Mobillite Satellite phones

1
MobilliteSatellite phones

• Aron Butler
• Caitlin Allard
• Kristina Cole
• Jill Buote
• John Gordon

2
Why Choose Mobillite?

• These phones provide communication in even the
  most secluded areas of the planet, including
  oceans (1)
• They are small, light, and durable. perfect for
  any type of business or leisurely travel
• Made with nalgene plastic (high-density
  polyethylene) which is stronger than other
  plastics and is environmentally friendly (2)
• Uses LEO (low earth orbit) satellite technology
• Provides worldwide wireless coverage with no gaps
• Orbit the earth at high speed, low altitude
  orbits
• Must fly complete orbits, further guaranteeing
  complete coverage over every area by at least one
  satellite at all times (3)

3
The Target Market

• People whose jobs require travel and unrestricted
  communication with the rest of the world
  including
• Professional/ scientific (researchers)
• (A)
• Size of segment (6,125,13)
• Total average income (60,327)
• Financers/insurance companies
• (B)
• Size of segment (5,575,813)
• Total average income (46,297)
• Agricultural management
• (C)
• Size of segment (1,729,992)
• Total average income (31,781)
• Foresters
• (D)
• Size of segment (1,249,000)
• Total average income (26,146)

4
Product Demand

• In areas where there is a high risk for natural
  disasters (specifically hurricanes such as
  Katrina) there is a strong demand for satellite
  phones
• In 2005 alone, one company alone sold over 1000
  phones during the month of September
• This remained the same during the first half of
  the 2006 hurricane season
• 2007 is expected to be the same with purchases
  and activations of the satellite phones (5)

5
NAICS Code

• 334220 (6)

6
Market Size and Growth

• In the last five years there has been a
  tremendous growth in the satellite phone market
• 30 average sales growth each year for the past
  five years
• Demand for rental units have almost doubled every
  year for the same period
• Public awareness for satellite phones has
  increased due to terrorist attacks and natural
  disasters
• There has been an increased interest by business
  and government agencies (7)
• However, many leading satellite phone companies
  have suffered great dept and bankruptcy due to
  lack of subscribers, even though there has been
  increased awareness people still are not
  purchasing satellite phones
• Globalstars stock is down more than 90 from a
  year ago (8)
• The estimated market size for 2002 was 42 million
  users, but the market never reached that size,
  there is not much of a demand (9)

7
Product Life Cycle

• Satellite phones have very low growth and profits
  due to the lack of interest in satellite phones
• When satellite phones first came out, the company
  lost money rather than earn money due to lack of
  public knowledge and need
• Sales increase during hurricane seasons and times
  of other natural disasters

(10)
8
Competitors

• The main competitors for Mobillite are
• Inmarsat
• Globalstar
• Iridium (11)
• Mobillite is a better product!
• Cheaper to rent or buy
• Dollar per minute calling fees
• Receiver of the call pays nothing
• Made of a stronger plastic (more durable)
• The smallest of all satellite phones
• attachable antenna
• Uses LEO satellite technology which is far more
  dependable than the commonly used geostationary
  services

9
Start Up Costs

• Mobillite could take out a 500,000 loan to start
  off with from a federal bank which would cover
  the costs of
• Office equipment and supplies- 25,000
• satellite equipment-125,000
• rent for the building- 100,000
• utilities and salary for workers- 200,000
• advertisements- 50,000
• We could also raise capital by offering stocks
  and shares to the general public

10
Test Marketing Plan

• In order to make Mobillite known to the public we
  intend to advertise on radio stations and
  billboards in major cities
• We will test Mobillite in Monterey, California.
• Not a major city
• May be subdued to earthquakes and forest fires.
• Fairly wealthy city with people that could afford
  to use our phone

11
Reduce, Reuse, Recycle

• With toxic elements like lead and mercury found
  in each mobile unit, it is important to keep
  satellite phones out of landfills and
  incinerators. (12)
• There are a number of Charities that accept the
  donation of old mobile phones (including cell
  phones and satellite phones)
• Wireless Foundations cell phone recycling
  programs
• Donate A Phone recycles phones to raise funds for
  a number of charities
• Call to protect collects retired phones to give
  to victims of domestic violence for use as a
  lifeline (13)
• If the user of a Mobillite satellite phone
  returns they old, used phone to us at the end of
  use, the user will receive a check reward of 25

12
Channel Type

• Mobillite will use C1 (direct marketing) and C3
  (producer to wholesaler to retailer to customer)
• We will be using a merchant wholesaler who will
  store our satellite phones for us
• Mobillite will be sold both online and in stores,
  so to avoid any pricing conflicts, Mobillite will
  be sold to the merchants at a discount price, who
  will sell to the retailers at a discount price.
  The online price will match the prices of the
  phones in the stores
• Mobillite will use selective market coverage,
  focusing on areas where there are high risks for
  natural disasters
• Mobillite will not be franchising

13
Location

• Mobillite will be located in Monterey, California
• California has a population of 36,457,549 (14)
• Eighth wealthiest state, so most of the people
  should be able to afford our phone
• High risk for natural disasters

14
Inventory Management

• The merchants will be warehousing Mobillite
  phones for us
• Mobillite will increase production during the
  summer and winter to prepare for hurricane
  seasons which generally happen in the fall and
  spring
• Mobillite will use air as its method of
  transportation because it is quick and we want
  our product to be readily available to our
  customers in case of sudden natural disasters.
• Air is the best method of transportation for
  small objects

15
Projected Income Statement Process

• Step A of units for the 1st year 95,000
  units
• Step B Labor 45
• Materials 90
• Benefits 20
• Total 155 units
• Step C L 45 x 95,000 4,275,000
• M 90 x 95,000 8,550,000
• B 20 x 95,000 1,900,000
• Total 14,725,000

16
Process Continued

• Step D OPERATING EXPENCES
• Administration 95,000 x 5 475,000
• Lease/rent costs 65,000
• Insurance 35,000
• Total operating expenses 575,000
• Step E ATC average total cost
• ATC (total cost of goods sold total
  operating expenses)
• expected of units sold
• (14,725,000 575,000) 15,300,000 161
• 95,000 95,000
• ATC 161

17
Continued.

• Step F Markup based on selling price
• Selling price ATC per unit
• 1- markup desired
• 161 460 per unit
• 1 - .65
• Step G Gross Profit sales cost of goods sold
• 44,175,000 15,175,000 29,000,000
• Net income before taxes gross profit total
  operating expenses
• 29,000,000 575,000 28,425,000
• Tax Amount net income before taxes x
  taxes(40)
• 28,425,000 x .40 11,370,000
• Net income after taxes before taxes tax
  amount
• 28,425,000 11,370,000 17,055,000

18
Breakeven Points

• Breakeven point in units total fixed costs/unit
  contribution margin
• contribution margin unit sales price unit
  variable cost
• CM 460 155 305
• BP 575,000 1,885 IN UNITS
• 305
• Breakeven point in dollars breakeven x unit
  sales price
• BP 1,885 x 460 867,100 IN DOLLARS

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Mobollite Satellite PhonesProjected Income
StatementYears 2008 - 2012

10 Growth each year
Year 2008 2009 2010 2011 2012
Sales 44,175,000 48,592,500 53,451,750 58,796,925 64,676,618
Costs of goods sold
Labor 4,725,000 5,197,500 5,717,250 6,288,975 6,917,873
Materials 8,550,000 9,405,000 10,345,500 11,380,050 12,518,055
Benefits 1,900,000 2,090,000 2,299,000 2,528,900 2,781,790
Total cost of goods sold 15,175,000 16,692,500 18,361,750 20,197,925 22,217,718

Gross profit 29,000,000 31,900,000 35,090,000 38,599,000 42,458,900
Operating expenses
administration 475,000 475,000 475,000 475,000 475,000
lease/Rent costs 65,000 65,000 65,000 65,000 65,000
Insurance 35,000 35,000 35,000 35,000 35,000
Total operating expenses 575,000 575,000 575,000 575,000 575,000
Net income before taxes 28,425,000 31,325,000 34,515,000 38,024,000 41,883,900
Taxes 40 40 40 40 40
Tax amount 11,370,000 12,530,000 13,806,000 15,209,600 15,209,600
Net income after taxes 17,055,000 18,795,000 20,709,000 22,814,400 26,674,300
20
Pricing Strategy

• We will first use Reference pricing by looking at
  our competitors prices in order to mark our cost
  down in hopes of attracting more costumers
• Penetration will then be our main strategy by
  setting a lower price to attract buyers to our
  satellite phone company instead of our
  competitors
• By setting a lower price we hope that our
  satellite phone will become further globalized
  and create a higher demand, which we intend to
  meet!
• Our price has been determined by mark up based on
  selling price, which will leave our company with
  a good profit
• Selling price ATC Per unit 161 460
• 1 Mark up desired 1 - .65
• Selling Price 460

21
Concerns

• Our pricing strategies are not to raise any
  concerns other than that of the reactions of our
  competitors, which may result with them trying to
  lower their price as well.
• However, other satellite phones cost about 200
  more than ours and will only create competition
  if other companies rethink and execute new
  strategies.
• When and if this does occur our company will have
  plenty of warning and time to rethink our
  strategy as well. Considering the fact that they
  would have more steps to take than us because our
  satellite phone is already unique and costs a lot
  less

22
Discounts Shipping

• Cash discounts and quantity discounts will not be
  an issue because our product is expected to be
  needed almost as soon as it is ordered, and in
  small quantities.
• If we were to give a cash discount almost all
  buyers would meet the standards, plus we are also
  selling our product online, which must be paid
  the minute its ordered
• Our shipping prices will only have an effect on
  the buyer depending on their location in
  comparison to our shipping stations.
• We would like standard shipping to cost about
  4.95, but if more than 3 satellite phone are
  purchased for the same shipping location then
  shipping will be free. However, we do not expect
  this to occur often.

23
Public Relations Campaign

• Objective Through our campaign we aim to build
  strong relations among our costumers, the media,
  and communities creating awareness about our
  product and exactly what our product can and will
  provide, that being assistance to attain or feel
  relief.
• Channel We will be using sponsorship to support
  NPR (National Public Radio), which is a
  non-profit internationally acclaimed producer and
  distributor of noncommercial news, talk, and
  entertainment programming. We will also sponsor
  KPBS and WJCT.
• By sponsoring them we will receive a 10 second on
  air acknowledgement for our financial support
  during these programs.
• Sooooo, with this we are getting our message
  across while generating community goodwill.

24
Public Relations Campaign

• Target We would like our campaign to target
  those who can benefit and receive the most
  assistance from our product when and if needed.
  Meaning to say, that by distributing our product
  we would like the consumers to be fully aware
  that we are providing a reliable form of
  assistance for various situations as well as
  location.
• Our target audience will therefore include
  customers as well as the communities which are
  more apt to being surrounded by natural
  disasters, such as hurricanes, earthquakes, brush
  fires, etc. Customers will therefore be those
  who are part of these communities, or those who
  travel, taking on the environment by means of
  hiking, white water rafting, or anything else
  that may call for immediate assistance.

25
Public Relations Campaign

• Our Message As a satellite phone provider we
  are trying to convey the message that our phone
  is a 100 reliable source for attaining
  assistance or relief at any time and place, while
  still being light, compact, and convenient.
• Our message will be released before and after the
  times of occurrence for natural disasters based
  on location. For example, the months in which
  hurricane season occurs. Yet, our phone will
  still be available at anytime for those who need
  it for reasons of comfort on trips or adventures.
• Evaluating PR In order to evaluate we would
  compare our sales in year 1 to what we predicted
  for year 1, then from there make the proper
  adjustments needed. We would also monitor the
  internet to see how many users checked out the
  product and web site. This can help us discover
  why possible consumers may have turned away. We
  could also check out other satellite phone
  companies to see if their sales jumped at any
  point in time when our product may not have been
  doing well. Yet, we only predict success!

26
Advertising

• Advertising budget (unit sales price x of
  units for yr.1) x 5
• (480 x 95,000) x .05 2,280,000mil
• Media forms
• Radio- We will be using a few different radio
  stations, those being ( NPR, WERZ, KPBS, and,
  WJCT ). We feel that these stations will target
  a variety of generations and not just the youth
  of today. This radio advertisement will consist
  of our general message and where you can find
  further info.
• Billboard- Our billboard will be eye catching
  and straight to the point, so it catches the eye
  when travelers are driving by. Anything to wordy
  wouldnt make an impact.

27
Billboard
Provides the ability to communicate any
time, anywhere, with anyone, under any
circumstance. For more information visit us at
Mobillitephones.com or tune into NPR, 107.9,
89.5, OR 89.9

• Mobillite
• Satellite phones

Mobillite Satellite phones
28
Scheduling

• Radio adds will be launched morning, noon, and
  night during prime hours morning 6-9am
• Afternoon 11am1pm
• Night 47pm
• Our billboards and radio adds will be launched
  before and after disastrous seasons.
• These are the seasons
• Southwest (brushfires) December June
• Atlantic Central Pacific (hurricanes) June
  November

29
Cost of Advertising
Audience Cost per ad/ add slots Cost per Thousand Households (CPM)
NPR (Nation Public Radio Sponsor) 40,000,000 650,000 16.25
WERZ- 107.9FM (Portsmouth) 15,000,000 60,000 X 3 (three time slots) 180,000 12
KPBS- 89.5FM (San Diego Sponsor) 21,000,000 300,000 14.29
WJCT- 89.9FM (Jacksonville sponsor) 18,000,000 400,000 22.22
Billboards (Fl, CA, NE area) 65,000,000 125,000 x 6 750,000 11.54
30
Advertising

• Theme Our theme will consist of making it know
  that our product is fully reliable and convenient
  in any situation or location providing assistance
  to attain or feel relief.
• Types of Advertising
• Competitive- We will be competing with our
  characteristics, being that our satellite phone
  is smaller and compact.
• Pioneer- Through pioneer we will be educating
  our consumers about our product because many are
  uneducated when it comes to satellite phones.
• Evaluation We will evaluate by sending and
  taking a pole from our costumers, but also by
  looking at our sales.

31
Sales Objective

• Mobillite will have a trial period of 30 days to
  sample our product for FREE! If our phone is not
  purchased, the consumer must return our phone
  with a required questioner explaining why they
  didnt want the phone.
• To ensure reliablity, we will take down all
  consumers credit information to protect us from
  theft through this trial. If the phone is not
  returned or bought after 30 days, we will charge
  their account, otherwise, this trial period is
  free of charge!

32
Sales Promotion

• In order to promote our phone, we will set up a
  demo in the retailers we intend on selling our
  phone in, directing specifically towards the
  consumer
• Circuit City
• Radio Shack
• Best Buy
• Dicks Sporting goods
• We will also use price reduction. If our phone is
  purchased during the trial period, the cost will
  be reduced from 460 to 400

33
Promotion Scheduling

• Since Mobillite production is increased during
  the seasons before common natural disaster
  seasons (summer and winter), our promotion will
  also take place during this time since it is
  leading up to the most important and crucial time
  to have our satellite phone

34
Promotion Survey

• To tell how well our demos went, people will be
  offered a survey rating what they thought of our
  phone
• We will also hand out cards with our website,
  monitor how many people are accessing our website

35
Key Points of Mobillte

• Strong and dependable
• No limit to service
• Smaller and significantly cheaper than our
  competitors phones

36
Consumer Objections

• Since many people dont know a lot about
  satellite phones, some concerns or complaints may
  be
• Consumers might feel that our phone is too large
  compared to the standard cell phone size
• Our phone does not offer extra features such as
  cameras, music, and internet that cell phones
  offer

37
Overcoming these objections

• Our phone offers around the world service that
  normal cell phones cannot provide without a
  service fee
• The point of our phone is not to use as a toy,
  its purpose is to be a reliable tool in reaching
  help in case of natural disasters, car accidents
  in remote areas, and as an aid to workers who are
  often placed in remote areas
• Miners
• Forestry/ agricultural workers
• scientists

38
Type of Close

• Mobillite will use an urgency close, regarding
  the end of our trial period. We will use our 30
  day trial period and the discounted price during
  this time as motive to buy our phone, because it
  wont last forever!

39
Follow Up Procedures

• In order to avoid post cognitive dissonance
  Mobillite will offer those who purchase this
  product a charger, an extra battery, a water
  proof hard case, a portable antenna for use in a
  car, and a one year warranty, all for free!
• We will also provide a Referral rewards program
  if a consumer tells a friend about Mobillite and
  they too purchase our product then both will
  receive a free Mobillite gift
• Stock in the Mobillite company is also available
• If Mobillite is purchased during expected
  hurricane seasons, we will provide a free
  hurricane emergency kit
• useful for any natural disaster

40
Sales Force

• Product line will be the way we structure our
  sales force. The salespeople of Mobillite will be
  fully knowledgeable about our product, in order
  to provide help and answers to the consumers
• Our sales force will be compensated and motivated
  by salary commission. Our employees will have a
  set salary, however, bonuses will be given based
  on how many phones the salespeople are selling
• Mobillite is a very pleasant environment filled
  with people who care about our product
• Our hours are flexible depending on the employees
  personal situation
• Opportunities to advance in the workplace are
  available to those with outstanding sales records

41
Resources

• 1. Ezine Articles. (2007)
• http//ezinearticles.com/?Satellite-Phone-Benefits
  -and-Informationid382575
• 2. Wikipedia. High density polyethylene. Last
  updated 9 Oct. 2007
• http//en.wikipedia.org/wiki/HDPE
• 3. Wikipedia. Satellite Phone. Last updated 9
  Oct. 2007
• http//en.wikipedia.org/wiki/Satellite_phone
• 4. U.S. Census Bureau. (2006) American
  Community Survey.
• http//prudence.franklinpierce.edu/exchweb/bin/re
  dir.asp?URLhttp//factfinder.census.gov/servlet/S
  TTable?_bmy26-geo_id01000US26-qr_nameACS_2006
  _EST_G00_S240426-ds_nameACS_2006_EST_G00_26-_la
  ngen26-redoLogfalse26-CONTEXTst
• 5. Global Com. Are You prepared for 2007? (2006)
• http//www.globalcomsatphone.com/globalcom/2007.h
  tml

42
Resources (cont)

• 6. U.S. Census Bureau. Retrieved Sept. 17 2007
• http//www.census.gov/cgi-bin/epcd/srchnaics07def
  s
• 7. Global Com. The Future of satellite Phone
  Market Looks Bright. Retrieved Oct. 9 2007
• http//www.globalcomsatphone.com/articles/future.
  html
• 8. Dow Jones Company Inc. Retrieved 9 Oct. 2007
• http//proquest.emi.com
• 9. New York Times. Planet Earth Calling Iridium
  Can the Satellite Phone Service Achieve a Soft
• Landing? Retrieved Oct. 9 2007
• http//query.nytimes.com/gst/fullpage.html?res9C
  0DE1DD1E3AF934A3575AC0A96F958260secsponpagewa
  nted2
• 10. Product Life Cycle. Retrieved Oct. 9 2007
• http//images.google.com/imgres?imgurlhttp//www.
  atkinson.yorku.ca/lripley/zchtplc.jpgimgrefurlh
  ttp//www
• atkinson.yorku.ca/lripley/imUproduct.htmh325w
  500sz14hlenstart7um1tbnid6eRAnmgzF1j
• EMtbnh85tbnw130prev/images3Fq3Dproduct2B
  life2Bcycle26svnum3D1026um3D1
• 6hl3Den26sa3DN

43
Resources (cont)

• 11. Mackay. Retrieved 17 Sept. 2007
• http//www.mackaysatellite.com/
• 12. NBC Newschannel. The Environment and You.
  Retrieved 17 Sept. 2007
• http//www.kpvi.com/global/story.asp?s6619867
• 13. Technobabble. Cell Phone Recycling Makes Good
  Cents. Retrieved 17 Sept. 2007
• http//www.lockergnome.com/nexus/technobabble/2005
  /01/26/cell-phone-recycling-makes-good-cents/
• 14. US Census Bureau. Retrieved 25 Oct. 2007
• http//quickfacts.census.gov/qfd/states/06000.h
  tml