Market Research and Analysis

Customers
A large advantage our product has is the large size of our potential market. This consists
of any corporation that does some kind of business in foreign markets, including
international trade, business affiliations, etc. Our initial market will also include
international tourists, since there is a large demand for translation when people visit
foreign nations. We feel that both of these markets will be receptive to our device, since
companies will be able to save on salaries for translation staff and tourists would be very
interested to be able to fully communicate with someone speaking a different language.
Both of these markets would benefit from our device and will view the cost of $500 to be
reasonable, which means we should be able to capture a decent market share when we
focus on an area.

Once our business is more established, we will be able to expand into further markets.
This include universities and schools, and the visual and hearing impaired. These markets
would get a huge benefit from our device and we should be able to capture many sales
from this area.

Market Size and Trends

The sizes of these markets are both very substantial, as there are 922 million international
tourist arrivals annually in 2008, with a growth rate of 1.9% over 2007. In addition to
this, business done around the entire world is constantly rising. The total market of
translation services is estimated at $8.8 billion in 2005 with a projected increase of 7.5%
per year for a worldwide market value of $12.6 billion in 2010. This growing market is
due to globalization, which means all people are connected ever closer to each other
around the world. With theses new connections people have, tourism and international
business dealings are rising consistently and should continue to do so. This will give our
product a huge market with a constant possibility to grow as the market grows. Plus,
since the opportunity is so large, even with a small percentage of the market share, we
will be able to maintain profitability and grow our business.

Competition and Competitive Edges

At the moment, we have two current competitors, HKTDC and ECTACO® that
manufacture and sell devices capable of speech translation to several languages. These
products offered are at a higher price point than our product ($529 to $599), and do not
offer the range of features our device will incorporate. The competing products are able
to sustain a small market share since they are both smaller items sold by larger
businesses. Our company will be able to focus more on research and development and the
service we can provide to our customers. Because of this, our product will have a
competitive advantage as soon as it launches.
If we change our business in the future to offer a translation software, we will have
competitors in SYSTRAN®, SDL, babylon®, and PROMT®. These companies offer
translations ranging from free to $800 for business software, with monthly subscriptions
and translation by the word or document available. These companies will also compete
with our current device, but do not have the portability or features that our product has.

Estimated Market Share and Sales

Based on the advantages our device has over our competitors in features and price point,
we will have a continuous demand for our product and be able to sell any number of units
we manufacture. This will include around 100,000 units in our first year of sales and
200,000 units in the second year, at which point we can evaluate the demand for our
product and base our production on that. These initial sales productions are based on our
capacity to make our product in the first few years of business as we will need time for
fully develop our company. To expand our company and completely assess our
customers’ needs, we will continually send surveys to clients and potential purchasers to
gauge what changes might need to be made to our product. This will include our outside
sales team constantly evaluating customer demand and possible improvements to be
made.

Marketing Plan
Our initial marketing plan will center on selling to Canadian businesses that operate in
foreign regions that have a need for translation services. This market will be aggressively
targeted by our outside sales team, who will go directly to these companies and show
them our prototype to encourage interest. We will emphasize the features of our product
and the cost savings of our device compared to competitors’ products and having
translators on staff. The tourism market will be another main focus initially, which will
be targeted through print and internet advertisements, and possible deals with tourism or
travel agencies.

Pricing
Our product will be priced at a level that is competitive with other similar devices on the
market and allow us to generate a healthy profit. Our device cost of $500 will allow a
business to save money in the first month of purchase by eliminating the need for
translators on staff. The tourism market will see the price as a fraction of the cost of one
trip, while making each trip easier. This price will help the acceptance and market share
of the product, as it is cheaper than the competitors’ products and has superior features.
Since our product can be manufactured for around $50 per unit, there is a large margin
for warranties, sales staff, and an allowance for potential discounts or promotions. Our
company is able to offer this price and service because it is very specialized; only
offering one product and focusing a great deal on service and quality.

Sales Tactics
Since our product needs to be demonstrated to our customers, we will use a direct sales
team to sell it to the business sector and universities. This will allow the translation to be
shown directly, with multiple sales possible with each demonstration. With a sales force
on staff we will be able to keep our old business with good customer service, and to
constantly attract new clients. Since the tourism market would be quite difficult to
capture with a direct sales team, we will look at separate distribution channels such as
travel agencies. We may be able to make a deal that combines a translator with a trip to
foreign nation that speaks a supported language. Our sales force and distribution deals
would be the most effective way to sell our device for the most profit, as we would find
the widest market for the least amount of overhead per unit sold.

Advertising and Promotion

Our company has plans to advertise in specific areas and promote our product at trade
shows and conventions as they arise. Initially we will only advertise in business and
tourism magazines and websites to keep our advertising costs low. Beyond this, our
direct sales team will be constantly promoting our device and word of mouth will help if
our device can perform beyond our customer’s expectations. Since our product is quite
small and the numbers of units sold are not too high, the distribution costs would be a
very small percentage of our overall costs, even when dealing with international sales.

References

Timmons: Preparing a business plan

Business Plan Example: Human Power

http://en.wikipedia.org/wiki/Tourism

http://www.world-tourism.org/market_research/facts/market_trends.htm

http://www.commonsenseadvisory.com/Research/All_Users/060301_QT_top_20/tabid/1429/Def
ault.aspx

http://www.ectaco.com/ECTACO-iTRAVL-Corrida-Deluxe-NTL-9C

http://www.systransoft.com/

http://www.babylon.com/

http://www.online-translator.com/