Potential market

 

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…
Note: Select and explain for one of above options or (in case of non relevance) define another. We try to identify why this potential product constitutes an innovation offer
The innovation potential of this product could be classified as one related to a market-driven innovation, though the market does not expect this kind of product in particular. Yet,  there are products on the market of similar action and effect, but with different forms and shapes (a plastic pot for instance), which are much less convenient for use than the silver pen. They are not suitable to be carried and always be at hand no matter where and in what conditions an individual is – at home, in the open, touring, working, sunbathing along a river coast or a lake, etc. With that in mind, the product’s innovation potential could also be categorised as one related to the replacement of existing products. The silver pen is very compact in size and shape and can easily be carried and used by an individual no matter in what conditions. In this regard the product would respond to a need to have something compact always at hand, when one wants to drink water of questionable drinking quality. Moreover, the water treated with this silver pen is disinfected at 100%.

This is also a product related to cost reduction. The product is very user-friendly and has low price – about 35 EUR a piece.

The market application is rather new. The product is expected to have great demand once on the market.

 

 

 

1b What added value for end-users does the product hold?
• higher quality
• Better technical characteristics
• Other …
Note: Select and explain for one of above options or (in case of non relevance) define another. We try to identify what new this potential product constitutes in accordance to the existing market status.
1. This is a product of high quality that achieves 100% disinfection of water.

2. It has a relatively low price.

3. It is very convenient for individual use.

 

 

 

1c What is the Unique Sales Proposition of the potential product?
Note: What makes your product unique in marketing terms? This helps your prospects to understand why they should buy from you rather than other existing product options.
 

The features that make the product unique in terms of marketing actually stem from the added value for the end users:

  1. the product is very compact in size and shape (as big as a pen) and hence – very convenient for individual use and for having it always at hand.
  2. It is very easy to use and the effect of its application is in place in only 10 min.
  3. Has a reasonable price – 35 EUR per piece. NB: this is the price at the present moment when the company is producing only individual pieces. Once it starts being produced in larger series, the price could go down as much as 25 EUR per piece. If made in mass production, it is even expected to go down to 20 EUR.

 

 

SECTION 2: The Market

 

2a What is the target market for the product?

National ¨

European ¨

Global ¨

Please describe the characteristics of your target market.

Note: Define the market range, the size of the target market (if possible) in terms of maximum product units
The target market for the product is the global market. Since the silver pen can be used any time, even as prevention when drinking water from the water tap (faucet), is has in practice unlimited market potential. In terms of precaution measures it could be used in a wide range of areas – everyday-use for water disinfection especially in spring and autumn, when there is a boom of infectious diseases (flue, cold, etc). It could as well be used for washing fruits and vegetables with water that has been disinfected with the help of the silver pen – this water cleans away the bacteria from the outer surface of the fruits and vegetables.

 

 

 

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

Note:
 

None of the above categories suits precisly the product. Similar products are produced by many companies, e.g. Plastic pots for water disinfection on the basis of silver and electrolisys, but they are not as tiny and convenient for carrying as is the silver pen. No products of size similar to that of the silver pen have been identified on the market.

With this in mind the product could be considered as key to the market.

Yet it has not got much novelty in the principle of its operation (disinfection with silver is known for centuries)  except for the form of the pen (the metal body with silver electrodes, made in the form of a pen, with a light at one end of the pen indicating the timing when the pen can be taken out of the water, i.e. it has achieved its effect), so this could rather categorise it as a base product, with a variety of anaolgues on the market, thought with certain disadvantages compared to the silver pen.

 

 

 

 

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

Note:
 

There is demand on the market and awareness of the end users of the effect of silver disinfection of water. However, the product has great market potential as it is very small in size, very convenient for transportation and use, has very wide application in people’s everyday life, and hence has significant market potential.

 

 

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)

Note: At this point we refer to the life cycle of the market related to the product. I.e. a product based on a new technology area (e.g. solar energy cars) is considered to be in the first phase of the life cycle when e.g. a typical TV set is in the maturity phase
 

The market life cycle related to this product is I its maturity stage.

The silver water effect is well known for ages. There are many other devices on the market for water disinfection on the basis of silver ions and electrolysis. The novelty of the product in question is in its tiny form and shape which allows for very wide application by any individual, any time, no matter where – at home, in the open, traveling on business or tourism, etc. And this is exactly what the market advantage of the product is in comparison to other similar products.

Industrial production in big series is still ahead. Currently the company produces the product in small series.

 

 

2e Strategic partnerships (existing or potential).
Note:
 

For a small-scale production the company (as is at present) needs a partner for distribution and sales.

For large-scale production the partnership sought would also regard investment in a production site – through joint venture, or bank loan for the investment, as well as for distribution and sales of the product afterwords.

 

 

 

SECTION 3: The Competition

3a What is the competition within your target market?
Note: Refer to other companies producing the same product
 

There are companies offering similar products. But their products are not so tiny in size. Besides being bigger in size, they have PVC body, whereas the silver pen has aluminium body. In the competitive product – the water pot in particular – the container where the water is stored and the electrolysis element are together in one and the same unit. In contrast, the silver pen can be used for any kind of container where the wter is poured in order to be disinfected. The Galvano company is the only producer of this kind of product so small in size. It could even be modified nad produced in even smaller size without affecting the effect of its application.

 

 

 

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)

Note:
  1. Very good quality – the silver pen has aluminum body, not PVC.
  2. .Very long exploitation life. One silver pen has the capacity to  disinfect about 18 000 litres of water, which makes around 70-80 000 glasses of water. After the silver electrode and the battery are discharged, exhausted, they can easily be replaced with new ones, which gives the pen very long exploitation life.
  3. Very tiny and compact in size and shape. Has the shape of a pen and weighs 43 grammes only.
  4. Low production costs – 15-20 EUR a piece.
  5. Very wide area of application: (I) can be applied in any kind of container with water, (ii) can be applied whenever needed – at home, at the office, in the open, when traveling on tourism or on business trips, etc.

 

 

 

3c Potential products relate to the following price range:

• High price range

• Average price range

• Low price range

Note:
 

The prototype costs around 35 EUR – market price for the end user. This means that if large-scale production is organised, the production costs will be optimised and reduced and will go considerably lower. This would, in its turn, lead to a larger margin in the market price.

The price is affordable to all categories of end users. In this regard the product could be considered as one related to low price range.

 

 

 

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

Note:
 

In general, when intended for end-users (individuals, or companies) the product will be marketed on the general markets. Yet, due to its wide applicability and functionality, it could be supplied to the army, to Development Assistance organisations (providing support to Africa, etc.), to the Red Cross or similar organisations. In those cases the sales and supplies might fall in the regulations of public procurement procedures.

 

 

 

 

SECTION 4: Indicators

 

Estimated cost of the new products 35 EUR at the moment, in small quantities.

25 EUR if organized in mass production.

Expected market volume (potential / maximum number of users) The local market (BG) could be around 300 000 pieces. Unlimited market for end users – any individual.
Expected sales volume 25 EUR market price  – 7 500 000 EUR for 300 000 pieces on the BG market.
Expected market share of the company (proportion between sales and total company sales in the relevant market) Cannot be assessed at the moment.

 

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