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 Confidentiality Agreement

The undersigned reader acknowledges that the information provided by

_________________________ in this marketing plan is confidential; therefore, reader agrees
not to disclose it without the express written permission of _________________________.

It is acknowledged by reader that information to be furnished in this marketing plan is in all

respects confidential in nature, other than information which is in the public domain through other
means and that any disclosure or use of same by reader, may cause serious harm or damage to
________________________.

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

___________________
Signature

___________________
Name (typed or printed)

___________________
Date

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

 Table Of Contents

1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

2.0 Situation Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

2.1 Market Summary . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.1.1 Market Demographics . . . . . . . . . . . . . . . . . . . .3
2.1.2 Market Needs . . . . . . . . . . . . . . . . . . . . . . . .3
2.1.3 Market Trends . . . . . . . . . . . . . . . . . . . . . . . .4
2.1.4 Market Growth . . . . . . . . . . . . . . . . . . . . . . . .4
2.2 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.2.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.2.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . .5
2.2.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . .6
2.2.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.3 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.4 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.5 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.6 Critical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

3.0 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

3.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
3.2 Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . .7
3.3 Financial Objectives . . . . . . . . . . . . . . . . . . . . . . . . . .7
3.4 Target Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
3.5 Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.6 Strategy Pyramids . . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.7 Marketing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.8 Marketing Research . . . . . . . . . . . . . . . . . . . . . . . . . .8

4.0 Financials, Budgets, and Forecasts . . . . . . . . . . . . . . . . . . . . . . . 9

4.1 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3 Expense Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

5.0 Controls 11
5.1 Implementation Milestones . . . . . . . . . . . . . . . . . . . . . . 12
5.2 Marketing Organization . . . . . . . . . . . . . . . . . . . . . . . . 12
5.3 Contingency Planning . . . . . . . . . . . . . . . . . . . . . . . . . 13
 Campus Laundry

1.0 Executive Summary

Campus Laundry (CL) is a full-service coin-op laundry (washing, drying, and folding) service
dedicated to consistently providing high customer satisfaction by rendering reliable machines and
furnishing a clean, enjoyable atmosphere at a competitive price.

There are several laundromats that currently serve the University of Michigan campus in Ann
Arbor, however they tend to be quite run-down. In addition to having a clean facility that strives
to ensure complete customer satisfaction, CL will be set up to provide an environment conducive
to studying. This will be accomplished by having ample desks for customers to use while they are
doing their laundry. CL will also provide a wireless digital subscriber line (DSL) solution for
customers to use. The wireless DSL will be inexpensive to set up and maintain, yet offer
significant value for the waiting students.

CL will have a coffee shop with light food offerings to encourage people to stay longer and spend
more money. The margins for the coffee shop are quite good so it will provide a good source of
revenue. The on-staff laundromat operator will be able to service both the laundromat and the
coffee bar at the same time. During peak times CL will have a second staff member serving the
bar exclusively.

Campus Laundry’s mission is to provide the customer with the most pleasant laundry experience
in the Ann Arbor area. We exist to attract and maintain customers. With a strict adherence to this
maxim, success will be ensured. Our services will exceed the expectations of the customers.

Market research indicates that a clean, quiet laundromat is in large demand for the Ann Arbor
area. Currently, most of the laundromats have a wait to use the machines, and have poor quality
facilities and surroundings. Having a superior service will allow CL to quickly gain market share.

Annual Sales Forecast

$250,000

$200,000

$150,000
Students
Low income customers
$100,000

$50,000

$0
2003 2004 2005

Page 1
 Campus Laundry

Table 1.0: Sales Forecast

Sales Forecast
Sales 2003 2004 2005
Students $65,225 $165,443 $187,887
Low income customers $13,045 $33,089 $37,577
Total Sales $78,270 $198,532 $225,464

Direct Cost of Sales 2003 2004 2005

Students $22,829 $57,905 $65,760
Low income customers $4,566 $11,581 $13,152
Subtotal Cost of Sales $27,395 $69,486 $78,913

2.0 Situation Analysis

Campus Laundry is entering its first year as a start-up business. The idea has been well received
and marketing will be critical to the success of the business. CL offers a clean, convenient laundry
facility for those that do their own laundry, as well as those in need of optional services. CL will
lure customers in with excellent customer service, a study-conducive environment, and wireless
Internet services for the waiting customer.

2.1 Market Summary

CL has captured good information about the market and knows a fair amount about the target
customers. The facility offers self-serve laundry services as well as optional services such as full-
service washing, drying and folding.

CL’s market information will be used to better understand who is served, their specific needs, and
how CL can better communicate with them.

Target Markets

Students
Low-income customers

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 Campus Laundry

Table 2.1: Target Market Forecast

Target Market Forecast

Potential Customers Growth 2003 2004 2005 2006 2007 CAGR
Students 7% 11,121 11,899 12,732 13,623 14,577 7.00%
Low-income customers 5% 6,434 6,756 7,094 7,449 7,821 5.00%
Total 6.28% 17,555 18,655 19,826 21,072 22,398 6.28%

2.1.1 Market Demographics

The profile for the Campus Laundry customer consists of the following geographic, demographic,
and behavior factors:

Geographics

• The immediate geographic target is the city of Ann Arbor with 138,090 people.
• A seven-mile geographic area will be served.
• The total targeted population is 17,555.

Demographics

• Male and females of relatively equal percentages.

• Age 19-45, with 67% of that group clustering between ages 20-29.
• Students living in off-campus facilities, and a smaller percentage of students from on-
campus housing who:
1. Want to escape the dorm facilities;
2. Prefer more quiet surroundings.
• Students' incomes are generally based on a combination of work income, parental income,
or student loans.

Behavior Factors

• Prefer to be productive while they are doing their laundry, a relatively frequent and time-
consuming exercise.
• Although they cannot afford their own laundry facilities, they do appreciate a clean, quiet
facility instead of the common noisy, low-quality landromats that currently serve the Ann
Arbor community.

2.1.2 Market Needs

Campus Laundry is providing its customers with a quiet clean laundry facility that ensures
customer satisfaction, as well as providing an environment that is conducive to productive
activities such as studying. CL seeks to fulfill the following benefits that are important to its
customers.

• Top-level customer service: The target customers have a fair amount of discretionary
income and appreciate good customer service. CL will provide a service that will appeal to
these customers.

• Clean facilities: A comfortable, stylish location and furnishings that offers clients a higher-
quality alternative than is currently available.

• Study conducive environment: Because doing laundry occupies a fair amount of time in
a person’s week, there is value in being able to be productive while you are doing your
laundry. Offering an environment that is supportive of studying with high-speed wireless

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 Campus Laundry

Internet access will allow customer to be productive with their laundry and other
responsibilities.

2.1.3 Market Trends

The market trends for laundromats are:

• Increased automation: Technology has driven down the costs of equipment that offer
technological efficiencies. Using technology reduces the dependence on human labor.
• Industry consolidation: Large corporations are constantly buying up mom and pop
operations.

Market Forecast

25,000

20,000

15,000
Students
Low-income customers
10,000

5,000

0
2003 2004 2005 2006 2007

2.1.4 Market Growth

The market growth for the self-serve laundry agency has seen 4% market growth. This growth
rate is supposed to be maintained for the next three years.

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 Campus Laundry

Target Market Growth

7.00%

6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%
Students Low-income customers

2.2 SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses within the company, and
describes the opportunities and threats facing Campus Laundry.

2.2.1 Strengths

• Well-trained staff to ensure optimum customer service.

• Well thought-out business model addressing market demand.
• Differentiated facilities.

2.2.2 Weaknesses

• Competition, although there is a significant differentiation between the competitors.

• A limited marketing budget needed to create brand awareness.
• Loan is required to start the business up.

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 Campus Laundry

2.2.3 Opportunities

• Participation in a steadily growing industry.

• Large target market.
• Consistent market demand due to the reoccuring need to clean clothes.

2.2.4 Threats

• Seasonal market demand due to many students leaving during the summer.
• Future/potential competition from a large franchised business.
• A large increase in homes built in the area that will decrease the reliance on laundromats.

2.3 Competition

There are several competitors, who serve the student and low-income market; facilities are
similar, dirty, noisy, with low-end services. Some competitors offer additional services beyond self
serve laundry, but most just offer self serve machines.

2.4 Services

Campus Laundry offers the following services:

• Self-serve washers and dryers; large front load washers, top load washers, normal and
large commercial dryers are available.
• Full service washing, drying, and folding.
• Relatively quiet environment for studying.
• Wireless Internet access for customers with laptops and wireless cards (WI-FI).
• Coffee bar with light food menu.

2.5 Keys to Success

CL’s keys to success are:

• Superior customer service.

• Clean, quiet and convenient facility.

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 Campus Laundry

2.6 Critical Issues

The critical issue that CL faces as a start-up is to ensure that it is balancing the debt load
adequately with the revenue stream, ensuring economic sustainability.

3.0 Marketing Strategy

The marketing strategy will be using a combination of advertising, promotional efforts and word-
of-mouth programs.

3.1 Mission

Campus Laundry’s mission is to provide the customer with the most pleasant laundry experience
in the Ann Arbor area. We exist to attract and maintain customers. With a strict adherence to this
maxim, success will be ensured. Our services will exceed the expectations of the customers.

3.2 Marketing Objectives

• Maintain steady, controlled growth.

• Decrease customer acquisition costs by 2% per quarter.
• Steadily increase market penetration.

3.3 Financial Objectives

• Double-digit growth for the first three years.

• Reduce overhead by 3% per year.
• Holding spending, as a percentage of revenues, at a steady level.

3.4 Target Marketing

The market can be segmented into one main group and one minor group. The main group is
University of Michigan students. The minor group low-income individuals and families that do not
have laundry abilities at their home/apartments.

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 Campus Laundry

3.5 Positioning

CL will position itself as a clean, customer centered laundromat that provides a reasonably quiet
facility for studying or Internet-based research/surfing. The desired positioning will be achieved
by leveraging its competitive edge of a customer-centric facility. The storefront is relatively quiet
and always clean, creating a atmosphere conducive to getting work done.

3.6 Strategy Pyramids

The single objective is to position CL as the premier laundromat serving the University of Michigan
students of Ann Arbor. Campus Laundry plans to quickly increasing market penetration through
superior service offerings. The marketing strategy will first seek to build customer awareness
regarding the services provided, then develop the customer base, and finally work toward
gathering a loyal following.

The message that CL seeks to communicate is that its clean and quiet facility is orientated toward
students. This message will be communicated by various methods. The first method will be
advertisements placed in the student newspaper. The second method will be a promotional effort
based primarily on coupons. The third method of communication will be networking. Networking
will be used to generate the word-of-mouth referrals.

3.7 Marketing Mix

Campus Laundry’s marketing mix is comprised of the following approaches to pricing, distribution,
advertising and promotion, and customer service.

• Pricing: The different services will have set prices posted.

• Distribution: All services will be distributed from CL’s store.
• Advertising and promotion: CL will use three forms of advertising to generate
awareness about their service offerings: an ad in the student newspaper, a coupon
promotional, and networking.
• Customer service: CL will take the approach that outstanding customer service is
necessary for developing a sustainable, profitable business.

3.8 Marketing Research

CL used two forms of market research to gain insight into its proposed market. The first type of
research was a survey that was distributed to students. The goal of the survey was to determine
the most important elements, or value, that a laundromat has for students. The results of the
survey were quite illuminating.

The other market research that was conducted was a competitive analysis of the different players
in the market. CL studied what their product offerings were, how they differentiated themselves,
how much demand they had, and how they interacted with customers. Both marketing research
efforts were very helpful to CL in validating its idea and gave it the confidence to move forward
with the project.

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 Campus Laundry

4.0 Financials, Budgets, and Forecasts

This section will offer a financial overview of Campus Laundry as it relates to the marketing
activities. CL will address Break-even Analysis, Sales Forecasts, Expenses Forecasts, and how
these activities link with the Marketing Strategy.

4.1 Break-even Analysis

The Break-even Analysis indicates that $8,666 is need in monthly revenue to meet expenses.

Break-even Analysis

$6,000

$4,000

$2,000

$0

($2,000)

($4,000)

($6,000)
$0 $2,896 $5,792 $8,688 $11,584 $14,480

Monthly break-even point

Break-even point = where line intersects with 0

Table 4.1: Break-even Analysis

Break-even Analysis:
Monthly Units Break-even 1,083
Monthly Sales Break-even $8,666

Assumptions:
Average Per-Unit Revenue $8.00
Average Per-Unit Variable Cost $2.80
Estimated Monthly Fixed Cost $5,633

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 Campus Laundry

4.2 Sales Forecast

The sales forecast indicates that growth should be fairly steady as more and more people become
aware of CL and the services offered.

Monthly Sales Forecast

$12,000

$10,000

$8,000

$6,000 Students
Low income customers
$4,000

$2,000

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Table 4.2: Sales Forecast

Sales Forecast
Sales 2003 2004 2005
Students $65,225 $165,443 $187,887
Low income customers $13,045 $33,089 $37,577
Total Sales $78,270 $198,532 $225,464

Direct Cost of Sales 2003 2004 2005

Students $22,829 $57,905 $65,760
Low income customers $4,566 $11,581 $13,152
Subtotal Cost of Sales $27,395 $69,486 $78,913

4.3 Expense Forecast

The Expenses Forecast will be used as a tool to keep the department on target and provide
indicators when modifications need to be made to ensure proper implementation of the Marketing
Strategy.

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 Campus Laundry

Monthly Expense Budget

$4,000

$3,500

$3,000

$2,500
Advertisements
$2,000
Promotions
$1,500 Networking

$1,000

$500

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Table 4.3: Marketing Expense Budget

Marketing Expense Budget 2003 2004 2005

Advertisements $20,620 $25,000 $28,000
Promotions $4,124 $5,000 $5,600
Networking $2,062 $2,500 $2,800
------------ ------------ ------------
Total Sales and Marketing Expenses $26,806 $32,500 $36,400
Percent of Sales 34.25% 16.37% 16.14%
Contribution Margin $24,070 $96,546 $110,152
Contribution Margin / Sales 30.75% 48.63% 48.86%

5.0 Controls

The purpose of the marketing plan is to serve as a guide for the organization. The following areas
will be monitored to gauge performance.

• Revenue: monthly and annual, based on plan compared to actual sales.

• Expenses: monthly and annual, based on plan compared to actual expenses.
• New customer percentage, that meets or exceeds stated expectations.
• Customer satisfaction, that generated repeat purchases and referrals.

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 Campus Laundry

5.1 Implementation Milestones

The following milestones identify the key marketing programs. It is important to accomplish each
one on time and on budget.

Milestones

Marketing plan completion

Advertising campaign #1

Promotional campaign #1

Advertising campaign #2

Advertising campaign #2

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Table 5.1: Milestones

Milestones Plan
Milestone Start Date End Date Budget Manager Department
Marketing plan completion 1/1/03 2/1/03 $0 Jason Marketing
Advertising campaign #1 2/1/03 6/30/03 $6,820 Jason Marketing
Promotional campaign #1 2/1/03 6/30/03 $1,544 Jason Marketing
Advertising campaign #2 7/1/03 12/30/03 $13,800 Jason Marketing
Advertising campaign #2 7/1/03 12/30/03 $2,580 Jason Marketing
Totals $24,744

5.2 Marketing Organization

Jason Cleanly will be responsible for the marketing activities. This will include assessing the
investment of each marketing effort with the return it provides. A return on investment analysis
will be conducted, to the degree possible, to determine if these campaigns merit repeating in the
future.

Page 12
 Campus Laundry

5.3 Contingency Planning

Difficulties and Risks

• Problems generating visibility.

• Overly aggressive and debilitating actions by competitors.

Worst Case Risks Include

• Determining that the business cannot support itself on an ongoing basis.

• Having to liquidate equipment to cover liabilities.

Page 13
 Appendix: Campus Laundry
Table 1.0 Sales Forecast

Sales Forecast Plan

Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Students $1,500 $2,234 $3,433 $4,432 $5,009 $5,533 $6,008 $6,200 $7,000 $7,234 $7,987 $8,655
Low income customers $300 $447 $687 $886 $1,002 $1,107 $1,202 $1,240 $1,400 $1,447 $1,597 $1,731
Total Sales $1,800 $2,681 $4,120 $5,318 $6,011 $6,640 $7,210 $7,440 $8,400 $8,681 $9,584 $10,386

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Students $525 $782 $1,202 $1,551 $1,753 $1,937 $2,103 $2,170 $2,450 $2,532 $2,795 $3,029
Low income customers $105 $156 $240 $310 $351 $387 $421 $434 $490 $506 $559 $606
Subtotal Cost of Sales $630 $938 $1,442 $1,861 $2,104 $2,324 $2,523 $2,604 $2,940 $3,038 $3,355 $3,635

Page 1
 Appendix: Campus Laundry
Table 4.2 Sales Forecast

Sales Forecast Plan

Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Students $1,500 $2,234 $3,433 $4,432 $5,009 $5,533 $6,008 $6,200 $7,000 $7,234 $7,987 $8,655
Low income customers $300 $447 $687 $886 $1,002 $1,107 $1,202 $1,240 $1,400 $1,447 $1,597 $1,731
Total Sales $1,800 $2,681 $4,120 $5,318 $6,011 $6,640 $7,210 $7,440 $8,400 $8,681 $9,584 $10,386

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Students $525 $782 $1,202 $1,551 $1,753 $1,937 $2,103 $2,170 $2,450 $2,532 $2,795 $3,029
Low income customers $105 $156 $240 $310 $351 $387 $421 $434 $490 $506 $559 $606
Subtotal Cost of Sales $630 $938 $1,442 $1,861 $2,104 $2,324 $2,523 $2,604 $2,940 $3,038 $3,355 $3,635

Page 2
 Appendix: Campus Laundry
Table 4.3 Marketing Expense Budget

Marketing Expense Budget Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Advertisements $1,000 $1,120 $1,300 $1,500 $1,800 $1,000 $1,200 $1,400 $2,000 $2,500 $2,800 $3,000
Promotions $200 $224 $260 $300 $360 $200 $240 $280 $400 $500 $560 $600
Networking $100 $112 $130 $150 $180 $100 $120 $140 $200 $250 $280 $300
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Sales and Marketing Expenses $1,300 $1,456 $1,690 $1,950 $2,340 $1,300 $1,560 $1,820 $2,600 $3,250 $3,640 $3,900
Percent of Sales 72.22% 54.31% 41.02% 36.67% 38.93% 19.58% 21.64% 24.46% 30.95% 37.44% 37.98% 37.55%
Contribution Margin ($130) $287 $988 $1,507 $1,567 $3,016 $3,126 $3,016 $2,860 $2,393 $2,590 $2,851
Contribution Margin / Sales -7.22% 10.69% 23.98% 28.33% 26.07% 45.42% 43.36% 40.54% 34.05% 27.56% 27.02% 27.45%

Page 3