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This sample marketing plan was created with Marketing Plan Pro software.

The market and related entry strategy mentioned earlier in this marketing plan is reflected in the assumptions used to build the financial model and corresponding pro-forma financial statements. The management of OSS Telecom Technology, Inc. believes these projections to be on the conservative side and, therefore, very attainable.

Sales Forecast

Revenues are calculated separately for each product and for maintenance and consulting services. In addition, product revenue is broken out between new sales and upgrade sales. New sales and upgrade sales are further broken down into license, installation, and customization revenue. The products included in this forecast are customer care and billing (CCB) products, prepaid IN (PPIN) product, and short messaging (SMSC) product.

Pricing assumptions for licenses include a 10% discount from list for direct sales and 30% from list for indirect sales. Sales are forecast at 50% direct and 50% indirect resulting in a weighted average discount of 20%.

Pricing for licenses stays constant over the five year period. OSS Telecom Technology does not increase license pricing while significantly increasing feature set to maintain competitive pricing advantage over the five-year period.

Sales Forecast

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Sales Forecast
 FY 2004FY 2005FY 2006
Sales   
CCB (Unicorn & MEDUSA combined)$13,432,825$19,857,900$30,434,900
Pre-paid IN$3,715,905$7,136,300$10,317,800
Total Sales$17,148,730$26,994,200$40,752,700
    
Direct Cost of SalesFY 2004FY 2005FY 2006
CCB (Unicorn & MEDUSA combined)$1,679,105$2,482,238$3,804,363
Pre-paid IN$464,488$892,038$1,289,725
Subtotal Direct Cost of Sales$2,143,593$3,374,276$5,094,088

Expense Forecast

Presented here are the individual line items for OSS Telecom Technology Taiwan and OSS Telecom Technology as well as a consolidated summary of all company expenses.

Marketing Expense Budget

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Marketing Expense Budget
 FY 2004FY 2005FY 2006
Advertising/Promotion$946,800$1,098,000$1,185,000
Travel$3,060,000$3,186,000$3,297,000
Other$0$0$0
 ------------------------------------
Total Sales and Marketing Expenses$4,006,800$4,284,000$4,482,000
Percent of Sales23.36%15.87%11.00%

Linking Expenses to Strategy and Tactics

The following chart illustrates the relationship between sales and relevant expense categories aligned with our marketing strategy.

Contribution Margins

The following table presents the results of OSS Telecom Technology on an EBIT (earnings before interest and taxes) basis for the period FY 2004 through FY 2006. As the table demonstrates, the development of a worldwide sales and marketing team, continued product development, and the establishment of worldwide headquarters causes the company to be in a negative position in its early years.

Contribution Margin

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Contribution Margin
 FY 2004FY 2005FY 2006
Sales$17,148,730$26,994,200$40,752,700
Direct Cost of Sales$2,143,593$3,374,276$5,094,088
Other Variable Costs of Sales$0$0$0
 ------------------------------------
Total Cost of Sales$2,143,593$3,374,276$5,094,088
    
Gross Margin$15,005,137$23,619,924$35,658,612
Gross Margin %87.50%87.50%87.50%
    
Marketing Expense BudgetFY 2004FY 2005FY 2006
Advertising/Promotion$946,800$1,098,000$1,185,000
Travel$3,060,000$3,186,000$3,297,000
Other$0$0$0
 ------------------------------------
Total Sales and Marketing Expenses$4,006,800$4,284,000$4,482,000
Percent of Sales23.36%15.87%11.00%
    
Contribution Margin$10,998,337$19,335,924$31,176,612
Contribution Margin / Sales64.13%71.63%76.50%

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