Product Launch Plan Wind-based energy is becoming the most popular and fastest growing form of alternative energy in today’s market. Compact Energy, Inc. (CE) is a newly formed organization with the goal of providing affordable energy solutions to all areas of the world. Currently, CE operates domestically in Eritrea and internationally in Argentina. In this paper, the team creates a product launch of CE’s compact windmill for both the domestic and international market. The team discusses the product, target market, market needs, market potential and growth, competition, marketing objectives and strategy, pricing, marketing communication, distribution strategy, and marketing research. Additionally, the team has completed a SWOT analysis of both the domestic and international market and a quarterly budget indicating the product launch expenses for a period of three years.
Compact Energy, Inc. Compact Energy, Inc. is the innovation and creation of Team B, a diligently formed group of business professionals all preparing to improve the quality and availability of alternative energy throughout the world. Headquartered in Eritrea, a small country in Northeast Africa, CE established its most recent location in Argentina. Contributing to its rapid expansion, CE created a business alliance with Strabag International, an environmentally friendly construction organization with unprecedented experience in alternative energy construction and installation (Strabag, 2012).
Product Description The engineers with Compact Energy, Inc. have created an innovative compact windmill design that is approximately half the size of traditional windmills but produces the same amount of energy as its traditional counterpart. This compact design allows the windmill to be placed in non-traditional locations, doubles the number of windmills that can be placed on wind farms, and permits the use in residential areas, opening up the market to an entirely new customer base.
Product Positioning Product position defines how CE products will fit into various markets. In 2010, world energy consumption experienced a five percent growth becoming the biggest increase over a two year period. Additionally, China and India have not shown any sign of slowing down resulting from the intense demand of energy caused by continual growth in the manufacturing markets. Within the last couple of years, environmentalists and innovators have focused efforts on conserving energy in both manufacturing operations and residential markets. Common methods of conservation include energy-saving light bulbs, energy-star rated appliances, solar panels, maintaining equipment preventative maintenance, and evaluating/updating production times. Given the environmental trends within the domestic and international market, CE’s compact windmill answers the increasing demand for alternative energy. By providing exceptional customer service, innovative product design, and increased availability (breaking into the residential market), CE maintains a strong position in the market.
Targeting
CE will select a targeting strategy that will reduce the screening and marketing cost as well as stimulate feedback and discussion about the product. The methods used to target the audience will include:
1. Understanding customers by performing surveys that will better define the customer behaviors.
2. Demographic description - This provides a general profile of the customer ethnicity, age, education, place of residence, and income.
3. Psychographics description - This defines the customers’ credit history, health concerns, political beliefs, and employment stability.
4. Target market surveys- An internal group will target 200 unbiased individuals and administer survey questions, such as:
• What factors would influence your decision to make the purchase of a compact windmill?
• Which services offered by CE do you find most useful?
• Which services offered to you feel need the most improvement?
• Are you considering the purchase of a similar product from a competitor? If so, from where?
Market Needs
Domestically, Eritrea is newly independent and in dire need for alternative energy sources. Extreme weather conditions, coupled with consistent power outages, reveals a market in need of Compact Energy, Inc.’s products. CE must, however, educate the public of the ability and use of the compact windmill, as the public is generally against any form of improvement (Capitaleritrea, 2009). Through an appropriate marketing strategy and communications, CE can bring much needed energy production to an area that is easily considered desolate because of weather during certain times of the year.
Internationally, CE must establish the same educational procedures to inform the public and industrial sectors in Argentina that the innovation offered by CE cannot be surpassed by any imitation. For the international market, CE must education potential consumers about the value of the product. Argentina can increase its energy production by as much as 60% through use of the compact windmill because the design allows usage in untraditional geographic locations. Additionally, there is exceptional value created in the residential market. In approximately year three, when the resident breaks even in cost versus production, the resident has the option to sell any excess energy produced to the local electrical co-op, thus making the compact windmill into a potential source of income.
Market Potential and Growth
Wind energy has become the ultimate source of solving some of the world’s energy challenges. Wind energy is a major energy source in many parts of the world due to concerns about global climate change. Electricity produced by windmills causes less pollution than other energy sources. This means less smog, less acid rain, and fewer greenhouse gas emissions. The country of Eritrea has an extensive coastline on the Red Sea, and there is a demand for windmill energy. The households of Eritrea use over 75% of total energy production. Windmill energy can be converted into electricity using a generator. Eritrea has no domestic petroleum production, and opportunities exist for oil and natural gas exploration.
Argentina has some of the best conditions in the world for wind power generation. Nearly, 70% of Argentina’s territory is covered with winds whose average speed measured 50 meters about ground level. Currently, Argentina has locally based manufacturers active in the windmill energy market. The domestic energy industry has a growing market for wind power and for American manufacturing facilities that make components for wind turbines. According to Kaygusuz, “ The World Energy Council has estimated that new wind capacity worldwide will total 180,000 MW to 474,000 by the year 2020, which equates to $150 billion to $400 billion worth of business” (2004, p. 96). Internationally, wind energy has become a major energy source in many parts of the world. The possibility of locating wind turbines in the coastal areas has opened up new opportunities for wind power. Wind energy is clean and fuel-free, and increasingly competitive with conventional fossil fuel sources.
SWOT Analysis
Compact Energy, Inc. has created a brief SWOT analysis for its domestic and international market, determining what the strengths, weaknesses, opportunities, and threats are to the organization. The analysis is summarized within this chart:
Strengths:
• Employed Engineers with an education concentration in windmill energy.
• Passion to create environmentally safe energy.
• Total of 50 years of experience in windmill and alternative energy production. Weaknesses:
• Organization has little experience in the industry and is a start-up business (hired experienced engineers to counter this weakness).
• No current customer base (established alliance with Strabag International to counter this weakness).
Opportunities:
• Partner with established African and Argentinian businesses, taking advantage of low labor costs and using existing raw materials.
• Eritrea is the ideal location, climate, and political standing to introduce compact windmill energy production.
• Argentina provides extensive opportunity for residential use, as much of the geographic landscape is not suitable for traditional windmills (but well-suited for the compact design). Threats:
• Potential competition.
• Public opinion – dislike change of area.
• Import and export costs.
• Inclement weather causing delays in the installation of compact windmills.

(Learning Team B, 2012)

Competition
Wind energy is not new to Argentina; it has been in use since the late 1980’s to 1990’s. When first introduced to the country, it was government funded and slowly switched over to private funding where it lies today. Various companies have expressed interest in utilizing wind energy within the confines of Argentina, as the wind patterns across the land are ideal for the purpose of fueling the country. During the inception and continuation of renewable energy, in particular wind energy, many of the internal electrical co-ops have taken up the lead in production of windmill energy. At this point in time, it appears that the Cooperative of Comodoro Rivadavia has the biggest wind farm in Argentina (Labriola, 2006). The information obtained shows that the biggest competition at this point would be the various electric co-ops within the country with foreign oil companies at a close second which will make this a tough market to infiltrate but well worth the effort in relation to potential earnings.
Marketing Objectives and Strategy
The marketing objective of CE is to gain a majority of the market share in windmill energy in Eritrea and Argentina while achieving the highest profits possible in the first three years of business. As the market for windmill energy begins to grow, CE is targeting households, neighborhoods, and commercial businesses by using persuasion regarding the return customers will receive after five to seven years (when the windmill costs pay for itself). Because windmill energy lasts up to 50 years and CE offers several warranty and service packages, customers will experience up to 45 years of return on windmill energy. Because of the expensive initial investment windmill energy requires, the marketing strategy will include an abundance of information on the benefits, cost savings, and rate of return along with persuasive techniques using lifestyle, social, and environmental reasons for using windmill energy.
Pricing
The pricing strategy is to set the price high to discourage competitors from entering the windmill market. CE can price high when entering the market because of the lack of other alternative energy sources and the return on investment that the windmill energy will provide after five to seven years. Eventually, the price will lower as the business continues to grow and competition ultimately enters the market. CE will price the windmills starting at $35,000 to residential locations, and that includes the price of installation. An individual can choose to have the windmill for his or her own home or a neighborhood could have a number of windmills to power the designated residential area. Commercially, the average cost for the windmills would start $1,200,000. The substantial cost difference is a direct result of the level of energy production required for commercial versus residential.
Marketing Communications
CE will become a formidable leader, both domestically and internationally, by providing an efficient and affordable alternative for energy production. Marketing in Eritrea and Argentina will focus on a product that can be placed not only on a wind farm but also in a residential setting without the fear of many associated health hazards, such as cancer, created through traditional energy production. Items to consider while initiating the marketing communication plan are: which consumers need to be targeted for inclusion into an aggressive communication plan? Who is the competition? And where should CE aggressively target efforts to get the product promoted in an effective manner (Fleischner, 2012). Research indicates that areas having shown previous difficulty in establishing windmill energy will be the primary areas CE should focus its attention. Additionally, CE should target consumers who feel that the local electrical co-ops have too much control and want to break free from the excessive charges produced by these large organizations.
CE’s product can be tailored to a single home, neighborhood or for a large scale business willing to provide a space for set-up. Current electrical output from windmill energy is limited by the ability to provide cranes to set up massive wind mills, (Fleischner, 2012), which provides the perfect environment for a company that can provide a compact efficient energy source. Growth requirements of energy in each country has been proven to be expansive and the needs in both countries ripe for other alternatives.
With competition being provided in the form of electric co-ops the advertising needs to target at the product being compact, affordable for each household and the amount of return the product will have in its years of useful life. CE’s mission is to provide affordable renewable energy to areas in need of reliable energy resources. With areas of interest being in remote locations and containing somewhat unreliable communication resources, CE will rely upon direct sales, contact and educational activities to gain the consumers attention and provide momentum in these counties.
Activities of advertising will include, but not be limited to, printed materials, a centralized website for information distribution, questions, and ordering, as well as direct campaigns such as informational meetings with residential areas and business entities. Pricing will focus on the end goals for both residential and industrial consumers – considering the long term schematics and comparing the monies produced for a compact windmill system versus traditional electricity over a ten year period. A critical benefit that must be communicated is the ability to sell back excess energy produced by the windmill to the local electric company, converting the windmill into a potential source of income after approximately five years in service.
CE’s advertising goal is creating a customer base that consists of a comparable mix of both residential and industrial consumers that equates to at least 20% of the market share within a five year time period. To achieve this goal, CE must apply aggressive sales, education and customer feedback which will create positive, productive word of mouth advertising. All marketing activities will be evaluated and tailored based upon feedback in market sales, customer satisfaction, and evaluation regarding how customers were introduced to CE’s product line (word of mouth, advertising, etc.).
Distribution Strategy
Distribution plays a crucial role in the success of domestic and international marketing strategy. It ensures that the windmill product can be delivered to customers efficiently and cost effectively. A domestic distribution strategy involves locating the most cost-effective vendor for the windmill product within the home country of Eritrea. A horizontal marketing system is ideal for both domestic and international markets. CE and Strabag International will combine resources in developing and producing the windmill product. International market entry is subject to the reliability of foreign infrastructure and foreign markets. High unit value products such as turbines are often sold through a company sales force. Exporting is the most traditional form of operating in international markets. The most efficient way to sell the windmill product internationally is by using an export intermediary such as a sales agent. According to Obaji, “the primary purpose of the distribution channel is to satisfy customer/end-user needs, and intermediaries are conduits to effect this goal” (2011, p. 90).
The windmill manufacturer will be located in Eritrea. Each country (Eritrea and Argentina) will have a sales agent intermediary to search for customers and negotiate the sale and delivery of the windmill product. The manufacturer in Eritrea will ship the windmill products to two retailers in Argentina. The two windmill retailers located in Argentina are Geosolar and GIAFA S.R.L. Members of the distribution channel also provide an important local marketing resource that enables a company to increase market share or enter new markets with the backing of local knowledge and established business relationships.
Financial Information CE created a quarterly budget, covering the first three years of operation in the domestic and international marketplace. This budget outlines the product launch expenses and a unit forecast. Refer to the Microsoft Excel® file attachment for specific budget details.
Marketing Research
Research for this plan has come from Internet resources, experience from CE personnel, and focus groups. The idea of beginning in Eritrea came from an employee of CE who was aware of the constant energy outages in Eritrea because of the frequent storms in the area. CE’s capitalizing on the storms and wind while providing continual energy will be appealing to the residents of Eritrea. Further research brought to light the excessive wind source in coastal regions prompting CE to choose Argentina as the second location to launch the compact windmill energy. Internet resources could provide details on the country, the government, and the lifestyles of the citizens. This allows CE to have a thorough understanding of the audience the business is trying to reach and the support the country’s government will provide to CE. The focus groups will provide more personal details of the potential buyers and their needs and wants. By using the focus groups comments, CE will be able to tailor the product, the marketing plan, and possibly the pricing to be more appealing to the residents. There is potential that CE can provide this market research to the governments of Eritrea and Argentina to persuade the government to offer incentives to residents to covert to windmill energy. The windmill energy is environmentally safe and reduces the use of natural resources that electricity requires today. The savings on the environment and natural resources may be a savings the government can pass on to the citizens by offering a form of energy rebate program. This benefits CE, the government, and makes the windmill energy even more affordable to the citizens.
Conclusion
Compact Energy, Inc. established headquarters in Eritrea, Africa with full intention of bringing affordable alternative energy to the residents and industries in the area. After full market analysis, CE determined that establishing a location in Argentina will also benefit the organization. This paper has provided the information needed for the product launch of the compact windmill, including a product description and positioning, targeting, market needs, market potential and growth, a SWOT analysis, competition and financial and budget information. Ultimately, it has been determined that CE will break-even after three years of operation. Now is the time for alternative energy production; CE could not enter the market at a more opportune time.

References
Capitaleritrea. (2009). Retrieved on January 28, 2012, from http://www.capitaleritrea.com/category/living/.
Enerdata. (2012). Retrieved on February 25, 2012, from http://yearbook.enerdata.net/.
Fleischner, M. (2012). 10 Key Components of a Marketing Plan. Advertising, Sales and Marketing.
Kaygusuz, K. (2004). Wind Energy: Progress and Potential. Energy Sources, 26(2), 95-105. doi:10.1080/00908310490268901.
Kotler, P., & Keller, K.L. (2006). Marketing management (12th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
Labriola, C. V. M. (2006). Wind Potential in Argentina, situation and prospects. Retrieved from http://www.icrepq.com/icrepq07/205-labriola.pdf
Learning Team B. (2012). Product Offering. Week 4 – MKT/571.
Obaji, R. N. (2011). The Effects Of Channels Of Distribution On Nigerian Product Sales. International Business & Economics Research Journal, 10(2), 85-91.
Strabag. (2012). Construction Worldwide. Retrieved on February 10, 2012, from http://www.strabag-international.com/databases/internet/_public/files.nsf/SearchView/01124F588ED4A12EC12577A4003FE2F2/$File/Brochure_Division3G_final_A4.pdf.