Marketing and Sales Activities
The primary objective of Mindshaker's marketing program is to build brand equity and establish key business relationships. These factors are critical for success in the electronic commerce industry and can also serve as substantial barriers to entry (See Exhibit 3). The message and "brand" Mindshaker will establish with its target market is that Mindshaker is "the complete source for all educational materials."

Mindshaker's marketing and sales programs will be implemented in conjunction with the phased rollout of the business to selected graduate programs. This strategy allows Mindshaker to tailor its marketing efforts to each school if necessary and continually improve its efforts as new schools are added. A variety of marketing tools and programs will be used to reach Mindshaker's two primary customers, professors and students. Some of the tools are specific to either professors or students while some apply to both and build overall brand equity. Described below are Mindshaker's initial marketing tools, positions, programs, etc...

Campus representatives

Student representatives will be hired at each school to provide a physical presence on each campus to perform duties such as marketing materials distribution and acquisition of target market distribution lists and facilitation of on-campus marketing programs such as presentations to professors, advertisers, and students. Representatives will receive one per cent of sales generated at their respective school. (See Exhibit 2)

The part-time regional sales and marketing representatives

These individuals will be responsible for managing the marketing campaigns at 30 schools, initiating and maintaining relationships with campus bookstores, and establishing critical business relationships with professors and other key campus personnel. This position will receive an annual base salary of $10,000 plus two percent of the sales generated in his/her region. (See Exhibit 2)

Advertising

Mindshaker will use university newspapers for campus-wide marketing efforts. Half-page advertisements will be run at the beginning of the fall semester and before winter break. During the first year of operations, Mindshaker will run four consecutive half-page advertisements to build brand equity prior to students leaving for the summer.

Personal letters to professors

Formal letters will be distributed to all graduate professors at each school. The letters will describe Mindshaker's products and services and how they can benefit professors. The letters will invite the educators to visit our site, post their syllabi, and also to introduce Mindshaker to their students. As demonstrated in the value-net analysis (Exhibit 12), professors are an integral component of Mindshaker's business and every effort will be made to ensure they understand the benefits of Mindshaker. Each letter will be followed-up by a personal phone call to verify receipt of materials and answer any questions regarding Mindshaker offerings.

Relationships with key opinion leaders and administrative assistants

Mindshaker will target relationships with two key personnel on each campus. The first person will be a faculty member or school administrator who is respected by their peers and is a champion of e-commerce and the application of technology for improved learning methods. The second person will be a seasoned administrative assistant on campus who is knowledgeable about all professors and can serve as a key information source.

Trade shows

Mindshaker management will aggressively attend selected trade shows to introduce our business to professors, publishers, and other stakeholders to further build brand equity.

Direct mail flyers

Mindshaker, via the campus reps, will distribute flyers to the lockers and mail slots of graduate students at the end of each semester to remind students of Mindshaker's services prior to the beginning of the subsequent semester. Flyers will be printed at a central location and shipped to each school. This approach ensures message consistency and substantially lowers the printing cost due to massive volume discounts.

Distribution
Distribution services will be outsourced to USCO Logistics, a national third-party logistics provider, headquartered in Naugatuck, Connecticut. USCO Logistics was founded in 1967 as a division of Uniroyal, Inc. USCO operates 10 million square feet of shared and dedicated distribution space for some of the world's largest and most respected companies.

The USCO Shared Logistics Division will handle the distribution of all Mindshaker products. USCO's Shared Logistics Division provides an in-place nationwide network of public warehousing and distribution centers for companies with a need for a high performance, yet flexible distribution infrastructure. USCO will not be a financial partner in Mindshaker's business, but instead will be the logistical management arm of the company. After Mindshaker has achieved a high volume business, management will consider partnering with USCO or another logistics provider in a more formal manner.

USCOs Shared Logistics Division offers the following benefits to Mindshaker:

• Nationwide facilities with networked communications capabilities.
• Standardized operating procedures in all locations.
• The ability to contract and expand with Mindshaker's business cycle, in terms of space and labor requirements.
• Economies of scale due to the sharing of overhead costs.

Mindshaker plans to begin operations with one central warehouse in order to keep inventory levels low as management gains more industry knowledge and increases its competencies in inventory management. Shared warehousing is also cost-effective, as Mindshaker will pay only for the space and services it needs. Additionally, a comprehensive line-up of value-added services will allow us to outsource as much of our logistics operation as necessary. Shared warehousing is especially attractive to Mindshaker due to the ability to distribute goods from multiple locations as our market penetration and sales increase, as well as offer services to deal with our changing distribution needs.

USCO will receive, inventory, pick, pack, and ship all Mindshaker products. This outsourcing will allow Mindshaker management to concentrate on our core competency and rest assured that the distribution of our products is in good hands.

Mindshaker will use the Lenexa, Kansas USCO facility due to its central location. This will allow for 2-3 day delivery to all of our customers. All products will be delivered by UPS ground service.

Product orders will be determined by the booklists of Mindshaker's target schools along with management's estimates of market penetration. The orders will be electronically transferred to the appropriate publisher and freight shipped to USCO Logistics where the product will be held in inventory. Individual customer orders will be placed through the Mindshaker web site.. processed by the company database, and then electronically transferred to USCO Logistics, where the order will be filled and delivered directly to the customer. Costs for USCO's value added services are based on the volume of product that will be processed, as well as the type of services we utilize and the inventory levels that are stored. Initially, we will need only basic handling and packaging services. Our inventory levels will be high at the start of each semester, until Mindshaker is able to more accurately determine market penetration and demand. Initially, the costs for procurement, inventory, handling, and shipping are approximately $6 per transaction. We expect these costs to decrease in the future through bulk shipping discounts and volume induced reductions in handling charges.

Services and Pricing
Mindshaker is proud to offer a guaranteed 14-day return for all products that are in resale condition. Mindshaker will not offer a book buy-back service-, however, the web site will feature tips on selling books and information on links to web-based companies that offer this service. A flat delivery charge based on the dollar amount of the order will be assessed to all customers. This reduces the hassle of determining shipping rates based on the total weight of each order. The normal delivery charge for textbook orders will be $4.95. Mindshaker will provide a toll free customer service number during business hours, to assist customers with web site usage and order tracking, and to answer questions regarding our products. A full-time general administrator will be hired to monitor the day-to-day operations of Mindshaker. This individual will be responsible for direct customer communications via email and telephone, data management, document acquisition and verification, customer service, and other duties as assigned. (See Exhibit 2)