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Atlas Inc.

“Supporting the World, One Computer at a Time”

December 5, 2010

Circe Cansino

Stefan Bernardi

Alexander Green

Michael Peters



A t l a s I n c .

Table of Contents

1. EXECUTIVE SUMMARY 4

1.1 MISSION STATEMENT 51.2 VISION STATEMENT 5

2. ENVIRONMENTAL ANALYSIS 6

2.1 CURRENT PERFORMANCE 62.2 MARKET DEMAND 72.3 COMPETITION & INDUSTRY 8

K RAMERICA 10PIRUM 10TECH TH!S OUT 10

2.4 MARKET SHARE 122.5 CUSTOMER ANALYSIS 13

COSTCUTTER 13

INNOVATOR 14MERCEDES 15WORK HORSE 16TRAVELER 17

2.6 COMPETITOR POSITION & VALUE 18

3. SWOT ANALYSIS 20

3.1 STRENGTHS 213.2 WEAKNESSES 213.3 OPPORTUNITIES 213.4 THREATS 223.5 INTERPRETING THE SWOT ANALYSIS 22

4. BCG MATRIX 23

5. STRATEGIC MARKET OBJECTIVE/ PLAN 25

5.1 STRATEGIC MARKET PLAN 255.2 BRANDS 26

HERCULES 4.0 26TITAN 2.0 26HERMES 3.0 27APOLLO 2.0 27ARTEMIS GOLD 27

ZEUS 28A THENA 2.0 28PEGASUS 28POSEIDON 2.0 29PROMETHEUS 29

6. MARKETING MIX STRATEGY 29

6.1 PRICE 29

2 | A t l a s I n c o r p o r a t e d



A t l a s I n c .

6.2 PRODUCT 306.3 PLACE 316.4 PROMOTION 31

7. MARKETING BUDGET 32

SUMMARY 33

8. PROFIT PLAN 34

SUMMARY 35

9. PERFORMANCE EVALUATION 35




A t l a s I n c .

In the culmination of the first two years of business, Atlas Inc. hasestablished itself as one of the top companies in the microcomputersindustry. Based on our financial performance, marketing performance,

investments in the firm’s future, and creation of wealth, Atlas has proveditself as a worthy competitor and is well on its way to becoming the marketleader. We entered the market targeting the largest segments (Workhorseand CostCutter) with two brands that would prove to be very profitable. Wecreated 8 more brands to meet the demands of the growing market, andgrew at an astounding rate of 190% on average throughout the 8 quarters. The struggle to remain market leader from quarter 6 onward was due to highoperating costs including high expenditures in advertising and brandengineering. The investments made in brand engineering, and later researchand development, to better our brands were very strategically implemented,and one that we believe will prove to be profitable in the near future.

Atlas capitalized on several core competencies throughout the 8-quarter cycle so as to create a strong competitive advantage in severalareas. Consistently, Atlas maintained a market-leading share of market,concluding with 31% and experiencing a market share growth rate of 221%from start to finish. Atlas also boasted the largest sales force (135 salespeople) and remained deeply invested in these sales people throughextensive training and sales incentives. More brands were made available forsale (10) than any of Atlas’ competitors and the corporation gained highprice judgments for these brands. Due to economies of scale, Atlas earneddiscounts on the cost of goods sold and the fact that a profit was turned on

every available brand that the company offered was another subtle butcrucial factor for Atlas. The two most influential aspects of Atlas’ success wasits large investment in both Research & Development and sales offices.Investment in R&D enabled additional product features and therefore anability to more efficiently and completely meet customer needs, while thevast, global expansion of sales offices facilitated both local and regionalservice for Atlas computers.

Atlas Inc. recognized the true value in investing in Research andDevelopment, because it provided value to the consumer, and helped coverall of the needs that each customer had. For this reason, Atlas Inc. invested

in Research and Development every quarter once it was made available,investing over $1,000,000 into it in their pursuit of bringing the highest valueto the customer. Atlas Inc. plans to continue to invest in R & D in order tocontinue producing the best computers in the market. Atlas, Inc. enteredQuarter 9 with 17 offices in all five market segments, with plans to openanother sales office in Guangzhou in Quarter 9, leaving only 2 cities withoutAtlas Inc. selling its computers. Atlas also entered Quarter 9 with 135employees, which nearly doubles the next competitor, with plans to hire 7


1. EXECUTIVE SUMMARY



A t l a s I n c .

more employees for the Guangzhou sales office. Atlas invests in salespromotions in an effort to make its sales force that much more effective, andwill give its employees an incentive to sell more. Atlas Inc. plans to makeboth its sales force and its computer brands highly effective in order tosustain a competitive advantage over its competitors.

Atlas Inc. ended Quarter 8 with profits of $4,840,615 and a cumulativeNet Profit of $3,751,771. This was the fourth quarter of consecutive growthand indicative of the quarters to come. With an expected increase of 10% insales, Atlas Inc. plans to generate $5,463,518 in profit, for a cumulative netprofit of $9,215,289. Atlas Inc.’s offices across the globe, a highly effectivesales force, and an excellent portfolio of computers will allow Atlas to enjoy abright future where it carries the world of microcomputers on its shoulders.

Atlas Inc. aims to bring its customers the highest valued computers for

the best price in the market while serving its customers needs.

Atlas Inc.’s vision is to revolutionize computers to give you the utmost

efficiency and peace of mind. We aim to construct our technology in a way

that takes simplicity to a new level to deliver trustworthy value so that you

will always look to Atlas Inc. to be your primary technological provider. At

Atlas Inc., we take our business seriously. Because we know you do too.

Profitability of Marketing Division


1. 1 MISSION STATEMENT

1. 2 VISION STATEMENT

2. 1 CURRENT PERFORMANCE

2. ENVIRONMENTAL ANALYSIS



A t l a s I n c .

Quarter

1Quarter

2Quarter 3 Quarter 4 Quarter 5 Quarter 6 Quarter 7 Q

Revenues 0 0 388,0104,499,74

59,532,94

917,764,234

29,475,921

32

Rebates 0 0 2,900 86,563 155,038 227,225 280,412

Cost of goods sold 0 0 336,714 3,215,452

5,838,250

10,340,836 18,378,426

20

Gross margin 0 0 48,3961,197,73

03,539,66

17,196,173

10,817,083

1

Sales office leases 0 0 145,000 220,000 439,000 638,000 857,000

Sales force expense 0 0 354,128 641,3971,275,33

82,006,575 2,749,868 2,

Brand promotions 0 0 0 0 0 0 59,600

Special programs 0 0 0 0 0 0 199,876

Ad creation/revision 0 0 60,000 60,000 60,001 210,000 90,000

Point of PurchaseDisplay expenses

0 0 0 0 5,600 18,000 25,200

Advertising expenses 0 0 91,102 236,432 772,878 2,142,567 1,855,070

Engineering cost fornew brands

0 120,000 0 240,000 120,000 300,000 360,000

Market research 72,800 0 40,000 100,000 100,000 100,000 100,000

Operating expenses 72,800120,00

0690,230

1,497,829

2,772,817

5,415,1426,296,61

45,

Operating profit -72,800-

120,000

-641,834

-300,099 766,844 1,781,0314,520,46

96,

Research anddevelopment costs

0 0 0 02,956,27

0994,900 1,421,285 1,

Set up costs for newsales offices

0 250,000 140,000 390,000 310,000 360,000 200,000

Net profit fordivision

-72,800-

370,000

-781,834

-690,099-

2,499,426

426,1312,899,18

44,

Cumulative netprofit for division

-72,800-

442,800

-1,224,63

4

-1,914,73

3

-4,414,15

9

-3,988,028

-1,088,84

4

3,

Our current sales have reached a total of $11,473,917 in revenue based on atotal of 10,758 units sold. Based on our total cost of goods sold($20,442,808) and the rebates that we offered (totaling $244,200), our grossmargin is $11,473,917.




A t l a s I n c .

Subtracting our total operating expenses of $5,274,147 from this grossmargin, our operating profit was $6,199,770. Removing from this our R&Dcosts and our set-up costs for new sales offices, our net profit for the divisionwas $4,840,615 while our cumulative net profit for the division was

$3,751,771.

The market began with a total demand of 1,281 in Quarter 3. By Quarter 8,the size had grown to 32,577. The following two bar-graphs indicate themarket demand in Quarter 3 as compared to the market demand in Quarter8.

The difference in total market demand represents a growth rate of 2,543%.Below is a graph depicting the total market demand for Atlas computers ascompared to those of its competitors, segment by segment.


2. 2 MARKET DEMAND

QUARTER 3

QUARTER 8



A t l a s I n c .

As indicated herein, Atlas held the highest total demand for the CostCutter,Innovator, and Mercedes segments. In terms of the Work Horse and Travelersegments, Atlas ranked second for both. Given the current growth rate of themarket, the market – both as a whole and within each segment – has a highpotential for growth. If spread across the six quarters – between Quarter 3and Quarter 8 – this growth rate equates to an average per quarter growthrate of 424% per quarter, assuming even growth. The actual average changein growth from Quarter 3 to Quarter 8 is 190%, calculated by averaging thegrowth rates from quarter to quarter. This is based on a linear growth model,but unfortunately the Product Life Cycle works on a bell curve, and themarket has already started to top off, indicating an entrance into thematurity stage. Which means that instead of growing to almost double thecurrent amount of units, the market will probably grow to anywhere between37,500 units to 42,500 units, in quarter 9.

Compared to the industry as a whole, Atlas Incorporated did fairly well. Atlasperformed above average in every category except for marketingeffectiveness, finishing 0.2 point below the industry average.


Market Demand

Company CostCutter

Innovators

Mercedes

Work Horse

Traveler

TotalDemand

Tech Th!sOut

862 1,306 1,028 1,195 1,407 5,798

Pirum 1,752 1,086 1,715 3,646 2,706 10,905

Kramerica 493 922 1,137 1,528 1,036 5,116

Atlas

Incorporate 1,953 1,790 2,284 2,549 2,182 10,758

2. 3 COMPETITION

& INDUSTRY



A t l a s I n c .

Overall, Atlas Incorporated finished second behind Pirum, with a TotalPerformance score of 9.634 as compared to Pirum’s 15.935. Atlas rankedsecond behind Pirum in financial performance (19.277 versus 23.206),market performance (0.330 versus 0.390), and wealth (1.536 versus 2.208),ranked last in marketing effectiveness (0.682), and second in futureinvestment behind Tech Th!s Out (1.445 versus 1.704).

Balanced Scorecard For Quarter 8

CompanyName

TotalPerforman

ce

FinancialPerforman

ce

MarketPerforman

ce

MarketingEffectivene

ss

Investment in

FutureWealth

AtlasIncorporated

9.634 19.277 0.330 0.682 1.445 1.536

Kramerica 0.305 9.782 0.160 0.700 1.039 0.268

Pirum 15.935 23.206 0.390 0.743 1.074 2.208

Tech Th!sOut

1.379 12.568 0.225 0.685 1.704 0.418


Industry Results For Quarter 8

Minimum Maximum Average Atlas Incorpora

Total Overall 0.31 15.94 6.81

Financial Performance 9.78 23.21 16.21 1

Market Performance 0.16 0.39 0.28

Marketing Effectiveness 0.68 0.74 0.70

Investment in Future 1.04 1.70 1.32



A t l a s I n c .

Kramerica was not one of Atlas’ major competitors as they struggled innumerous areas throughout the 8 quarters. In total performance, theyranked last with 0.305 as compared to our 9.634. Financially,Kramerica also had difficulty as their Financial Performance score wasranked last at 0.160. As well, they ranked last in both futureinvestment (1.309) and wealth (0.268).

Pirum was Atlas’ primary competitor for most of the 8-quarter cycle. Intotal performance, Pirum ranked first at 15.935. This was a product of their market-leading performance financially, in marketing, and wealth. Their weakest performance was in future investment, where theyranked third behind Tech Th!s Out (1.704) and Atlas (1.445).

Tech Th!s Out was another company that Atlas did not compete withdirectly. Overall, they ranked third in total performance, a result of a

third place ranking in terms of finance (12.568), marketing (0.225 and0.685), and wealth (0.418). Tech Th!s Out did, however, lead themarket in future investment with a rating of 1.704, 0.384 points higherthan the industry average.


KRAMERICA

PIRUM

TECH TH!S OUT



A t l a s I n c .

Total Market Share: Quarter 8

In terms of share position,Atlas Incorporated finishedwith a slight advantage,leading the market with a31% share. Pirum ranked aclose second with 30% shareof market, while Tech Th!sOut and Kramerica tied withan equal share of market,each owning 18%.


Throughout the 8-quartercycle, however, Atlas hadheld a larger share of market than this in twoearlier quarters. In Quarter5, our leading share positionpeaked with a market shareof 43%, as indicated by theadjacent graph.




A t l a s I n c .

Atlas Incorporated had a total market share of 31% and completed the eightquarters as the market leader in terms of market share.

Market Share

Company CostCutter

Innovators

Mercedes

WorkHorse

Traveler Total Mark

Share

Tech Th!s Out 13.8% 25.6% 14.7% 14.1% 24.5% 18.Pirum 29.3% 20.3% 25.6% 35.2% 38.9% 30.

Kramerica 16.2% 19.6% 22.2% 18.8% 17% 18.

AtlasIncorporated

40.4% 34.3% 37.3% 31.7% 19.4% 31.

Atlas led the market in several segments: CostCutter (40.4%), Innovators(34.3%), and Mercedes (37.3%). Within the other two segments, Work Horseand Traveler, we ranked second behind Pirum, our primary competitor.


As compared to our Quarter 8share of market (31%), Atlas’initial share of market fromQuarter 3 was merely 14%,equal to that of Tech Th!s Out.At this point, Kramericadominated the entire marketwith a 54% share, while Pirumheld only 16%. From Quarter 3

to Quarter 8, Atlas’ marketshare increased by a rate of 221%. This share of marketgrowth rate was larger thanPirum (187%), Tech Th!s Out(128%) and Kramerica (-66%).Analyzing growth quarter byquarter, the average equates to about a 9% increase per quarter. Given this


2. 4 MARKET SHARE



A t l a s I n c .

quarterly increase, the market share potential for Quarter 9 would beapproximately 34%.

For each target market segment, the needs of Atlas’ customers were uniqueand differed from all of the others. Below is a segment by segment analysisof what the customers required and the priority of different features andservices. Any rating over 110 indicates an exceptionally strong customerneed with high-priority.

Here, the customer was lookingfor a low price and a simplecomputer, easy to operate, easyto maintain. For the CostCuttersegment, the number onepriority was that the computerallowed them peace of mind,meaning that it was safe,secure, and entailed no hassle(133). They wanted a computereasy to use (127) and easy to

setup (125). This was inherentlya low-cost segment (123) andsimplicity (121; 116) was integral to CostCutter needs. Additionally, theydesired productive operators (120) and competent sales personnel (115), afunction of customer service.

In terms of business functions,CostCutter users are largely inoffice and administrativeservices (126), general andcorporate management (113),

and data processing (110).Consequently, this segmentplaced a very high importanceon word processing (125),bookkeeping and budgeting(114), and data management(109) applications.


2. 5 CUSTOMER ANALYSIS

COSTCUTTER



A t l a s I n c .

For Atlas, the Titan 2.0 and the Poseidon 2.0 were the products targeted atthe Cost Cutter segment, aimed to address low-cost, security, and ease-of-use.

The innovator segment wasone of the least price-sensitiveand was focused on thefunction of the computer forthe purpose of high-powered,artistic uses. Their primaryconcern was fast access to

graphical images (129),followed by ultra-fastresponsiveness (125; 124) andfast computer to computerlinks (124) combined with theability to see and work onmultiple programs (123). Thewanted a fast processingcomputer (123) and favouredperformance over price (121),especially in catering to individual customer needs.

Regarding business functions, the Innovator segment was composedprimarily of engineers (123),planned managers (115), anddata processers (113). Becauseof Innovator needs, theapplications most highlysought after by the Innovatorsegment were web designmanagement (126), technicalgraphics (126), and statistical

analysis (124).

For Atlas, the Hermes 2.0 wasthe product targeted at theInnovator segment, aimed toaddress graphicalperformance, quick


INNOVATOR



A t l a s I n c .

Atlas, the Zeus 2.0 and the Athena 2.0 were the brands targeted at the CostCutter segment, aimed to address graphical performance, quickresponsiveness, and functionality in terms of multitasking and computerlinking.

The Work Horse segment wanteda simple computer for a lot of use; essentially, this was thestandard computer. Security,ease of use, and easiness on theeyes were all priorities for thissegment, as were availability(119), computer to computerlinks (119) and quick serviceresponse time (119). This was a

price-conscious segment (120)that also valued an establishedbrand name (118).

The Work Horse segment wasprimarily focused on generaloffice functions, particularlyfinancial management (123),office and administrativeservices (122), and general andcorporate management (119).

These functions correlated tothe applications required by thissegment, which included, mostimportantly bookkeeping andbudgeting (127), wordprocessing (127), andcommunications with othercomputers (121).


WORK HORSE



A t l a s I n c .

Competitor Tactical Highlights

Tech Th!s OutPirum

KramericaAtlas Incorporated

Total Demand

Number of Sales Offices

Total Sales Force LastQuarter

Number of Brands for Sale


2. 6 COMPETITIVE POSITION & VALUE

57981090

5511610758

696

17

558760

135

956



A t l a s I n c .

Average Price

Total Local Inserts

Current Quarter BalancedScorecard

In reviewing AtlasIncorporated’s competitiveposition, there are several ways in which Atlas exceeded its competition andothers where they fell behind and were less effective than its competitors. In Total Demand, Atlas ranked second behind Pirum with a demand of 10785 ascompared to 10905. The other two companies had only about half as much Total Demand as Atlas and Pirum, with Atlas generating about 1.86 (Tech Th!s Out) and 2.10 (Kramerica) times more demand respectively. In salesoffices, Atlas dominated the market opening a total of 17 offices versus 9

(Pirum) and 6 (Tech Th!s Out and Kramerica). Sales offices were the toppriority for Atlas throughout the 8-quarters as they pushed to hold thatlargest share of the global market. Atlas’ Total Sales Force was foremost ascompared to the other three competitors with 135 total sales people versus55 (Tech Th!s Out), 87 (Pirum), and 60 (Kramerica). On average, Atlas had 68more sales people than its competitors. Atlas also led the market in totalbrands with 10, compared to 9 (Tech Th!s Out), 5 (Pirum), and 6 (Kramerica). The average price per computer for Atlas was $2820, while the industryaverage was about $2730 – representing an average 3% and $90 cheaperthan that of Atlas – and two other companies had lower average pricing thanAtlas. As well, Atlas led the industry with 102 inserts, an average of about 48

inserts more than competitors. Despite leading in Total Number of Salesoffices, Total Sales Force, Number of Brands for Sale, and Total Local Inserts,Atlas’ Balance Scorecard did not reflect its success as compared to Pirum,because of the fact that its prices were above the industry average.


10

26302632

28372820

249542

102

116

0 10



A t l a s I n c .


3. SWOT ANALYSIS

• Consistently maintained a high

total share of market

• Continual large investments into R

& D

• Have the largest sales force

• Most brands available for sale

• Turning profit on every available

brand

•

Have high price judgment of ourbrands

• Have strongly invested in

employee’s (training & salesincentives)

•

WEAKNESSESOPPORTUNITIESSTRENGTHS

• Have lower overall brand judgment

• Very high operating expenses

•High competition as well as a loss of share of market to Pirum

• Possible loss of profit due to

cannibalization within our own product

lines

• Loss of overall profit for all companies

due to the prisoner’s dilemma

THREATS• An opportunity for growth/ expansion

• Continual need for new and better

features within the products

• Opportunities to out compete other

competitors in sales force efficiency

3.1 STRENGTHS



A t l a s I n c .

Atlas Incorporated has had a great deal of success in its first 8quarters; one of the many factors that have led to this success are thestrengths contained within the company.

• Consistently maintained a high total share of market

• Continual large investments into R & D• Have the largest sales force

• Most brands available for sale

• Turning profit on every available brand

• Have high price judgment of our brands

• Have strongly invested in employee’s (training & sales incentives)

• Maintain the largest number of sales offices (allowing for both local

and regional service)

• Have earned discounts on costs of goods sold, due to economies of

scale

• Higher overall ad copy judgment

Every company contains weaknesses and Atlas is no different, we’veidentified these weaknesses and in the future will look to improve uponthem.

• Have lower overall brand judgment

•

Very high operating expenses

Within a market there are many opportunities to seize. We at Atlas Inc.continually try to identify which opportunities would allow Atlas to maintainprogress within this market.

• An opportunity for growth/ expansion

• Continual need for new and better features within the products

• Opportunities to out compete other competitors in sales force

efficiency


3.2 WEAKNESSES

3.3 OPPORTUNITIES



A t l a s I n c .

Markets also present threats that can hurt Atlas’ movement forward

and by fully realizing these threats we can invest in strategies to combatthem.

• High competition as well as a loss of share of market to Pirum

• Possible loss of profit due to cannibalization within our own product

lines

• Loss of overall profit for all companies due to the prisoner’s

dilemma

The SWOT Analysis provides Atlas a great opportunity to identify ourstrengths, weaknesses, opportunities and threats. After having identifiedthese we can take our weaknesses/ threats and convert them into strengths/opportunities.

Atlas realizes that with the opportunity for expansion and

growth in the market, that we can match that with one of ourcore strengths, in having the most sales offices, and continuethis growth and expansion. We plan to open sales offices in alllocations through the next few quarters. This has, and willcontinue to lead to a competitive advantage for our company.

Atlas has also notices how beneficial R & D can be to acompany in terms of innovation. We’ve matched this with ourstrength, our continual high investments in R & D, which can leadto higher brand judgments in the future.


3.4 THREATS

3.5 INTERPRETING THE SWOT ANALYSIS

MATCHING OPPORTUNITIES AND STRENGTHS

CONVERTING WEAKNESSES & REDUCING THREATS



A t l a s I n c .

A pivotal part of a SWOT Analysis is converting weaknessesto strengths, as well as converting threats into opportunities. Throughout the last few quarters, and particularly in quarter 8we realized a threat in the intense competition from Pirum,predominantly in the realm of the traveler segment. Having

noticed this we designed a new brand in Prometheus to moredirectly compete with Pirum’s traveler brand. This was astrategy that we hoped would steal SOM from Pirum in thetraveler segment, and it rightfully did so, changing Pirum’straveler segment SOM from 38% to 36%, and converselychanging Atlas’ from 19% to 29%. We also realized a weaknesswe had throughout the last few quarters, in that we had by farthe highest advertising costs. This in turn was hurting our netmarketing contribution, so we cut advertising costs to match itmore to that of Pirum. By reducing our advertising costs andstealing SOM from Pirum, we converted weaknesses to strengths

as well as converting threats into opportunities.


4. BCG MATRIX



A t l a s I n c .


Titan 2.0

Hercules 4.0 Hermes 2.0

Apollo 2.0PrometheusM

ar

ke

t

G

ro

w

th

Stars Question Marks

High

Cash Cows DogsPegasusAthena 2.0Zeus 2.0 Artemis GoldPoseidon 2.0

Market Share

Low

High Low



A t l a s I n c .

The Hercules model was one of Atlas’ firstmodels, created inquarter 2. All thebrands Atlas haswere named tomatch mythologyand the company name in some way. The Hercules brand was named after“Hercules” the powerful Greek Demigod and would be our “workhorse”


5.1 STRATEGIC MARKET PLAN

5. STRATEGIC MARKET OBJECTIVE / PLAN

Prometheus

Pegasus

Poseidon 2.0

Hermes 2.0

Artemis Gold

Hercules 4.0

Titan 2.0

Apollo 2.0

Athena 2.0

Zeus 2.0

1006633

Competitive Advantage

33

66

100

M

ar

ke

t

Attr

ac

ti

ve

ne

ss

HERCULES 4.0

5.2 BRANDS



A t l a s I n c .

hence why it was designed to appeal to one of our target markets, theworkhorse segment. Throughout the span of these last 8 quarters theHercules model has been one of our highest selling brands. We were able tooffer the Hercules at a very low price due to the high level cost advantagewe achieved by selling over 1,000 units. Throughout the lifespan of the

Hercules brand, as R & D made more features available, and as we realizedwhich features would better fit the customer needs, on top of the originalcomponents we added a high capacity hard drive, added presentationsoftware and removed manufacturing control software. We also added a 17”monitor, high performance processor, an uninterruptible power supply andexpansion slots. As all these features were added we continually saw thesales of the Hercules increase. In the position that Hercules falls in wedecided to take a defensive strategy in protecting our position. We did thisbecause throughout the entire 8 quarters we were the market leader formost of that time period.

The Titan was also one of our first models released in the 2nd quarter. The Titan was named from the great Titan Gods; the name was also used asa play on words for the advertising campaign in “Titan Your Wallet.” Thismodel was designed to appeal to one of the largest segments, the costcutter. This has also been one of our highest selling brands because weoffered it a very low price. This is again because we sold over 1,000 unitsachieving a high level cost advantage. Again as more information on

customer needs and more features came available to the Titan, we added,on top of the original components a CD read/write drive, a high capacity harddrive, database software, and a mid-range processor. We added features tothe Titan with the target market in mind, the Cost Cutter is looking for acheap, low-end computer and we gave them this in the Titan. We again tooka defensive strategy in protecting share position with the Titan during thegame because it was a brand judgment score leader for most of the 8quarters. But in quarter 8 Pirum and Tech Th!s Out surpassed the Titan inbrand judgment so we may now take an offensive, improve position strategy.

The Hermes brand was developed in the 4th quarter. The Hermesbrand was named after the great messenger of the Gods. We originallyintended for the Hermes to be geared toward the workhorse segment, but


TITAN 2.0

HERMES 2.0



A t l a s I n c .

The Zeus brand was also designed in the 5th quarter and was aimedtoward our main target market, the Mercedes segment. The brand wasnamed after Zeus, who was a Greek God, known as the father of Gods and

men. We had to wait until the 5th

quarter to design this brand because thiswas the first quarter R & D was available. Zeus has been the most profitablebrand we’ve had to date due to its high level of sales, over 2,000 units. Zeusalso has the highest profit margin at $1,646 per unit. Throughout thelifespan of the brand we added as many features as would be available,including an expanded keyboard with hotkeys. With R & D continuallybecoming available the Zeus brand is prime for updates. The Mercedessegment is continually looking for innovation and our investments in R & Dwill maintain this brand as our most profitable. With the needs of theMercedes segment in mind we will maintain an offensive strategy with Zeus,particularly an invest to grow strategy.

The Athena brand was again design in the 5th quarter, and was alsoaimed toward our main target market, the Mercedes segment. The brandwas named after Athena, the Goddess of wisdom, warfare, and crafts. TheAthena brand was meant to be a slightly lower end version of the Zeus;available for the more price conscious Mercedes segment. The Athenamodel differed from the Zeus in that it only has a CD drive (vs. DVD), a 19”

monitor (vs. 21”), and a standard keyboard (vs. expanded w/ hotkeys). Wetook a defensive; optimize position strategy with this model because wewanted to have a model available that could improve our already dominantSOM in the Mercedes segment.

The Pegasus brand was also designed in the 5th quarter, and wasdesigned to fit the needs of the workhorse segment. The brand was namedafter the winged divine horse of Greek Mythology. The Pegasus brand wasdesigned to offer a slightly different version than that of the Hercules. ThePegasus model differs from the Hercules model in that it doesn’t have webdesign software or an uninterruptible power supply, however it does have anultra high performance processor (vs. high performance processor). This wasan offensive; optimize position strategy because we were fighting to earnback SOM from Pirum in the workhorse segment.


ATHENA 2.0

PEGASUS



A t l a s I n c .

The Poseidon brandwas again originally

designed in the 5th quarter, and was designed to appeal to the cost cuttersegment. The brand was named after Poseidon, who was the God of the sea. The Poseidon model was designed to offer more high-end features thanthose of the Titan. The Poseidon model differs from the Titan in that it hasengineering graphics software, expansion slots, and a high performanceprocessor (vs. mid-range processor). This was a defensive strategy, inparticular an optimize position strategy because we have been, and still arethe market leader in the workhorse segment.

The Prometheus is the last brand we designed in quarter 8, it wasspecifically made to mock Pirum’s Forelle 3, which was targeting the travelersegment. The brand was named after Prometheus, who was a Titan and thebrother to Atlas. We mocked every feature the Forelle 3 had in creating thePrometheus, in doing this we stole the SOM the Forelle 3 had in quarter 8. Inits first quarter being sold the Prometheus proved its worth by achieving acost advantage, selling over 1,000 units. We’ve also invested in new R & Dfor quarter 9 which will allow us to add long-life battery for portable. ThePrometheus was clearly an offensive strategy used to improve position andsteal SOM from Pirum.

BrandUnitedStates

Canada Brazil Europe China

Hercules2.0

2,399 2,399 2,399 2,3992,399


POSEIDON 2.0

PROMETHEUS

6.1 PRICE

6. MARKETING MIX STRATEGY



A t l a s I n c .

Titan 2.0 1,7501,750 1,799 1,750 1,799

Hermes2.0

3,100 3,100 3,100 3,200 3,100

Apollo 2.0 2,400 2,400 2,700 2,400 2,800ArtemisGold

2,850 2,850 2,800 2,850 2,900

Zeus 2.0 4,399 4,399 3,950 4,399 4,450Athena2.0

3,600 3,600 3,500 3,600 4,200

Pegasus 2,599 2,599 2,500 2,599 2,550Poseidon2.0

2,450 2,450 2,400 2,450 2,450

Prometheus

2,495 2,495 2,495 2,495 2,495

Performance-based pricing was used since prices were set based onthe price that consumers were willing to pay in each region, and the product-price position of our competitors. A multi-segment pricing strategy was usedbased on the differing needs and price sensitivities of the customer base. Asthe market matured, we used our differentiating benefits of R&D to establisha plus-one pricing strategy.

We were able to use price as a differentiating factor for our Cost Cuttersegment, by setting our prices lower than our competitors, while providingproduct features that were consistent with the needs and usage behaviors of this segment according to market research.

Brand Segment Demand Brand Judgement

Hercules 4.0 WorkHorse/Costcutter/Innovator

1,141/439/12 74/71/42

Titan 2.0 Cost Cutter/Workhorse 1,203/341 71/58Hermes 2.0 Mercedes/Innovator/Workho

rse

323/308/39 55/70/49

Apollo 2.0 Traveler 439 63Artemis Gold Traveler 262 61Zeus 2.0 Mercedes/

Innovator/Workhorse1,715/874/106

65/86/66

Athena 2.0 Innovator/Mercedes/Workhorse

589/246/122 78/53/62

Pegasus WorkHorse/Cost 647/186/7 68/66/41


6.2 PRODUCT



A t l a s I n c .

Cutter/InnovatorPoseidon 2.0 Workhorse/Costcutter 136/125 54/62Prometheus Traveler/Workhorse 1,481/17 76/36

Ten brands were designed to fit the needs and usage behaviors of the 5segments in the market. Brands were altered according to brand judgmentand demand. Each quarter, we evaluated our competitors’ brands incomparison with ours and adjusted to compete with those brands. Weopened with two brands targeting our Cost Cutter and Work Horse segments.Our product line was extended in quarter 4 and again in quarter 7 in order tomeet the needs of more customers in each segment. For quarter 9, wedeveloped one more brand for the traveler segment in order to steal share of market from our leading competitor.

Early in the market, we took an offensive strategy to try to gain marketshare. When we became market share leaders in quarter 5, we took a

defensive strategy, analyzing our own weaknesses. As the market matured,we used a Flanking strategy by investing in R&D to innovate our products totry to gain a competitive advantage.

For all segments besides Cost Cutter, which was differentiated mainlythrough price, we differentiated by creating incremental benefits and valuethrough product features to enhance quality, and through performance anddurability of our products to drive quality.

UnitedStates

Canada Brazil Europe China

New York Montreal Curitiba Paris ShanghaiAtlanta Toronto Rio De

JaneiroRome Beijing

Chicago Calgary Sao Paulo Berlin Guangzhou

Los Angeles Vancouver London

We created service differentiation to add value to our brands throughthe opening of sales offices, and hiring sales people to fill those offices. InQuarter 9, we opened a sales office in Guangzhou, China (In bold). Weopened sales offices in seventeen of the twenty available cities, giving us adistribution advantage over our competitors.


6.3 PLACE



A t l a s I n c .

For quarter 9, to continue increasing our service benefits, we investedin the following programs: professional training, incentive, anddemonstration kit programs.We plan on open offices in all twenty cities available, and properly train oursales force to better suit the needs of our customers. All of our products were

offered in each of the 17 cities in order to create absolute availability andreduce search costs for our customers.

Company Total Local AdInserts Q7

Total Local AdInserts Q8

Atlas 190 172Pirum 57 85Kramerica 96 96 Tech Th!s Out 12 12

Our advertising judgments were relatively competitive, but we realizedthat while we were gaining market share, we were turning lower profits thanour leading competitor Pirum. Since we raised brand awareness early on, asseen by our market share lead in most segments, we saw the need to cutback on advertising, and instead invested in our sales force and research and

development to better serve our customers with each of our brands. Whereadvertising was critical in the early market, as the market matured, itbecame less so. Though we did cut back drastically, advertising is still animportant cost, especially as we enter new cities to do business.


6.4 PROMOTION

7. MARKETING BUDGET



A t l a s I n c .


Marketing Budget

Quarter 8 Quarter 9 Explanation of Q9 Increases

Sales office leases 968,000 999,000

Opened office in Guangzhou in Quarter 9 (lease is$31,000)

Sales force expense 2,882,874 2,907,374

Hire Sales Force for our new office opened in ChinQuarter 8 (7 people, total $24,500)

Brand promotions 82,300 88,000

Offer bonuses to the 7 new sales people in China($5,700 increase)

Special programs 210,149 221,049

Need to train the new sales people from China ($10increase)

Ad creation/revision 29,999 60,000

Need to change the ads for Apollo 2.0 and Promethto account for the new R&D.

Point of Purchase Displayexpenses

34,000 34,000

Already have Point of Purchase Displays for all branot creating a new brand so more point of purchasedisplays are not necessary.

Advertising expenses 906,825 942,825

Need to Advertise in Guangzhou for all the brands. increase of $36,000.

Engineering cost for newbrands

60,000 60,000

Need to Modify Apollo 2.0 and Prometheus for theaddition for the long lasting battery for portablecomputers.

Market research 100,000 100,000

No change. Already purchase research for every reno need to purchase more.

Research and developmentR&D Investment in Office software-word, spreadsh

SUMMARY



A t l a s I n c .

Atlas, Incorporated has always focused on expanding into differentterritories, helping bring its computers to many new customers andincreasing its sales and therefore profit. However, with a growth mindedstrategy, Atlas Incorporated adds more costs than its competitors. By adding

another office in Guangzhou in Quarter 9, the cost for office leases increasesto $999,000. With Atlas Inc. opening a new office, other costs come with it,such as staffing the office, which led to a $24,500 cost per quarter. Afterhiring the new staff, brand promotions and special programs are required tokeep the sales force competitive and hard working. This leads to a $16,600increase for both of the programs. With a new sales office in Guangzhou alsoleads Atlas Inc. to having to put another $36,000 in advertising. So withAtlas, Inc. making the Guangzhou office operational cost Atlas, Inc.$108,100. Atlas, Incorporated is also looking to open another office in BeloHorizonte, which will cost Atlas, Inc. $40,000. By seeking to open anotheroffice, Atlas keeps with its mission to continually expand into more markets

and thus grow its sales.

These costs made up part of the total costs, but the majority of thecosts came from Research and Development. Atlas, Inc. plans on spending$1,705,542 on a new release of Office software-word and spreadsheets. Withthis addition to the options for Atlas computers, customers can expect to geta greater value for the price they pay. This also gives Atlas, Inc. acompetitive edge over its competitors, and should lead to greater sales inthe quarters to come. Atlas, Inc. has always kept an eye on the future andseeks to improve itself in any way possible. So, Atlas, Inc. has invested inResearch and Development in every quarter that it has been available, and

seeks to continue this, but it costs $30,000 per computer brand to applythese new additions to the different brands. So, Atlas will have to spend$60,000 on Engineering Costs for new brands. Both of Atlas’ TravelerComputer Brands will need to be changed to account for the longer lastingbattery, a product of Quarter 8’s Research and Development Investment.

Since these brands will both changing, their advertisements need tochange to match what the brand offers. Since it costs $30,000 to alter an ad,and two brands were altered, it will cost an additional $60,00 to update theseadvertisements. It costs $120,000 for Atlas to change two brands andchange their corresponding advertisements. For Atlas, Inc. to continue to

grow, it will require strategic altering of brands, in order to keep its costs low.But as of right now it seems that Atlas, Incorporated is looking very strongfor the future, and can look for sizeable returns on these investments.




A t l a s I n c .


8. PROFIT PLAN



A t l a s I n c .


Profitability of Marketing Division

Quarter 8 Quarter 9 Explanation of Q9 Increases

Revenues 32,160,925 35,377,017 We can assume a 10% increase based on past quarters, butmarket is in the maturity stage (increase of $3,216,092).

Rebates 244,200 268,620 10% more units sold (an increase of $24,420 rebates)

Cost of goods sold 20,442,808 22,487,08910% more units sold, means the cost goes up by 10% as weincrease of $2,044,281)

Gross margin 11,473,917 12,621,308

Sales office leases 968,000 999,000 Opened office in Guangzhou in Quarter 9 (lease is $31,000)

Sales force expense 2,882,874 2,907,374Hire Sales Force for our new office opened in China in Quartpeople, total $24,500)

Brand promotions 82,300 88,000Offer bonuses to the 7 new sales people in China ($5,700increase)

Special programs 210,149 221,049 Need to train the new sales people from China ($10,900 incr

Ad creation/revision 29,999 60,000Need to change the ads for Apollo 2.0 and Prometheus to acfor the new R&D.

Point of Purchase Display expenses 34,000 34,000 Already have Point of Purchase Displays for all brands, notcreating a new brand so more point of purchase displays arenecessary.

Advertising expenses 906,825 942,825 Need to Advertise in Guangzhou for all the brands.

Engineering cost for new brands 60,000 60,000Need to Modify Apollo 2.0 and Prometheus for the addition folong lasting battery for portable computers.

Market research 100,000 100,000No change. Already purchase research for every region, no purchase more.

Operating expenses 5,274,147 5,412,248

Operating profit 6,199,770 7,209,060

Research and development costs 1,279,155 1,705,542R&D Investment in Office software-word, spreadsheets - newrelease

Set up costs for new sales offices 80,000 40,000 Set up and office in Belo Horizonte, Brazil ($40,000)

Net Profit for Division 4,840,615 5,463,518

Cumulative Net Profit for Division 3,751,771 9,215,289



A t l a s I n c .

Atlas, Incorporated has been experiencing five quarters of consecutive

growth, and so it is reasonable that it can expect to see some more growth inthis next quarter. The market is currently in the Maturity Stage of the ProductLife Cycle, and fewer customers are entering into the market. Atlas, Inc. isalso competing directly with Pirum for the highest share of market, but AtlasInc seems better poised to take over the highest share of market within afew quarters, starting in Quarter 9. Atlas Inc. finds itself in almost all of theworld’s markets with the most computers. With this in mind, Atlas Inc. plansto keep making each of its brands better and more valuable at a cheaperprice than that of its competitors, and continually take over a higher overallshare of market. This is why Atlas Inc. expects a 10% increase in numbers,because its investment in the future will finally come into play and lead Atlas

Inc. into a position to become the number one computer provider in themarket.

In evaluation our first two years of business, we have gained highshare of market and realized a high profit margin. Atlas Inc. offers twoproducts for each of the 5 customer segments. As of quarter 9, we will haveestablished 18 sales offices throughout the global market, and with our planto have offices in every available city, we will expect to dominate theindustry with a distribution advantage. As our goal is to be the leading

company in the market, we will convert our weakness to strengths and takefull advantage of our opportunities. Our prices will remain competitive, andwe will closely evaluate all operating costs to limit spending. We have beenable to gain market leadership in three of the five market segments, and willcontinue to capitalize on our strengths in those segments. In order tobecome the total market leader, we will capitalize on our competitiveadvantages and continue investing in research and development to increasethe value of our products. Though our performance in the first 8 quarters has


SUMMARY

9. PERFORMANCE EVALUATION



A t l a s I n c .

not produced a position as market leader, the management of Atlas Inc.strategizes long term, and we expect to become the most dominantcompany in the microcomputer industry.

atlas incorporated - marketing management report

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