Potential market

SECTION I: The product

 

1a The innovation potential of this product is related to:

  • Technology-driven innovation (under the influence of the development of science – the market is not ready for the product)
  • Market-driven innovation (as a result of market surveys, the market expects the product)
  • Replacement of existing product
  • Product related to cost reduction
  • Radical new product
  • Other, what…
As a matter of fact the original idea was followed by the observation of the designers. From that point an extensive market survey and competitor analysis began. From the beginning the designers refused to think in portable personal solutions. The designers observed that people on the beach form private islands (members of the family, friends, couples, etc.), and whatever resource is already in this island could be utilized for the beach safe purpose. The beach umbrella was identified as the most general, and already-there object. This proposed product fulfills the function of a beach umbrella stand and a safe. In this context the introduction of this product to the market could be considered as a replacement of an existing product or an introduction of an extended product. Nevertheless the safe function is the primary function, as the voice of the customer is much louder.

 

1b What added value for end-users does the product hold?
• higher quality
• Better technical characteristics
• Other …
The security issues are always difficult to handle. Phrasing it exaggeratedly: no one is willing to pay for it as long as they are not thieved. People sometimes tend to think in a big way that it will not happen to them. Moreover, those who actually think about security issues they think in probabilities and not in possible losses. It is very difficult to distinguish between safe and safer solutions. That is the reason behind that the product not only looks safe but it is safe. If the level of safety is a competitive factor (it is supposed to be) then the product holds the added value of both higher quality, and better technical characteristics.

1c What is the Unique Sales Proposition of the potential product?
The safe, integrated design gives the uniqueness of the product. The look is robust, it is heavy, the applied concrete and stainless steel combination reminds the theft that it is not only the outside looks so, but usually the inside is safe. As it is not offered for the end-user to buy but for a company taking care of the beach, it must certainly be highlighted, that the availability of the beach safes is definitely an advantage for them and an added value for the user. There is an added value for the beach business company: the umbrellas are fixed from the safe room, so normally when the safe is in use the umbrella cannot be taken out from the stand. All those functionalities for the price of a European leading umbrella stand.

 

SECTION 2: The Market

 

2a What is the target market for the product?

National ¨

European ¨

Global ¨

The market is global as the phenomenon is global. Everywhere around the world at lakesides, sea sides, any kind of open air beaches or baths can use the product. It can be the part of the service or can be operated in rental. The product can be sold to hotels, or any enterprises operating campings, beaches. Providing the service in question the hotels and beaches are able to gain comparative advantage, or it might be a standard on the long run (just as any other condition of hotel stars).

 

2b How the product is characterized from the following options? Number of companies producing similar products in the field.

• Base – applied by all companies in the industry

• Leading – applied by a single or limited number of competitive companies

• Key –at a development stage, but has already proven its potential

The product should be characterized as a leading product, though the core problem has many-many alternative available solutions. The distinctive quality is physical safety. If only the beach-umbrella related alternatives have to be taken into account, there are only three major competitors, all of them provides lower level of physical safety.  Some patents are also dealing with the integration of the beach umbrella and a safe (e.g. US PAT No. US7021866).

 

2c What type of market demand will be satisfied?

• Existing demand – the market is already developed

• hidden (latent) demand – the market has yet to be developed

The market demand is existing in the sense that the initial problem exist and competitor product are available. On the other hand the market has to be developed, since the available solutions are not general in the service palette. An intensive market development effort has to be made to convince the business actors and to reach the end-user to raise the demand.

2d What is the current stage of the product’s market life cycle?

• Implementation, implementation in production (leading to a radically new product offers)

• Growth (rapid spread within the industry or outside it)

• maturity (parameters of the technical characteristics of manufactured products reached their maximum, higher-grade products can be manufactured on the basis of technological substitution)

The type of product is in the first half of the growth phase, with moderate speed of spread. Many customers are not aware that the mentioned solutions exist. The major competitors came out with their model in three years time, so they are in a little advantage. Controversially, from the aspect of the beach operators the technology push strategy did not lead to mushroomed beach safes. The manufacturers of the security devices should also target possible users to put also market pull pressure on the service providers. The competitor products’ price is in the range of the 20-40 $, while a better quality umbrella stand is around 250 $. The stand is only needed when the ground is impossible to drill the pole into, or when it takes non-reasonable effort to drill an other hole just to move the umbrella. On the one hand it is not impossible to reach a 150 $ (100 EUR) per unit price with the proposed product. On the other hand a rental system seems to be viable.

2e Strategic partnerships (existing or potential).
In the case of the proposed product there is no existing strategic partnership. And in this case it is not even necessary to have such a cooperation in this phase of the product life cycle. The common marketing channels does not mean an extreme market advantage, the raw materials and technologies are available and subject to bargain. Later on it is possible to set up a strategic partnership with a beach umbrella manufacturer, or a safe manufacturer, even with a security company.

SECTION 3: The Competition

3a What is the competition within your target market?
The same kind of a product is not produced by any competitor company. The closest competitor is U.L.O. Beach Safe (Montclair Beach Products LLC, Montclair, NJ, USA) (40$), there is SafeTBox (Safe T Box Ltd., London) (rental system), and Beach Safe (Secure-It, Inc., East Longmeadow, MA, USA) (20$). SafeTBox is the fastest growing company out of the three, the product appears in hospitals and hotels as well.

3b What competitive advantages will the introduction of the new product ensue?

• lower prices based on lower production costs

• product differentiation (uniqueness of the product proposal)

The main competitive advantage is that from the unsafe situation the product in the proposal offers an extremely safe situation. The product is built up from durable, heavy materials, the weight in itself is an advantage both in the safe function and the umbrella stand function. Compared to the closest competitors the security (function) /cost ratio might be higher in the current case. The market tests will show the willingness to buy and the price sensitivity of the potential customers. The competitive potential of the price is questionable here, although taking the double functionality into account the price seems to be reasonable.

 

3c Potential products relate to the following price range:

• High price range

• Average price range

• Low price range

Taking pricing into consideration the product cannot be classified into the common ranges. The product provides a service, the price of which is even hard to compare to something, since we do not what to compare to. If we compare to the closest competitors, it is a high price range, but with recognizable additional value. When compared to the umbrella stands it is mid price range, but with a recognizable added value. When the safety / cost ratio, or the expected value of the possible loss in case of a theft is in the focus, its price is in the “reasonable” range. On top of that a maintenance-free, very durable product will gain income for the company for decades.

 

3d Potential products will be marketed:

• To regulated markets (e.g. heat supply, water supply, universal telecommunication services, agricultural products, fishing industry, architectural services)

• To markets operating on the principle of free negotiation between agents on the market

The proposed product will be marketed to markets operating on the principle of free negotiation between agents on the market. The pricing will be dependent from the models of sales or rental.

 

 

SECTION 4: Indicators

 

Estimated cost of the new products 80 EUR
Expected market volume (potential / maximum number of users) 10,000 (HUN)
Expected sales volume 100 (1st year)
Expected market share of the company (proportion between sales and total company sales in the relevant market) company dependent

 

KEYWORDS QUANTITATIVE ASSESSMENT (0-5).

 

Please put X as appropriate. 1 2 3 4 5
Added-value potential         X
Size of future market demand       X  
Competitive positioning of the product         X

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