Marketing plan for Cronzy pen

1. Executive Summary

The study aims to develop a marketing plan for Cronzy pen, which is a smart color pen with unique features. The marketing plan provides a report on the comprehensive characteristics of the pen along with its usability in today’s digitalized market scenario. To develop the strategic focus through situational analysis including external and internal environment, the present study considers SWOT and PESTLE analysis for the target market of the US. Considering the environment, the study also portrays significant future goals, mission and core competency of the product in accordance with the market of the US In addition, it also depicts the financial forecast for upcoming three years along with implementation, evaluation and control plan.

2. Product Description

Cronzy Inc. will plan to launch a crow-funding campaign through new and innovative product introduction. In order to attract the expected amount of funding from this campaign, the company will introduce a hi-tech, smart pen with an innovative model in contemporary market. The product will also be able to provide an effective and innovative model, through which artists and designers among the other target consumers can add color to their creations as per their choices. The Cronzy pen will hence develop a unique capability to write in over 16 million colors of the world. The company will represent the pen as the perfect depiction of imagination to reality through technological assistance. It can hence be recognized as the ultimate portrayal of modern technology for creative people. In the context to innovation, the company will concentrate on developing a concept that will lead the art material industry towards advancement in the near future (PR Newswire Association LLC, 2017; Cronzy Inc, 2016).

The product will also provide the artists with an opportunity to use just one Cronzy pen to develop color through technology rather than carrying bulk of different color pencils with them. Besides, the reason to develop this ultra-modern hi-tech pen will ally with the purpose of building as an essential tool for every designers and digital artists thereby proving its effectiveness in different areas of work (PR Newswire Association LLC, 2017; Cronzy Inc, 2016). The product will include a pen, charging case, power supply, five ‘interchangeable tips’ for the pen, which has different diameters, two set of cartridges with ink and required instruction. The product will possess a simple attribute of introducing new colors by scanning any object, choose the color from Cronzy app and then using that particular color to draw or write something on the paper. Cronzy smart pen will hence provide the targeted audiences with an opportunity to use it with different width’s nibs to write, draw or for just stroke in the note pad, canvas, sketchbook or even skin. The pen will be compatible with iOS, Android or Windows phones to select the desired colors or shades on the individual devices (Cronzy Inc, 2016).

3. Strategic Focus and Plan

This section covers three significant amenities of corporate strategy that can influence the marketing plan for Cronzy pen in the US market. These aspects are mission, goals, the core competency areas and competitive advantage of Cronzy Pens.

Mission

The mission of Cronzy pen will be to provide its users with a hi-tech pen which will enable them to include availing all the colors of the world in their daily life with innovation. By introducing this unique and innovative product in the art material’s market, Cronzy Inc will provide a challenging career and fund raising opportunities for the employees and company’s stakeholders respectively.

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Goals

For the upcoming three years Cronzy Inc., will seek to achieve the following financial and non-financial goals:

Financial Goals

• To ensure growth, the company will be expected to earn approximately $1,000,000 return on investments per year
• To ensure at least 60% of profit in first year
• To have a specific planning and budget for future development and contingency control planning

Nonfinancial Goals

• To enhance the present value image of the company by introducing Cronzy smart pen
• To penetrate and lead local and international art materials’ market
• To achieve national distribution in two large retail chains of art materials within the upcoming two years
• To include additional characteristics within the third year of operation
• To become best innovative brand in art material market and serve the customers beyond their expectations

Core Competency and Sustainable Competitive Advantage

The core competency of the Cronzy pen will be its activity area and the process of actions. The company will develop this product of a smart pen as a completely new approach of the hi-tech world. It is different from other colored pen due to its effective utilization of technology, through which it can apply more than 16 million colors from an individual pen. As previously stated it is a smart pen, so it is clear that it will activate and operate through the smartphone’s Cronzy app. This specific app will help the pen to scan the color of any object from the surroundings and use it for drawing or writing. Through the utilization of this effective pen, the users will be free from carrying multiple pens of different colors for their usage. In addition, the Cronzy will introduce a new device that can gather all the existing colors throughout the world with the assistance of this innovative special mechanism. The pen will be prove to be effective for everyone starting from a general artist, digital artist, adult, children, a creative individual to that of the multinational owners. Moreover, the targeted population can use Cronzy pen in every place both in meeting or classroom and at the time of walking, chatting, travelling or drawing. The huge range of color availability and usability of the Cronzy pen will easily attract the interests of the people towards it. Considering these unique features of Cronzy pen, it can be inferred that these will help to develop core competencies in the respective markets. In the art material market, Cronzy pen will be able to develop an evolution as an effective tool, which can develop a sustainable competitive advantage for the company’s products and future prospects.

4. Situational Analysis

The situation analysis reflects the scenario of the current environment, in which the product will be launched to gain success and meet the projected goals. To assess the associated environment, where the Cronzy pen will be introduced, two significant analysis tools such as SWOT and PESTLE analysis will be helpful in critically portraying the internal and external environmental elements.

SWOT Analysis

Considering the above discussed SWOT analysis of the Cronzy smart pen, it can be highlighted that though the hi-tech pen will provide unique features and great usability but the market may even face certain criticalities due to its processes. The product should consider these highlighted problem areas for its further growth and success.

PESTLE Analysis

Source: (Chafuen, 2017; European Parliament, 2017; U.S. Small Business Administration, 2016; Green, 2014; Malone, 2013; The Media Resources Center, 2013)

From the above discussed PESTLE analysis of the US, it can be evaluated that economic, legal and technological factors assists the company to further develop the product in respective market. The environmental, political and social criticalities should be considered adequately in the operational path of the Cronzy pen to remain available, feasible and successful in the US’s art material market.

5. Market Analysis

Industry Analysis

Based on the changing trends of the art material and pen industry, it can be observed that preferences of certain groups of individuals have changed with the emerging market with the expectations remaining the same. In the context of editorial and art related work procedures, pen and these materials are highly utilized. On the other hand, educational purposes also pen and such types of materials are mainly used. However, in the context of contemporary world of art materials, technology is one of the important criteria that can be recently included as a prime object and immensely change the form of outcomes as well as necessity in the individual’s life. According to Yerak (2016), people who are associated with the tasks of writing, editorial and art as profession mostly prefers to carry an expensive pen in their personal tool kit as a professional practice. Considering the present scenario of modern people, it can also be highlighted that people have not forgotten the pen industry completely even in the era of digitalization. Based on the recent market analysis, it can be stated that there is a category of pen, which falls under the luxury items still has significant demand among the customers. Contextually, Yerak (2016) also portrayed in his article that, for making notes in office meetings, journal keeping and other art related aspects, several people still utilize the stationery products such as pen s, which can be considered positive news for the respective industry. According to the core pen industry’s distributors and sellers’ data, it can be inferred that individuals still use pen as an ideal gift items. New features and innovative designs are always welcomed in this industry as per the customers’ changing trends. The trend-setter companies in respective industry mostly consider the adaptation perspective in terms of the new product launch of their customers (Yerak, 2016). Considering these features and trends of the pen and art material industry, it can be stated that Cronzy pen has an opportunity to hold market attention as the luxury pen product possesses a special facility of digital adherence.

Market Competitors

Aston Leather, Ezra Arthur, Field Notes, Fisher Space Pen, Farnklin-Christoph, Karas Kustoms, Noodlers, Quo Vadis are the major pen companies that lead the art and pen materials market in the US. These brands are present in the market from years and are able to produce great value within the industry. These major brands produce innovative, quality and historic fine writing instruments for their customers. These companies hence produce their pens and art materials within the country and some of them even operate outside the country throughout the world. These pen brands do not utilize digitalization technology and advanced aspects in their products’ differentiation, similar to that of Cronzy pen. From this aspect, it can be stated that there is a prominent chance of Cronzy pen to hold the market position, gaining competitive advantage in the US, through comprehensive product differentiations and utilization of effective digital technology (Pen Chalet, 2017).

Company Analysis

Cronzy Inc is a new startup company of the US and the project, concentrating on the production and distribution of smart pen is developed under the crowd funding campaign. The project was established in the year 2014 with the concepts being approved by the management in 2015. The company started implementing the plan in 2015 itself and continued till the year 2016. Last year, the company invested its entire time to crowd-funding for the smart pen and developing the effective production stage. In the upcoming months of present year, the company will invest its time and capital in mass production and shipping the end products in different countries across the world (Indiegogo, Inc., 2017).

Customer Analysis

In the US, respective market of pen and art materials’ demand significantly follows a trend based on the customers’ requirements and changing choices. As previously stated, the industry has witnessed several changes with the passage of time but the industry has survived amidst it by meeting the expectations of its customers. Most often, it is observed that people who are involved with art, creative works and study mostly use such types of pen and colors. Similarly, children for their creative arts, crafts and drawings require variety of colors. Besides, for making notes, important points in official meetings at times, the authorized individuals require color pen or pencils. Considering the vast utilization of color pen or pencil, it can be inferred that in the era of digitalization also, these materials have not lost its importance completely. From this inference, it can be asserted that the characteristics of Cronzy pen will be able to provide a great experience to the users with respect to the variety of colors and innovative process of utilization.

Target Market Analysis

The initial target of Cronzy smart pen will be the people who are directly linked with creative work and different innovative art forms including painting, fashion designing and children development among others. Most prominently, these areas are fundamentally required comprehensive utilization of variety of colors and shades. Cronzy smart pen will be able to open up a new unique path for these creative people and ease their work by providing more than 16 million colors in their pocket without carrying multiple colored pens.

Points of Differentiation Analysis

The major point of differentiation in the product is allied with the unique characteristics of Cronzy smart pen in comparison to the other available products in the similar market field. To highlight upon the points of differentiation with other available colored pen in the US’s market, the following points can be considered:

• Innovative technique and convenience: In relation with the other competitors’ products in similar field of market, no other company can provide such kind of innovativeness besides Cronzy Inc
• Contemporary trends: This present era is a portrayal of digitalization and technological advancements, where Cronzy pen will also portray a similar digitalized unique concept for its customers
• Premium service: The Cronzy smart pen will provide a view to its customers that will be truly beyond their expectations. The smart pen claims that it will serve more than 16 million colors for its users that they can collect and save in their devices for their future use
• Value-added Packaging: The Cronzy smart pen will provide five different types of nibs, two color cartridge, charging case, power supply and instructions within a single packet

Positioning

It is an important marketing concept for company’s market penetration and further successful operative modes. In order to prove the effectiveness of this concept, Cronzy Inc should analyze the target market determines the advertisement idea, pricing strategy and sales locations. The core positioning strategy allies with the concept of pricing, promotion and place of company’s offering (Cravens & Piercy, 2006). In the context of quality, uniqueness and advanced features of Cronzy smart pen, it can be recommended that the company focus on its advertisement positioning for better responses.

6. Marketing Program

For developing the marketing program of Cronzy smart pen in the US’s art material market, it should consider the four marketing mix (4Ps i.e. product, price, promotion and place). The detailed elaboration has been provided below:

Product Strategy

In product strategy, Cronzy Inc should summarize its product line, product quality and packaging for better result in future. Product line signifies the range of particular product or the variety of its characteristics that the company offers within a significant market region. Cronzy Inc will hence plan to offer smart Cronzy pen, which has five different nibs with various diameters and two color cartridges. By changing the nibs, the user can use five different smart pens in a package of one pen. Besides the product line, product quality is another important aspect for in-depth product strategy. The digital technology and advance system that can be utilized within the Cronzy smart pen’s process develops a comprehensive quality for implementation. Packaging is one of the great aspects of marketing strategy for the manufacturers, through which they can establish an ‘edge to edge’ competition among the existing players in respective market region. Cronzy smart pen will provide a compact packaging for its customers, through which respective customers will be able to obtain pens with varied nibs for different utilization, color cartridge, designer charger box, power supply and instructions.

Price Strategy

Price strategy is an important factor that a company can utilize to hold competitive position in respective market. In addition, strategic pricing is also capable to develop a competitive advantageous position for the brand and its product. For one Cronzy pen set, the company will be planning to fix the price to $219. Besides, the company will provide several offers with multiple purchases of smart pens in a single order. In addition, the company should address the flexible pricing strategy and additional offers with the changing trends of market competition and customers’ expectation regarding the product price and offers.

Promotion Strategy

Promotion as a concept within marketing strategy has a significant impact in successful product implementation in the respective market region. The core idea of Cronzy smart pen will ally with the uniqueness and innovativeness that is beyond the customers’ imagination. The Cronzy smart pen will offer varied nibs for a single pen, which serves five different aspects for the users. Moreover, its easy technique of utilization can also prove be an effective promotional tool for the smart pen in the US market. For promotional aspects, the Cronzy Inc may utilize both online and offline concepts. Online promotion will provide the opportunities to reach maximum numbers of target customers at a particular point of time, while offline promotion will help to reach those customers who are not found within the online zone.

Place Strategy

Place or distribution strategy comprises the planning made according to the present market scenario. The company will propose an opportunity to the distributor to get the special offer for Cronzy smart pen’s dealership, through which the company can get attention from distributers. Besides, Cronzy pen can also follow a direct distribution planning through internet for foreign customers across the world.

7. Financial Data and Projection

Three Years Projections

Cronzy pen is a new concept of a startup company, due to which there is no resource of previous budget or profitability aspect. The following start-up budget for three years is structured to provide an idea regarding the estimation of its potential expenses, revenues, profits and future planning:

Table 1: Start-up Budget

The above depicted marketing budget is constructed based on the company’s initial objectives. Besides the initial three years budget planning, Cronzy pen will segregate 10% of its revenue for further market research, 15% for community and stakeholders’ development and 5% for contingency control planning.

Figure 1: Estimated Profit of Cronzy pen (3 Years)

Based on the profit situation for three years, it can be highlighted that Cronzy pen will be expected to earn 60% profit in 2017, 62% profit during 2018 and 66% profit in the year 2019.

Total Cost (TC)

Total cost refers to the entire financial cost of producing a specific product. Total cost of production can be increased or decreased with the amount of products or services (Kinney & Raiborn, 2012). TC for the Cronzy pen as stated in table 2 are $21900, $26280, $32850 for the year 2017, 2018 and 2019 respectively.

Fixed Cost (FC)

Fixed cost falls under the payable amenities of the company that do not change with the alteration of production amounts (Kinney & Raiborn, 2012). As stated in table 2, the amount of FC for the company in the three years 2017-2019 is $12000 each.

Variable Cost (VC)

Variable cost is the amount that lies with the company’s production volume. When the volume increases VC also rises and with the decrease in production VC deems to falls (Kinney & Raiborn, 2012). The VC for the company as projected in table 2 during 2017-2019 are $9900, $14280, $20850.

Table 2: Projected Costs of the Cronzy Pen

Marginal Analysis

Marginal analysis can be identified as the decision making tool for any company, which assists to maximize company’s profit. This process analyses additional expenses and additional operations to maintain a balance between them (Kinney & Raiborn, 2012).

Break-Even Analysis

Through the break-even analysis, a company can analyze its break-even level, where quantity or revenues are able to cover the entire cost of the company. At the break-even point total profit of a company is always zero (Kinney & Raiborn, 2012). The table below clearly illustrates the break-even analysis for the company:

Table 3: Projected Break-Even Analysis of Cronzy Pen

8. Organization

Every organization should maintain a hierarchical framework for developing effective work procedures and system frame. The Cronzy Inc has a team of six people along with its CEO. Being a technologically advanced system provider company, Cronzy Inc has different roles of hardware and software developers and managers. The following hierarchical framework given below provides a comprehensive understanding of the company’s workforce:

Figure: Hierarchical Framework of Cronzy Inc

Cronzy Inc is a startup company and these positions are permanent and essential for carrying out the production and distributional operations effectively. As the company grows with successful incorporations of product variations, many individuals with special expertise will be included into the hierarchy.

9. Implementation Plan

Introducing the Cronzy pen in the entire region of the US is one of the complex operations and will require innovative promotional activities to obtain the attention from large number of target customers. It will also contribute in raising their awareness regarding the products to enhance their curiosity for initial trials. As previously mentioned, Cronzy pen should include online and offline promotional criteria for reaching the maximum target customers within a short time span. The Cronzy pen’s management should plan an in-depth schedule to enter the US market and develop a competitive advantage within the market. In the context of determining the rate of success, the company should first assess its production and distribution trade-offs for maintaining the high quality operations throughout the US.

10. Evaluation and Control

For an effective evaluation planning, Cronzy Inc should incorporate short term goals for its initial production, distribution and selling units for each of the region in the US. Moreover, the company can also set certain monthly sales target for meeting the projection. In addition, for measuring financial activities and control over the operations, the company should incorporate financial audit system and include financial recommendations on a professional level for balancing the budget and revenue, thereby enhancing the strategies within particular time interval (Dauber 2009). On the other hand, Cronzy Inc will be needed to undertake adequate control to deal with the situational inconveniences. The following strategies can be considered as the key control measures for Cronzy smart pen:

• Merger and acquisition with any stable technologically advanced brand in the US.
• Identify a potential buyer for the Cronzy pen concept in order to deal with contingency situations.