The Brand Collective Product Plan

THE BRAND COLLECTIVE

PRODUCT PLAN PREPARED BY REMEL HOSKINS

CCTP 806: PRODUCT DEVELOPMENT IN THE NEW DIGITAL AGE DECEMBER 14, 2018

THE BRAND COLLECTIVE Executive Summary The Brand Collective (also known as the Brand or the Collective) is a full-service marketing consultancy based in Washington, D.C. The Brand Collective partners with clients to provide an experience that brings powerful, brilliant and creative ideas to life by developing and implementing innovative and strategies for a diverse audience of clients. The Collective works to promote and protect brands and their reputations through strategic branding, communications, and creative services.

Typical clients will include startup companies, small businesses, non-profit and for-profit companies, companies in the public sector including government agencies as well as individual persons. Each client seeks a professional firm to assist in their perceived public image. The Brand Collective intends to rapidly gain market share through their inclusive and specialized approach to their clients coined in a term the “collective experience.” The Collective Experience serves as a new competitive edge through which to grow the customer base.

The Brand Collective is a partnership of two industry professionals with years of experience and insight in the world of public relations, marketing, and communications strategy. By leveraging their skills and experience, the Brand Collective will reach profitability by year one, generating revenues of $400,000 by year five.

Positioning The Brand Collective positions itself as a marketing consultancy rather than a public relations agency because it provides solutions to company problems rather than act on the company’s behalf. The services provided by both marketing consultancy’s and public relations firms are similar in nature and thus all work under the same advertising agency umbrella. This product plan uses resources from public relations agencies in the United States to explain company positioning and market research.

The Brand Collective is beginning their first year of full-service operations. To bring the business to profitability, The Brand Collective needs a $200,000 initial investment to apply towards their strategic and focused marketing plan. The primary market need is a public relations firm that specializes in digital development, startup development, image creation, and PR event management. The demographics of startup companies are utilizing fewer PR services as a more do-it-yourself approach arises.1 The Brand Collective receives assistance from partners, and competitors have researched strategic needs to help the agency’s largest target segment. While there are many PR firms in the area, none can truly cater to the market-specific needs of startups and small businesses.

1

https://b2bprblog.marxcommunications.com/b2bpr/public-relations-to-make-you-a-startup-rockstar

3 Scenarios

1. Jane is the president of A Start-Up Company (ASC). She knows that she needs the help of a PR firm to establish ASC’s brand and get the company off the ground. They have very little money to dictate towards marketing and branding, but they feel that marketing services would help them increase product sales. They want to build brand recognition both among their audiences and among new audiences. They have a makeshift logo, but it doesn’t necessarily embody all that the company stands for. They believe that a new logo along with a revamp of the company mission statement will help increase brand recognition and company awareness.

2. Joe is a member of the Zika Coalition at The Center for Disease Control and Prevention.

His team wants to publicize information on the Zika Virus, and its impacts on the U.S. They want to increase awareness of the virus and also ensure that public interest remains for years to come. Zika Coalition group wants to disseminate information in the form of handouts, commercials, and website revamping. Even with limited resources and funding, this federal government agency has set aside a budget for marketing and advertising activities.

3. Jay is a freelance graphic artist whose only clients are her church and her relatives. She wants to build her clientele, and she feels the only way she can do that is if she completely revamps her message. Jay is fully able to make her own graphics, build her own website, and create her own career and company narrative, but she seeks advice from creative professionals on how to articulate her company’s goals.

What is the need?

Each of my target segments needs solutions, expertise, unexpected ideas, or strategic branding that would drive impact on their businesses. Any or all of our services will help our clients to better communicate with their audiences.

Differentiation Our expertise includes: • Consulting • Digital solutions • Brand Development and Production • Digital and digital transformation services • Influencer marketing • Media relations • Public affairs The Brand Collective offers these services individually or in the form a package, with set monthly rates and set deadlines.

Naming “The Brand”

Most Public Relations agencies and marketing firms have a typical formula for naming an agency: founder surname 1 + founder surname 2 = agency name.2 In order to stand apart from competition the Brand Collective took a more wholistic approach in giving the company a name.

The definition of collective is an experience shared by a number of people. Our founders wanted from the very beginning to exemplify a unique shared experience between the workers at The Brand their clients. The Brand Collective the talents of two founders, both equipped with their own realms of expertise and knowledge. The use of their collective knowledge to piece together a business that would provide a collective of services to others is how the brand got its name. The Collective Experience demonstrates this agency’s driving passion for solving problems and delivering lasting value to their clients by creating a shared experience for both client and the Brand.

Uses The Brand Collective knows which audiences they serve and which audiences they do not serve.

The use of our services is broken down into three categories, branding and design, communications and messaging, and event management.

Branding and Design Objective Our branding and design objective is to add value to a company reputation through strategies and impactive user friendly visuals. Every design is the beginning of a strategy and not a means to an end. The Collective works to maintain a controlled approach while creating, implementing and maintaining design standards and metrics. Every company is different, and each collective experience will breed new insights and new ways to visually communicate in your company products. Through the branding and design department the Collective offers services including brand strategy development, creative concept development, digital solutions, design and layout services, advertising and campaign management, media planning and monitoring, print, web and electronic promotional materials, web design and management.

Communication and messaging Communication and messaging was birthed from the notion that branding message can either make or break your business. It’s not about how nice your logo and website are, but how effective your strategy is at attracting your audience. The Collective brings journalism, design thinking and communications strategies to your current company narrative to produce a result that will be impactive for years to come. The Collective offers services ranging from strategy refinement and consulting, influencer marketing brand communication, internal communication, media relations, stakeholder relations, online and social media communication.

2

https://www.thebalancecareers.com/ad-agency-names-great-vs-dull-39001

Campaign Strategy and Event Planning The Brand Collective wants to create experiences that strengthen relationships and resonates with target audiences. The Collective communications team inspires guest through strategic staging and managing or memorable events all while pursuing brand loyalty. This includes any campaign messages that needs to be spread through a series of digital stories and suites of online and social content, let the Collective bring life to any campaign or event. Services include startup development, concept development, planning and implementation, on-site management, product and design, data based and guest relations, strategy and refinement.

Product Components 1. Welcome to the Collective – establishes if The Brand Collective is the best match and well suited for the client, if that is the case the Collective establishes an initial discovery meeting.

2. The Collective Experience – in the information gathering process the Collective begins to research and put together a tailored experience that addresses the needs, wants and desires of your company. The Collective interrogates the client’s revenue goals, ideal customers (in order to create accurate target personas), current advertising/marketing strategies and their success, and success metrics and evaluation.

3. Experimentation – the Collective uses prototypes and design thinking methods to test out strategies before implementing them.

4. Implementation – once the background work is finished and both the agency and client are satisfied with the chosen method, the client can implement the strategies within their company. The Brand Collective then sends out an assessment for evaluation and feedback.

Implementation Requirements What do you need to do to receive the services we’re offering?

The Brand Collective uses technology and platforms in order to keep track of progress and allow the client to keep tabs on our timeline. The platforms help to ensure that the steps of the marketing plan are finished in the most efficient time period possible. In order to successfully communicate with the customer and implement the products produced by the Collective team, the client will utilize the following technology and software.

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You need a computer. It is assumed that you or a member of your company has a computer or laptop through which to utilize the product managing software and to view the PDFs, excel sheets and other documents that we might send to you.

You need access to a company email. The majority of correspondence takes place through an email platform. The Brand Collective allows you to see work and progress through task managing software, but these notifications also come through email.

You will need access to Trello, Brand 24 and Prowly. These are our top project management and communications platforms. You can use

•

We may need to do run-throughs of the event. For all parties considered to successfully be in place at the time of a big event, allow us to take out time to strategize, go over roles, and ensure that all the necessary components are in place.

Resources The Brand Collective has a series of partners they consult with on specific projects. They utilize the public resources provided by competitors, Edelman and Booz Allen Hamilton for plans to inspiration. The following resources are used for The Brands day to day operations: • Trello.

• Brand 24.

• Prowly.

• Microsoft Office.

• Adobe Creative Suite.

• Google Suite.

• Social Media Platforms.

TARGET MARKET & VALUE PROPOSITION Market Description Marketing consultancies are growing fast by using strategic data analytics to bring solutions to big business problems that traditional advertising can no longer solve alone3. By layering on creative services and content marketing, marketing consultancies have become a one stop shop for businesses and nonprofits.

Market data for the public relations sector shows that the worldwide public relations revenue is projected to grow from 14 billion U.S. dollars generated in 2016 to approximately 19.3 billion by 2020.4 In the United States, PR agencies generated a revenue of 13.5 billion U.S. dollars in 2016, experiencing a significant growth compared to previous years.5 The rise of consultancies is a reflection of how much marketing is changing. With the advent of new technologies, including technologies that block ads when you’re watching tv or block commercials, agencies have to be more creative and strategic in order to find their customers.

Year 0 Sizing & 5-Year Forecast In the Metropolitan Washington, D.C. area approximately 21,000 people who work in the Advertising and Public Relations industry.6 For the sake of delegating financials for The Brand Collective 10,000 of these individuals work in firms that are less than 10 people for PR services.

There are 1800 hours per year of services rendered, and therefore, 18million hours in year 0 for the Brand Collective. As the company generates more business and works their connections for clients, a predicted 2% growth will occur every year. This will generate an expected sale of $70,125 by year one. It is a goal that the Brand Collective will have a market share within the next 5 years of launch. However, the considering the company has less than 5 works, and a small host of clients compared to the competitors, the market share will be miniscule.

Target Segments Start-up companies and small business. This target segment is our most important because we can cater to the very specific needs that they want to accomplish in their various brands.

Startups value community and feedback as well community, collaboration, and emotional bonds. Because these segments are smaller and intimate, they are more likely to value the “collective experience” the Brand Collective offers.

3

https://adage.com/article/news/consultancies-rising/308845/ https://www.statista.com/topics/3521/public-relations/ 5 https://www.statista.com/topics/3521/public-relations/ 6 Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Public Relations Specialists, https://www.bls.gov/oes/2017/may/oes273031.htm 4

Demographics:

Ages: 25-40 M&F

Geographics:

Live in urban areas, or suburbs

Psychographic

they value freedom and integrity in their work and in their consumers.

Wages: $50K to $90/year Prefer to work in teams rather than silos

Rents WeWork space or works from home.

Work downtowns in cities, or population dense areas They want to Feel the need be a company to brag on that services all social platforms

Mostly single with some college Prefer to stay in places where resources are near

Fully capable of using technology

Have “do-ityourself” attitudes but are willing to take consultations

Free-flowing, full of ideas and open to new ideas.

Relies on public transportation and ride sharing

Government agencies. This target segment tends to be a huge network of people with different skill sets and areas of expertise. In order to manage all agencies, employees, and programs, there is a complex system of rules and procedures in place and hierarchy and protocol that every work follows.

Demographics:

Ages: post college or military to retirement age

Wages: $50K to $200K/year

Has offices within offices in other departments

Stable relationships and marriages

Geographics:

Live in rural, Considered urban or middle class or suburban areas better

Psychographic

Very busy, every day is different

Works in Downtown Washington, D.C. and frequents travel Don’t always know the best way to reach audiences, and need marketing help

Aren’t afraid to venture outside of the District to work if its more convenient Lot’s of bureaucracy

They are stuck in a systematic way of completing work

Younger workers use technology, more seasoned workers may or may not.

Relies on public transportation and ride sharing, rarely drives Can be a frustrating environment to work in

Individuals and nonprofits. Individuals will likely use our services instead of our service packages. This demography we will least likely see, so we don’t really market to them. This is also true with non-profit companies; only well-off businesses will take advantage of services from The Brand Collective. Because nonprofit does work toward the public good, the

organization is eligible for benefits that are not applicable to for-profit organizations. They also enjoy tax-exempt status.

Demographics:

Geographics:

Psychographic

25-55, entrepreneur minded Live in rural, urban or suburban areas and prefer metro access may not have much money, but they are goal minded and optimistic

Wages: approx..$50K

Works from home

Lower, upper or middle class depending on the individual

Stays home for the sake of not having time to travel

They are stuck in a systematic way of completing work

Know how to reach audiences but seek advice for marketing

Single or in stable relationships Aren’t afraid to venture outside of the District to work if its more convenient “do-ityourselfers”

Use technology daily Relies on public transportation and ride sharing, rarely drives Have to be selfmotivated selfstarters to stay afloat financially

Total Market The unit of sale is hours per services rendered. To calculate the overall size of The Brand Collective’s market, the number of services rendered in a year (18,000,000 hours in year 0) is multiplied with the number of people in each of the three target segments. For example, Individual’s and Nonprofits utilized 10,500 hours’ worth of services in year 0.

Total Market (units) Growth Rate (% per year)

Total Market by Segment Target Segment 1 (TS1) Target Segment 2 (TS2) Target Segment 3 (TS3) Remainder

Desired Market Share Target Segment 1 (TS1) Target Segment 2 (TS2) Target Segment 3 (TS3) Expected Sales by Target Segment Target Segment 1 (TS1) Target Segment 2 (TS2) Target Segment 3 (TS3)

Year 0 18000000 2%

Year 1 18360000 3%

Year 2 18910800 8%

25000 28500 2000 3000 10500 9600 18,322,500 18,869,700

10% 10% 10%

2500 200 1050

20% 20% 20%

5700 600 1920

Year 3 20423664 10%

30000 10000 10200 20,373,464

30% 30% 30%

9000 3000 3060

Year 4 22466030

Year 5 23589332 Unit of sale = Hours rendered for services

5%

34000 8000 10800 22,413,230

40% 40% 40%

13600 3200 4320

37500 Start-ups/Small Business (TS1) 5000 Government Agencies (TS2) 11400 Individuals/Non-profits (TS3) 23,535,432

50% Start-ups/Small Business (TS1) 50% Government Agencies (TS2) 50% Individuals/Non-profits (TS3)

18750 Start-ups/Small Business (TS1) 2500 Government Agencies (TS2) 5700 Individuals/Non-profits (TS3)

ENVIRONMENTAL ANALYSIS (PEST) POLITICAL

Public relations and political often go hand in hand and have since the Roman times.7 History shows us that public relations messaging is the reason why politics is what it has become today.

Politicians need public relations to broadcast their messages, and just like how PR firms have to be strategic in order to market and get sales, politicians also need strategic marketing to win campaigns. Political issues also directly impact public relations, particularly in large companies with multiple departments. One piece of legislation or one bad PR campaign can cost a company millions of dollars and can sometimes even force it to close its doors.8 It’s important for PR companies to remain neutral while doing work that weighs heavily on the company image. Political forces exist at the local, state, regional, national and even global level and can play a major role in public relations campaigns.

ECONOMIC Public relations has a strong connection to issues of size and economic impact on society at large. Primarily big PR companies are impacted by economic change, because financial resources are what allows advertising in media space across various outlets. Whereas economic development can provide an opportunity challenge for PR practitioners, economic forces can also have a negative impact on the business.9 Many say that the economy has no discernible impact on public relations,10 but economic forces are equally as daunting to organizations as political issues. Economic downturns happen at every level. An organization's customers, vendors and employees can all be affected by economic challenges.11 For example, has prices have nearly doubled in the last several years and manufacturers of transportation goods have to struggle against fuel efficient and hybrid cars.12 This leaves major car makers overstocked with trucks and cars that they can’t sell because of fuel usage. Behaviors change as gas prices rise and fall, and these changes directly impact what PR professionals need to look out for in order to be effective in business.

SOCIOCULTURAL Social attitudes are in constant play for PR agencies. As more people embrace the “do-ityourself” culture, PR practitioners run the risk of losing their client base altogether. Resources for public relations are widely dispersed among the internet and as society embraces this attitude, more companies and business will follow. This is considered an extreme case scenario

7

The Role of Public Relations in Politics | Washington .... https://wwpr.org/the-role-of-public-relations-in-politics/ The Effects of External Forces in a Public Relations .... https://smallbusiness.chron.com/effects-external-forcespublic-relations-market-14028.html 9 https://sarahaasullivan.wordpress.com/2011/02/21/pr-and-economics/ 10 https://www.forbes.com/sites/kenmakovsky/2013/02/28/the-impact-of-the-economy-on-publicrelations/#45b9a7f84e01 11 The Effects of External Forces in a Public Relations .... https://smallbusiness.chron.com/effects-external-forcespublic-relations-market-14028.html 12 The PR Behind Gas Prices - TrendKite. https://blog.trendkite.com/trendkite-blog/the-pr-behind-gas-prices 8

as PR use has continued to rise year after year. However, society’s outlook could change in an instant with the new technological advancements being made every day.

Public relations has an advantage as often they shape public opinion. It is because of campaigns in the areas of alcohol and cigarettes that the tobacco industry continues to be the billion-dollar industry they are today.13

TECHNOLOGICAL There are very few areas of business that have not been affected by technological innovation.

Technology is a dire necessity for both public relations agencies and their clients. In order to gather data, advertise on a website, engage with audiences on social media, and communicate with clients, PR agencies need technology it has made multiple difficult tasks much easier to handle. Also, considering the loads of work needed to be completed by PR agencies, many of their technologies are a well worth the purchase and annual investment so that practitioners won’t have to do things manually. Technology impacts the day to day operations of public relations agencies, and that will like continue in the future.

13

How Tobacco and PR Grew Up Together - SourceWatch. https://www.sourcewatch.org/index.php/How_Tobacco_and_PR_Grew_Up_Together

COMPETITOR ANALYSIS SWOT: The Brand Collective STRENGTHS •High Customer demand •Vast range of services/products •Good reputation among stakeholders and direct access to influencers via website and social media channels OPPORTUNITIES •Growing Demand •PR Services at varying rates depending on your need (discounted services)

WEAKNESSES •Lack of credibility/ solid reputation •Lack of experience in crisis management/communication •Do-it-yourselfers

THREATS •Other more reputable PR agencies and firms •Pricing perspectives of competing PR companies •technology Considering the factors that were unearthed in the PEST analysis, The Brand Collective is fully aware of any potential impacts that politics, the economy, society and technology may have on the business. Technological impacts will not destroy the business, if anything it enhances the business and the collective experience. Political and economic factors are two areas that the founders and workers of the Brand Collective need to stay on top of in order to get ahead of any happenings that could cause the Collective to lose clients.

SWOT: Edelman

STRENGTHS •Experience and Skilled Workforce •Vast Range of PR Sectors •High Growth Rate OPPORTUNITIES •Venture Capital •Global Markets •Growing Demand

WEAKNESSES •Future Profitability •High Investments in R&D THREATS •New Entrants •Clients Substitute Products/services

According to an industry ranking, Edelman – a private firm co-headquarter in Chicago and New York City – is the largest PR agency worldwide. In 2016, the company generated nearly 875 million U.S. dollars in fee income, up from 855 million a year earlier. This constitutes an annual growth rate of 2.4 percent.14 Edelman engages in the startup development realm, as does The Brand Collective. Edelman’s program is more advanced and has been around longer, but it is still an opportunity for the Brand to maximize this effort. Another opportunity for the Brand Collective is that they include their customers in their own experience.

14

https://www.statista.com/topics/3521/public-relations/

SWOT: Omnicron Group

STRENGTHS WEAKNESSES •Strong distribution network •New Entrants •Product Innovation •Minimal feedback channels •High level customer satisfaction •High Investments in R&D •Strong cash flow •Higher attrition rate in work force OPPORTUNITIES THREATS •Opening up of new markets because of •Intense competition government agreement •Changing consumer buying behavior from •New environmental policies online channel •The new technology provides an opportunity to Omnicom Group to practices differentiated pricing strategy The last target segment is similar to the Brand Collective in that they care as much about research and developments as we do. Across the board the advancement of technology is cause PR companies to face the challenge of getting consumers to do business instead of trying to engage in PR activities alone. It will take more strategic marketing to effectively market to audiences and business to build relations and take on new clients.

MARKETING STRATEGY Branding

The Brand Collective strives to display themselves as a luxury company. The simplistic logo is complementary to the slick and luxurious nature of the website and social media channels. In order to make customers feel like their investment is well worth it, the Brand works diligently to ensure every appearance of their company is clean and sleek.

Mock Webpage

The website utilizes the same sleek design principals as the logo. The landing page is simple and offers the choice of viewing work, hiring us, or scrolling down to see more of our offerings and services. All of the company social media channels are linked to each other within the website.

As the Brand Collective offers a very dense and diverse amount of services it is important that they don’t overwhelm the customers they want to market to. Therefore, the scrolling website presents as an effective long-term solution.

Marketing Strategy

The Brand Collective will use a combination of targeted advertising and networking to generate visibility and communicate The Collective’s message that they are the startup development PR firm in the area that possesses the ability to offer specialized services and flexibility to help the customer manage their public image and provide any creative or digital services the customer needs. Networking with allow the principals at the Brand Collective to be effective in leveraging the already existing relationships have been established through years working in the different industries.

Marketing Objectives: • Maintain positive steady growth each month • Increase the Brand Collective’s visibility with the industries of targeted companies • Experience new clients attracted to The Brand from referrals.

There is NO shortage of public relations agencies in Washington, D.C. We do more strategic marketing in order to maintain our current customers and to reach new ones. The following are the strategies used to effectively market The Brand Collective: 1. Advertising: An advertising campaign will reach prospective customers. The advertisements will communicate the “Collective Experience” message: The Brand Collective is a PR firm that can work collectively with their clients working alongside them to come up with solutions. The advertisements will detail the different services The Collective provides as well as the rich experience the founders have in the startup development niche.

2. Online and social presence: The Brand Collective seeks to leverage influence via our online platforms. All initiatives, pricing details, products and services and contact information are found via our website brandcollective.com. The Collective is a small business that offers many services and it is necessary to market those on the cover page. The Collective showcases work efforts on both our website as well as on social media platforms, Facebook, Instagram and Twitter.

3. Networking: Both founders have a long history in the public relations and marketing sphere, and they have a laundry list of contacts that they have developed over the years. The Brand Collective will leverage these contacts to raise visibility and establish relationships with these contacts to serve them.

Branding Archetype

Creator and Hero hybrid: The Brand Collective identifies closely as The Creator archetype, as the agency’s goal is to create products with meaning and lasting value in an artistic and profitable manner. The goal of the Brand Collective is to help their clients foster innovation creativity and to use their imagination to achieve company goals. Aside from the creative side, the Brand Collective also has a Hero approach, in that they want to make a positive impact on their clients, inspiring them to be better companies once they leave the Collective. The Brand

Collective has an honest but strong and confident approach to each strategy they bring to their clients. The Brand Collective will use the archetype approach in their advertised products.

SALES STRATEGY Sales Strategy and channels PR agencies always strive to find more clients. Acquiring new clients has become more challenging as different types of agencies, such SEO firms and social media firms, offer overlapping services.15 Yet it is still important to deliver convincing new client pitches, acquire more clients and become more profitable as an agency.

• Networking: Similar to the marketing strategy, The Brand Collective will utilize their provided network to leverage more clients into their business.

• Offer referral incentives: One of the ways to make the network work for the company is to offer rewards to those who do business with the Collective.

• Social media: our biggest marketing strategy is the constant driving of traffic to our social media channels. The Collective can monitor the growth of these channels and tell digital stories across platforms that markets the services they offer.

• Website: The majority of The Brand Collectives information and pricing details can be found on their website. Unlike their competitors, the Collective offers pricing metrics and details right on the website as well as contact information to address any specific needs. Having this much detail and clarity on the website allows potential customers to make a decision early on whether or not to use the Brand’s services.

15

https://glean.info/8-successful-strategies-pr-agencies-use-win-new-clients/

EXIT STRATEGY 3 Exit Strategies

1. Give the company to the employees: The founders of The Brand Collective have no intentions of running the business for the rest of their lives. The opportunity to have the agency function without them would be the first exit strategy. The Collective has many opportunities for growth and expansion, and a leadership team should manage these areas. With a capable leadership team, the founders can pursue other opportunities while setting up the company to run without them.

2. Merger: The second exit strategy the Brand Collective would undertake is to merge with an existing public relations firm or marketing agency. This strategy would allow the founding owners and any other supporting staff to join forces with a similar company while agreeing to work together going forward. Two agencies with complementary skillsets enable Brand to save resources by combining. The work of the Collective would continue, and all parties considered would be able to make money and generate revenue at an exponential rate.

3. Acquisition: The last exit strategy would be to sell The Brand Collective to a similar agency or a firm that is not an agency. Many companies are looking for digital and marketing consultancies, primarily in the business consulting space. The selling of the collective could allow for more strategic marketing work to be done at a broader scale, giving employees the opportunity to expand their skill set and knowledge base in a different direction.

PRICE Pricing Strategy The Brand Collective’s pricing strategy is value based. The Collective wants to implement more structured approaches to pricing, but for now the value of the work produced and the Collective Experience offered will speak for the strategy. Most PR agencies prefer to charge retainers, which are basically a fixed monthly or quarterly fee charged for a contractual commitment of minimum 6 months. Most of times is paid in advance.16 The Brand Collective wants to move in the direction of more competitor-based pricing in later years, including retainer pricing. However, in their initial launch year, the pricing will be services provided by the hour. Depending the staff person and their seniority, The Brand Collective charges varying hourly rates. The Collective also participates in payment-by-results pricing, an offering mentioned in the discovery meeting.

Price Once the steps of the onboarding process have been completed, the client moves into the Collective Experience segment. From that point on they will be billed approximately $200 per hour or more depending on the seniority of the staff person and the workload of the project.

16

Show me the money - PR agency pricing structure .... http://getmustr.com/blog/show-money-pr-agency-pricingstructure-fundamentals-2/

FINANCIALS Breakdown of Investment Detail The Brand Collective is requesting for a $200,000 initial investment. The following is a breakdown of finances for this investment.

Initial Investment Assumptions Technology and Subscriptions over 3 years • 4 iMac desktop computers • Adobe Creative Suite 3yr • Potential Resource Increase • Trello, Brand 24, Prowly • Squarespace and Website Fees

Shared Office Space • WeWork Fees • Conference Room Booking Contracted Employees • Advertising Research and Development • Subscriptions

Initial Investment Total

$40,000 $35,000 $4,000 $20,000 $1000 $100,000 $36,000 $36,000 $72,000 $50,000 $50,000 $28,000 $28,000 $200,000

The Brand Collective’s initial investment can be broken down into four sections, technology and subscriptions, office space, contracted employees, and research and development.

The most important section of this is the technology and subscriptions as the Brand Collective needs computers and access to programs and software to ensure that they are able to provide the services each client may need. The Brand Collective is currently a telework company, but as it grows and expands, it is a goal that the employers will need to operate in a shared office space. They are planning for this early as it should be implemented within the first five years.

Unit Cost For every hour a Brand Collective agent works, they also need social security and 401K benefits, so for every dollar they are paid they will receive money as well to go towards their benefits package. For year one, the unit costs is $80 an hour.

Selling, General and Administrative The Brand Collective has experienced very high costs in order to run the business.17 Our SG&A cost will be 45% for years 0 through 5. We have expenses for promoting the Brand, utility bills accumulated from WeWork, and possible travel costs for the administrative team.

Taxes The Brand Collective’s tax rate will be 15%18 considering the tax rate of similar PR firms who are operating as small businesses.

Financial Tables Revenues and Pricing Year 1 18360000

Year 2 18910800

Year 3 20423664

Year 4 22466030

Target Segments Target Segment 1 (TS1) Unit Price Revenue TS1

2500 $200 $500,000

5700 $200 $1,140,000

9000 $200 $1,800,000

13600 $200 $2,720,000

Target Segment 2 (TS2) Unit Price Revenue TS2

200 $200 $40,000

600 $200 $120,000

3000 $200 $600,000

3200 $200 $640,000

2500 Government Agencies (TS2) $200 $500,000 Government Agencies (TS2)

Target Segment 3 (TS3) Unit Price Revenue TS3

1050 $200 210,000

1920 $200 384,000

3060 $200 612,000

4320 $200 864,000

5700 Individuals/Non-profits (TS3) $200 1,140,000 Individuals/Non-profits (TS3)

$750,000

$1,644,000

$3,012,000

$4,224,000

Total Market (units)

Year 0 18000000

Total Revenue

Year 5 23589332 Unit of sale = Hours rendered for services

18750 Start-ups/Small Business (TS1) $200 $3,750,000 Start-ups/Small Business (TS1)

$5,390,000

Costs Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Costs Initial Investment

Unit Cost

$80

$82

Units Sold

3750

8220

Cost of Goods Sold

17

$200,000

$84

15060

$86

21120

$88

26950

$300,000 $674,040 $1,265,040 $1,816,320 $2,371,600

https://case.edu/finadmin/controller/pdf/accounts.not.chargeable.to.federal.government.pdf 2018 Tax Changes for PR Owners and Their Agencies - Thu .... https://www.odwyerpr.com/story/public/10086/2018-01-25/2018-tax-changes-for-pr-owners-their-agencies.html

18

Income Summary Year 0 ($200,000)

Year 1

Year 2

Year 3

Year 4

Year 5

Revenue

$750,000

$1,644,000

$3,012,000

$4,224,000

$5,390,000

Cost of Goods Sold

(300,000)

(674,040) (1,265,040) (1,816,320)

(2,371,600)

$450,000

$969,960

$3,018,400

Initial Investment

Gross Margin Depreciation

(40,000)

Sales, General and Administration

(337,500)

Net Operating Profit

72,500

Other Expenses (list) Profit before Tax Taxes Profit

(40,000)

$2,407,680 (40,000)

(739,800) (1,355,400) (1,900,800) 190,160

351,560

(40,000) Depreciation Term (years)

5

(2,425,500) SG&A (% of Gross Revenue)

466,880

45%

552,900

$0

$0

$0

$0

$0

$72,500

$190,160

$351,560

$466,880

$552,900

($10,875)

($28,524)

($52,734)

($70,032)

($82,935) Tax (% of Profit before Tax)

$61,625

$161,636

$298,826

$396,848

$469,965

($200,000)

Cost of Capital

$1,746,960

(40,000)

15%

10% Expressed as an Annual Interest Rate

Net Present Value

$776,982

Internal Rate of Return

79%

Net Present Value (NPV) & Internal Rate of Return (IRR) The Net Present Value is positive at $776,982.

The Internal Rate of Return is 79%.

Sensitivity Analysis In conducting three separate sensitivity analysis, I wanted to determine which factors had the greatest impact on the profits and the NPV for the Brand Collective. The purpose first scenario is to maintain the same numbers from the year 0 to see what would happen if the clientele in each target segment remained stagnant for the next five years. I changed the numbers for each segment to be the same number of hours each year.

Year

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Profit ($200,000) $61,625 $144,500 $214,625 $272,000 $344,675 The end result was a loss of profits, and the NPV at 536,491. It would also take us three years to make profitability.

In the next scenario, I used the same target segment numbers from scenario 1, and next I increased the cost of services by increasing the calculated price per hour from $200 to $375 for each target segment.

Year

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Profit ($200,000) $368,422 $758,049 $1,135,016 $1,499,188 $2,001,378 The end result was a significant increase in profits, and the NPV at $3,880,870.

In the final scenario I raised my initial investment price from $200,000 to $500,000 dollars. This resulted in a NPV of $283,652.

Year

Profit

Year 0

($1,000,000)

Year 1

$10,625

Year 2

$110,636

Year 3

$247,826

Year 4

$345,848

Year 5

$418,965

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https://b2bprblog.marxcommunications.com/b2bpr/public-relations-to-make-you-astartup-rockstar https://www.thebalancecareers.com/ad-agency-names-great-vs-dull-39001 https://adage.com/article/news/consultancies-rising/308845/ https://www.statista.com/topics/3521/public-relations/ https://www.statista.com/topics/3521/public-relations/ Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Public Relations Specialists, https://www.bls.gov/oes/2017/may/oes273031.htm The Role of Public Relations in Politics | Washington .... https://wwpr.org/the-role-ofpublic-relations-in-politics/ The Effects of External Forces in a Public Relations .... https://smallbusiness.chron.com/effects-external-forces-public-relations-market14028.html https://sarahaasullivan.wordpress.com/2011/02/21/pr-and-economics/ https://www.forbes.com/sites/kenmakovsky/2013/02/28/the-impact-of-the-economyon-public-relations/#45b9a7f84e01 The Effects of External Forces in a Public Relations .... https://smallbusiness.chron.com/effects-external-forces-public-relations-market14028.html The PR Behind Gas Prices - TrendKite. https://blog.trendkite.com/trendkite-blog/the-prbehind-gas-prices How Tobacco and PR Grew Up Together - SourceWatch. https://www.sourcewatch.org/index.php/How_Tobacco_and_PR_Grew_Up_Together https://www.statista.com/topics/3521/public-relations/ https://glean.info/8-successful-strategies-pr-agencies-use-win-new-clients/ Show me the money - PR agency pricing structure .... http://getmustr.com/blog/showmoney-pr-agency-pricing-structure-fundamentals-2/ https://case.edu/finadmin/controller/pdf/accounts.not.chargeable.to.federal.governme nt.pdf 2018 Tax Changes for PR Owners and Their Agencies - Thu .... https://www.odwyerpr.com/story/public/10086/2018-01-25/2018-tax-changes-for-prowners-their-agencies.html