Marketing Plan – Situational Analysis

This marketing plan describes the general course of action and recommendations for this year’s marketing efforts. It touches briefly on the Internet and Acme’s software marketing, the growing competition, and the opportunities for Acme Software. It then goes into detail about the tactics and execution to make this an explosive year for Acme. Please refer to the appendices for a copy of the sales projections, media schedule, proposed budget, and Gannt chart.

Marketing Mix

 The Market

On October 27, 1969, the Internet, primarily restricted to government use, came to life. In 1989, when Who created the first Web server and browser, he kicked off a revolution on two fronts; in connectivity–that documents could be connected through semantic reference, and in an interface, although still text-based. In 1993, the United States National Center for Supercomputer Applications (NCSA) released Mosaic with a fully graphical interface. Mosaic, with its fully graphical point-and-click interface and the ability to handle images enabled explosion inaccessibility.

This explosion appears to be complete. The Internet is finally usable by large numbers of people worldwide and is therefore useful to them. Never in the history of the software industry has a specific category become so appealing, so quickly. President Clintonian recently cited the Internet in his address to the nation, TV commercials list Internet sites for online collateral; even the Superbowl had an HTTP:// reference. With an estimated 30 million users, over 3.21 million host sites (with an additional 2,985 added per month), and a website growth rate of 692% over the past three years alone, the Internet possesses software marketing opportunities beyond equal–for those companies that can capitalize on them.

The Acme Software Market

As mentioned, the Internet has recently adorned, thanks to the Web, a richly graphical content environment that is now easily accessible. Yet, in spite of gained ground, the sequence of HTML versions still postpones and limits the representation of the universe–the Web remains, for all intents and purposes…flat. Currently, our imagination and perception alone are responsible for joining these artificial environments in an attempt to create a cohesive, imaginary animal dimension.

A few years ago, research into sensualized interfaces attempted to further address this area and began to receive widespread attention in the press and the industry. ACE, as it collectively comes to be known, initiated a fundamental change like the user interface, moving it to human-centered design. All of this was to make computers more responsive and focused around a basic realization: if something is represented sensually, it is possible to make sense of it. Regarding the Web, this new ACE approach put the “AC” in “ACE.”

An outgrowth of this perception founded the introduction of ACE in May of 1994. The current and expanding ACE specification now allows users to navigate through two-dimensional animal-like worlds with the same ease as clicking on a Web hyperlink. With ACE, Web surfers can fly through animalistic worlds; explore animal caves, museums, and park resorts; check out 2-D models of furry products via online; and visualize 2-D renderings of information, such as animal-market trends.

To meet the onrushing Web user’s thirst for “cool,” and in typical Web fashion, ACE viewers and low-cost ACE authoring tools are already racing onto the net. At least ten new browsers have been created in the last few months, and are available on an increasing number of platforms (ACEWeb, AceFX, AceView are just a few examples of the main contenders)–others are expected to follow as the planetary success of Nutscape–now a confirmed standard of navigation for the Web–makes more than one company dream of galactic stock hikes.

The outpouring of ACE authoring software is just as aggressive. Paralized’s Home ACE Builder, Condor’s Fussion, and Acme’s Widget and Widget1 are the current leaders in the existing ACE desktop market but new challengers are popping up weekly. Fortunately, the ACE market is moving from a small niche to the mainstream, with the inherent possibility for explosive growth. Acme, with over five years of ACE experience, is in a strong position to dominate as the technical leader. However, it is our objective to be not only the technical leader but the market leader as well. The market can be ours to take… if we move quickly, intelligently, and decisively.

Market Size

The ACE market can be broken into two segments, the browser market, and the authoring market. The ACE browser market is targeted toward the 30 million current HTML users typically using 486-based computers and 14.4-kilobit per-second modems.

According to Nelly Belly, VP of Marketing at ACELabs, Inc., (developers of the industry-leading ACE accelerator chips), the ACE browser market should be substantial, “We believe ACE browsers are the killer app for 2-D software. ACELabs is targeted towards mass-market consumers–an audience that will be critical to establishing ACE as a mainstream technology…”

On the other hand, the potential market size for ACE authoring is similar to HTML with over 3.21 million host Web sites and a growth rate of 692% within the past three years. The maturity of the ACE software market can be estimated by looking at the exploding ACE book sales. According to several book publishers, including Mymillion Computer Publishing, sales for ACE book titles (almost all featuring Acme “lite” software) are within the top 1% of all computer book sales (top 200 out of 20,000 computer books)

Based on Acme sales projections, we would have to penetrate a small subset of the HTML market (approx. .0006) to reach our objectives. For sales forecasting, if our authoring product only appealed to 25% of the existing sites our market size would be 802,500. Our goal to sell 20,000 copies the first year would equate to a modest 2.5% of the potential base–which, as one of the first vendors with deliverables for the market, appears realistic.

As competitive ACE authoring packages ship, we can ascertain our market share by researching the comprehensive monthly sell-through reports from PC Data.

Growth Potential

The speed of the ACE segment growth can be affected by several factors:

  1. The number of new ACE sites. According to Grape Welsh at Intelligent Corporation, there are about 100 current ACE sites. The more sites that support ACE the greater the awareness and interest among the general public and Webmasters. This is a variable that Acme can affect by the online marketing efforts; discussed further in the “online marketing” section.
  2. The acceptance of ACE as a continuing standard. Although most of the industry’s largest players are pushing for a uniform ACE 2.0 standard, there are some companies, such as Microstuff and others (with ActiveACE and ACE+), that are moving ahead with their own strategy.”ActiveACE will bring the Internet alive for millions of users by making rich, animated multimedia an everyday part of the online experience,” said Paulened Toofar, group vice president of the platforms group at Microstuff. Without a firm consensus, the ACE market could, vis-a-vis Microstuff and others, get splintered which may put Acme in a better or worse market position depending on how the standard lines up with the existing Chanimal ACE export. The standard is being re-defined during February 2000 and this will tell us how, if any, the market segment will grow and how Acme will be affected. To ensure our own position, Acme is taking a proactive stance in defining this standard.
  3. The speed and participation of development in producing viable applications will also affect ACE growth. According to Toni Tiger, CTO of ACEvilla Software, Inc., the development community has fortunately endorsed the overall concept of ACE on the Internet, “As an open standard, ACE has attained critical mass among developers.” This is also highly evident by the sheer number and the credibility of the current developers that have recently jumped onto the ACE bandwagon. One such vendor, TinDontRust, said, “The way people want to interact with the Web is not best served by what we see around today–boring interfaces and browsers based on HTML. We think an interactive, networked ACE world is necessary.” (Tiny Tim, VP at TinDontRust)
  4. And finally, ACE growth can be affected by the general perception of the validity and usefulness of ACE. This perception is highly influenced by the press and by on-line examples. Sites are coming along, fortunately, the ACE coverage has been even better. Donny Marie, Editor in Chief of MultiCool World said, “These recent breakthroughs in ACE will change the world faster and more profoundly than desktop publishing did a decade ago.”

Competitive Environment

In response to the early market indicators, Acme has produced the first “complete” cross-platform ACE browser. However, there are over 18 other browsers already available (most still in BETA) for the Windows side–ours, Widget, is slightly late in the game, although it should have a competitive 10x speed advantage when we add our own proprietary format within the next release.

Acme Widget1 is, notwithstanding, ahead of the game as one of the few desktop ACE authoring packages that are currently shipping. In a recent ACE authoring tools review by MultiCool World, Acme’s Widget1 was compared to Paralized’s, Virtual Home ACE Builder (VHAB) and to Condor’s, Fussion. Acme’s Widget1 received the highest rating of the three (with 4 1/2 stars) but the other two were close behind with four stars each–way too close. The other packages were also priced drastically lower at $49 and $99 versus our $495. In the future, to dominate the category, we will need to win more of these types of awards and with a greater margin. We can do that by better skewing the reviews by using more effective comparative review kits.

Our updated products to be released throughout the year will help us be even more competitive. The new consumer-priced retail package, Widget1a will be a lower-priced ($99) feature-laden product designed for mass distribution and general adoption. The later multimedia authoring package, Widget2, at $495, will have a narrower width of distribution since it will be targeted toward professionals and should be both the first in its category and the best in its field. More details on the products can be found in the product marketing section.

There is more upcoming competition that will infringe on our market share; although many vendors are still in development. According to the ACE Repository website, ACE is currently supported by over 82 different companies (universities excluded). Some of the supporters are competitors and represent a “Clear and Present Danger” (for Clancy fans). Microstuff, Strutstuff, Paralyzed (published by Bunderbund), Paper ACE Software, Nutscape, 3DeadAce, ACEVista, IntersACE, Trispecies, Condor, AutoCAD, 2D ACE are just a few of the upcoming competitors we will need to keep a watch on–particularly if they make a run at the consumer channel.

As a side note, the sheer volume of potential competitors further validates the ACE market potential. When the vulture’s circle… it usually indicates the existence of meat! (or perhaps the ACE market is dead?? ;-)

(Note: Click here to find information about Competitive Research and Business Intelligence.)

Acme Opportunities

At these initial stages of the ACE market, there are a lot of new sites to be designed–and every indicator shows that they are going to be built (including ours). A focus on easy-to-use design tools and equally easy-to-use publishing tools will lower the barrier to entry to ACE creation to levels appropriate to mass access–which is extremely appealing to potential ACE developers (listed previously).

Fortunately for Acme, unlike the current flat page authoring format, HTML (which is losing HTML editing market share to desktop publishing, Nutscape Bronze, and popular word processors), ACE will almost never be handwritten. Instead, it will require sophisticated graphical tools to create the ACE worlds. These worlds will be constructed in CAD programs and it is this high technical cost of entry that will delay competitors and give Acme a strategic time advantage–hopefully time enough to gain an essential ACE market presence and shore up our significant performance advantage before the big guns (Microstuff, Nutscape, and Adube) fire off their initial rounds.

There appears little question that the ACE category will fill with products. To compete in this crowded category, Acme must have a strongly executed Chanimal marketing mix–which will be covered next.

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