Brand Extension Marketing Plan for D.Light and the State of Virginia
1.0 Executive Summary
Solar Photovoltaic (PV) consumer products are reliable, renewable and pollution-free energy sources that collect energy from the sun. PV systems are utilized within commercial and residential areas and are becoming more affordable for consumers to purchase. Here at D. Light we are offering PV options to consumers that will help lower their electricity cost. D.Light’s D3200 is an off-grid solar photovoltaic system that allows consumers to purchase three different sized systems that will generate more power than needed to do daily chores or run a business.
Lowering the cost of electricity for consumers in the Virginia Beach area is our goal; utilizing this brand extension and the marketing mix with various strategies. Operating in the PV industry can bring more investors and create value for the company while providing a return on investment for all stakeholders. Utilizing the research conducted on the targeted area, we will sale and promote our product to the 62% homeowners creating a 30% sales potential from the market. In addition, low operating costs will permit the company to design and sell the most affordable solar-powered products on the market, offer consumer’s energy independence, and create a sustainable energy economy all while remaining true to its vision: transform millions of lives.
Utilizing off-grid systems provide numerous benefits for both the customer’s and the company. For instance, electricity savings, renewable energy, low cost to maintain, efficiency, and no harmful emissions or pollutants to the environment; the benefits for the company include brand equity, opportunities for more partnerships and investors, opportunity to expand and large consumer base. Solar energy has become the most widely talked about energy choice the future; therefore, the price depends on a number of factors per watt can depend on the current market. The highest can be $12 per watt and customers needs include low cost energy solutions and products, utility security, alternative energy sources, environmental advantages, scalable, versatile and flexibility of installation.
Another advantage of investing in off-grid solar systems is the fact that they can be used in remote areas. Each system can produce enough power off grid more cost-effective than expanding power lines. Marketing on a global level will begin with collaborating with homebuilders to provide installation of solar photovoltaic systems in each new home built, direct mail, mailing lists, and specifically word-of-mouth on social networking sites. In addition, D. Light will offer free solar seminars to homeowners, businesses and anyone who wants to lower their utility costs. 2.0 Situational Analysis
The market for Solar Photovoltaic (PV) consumer products has significantly increased since its beginning in 1897and this type of energy resource seemingly becomes more accessible on a daily basis. Federal regulations, various financial options, and numerous utility options make it all possible. More and more business owners are increasingly interested in investigating in the PV market to reap the many benefits and offer the lowest price of electricity via numerous products worldwide. Solar powered products continue to cross business executive’s minds in a variety of industries and locations. It is a business that has grown into an investment flowing opportunity and has become abundantly needed worldwide. The solar consumer product segment transforms a small entity into a big entity; unfortunately the risk presents some unique challenges for the business. In the past, residential consumers and business owners utilized conventional energy products, i.e. kerosene, diesel, and coal in their day to day operations. Since the increase in oil prices has fluctuated and diesel has subsidized in some areas; phasing out fossil-fuel will continue for years to come. In order to determine a valid business model, some careful investigation into the macroeconomic, micro-economic and socio-economic factors must be considered and researched. Unfortunately, each of these areas are significantly different in other regions; therefore, it is clear there are numerous factors to consider before implementing any renewable energy technology onto the market, paying close attention to the fluctuating market and the market conditions. It is also necessary to take into consideration the finances, market trends, market growth, consumers, and location.
2.1 Market Summary
The emerging global market for solar consumer products has reached its peak and electricity manufacturers and distributors continue to enter the market to provide energy access to consumers at a low cost worldwide. With over 3.1 million people worldwide that pays high cost to electricity and energy service providers; it will make more sense from an economic point of view to electrify the communities via off-grid systems. It has been estimated that to achieve universal access to electricity by 2030, 60% of the total installed generation will need to be off-grid, of which, 18% will be standalone systems and 42% will be mini-grids. Solar photovoltaic products have a variety of uses: heating water, homes, and cooling; therefore, this brand extension will consider the domestic market, specifically the state of Virginia.
2.1.1 Market Demographics
Geographic
Virginia is known as the Old Dominion State, it became a common law state on June 25, 1788. It is an area filled with over 42,774 square miles of Pamunkey soil and borders Kentucky, Maryland, North Carolina, Tennessee, and West Virginia. Virginia is also the gateway to New York and Florida and has 5 climate regions: Tidewater, Piedmont, Northern Virginia, Western Mountain and Southwestern Mountain. The weather can get a bit sticky but there are times when the weather is not too cold and not too hot. Virginia is a state filled with many transportation routes ranging from an Amtrak station to 11 commercial airports for commuting short and long distances.
Research shows there are 5 prosperous and growing cities in the state of Virginia that are perfect to build a facility to market our products and help the local community at the same time. The chart below shows that Virginia Beach has the highest total population; followed by Norfolk, Chesapeake, Arlington and Richmond. The city of Virginia Beach has the potential to obtain 8,110 megawatts of solar power for residential and commercial consumers by the end of 2022. Illustration 1.0 Top Cities in Virginia
The plan will begin with establishing facilities in the city of Virginia Beach; a city that is in proximity to the PV solar plant in Murfreesboro, North Carolina. Virginia Beach is one city out of the top 5 that is part of an area that is called Hampton Roads. Establishing a facility in Virginia Beach will allow D.Light to provide easy access to solar energy for all consumers. The demographics of Virginia Beach consist of mostly married military couples with families and college graduates. Residents of the city for the most part are property owners; on the other hand, employment consists of mainly office, administrative, sales, executives, and construction positions. As for the weather, it is average during the summer months at 87 degrees and during winter months the lowest is at 26 degrees. The map below highlights the targeted area. Illustration 2.0 City of Virginia Beach
The communities in the city entails a variety of industries, including nationally and internationally known corporate headquarters, high-powered and technologically advanced manufacturers, billion-dollar defense contractors and locally owned businesses. Virginia Beach is a strategic location and friendly environment for all business entities; so much so that it is a hub to over 180 international foreign businesses to establish their North American headquarters or an office location in Hampton Roads. Large and small organizations employ thousands to make a unique contribution to the growing economy.
Population growth in Virginia Beach has increased at a rate of 2.4% annually; unfortunately, current data from the University of Virginia shows that the growth rate will decrease every 10 years until 2040. As of 2013 Virginia Beach population has reached 448,479 people and 209,043 (64.2%) of them are homeowners according to the U. S. Census Bureau. The Weldon Cooper Center states that the population will decrease in the near future due to economic and social conditions. The graph below that shows the decrease in population during the next 30 years. Illustration 3.0 Population Decrease
The city of Virginia Beach current demographics report of this year shows that 67.4% are Caucasian (white), 19.6% African American, and 0.4% American Indian and Alaska Native. The Asian and Pacific Islander population equals 6.3% and the Hispanic or Latino population equals 7.3%. In addition, 4.2% of the population are individuals of two or more races and 2.1% are considered as another race. Meanwhile, the per capita income in 2014 reached $59,049, while the median average income equaled to $74,867. The table below represents the total homeowner population in the city, a chart that shows the type of housing for solar energy; followed by a chart that highlights the overall state of Virginia’s homeowners by age. Illustration 4.0 Homeowners Population Illustration 5.0 Housing Types Illustration 6.0 Homeowners by Age
Our two target segments will begin with age group’s 35 to 44 and 45 to 54; combining these two segments of the population in the area will provide D.Light a total of total 16.6% of residential sales. The percentage of sales from solar energy at parity for D.Light will depend on the number of consumers gained from marketing in the residential area; while the commercial area sales potential total 2.9%. The combined total will estimate 9.6%; according to the IREC Virginia has a 7.9% potential to obtain consumer sales of solar electricity at or below the normal cost of retail electricity. Since this is the most recent data that is available, we will use this information for our service line.
Reaching the target audience will take some careful marketing strategies due to the type of product being offered by the company. Solar energy can reduce the high dependency for fossil fuels in the surrounding area of Virginia Beach, Virginia. Therefore, to market our products to the two demographic segments based on age; requires some modern and new marketing strategies. We will target the market by focusing on consumer personality traits, values, and lifestyles. In other words, to successfully integrated solar energy products in the city; we have to jump from the modern theoretical knowledge and design a product that promotes economic growth and lower energy cost for consumers. Research conducted about the consumers in the area shows that customers in the two segments love to shop, party, vacation, and have fun.
According to research conducted by Old Dominion University, Virginia Beach is home to over 9 major retail corridors, retail stores, and has more than 20 million square feet of retail space and continues to be strong due to the local’s high incomes and desire for new and unique shopping experiences. Residents spent more than $4 billion last year, and tourists that vacation there add another $1.2 billion. Virginia Beach is also the perfect location to develop solar energy to increase our presence on the domestic market. The city is committed to the environment and sustainability of communities; as an incentive to business they offer a discount on property tax at a rate of $0.15 per $100 of the assessed value - if the company operates in an energy-efficient building. It is a city that hosts one of the most active Foreign Trade Zones (FTZ) in the country. There is no doubt that D.Light cannot break domestic sales records and open a facility for Solar PV consumer products in Virginia Beach.
Behavioral Factors
 Internal factor - limited information processing and memory capabilities causing biased decisions
 Analytical – focused on moment of choice for course of action
 Non-personality – leadership, training/experience, and morale
 Time stress – (quantity and quality) too much or too little information
 Dissonance – uncomfortable and tension about chosen course of action
 Missing finances and stakeholders
 Vulnerability, accessibility to, and susceptibility of consumers
2.1.2 Market Needs
Energy, a much needed necessity that plays a critical role in our daily lives; and with the recent increase in energy costs, oil prices, and the population, energy demand has increased rapidly. Sustainable energy is the key to the growth and optimization of the city, the economy and for the customers combined. Statistics show that the demand for solar energy has increased by 30% annually over the past 20 years. This is due to the decline in costs and prices of electricity; current fourth quarter reports show that solar energy has generated record revenues of $67.1 million. Solar energy can fulfill the anticipated need for “green energy”, affordable electricity costs, and environmental safety. Therefore, the company will strive to provide the following benefits to the community:
 Offer reliable competitive products and services at lower cost than their current electric service provider
 Reduce environmental concerns – low emissions, customer lives, etc…
 Lower unemployment rate
 Maintain financial status – customer accessibility
 Maintain energy security – utility and products
 Be the leader in the industry
2.1.3 Market Trends
Satisfying product and service quality and cost requirements for current and potential customer’s always presents some hassle to organizations. On a daily basis managers try to innovate new products or services that will fulfill customers needs; unfortunately, trends can influence how a customer views one organization products compared to its competitors. Therefore, it comes down to those that create the product and the expertise that management possesses to understand how to implement a successful marketing plan into their new and existing products.
Trends that can influence how customers will view our product compared to the competition includes:
 Psychological – perception about quality, efficiency, function, and effectiveness of the product; does it meet consumer need
 Competition – products and services
 Political – pressure to eliminate fossil fuels
 Finances
 Price –product or service at a low or high cost
 Culture and social status – family, friends, etc…
 Marketing – familiarity with the product or service
 Personal – interests, age, lifestyle
There are numerous reasons or trends that can influence the way a customer analyze our products compared to the competition during their decision making process. It requires D.Light to identify and understand each of these factors to create a strategy or unique value proposition to deter or lessen the perceptions of consumers. Doing so will help us target our market segments and our products will fall more in line with the needs and their way of thinking; thereby increasing sales and the bottom line of D.Light.
2.1.4 Market Growth
According to a research study conducted by Lux and the Solar Energy Industry Association, the solar energy industry is expected to grow at a rapid rate of 8.3% nationwide. The increase occurred in 2013 from 37.5 GW and by 2019 will reach 65.6 GW; with an annual growth rate of 16.3%, there is no doubt that the United States will be the fastest-growing country as consumers purchase new installations. The U.S. will grow faster, outgrowing the rest of the country; growing from 4.7 GW to 11.7 GW; while new installations nearly tripled in 2013 from 5.3 GW to 15.4 GW in 2019. On the other hand, the cost to run the system will dramatically decrease to an estimated $0.36/W for utility-scale and $0.60/W for residential consumers by the mid era of 2019. Cutting the total cost to run the system by 20%; and since 2012 the solar industry market has seen a remarkable increase for the use of solar power. The amount of solar panels installations in Virginia on household rooftops totaled to over 54 megawatts of solar power, more than doubling the 21 megawatts in recent quarters. The chart below highlights the generating capacity by fuel type for the United States from 2012 to the first quarter of 2014. Illustration 7.0 Generating Capacity by Type
Research performed by the Institute for Self-Reliance points out that effectively capturing solar energy and provides it at a low cost for residential and commercial consumers can be provided at 9% of the total U.S. electricity use by 2022. This means that homeowners and commercial businesses can install solar PV products on the rooftops of their homes or business and reap the benefits of low cost electricity. The table below highlights the solar parity potential for both residential and commercial consumers by year beginning with 2012. For instance, residential consumers can install solar PV products and obtain 75,000 MW of solar power and commercial consumers can also obtain 33,000 MW of solar power all for no more than $3 or $4 per Watt by 2016. This means that D.Light can offer solar PV products to both consumers at prices competitive with retail electricity. Illustration 8.0 Solar Parity Potential
On the other hand, solar power is growing faster than expected, there is potential that it can increase by 2022 for residential consumers to obtain 190,000 MW of solar parity power and commercial consumers can obtain 122,000 of solar parity power. In fact, residential installations passed non-residential installations (i.e., commercial, industrial, government and nonprofit) in the first quarter of 2014. The utility segment will increase to 45%, while the residential segment increases to 49% over the next year. Unfortunately, the non-residential segment will decrease to 1.4% due to no government incentives. As a result, solar installations represent a sizeable amount of the new electricity source in the U.S. Currently, solar PV represents 36% of the capacity in the U.S., second to natural gas. Our goal is to offer bright and clean solar power accessible to all residential households who want to have a better life and future for themselves and their children. The table below shows the residential and non-residential installations for the years 2008 to the first quarter of 2014. Illustration 8.0 Residential – Non-residential Installations
2.2 SWOT Analysis
The following SWOT analysis summarizes the key strengths and weaknesses Virginia Beach faces, as well as the opportunities and threats to be considered.
2.2.1 Strengths
 Credibility and trust
 Strong customer relationship via monitoring
 Energy pioneer with excellent marketing tactics
 Excellent sales via knowledgeable staff
 Social influences
 Excellent products for customer value
 Brand recognition
 Reputation as an innovator
2.2.2 Weaknesses
 Too much or not enough inventory
 Less finances to support staffing and costs
 Weak supplier and vendor relationships
 No ROI – stakeholders
 Old market research data
2.2.3 Opportunities
 Expansion of products
 Expand locations
 Increase product demand
 Product distribution and diversity
 Increase consumers
2.2.4 Threats
 Numerous competitors on the market
 Fluctuating economy
 Less consumer spending
 Stronger competitor brand on the market
 Shipping and transportation barriers
 Payment systems
 Legal systems
2.3 Competition
The solar energy markets competition can be very fierce; and in the city and surrounding areas of Hampton Roads there are 108 competitors in the local vicinity that D.Light will have to gain an edge over. Every business no matter the industry will have competition; it can also bring numerous benefits to the company. Organizations that create similar products compete for consumers, lowest price, innovations, marketing, suppliers, and sales. With that in mind, D.Light’s top competition in Virginia Beach includes: Solar Services, Integrated Power Sources of Virginia, and SolarTyme on the local domestic scale. Worldwide competitors include but are not limited to include: Trina Solar, Suntech Power, Solar Energy International, and Bosch.
One of D.Light’s top competitors is Solar Services; their marketing mix includes:
 Product: Creating marketing ads based on consumer reviews and ratings
 Promote: Partner with sports players and teams that are loyal customers
 Place: Broaden consumer awareness via seminars every three months at various locations
 Price: Provide free estimates via a solar program for new consumers
D.Light’s products are created with passion for consumers at the right price; some are portable, and others are grid built. All D.Light products are solar-powered that are a perfect fit to use in low-light settings. The lights transform the lives of many customers; and are develop from high-quality materials. D.Light will continue to utilize a theoretical path; we will continue building the brand, build consumer trust and increase referrals through implementing extra social media sites, public relations, media, and advertising.
2.4 Product Offering
All solar systems produce a set amount of energy flow when there is enough sunlight to shine on the panels. This power determines whether the consumer will have an on grid or off grid system. D.Light manufacturer’s three different types of solar product segments: single use, multifunction, and power systems. Under the single use segment, which we call the learning light segment; we create two portable, hand held LED lights: the S2 and S20. Under the multifunction segment, we create one S300; and under the power system we create the D20. Now we will create a brand extension to the multifunction segment which includes the off grid system the D3200.
D.Light will create an off grid system for residential and commercial consumers that is cost-effective, heats, cools, and can be utilized for cooking, drying clothing, and for other uses. This product will be called the D3200, designed to service residential homes, small businesses, and municipal stations. The D3200 prevents blackouts, can be easily financed, has the best off-grid power, and can be set to a per energy wattage according to the consumers specifications (2K-3K). The D3200 can easily be equipped to service six rooms per home and each room with a ceiling fan. Our product will come with a 6-year warranty to cover replacement parts.
Our off grid system provide numerous benefits; these benefits include: savings on electricity, renewable energy, little to no maintenance, increased efficiency, and no emissions or harmful pollutants. Therefore, building brand equity for our new brand extension begins with building partnerships with different organizations to gain expertise knowledge on the local market; focus more on our core competencies to create a viable business; and build support systems to understand the socio-cultural segment.
2.5 Keys to Success
There are numerous factors that will determine the success of this company; three primary keys to success:
 The people – consumers and staff
 Innovation – developing new and reinventing old products
 Expertise – skills and knowledge of the business
2.6 Critical Issues
Every business face issues on a daily basis; to handle these issues D.Light will continue to build trust for our customers by monitoring their purchases for full period of their warranty. For D.Light to monitor customer purchases to guarantee that their product fits their needs will build our brand image and equity. Employees will continue to train and gain on-the-job knowledge about all of products and services performed to consumers to guarantee that we maintain a competitive advantage over our competition and offer our products at a competitive price. All of the weaknesses will be dealt with by maintaining that all of research data regarding the market is up-to-date and this will provide the company with potential opportunities.
3.0 Marketing Strategy
D.Light currently provides low cost portable solar-powered LED devices to consumers; specifically in the lowest growing economies. In order to continue this process, our marketing objectives will begin with partnering with homebuilders. Doing so will allow the company to install solar grids for free to potential homebuyers. For homeowners that already are living in their home, we will begin offering free solar seminars; those attending the seminar will receive a no cost estimate on the best approach for lowering their electricity bill. If the consumer decides to purchase our system we will provide a $1000 incentive. The customer will not have to pay us one dime until we complete the job and deduct the $1000 off the price of the grid. Marketing our products will begin with numerous pricing options that are flexible for consumers to purchase the product with no additional strings attached. We will create a team of 12 sales agents that will market products to the 62% of homeowners. Marketing strategies begin with direct mail, mailing lists, and specifically word-of-mouth on social networking sites.
Our consumer base will grow through word-of-mouth, direct selling, networking site posts, and cold calling consumers within our target market.
3.1 Mission
The solar power industry is increasing and as technology continues to increase; so does the demand for electricity. Therefore, our mission at D.Light remains the same to become the global leader providing affordable solar energy powered products to households and businesses around the world; while transforming the use and energy purchase through our products. Although there are significant reasons why consumer should purchase our products; our value proposition sums it up for Virginians who want to become energy independent; D.Light products features Optiwave technology that has been designed and installed in all our Off Grid Solar Energy Systems. Our Off Grid Systems optimize power output to make living enjoyable via affordable and quality products. Therefore, our value proposition, offer products that are less complicated and affordable to provide solar-powered energy to lower the cost of electricity and the ideal sustainable and dispatchable power method for households and business.
In addition, our fundamental goals for quality to guarantee that more and more home owners become independent from electric utility companies include:
 Design and sell affordable solar-powered products
 Promote energy independence
 Create a sustainable energy economy
 Transform millions of lives by year end 2025
 Improve consumer satisfaction
 Focus on staff/employee growth programs
 Establish effective and efficient quality programs
 Invent cost effective business solutions
3.2 Marketing Objectives
Our objectives include generating 90% sales within the first quarter, improve and maintain customer relationships, and achieve operating efficiency at 95% within two years. Plus, D. Light will decrease customer order shipping times and resolve customer complaints within 10 days, changing from our current 30 day time frame. Our overall objective to gain a share in the market begins with knowing and understanding our consumers and their needs. In addition, to gain our share of the market we will continue to create high-end products at a low cost for consumers that are customized to fit their needs; doing so motivates the customer's to purchase our products.
Although the market size is a critical aspect; the number of consumers wanting solar power will provide a significant gain for D. Light to obtain a share of the market.
3.3 Financial Objectives

3.4 Target Markets
D, Light will focus on meeting the consumer demand within the Virginia Beach area; mainly on Solar Services, Integrated Power Sources of Virginia, and SolarTyme consumers. We will also focus on the 62% of homeowners that want to lower their electricity usage and monthly costs. D. Light will establish relationships with consumers and believe each consumer will provide an exceptional number of referrals. Therefore, the chart estimates show that D. Light will achieve 30% of revenue from referrals and 50% from clients of the competition and 20% from new business. The table below further estimates the total projected sales by age in the targeted area, Virginia Beach. Illustration 9.0 Sales Projection By Age Illustration 10.0 Target Market Consumers
The potential for profit in this segment is very high. The operating costs required to address this segment are minimal, allowing a majority of service revenue to be turned directly into profit. While the barriers to competitive entry may be fairly low, no clear leader has gained the mind-share of the potential client market. Additionally, based on the overwhelming size of the market and the distributed nature of the potential clients, it is unlikely that any competitor will be able to dominate the market in the near future.
3.5 Positioning
D. Light provides exceptional quality products to consumers; we hire the best qualified individuals that have the much needed skills and experience to help the business succeed and grow. Our products and services are custom made specifically to the unique needs of consumers while focusing on long-term solutions to improve their electricity usage. Therefore, our position as the leading PV product supplier will focus on residential and commercial business owners.
3.6 Strategies:

3.7 Marketing Mix/Program
D. Light’s marketing mix program will be comprised of the following mix, as described by the 4P’s. Product
Our product is an off grid system for residential and commercial consumers that is cost-effective, and can be utilized for numerous uses. The D3200 will be designed to service residential homes, small businesses, and municipal stations; our product will prevent blackouts and can be easily financed. The system has the best off-grid power, and can be set to a per energy wattage according to the consumers specifications (2K-3K). The D3200 can easily be equipped to service six rooms per home and each room with a ceiling fan. Our product will come with a 6-year warranty to cover replacement parts, a replacement solar panel and a battery pack that can be charged to cover when there is no electricity available. Price
Based on current research the price of off-grid solar powered systems range from $400 to $5000; and based on these prices D. Light will counter with a price that is suitable for all residential and commercial owners. The price of D. Light’s off-grid solar system will depend on the wattage set by the consumer. For example, for 480 watts the price of the grid is $675. For 1500 watts the price of the grid will be $1300 and for wattages above 1500; the price of the grid will be $2550. Each our off-grid systems are customizable to the consumer’s specifications and will be priced accordingly. In addition, normal costs of installations will be $85/hour until the project is completed no matter the number of employees that complete the job. Place
The commerce area in Virginia Beach is composed of a highly-diverse collection of industries, including domestic and international corporate offices. Currently we have set a location in the Virginia Beach area; therefore, the main location of our facilities will be in the Pembroke district. Total population in this area shows that there are over 291,000 households with a median income of $50,464 and close to the heart of the city. Currently there are no solar energy organization in this vicinity which makes it a perfect location to conduct business. Distribution of our product begins in the region of Virginia Beach, with successful sales we will potentially expand in Norfolk, and Chesapeake region. Promotion
To promote our products D. Light will use various strategies in order to maintain a loyal consumer base and a competitive advantage over the competition. Working with Insight Promotions the company will create sweepstakes to allow business and homeowners a chance to win a free off-grid system. In addition, we will maintain social networking sites, advertise in local and national newspapers, on billboards, magazines, radio stations, and advertise on television. Participating in the local better business bureau and chamber of commerce chapters to allow consumers to view everything there is to know about our company and products and services that we offer. Doing so will allow us to increase company and product exposure.
3.8 Marketing Research
The best type of marketing research that will work best to get the information needed to make informed decisions starts with the current market analysis. This includes the current situation, legal, political, social, and environmental factors that will hinder the businesses success. In addition, information conducted during a primary research includes interviews with potential clients, surveys, focus groups and mail questionnaires are an exceptional method to utilize to help make critical decisions. Our secondary research will consists of qualitative and quantitative analysis of all the data collected during the market research to determine the best methods to utilize before proceeding with investments and other business transactions and to evaluate the data as needed. D. Light will conduct a meeting to determine whether to hire an outside company to conduct the research or perform the analysis on our own.
4.0 Financials
The next sections concentrate on the financial overview of D. Light relative to the startup of the company and the project, D3200 going to market. The fixed and variable expenses along with monthly expenses have been estimated to provide a full overview of the forecast and future success of the company. Included with this financial data is a quarterly break even analysis and a three-year forecast.
4.1 Break-even Analysis
During the first quarter of the year, operating and running the business and with an estimated 500 D3200s in inventory, will provide the company with a total sales estimate $337,500. These calculations will put the company’s profits at $36,200, unfortunately, further review of the data shows that the contribution margin per unit estimates 162; and the company’s gross margin, earnings from the sale of the small D3200, before the deduction of expenses at $81,000. The total number of the small units to sale every year to break even is 277; unfortunately, further analysis of the information, shows that for the remainder of the first year we will remain in the red until the third quarter of the second year.
Furthermore, the company will see a small profit during the third and fourth quarters of the second year. In the third year, D. Light will remain in the black to remain profitable. Data tables were created for the medium D3200 and the large D3200 as well; the illustrations below will high the break even analysis performed for the small D3200.

Quarterly Breakeven Analysis
D. Light Small D3200
Amounts shown in U.S. dollars
Sales
Sales price per unit 675
Sales volume per period (units) 500 Total Sales 337,500
Variable Costs
Commission per unit 300
Direct material per unit 60
Shipping per unit 33
Supplies per unit 120
Variable costs per unit 513 Total Variable Costs 256,500
Unit contribution margin 162 Gross Margin 81,000
Fixed Costs Per Period
Administrative costs 4,500
Insurance 6,600
Property tax 1,200
Rent 30,000
Other fixed costs 2,500 Total Fixed Costs per period 44,800 Net Profit (Loss) 36,200
Results:
Breakeven Point (units): 277
Illustration 11.0 Small D3200 BE Analysis I Illustration 11.0 Small D3200 BE Analysis II Illustration 12.0 Small D3200 Unit CM Illustration 13.0 Small D3200 VC Per Unit Illustration 14.0 Small D3200 BE Chart
4.2 Sales Forecast: 1st year by month; 2nd and 3rd years by quarter
The sales of the small D3200 will start at the end of the second year in business and remain and a steady rate of return during the remaining years of operation. Additional forecasts for the medium sized D3200 are similar to the small. The difference with this size is that during the first three quarters of the first year in operation; the company will remain in the red. Sales price for the medium unit is $1300, the company will start with 500 units and during the fourth quarter of the first year the company will make a profit of $18,950 and continue to see profits with the medium unit sales. The unit contribution margin for these units equal 425, the gross margin $212,500 and the break even units total to 105.
Furthermore, the analysis of the large sized D3200 with the same amount of inventory provides the company with break even units at 52. On the other hand, no sales will be made on this unit during our first and second quarter of the first year of operation. The good news is that during the third and fourth quarter of the first year and the remaining operating years the company will see significant gains with the sale of the larger units. The following illustrations contain data regarding the medium and large sized D3200s.
Quarterly Breakeven Analysis
D. Light Medium D3200
Amounts shown in U.S. dollars
Sales
Sales price per unit 2,550
Sales volume per period (units) 500 Total Sales 1,275,000
Variable Costs
Commission per unit 1,350
Direct material per unit 120
Shipping per unit 100
Supplies per unit 120
Variable costs per unit 1,690 Total Variable Costs 845,000
Unit contribution margin 860 Gross Margin 430,000
Fixed Costs Per Period
Administrative costs 4,500
Insurance 6,600
Property tax 1,200
Rent 30,000
Other fixed costs 2,500 Total Fixed Costs per period 44,800 Net Profit (Loss) 385,200
Results:
Breakeven Point (units): 52
Illustration 14.0 Medium D3200 BE Analysis I Illustration 15.0 Medium D3200 BE Analysis II Illustration 16.0 Medium D3200 Unit CM Illustration 17.0 Medium D3200 VC Per Unit Illustration 18.0 Medium D3200 Variable Costs per Unit
Quarterly Breakeven Analysis
D. Light Large 3200
Amounts shown in U.S. dollars
Sales
Sales price per unit 2,550
Sales volume per period (units) 500 Total Sales 1,275,000
Variable Costs
Commission per unit 1,350
Direct material per unit 120
Shipping per unit 100
Supplies per unit 120
Variable costs per unit 1,690 Total Variable Costs 845,000
Unit contribution margin 860 Gross Margin 430,000
Fixed Costs Per Period
Administrative costs 4,500
Insurance 6,600
Property tax 1,200
Rent 30,000
Other fixed costs 2,500 Total Fixed Costs per period 44,800 Net Profit (Loss) 385,200
Results:
Breakeven Point (units): 52
Illustration 19.0 Large D3200 BE Analysis I Illustration 20.0 Large D3200 BE Analysis II Illustration 21.0 Large D3200 Unit CM

Illustration 22.0 Large D3200 VC Per Unit
• Risk
The risks associated with starting a new company and launching a new product are numerous; on the other hand, operating this facility as an additional location, the company’s only expenses include setting up email accounts, purchasing business cards, creating a website, and other basic communications methods. There are also continual expenses but do not directly affect the revenue, but create profits for the company. Furthermore, the market has to remain in a stable condition in order for the company to become successful; below are several risks the company may face in lieu of this project.
• Competition – those with valuable monetary and personal resources
• Management – the skills and talent of current employees that hold this position; some may lack knowledge and expertise
• Location – the chosen location may not be easily acquirable, less attractive, or customers may not want to purchase our products
• Labor market – starting a company with high unemployment rates may be a much needed opportunity; but on the other hand, choosing the right employees may be limited within the area
The most critical components of sales performance starts with the process of how we conduct business, design our products for consumers, and the overall marketing strategies. In addition, other factors include the current market situation, profitability, sales employees, customers, and marketing department. The success of this company will depend on all the factors mentioned because no company is successful without consumers.
4.3 Expense Forecast
Attached below is a pro forma business forecast statement that estimates the operating expenses for the year. This will determine whether or not the company will have enough finances to operate the business. The current target operating market in Virginia Beach provides the company with enough potential to gain consumers and maintain a successful business. In addition, success of the company in this targeted area will depend on finding the right consumers and employees to hire that will help the company achieve its goal. Our goal will begin with finding investors to capitalize on our finances to build a building instead of renting before the end of our second year of operation.
D. Light's Pro Forma Business Budget (estimates)
Marketing Expenses
Expense Category Planned Expense Actual Expense Variance Brochure $ 300.00 $ 120.00 $ 180.00 Website $ 500.00 $ 100.00 $ 400.00 Business Cards $ 150.00 $ 15.00 $ 135.00 Advertising $ 1,000.00 $ 1,000.00 $ -
Marketing Consultation Fees $ 1,500.00 $ 175.00 $ 1,325.00
Website Maintenance $ 2,000.00 $ 175.00 $ 1,825.00
Total Marketing Expenses $ 5,450.00 $ 1,585.00 $ 3,865.00
Illustration 23.0 Pro Forma Budget
5.0 CONTROLS
The best way to monitor sales activities, expenses, revenues and other business actions will require the business to create a journal or utilize Microsoft Excel. This process is critical in order for the company to achieve its goals and objectives. This allows the company to compare its operating budget to its pro forma budget with actual costs to estimated costs for the year of operations. In addition, the company can design a monitoring program utilizing Microsoft Access on a backup server to allow management to constantly monitor and update business activities at the end of the work day.
Each department lead in the marketing, sales, customer service, and human resources department will be required to post their activities at the end of the day for the CEO to verify activities are accurate. At the end of the month meetings will be held to discuss the status of the business and its overall progress for the month and determine some future strategies that will help the company continue on the path to great success. To determine the overall marketing effectiveness of the company’s strategies; we will mail or post on the company website, a link that allows customers to provide feedback on how our marketing strategies gain their attention to purchase our products. In addition, other surveys will be added to website to allow the consumers and employees to provide feedback on what we can change and make some suggestions and improvements.
Furthermore, assess the changes in the market environment will be outsourced to a consulting team to conduct market research on a quarterly basis. Doing so will allow the company to monitor the market situation so that we can make some changes to satisfy consumer needs and demands.
5.2 Marketing Organization
The marketing functions for this project will be handled by William Berry, the marketing manager and his team of employees. William has four other employees, John Dembury (Drawing), Nancy Jones (Art and Graphics), Katina Phipps (Editor) and Sarah Bloodline (Co-Editor). In addition, I, Charlotte Taylor will be the one to implement this brand extension plan to guarantee that we have a successful project before putting the product on the market.
5.3 Contingency Planning
All businesses face risk and for D. Light how we handle these risk will determine the amount of time we operate the company within the targeted area. Investing in the Solar PV market will increase the growth of the solar market and bring in a ton of competitors. Therefore, numerous risks come to play when developing a business. The first risk associated with Solar PV, the fact that most organizations may not see a return on their investments (ROI) which causes financial risks to the company. Second, physical damages caused by hurricanes, fires, and mudslides; all of which the company may see liability claims or endanger human and animal safety. Unfortunately, there are also risks that cannot be controlled; they involve poor lighting from the sun, weak electrical grids, federal regulation changes and electricity market prices.

Monitoring these risks and other factors will be a team effort; therefore, a team of eight employees will monitor these risks via constant research and market monitoring. During the weekly or monthly meetings the information gathered will help the company determine a strategy to handle these risks. In addition, we will also take a higher level of quality management to guarantee that we offer the best service to our clients. Adapting to adversity takes careful steps; therefore, we must first understand the situation and look at it from a different perspective by thinking outside the box. This requires the company employees and management to realize that we can overcome anything by motivating ourselves and remember that we cannot change everything that occurs within our lives or business. References
Baker III, H. G. (2001, August 21). Decision Making influences. Retrieved from http://www.unf.edu/~gbaker/Man6204/itee2.PDF
D.Light. (2014). About us. Retrieved from http://www.dlight.com
Douglas, S. P., & Craig, C. S. (2011). Convergence and divergence: Developing a semiglobal marketing strategy. Journal of International Marketing, 19(1), 82-101
Hall, S., Harrison, S., & Enesey, S. K. (2014). Virginia Beach: 2014 Community profile. Inside Business Journal. Retrieved from http://www.yesvirginiabeach.com/business-environment/business-environment
Farrell. J. (2012). Commercial rooftop revolution [Data file and book]. Retrieved from http://ilsr.org/commercial-roofop-revolution/
Gunter, M. (2012, November 13). Virginia population will continue to grow in size and diversity, U.Va researchers say. Retrieved from http://news.virginia.edu/content/virginia-population-will-continue-grow-size-and-diversity-uva-researchers-say
Institute For Self-Reliance. (2014). How much unsubsidized solar power is possible? Retrieved from http://www.ilsr.org/projects/solarparitymap/
International Energy Agency. (2014). WEO 2014 electricity database [Data file]. Retrieved from http://www.worldenergyoutlook.org/resources/energydevelopment/energyaccessdatabase/
International Energy Agency. (2014). World energy investment outlook [Executive summary]. Retrieved from http://www.iea.org/publications/freepublications/publication/world-energy-investment-outlook---executive-summary.html
Kotler, P. & Keller, K.L. (2012). Marketing management (14th ed.). Upper Saddle River, NJ: Pearson Prentice Hall
Leber, M., Bastič, M., & Buchmeisteri, B. (2014). The trends in usage and barriers of innovation management techniques in new product development. Strojniski Vestnik/Journal of Mechanical Engineering, 60(6), 382-388. doi:10.5545/sv-jme.2013.1611
National Renewable Energy Laboratory. (n. d.). The solar prospector. Retrieved from http://maps.nrel.gov/prospector
National Renewable Energy Laboratory. (n. d.). Solar resource data. Retrieved from http://maps.nrel.gov/prospector
Naval Postgraduate School (1998, July). Human factors influencing decision making
(NPS-OR-98-003). Retrieved from http://www.dtic.mil/get-tr-doc/pdf?AD=ADA351910
Nyman, H. (2012). How to successfully overcome adversity. Canadian Expat Network. Retrieved on January 24, 2014 from http://www.canadianexpatnetwork.com/public/186.cfm
Perreault, Jr., W. D., & McCarthy, E. J. (2006). Essentials of marketing: A global managerial approach (10th ed.). New York, NY: McGraw-Hill Irwin
Sheen, E., & Denend, L. (2012, February). D. Light III: Building credibility and trust. Global Health: Innovation Insight Series. Retrieved from http://www.gsb.stanford.edu/sites/default/files/documents/d.lightIII-BuildingCredibilityandTrust.pdf
Solar Energy Industries Association. (2014, December 09). U.S. solar market insight: New report shows U.S. solar industry tops 1 GW of installed capacity for third straight quarter. Retrieved from http://www.seia.org/research-resources/us-solar-market-insight
Tatlilioglu, K. (2014). A research towards to the determination the factors effecting the consumer behavior and trends (the sample of Bingol University). International Journal of Academic Research, 6(3), 150-156. doi:10.7813/2075-4124.2014/6-3/B.22
U.S. Energy Information Administration. (2014). Residential energy consumption survey (RECS) [Data file]. Retrieved from http://www.eia.gov/consumption/residential/
Viardot, E. (2004). Successful marketing strategy for high-tech firms. Boston: Artech House
Vieweger, B. (2014, August 29).Worldwide solar market to grow 75% by 2019 to over 65 GW. PV Solar Report. Retrieved from http://www.pvsolarreport.com/solar-market-to-grow-to-over-65-gw-by-2019/
Virginia Beach Department of Economic Development. (2014). 2014 Community profile. Retrieved from http://www.yesvirginiabeach.com/media/community-profile
Wang, U. (2014, February 19). Will the solar market outlook turn rosier for 2014? Forbes. Retrieved from http://www.forbes.com/sites/uciliawang/2014/02/19/solar-market-outlook-turns-rosier-for-2014/
Weldon Cooper Center for Public Service. (2012). Virginia population projections [Data file]. Retrieved from http://www.coopercenter.org/demographics/virginia-population-projections