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…
This R&D result is partly technology-driven innovation, but due to its significant aid in production cost reduction, prolonged service life, lowered fuel consumption and decreased environmentally harmful emissions, it is mainly cost reduction product. Among the main advantages is also the simple implementation without modifications in the production lines of the automotive manufacturers, allowing spearing time and money for the application of the innovation. It is not a secret – one of the main challenges nowadays is the environmental pollution and the air pollution in particular. The proposed R&D product owns a great potential facing this ongoing challenge.

 

1b What added value for end-users does the product hold?
• higher quality
• Better technical characteristics
• Other …
 

Currently widely used valve systems with springs are more complicated, expensive and less reliable than the proposed product. The possible end user will benefit mainly from lowered gas bills and prolonged service interval. The large scale substitution of the standard spring valve system with the springless product will lead to significant reduction of the raw materials, needed for manufacturing, as well as to noticeable decrease in the environmental footprint.

 

1c What is the Unique Sales Proposition of the potential product?
The proposed springless valve system leads to direct profit of the potential user as well as the manufacturer of the system. The lack of valve return springs simplifies the overall construction, not only directly lowering the costs of the system, but also reducing significantly the exploitation costs and lowering the fuel consumption of the engine. These features, combined with prolonged service intervals and lifetime makes the potential product well positioned one in the market grid. The possible user could be strongly attracted by the direct lowering of his servicing bills.

 

SECTION 2: The Market

 

2a What is the target market for the product?

National Õ

European Õ

Global ¨

Please describe the characteristics of your target market.

The target market Is focused as national to European. The acceptable price of the product plus the easy implementation without major changes in the production batch line and the direct benefits for the user makes it an excellent choice for building even in already manufactured and already serving internal combustion engines. Due to lack of serious competitors in Europe there are great possibilities for fast implementation and broadening of the market share.

 

 

 

 

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 could be characterized as a leading one, applied by a very limited number of companies. The intellectual property research has found three similar products and companies in USA and one, located in Europe. Considering the huge numbers of internal combustion engines already in service and entering exploitation every year, the competition influence could be considered as very low. So the development potential is strong.

 

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 technical decision will serve already existing marketing demand. The huge worldwide needs for lowering the consumption of fossil fuels, reduction of the environmental footprint of the automobiles and limitation of the raw materials, used for manufacturing of the goods, have already traced the demand for implementation of the springless valve systems. Due to the above-mentioned this system has strong marketing potential in numerous fields – automotive, various internal combustion engines, i. e. the innovation could be implemented on any batch production transport vehicle (cars, buses, trucks, fork lifting machines, marine engines and many other).

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 current stage of the product’s market life cycle could be named as “Growth”. The product could spread easily within the industry, especially when matching specific criteria and technical needs of the different automotive manufacturers.  The direct benefits of the technical decision are also highly attractive for the manufacturer to boost the implementation in the engines. The recovery of the world industry is marked by increased demand of automobiles and related products and this is the great opportunity for the company to take part in this recovery and successfully start implementation of the product.

 

2e Strategic partnerships (existing or potential).
There no existing partnership at the moment, however the perfect partnership could be with a well-known automotive manufacturer for direct implementation of the spring-less valve system in their engines. The grant of a license agreement is also a possibility, but the best result could be a strategic partnership or joint venture. The company could also seek contacts with the emerging automotive manufacturing in Bulgaria, in the face of the Chinese company Great Wall for possible use of their product in the production line of the company, aimed to the Bulgarian market and abroad.

 

SECTION 3: The Competition

3a What is the competition within your target market?
The main competitors are overseas companies and individuals, such as Pit Bull Products, Inc. (Huntsville, AL, US), Decuir Engine Technologies LLC and George Louie (Brooklyn, NY, US). All three have already patented utility models of spring-less valve systems. For example Decuir Engine Technologies LLC independently advertises and offers its technical decision as License agreement and as upgrade to individual automobile owners. They have also accommodated their technical decision to many different engines, mainly used in USA. Practically there aren’t any competitors an the European and the local market, which makes the task for successfully entering and enlarging market a little bit easier.

 

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 proposed system could significantly lower the production costs, while the simplified design will lead to easier production and implementation. The proposed system decision has some differences, compared to the proposals of the rivals, which result of less used construction materials and much better characteristics than the competitors. In addition the construction is more simple and easy to be manufactured. Due to the differences in the labor costs and the overall production costs, the NITI 95 project gains remarkable advantage in front of the rivals.

 

 

 

 

3c Potential products relate to the following price range:

• High price range

• Average price range

• Low price range

The potential product could be positioned in the mid to low end of the price range. It will lower the production costs due to the lowered amount of materials for manufacturing, simplified design, thus lowering the labor costs. The implementation of the system is relatively simple in any type of internal combustion engine, the spring-less valve equipped heads costs less than conventional model, yet boosting the characteristics of the engine. The relatively low cost of the modified system with its direct benefits for the end user, makes the spring-less valve system very attractive.

 

 

 

 

 

 

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. There is a good possibility for direct marketing of lots of the product, negotiating modification of the existing automobile fleets of the large companies – such as service and utility providing, postal, courier, transport and shipping. And interesting possibility for development is also a direct contact with a big taxi company for modification of their fleet. Also the main goal for long term development – implementation of large quantities in the production line of a strategic partner – automobile manufacturer.

 

 

 

 

SECTION 4: Indicators

 

Estimated cost of the new products 0.8M
Expected market volume (potential / maximum number of users) 1M – 2.5M
Expected sales volume 1M
Expected market share of the company (proportion between sales and total company sales in the relevant market) 20-25%

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