opportunities for Kiai to grow in the future than the USC. Although small businesses also have tight budgets and are cautious, since there is a number of potential clients, it will be easier to find one that will buy into Mills' idea. The USC would probably only be a short term client which would not fit with Kiai's marketing goal to expand and gain credibility.

Kiai's service is advertising on the back of ten student laptops over the eight month academic year. Mills has to sell this method of advertising as more effective than the standard news ad. The client will sign a contract and be responsible for the design and production fees for the laptop skins. The price for one academic year of advertising is $11,080. This price is decided by adding all start up costs and expenses with Mills' personal profit of $5,000. This is a perfect balance between affordability and quality. Kiai won't appear cheap and will still offer a competitive CPM.

Mills will be promoting his new business and attracting customers through a Small Business Centre membership as well as attending their seminars. By establishing himself in the SBC community, he can gain a reputation as well as attract a client. Mills will also need to spend money on printing business cards, brochures, and posters to spread the word about Kiai. Approximately $1,320 will be spent on a promotional budget for Kiai's first fiscal year.

After the internal and external analysis, Kiai's main target market should be small businesses and Mills should follow the recommendations made in this marketing report.

Introduction

Kiai Marketing Group is a newly founded marketing company that is introducing a new method of

advertising using the backs of university students' laptops to advertise companies that target the student

market. Roger Mills, the sole founder, has a marketing challenge to establish a client base for the new

company and decide on a price to make a $5,000 profit over the 8-month academic year. Mills wants to

find one business to serve for the first academic year that will spearhead his new company to success.

Mills also wants to create legitimacy and credibility for the Kiai brand to eventually expand and grow.

Being a full-time student, Mills plans to make all preparations for the coming school year during the

summer months. Kiai's target market will be London's small businesses trying to target Western

students specifically and the service being sold is the advertising on student's laptops in classes and

around campus. The internal and external analysis as well as justifying all areas of marketing, the

product, placement, price, and promotion will be important in defining this marketing challenge.

Corporate Capabilities

Finance

Mills intends on using his own personal savings to start up the business over the summer. Since Kiai is

on such a tight budget, only the most effective promoting methods will be used. The students will be

paid $17 per week, the most efficient for the new company. The final price for a year of advertising will

have to be enough to cover all expenses and salaries as well as make a $5,000 profit for Mills.

Marketing

Kiai's main competitive advantage is the unique and interactive form of advertising. There is a gap in

the advertising market that Kiai can be the first to penetrate. When inquired, the students employed by

Mills will sell a casual, thirty second sales pitch. This is much more impressionable than normal

advertising as the product can “speak the brand.” This advertising also directly and exclusively targets

Western students, a market in high demand in London, but that can sometimes be hard to infiltrate

because of strict regulations on advertising by the student government.

Operations

There will be ten selected students who will put laminate stickers on the back of their laptops with the

business logo or branding for the designated company. This will mean ten skins will need to be

produced, each at around $25. The advertiser will be responsible for all costs relating to the production

of the skin. The advertising will be dependent on the student and how involved they are. The student

will also have to be trained to “speak” the product, since that is Kiai's competitive advantage over other

advertisements. For this reason, Mills will be extremely selective to make sure the laptops are properly

utilized for maximum visibility. Since the company is new, there is no previous relations with any

suppliers. Also, there is no physical product being sold so this isn't so important.

Human Resources

Roger Mills is the owner and founder of the company. He will be managing employees and responsible

for all promoting and developing of Kiai. The ten students who will be employed by Mills are

responsible for using their laptops consistently and being able to cast a casual sales pitch when

approached about the product. These students will need to be trained by either the advertiser or Mills

for when they are asked about the brand.

Industry Analysis

Political

The student government at Western restricts a lot of companies from advertising on campus. This is

ideal for Kiai because the back of students' laptops is an opportunity for a new way for advertisers to

reach Western students despite restrictions. The student government doesn't appear to be giving Mills

any problems so long as as all of the advertising is tasteful and well placed.

Social

With more and more online sources of information, the newspaper industry is slowly becoming

irrelevant, especially to university age students. Advertising in a newspaper is less effective than it was

a decade ago, meaning there is an opportunity for Kiai to capitalize on a new advertising method.

Technology

During the past decade, the number of laptops in classrooms has drastically increased. This opens up

the market for a whole new concept of advertising. If Kiai captures and capitalizes on this market now,

the opportunity for growth around London and eventually expansion to other campuses will be possible

once the brand is established and gains credibility.

Competitive Analysis

Direct Competitors

The biggest direct competition for Kiai is The Gazette and immobile poster campaigns because they

target exclusively Western students like Mills' advertising would be. The Gazette runs three times a

week and is catered directly to Western students unlike Western News. The pricing for a full year is a

little less expensive but, as shown in Exhibit 3, if the advertiser was to look at the number of

impressions, Kiai still delivers a lower CPM (cost per impression) with conservative projections. The

Gazette is also not interactive and is a very traditional advertising method; many modern students are

less likely to pick up a paper when the internet offers much of the same information with more

convenience. As well, the space on the laptop is bigger and is more likely to capture attention at the

same or lower price than the paper. The immobile poster campaign is somewhat visible but again

cannot offer the advantage of “speaking” the product. The posters also have a very high CPM, making

Kiai the more affordable and effective option. The main competitive advantage that the newspaper and

posters have over Kiai is that it is an established and trusted source of advertising. That being said, Kiai

offers more features in our new interactive method than either The Gazette or the immobile posters can

offer with more exposure.

Indirect Competitors

While advertisements that directly target Western students are direct competition, there is also other

advertisers that include students in their market such as The London Free Press and Western News.

There is also The Orientation Week packages, but that is only one week of advertising and not a full

year and has a particularly high CPM so it isn't really in the same category as Kiai's advertising will be.

The London Free Press has a large reader base but is targets the community of London as a whole and

not necessarily Western students individually. Western News is a newspaper on campus but focuses on

the faculty and staff and not the actual students. Since very few students pick it up, it is indirect and

not a very big threat. The indirect competition's only threat is the fact that small businesses may choose

a more traditional and safe form of advertising instead of branching out into a new form.

Consumer Analysis

Small Businesses

A lot of the businesses in London are geared towards the university and college populations because

there are thousands of students that come to London every September. London is also a growing city,

named one of the 'Cities of the Future' which means more businesses are likely to appear and will

broaden the market for future growth. The government supports small businesses so many

entrepreneurs are encouraged to start up companies. Kiai can benefit from these businesses targeting

Western students. The only issue would be that Kiai is a new, unestablished company with a very

innovative and non-traditional idea and small businesses tend to be operating on tight budgets so they

need to make sure their advertising is effective and affordable. Kiai can still compete with higher

exposure rates, according to Exhibit 1, as long as Mills is able to sell his idea of “speaking the brand”

along with the visual advertisements.

The University Student Council (USC)

Since USC's main objective is to get students involved and provide the best student experience, Kiai

will be able to appeal to that demographic best. There are many retailers in University Community

Centre and events to advertise to the student community. The HYPE Street Team is a new group that is

responsible for creating promotional strategies for these things but may not be able to afford to invest

in a new type of advertising like Kiai. The USC has a tight budget and may not be willing to give

HYPE the extra funding for Kiai marketing. Also, Mills doesn't foresee this group to be a long term

client, which would defeat the marketing challenge goal of establishing credibility and clientele. In

short, the USC probably isn't the best choice for Mills to target in his first year of business.

Target Market

Kiai will target London's small businesses because this is the market with the most potential for growth

and has many different options. Since one of Mills' goals is to make $5,000 in profit, a small business is

probably able to spend more money than the USC. Another goal is to gain legitimacy; once a credible

company client is obtained, Kiai will be able to establish its own brand and build a reputation. As well,

there are many opportunities for different types of companies that appeal to university students.

London was also named one of the “Cities of the Future” and many entrepreneurs are encouraged by

the government to open up businesses. This will give Kiai a large pool of potential clients in the future

when his company starts to grow. The USC is not a market that can be expanded or capitalized upon

after the first fiscal year since the commitment is short term. Kiai needs a first client that can become

loyal to the company and that will give positive feedback to the small business community if Mills is

able to get the impression results that he plans on.

Product

The “product” in this case is actually a service, advertisement and how many impressions it is able to

get, the metric for impressions is CPM. The physical product is the laptop skins that the company is

responsible for, which will cost $25. These skins will be on display of ten involved students laptops and

should attract students to the business, meaning the designs and logos must be appealing to the student

demographic. This could be through bright, colourful ads and making sure the company that Kiai

promotes and advertises for is one that will appeal to the student body. The company will sign a

contract for Kiai to advertise for one academic year, from September to April, on the ten students'

laptops. The advertisements themselves will be mobile and will be displayed all around campus as the

students attend various classes and activities. Eventually Mills would like to have 100 laptops in

different faculties and programs to reach out to all groups of students on the Western campus. Although

the idea of advertising on laptops is a completely new innovation and it is hard to project how many

impressions it will make, according to Mills projections and Exhibit 1, it is much higher than any other

option and much more affordable. Customers may be cautious to invest in a totally new market so Mills

will have to make sure he attends the Small Business Centre's networking to properly explain and

justify his idea to potential customers. Mills is sure that advertising on laptops will make a more lasting

impression on students than a standard newspaper or poster ad would since it is more interactive than a

poster or newspaper ad. Mills will have to capitalize on this competitive advantage in order to capture a

client. Kiai will have to appear as a sound and safe investment for any small business owner to consider

it as an advertising option.

Placement

The most efficient way for Kiai to attract a client will be through the Small Business Centre's

networking and seminars which he could go to by obtaining a membership to the Small Business

Centre(SBC). Also included in this membership is discounts on meeting rooms which could work in

Mills' favour. Meeting clients in these rooms will give Kiai a more professional and credible appeal to

potential clients. Here Mills can meet and greet prospective clients as well as lend his services to other

entrepreneurs, which can get his name out into London's small business community. Mills should also

get a website designed and running during the summer to further his legitimacy and direct interested

business owners for more information on his marketing group and service. In order to meet his profit

goal, Mills must have effective placement. The hardest part of the marketing challenge will be

obtaining a client that will give Kiai the starting boost that his company needs. Kiai must have proper

advertising to attract a committed client for the upcoming year. The trade show option probably

wouldn't be the best option for Kiai at this time because it is costly and time consuming for Mills. After

Kiai has an established client and more funding, the trade show would be an option to consider but

currently is not an efficient choice.

Price

Kiai needs to be priced in relation to other forms of advertising with a similar amounts of impressions.

Since Kiai is a new company and a completely different way of advertising, Mills will have to offer his

service at a slightly lower price without appearing to be a cheaper option. This is possible after all the

start-up costs are included. In Exhibit 2, there is a complete breakdown of Kiai's pricing. The marketing

budget for Kiai is $1,320 and will include all promotional spending. The students Mills employs will

also have to be payed $17 a week for seven months out of the eight month academic year with holidays

which will be another $4,760. Mills will still easily be able to meet his $5,000 goal and will also be

able to stay below the competition with both his price and CPM, which is $22.37, without appearing

“cheap.” All this being added, the total price for one year of advertising on ten student laptops will be

$11,080 with a $5,00 profit for Mills after expenses are accounted for. This is a reasonable price for the

amount of advertising and similar to competitors but at the same time still gives a slightly lower price

in order to attract clients. Once Kiai is established and starts getting a steady stream of clients, the price

may increase as demand for advertising on laptops goes up.

Promotion

It is important for Mills to choose the most efficient methods of promotion for his new company since

Kiai is operating on an extremely tight budget of his summer savings. The promotional budget for Kiai

is $1,320 for the first fiscal year. This will be allocated to start up a website and gain membership to the

SBC as well as attend seminars where Mills can meet potential customers. The membership to the SBC

is $95 and will allow Mills to gain access to the business seminars as well as a discounted rate on

renting rooms for meetings. This will further Kiai's credibility and give Mills a place to meet with

clients. The website will cost $750 for the design and domain name registration and give the company

legitimacy as well as a place to direct interested business owners. The website will also include an

email address and site maintenance for one year. In addition to the SBC membership and the website,

Mills can also use the direct sales method to speak directly to small business owners. He should open

with a 30-second sales pitch in which he should cover the new advertising idea, the targeted student

population, and how much the cost per impression is in relation to other direct competitors. This is the

most effective way to communicate and establish relationships with future clients. At the networking

with SBC and direct selling, Mills should hand out or put on display brochures with information about

Kiai and contact information. These brochures along with posters advertising and spreading awareness

about Kiai will cost $225. In order for Mills to appear professional, Kiai will also be needing business

cards to give to prospective clients which will cost $50 for 250.

Conclusion

Kiai's main goals for its first fiscal year is to make a $5,000 profit for Roger Mills, establish a credible

and legitimate company, and set the company up for future growth. After analyzing the internal and

external environment, this will best be obtained by targeting London small businesses. Mills should

promote his new company by joining the Small Business Centre and going to seminars to eventually

sell directly to business owners. Mills should also create a website to further his legitimacy as a

company. The price for one academic year of advertising will be $11,080, a competitive but affordable

alternative to the traditional newspaper or poster ads. If Mills spends his entire summer planning and

organizing his new company, Kiai should be able to have a successful fiscal year and Mills should be

able to easily make his $5,000 profit.

Exhibit 1Expected Exposure Rates for Kiai

Per Week(# of impressions)

Per Year(# of impressions)

High 2020 565600

Low 1770 495600

Cost per Year: $11,080CPM(Based on low projections): $22.37

Low $1.84

Median $18.79

High $180.00

Average $51.06

Kiai $22.37

Exhibit 2Pricing for 7 months of Exposure(one academic year)

Projected Costs of Advertising and Promotion:Informational brochures and posters $225Business cards 50Small Business Centre membership 95SBC Networking* 200 Website 750

Total: $1,320

Salaries For Students:$17/week7 months10 students

Total: $4,760

Total Costs: $6,080

Profit Goal: $5,000

Price for 8 Months of Advertising: $11,080

*Assuming Mills goes to ten free seminars and ten $20 seminars

Exhibit 3

Cost (for a full year) Impressions CPM

Kiai Marketing $11,080.00 495600 $22.37

The Gazette (full page) $11,440.00 352000 $32.50

Immobile Poster $13,200.00 80000 $110.00