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…
The innovative concept is related to an original problem finding, i.e. that the light sources were designed to provide illumination, and mostly the state of light emitting (functioning) was taken into consideration in the design, and the “switched-off” state was considered as secondary. Furthermore the latent demand of personalization was a driving force of the innovation. The concept could be considered as a novel approach for existing problems, this way a replacement of existing products. Wall mounted light sources are available, some of them utilizes LED technology. The innovation is in the integrated approach and the synergic solution. The innovation is carried out through the toolset of industrial design.

 

1b What added value for end-users does the product hold?
• higher quality
• Better technical characteristics
• Other …
Novelty, oddity, rich aesthetics, fresh design, etc. integrated in a functional, everyday-life product – that is the added value of industrial design. This added value is purchased with the product. In function there is needless to search for innovation. Turn on, turn off, adjust the amount of the light. The solutions this case are more interesting. The amount of light can be adjusted by adding ore removing lighting units. The whole composition can be rearranged within the purchased amount of pieces.

1c What is the Unique Sales Proposition of the potential product?
On top of the other added values the competitive advantage is provided by the possibility of customization / personalization. “You and your neighbor do not have the same!” There is a variety of 7 different base units, alternatives in color, so eventually a virtually unlimited combinations of the modular elements. Still the composition can be rearranged, lighting units can be added or removed.

 

SECTION 2: The Market

 

2a What is the target market for the product?  

National

European

Global

Please describe the characteristics of your target market.

The basic target market is Europe, though the product could be shipped to any other countries. The target market is the average people, 18-40 years of age. The target market is sensitive to new solutions, not only the innovators, but the early adopters. Design solutions typically target those groups. The other characteristic of the target market is the environmentally consciousness. The product is an example of mature eco-design; the use of materials and technologies, just as the energy consumption makes the product sustainable.

 

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 proposed product is a design variation to serve for illumination purposes. In this meaning it is a base product – most of the companies in the lighting business has wall mounted LED light source. When moving from the core function to the sophisticated services it will be revealed that taking the complex functionality into consideration, the number of competitors decreases drastically.

 

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 proposed product satisfies a latent demand. It has been observed that – in other product markets – people have the need to personalize their living environments. The other feature, which might be acknowledged by the market is the possibility to rearrange and reorganize the elements of the composition by the user at any time. There is no factual proof (survey results, market studies, etc.) about the willingness to buy, so the team should be ready to develop the market.

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)

Design is changing fast, the design trends are changing fast. The proposed concept is a leading-edge solution of a kind, still it belongs to a mature market. If LED technology is taken into account, and the novel market niche is considered it is surely in the market introduction stage. The target market characteristics also determine the marketing strategy to be directed to put a high effort in promote the product.

2e Strategic partnerships (existing or potential).
The primary strategic partnership is between the Institute and the cooperating company. As the lighting design is an extensive field of design projects at the University, the cooperating company has a significant experience in design as well. In the prototyping experience there exist key importance partners, which the company could count on. The company is a wholesale dealer at the same time, so the future product would benefit from the broad trading partnerships of the company.

SECTION 3: The Competition

3a What is the competition within your target market?
A little number (10-20) major alternative designs were identified as competitors of the proposed concept. There is one competitor product to highlight, because they have literally the same design thinking. The unique, brilliant “Origami” lamps designed by Ramón Esteve for VIBIA. This lamps created from Polycarbonate diffuser, each part 1 x LED strip 24V 17.2W. ORIGAMI lighting is adapted for outdoor (IP65) settings which you can construct to climb a wall or facade like ivy. The source is a LED light, guaranteeing high- efficiency energy consumption. As they describe, they followed the same approach. “Walls delimit spaces and are the main support for decorative elements; they hold up pictures, murals, photos, shelves, etc. Lighting elements can perform this personalization function, which is why Vibia has created a new product category: ORIGAMI blends light functionality with an opportunity for artistic creation. With just two pieces, interior designers can create infinite compositions. With a single plug-in point and no need to embed, you can make as many configurations as you like.” There are a few competitors who realized the same opportunities. The average composition estimated to be sold is 10 units at a time.

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 competitive advantage has to be measured according to the purpose, the set of functional goals of the competitors. Design extends those functionalities from the technical-economical level to the individual psychological and social levels. The competitive advantage of the proposed product is that it gives something to the latter by the means of design.

 

3c Potential products relate to the following price range: 

• High price range

• Average price range

• Low price range

The proposed product relates to the average price range, meaning the circle of closer competitors. The price range could be considered a high price range in comparison to the global market of lighting units. In pricing the price range of the competitors has to be kept, some lower than the others. This might be facilitated by lower costs of production.

 

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 potential products will be marketed to markets operating on the principle of free negotiation between agents on the market. Pricing and sales indicators have to be identified, since the product is a modular system. The calculations and estimations assume that there exist an average unit as the “building block” of the system.

 

SECTION 4: Indicators

 

Estimated cost of the new products 25 EUR / unit
Expected market volume (potential / maximum number of users) 20 million
Expected sales volume 12000 units
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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