Download - The Star Mobile Marketing Plan

Ding Wei Yee (1071200152)

BMM 6034 (Marketing Management)

10/30/2007

THE STARMOBILE

MARKETING PLAN

Marketing Management

“Malaysia’s very first Mobile Newspaper! Get your news on the go!”

Ding Wei Yee (1071200152) 10/30/2007

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THE STARMOBILE MARKETING PLAN

Marketing Management

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Upon request, this document is to be immediately returned to _______________.

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This is a Marketing plan. It does not imply an offering of securities.

Ding Wei Yee (1071200152) 10/30/2007

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TABLE OF CONTENTS

Content Page

1.0 EXECUTIVE SUMMARY 3

1.1 OBJECTIVES 3

1.2 MISSION 3

1.3 KEYS TO SUCCESS 4

2.0 MARKET ANALYSIS SUMMARY 4

2.1 MARKET SEGMENTATION 5

2.2 TARGET MARKET STRATEGIES 9

2.2.1 MARKET DEMOGRAPHICS 10

2.2.2 MARKET NEEDS 13

2.2.3 MARKET TRENDS 13

3.0 S.W.O.T ANALYSIS 13

3.1 STRENGTHS 13

3.2 WEAKNESSES 14

3.3 OPPORTUNITIES 14

3.4 THREATS 14

4.0 MAIN COMPETITORS 14

4.1 COMPETITIVE EDGE 15

5.0 PRODUCTS AND SERVICES 15

5.1 COMPETITIVE COMPARISON 16

5.2 FULFILLMENT 17

5.3 TECHNOLOGY 17

6.0 MARKETING STRATEGY 17

6.1 POSITIONING 18

6.2 MARKETING MIX 18

7.0 SALES STRATEGY 18

7.1 SALES FORECAST 19

8.0 FINANCIAL PLAN 22

8.1 START UP 22

8.2 START UP FUNDING 23

8.3 PERSONNEL PLAN 24

8.4 ASSUMPTIONS 25

8.5 KEY FINANCIAL INDICATORS 25

8.6 BREAK-EVEN ANALYSIS 26

8.7 PROJECTED PROFIT AND LOSS 27

8.8 PROJECTED BALANCE SHEET 29

9.0 CONTROL 30

9.1 MARKETING ORGANIZATION 30

9.2 CONTINGENCY PLANNING 31

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1.0 EXECUTIVE SUMMARY The Star, Malaysia's leading English daily is preparing to launch TheStarMobile, Malaysia

first newspaper to go mobile. The mobile market has been lucrative to those who dare

venture into a new media. In 2006 alone, the mobile revenue segment amounted to RM14.5

billion (source: MCMC). The mobile market in Malaysia can still be described as being in the

stage of infancy as compared to the more accomplished countries like Scandinavia and Japan

where mobile is not a new media but a necessary tool in every marketing plan. With that

said, TheStarMobile is actually paving new paths for other companies in this field.

TheStarMobile will be targeting various segments in the consumer market and business

markets taking advantage of the vast mobile market that just keeps getting bigger and more

sophisticated every day. With growing 3G awareness within the mobile generation, the time

is ripe to kick-start TheStarMobile as the first mobile news channel for Malaysians replacing

TV, Radio and maybe even the paper in the future.

The primary marketing objectives of this plan is to achieve a new level of branding for The

Star and its mobile arm TheStarMobile using the analytical tools of Blue Ocean Strategy

(2005) by W.Chan Kim and Renee Mauborgne published by Harvard Business School Press

to analyze the market and devising a new plan to reach broader audiences opening a new

world of Blue Ocean for TheStarMobile.

1.1 OBJECTIVES The objectives of TheStarMobile in the long run are to do the following:

Create a new blue ocean of customers while riding on The Star newspapers existing

readers.

To establish itself as a brand not just a part of The Star newspapers.

Canvass entire mobile market with a comprehensive full market coverage strategy.

To increase gross to more than 25%.

To increase sales by 50%

1.2 MISSION The mission of TheStarMobile is to provide The Star newspaper readers and the mass of the

mobile market with a comprehensive, easy-to-use and hyped-up mobile news channel where

news comes in easy little bite sizes that better suit the generation of people on-the-go. SMS,

MMS, Mobile Content and Mobile Media Services including Premium SMS services are also

provided for the Star Publications (Malaysia) Bhd as a solution to their growing MIS needs

within the corporation. TheStarMobile also boasts a full range of telecom service facilities

including 3G Video, WAP infrastructure and a sophisticated billing system. This all means

that TheStarMobile is able to offer one-stop mobile solutions capability enabling our

customers to deal with one supplier that has the technology and international reach to fulfill

all their requirements. Our client list include some of the world's leading portals, national

broadcasters, national and regional publishers, international carriers and network operators

and hundreds of independent telecommunications companies, testifies to the company's

ability to deliver high quality services at the lowest total cost of ownership.

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Through our core technology Platforms - customers can use self-provisioning mobile and

telephony services and have access to a vast range of our readymade services. This is a

unique offering that sets TheStarMobile and our customers apart enabling them

communicate freely internally with staff, externally to contractors / suppliers and to generate

revenue quickly from their SMS/MMS campaigns utilizing unbranded content such as

competitions, quizzes, games, news and information services, presented as their own. Speed

to market is the key in the fast moving telecommunications sector.

TheStarMobile's core revenues will be generated from these core technology platforms-

access charges to retrieve premium information, use of platform and provision of technical

assistance.

TheStarMobile's mission statement is an expression of its basic purpose and intends to

define the company's business and marketplace and clarify its primary service orientation:

1.3 KEYS TO SUCCESS Our core values describe who we are and why we exist

Customer Driven - To understand and exceed customer needs and expectations

Integrity - Transparency in all business dealings

Operational Excellence - To demonstrate competitive superior quality and

performance in all our products and services

Economic Value - Maximizing value through products and services while also

meeting our profit objectives

2.0 MARKET ANALYSIS SUMMARY Mobile is by far the largest media audience in history, and with 808.3 million subscribers in

2005 in the Asia-Pacific region alone and a growth rate of 16.8% (source: Datamonitor), the

mobile medium promises to reach a far broader audience than radio, TV or the internet.

Distributing your brand in mobile can catapult it to worldwide recognition faster than

anything else.

The Asia-Pacific wireless telecommunications services market generated total revenues of

$150.1 billion in 2005; this figure represents an increase of 12.3% on the previous year and a

"To be the best supplier of mobile technology solutions to our

global communication customers and business partners at

the lowest total cost of ownership"

Ding Wei Yee (1071200152) 10/30/2007

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compound annual growth rate (CAGR) of 16.1% for the five-year period spanning 2001-2005.

Asia-Pacific is the world's fastest growing region for this market. In the same period, the

European market grew with a CAGR of 12.8% and the Americas regional market with a

CAGR of 14.3%. Asia-Pacific had 808.3 million wireless telecommunications subscriptions in

2005: this is an increase of 16.8% over the previous year and represents a CAGR of 24.5% for

the five-year period spanning 2001-2005. This indicates that prices within this market are

falling in the Asia-Pacific region, as the technology becomes widespread, and competition

causes price erosion in the market.

TheStarMobile has identified the 19.5 million mobile subscribers in Malaysia including The

Star's readership of 1.4 million (source: Frost & Sullivan) as key target market for business.

The mobile market will be analyzed using new analytical tools provided by the Blue Ocean

Strategy opening up new uncontested markets where competitors wherever they maybe will

become totally irrelevant.

2.1 MARKET SEGMENTATION The mobile demand and penetration rate as at 2006 is 72.3% translating into 19.5 million out

of the total population of 26.9 million Malaysians.

In respect to the service providers in Malaysia, Maxis takes the lead. Out of the total number

of mobile subscribers at 19.5 million as at 2006, the respective providers Maxis, Celcom and

Digi holds 42%, 31% and 27% respectively.

The market has just begun expanding here in Asia as the mobile subscribers penetration

rate has been increasing steadily over the years and have yet to show signs of slowing down.

Malaysia’s mobile market development has been quite remarkable compared to the selected

economies namely: China, United State of America, Malaysia, South Korea, Australia,

Taiwan, UK and Hong Kong. These economies were selected on the basis of the size of their

mobile market and the potential for growth.

The 3G market is still in a state of infancy but in the space of 1 year from 2005 to 2006 the

amount of 3G subscribers increased by close to 800% a remarkable feat for a developing

country.

The strategy canvas for TheStarMobile will canvass the other mobile companies in the

market including the 3 service providers. The market for mobile has been tremendously

diluted by the mobile content companies and SMS service companies. They have not only

saturated the market to a point that there is no longer any brand loyalty amongst the mobile

users but they have created a very bad reputation for a start-up mobile news channel on

WAP. Fortunately The Star is the leading English daily in Malaysia and that helps lend

more credibility to the product.

Ding Wei Yee (1071200152) 10/30/2007

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42%

31%

27%

Service Providers Market Share (2006)

Maxis

Celcom

Digi

(source: MCMC, 2006)

0

10

20

30

40

50

60

70

80

1998 1999 2000 2001 2002 2003 2004 2005 2006

Pe

ne

tra

tio

n R

ate

(%

)

Mobile Penetration Rate (1998-2006)

Penetration

Rate

(source: MCMC, Q2 2007)

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29.9

67.6

74

74.1

79.4

91.4

97

102.2

122.6

0 50 100 150

China

USA

Japan

Malaysia

South Korea

Australia

Taiwan

UK

Hong Kong

Mobile phones per 100 people

Mobile phones

per 100 people

(source: MCMC, Q2 2007)

45692

406717

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

2005 2006

3G Subscribers

3G

Subscribers


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Mobile Market Strategy Canvas

Strategy Canvas for TheStarMobile

High

Low

Price

Mobile Content SMS

services

Chat services Video

capability

Ease-of-use

3G capability Platform Technology Wi-Fi

capability

MMS

services

Value added services

Strategy Canvas for TheStarMobile 2008

TheStarMobile

High

Low

Price

Mobile Content SMS

services

Chat

services

Video

capability

Ease-of-use

3G capability Platform Technology Wi-Fi

capability

MMS

services

Value added services

Mobile Companies

Strategy Canvas for Mobile Industry 2004 - 2007

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Market Analysis (source: MCMC, 2006)

Year 1 Year 2 Year 3 Year 4 Year 5

Potential

Customers

Growth CAGR

Maxis 16% 8,100,000 9,396,000 10,899,360 12,643,258 14,666,179 16.00%

Celcom 16% 6,100,000 7,076,000 8,208,160 9,521,466 11,044,901 16.00%

Digi 16% 5,300,000 6,148,000 7,131,680 8,272,749 9,596,389 16.00%

Total 16.00% 19,500,000 22,620,000 26,239,200 30,437,473 35,307,469 16.00%

Maxis, Celcom & Digi Subscribers

2.2 TARGET MARKET STRATEGIES TheStarMobile will be starting off by targeting existing The Star newspapers readers by

using the Product Specialization Strategy. Using this strategy, the products will catered to

the 3 main categories that are; working men (21 years and above), women (21 years and

above) and school children. These three main categories will be analyzed thoroughly by state,

income group, number of SMS a day and so on in the following charts and tables.

In the second phase of the plan after the first phase is executed, a new target market

strategy (Full Market Coverage) will be initiated to cover the entire mobile market in

Malaysia and abroad. This will comprise of a differentiated strategy in which separate

marketing mix is designed to cater to different target segments.

0

1

2

3

4

5

6

7

8

9

2003 2004 2005 2006

No

. o

f co

nn

ecti

on

s

(mil

lio

n)


Mobile Phone Connections by Service

Providers (2003-2006)

Maxis

Celcom

Digi

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2.2.1 MARKET DEMOGRAPHICS TheStarMobile will first of all be catering to the many different readers of The Star

newspapers and the mobile market in general. Refer to the table below.

Newspaper Readership (Q2, 2007)

The Star Daily 1, 325, 000

Sunday Star 1, 441, 000

(source: Synnovate’s Media Atlas Q2, 2007)

Mobile Subscribers by State: Selangor continues to be the state with most subscribers 3

years in a row. It has 21% of the subscriber base in 2006 this is followed by Johor (13%) and

Federal Territory Kuala Lumpur (8.6%). Percentage distributions of other states are as

follows:

State Percentage share of mobile phone subscriber base

2004 2005 2006

Selangor 25.0 24.7 21.7

Johor 13.2 13.7 13.0

Kuala Lumpur 9.5 9.7 8.7

Perak 8.1 7.3 7.7

Sarawak 6.4 5.9 7.1

Kedah 6.4 5.9 6.6

Pulau Pinang 6.9 7.4 6.6

Sabah 6.0 6.4 6.4

Pahang 4.0 4.5 4.8

Kelantan 3.6 3.7 4.6

Negeri Sembilan 4.0 3.9 4.3

Terengganu 2.5 2.9 3.8

Melaka 3.5 3.0 3.7

Perlis 0.7 0.8 0.9

Labuan 0.2 0.2 0.3


Percentage distribution of subscribers by broad age groups: Adults (ages 20-49 years as at

last birthday) continue to be the biggest contributing group accounting for 66.8% of the

subscriber base. Pre-teens and teens are the second largest group followed by seniors (aged

50 and above). Refer to the chart below:

12.3

78.8

913.1

78.2

8.720.5

66.8

12.6

2004 2005 2006

Percentage distribution of Mobile subscriber base

Pre-teen & Teens Adults Seniors


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Percentage distribution of subscribers by gender: survey results show that males make for

most of the subscriber base by 58.3% and females 41.7%. The differences between the

percentages of the 2 sexes have narrowed down in the last 3 years. Refer to chart below:

Percentage distribution of subscribers by income category: About 90% of the mobile phone

subscriber base is from income groups of less than RM 3,000 a month and the remaining 10%

are from income groups of RM 3,000 or higher. Refer to chart below:

0

10

20

30

40

50

60

70

2004 2005 2006


Male

Female


39.1

50.4

7.2

3.3

< RM 1,000

RM 1,000 < RM 3,000

RM 3,000 < RM 5,000

RM 5,000 and above


Percentage (%)


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Percentage distribution of subscribers by ethnicity: The Malay race accounts for 57.3% of the

subscriber base followed by the Chinese (28.9%) and the Indians (6.2%). The other ethnicities

are included in the chart below:

Percentage distribution of mobile subscribers purchasing products with their mobile phones:

Percentage increase between 2005 and 2006 is not much but that does not indicate that the

market is going nowhere. Refer to chart below:

53.957.3

32.428.9

6.3 6.26.5 6.7

0.9 0.9

2005 2005


Malay Chinese Indian Sabah & Sarawak Others


81.3

18.7

82.4

17.6

No Yes

Percentage distribution of Mobile subscribers

purchasing mobile products

2005 2006


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2.2.2 MARKET NEEDS TheStarMobile seeks to fulfill the following benefits that are important to customers:

Ease-of-use

Reliable and honest products

Mobile Business tools

Mobile Stock Options tools

New creative products

Low costs

Available anytime, anywhere 24/7

Broader reach and instant connectivity

Convenience and personalization

2.2.3 MARKET TRENDS Based on market analysis, the mobile market has been enjoying a growth rate of around 20%

for the past years. The mobile market is indeed a lucrative one and will continue to provide

opportunities for the adventurous business entrepreneur.

TheStarMobile is taking this opportunity to dive into this lucrative ocean and provide the

current mobile consumer market with better, reliable products and services at a cheap price.

3.0 S.W.O.T ANALYSIS The SWOT analysis provides us with an opportunity to examine the internal strengths and

weaknesses TheStarMobile must address. It also allows us to examine the opportunities

presented to TheStarMobile as well as potential threats.

3.1 STRENGTHS TheStarMobile identified the following as strengths:

We are a growing company

We pioneer new technologies

o As mobile technology constantly evolves, we develop solutions that can

enhance your business by bringing new services to market first.

o We are constantly striving to bring new solutions to the market that will

cement our position within the market place with our core proprietary

platform technologies.

We put customers first

o Customers are the most important element of TheStarMobile, they are our

biggest assets, and we strive to exceed customers' expectations

o We work with our customers to gain an understanding of their business, their

goals and objectives to ensure they receive the best possible service and the

right solutions to meet their needs.

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3.2 WEAKNESSES TheStarMobile identified the following as weaknesses:

A dependence on quickly changing technology.

Cost factor associated with keeping state-of-the-art hardware.

A budding company that needs to build a strong reputation in the industry

3.3 OPPORTUNITIES TheStarMobile identified the following as opportunities within the industry:

Growing population of mobile subscribers.

Social bonds fostered by the new mobile communities.

Strategic alliances offering sources for referrals and joint marketing activities to

extend our reach.

27.4 million mobile market yet to be penetrated.

3.4 THREATS TheStarMobile identified the following as threats within the industry:

Rapidly falling cost of Internet access.

Emerging local competitors.

4.0 MAIN COMPETITORS At this point in time, TheStarMobile does not have any immediate competitor in the industry

although it would be easy for companies in the similar mobile line to try to adapt to some of

the products although the platform technology is trademarked. Anyhow in order to keep

competition at bay, TheStarMobile has benchmarked a few companies that have enjoyed

significant success in the region.

Leading companies in the mobile industry:

China Mobile (Hong Kong) Limited

China Mobile, formerly China Telecom (Hong Kong), is a provider of cellular

telecommunications services in China.

For fiscal year 2005, the company reported revenues of $33.1 billion, an increase of

34.9% on fiscal 2004. Net income for the year increased by 36.1% and was recorded

at $7.3 billion.

China Unicom

China Unicom is a telecommunications company, operating primarily in China. The

company provides mobile communications, paging, long distance and data services

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in China, and is the second largest mobile phone operator in the country. China

Unicorn is headquartered in Beijing, China and has approximately 39,000 employees.

For fiscal year 2005, the company reported revenues of $11.4 billion, an increase of

12.5% on fiscal 2004. Net income for the year increased by 15.3% and was recorded

at $645.6 million.

NTT Corporation

NTT (Nippon Telegraph and Telephone) Corporation functions as a holding company

for the NTT Group, which is the largest telecommunications provider in Japan. The

company is headquartered in Tokyo, Japan.

For the fiscal year ended March 2006, the company generated revenues of $96.6

billion, a decrease of 0.6% from the previous year. Net income was $4,529 million and

decrease of 29.8% from the previous year.

4.1 COMPETITIVE EDGE TheStarMobile’s competitive edge is our positioning as strategic ally with clients, who are

clients more than customers. By building a business based on long-standing relationships

with satisfied clients, we simultaneously build defences against competition. The longer the

relationship stands, the more we help our clients understand what we offer them and why

they need it.

5.0 PRODUCTS AND SERVICES TheStarMobile has designed a range of products and services for the entire mobile

population. Products and services accompanied by sales literature below:

No Products / Services Sales Literature

1 Exclusive News Feed Service Provides RSS Exclusive News feed in almost real-time

so that customers can always be up to date, anytime.

Subscription Fee: RM2.00 for life

Per SMS: RM0.60

Per MMS: RM1.00

News updates will be sent to customers based on their

preferences like Sports, World News, Business, Health

and Women.

2 Stock Exchange Service Provides Stock Exchange updates directly to your

mobile.

You can even use our free products on our Star Stock

WAP page like stock calculator and etc.


Per SMS: RM0.60

Per MMS: RM1.00

News updates will be sent to customers based on their

preferences like 1st Board, 2nd Board and others.

3 StarJobs Service Provides a Job search community for graduates who

are looking for jobs.


Per SMS: RM0.50

Job opportunities will be sent directly to mobile and

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graduates can take their pick from there.

Companies can also list themselves under StarJobs to

be in the forefront of headhunting for new talents in

the industry.

4 Mobile News Streaming Provides a general news summary of National and

World news with business and sports updates


Per SMS: RM0.50

News updates will be sent to customers twice daily.

5 StarMobile Subscription Subscription service for all Star Mobile products:

Comics, Wallpapers, Games, Sudoku, Videos and

Ringtones


Every new subscriber will receive 10 free products of

customers’ choice.

6 Comics RM4.00 per branded comic

RM2.00 per standard comic

7 Wallpapers RM2.00 per wallpaper

8 Games RM4.00 per Java Game

9 Star Sudoku RM3.00 per Download

10 Videos RM3.00 per Video

11 Ringtones RM2.00 per Mp3 Ringtone

12 Advertisement Service Based on The Star Ad Rates (Starting 2008)

5.1 COMPETITIVE COMPARISON Today there is a critical mass of download-capable, colour handsets in the hands of

consumers and 100 percent of these phones are capable of interacting and responding in real

time. No other medium provides the occasion quite like mobile to establish a one-to-one

relationship with an audience. The demand for games and other interactive mobile content

such as news, sports and information services, images, and music, is booming and according

to industry analysts, is playing an increasingly dominant role in mobile phone usage.

Advancing technology combined with a maturing market has created an unprecedented

marketing opportunity to reach a new audience of gigantic proportions.

Why Choose TheStarMobile?

We pioneer new technologies - As mobile technology constantly evolves, we

develop solutions that can enhance your business by bringing new services to market

first. We are constantly striving to bring new solutions to the market that will

cement our position within the market place; we have so far commercialised

our platform technologies and will strive to develop better, faster and more cost

effective solutions.

We put customers first - Customers are the most important element of

TheStarMobile, they are our biggest assets, and we strive to exceed. We work with

our customers to gain an understanding of their business, their goals and objectives

to ensure they receive the best possible service and the right solutions to meet their

needs.

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5.2 FULFILLMENT While the TheStarMobile platform technologies are an important part of the mobile

solutions, the information and actions generated from mobile transactions are equally

important.

Our solution includes a normalized database from which TheStarMobile and customers can

access and integrate TheStarMobile data into their own business processes. Access rights to

data will be closely held, and authorization routines will be implemented at the site,

database and device level.

5.3 TECHNOLOGY TheStarMobile will sell complimenting products of the highest quality, and latest scientific

development.

TheStarMobile incorporates the proprietary platform technologies, latest hardware and

software to manage inventories, client database, point of sale, email capabilities, Web-

enabled networking, inventory, historical log, employee records, transaction history, accounts

receivable/payable and payroll. Back-up of the system is performed daily.

A thank you note will be sent automatically after services have been performed.

6.0 MARKETING STRATEGY TheStarMobile will be offering many unique products and services that will be introduced to

the market through targeted advertising:

SMS and MMS blasts

o By gathering the information from TheStarOnline database, start by blasting

Free-of-Charge advertisement SMS and MMS with free gifts if the start

subscribing.

SMS competitions

o Conduct SMS competition through The Star radio stations and get DJ

celebrities to spread the word.

E-newsletters

o Sent through TheStarMobile website.

E-Commerce site optimization

o TheStarMobile e-commerce website must be optimized periodically to stay on

top of the Google analytics ranking system.

Direct sales

o Direct Sales Team will manage the government agencies and business

partners through personal sales calls. This market is a long term, repetitive

business where relationships are a key component to success.

o Sales will be targeted to Malaysian mobile market in the early stages. Plans

to expand into the Asia-Pacific markets are scheduled for 2009.

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6.1 POSITIONING TheStarMobile’s positioning statement:

6.2 MARKETING MIX

Product The names of the products are as listed below, however other details on

products and services can be referred to, 5.0 Products and Services:

1. Exclusive News Feed Service

2. Stock Exchange Service

3. StarJobs Service

4. Mobile News Streaming

5. StarMobile Subscription

6. Comics

7. Wallpapers

8. Games

9. Star Sudoku

10. Videos

11. Ringtones

12. Advertisement Service

Price Prices are as detailed under 5.0 Products and Services

Place Anywhere as long as there is mobile reception!

Promotion Promotion plan:

To reward every new subscriber with 10 free TheStarMobile products and

services of their choice. This way, most customers will choose the

subscription option. Although this may put a slight dent on our growth

curve, in the long run this will easily educate customers to use more

services as it is the services that will be generating most of the revenue in

the future.

7.0 SALES STRATEGY TheStarMobile will be offering a unique solution that will be introduced to the market

through targeted advertising, SMS and MMS blasts, e-newsletters, website optimization and

direct sales.

“For Malaysian Mobile users who needs information/entertainment on

the go and TheStarMobile is your one-stop mobile solutions company

that provides News, Entertainment and Services with low-prices."

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Direct Sales Team will manage the government agencies and business partners through

personal sales calls. This market is a long term, repetitive business where relationships are a

key component to success.

Sales will be targeted to The Star readers and TheStarOnline users in the early stages. Plans

to expand into the Asia-Pacific markets are scheduled for 2009.

7.1 SALES FORECAST The table below outlines the sales forecast and cost of goods sold. The forecast is based on

reasonable sales projections within this very large market.

The exponential growth of the access charge revenues is based on the cumulative volume of

the products and services sold. For every unit sold, TheStarMobile charges a monthly fee to

access or subscription fee of RM1.00 to RM3.00 depending on the product or service.

The table and graph below will project the sales of the first 3 years.

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Sales Forecast

Unit Sales

Year 1 Year 2 Year 3

Exclusive News Feed Service 525,265 875,442 919,214

Stock Exchange Service 700,354 1,197,318 1,257,183

StarJobs Service 632,706 1,054,510 1,107,235

Mobile News Streaming 376,089 843,608 970,150

TheStarMobile Subscription 3,979,282 7,958,563 8,356,491

Comics 421,804 843,608 885,788

Wallpapers 632,706 1,265,412 1,328,682

Games 843,608 1,687,215 1,771,575

Star Sudoku 843,608 1,687,215 1,771,575

Videos 843,608 1,687,215 1,771,575

Ringtones 632,706 1,265,412 1,328,682

Advertisement Service 795,856 1,591,713 1,671,298

Total Unit Sales 11,227,590 21,957,230 23,139,448

Unit Prices Year 1 Year 2 Year 3

Exclusive News Feed Service $1.00 $1.00 $1.00

Stock Exchange Service $1.00 $1.00 $1.00

StarJobs Service $1.00 $1.00 $1.00

Mobile News Streaming $2.00 $2.00 $2.00

TheStarMobile Subscription $2.00 $2.00 $2.00

Comics $1.00 $1.00 $1.00

Wallpapers $3.00 $3.00 $3.00

Games $4.00 $4.00 $4.00

Star Sudoku $4.00 $4.00 $4.00

Videos $3.00 $3.00 $3.00

Ringtones $3.00 $3.00 $3.00

Advertisement Service $1,500.00 $1,500.00 $1.00

Sales

Exclusive News Feed Service $525,265 $875,442 $919,214

Stock Exchange Service $700,354 $1,197,318 $1,257,183

StarJobs Service $632,706 $1,054,510 $1,107,235

Mobile News Streaming $752,178 $1,687,215 $1,940,300

TheStarMobile Subscription $7,958,563 $15,917,127 $16,712,982

Comics $421,804 $843,608 $885,788

Wallpapers $1,898,117 $3,796,235 $3,986,046

Games $3,374,431 $6,748,862 $7,086,300

Star Sudoku $3,374,431 $6,748,862 $7,086,300

Videos $2,530,823 $5,061,646 $5,314,725

Ringtones $1,898,117 $3,796,235 $3,986,046

Advertisement Service $1,193,784,489 $2,387,568,978 $1,671,298

Total Sales $1,217,851,278 $2,435,296,036 $51,953,417

Direct Unit Costs Year 1 Year 2 Year 3

Exclusive News Feed Service $0.25 $0.25 $0.25

Stock Exchange Service $0.25 $0.25 $0.25

StarJobs Service $0.25 $0.25 $0.25

Mobile News Streaming $0.50 $0.50 $0.50

TheStarMobile Subscription $0.00 $0.00 $0.00

Comics $0.25 $0.25 $0.25

Ding Wei Yee (1071200152) 10/30/2007

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Wallpapers $0.75 $0.75 $0.75

Games $1.00 $1.00 $1.00

Star Sudoku $0.00 $0.00 $0.00

Videos $0.75 $0.75 $0.75

Ringtones $1.50 $1.50 $1.50

Advertisement Service $450.00 $450.00 $0.30

Direct Cost of Sales

Exclusive News Feed Service $131,316 $218,860 $229,804

Stock Exchange Service $175,088 $299,330 $314,296

StarJobs Service $158,176 $263,627 $276,809

Mobile News Streaming $188,044 $421,804 $485,075

TheStarMobile Subscription $0 $0 $0

Comics $105,451 $210,902 $221,447

Wallpapers $474,529 $949,059 $996,512

Games $843,608 $1,687,215 $1,771,575

Star Sudoku $0 $0 $0

Videos $632,706 $1,265,412 $1,328,681

Ringtones $949,059 $1,898,117 $1,993,023

Advertisement Service $358,135,347 $716,270,693 $501,389

Subtotal Direct Cost of Sales $361,793,325 $723,485,020 $8,118,610

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000 Exclusiv e News Feed Serv ice

Stock Exchange Serv ice

StarJobs Serv ice

Mobile News Streaming

TheStarMobile Subscription

Comics

Wallpapers

Games

Star Sudoku

Videos

Ringtones

Adv ertisement Serv ice

Sales Forecast for 1st Year

Ding Wei Yee (1071200152) 10/30/2007

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8.0 FINANCIAL PLAN The most important element in the financial plan is the critical need for improving several of

the key factors that impact cash flow:

1. We must at any cost stop the slide in inventory turnover and develop better

inventory management to bring the turnover back up to 6 turns by the third year.

This should also be a function of the shift in focus towards service revenues to add to

the product revenues.

2. We must also bring the gross margin back up to 30%. This too is related to improving

the mix between hardware and service revenues, because the service revenues offer

much better margins.

The premier element in TheStarMobile’s financial plan is initiating, maintaining, and

improving the factors that create, stabilize, and increase our cash flow:

1. We must create visibility so as to create customer flow.

2. We must maintain a dependable, cheerful employee force so as to minimize turnover.

3. Create a brisk turnaround on our products, always creating new exciting products

8.1 START UP The start up of this company will require the following expenses as listed in the table below:

Start-up

Requirements

Start-up Expenses

Legal $15,000

Stationery etc. $1,500

Insurance $10,000

Computer $150,000

Platform Technologies Trademark $200,000

Other $100,000

Total Start-up Expenses $476,500

Start-up Assets

Cash Required $100,000

Other Current Assets $100,000

Long-term Assets $250,000

Total Assets $450,000

Total Requirements $926,500

Ding Wei Yee (1071200152) 10/30/2007

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8.2 START UP FUNDING Investment funding:

o TheStarMobile is in the process of negotiating with potential investors for the

seed cash needed to start the business. It is expected that $125,000 will be

raised to start the business. It is expected that no more than 15% interest

will be given to each investor.

Bank Financing:

o TheStarMobile is submitting business plans and other requested documents

to financial institutions in pursuit of the additional $625,000 needed to

finance the rest of the company and provide operating cash for the business.

It is expected that the loan will be a part of the SBA 7(a) program. It is

assumed that the terms of the loan will require repayment in 7 years, at a

rate of 8%

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

Expenses Assets Investment Loans

Start Up

Ding Wei Yee (1071200152) 10/30/2007

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Start-up Funding

Start-up Expenses to Fund $476,500

Start-up Assets to Fund $450,000

Total Funding Required $926,500

Assets

Non-cash Assets from Start-up $350,000

Cash Requirements from Start-up $100,000

Additional Cash Raised $0

Cash Balance on Starting Date $100,000

Total Assets $450,000

Liabilities and Capital

Liabilities

Current Borrowing $100,000

Long-term Liabilities $200,000

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $126,500

Total Liabilities $426,500

Capital

Planned Investment

Owner $200,000

Investor $300,000

Additional Investment Requirement $0

Total Planned Investment $500,000

Loss at Start-up (Start-up Expenses) ($476,500)

Total Capital $23,500

Total Capital and Liabilities $450,000

Total Funding $926,500

8.3 PERSONNEL PLAN The Personnel Plan reflects the staffing levels required to create the Mobile Content, central

database, and establish the customer base needed to achieve the revenues projected and

reach profitability.

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Personnel Plan


Production Personnel

People 5 5 5

Average per Person $18,000 $18,000 $18,000

Subtotal $90,000 $90,000 $90,000

Sales and Marketing Personnel

People 5 5 8


Subtotal $150,000 $150,000 $240,000

General and Administrative

Personnel

People 2 2 2


Subtotal $24,000 $24,000 $24,000

Research & Development

Personnel

People 2 2 2


Subtotal $36,000 $36,000 $36,000

Total People 14 14 17

Total Payroll Expenditures $300,000 $300,000 $390,000

8.4 ASSUMPTIONS The financial plan depends on important assumptions. The key underlying assumptions are:

1. We assume a slow-growth economy, without major recession.

2. We assume of course that there are no unforeseen changes in technology to make

products immediately obsolete.

3. We assume the continued move towards convergence technology in the Information

Industry.

4. We assume there will not be an economic crash that would greatly hinder our target

market's access to their personal luxury finds.

8.5 KEY FINANCIAL INDICATORS The Benchmark Comparison chart highlights our ambitious plans to correct declining gross

margin and inventory turnover. The chart illustrates why we think the ambitious sales

increases we plan are reasonable. We have had similar increases in the recent past.

The following chart shows changes in key financial indicators: sales, gross margin

and operating expenses. The growth in sales goes above 20% for the second year in a row, but

Ding Wei Yee (1071200152) 10/30/2007

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then settles. We expect to keep gross margin higher than before, but our projections show a

slight decline as we go into new product areas and anticipate new competition.

As shown in the Benchmarks chart below, our key financial indicators are:

Projected Sales: Projections are based on actual past performance, and are

conservative. We will increase sales at an average rate of 5-10% per year.

Gross Margins

Operating Expenses: Operating expenses are based on providing our employee-

owners with above average wages and benefits, and providing superior customer

service. Expenses are projected to increase at the rate of 6% per year.

8.6 BREAK-EVEN ANALYSIS TheStarMobile revenues are generated from Product and Services sales (a onetime expense)

and access charges or subscription (a monthly recurring fee). Given this, the break-even

formula must be adjusted to reflect both one time and recurring revenue activities. Using the

sales forecast as a guide, and based on estimates made for fixed cost, average revenue per

product unit and access charges, variable cost for unit manufacturing and service fees, the

break-even volume was established to be 700 units per month with a subscription base of

6,800. We anticipate achieving break even in Year 4 as detailed in the graph below.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Sales Gross Margin% Operating Expenses

Year 1

Year 2

Year 3

Benchmarks

Ding Wei Yee (1071200152) 10/30/2007

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Break-even Analysis

Monthly Units Break-even 2,095

Monthly Revenue Break-even $227,265

Assumptions:

Average Per-Unit Revenue $108.47

Average Per-Unit Variable Cost $32.22

Estimated Monthly Fixed Cost $159,750

8.7 PROJECTED PROFIT AND LOSS Based on the realistic sales projections and efficient cost control measures in

place, TheStarMobile will achieve profitability in just over two years. Company profits in

subsequent years will increase in the years due largely to the exponential growth of the

access charges. Gross margins reveal dramatic growth, again because of the growth in

revenues from access charges.

($200,000)

($150,000)

($100,000)

($50,000)

$0

$50,000

$100,000

0 600 1200 1800 2400 3000

Monthly break-even point

Break-even point = where line intersects with 0

Benchmarks

Ding Wei Yee (1071200152) 10/30/2007

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Profit and Loss


Sales $1,217,851,278 $2,435,296,036 $51,953,417

Direct Costs of Goods $361,793,325 $723,485,020 $8,118,610

Production Payroll $90,000 $90,000 $90,000

Other Costs of Goods $0 $0 $0

------------ ------------ ------------

Cost of Goods Sold $361,883,325 $723,575,020 $8,208,610

Gross Margin $855,967,953 $1,711,721,017 $43,744,807

Gross Margin % 70.29% 70.29% 84.20%

Operating Expenses

Sales and Marketing Expenses

Sales and Marketing Payroll $150,000 $150,000 $240,000

Advertising/Promotion $600,000 $600,000 $600,000

Other Sales and Marketing

Expenses

$120,000 $120,000 $120,000

------------ ------------ ------------

Total Sales and Marketing

Expenses

$870,000 $870,000 $960,000

Sales and Marketing % 0.07% 0.04% 1.85%


Expenses


Payroll

$24,000 $24,000 $24,000

Marketing/Promotion $300,000 $300,000 $300,000

Depreciation $3,000 $3,000 $3,000

Utilities $180,000 $180,000 $180,000

Insurance $60,000 $60,000 $60,000

Payroll Taxes $24,000 $24,000 $24,000

Other General and Administrative

Expenses

$120,000 $120,000 $120,000

------------ ------------ ------------

Total General and Administrative

Expenses

$711,000 $711,000 $711,000

General and Administrative % 0.06% 0.03% 1.37%


Expenses:

Research & Development Payroll $36,000 $36,000 $36,000

Consultants $180,000 $180,000 $180,000


Expenses

$120,000 $120,000 $120,000

------------ ------------ ------------

Total Research & Development

Expenses

$336,000 $336,000 $336,000

Research & Development % 0.03% 0.01% 0.65%

------------ ------------ ------------

Total Operating Expenses $1,917,000 $1,917,000 $2,007,000

Ding Wei Yee (1071200152) 10/30/2007

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Profit Before Interest and Taxes $854,050,953 $1,709,804,017 $41,737,807

EBITDA $854,053,953 $1,709,807,017 $41,740,807

Interest Expense $30,000 $30,000 $30,000

Taxes Incurred $256,206,286 $512,932,205 $12,512,342

Net Profit $597,814,667 $1,196,841,812 $29,195,465

Net Profit/Sales 49.09% 49.15% 56.20%

8.8 PROJECTED BALANCE SHEET Our Projected Balance Sheet shows we will not have any difficulty meeting our debt

obligations as long as our revenue projections are met.

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

Profit Monthly

Ding Wei Yee (1071200152) 10/30/2007

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Balance Sheet


Assets

Current Assets

Cash $662,260,419 $1,923,344,319 $1,825,799,159

Other Current Assets $100,000 $100,000 $100,000

Total Current Assets $662,360,419 $1,923,444,319 $1,825,899,159

Long-term Assets

Long-term Assets $250,000 $250,000 $250,000

Accumulated Depreciation $3,000 $6,000 $9,000

Total Long-term Assets $247,000 $244,000 $241,000

Total Assets $662,607,419 $1,923,688,319 $1,826,140,159

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $64,342,752 $128,581,840 $1,838,215

Current Borrowing $100,000 $100,000 $100,000

Other Current Liabilities $126,500 $126,500 $126,500

Subtotal Current Liabilities $64,569,252 $128,808,340 $2,064,715

Long-term Liabilities $200,000 $200,000 $200,000

Total Liabilities $64,769,252 $129,008,340 $2,264,715

Paid-in Capital $500,000 $500,000 $500,000

Retained Earnings ($476,500) $597,338,167 $1,794,179,979

Earnings $597,814,667 $1,196,841,812 $29,195,465

Total Capital $597,838,167 $1,794,679,979 $1,823,875,444

Total Liabilities and Capital $662,607,419 $1,923,688,319 $1,826,140,159

Net Worth $597,838,167 $1,794,679,979 $1,823,875,444

9.0 CONTROL TheStarMobile Marketing Plan serves as a guideline for the company and needs constant

monitoring using analytical tools in the following regards:

Sales: Weekly, Monthly, Yearly

Google Analytics: Daily

Expenses: Monthly

Customer Satisfaction

Innovation of new products and services

9.1 MARKETING ORGANIZATION TheStarMobile Marketing Director Ding Wei Yee will be heading the marketing initiatives.

Ding Wei Yee (1071200152) 10/30/2007

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9.2 CONTINGENCY PLANNING TheStarMobile De-Risk Model after anticipating the future challenges for the company:

De-Risk Model

o Value Innovation on products and services to make a leap in value for

Mobi.SOL and to make other competition irrelevant

o Keep innovating in-line with new technologies