Executive Summary

             PetSpeaker, a new start-up company, is seeking to launch the revolutionary new PetSpeaker, which enables people to understand what their pets are saying by turning their sounds into human language – whether verbal or written. The PetSpeaker makes this communication possible through a breakthrough sound recognition technology in which embedded chips in pet tags or collars are programmed to translate the sounds into words or phrases. These words and phrases are transmitted to a wireless or computer receiver, where they are amplified and can be heard by an individual or group of listeners. They can be turned into text, too.

               Currently, the PetSpeaker is only available for turning the sounds of dogs and cat sounds into English. However, the company plans to make the product available in other languages, as well as expand the market to include other types of pets and animal communication.  The Company is additionally marketing a complementary line of novelty products, called the PetTalker, which feature an embedded chip in a collar or tag that is programmed with some simple words and phrases to play when triggered with a button or sound, much like a talking doll or animal. These PetTalkers are designed to be used as premiums and give-aways, as well as being sold as novelty, gift, or toy items, to call attention to the PetSpeaker 

The Company expects a high-level of interest in the PetSpeaker, once consumers are aware of it, because people have a strong emotional bond with their pets, often treating them like members of the family. As reflected by the Company’s preliminary research, people very much want to know what their pets are thinking, feeling, and want to say to them, and they are very eager to buy this product, once they know it works.    

Thus, the Company plans a high-profile advertising campaign, along with heavy public relations, to attract attention to the PetSpeaker and show that it works, using demonstrations, short and simple explanations of the technology that makes it possible, and testimonials from people who have successfully used the PetSpeaker to understand their pets. This advertising plan describes how the Company plans to advertise the PetSpeaker for the first 7 months using a $10 million budget for this product launch.   An initial month will be devoted to ad production, preparing catalog and press materials, and advertising and PR planning. 

The following overview describes the major highlights of this plan.
 

Overview 

            The major topics featured in the plan are the following: the situation analysis, objectives, strategy, budgeting, execution, evaluation, and an appendix featuring the copy and visuals used in the campaign, along with a detailed budget and media plan.  

Situation Analysis 

            The pet industry is currently a growing $50 billion plus industry, in which there are about 43 million dog owners of 62 million dogs and 34 million cat owners of 75 million cats. Within this industry, the most rapidly growing segment is pet supplies, since people are buying more and more specialty products for their pets, because people have such a strong emotional bond with them, even treating them like family members. Together, pet supplies and pet-related services, including training, account for about $14.5 billion – about 29% of the total pet industry.   In response to this growing demand, the pet industry has been marked by the growth of super-premium pet food companies and pet superstores, while an expanding community of pet enthusiasts are involved in clubs, dog and cat shows, online communities, and other activities. Numerous specialty publications have emerged to appeal to pet owners and the industry, and a growing number of radio and TV programs on pets have developed, too. 

            This growing market for pet supplies and services for highly enthusiastic pet owners provides an excellent market for a product that promotes closer communication and understanding between people and their pets. The PetSpeaker also is well positioned to appeal to this market, since it is a completely new product based on recent developments in embedded chips, wireless, and speech recognition technology which have made the PetSpeaker possible. Accordingly, the Pet Speaker begins with no competitors at all.  While there are a few powerful pet food companies and distributors that dominate the market, PetSpeaker’s strategy is to turn these large companies into  partners rather than competitors and work out licensing and distribution deals with one or more of the major players in the industry. There is little threat from the other companies creating specialty pet products and offering training programs, since these are relatively small niche marketing companies.  The Company can also take advantage of the specialty pet magazines and programs for promoting its products. 

            A preliminary research study by the Company demonstrates that there is a strong market for the PetSpeaker, too. Based on interviews with a broad range of pet owners of different ages, ethnic groups, and occupational backgrounds, researchers found that respondents had a highly favorable response to the PetSpeaker, and many respondents wanted to buy the PetSpeaker once it is available.  Once assured it really works, consumers are eager to get the PetSpeaker, because they want to know what their pet thinks, feels, and wants to say to them.

Objectives 

            In order to launch the PetSpeaker Company and its PetSpeaker and PetTalker product lines, the advertising campaign has these major objectives:

1)      To build consumer awareness of the PetSpeaker brand and company,

2)      To inform and educate consumers about this new technology that makes the PetSpeaker possible.

3)      To influence the consumer’s intent to buy the PetSpeaker and build sales.

4)      To get consumers and the media talking about the PetSpeaker.

5)      To interest major manufacturers and distributors in the pet industry to partner with PetSpeaker and distribute and promote the PetSpeaker product line.

Strategy 

To achieve these objectives, the advertising campaign will include a mix of print, radio, and TV advertising, along with directory advertising, Internet advertising, sales promotion, a targeted direct mail campaign, participation in pet industry trade shows and consumer pet shows, and an extensive public relations effort, including a Company Web site. The primary emphasis will be on print advertising in magazines directed towards pet owners of dogs and cats; on a direct mail campaign to wholesalers, retailers, and distributors of pet products; on sales promotions tied in with the advertising and direct mail campaign; and on a PR effort to gain publicity through TV and radio talk shows and news programs and through articles in newspapers, magazines and Internet publications.  

Budget 

To attain these objectives, the advertising budget has been set at $10 million for a 7-month ad campaign, plus 1 month of advertising and PR production and planning. 

Execution 

To meet the above advertising objectives and strategy plans, PetSpeaker will combine print, radio, TV, and Internet advertising targeted to current pet owners with an intensive public relations campaign to gain a high-profile in the media.  A high level of popular interest is expected, since the Pet Speaker is a revolutionary new product and people have a high and growing level of interest in pets today. These ads and the PR campaign will highlight the major perceived benefits of the PetSpeaker – that it promotes understanding, communication, and a better relationship between pet owners and their pets.  In addition, the campaign will include demonstrations, testimonials from users, and brief explanations of how the technology works to address the major issue raised by consumers who are eager to obtain the product but uncertain whether it will really work.  The focus of the ads and PR will be on people using the PetSpeaker to learn what their pets are thinking, feeling and want to say. The PetTalker will be used primarily as a promotional device for drawing attention to the PetSpeaker, as well as being sold as a novelty, gift, toy, and premium product. 

Evaluation              

The effectiveness of the advertising campaign will be measured after the campaign by measuring the level of consumer awareness and favorable attitudes towards the PetSpeaker and by measuring the level of sales each month during the campaign.  It is assumed that a high level of awareness, favorable attitude, and sales will show that the campaign has been successful. 

Appendix           

This final section features examples of the print ads, radio scripts, TV audio and storyboards, press releases, direct mail letters, budget and 7-month media plan. A CD is available that features highlights from the PetSpeaker Website.

Situation Analysis 

            The current growth in the pet industry and the emergence of new enabling technologies in embedded chips and speech recognition make this an optimal time to launch the new Pet Speaker. This product is completely unique; no company in the pet industry is currently producing it; and no high-tech companies are currently working with the basic technology that make the Pet Speaker possible – translating animal sounds into human voice or text. Yet technology specialists working with speech recognition software, which can be encoded and programmed on embedded chips, have indicated that this sound to voice technological application is possible.   

Thus, with an effective advertising, promotion, and PR campaign, as described here, the Pet Speaker has the potential to become a breakthrough product in a $29 plus billion industry. The situation is such that this three-pronged ad plan can create a strong launch in a growth industry, since people are increasingly interested in their pets and spending money on them, especially cats and dogs, much like they lavish attention and money on family members. 

Since there is a potential for strong competition from me-too products by a few established global companies that dominate manufacturing and distribution channels in the pet industry, the ad plan is designed to support PetSpeaker’s first-mover strategy of quickly gaining public attention and partnering with one or more of the major potential competitors through a joint venture or subsidiary agreement.   

The following discussion of the historical context, industry analysis, market analysis, technology overview, and competitor analysis describes the situation in more detail. 

Historical Context 

            Pet Speaker is a brand new company with a unique new line of products.  It is based on a never-before developed technology, in which animal sounds, such as a dog’s barks and a cat’s meows, are converted into human verbal or written language.  Now recent embedded chip and speech recognition technology make this conversion possible. 

Since Pet Speaker is a start-up, it has a limited advertising budget of only $10 million for its initial launch to achieve recognition among pet owners of dogs and cats in the United States and among members of the pet industry.  Also, as a start-up with a unique new product, PetSpeaker has not yet had a chance to develop an identity for its two brands – the PetSpeaker, its technologically advanced sound to language system, and the PetTalker, its line of novelty gift and toy products, using a simple form of this technology, such as used by a talking doll, which features a limited number of responses programmed on an embedded chip. 

However, the Company is committed to creativity and innovation and finding new ways to apply its cutting edge PetSpeak technology to other products.  For example, it plans to use this technology to expand into other U.S. markets and other countries using other languages, such as Spanish, French, German, Chinese, and Japanese. Additionally, the Company plans to apply its technology to translate the sounds of other pets and other animals into human voice and text formats (such as working with bird calls and the sounds made by chimps, dolphins, and horses).  Once the initial technology has been introduced to the market, many other applications are possible, and the company plans to aggressively exploit these by entering into partnerships, joint ventures, and licensing arrangements with major manufacturers, retailers, and wholesalers in each field it enters.

Industry Analysis 

            Today, the pet product industry, of which Pet Speaker is a part, is a large and rapidly growing market. According to the American Pet Product Manufacturers Association (APPMA), the market for pet products and services was $23 billion in 1998, $27 billion in 2000, and is expected to grow to $29 billion in 2001.[1]  By 2005, the industry is expected to grow even more to $33.5 billion, according to a study by Business Communications Company on The Pet Industry[2]. Within this category, pet food accounts for the largest category of pet related products – $10 billion, while pet supplies, including dog and cat toys, collars and leashes, cages and habitats, and books, total $5 billion. Major pet-related services, including grooming, obedience training, and veterinary care, account for $9.5 billion. The Pet Speaker product line falls into the latter two categories – supplies and services -- accounting for $14.5 billion – about half of the pet products industry.[3] 

            Significantly, this market is growing rapidly. As reported by the leading industry publication, Pet Business, which celebrated it 25^th anniversary in 1998, the pet industry first began to organize itself into an industry in the early 1970s.  Though the American Pet Products Manufacturers Association was formed in 1958 and the Pet Industry Distributors Association began in 1968, the industry was still relatively small and unformed in the early 1970s. Essentially, it was a small, but growing industry, which was made up of small private manufacturers, distributors, retailers, and other enterprises.[4] 

            Then, in the late 1970s and late 1980s, everything changed with the development of two major business successes – super-premium pet foods and pet superstores, resulting in the rise of a few dominant players in the industry in the 1990s.  The super-premium pet foods phenomena was kicked off in 1976 the by Iams Company, now number two in the industry, but then a small Ohio company producing food for mink.  Iams introduced the Eukanuba brand, as a high-protein, high-fat, meat-based brand, and the following year the Science Diet company came out with its own premium entry.  These brands were soon followed by other competitors, leading to the rise of over 70 super-premium pet foods today, though this category is dominated by a few market leaders, including Ralston-Purina (now the biggest) and Iams.[5] Other major premium brands include Science Diet, Nutro, and ProPlan, while the major supermarket brands include Alpo, Friskies, and Kal-Can. 

            The success of these premium pet foods in turn led consumers to increasingly go to their local pet shop on a regular basis, which led to the growth in sales of other pet products and accessories. As a result, by the mid-1980s, the pet industry took off as premium pet foods boomed with more and more brands. Then, as consumer purchases of both pet foods and supplies increased, this growth led to the beginning of the pet superstore, launched in 1987 in Phoenix, Arizona, by PetSmart, which has become the market leader with over 525 stores.[6]  The other big superstore, number 2 in the industry, is Petco, which has nearly 500 stores in about 40 states. [7]  

            Yet, while pet foods may be the largest segment of the industry at 47% of the market, the most rapidly growing market segment is pet supplies, which represents 5.5% of the market. These supplies include dog and cat toys, collars and leashes, cages and habitats, and books. This segment is projected to increase from $5.2 billion in 2000 to $6.9 billion in 2005, according to the Business Communications Company Pet Industry study.[8]   Other pet services, such as for training and pet care, accounting for 2.2% of the market, are expected to increase, too, from $5.2 billion to $6.9 billion in 2005.  The other major pet industry category, veterinary services, with 4.6% of the market, is expected to increase from $7 billion to $8.8 billion during this same time period. [9]   

            Another growing opportunity in the pet industry is exporting of U.S. produced pet products, which are slightly under $1 billion a year, as of 2000.  They are expected to grow about 4.8% between 2000 and 2005.[10] 

            The reason for this tremendous growth in pet products and supplies is due to the growing number of pet owners and pets. According to a survey conducted by the American Animal Hospital Association, there were approximately 235 million households which owned pets – especially in homes with families with children between the ages of 5 to 19. These households represent about 60% of all US households, and 40% of these households own more than one pet, according to an APPMA study.  Another study by Sloan Trends & Solutions in 1998 found that the average household with pets spent about $350 on their pets in 1998.[11] 

            As for the number of pets – according to the American Pet Association’s statistics as of 1998 (to be updated in late 2001), there were approximately 43 million dog owners who owned 62 million dogs, and about 34 million cat owners, who owned 75 million cats, for a total of 137 million pets.             

            While the superstores and discount stores account for over 50% of U.S. sales volume, pet supplies are sold by many other retailers in a highly fragmented market.   Among these other retailers are supermarkets, discount stores, other mass merchandisers, specialty pet stores, direct mail houses, Internet retailers, and veterinarians.[12] Plus various organizations are devoted to pets, including pet clubs and associations, some of which sell pet supplies and other pet products.  PetSpeaker thus has multiple channels it can use for sales, promotions, and partnering with other companies. 

Market Analysis 

The Pet Owner Market in the U.S. 

            The market for the PetSpeaker pet-human communication system is current pet owners, particularly the large segment of customers identified as “pet enthusiasts” by the leading wholesaler PetSmart. These customers are “passionately committed to their pets” and regard their pet like “a family member.”[13] These customers are the biggest buyers of a variety of pet services, including grooming, pet training, and veterinary services, which are all potential markets for people who want to better communicate with their pets. For example, such customers often take their pets with them when they go to PetSmart stores to shop, and many watch grooming and pet training at these stores.  Many also participate in the PetSmart pet training classes, besides buying toys from a specialty “Toy Shoppe” for pets that has become part of the PetSmart superstore. 

            The market for the PetTalker novelty-gift product, which is like a talking Barbie Doll, Tickle-Me Elmo, or Billy Bass Talking Fish, is the broad general consumer market. Besides the range of pet owners, from the less committed to the true pet enthusiast, this market also includes the huge mass market for fad and novelty products. This market includes everyone of all ages.  However, as with novelty and fad products generally, this market is likely to be ephemeral – lasting perhaps a year or two, so it will primarily be used as part of the introductory promotional and PR campaign to draw interest to the PetSpeaker. 

            More particularly, the market for the Pet Speaker in the U.S. is limited to translating dog and cat sounds to human language, is the more than 43 million dog owners and 34 million cat owners, who own respectively over 62 million dogs and 75 million cats.      

            The strong commitment of these owners for their pets – which can be tapped for interest in the PetSpeaker -- is shown by some of the 1998 statistics provided by the American Pet Association.[14]  These show how millions of owners treat their pets much like their own children or other family members by buying them gifts, celebrating their birthdays or displaying their pictures.  More specifically, these statistics show that:

·        28.5 million dog owners purchased Christmas gifts for their dogs.

·        9.8 million dog owners celebrated their dog’s birthday, such as by giving their dog a special treat, meal, cake, ice cream, new toy, or a new bone.  Around 5-10% of these owners sang or wished their dog a happy birthday, gave their dog a party with other dogs or pets, took their dog to a favorite place, or took birthday photos.

·        37 million cats got Christmas gifts from their owners and 13 million of them had their birthdays celebrated. 

A more recent 1999 survey by the American Animal Hospital Association of 1100 pet owners showed how very deep this attachment runs,[15] in that most owners see their pets as more than just pets, but part of the family.  For instance, from 40-100% of all respondents reported that they:

·        Give their pet a Christmas or Hanukkah present (100%)

·        Include their pet in holiday celebrations (87%)

·        Consider their pet “smart” or a “genius” (75%)

·        Sing or dance for a pet (65%)

·        Celebrate a pet’s birthday (63%)

·        Take time off from work to care for a sick pet (53%)

·        Prepare special meals for a pet (52%)

·        Take their pet to work (44%)

·        Display a pet’s photograph at work (43%) 

This commitment is especially strong for dog owners.  More than half of all U.S. dog owners say they are more attached to their pets than to at least one other human being, and from 4-13 million say they are as attached to their dogs as they are to their best friend (13 million), children (6 million), or spouse (4 million). Over half of these dog owners (25 million) train their dogs to perform at least one trick.   

The reasons dog and cat owners give for acquiring their pets further shows the great appeal of a product enabling them to better communicate together.  According to the American Pet Association, the owners mentioned these reasons, some giving multiple responses: 56-62% specifically said they wanted “someone to communicate with”; while 83-84% sought companionship, and 90-93% wanted someone to play with.[16]   

The Growth of Premium and Specialty Products 

In sum, the dog and cat owner market is a vast one in which owners show a high level of attachment and commitment to their pets, as well as a strong interest in communicating and building the relationship with them.  In turn, these factors have led owners to make more purchases of not only basic pet products, but to purchase more premium and specialty pet products of all types.   For example, the following facts on Pet Industry Trends, available from various sources, illustrate this growing market for premium and specialty pet products.[17] 

·        Between 1997 and 1998, the number of dog and cat products claiming to have natural, holistic, or nutraceutical properties increased 21% and 50% respectively.

·        Due to the growing market for health conscious pet products has been growing, premium pet food brands, such as Hills Science Diet, Nutro, Eukanuba, and Iams, now represent 30% of the total pet food market.

·        A growing number of pet food products are being produced for behavior modification, as well as offering a variety of health benefits, including weight reduction, disease control, and skin and coat health.

·        Companies are developing more specialized products to take into consideration a pet’s breed, stage of life, and current lifestyle, since consumers have become more interested in learning about their pet’s likes and dislikes – which could be something they want to communicate about.

·        Consumers have become increasingly interested in the emotional and mental stability of their pets, so they are seeking products that treat a variety of emotional conditions, such as hyperactivity, motion sickness, sleep disorders, anxiety, and depression. This interest in their pets’ feelings is another reason they want to better communicate with their pets.

·        Due to the healthy expanding economy of the 1990s, American pet owners have been able to “lavish unprecedented spending on their pets”.  Since these owners often consider companion animals, such as dogs and cats as members of their family, pet food companies have cashed in on this emotional bond.  For instance, Funda Alp, a spokesperson for the American Pet Products Association stated that “love does translate into dollars.”[18]

·        Researchers have identified an emerging consumer trend of “pets parents”-- people who think of and treat their pets like children, and pet behavior specialists note many similarities between the two, such as the way both children and pets learn through play and exploring the world around them.  In response to this growing pets parents market, a growing number of companies have been bringing out toys and specialty products for pets.  For instance, PetSmart and Hasbro teamed up to create a line of pet products inspired by the best-loved and most-remembered classic toys for kids called the “Paws ‘N More” line, which includes a puppy key teether and pacifer and play mat and fish mobile for cats.[19]
 

The Market for Petspeaker’s Products Promoting Communication with Pets 

This growing trend of people who closely bond with their pets, treat them like family members, and become like “pet parents” suggests a great potential for a product like the PetSpeaker that enables people to understand what their pets are saying.  Preliminary research conducted by GJ&E Advertising suggests this, too.  

The research was conducted in the San Francisco Bay Area with a sampling of individuals from a wide range of age groups from 16 to 65 with varied occupation backgrounds, including a pet shop owner, veterinary clinic employee, hair salon owner and four employees, office workers, a mortgage broker, banker, housewife, and several students.  It included individuals with different racial and ethnic backgrounds, including a few respondents who were Hispanic, Asian, and African-American.  

The respondents were contacted through intercept street surveys and by contacting people in their place of employment. Although the initial sample included only 20 individuals, the responses were almost unanimously positive in supporting the product concept and in selecting the two names chosen for the product from a group of names. Subsequent surveys underway with a large group of interviewees about their most preferred benefits, ad copy, pricing, and expected usage patterns confirm these initial results. (A copy of the two questionnaires used in the original research – an initial questionnaire and a revised one based on the first responses – is in the Market Research Design and Development section of the Appendix). 

The initial reaction of the respondents was strongly favorable, when the product was described as a new product that “enables people to understand what their pet dogs and cats are saying to them by translating these sounds into English or any other language.  Friends, family members, and others can listen in, too.”  

The respondents were also briefly advised how the product would work with this description:

“This product is powered by a revolutionary scientific breakthrough – an embedded chip technology placed in a collar, pet tag, belt, chain, leash, or clip-on device.  This chip is programmed to turn these sounds into words you can understand.  Then, it transmits and amplifies these words through a small receiver you can carry with you or through a speaker in a room so everyone can hear.” 

  All of the respondents either indicated that they wanted to get the product for themselves (90%) or thought that others would be interested, even if they weren’t because they didn’t own a pet (10%).  Some of the comments which show this highly positive reaction, when people were asked their reactions to the product concept and what they liked about it, were the following: 

“Wonderful!…I’d like to hear what my pet has to say.” 

“I like it a lot…I like the idea of better understanding my pet.” 

“It’s wonderful…I like it because it’s a fantastic idea.” 

“It’s a million dollar idea…Then there’s no language barrier between people and animals.   And you could turn it off when you want.” 

            Both male and female dog and cat owners of all different backgrounds -- from teenagers to seniors over 65 and from different occupation groups -- expressed a strong interest in knowing more about their pet’s thoughts, feelings, wants, and needs.  Some typical comments: 

“I think it’s a great idea.  I have three dogs, so it would be useful to know what they have to say, and I would like to purchase this, if it is available.  (male dog owner, waiter in his 20s). 

“Great!…I’d like to know what my pet thinks or feels.” (male dog owner, salon owner in his 50s) 

“It’s perfect.  I’d like to know the truth of my dog.”  (Spanish-speaking male dog owner, retired, 64).  

“Great!…I’d like to be able to tell what my cat is thinking when she looks at me…I could know if she’s hungry, hurt, what she thinks of me.” (female cat owner, hairdresser, in her 20s) 

“It’s incredible…I like it because I want to know what my cat thinks about me and its needs.” (Spanish-speaking female cat owner, administrative assistant, 19) 

“It would be nice to know what my pet is thinking.” (male cat owner, student in his 20s).       

“It’s cool…Just to be able to understand your pet is great.  I’d like to know how my pet loves me.” (male cat owner, student, teenager) 

            The main concern which a few people expressed was “Would it work?” or “Is this believable? Can it actually be done?”, because people aren’t familiar with this new technology. But when assured that the PetSpeaker’s translation of their pet’s sounds to words was indeed technologically possible, they were very enthusiastic and eager to buy the product when it came out.   Some typical comments were these: 

                        “It sounds good if it works.” 

“It sounds great, but impossible.  I don’t know if it would work.  How about a demo.” 

“It’s almost unbelievable, but I like it.  Wow!!!!!” 

Thus, the preliminary research results suggest a strong market for the PetSpeaker, although people need to have some reassurance that it works, such as with a demonstration to show it in operation and/or an explanation of how the new technology today makes the product possible. 

            There was also a very positive response to two of the names proposed for the product – PetSpeaker and PetTalker – and people had no alternative suggestions, which led to choosing these two names for PetSpeaker’s two product lines.   People liked the names because they conveyed very clearly what the products enabled people to do – listen to their pets speak or talk to them.   In fact, many respondents had trouble choosing between the two names, and they only chose one over the other when forced to choose. 

            However, their reasons the respondents gave for preferring one name over the other contributed to selecting the “PetSpeaker” name for the more sophisticated communication system and the “PetTalker” name for the novelty line of products.  Those who chose “PetSpeaker” thought it “sounded more professional” or thought it “conveys the meaning better”, because the name suggested that the pet sounds might be heard through a speaker system.   As one woman commented: “I think Pet Speaker suggests an amplifier.”  Another said: “I think of a pet speaking.”  By contrast, those who preferred “PetTalker” emphasized that they liked the way the words sounded together.   As one stated: “I like the sound of the two words together.”   Another remarked: “It just sounds better.”   Thus, since the respondents liked the name “PetSpeaker” especially because of its meaning and “PetTalker” especially because of the way it sounded, it seemed reasonable to associate “PetSpeaker” with the more sophisticated communication system and “PetTalker” with the novelty product line. 

            Finally, the preliminary research suggested that not only would people be interested in getting the PetSpeaker system in its most basic form – an embedded chip in a pet collar or tag, but some were interested in a line of specialty “Designer Pet Tags”, which are a type of pet jewelry.  While half of the respondents liked the basic collar or tag, half liked different types of jewelry items, which included pendants with different designs, a gold chain, and a decorated collar design.  The appeal of this designer line was especially strong for the female respondents, perhaps because jewelry is a product that appeals more to women generally. The illustrations which had the strongest response are featured on the following page.   

Though the images used in the research study were not meant to be the final designs, they suggest the strong appeal of a designer line of PetSpeaker tags and collars that build on the basic product concept. 

A Sampling of Preferred Designer Pet Tags 

The Basic Collar Design 

Most Preferred Chain Design 

 Some Selected Pendant Designs 

Some Choker and Collar Designs 

Distribution Networks 

The wide range of distribution networks in the pet industry offers PetSpeaker many opportunities.  They range from pet superstores to special pet stores to department and discount stores to the Internet.  Even stores selling specialty electronic goods, such as Good Guys and Circuit City, offer a distribution possibility.   More specifically, these distribution networks include: 

·        The chain superstores, dominated by the two leaders: PetSmart, with over 525 stores, and Petco, with almost 500 stores.   These stores emphasize a service-based strategy that appeals to pet owners seeking premium products for their pets. While the major draw of these huge stores is the specialty pet foods, consumers can buy higher margin pet accessories at these stores, too.[20]

·        Mass merchants, such as Wal-Mart, which advertise aggressively.

·        Online pet supply retailers, which offer additional pet products besides pet foods. While some of the exclusively dot-com retailers have experienced spectacular demises, such as pets.com and petopia.com, other companies offering products direct from manufacturer to consumer have had some success. 

·        Online pet marketplaces and malls that target the consumer or those in the trade.   Some of these include:

o       Biz2Biz Pet Marketplace, a site that has over 30,000 suppliers and buyers in the pet industry all over the globe.

o       Petindustry.com, an online mall for hundreds of small companies, which offer a range of pet products, including novelties and gifts, toys and exercise products, collars and leads for dogs and cats, and training products for dogs. The mall even includes 10 manufacturers and distributors of electronic devices, including one company, Voice Pals, that offers the PetTalk where owners can talk to their dog they have left at home, so their dog doesn’t feel lonely.

o       ABC Pet Supplies, featuring about 3 dozen pet merchants online.

o       Pets4You.com, featuring magazines, publications, and other pet supplies

o       Allpets.com, a subsidiary of Pet Quartrs, Inc., which started off to become the world’s premiere online pet magazine and encyclopedia.  Now it is a leading online and mail-order catalog company, featuring expert content on training, grooming, and general pet care, besides selling products. 

·        A growing number of pet organizations, some of which sell specialty pet products or provide news about them to members, such as Friends of Animals, Humane Society International, and the PALS Foundation (which celebrates the beneficial relationship between people, animals, and nature). Many of these organizations exist primarily or exclusively online, bringing together pet owners with different types of pets all over the world, such as the Petlovers’s Club, CyberPet, and hundreds of dog and cat Web rings.   

·        A growing number of pet industry organizations and events, such as:

o        the World Wide Pet Supply Association, America’s oldest pet industry trade association with over 500 members, including manufacturers, product distributors, suppliers, manufacturers’ reps, and retail businesses.  It sponsors several big trade shows, including the SuperZoo in July for the trade and the world’s largest consumer pet expo – the Family Pet Expo, held each year in Southern California in the Spring and in Northern California in the Fall.  The 2001 shows are in Pomona and Sacramento.

o       the Pet Industry Distributors Association, founded over 30 years ago, which includes pet manufacturers in addition to pet wholesalers and distributors as members.  It sponsors an annual Pet Exposition and Trade Show (PETS) in Florida each spring.

o       the American Pet Products Manufacturers Association, founded in 1958, which has almost 600 pet product manufacturers and importers. It sponsors an annual Pet Products Trade Show, considered the premiere pet products trade show in the industry.  The APPMA also publishes the National Pet Owners Survey every two years, which provides statistics on current pet population, owner demographics, purchasing habits and marketing trends.   The 2001-2002 Pet Owners Survey was just released.

·        A growing number of pet magazines for both consumers and the trade, available various in print, online, and both print and online editions.  Among these are:

o       Pet Business, the magazine of the pet industry

o       Pet Industry, which offers 4 high-priced newsletters ($295 each; $995 for all 4) directed towards senior executives at pet food and pet product manufacturers, distributors, and retail chains.  These newsletters include the Dog Industry Newsletter, Cat Industry Newsletter, International Pet Industry Newsletter, and Vet Industry Newsletter.

o       A number of consumer oriented pet magazines, including: Animals, Pet Life, Dog World, Dog & Kennel, Cats, I Love Cats, Cats & Kittens, Dog Fancy, Gun Dog, Pet Life, Cat Fancy, Dog News, Dogs in Review, Dogs USA, Puppies USA, Cats USA, Kittens USA, Popular Dogs Series, and Popular Cats Series.  Plus hundreds of magazines are directed towards the owners of particular types of dogs and cats, such as Canix Max Magazine for large dog enthusiasts, Cardifair, for Welsh Corgis lovers, and Hound Life Magazine, for hound dog fans.  There are also regional magazines for owners in a particular area, such as City and Country Magazine for owners in Austin, Texas.

·        A growing number of portals which provide links to other pet sites, and sometimes sell pet products, such as:

o       PetsHub.com, which features directories to appeal to any kind of pet lover.  Subjects include cat and dog breeds, health, training, and humor, pet magazines, pet travel, and even lists virtual pet sites.

o       Pet Industry Information Database.

o       Yahoo’s pets category.

o       PetsForum Group, featuring pet and animal information, including recent news around the globe.

o       Pet Net, featuring many different specialty publications and interesting pet links.

o       the Pet Palace, which has photos and descriptions of many pets.

o       Dogseek, which features Web rings of dog owners and has a specialized search engine featuring 11,000 dog Web sites.

o       Looksmart, which has listings of reviewed Web sites about dogs, cats, and other pets.

·        A growing number of radio and TV shows devoted to pets, some of which sell products or have partnerships with pet product sponsors.   Among some of these shows are:

o       Pet Talk America, a nationally syndicated radio show on pets, which started in 1994.  It sells a variety of specialty pet products, including the pet chime wireless doorbell, which a pet can ring to let its owner know it wants to go out, and a flowing fetch ball, which dogs can play with at night.

o       Pet Radio, a one hour weekly program on KATD 990 AM in Concord, California each Friday afternoon, featuring new product reviews and pet related topics.

o       The Pet Radio Show on CFUN on Granville Island.

o       The NBC Pet Vet TV Series, with Dr. Richard Ford, which is syndicated to TV stations and is sponsored by several animal organizations, including the American Pet Products Manufacturers Association (APPMA), American Kennel Club (AKC), and American Animal Hospital Association (AAHA).

o       Animal Planet, a TV cable network which features programming on dogs and cats as well as other animals.  It also sells products through the station and its Web site. 

In sum, as the size of the market for pets and number of products available has grown, so has the number of distribution outlets for all types of products.  PetSpeaker plans to advertise, promote, and publicize its product line through these various marketing outlets.

The Future Global Potential 

While the PetSpeaker’s launch will be confined to the U.S., the global trends in the pet market show the potential for a rapid worldwide expansion in the future.   While pet food products, which comprise half of pet industry sales, have led the way in this market, they have opened the door for other specialty products.    

Their aggressive advertising has helped them push into this market.  For example, many U.S. companies have combined new product lines with aggressive advertising to penetrate foreign markets and expand sales in foreign countries, such as Hill’s Pet Nutrition, which experienced strong growth in Japan and Europe after heavily advertising new products for cats.   Those companies with the strongest position in this growing global market for premium pet food include the big three: Colgate-Palmolive’s Hill’s Pet Nutrition, with 33% of the market, followed by Proctor & Gamble Iams which controls 27%, and Ralston-Purina with 15%.[21]    

This global market is one which PetSpeaker can rapidly enter through partnering with these already established global companies.  

Technology Overview 

            Recent developments in technology have made the PetSpeaker possible, although the Company’s key advantage as a start-up is that no company or individual has yet applied these developments to make a similar product. This technology involves programming an embedded chip with sound recognition technology that translates these sounds into human language.  Then, those words are either transmitted to a receiving device, such as a wireless receiver or speaker system or to a computer text output device.    

            Both embedded chips and speech recognition technologies have only been developed recently – embedded chips starting in the early 1970s, speech recognition within the last decade.  After years of gradual development, the last few years have witnessed an exploding interest in a variety of embedded chips and speech recognition technologies.   For example, in April 2001, San Francisco was the site of the Embedded Systems Conference, which took up the whole South Hall of the Moscone Center, and featured about 350 vendors of embedded chip devices.  Among them were two dozen companies involved in using speech recognition technology on these chips.   And more Embedded Systems Conferences are planned for other cities, including Chicago in July 2001, Boston in September 2001, Stuttgart Germany in October 2001, and again in San Francisco in March 2002. A Communications Design Conference to discuss communication applications for embedded systems is set for October 2001 in San Jose. 

            The speech recognition companies have been using this technology for a variety of applications, including using voice commands for wireless communication, automating customer service response operations, providing access to online databases and servers, and assisting the disabled to use computers. As an example, the catalog sheet from one company, Conversay, describes its embedded speech technology thus: 

      “With Conversay technology on wireless devices such as mobile phones and PDAs, users can access information using the most natural interface there is…the human voice…The Speech Engine…is both a speech recognizer and a text-to-speech (TTS) engine.  With Conversay’s embedded Software Development Kit (SDK), application developers can use an API to integrate speech recognition and TTS capabilities into embedded products.” 

            Conversay additionally describes its technology as so advanced that it provides “robust speech recognition in noisy environments”, has “unique spelling-to-pronunciation capabilities (which) allow for unlimited vocabulary, is able to “determine pronunciation rules for new words in real time”,  can continuously adapt the speech system to “improve overall speech recognition accuracy,” and offers “multiple language models,” which now include English, German, French, Mandarin Chinese, with others in development.    

While most of the companies showing off their speech recognition technology at the Embedded Chips Systems Conference were relatively small – consisting of about a dozen to two dozen employees, primarily in engineering and electronics, these companies represent the tip of a growing explosion of speech recognition technologies.  Among the other companies which were repeatedly recommended as referrals at the conference were:

·        Fonix, based in Draper Utah,

·        Nuance, based in the Silicon Valley,

·        Dragon Naturally Speaking Enterprise Products, which were acquired by Lernout & Hauspie, a global leader in speech and language technologies based in Belgium, with a U.S. affiliate in Burlington, Massachusetts.  

Other company reps at the conference who claimed the ability to develop a sound to language technology were from Conversay, based in Redmond, Washington, and from Tektronix, in Beaverton, Oregon.   

Some of the biggest companies have also moved into developing speech recognition technologies or partnering with technology companies in the last few years.   Some recent examples include:

·        Apple Computer has developed its own Speech Recognition and Speech Synthesis Technologies which enable computer users to give their computers voice commands, initially in English, and now in Spanish.

·        IBM is developing its own speech recognition software in its Phoenix office.

·        Microsoft recently licensed speech recognition technology from Speech Works International to use speech-activated systems for conducting transactions by phone and has plans to integrate a Microsoft voice portal into its new .NET system.

·        American Online and Yahoo have each licensed the SpeechWorks technology for use on their own phone portals, while other SpeechWorks clients for its voice technology include Fed Ex, United Airlines, Thrifty Car Rental, and the Fidelity Investments Institutional Brokerage Group.

·        And SpeechWorks, headquartered in Boston, had its own “Global Speech Day” on May 2-3, 2001, in which invited participants dialed into its Web site using a special access code. Then, they could listen to VideoCam and PowerPoint presentations and access white papers and other documents on the latest in speech recognition developments.  Among the developments described at this event were the growth of speech portals, most of them using wireless technologies to promote online commerce[22], and the use of speech for customer call centers.[23]  As highlighted at this event, all of these developments were made possible by breakthroughs in over-the-telephone speech recognition technology, now being turned into a wide variety of commercial applications. 

            In short, the technology has been developed to communicate information from the embedded chips in the form of voice or text output.  In fact, a report by the high-tech market research firm, the Cahners In-Stat Group based in Scottsdale, Arizona, sees a booming future ahead for this technology as new applications are developed and prices drop.  It predicts that by 2005, the sales of speech recognition software engines, which form the basis for all speech recognition products, will rise to $2.7 billion.  The three key reasons for its growth, according to In-stat’s senior analyst Brian Strackman are these:

·        The creation of new development tools, such as Voice XML, making it possible to create new cutting edge products. 

·        The advance of microprocessor technology to the point where speech recognition products are made “faster, better, and cheaper”.

·        The demand from service providers and voice portals, which is creating new markets for speech recognition products.[24]  

Yet, despite these technological advances, no speech recognition company – or any other company or individual researcher – has applied this technology to interpret sounds from animals, including dogs and cats, and translate that into human language. Nevertheless, a dozen individual CEOs, engineers, and marketing reps of these companies contacted at the Embedded Chips Conference indicated that this type of translation is possible, when they were asked if the technology might be used to turn the sounds of a dolphin or bird call into human language.  (None were told the actual planned application of this technology to dog or cat sounds, since once this application is developed, any company with engineering expertise could easily take this idea to produce, market, and advertise a product like the PetSpeaker).   

Thus, since it is technically feasible to apply these new technologies to translate animal sounds into human language, PetSpeaker has an early-mover advantage by quickly getting its product to market and using an aggressive advertising and public relations campaign to gain brand recognition.  To this end, PetSpeaker plans to team up with a technology partner in the speech recognition industry to provide this technology and file for a patent on this technological application.  But then, given the ease with which another company can copy this technology once the application is known and the product category established, partner with much larger, established companies in the pet industry. 

Competitor Analysis 

            When it comes to competitors, PetSpeaker faces a very competitive marketing environment. PetSpeaker’s initial advantage is that it has no direct competition for this product, since the PetSpeaker represents a unique breakthrough product based on using recently developed speech recognition and embedded chips technologies for a never used before application – translating animal sounds into human language.  However, once the product is launched and shown to be technologically viable, PetSpeaker faces a high level of competition from already established companies.  

While any of the many high tech companies developing or using speech recognition technology could become competitors – from specialized software development companies like Speechworks, Nuance, Fonix, Conversay, and Dragon Naturally Speaking Enterprise Products to software/computer giants like Apple, Microsoft, and IBM, it is more likely that these high tech companies will not seek to expand into the highly competitive pet market.  They are unlikely to enter this market, because it is not only highly competitive and dominated by a few giant pet food companies, but it has an entirely different distribution system, such as through pet superstores, discount stores, local pet stores, and supermarkets.   Thus, given the lack of a good distribution match, it seems unlikely that any high tech companies, while providing the required technology, will become competitors.  Rather, they are more likely to become partners with PetSpeaker or other potential competitors. 

Likewise, the large media communication companies, like AOL and Yahoo, which have been entering into partnerships with companies developing speech recognition software, are not likely competitors either, since they primarily act as distributors and partner up with product manufacturers and service providers.  Thus, like the high tech companies, these media communication companies are more likely to be potential partners with PetSpeaker or other potential competitors. 

 Rather, PetSpeaker’s major competitors are primarily the big manufacturing companies in the pet industry, along with the major wholesalers and retailers who have their own manufacturing for some private label products.  Plus there may be some competition from the smaller specialty pet product manufacturers, particularly those selling related products, such as collars and leads, dog and cat toys and exercise products, dog and cat novelty and gift products, dog and cat electronic products, and dog training products, although these are unlikely to be a major threat since they are so small.  More specifically, the major competitors in each of these categories are the following:  

Major Pet Food Manufacturers[25]

The major companies which account for about 60% of the market include these, listed in order of their share of market in 1999:

Ralston-Purina – 14.3% share with $1.6 billion in sales.  

Friskies PetCare (a subsidiary of Nestle) – 11.4% share with $1.3 billion in sales.

Heinz Pet Foods (a subsidiary of Quaker Oats) – 10.7% share with $1.2 billion in 
                     sales.

            Doane Pet Products (primarily a private label manufacturer, whose biggest account is
                       Wal-Mart) – 7.9% share with $1 billion in sales.

            Hills Pet Nutrition (a subsidiary of Colgate-Palmolive) – 7.4% share with $.8 billion in
                    sales.

            Iams Co. (a subsidiary of Proctor & Gamble) – 5% share with $.6 billion in sales

            Kal Kan (a subsidiary of Mars Foods) – 4.4% share with $.5 billion in sales

            Nutro – 2.5% share with $.3 billion in sales
 

Major Wholesalers and Retailers with Private Label Products[26]

The major chains which sell pet products, listed by number of stores in the chain from highest to lowest, are:

Petco – 531 stores in 42 states, based in San Diego, California. 

PetSmart – 530 stores across the US and Canada, based in Phoenix, Arizona.

Pet Valu – 381 company and franchised stores in the US and Canada, based in
                     Ontario, Canada

            Pet Supplies “Plus” – 160 stores nationwide, based in Livonia, Michigan.

            Petland – 148 stores in US, based in Chillicothe, Ohio.

            Petland Discount Center – 111 stores in New York, Connecticut and New Jersey,
                       based in New York City

            Pet Supermarket – 63 stores around the US, based in Ft. Lauderdale, Florida.

            Superpetz – 36 stores around the US, based in Hatfield, Pennsylvania

            Petcetera – 20 stores in Canada, opening 14 more this year, based in Vancouver,
                        British Columbia

            Pet Food Express – 16 stores in San Francisco Bay Area, based in San Leandro,
                         California.
 

           Smaller Specialty Pet Product Manufacturers and Distributors

While there are hundreds of small specialty manufacturers and distributors, it is hard to get sales information about them, since they are generally run by an individual, couple, or are a company with a few employees.  Though some list hundreds or thousands of products for sale, their volume is limited.  Many sell their products direct online, as well as through other sales channels.  Typical of these specialty manufacturers and distributors are these manufacturers who are listed at www.petindustry.com as selling electronic devices, collars and leads, novelty and gift items, and toys and exercise products, such as:

Drs. Foster & Smith, Rhinelander, WI - pet supply catalog with 1000s of products

K-II Enterprises, Syracuse, NY – pet training devices

Lentek International, Orlando, Florida – environmentally safe pet products

PetNetOutlet, Smithville, Missouri – distributes name brand pet supplies

Ryan’s Pet Supplies, Phoenix, Arizona – wholesale pet supplies

The Dog Shed, Pocatello, Idaho – supplies, grooming, and training

Voice Pals, Chicago, Illinois – PeTalk device to talk to your pet at home

A Place for Pets & People Too, San Diego, CA – personalized pet products

American Pet Classics, Alpharetta, Georgia – pet ID tags and collars

BunGee PupEE, Houston, Texas – expandable dog leash

Innotek Pet Products, Garrett, Indiana – electronic pet products for training dogs

Leather Brothers, Conway, Arkansas – collars, leads, harnesses, muzzles

Moon Valley Collars, Sonoma, CA–handcrafted collars, leads, bandannas, pillows

Arielle’s Bronzeworks, Hauppage, New York – jewelry and sculpture

Animal Designs, Lewisberry, Pennsylvania – clothes and accessories for pets

Blue Ribbons Pet Care, Baldwin Harbor, NY. – St. Francis Pet medals for pets

Dog Days Productions, Oakland, CA – unique pet products, services, events

And hundreds of others.

The major pet food manufacturers, wholesalers, and retailers represent the greatest threat, if they come out with me-too products, since they will have much greater financial capital, personnel, and distribution networks in place to quickly take over the market.  However, given PetSpeaker’s strategy of entering into strategic partnerships with selected major manufacturers, wholesalers, or retailers as described in more detail in the discussion of strategy, it is expected that PetSpeaker can overcome any potential competitive threat from these large companies.  PetSpeaker’s advertising campaign is designed to not only attract consumer excitement but to gain interest from these major companies and thereby turn them from competitors into partners or gain licensing or take-over interest from them. 

As for the smaller specialty pet product manufacturers, they will generally not be a threat, since they are much smaller, and a great many are largely mom and pop type operations with only a few employees.  Some have only a Web presence and limited distribution.  In fact, a local start-up company, Dog Days Productions, which has not yet sold any products, turned up on this list.  As with the major pet companies, some of these potential competitors can be turned into partners, who might want to market the PetSpeaker along with their own products through their own distribution channels. 

Objectives 

            The advertising campaign to help launch the PetSpeaker Company and the PetSpeaker has the following major objectives:

1)      To build consumer awareness of the brand and company, since Pet Speaker is a new start-up company and the PetSpeaker system is a completely new product based on a breakthrough in embedded chips and speech recognition technology.

2)      To inform and educate consumers about this new technology, so they understand how it is possible and thus believe that the PetSpeaker can provide this sound-to-human-language technology, so people can use it to understand their pets.

3)      To influence the consumer’s purchase intent, so consumers will buy the PetSpeaker and thereby build sales.

4)      To get consumers and the media talking about the PetSpeaker, so they will influence others to buy the product, thereby further increasing sales.

5)      To interest major manufacturers and distributors in the pet industry to partner with PetSpeaker, so they will and distribute and promote the PetSpeaker line rather than compete.  This way, through these partnerships, PetSpeaker will build sales and discourage competition from the big companies that are already established in the pet industry. 

The time frame for achieving these objectives is 8 months, beginning as soon as PetSpeaker has developed a working prototype with its technology partner, following its review of prospective candidates which is beginning now.    

However, to prepare the groundwork for this real product launch, expected to begin in 2002, the following plan is based on a mock product launch.  The plan assumes the technology has already been developed and the first run of products is being produced.   The plan also assumes that PetSpeaker has already acquired its first round of angel and seed capital, so it can fund its first run of products, which will are expected to cost approximately 1/5 of the list retail price.   In addition, this plan assumes that PetSpeaker has sufficient funds to cover its operating capital and has an advertising budget of $10 million to cover the costs of its start-up promotional campaign lasting for 8 months, with the first month devoted to preparation, planning, and the production of advertising and PR materials.  These products to be manufactured and advertised include the following: 

The PetSpeaker Basic System – retailing for $399-499.           
             (This consists of an embedded chip in a collar or tag and a wireless phone receiver, with a small additional cost for designer tag options; it also includes the software and adapters to enable customers to transmit the translated words to a speaker system or computer, with the speaker or computer provided by the consumer) 

                       The PetTalker Novelty Item – retailing for $39-49.
            (This consists of an embedded chip in a collar, tag, or designer tag, which is programmed with simple sounds and responses.  It can either be put on a real dog or cat or on a stuffed animal, and used as a novelty gift).   

            The success of this 8-month campaign to promote consumer awareness and favorable attitudes, develop sales, and attract partnering interest from major manufacturers and distributors will be measured at the end of 8-months by these three measures:

1)      the level of awareness and favorable attitudes which consumers have of the PetSpeaker, based on doing street intercept and phone surveys of consumers to learn if they are aware of the PetSpeaker and their attitude towards the PetSpeaker, whether or not they are aware of it.

2)      the number of sales of the PetSpeaker on a monthly basis during the course of the campaign, using trend analysis to relate the level of sales to specific advertising, promotion or publicity events during the 7-month media and PR campaign.  (For instance, if the PetSpeaker is featured on a high profile TV show like Oprah, the level of sales will be charted and compared for the few days before the show and after the show to note any change in sales, such as a sales spike suggesting the effectiveness of this promotional vehicle).  This analysis will also assess where sales have been strongest, according to geographic, demographic, psychographic, lifestyle, or other factors, where these can be measured, to indicate the groups with the strongest favorable response to the PetSpeaker.  Additionally, this analysis will seek to determine more precisely the reasons that buyers have bought the PetSpeaker, so this information can be used in future advertising campaigns to highlight these benefits and further increase sales in the future.

3)      the number of manufacturers, distributors, or other companies that express interest in partnering with PetSpeaker, such as by distributing the PetSpeaker, entering into joint ventures, licensing PetSpeaker’s technology, logo, or designs, investing in Pet Speaker, or seeking a buy-out or subsidiary arrangement with Pet Speaker.  Meeting this objective will be deemed a success if PetSpeaker enters into a one or more profitable distribution, partnership, investment, or buy-out arrangements with other companies. 

Strategy 

            To achieve the above objectives, the advertising campaign will include a mix of print, radio, TV, and Internet advertising, along with a direct mail campaign, participation in trade shows for the pet industry and consumers, directory advertising, and an extensive public relations effort.   The primary emphasis will be on an initial launch at trade and consumer pet shows, along with print advertising in magazines directed towards pet owners, particularly of dogs and cats; on a direct mail campaign to wholesalers, retailers, and distributors of pet products; on sales promotions tied in with the advertising and direct mail campaign; and on a PR effort to gain publicity through news programs, TV and radio talk shows, and articles in newspapers, magazines, and Internet publications.    In addition, PetSpeaker will be filing for patent, copyright, and trademark registrations and pursing an active campaign against any infringements to prevent competitors from using PetSpeaker’s technology and ideas to introduce and promote similar products. 

            More specifically, the strategy in each of these areas is as follows.  The cost of these strategies is outlined in the Budget, while the advertising schedule is described in the Media Plan.  The copy and design for print ads, radio and TV commercials, press releases, letters for the direct mail campaign, Web site, and sales materials are briefly described in the discussion of Execution and included in the Appendix.  In addition, a CD included with this report features the copy of the current Web site and a PowerPoint presentation with animated Internet ads. 

Participation in Trade Shows for the Pet Industry and Consumers:  The PetSpeaker will be featured at the major pet industry trade shows, such as the shows sponsored by the American Pet Products Manufacturers Association; Pet Industry Distributors Association; and the World Wide Pet Supply Association.   In addition, the PetSpeaker will be featured at the major consumer shows devoted to pets, such as the Family Pet Expo, sponsored by the World Wide Pet Supply Association, which is held each year in Southern California in the Spring and Northern California in the Fall.  Other major consumer shows in other parts of the country will be included as well, such as the Pet Extravaganza in Michigan, Tufts Animal Expo in Massachusetts, and Calgary Pet Expo in Washington.  Depending on costs and attendance considerations, the PetSpeaker company will have its own booth or will make arrangements for other companies to distribute the PetSpeaker through either sales at the show or taking orders for future fulfillment.   Additionally, PetSpeaker will provide sales promotion incentives to retailers and distributors who want to sell the PetSpeaker at the hundreds of regional and local dog and cat shows around the country, such as the annual Dog Show in San Francisco sponsored by the Golden Gate Kennel Association, part of the American Kennel Association. 

Print Advertising:  This will be our primary vehicle for advertising, and we will use a targeted campaign based on advertising in publications for pet owners and those in the pet industry.  These include publications that are for dog owners or cat owners only, such as Dogs in Review, Dog World, Dog Fancy, Dog & Kennel, Canine Times, and Bark Magazine for dog enthusiasts, and Cats Magazine, Cat Fancy, and Cats & Kittens for cat fanciers, and All Pets and Bonkers Pet Magazine for pet owners generally, Pet Business, Pet Life, and Animal Fair for general pet information.

Radio Advertising: While our use of radio will be limited, because owners using the PetSpeaker with their pets is best shown visually and radio audiences are often inattentive, some radio ads will be used on programs that deal with pets.   These include the one nationally syndicated show, Pet Talk America, and a number of local radio shows dealing with pets, including Pet Radio.  In addition, since the Pet Speaker is based on a breakthrough technology, some radio ads will be run on some programs featuring news about technology, such as CNET Technology News Radio and Business and Technology Radio. 

TV Advertising:  Our TV advertising will also be limited, because of our limited budget and the high cost of advertising on television.   Another reason for limiting our TV ads is that the television format is very short and fleeting, and most TV ads face a very cluttered environment.  However, selectively, a few TV ads will be used on special interest programming, primarily on cable stations, which is targeted to people who own pets or have a high interest in animals.   Among these channels are Animal Planet, which features some programming on pets; Discovery Channel, which features occasional documentaries on animals; and educational and local channels, such as KQED-TV and Channel 65 in the San Francisco Bay Area, which feature occasional programs on pets, such as “Miracle Pets”, “Hero Dogs”, and “Dogs at Work.” The particular educational and local programming will be selected after obtaining programming schedules from local stations. 

Web Site Development:  Our Web site will be designed to provide information about the Pet Speaker and recent developments.  Among other things, the Web site will include demonstrations of the Pet Speaker in action, provide descriptions of how the technology works, show examples of cat and dog owners using the Pet Speaker, offer testimonials from satisfied users, feature different models, and enable visitors to order the Pet Speaker online or refer them to stores in their area.  It will also include press materials and links to recent news stories and magazine articles about the Pet Speaker, as well as a list of upcoming media events.  Other features will be added as the Pet Speaker expands its reach nationally and then internationally.  Some sales and ordering information about the Pet Talker will be included, too, although this is primarily designed to be a novelty and premium item. 

Internet Advertising:  Our Internet advertising will be targeted to the many sites that deal with pets. This strategy will include setting up links with the hundreds of commercial and personal pet Web sites, participating in affiliation programs with both pets and general Web sites, such as Commission Junction, which offer a commission for sales, and paying for advertising on the sites which have a high volume of traffic, such as Yahoo and Lycos.  The other major sites where we advertise include Petshub.com, Pets4you.com, Biz2Biz.com, Allpets.com, Allourpets.com, Animalfair.com, and Petsforum.com.   

Direct Marketing Mail Campaign: Our direct marketing strategy is based on sending mail or e-mail to retailers and wholesalers selling pet products.  Besides contacting the major superstores, such as PetSmart and Petco, and major distributors, the direct mail campaign will be directed towards the smaller independent pet store retailers and distributors, some of whom have an online presence.  In addition, another direct mail campaign will be directed towards organizations involved with pets and animals to let them know about the PetSpeaker, so they can inform their members and subscribers through their newsletters or use the PetSpeaker as a fundraiser for the organization.  For instance, some of the organizations to be targeted include the numerous SPCAs around the country, the American Humane Society, pet hospitals and veterinary clinics, and pet rescue organizations.  These mailings will be combined with various sales promotion programs to encourage volume and early sales.  Besides PetSpeaker’s internal lists with information on these retailers, wholesalers, and organizations, selected mailing lists will be purchased or rented from list brokers, such as lists of pet retailers, wholesalers, and distributors, and lists of trade show exhibitors and attendees of major pet industry trade shows, including those PetSpeaker will be participating in. 

Sales Promotion:  Our sales promotion strategy will be tied in with our advertising, direct mail, trade show, and retail/wholesaler incentive programs.  It will be based on the following tie-ins with each of these programs:

Advertising:  Consumers will receive a discount off the regular retail price if they respond to any of our ads -- whether in print, on radio, on TV, or on the Internet, within a limited time period.   This discount will be between 10-25% off of the ordinary retail price. 

Direct Mail:  Since our direct mail campaign will be directed towards retailers, wholesalers, and organizations interested in marketing the product, this promotion will offer 10-20% discounts for volume orders and for purchases by a certain date to encourage large and early orders. This offer will also provide a 10% advertising allowance for co-op ads featuring the PetSpeaker, with the 10% granted after proof of advertising is shown with advertising clips. 

Trade Shows:  These promotions will offer a discount for purchases made at both pet industry and consumer trade shows or within 2 days of the show, if orders are placed on a special form distributed at the show. 

Retailer/Wholesaler Incentive Programs:  These discounts will be similar to those offered in our direct mail campaign to retailers and wholesalers, although they will be based on direct phone contact and personal meetings with the largest retailers and wholesalers in the 25 largest metropolitan areas.  A team of national sales reps will be recruited to work on a commission basis to make these contacts and take orders.  The strategy here is to offer larger discounts of 20-33% for high volume orders and purchases by a certain date to encourage such high-volume early orders.   This offer will also provide for a 10% advertising allowance for co-op ads featuring the Pet Speaker, with the 10% granted after proof of advertising is shown through advertising clips.  Retailers who order over a minimum amount can also obtain at no charge a Point of Purchase display featuring a stuffed cat and/or dog with a collar or tag that is programmed to emit sounds when people walk by or push a button.  The retailer can decide which approach works best in his or her own store.    

Directory Advertising:  Our directory advertising will be focused on putting display listings in directories that go to those in the pet industry and to pet owners, such as directories published by About Cats, Absolutely Cats, Cat Fanciers, All About Dogs, Dog-0-Mania, and the Doggie Directory.   

Public Relations Campaign: Our public relations strategy is based on attracting widespread media interest, because the PetSpeaker is a new, unique, and exciting product with a very broad appeal to millions of pet owners based on a technological breakthrough in communications.  It is a story that will have great emotional appeal, because people are highly emotionally involved with their pets, while the product as based on a revolutionary innovation in technology.   The PR campaign will playing up both the emotional and tech breakthrough angles in pitching stories on the PetSpeaker to both the mass media and the trade press for the pet industry, business, and high-tech communications.  In particular, the PR campaign will use these methods:

·        Preparing a series of press releases about the PetSpeaker, pet owners using the PetSpeaker, the technology making the PetSpeaker possible, and other newsworthy topics to be developed.   The initial release will highlight the new pet-human communication benefits provided by this breakthrough technology.  

·        Creating a PetSpeaker press kit, which includes the press releases, along with photos of owners and their pets, questions and answers for the media, and in some cases, a sample audio cassette or video featuring owners using the Pet Speaker with their pets.

·        Distributing information about the PetSpeaker through mailings or faxes of press releases, handing out press kits at special events and press conferences, and sending out news items through national promotional services, like PR Newswire and Business Newswire. The Company will also make use of current PR databases, such as those provided by Bacon’s and the Power Media Yearbook published by Broadcast Interview Source.

·        Placing a series of ads about the PetSpeaker in publications directed towards the media, such as Radio-TV Interview Reports, to increase awareness among media professionals, leading to interviews with print journalists and guest appearances on radio and TV shows.

·        Contacting journalists at newspapers, magazines, and news services who write pet, entertainment, family, recreation, and pop culture articles to interest them in writing a feature story about the PetSpeaker.

·        Setting up interviews and press conferences to announce the introduction of the PetSpeaker and latest developments. 

·        Organizing a press tour to feature interviews and demonstrations with company spokespersons and local pet owners who have used the Pet Speaker.   This tour will target the major markets and coordinate activities with local events, such as national dog shows or events where PetSpeaker will have a booth or sell the PetSpeaker through its distributors, such as at the Family Pet Expo, sponsored by the World Wide Pet Supply Association.

·        Arranging for an outside PR firm to handle an initial PR campaign for the first three months directed towards the major radio and TV stations, since a top PR specialist will already have media contacts, resulting in a faster favorable response from big shows, like Oprah, Jay Leno, David Letterman, Good Morning America, and Today.

·        Contacting well-known celebrities who are pet owners to invite them to be spokespersons or endorsers for the PetSpeaker.

·        Developing tie-ins at conferences and conventions dealing with pets and the latest in communication technology to do demonstrations on the PetSpeaker.

·        PetSpeaker will additionally join the major pet industry organizations as an affiliate member or sponsor, such as the American Society for the Prevention of Cruelty to Animals and American Humane Society.

Budget           

            To achieve these objectives, the advertising budget has been set at $10 million for an 8-month advertising campaign, which includes 1 month of production, preparation, and planning.  The items included in the budget have been determined based on the above strategy, which has been developed to achieve the advertising objectives.  As previously noted, the advertising vehicles we will use include: a tradeshow launch, print advertising in publications to pet owners and the pet industry, radio and television advertising on specialty shows and stations directed to pet owners and animal lovers, Internet advertising through our own Web site and ads on Web sites directed towards pet owners, a direct mail campaign to retailers and wholesalers, and a public relations campaign featuring press releases, media kits, tie-ins at events, and celebrity endorsements.   More specifically, the budget includes the following elements. 
 

Trade Shows 

The launch of The Pet Speaker will take place at the WWPSA (World Wide Pet Supply Association) Industry Trade Show on June 1^st, 2^nd, and 3^rd in Anaheim, California.  We will also be attending 6 other trade shows during our campaign.   

At the WWPSA trade show, we will have a large booth to attract attention to the Pet Speaker.  The booth will feature demonstrations of the PetSpeaker with real dogs and cats, along with brochures and press releases explaining the PetSpeaker and its revolutionary new technology.   Anyone stopping by the booth will receive a free dog or cat collar, whichever they prefer, with the PetSpeaker name and slogan printed on it.  They can also leave a card to enter a drawing to win a Pet Speaker grand prize or one of a dozen Pet Talker second prizes at the end of the show.   

The PetSpeaker will additionally be advertised in the show program and showcased at the entrance to the convention center.  We will also be sponsoring the registration packet badge holder lanyards with our product name and slogan printed on them.  For even further impact, we will sponsor the one pre-show breakfast for different groups of attendees, where Company representatives will be give a short demonstration of the Pet Speaker, explain the underlying technology and answer questions.  Over the course of the three days at the show, we will have 12 30-minute demonstrations of our products, featuring 6 presentations of Pet Speaker for dogs and 6 presentations of the Pet Speaker for cats.  There will also be two point of purchase racks set up featuring the Pet Speaker.  A breakdown of our WWPSA trade show costs is as follows: 

On July 1^st, 2^nd, and 3^rd we will attend the APPMA (American Pet Products Manufacturers Association) Trade show in San Diego, California.  At the trade show we will have 1 large wall booth. As at the WWPSA show, the booth will feature demonstrations of the PetSpeaker with real dogs and cats, along with brochures and press releases explaining the PetSpeaker and its revolutionary new technology. Anyone stopping by the booth will receive a free dog or cat collar, whichever they prefer, with the PetSpeaker name and slogan printed on it.  They can leave a card to enter a drawing to win a Pet Speaker grand prize or one of a dozen Pet Talker second prizes at the end of the show. The PetSpeaker will additionally be showcased at the entrance to the convention center. We will also sponsor the registration packet badge holder lanyards with the PetSpeaker name and slogan printed on them and will have two point-of-purchase racks set up for the PetSpeaker.  Over the three days of the show, we will have 6 30-minute demonstrations of our products, featuring 3 presentations of Pet Speaker for dogs and 3 presentations of the PetSpeaker for cats.  A breakdown of APPMA trade show costs is as follows: 

On August 3^rd, 4^th, and 5^th we will attend the Tufts Animal Expo in Boston, Massachusetts.  At the show we will have 1 large booth, which will feature regular demonstrations and brochures as at the previous shows.  As before, anyone who stops by the booth will receive a free dog or cat collar, whichever they prefer, with the PetSpeaker name and slogan on it.  They will also have the opportunity to enter their business card in a drawing to win a Pet Speaker or one of a dozen Pet Talkers at the end of the show.    As at the other shows, the PetSpeaker will be showcased at the entrance to the convention center, and we will have two point-of-purchase racks with the PetSpeaker set up at the show.  We will additionally have 6 30-minute demonstrations during the three days at the show and are sponsoring registration packet badge holder lanyards with the PetSpeaker name and slogan printed on them.  A breakdown of the Tufts Animal Expo costs is as follows: 

On September 1^st, 2^nd, and 3^rd we will be attending the Pet Extravaganza in Taylor, Michigan.  At the trade show we will have 1 large booth, which will feature regular demonstrations and brochures as at the previous shows.  As before, anyone who stops by the booths will receive a free dog or cat collar, whichever they prefer, with the PetSpeaker name and slogan on it.  They will also have the opportunity to enter their business card in a drawing to win a Pet Speaker or one of a dozen Pet Talkers at the end of the show.    As at the other shows, the PetSpeaker will be showcased at the entrance to the convention center, and we will have two-point-of purchase racks with the PetSpeaker set up at the show.  We will additionally have 6 30-minute demonstrations during the three days at the show and are sponsoring registration packet badge holder lanyards with the PetSpeaker name and slogan printed on them.  A breakdown of the Pet Extravaganza costs is as follows: 

On October 1^st, 2^nd, and 3^rd we will be attending the Calgary Pet Expo in Seattle, Washington at the Calgary Round-Up Center.  At the trade show we will have 1 large booth, which will feature regular demonstrations and brochures as at the previous shows.  As before, anyone who stops by the booth will receive a free dog or cat collar, whichever they prefer, with the PetSpeaker name and slogan on it. They will also have the opportunity to enter their business card in a drawing to win a Pet Speaker or one of a dozen Pet Talkers at the end of the show. As at the other shows, the PetSpeaker will be showcased at the entrance to the convention center, and we will have two point-of- purchase racks with the PetSpeaker set up at the show.  We will have 12 30-minute demonstrations during the three days at the show.  A breakdown of our Calgary Pet Expo costs is as follows: 

On November 2^nd, 3^rd, and 4^th we will be attending the SuperZoo Pet Christmas Expo in Dallas, Texas at the Dallas Convention Center.  At the trade show we will have 1 large booth, which will feature regular demonstrations and brochures as at the previous shows.  As before, anyone who stops by the booth will receive a free dog or cat collar, whichever they prefer, with the PetSpeaker name and slogan on it.  They will also have the opportunity to enter their business card in a drawing to win a Pet Speaker or one of a dozen Pet Talkers at the end of the show. As at the other shows, the PetSpeaker will be showcased at the entrance to the convention center, and we will have two point-of- purchase racks with the PetSpeaker set up at the show.  A breakdown of the SuperZoo Pet Christmas Expo costs is as follows: 

On December 1^st, 2^nd, 3^rd, and 4^th we will be attending the Pet Industry Christmas Trade Show and Educational Conference.  At the show we will have 1 large booth, which will feature regular demonstrations and brochures as at the previous shows.  As before, anyone who stops by the booth will receive a free dog or cat collar, whichever they prefer, with the PetSpeaker name and slogan on it.  They will also have the opportunity to enter their business card in a drawing to win a Pet Speaker or one of a dozen Pet Talkers at the end of the show.   As at the other shows, the PetSpeaker will be showcased at the entrance to the convention center, and we will have two point-of-purchase racks with the PetSpeaker set up at the show.  Additionally, PetSpeaker is advertising in the show program and will have 8 30-minute demonstrations during the four days at the show.  A breakdown of the Pet Industry Christmas Trade Show and Educational Conference costs is as follows: 

Print Advertising 

Our print advertising is very extensive and includes 14 different publications.  The magazines in which the PetSpeaker will be advertised in include the consumer magazines: Dogs In Review, Dog World, Dog & Kennel, Dog Fancy, Canine Times, Bark Magazine, Cats Magazine, Cat Fancy, Cats & Kittens, All Pets Magazine, and Bonkers Pet Magazine, and the industry magazines: Pet Business, Pet Life, and Animal Fair Magazine. The PetSpeaker will be advertised in each of these publications every month for seven months.  A breakdown of our print advertising costs is as follows: 

Radio and TV Advertising      

PetSpeaker will produce and run a series of television and radio ads during our 7-month campaign.  After a month for production and preparation beginning in May for our first television commercial and first 2 radio commercials, we will start airing the first of our series of 5 different television commercials and 18 radio commercials in June.  These will air on June 1^st, the day of our initial product launch at the WWPSA Trade Show in Anaheim, California. Then production of the next commercials will continue as the already completed commercials air.  Our radio ads will be run on Pet Talk America, Pet Radio, CNET Technology News Radio, and Business & Technology Radio.  Our television ads will be run on Animal Planet, Discovery Channel, NBC, FOX, and a number of local and educational stations to be announced.   

The total costs of production include the costs for talent, studio time, making master video and audio tapes, dubbing duplicate video and audio tapes, and setting up satellite links for transmitting video or audio feeds to the stations set up to receive such feeds.  A breakdown of these production costs is as follows: 

Our radio ads will be broadcast every day from June 1^st through December 31^st, with 2-3 new ads introduced every month.  During June through October a series of two commercials will be played on each radio station twice a day, with new ads each month.  During November and December a series of three commercials will be played on each radio station three times a day, with new ads each month.  A breakdown of these radio advertising costs is as follows: 

Our television ads will be broadcast from June 1^st through December 31^st, with a new ad introduced every 4-6 weeks.  We will be running a total of 256 ads during the seven-month span of our advertising campaign.  A breakdown of our costs for each station is as follows: 

Internet Advertising 

The costs for Internet Advertising will include both the costs for PetSpeaker Web site development and maintenance and other Web site advertising. 

The cost of the developing, maintaining, and updating the PetSpeaker Web site during the 7 month ad campaign will be $150,000. This amount includes the cost of registering the web site URL with www.submit-it.com for $59 a month to keep the site registered with the top 400 Internet search engines.  In addition, this cost will include design fees paid to the Web site designer and hosting service for these activities.   

The Internet web sites where PetSpeaker will be advertised during the 7-month period will include Yahoo.com, Lycos.com, Petshub.com, Pets4you.com, Biz2Biz.com, Allpets.com, Allourpets.com, Animalfair.com, and Petsforum.com.  A breakdown of these Internet ad costs and the type of advertising on each site is as follows: 

Direct Mail Campaign 

Our direct mail campaign will be directed to pet product retailers, wholesalers, and distributors and to pet organizations and pet magazines.  We will also be sending follow-up letters and catalog sheets by direct mail to the registered exhibitors and attendees at the 7 trade shows we will attend.   These letters will remind them to place their orders and take advantage of our special sales promotion discounts.  More specifically, the list of pet retailers, wholesalers, and distributors, pet organizations, and pet magazines we will be contacting includes the following major companies:

Retailers/wholesalers/distributors:

            PetSmart

            PetCo 

            Wal-Mart

            Pets Online Store (www.pets.com)

            Petopia Online Store (www.petopia.com)

            Biz 2 Biz Online Pet Marketplace (www.biz2biz.com)

            Pet Industry Online (www.petindustry.com)

            ABC Pet Supplies       

            Pets 4 You Online (www.pets4you.com)

            All Pets Online (www.allpets.com)

            Pet Land

            Pet Food Express

            Pet Supermarket

Pet organizations:

            Friends of Animals

            Humane Society International

            PALS Foundation

            World Wide Pet Supply Association (WWPSA)

            Pet Industry Distributors Association

            American Pet Products Manufacturers Association (AAPMA)                  

Pet magazines:

            Dogs In Review

            Dog World

Dog & Kennel

            Dog Fancy

Canine Times

            Bark Magazine

            Cats Magazine

            Cat Fancy

            Cats & Kittens

            All Pets Magazines

            Bonkers Pet Magazine

            Pet Business

            Pet Life

            Animal Fair Magazine 

A breakdown of our direct mail advertising costs is as follows:

Public Relations Campaign 

Our public relationships campaign will include the development of a series of press releases, media kits, listings in newsletters and directories that go to the media, letters to celebrities or their agents or managers for endorsements, and a press tour by PetSpeaker representatives to demonstrate the PetSpeaker in about 20 media markets.  In addition, we will register with Biz2Biz.com which will supplement our own PR efforts by releasing a press release on our product during each month of our advertising campaign.  Biz2Biz.com will also be designing and mailing our media kits to selected media locations.   While some of our PR campaign will target the same pet publications in which we have advertised, our PR campaign will be far more extensive in publicizing the PetSpeaker to the major media, including news and general interest magazines, TV and radio talk shows, and daily and weekly newspapers in the top 50 metropolitan markets. 
 

Press Releases and Media Kits 

A list of the locations our press releases and media kits will be sent to include: 

Pet Publications

Dogs In Review

            Dog World

Dog & Kennel

            Dog Fancy

            Bark Magazine

            Canine Times

            Cats Magazine

            Cat Fancy

            Cats & Kittens

Bonkers Pet Magazine

All Pets Magazine

            Pet Business

            Pet Life

            Animal Fair Magazine           

            News and General Interest Publications

            Time

            Newsweek

            Business Week

            Consumer Reports

            Other general circulation magazines with 20,000+ plus circulation

            Daily and weekly newspapers in the top 50 metropolitan markets 

Media Services and Directories  

The various media services and directories we will be using to inform members of the media about the Pet Speaker include two daily or weekly fax and e-mail services: PR Newswire and Business Newswire and the biweekly Radio/TV Interview Report.  We will also be using the databases provided by Bacon’s PR Database and Broadcast Interview Source, which publishes the Power Media Yearbook and the Power Talk Yearbook to make additional contacts by PR releases or follow-up phone calls.   More specifically, the costs of these services and directories is as follows: 

Letters to Celebrities and their Agents or Managers 

            To obtain celebrity spokespersons and endorsements, we will research the names of celebrities who own dogs or cats and how to contact them.   Then, we will send letters to them inviting them to be spokespersons for PetSpeaker or to provide an endorsement in return for some compensation and publicity for their involvement with this cutting edge product.  The costs of doing this research, sending these letters, and providing for celebrity compensation and on-site promotional costs are as follows: 

Press Conferences and Media Tour 

PetSpeaker reps will go on a Media Tour to 22 major metropolitan areas in the United States.  During this media tour, these reps will have press conferences and give away media kits in each city.  A breakdown of our media tour/press conference advertising costs is as follows: 

Using a Press Release Mailing Service           

Besides our in-house public relations expenses, our costs to Biz2Biz.com for releasing additional press releases and designing and mailing additional media kits are as follows: 

Directory Advertising 

                Our company will be registering with a number of pet industry directories to further promote the PetSpeaker and the Company generally.  A breakdown of our costs for our directory advertising is as follows:           

Patent, Copyright, and Trademark Registration 

Due to the threat of other companies bringing out similar products once the technology is known to exist, PetSpeaker will be spending $100,000 to file for patent, copyright, and trademark registrations.  This cost will cover both filing fees and the estimated costs of legal fees for letters to infringers and warning ads to prospective infringers should this become a problem.  A breakdown of these costs is as follows.   

Unsold Products 

Finally, the cost of products used as give-aways includes those used at the trade shows, in the media kits, and during the media tour and press conferences.   Initially, these give-aways will include 460 PetSpeakers and Pet Talkers (230 of each), with 160 given away at the trade shows, 250 sent in media kits, and 50 used during the media tour/press conferences.  A breakdown of the cost for these unsold products based on these costs is as follows: 

Total Advertising and Public Relations Costs

The total advertising and public relations costs for this 8-month advertising campaign are the following: 

Execution 

            To meet the advertising objectives and strategy outlined in this plan, PetSpeaker will implement the following copy strategy, media plan, and integrated marketing communications.  These three approaches will be coordinated to highlight PetSpeaker’s major benefits for its primary target market – current cat and dog owners.  In addition, this coordinated campaign will further address the major issue raised by many prospective consumers who are excited about the product but uncertain whether it will really work – the issue of credibility and belief.   

Accordingly, some advertising is designed to demonstrate that the PetSpeaker works by explaining or demonstrating how it does translate animal sounds to human language due to recent breakthroughs in embedded chips and speech recognition technology. The focus of the ads will be on the PetSpeaker, while the PetTalker will be used primarily as a promotional device to draw attention to the PetSpeaker, as well as being sold as a novelty, gift, toy and premium product. More specifically, the copy strategy, media plan, and integrated marketing communications will use these elements.
 

Copy Strategy 

            The copy strategy is designed to express the major advertising objectives for the PetSpeaker.  To this end, all the ads and PR for the product, regardless of media, will be prepared with these objectives in mind.

1)      To build consumer awareness of the PetSpeaker through dramatic, visually exciting, interesting ads with short, snappy copy that immediately conveys the advertising message.

2)      To influence the consumer purchase intent and thereby sales of the PetSpeaker, by emphasizing the major benefits consumers seek from it, as identified through market research: the ability to understand what their pets think, feel, want, and need so they can better communicate and relate to them, because of their close, emotional bond with their pets.

3)      To inform and educate consumers about the new sound to human language technology that makes the PetSpeaker possible through product demonstrations and brief, clear explanations understandable to a general market, so consumers will understand and believe that the PetSpeaker really works. 

To achieve these objectives, PetSpeaker will run a series of print ads, radio/TV commercials, and Internet banner ads showing that people can now communicate with their pets using the PetSpeaker due to a technological breakthrough.   Then, consumers can learn more about the product and how to get it by going to their local pet store, contacting the Company’s call center at a 1-800 number, or going to the PetSpeaker Web site.   

The introductory message will highlight an identified benefit in the form of a question:

            “Want to know what your pet wants to do?”

            “Want to know what your pet is saying?”

            “Want to know what your pet is thinking?”

            “Want to know what your pet is feeling?”

            “Want to know how much your pet loves you?”

            And so on.   Then, the imagery in the print ads and TV commercials and the audio in the radio commercials will feature a consumer who can now communicate with his or her cat or dog as a result of using the PetSpeaker. 

            All of the ads will emphasize that this technology is now possible with the subhead featuring the theme line: “Now you can!”  Then, the body copy in the print ads and the words spoken by the announcer in the radio and TV ads will briefly explain the product concept and assert that a breakthrough technology makes this pet-human communication possible.   Finally, the concluding copy will urge the prospective consumer to action, so he or she will want to get the product or learn more about it by going to a pet store, calling a phone number, or going to the Company Web site.    

For example, the initial copy line in the print ads conveying this message is this:

      “Turn your pet’s sounds into English words you can understand. Get the unique PetSpeaker with its breakthrough PetSpeak technology. At your local pet store or call 1-800-PetSpeak… www.petspeak.com.” 

            Likewise, the Internet ads will feature the same headlines and theme line featured in the other ads, and then invite the consumer to click through for more detailed information about the PetSpeaker on the Company’s Web site. 

            As the Company expands its reach to other markets and the PetSpeaker is programmed to translate dog and cat sounds into other languages, the ads will reflect this. For example, the Company plans to run ads in other languages to let consumers in other markets know that the PetSpeaker is now available for their group, such as by describing how the sounds of a “pero” or “gato” will be turned into “palabras en Espanol” for the Hispanic market in the U.S. and Mexico.    

            More specifically, since the Company plans to expand first into the Hispanic market, the Spanish version of the Company’s print ads is as follows: 

            Here are the Spanish headlines for the other print ads in the introductory 7-month campaign.  (The subhead and body copy remains the same for all the ads).       

            A copy of all the print ads, radio and TV scripts, and Internet ads for this introductory campaign are included in the Appendix. 

Media Plan 

            As described in the discussion of strategy and listed in the budget, the media where these print ads, radio/TV commercials, and Internet ads will run have been selected to appeal to these primary consumer and trade market segments: 

1)      consumers who are current pet owners of dogs and cats and have a strong interest in their pets or animals generally, as reflected by these indicators:

·        reading magazines on dogs or cats

·        listening to radio or TV programs for pet enthusiasts

·        viewing TV programs on pets

·        participating in online interest groups devoted to dogs or cats, such as Web rings and newsgroups. 

2)      retailers or wholesalers in the pet industry, who are interested in the latest in products for dog or cat owners, as reflected by these indicators:

·        reading industry magazines

·        participating in industry trade shows

·        participating in online forums and Websites devoted to the pet industry. 

To this end, the media plan describes the particular consumer and trade vehicles selected for the first 7 months of the ad campaign.   A copy of this plan is in the Appendix.  For each media vehicle, it lists the size of the audience, characteristics of the audience, rating or reach, the number of ad insertions or frequency, and where relevant the GRP (gross rating points), CMP (cost per thousand), and CPRP (cost per rating point).

Integrated Marketing Communications 

            Besides the extensive ad campaign using print, radio, TV, and the Internet, PetSpeaker will use additional IMC strategies to complement the media advertising campaign.   As previously described in more detail in the strategy and budget sections, these communications include the following vehicles.

1)      Participating in pet trade and consumer shows, including an industry trade show product launch

2)      A direct mail campaign to retailers and wholesalers, featuring letters and catalog sheets promoting the PetSpeaker.

3)      Preparing sales promotion support materials, including catalog sheets, brochures, and flyers.

4)      A public relations campaign featuring press releases, a media kit, calls to set up interviews with selected journalists, press conferences, a letter campaign to line up celebrity spokespersons and endorsements, organizing a press tour of Company reps to major markets, and tie-ins at conferences and conventions dealing with pets. 

A copy of the materials to be used in the various phases of the IMC campaign, including press releases, letters, and a catalog sheet, is included in the Appendix.  

Evaluation 

            The effectiveness of this advertising campaign will be assessed based on achieving the three major objectives previously noted in the Objectives section: increasing consumer awareness and favorable attitudes; building sales, and interesting manufacturers, distributors, and other companies in partnering with PetSpeaker.  To this end, as previously noted, the success of the advertising campaign will be measured at the end of 8-months by these three measures:

1)      Level of awareness and favorable attitudes which consumers have of the PetSpeaker. This will be ascertained by doing street intercept and phone surveys of consumers to learn if they are aware of the PetSpeaker and their attitude towards the PetSpeaker, whether or not they are aware of it. A high level of awareness and a highly favorable attitude will be regarded as a measure of the campaign’s success in increasing consumer awareness and achieving a favorable attitude.

2)      Number of sales of the PetSpeaker on a monthly basis during the course of the campaign.  This will be determined by using trend analysis to relate the level of sales to specific advertising, promotion or publicity events during the 7-month media and PR campaign.  This analysis will also assess where sales have been strongest, according to geographic, demographic, psychographic, lifestyle, or other factors, where these can be measured, to indicate the groups with the strongest favorable response to the PetSpeaker.  Additionally, this analysis will seek to determine more precisely the reasons that buyers have bought the PetSpeaker, so this information can be used in future advertising campaigns to highlight these benefits and further increase sales in the future.  A high and increasing level of sales will be regarded as a measure of success in achieving this sales objective.

3)      Number of manufacturers, distributors, or other companies that express interest in partnering with PetSpeaker.  This might be done in various ways, such as by distributing the PetSpeaker, entering into joint ventures with the Company, licensing PetSpeaker’s technology, logo, or designs, investing in the Pet Speaker, or seeking a buy-out or subsidiary arrangement with Company.  Meeting this objective will be deemed a success if PetSpeaker enters into a one or more profitable distribution, partnership, investment, or buy-out arrangements with other companies.