2002

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2003

*

2004

*

2005

(Est

imat

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2006

(Est

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1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000N

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Year of Enrollm ent

DICE MARKETING PLAN

OUR CUSTOMER

Total MarketAll universities and colleges are our target customer for DICE. By the nature of

these institutions, our secondary customer is the faculty and students who will be using DICE to enhance their educational journey. In the fall of 1999, the US Department of Education reported that there is 39581 degree granting institutions. This is the total number of possible customers that DICE can reach. When determining our actual market share for the services that we will provide, this number decreases roughly in half. Of these degree granting institutions, 56% (as reported in 2005 and published by Sloan’s Consortium) have identified online education as a critical long-term strategy2. Additionally, United States online enrollment increased from 1.98 million in 2003 to 2.35 million in 20043. These figures, as well as estimated figures can be seen in the chart pictured at right. DICE’s benefits can be realized in the traditional full-time on-campus student profile exhibited by all of the degree granting institutions. However, the benefits are expressed in greater quantity to distance and online education curriculum in these institutions.

First CustomerFor our first instantiation of DICE, we have selected Old Dominion University as

our premier customer. The reasons for choosing ODU relied on two items: this is the current university that the DICE development team attends and ODU has a vested interest in the success of their distance education program. Old Dominion University is one of the largest providers of distance learning degree programs in the country. It serves over 4,000 students at 50 sites in 6 states and U.S. Navy ships deployed around the globe. These also reflect students who are enrolled at certain sites, but attend their classes in the online setting.

1 http://nces.ed.gov/programs/digest/d01/dt180.asp2 http://www.sloan-c.org/resources/overview.asp 3 http://www.sloan-c.org/resources/overview.asp

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1984-1985 1989-1990 1994-1995 1999-2000 2004-2005

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ODU Distance Education Enrollment 1

Additionally, as outlined in Old Dominion’s Strategic Plan, ODU is committed to providing quality student support services to students who are in distance education and strives toward providing services that are at least as good as the services provided to the on-campus population. This commitment to distance learning is clearly explained in the 6th goal of ODU’s Strategic Plan.

Old Dominion University’s 2005-2009 Strategic Plan Excerpts:“6a.1 Develop new programs or enhance existing programs in all academic

colleges that focus on regional needs or “changing lives” within the region.”

“6b.1 Strengthen our current distance education programs across the Commonwealth of Virginia and the world, specifically through special accessibility agreements with Virginia community colleges but also by initiating new global programming.”4

Secondary customers Identified

Finally, our secondary customer becomes the faculty and students who will ultimately use DICE. Our product will be based off of the idea of community. The educational community aspect will be the key element that truly separates DICE from any other product currently on the market. By looking at the success of similar community software packages, we can ascertain the potential success of DICE. Using the product Facebook (http://www.thefacebook.com) and MySpace.com (http://myspace.com), we can draw comparisons to the societal acceptance of online communities. Each of these companies reported roughly a three hundred percent increase

4 http://www.odu.edu/ao/affairs/odusp2005%5B2004.12.10%5Dbov.pdf

in daily reach, with Myspace.com reaching upwards of 25 billion people logging in per day. The trends of society flocking to some type of online community is described in the following charts detailing the two companies mentioned above.

OUR COMPETITION

The following chart details what features DICE brings to the table in comparison to current technologies that are available. As you can see, many other products come close to a complete solution for distance education community building. However, they either lack in functionality or lack community.

Most Instant Messaging clients do not include any type of community. They rely on the user to create their own community. This however presents the problem when a student does not know who they need to add to their community. The current academic products of our competition create a community. However, this community is limited to a single class. If students need additional help, these products do not address this.

All of the features that need to come together to create the comprehensive solution are not available in any existing product. DICE creates the online community and adds each of the modules of communication that are necessary to facilitate the learning environment. Therefore, as shown in the matrix above, DICE is clearly the only solution for colleges and universities who want to facilitate the learning process for their online or distance education faculty and students.

BENEFITS TO CUSTOMER

What physical items are purchased?

As shown in the above figure, schools will receive DICE, along with Training Materials, and a custom interface to their own Student Information System (Banner, Oracle, PeopleSoft, Matrix, Datatel, etc.). This listing is subject to change as new releases or versions of DICE are instantiated. These three items are outlined below:

Training Materials

o 20 Printed User Guides

o 20 Electronic User Guide (in PDF format) on CD

o Sample of Promotional Materials to Use for Faculty/Staff/Student Acceptance

o 20 Hours of Onsite Training from a DICE Expert to each school’s identified support personnel

Interfaces

o Customizations as detailed in the purchase agreement

o Documentation describing interface links and data mapping

DICE

o Initial setups to link to your database of choice

Supported databases include (MySQL, Oracle, SQL, Solid, Access)

o Installation of client/server and web based tools for management staff

o Customizations as detailed in the purchase agreement

o Reporting mechanisms as detailed in the purchase agreement

What is not in the box that is required?

o Database to house DICE community information, archived communications, and management data

o Local support staff (1 staff member per 10,000 students recommended)

o Peripherals needed to use certain features of DICE (i.e. computer speakers, microphones, etc.)

What Do You Get That is Not in the Box?

When purchasing DICE, your benefits will start coming in a chain reaction fashion. Starting with a higher retention of students and ending with increased money from tuition payments of these retained students. Learning communities, like DICE, will increase study with others by 20%5. This amount of increase is key to retaining freshman who will get lost in the shuffle, for recruiting non-traditional students, and for offering support to students in higher level classes.

Benefits of Learning Communities:

Once student retention is achieved, federal funding will increase. Although it may be a bad indicator, graduation rates are key in determining how much federal funding a school will receive. To the federal government, higher graduation rates are an indicator that the institutions are performing well. However, this does not take into account the non-full time students, who decrease this number drastically. DICE will help to even the playing field in this regard. Students will be able to take more classes since the amount of time they spend looking for help will be reduced to a negligible number. This idea will help ODU tremendously, since they have one of the lower graduation rates for 4 and 5 years in the Commonwealth of Virginia.

Graduation Rates in Virginia:

5 http://cade.icaap.org/vol5.1/8_powell_et_al.html 

Finally, a return on investment for schools is in the increased tuition that they will see from student retention. Just bumping up retention or recruitment to one percent well outweighs the monetary cost of DICE. In the example below, we can look at the benefit that ODU would receive if one percent of their student population took 12 credit hours more than usual. This directly relates to retaining freshman and increasing the amount of classes that part-time students can take.

If we can increase ODU enrollment by 1%

o 208*12*181=451776

student * 12 hr * $181 cost per credit hour = $451,776

o $45,1776 * 2 semesters = $903,552

o Annual comparison:

1% retention/recruitment +$903,552

Cost of DICE -$35,000

Increase realized by ODU +$868,552

CUSTOMER RETENTION AND NEW CUSTOMER SOLICITIATION

We will need to continue to address the needs of our current customers, as well as using them to promote our product. We will employ certain forums that will encourage the word-of-mouth sales tool. Using word-of-mouth publicity, we can reach markets without spending a lot of time and money. In essence, we are employing our customers to create the buzz on DICE to increase our customer base.

Our post-sales/retention plan consists of:

1. Educational conferences2. User Conferences3. Training of users

o Step-through demoso FAQ listingo Online help “wiki” formato List serves

4. Customer feedback forums5. “Golden User” reviews

We will explore what Educational Conferences are attended by faculty and administrative officials who make decisions on IT solutions and on distance education curriculum. Some conferences that we will plan on attending include: Annual Conference on Distance Teaching and Learning as sponsored by the University of Wisconsin-Madison, TCC Worldwide Online Conference as sponsored by the University of Hawaii, etc. Once our customer base increases to several institutions, we can then create our own annual User Conference where we can facilitate the word-of-mouth publicity. Finally, we will create an intensive company website that will allow customers to get direct feedback, updated notes on DICE and the company, and online tutorials/help. Each of these items will be available to current and interested customers so that the materials can play a dual role of education/support and marketing.

BREAK EVEN ANALYSIS

DICE will use a strategy to bring its first customer on-board at a special discounted price. This will allow our product to take root into the market and create a buzz. Since DICE will be roughly $379.000 shy of breaking even (after the federal grants are applied), we will be able to sell this product to ODU for a $10,000 one time fee. The next cost that must be considered is the recurring cost, or OutYears cost of DICE. This is roughly $524,000. It makes absolutely no sense to license this product to one individual school for such a large amount. Just looking at the recurring cost quickly, we can see that 10 schools paying $75,000 one time setup fee and a $35,000 yearly licensing fee will cause a break even point. The DICE staff has agreed that setting a goal

of the break even point to be 10 schools is acceptable. There are 29 potential customers in the commonwealth of Virginia alone who we can sell DICE to. Additionally, there are over 3900 schools where DICE is a product that may be of interest. This makes our break even point at .25% of the total potential market. Therefore, any amount that we charge ODU can be applied as promotional discounts. We have chosen $25,000 as the discounted yearly licensing fee for ODU. This number was derived as a medium point so as not to have the discount a stumbling block or point of frustration for new customers.

The chart below shows our break even analysis in simple form:

Total Cost of DICE -$1,228,928Phase 1 grant $100,000Phase 2 grant $750,000Initial Amount in Deficit -$378,928ODU Implementation $35,000OutYears Cost - Year 2 -$545,765ODUI + 6 new clients $685,000Year 2 Earnings -$204,693OutYears Cost - Year 3 -$545,765ODU+6 old clients + 6 new clients $895,000Year 3 Earnings $144,542

After DICE is rolled out to around 6 customers, we will start seeing a net profit on a yearly basis. We estimate that DICE can be safely rolled out to 6 schools each year. This means a new implementation will occur every two months. By maintaining the staffing plan that we have for Phase III and the OutYears, we should be able to sustain this rate of implementations for many years.

A chart listed below shows our net income potential on the basis of charging customers (after ODU) a price of $75,000 one time set up fee and $35,000 yearly licensing cost:

Customer # Years Amount Profit/Loss1 - ODU 1 ($343,928)

7 2 ($204,693)13 3 $144,542 19 4 $703,777 25 5 $1,473,012

($343,928)($204,693)

$144,542

$703,777

$1,473,012

($600,000)($400,000)($200,000)

$0$200,000$400,000$600,000$800,000

$1,000,000$1,200,000$1,400,000$1,600,000

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