Marketing_Plan_for_Bathroom_Fixtures_in_Canada

Marketing Plan for AQUASTAT [pic] Prepared for: G. Liberatore November 23, 2004 Executive Summary The Market for bathroom fixtures and accessories is ever increasing due to information provided that Canadians and Americans will be heading toward a water shortage if they continue with their current water usage. Currently there has been an increase in water saving products in the bathroom fixture market. These products are designed to use less water than the traditional ones that were originally installed in most homes. Aqua Fixes is a small corporation that was established in 1985. The products that our company produces include shower fixtures and shower accessories. Our company name has become increasingly known over the years. Currently our products can be found at all location where bathroom fixtures and accessories are sold. As well our products can be found in all building supply stores. We offer a variety of products to consumers and home renovators including numerous models of shower heads and portable whirlpools. The objectives of Aqua Fixes and the Aquastat are to satisfy customer needs in regards to reducing water consumption and also to offer customers products that increase safety and reduce the number of hazards associated with the bathroom and bathtub. Our company thrives on social responsibility and we aim to help customers incorporate products into their households that increase their awareness of social responsibility. Our company’s main marketing strategies and objectives are to provide top quality products at reasonable prices to consumers. Table of Contents Current Marketing Situation Analysis 1 Product and Service Review 1 Market Overview 1 Bathroom Market in General 1 Trends and needs 1 Environments 2 Demographics 2 Economic 2 Technological 2 Political 2 Legal 2 Cultural/Social Error! Bookmark not defined. Competition Review 3 Distribution Review 3 SWOT Analysis 3 Strength 3 Weakness 3 Opportunity 3 Threats 4 Objectives and Issues 4 Objectives 4 Issues 4 Value Proposition 5 Marketing Strategy 5 Chosen Target Market 5 Other Potential Segments: 6 Positioning: 6 Marketing Research: 6 Product 6 Price 7 Place 7 Promotion 8 Action, Budget, Control 8 Action Programme: 8 Budget: 8 Controls: 9 References 10 Appendix A Group Members and Student Numbers Appendix B Housing Starts, under Construction and Completions, seasonally Adjusted Appendix C Canadian Water Usage Statistics Current Marketing Situation Analysis Product and Service Review Aqua Fixes is a company that produces bathroom accessories. We concentrate on product development, marketing strategies and budget control. Until now, we have been producing products like “Anti-slip Mats”, “Portable Whirlpool Bath”, and various styles of shower heads. The costs of our products range from $20-$300. We wholesale our products to retailing shops such as Wal Mart, Zellers and Sears. We have also thought about targeting companies such as 3M, Moen or WaterPik to purchase the idea from us. In order to increase our profits, we invented a product that would assist in increase the number of sales of our products. The Aquastat is an addition to our family of other water saving bathroom fixtures. Also, we believe that this product will become a trend for the market. Market Overview Bathroom Market in General In general, the bathroom equipment market has increased moderately due to the steady increase in the number of households and their annual incomes. It is also called plumbing fixtures industry, and closely related to the interior design industry. Income comes from several market segments: wholesale market for home builders or renovation contractors, and the final customers. US bathroom remodeling market for 2003 is $20 billion US dollars, which is 31% increase form 2001[1], and the corresponding numbers of demand exist also in Canada. Trends and needs • The rise in one and two-person households and senior citizens remaining independent longer will increase the number of houses. From 2000, BC's house construction met a new boom, with the forecast of at least 11% increase from 2006 to 2013[2]. • The new lifestyle of the second-baby boomers and the young persons create better chances. In Canada, the new houses are continuously increasing (see appendix B). In USA, new homes with more than 2 bathrooms are 56% of total new home constructions in 2003, 11% increase from 1990[3]. Environments Demographics • Metropolitan areas (large concentrated areas), for example, Quebec and Ontario have a population of greater than three fifths of Canada’s total population and therefore would have increased income and expenditures. This would help sales, but will allow for more competitors in this market. The smaller areas would have fewer competitors which would be an advantage. • More families with discretionary income will be able to pay for luxury items or spend more of their income on improving their homes. Currently, more and more families have fewer children[4]; therefore they can invest more money on home improvement. Economic The Canadian economy is relatively stable and does not effect our analysis Technological • Internet communication with distributors, suppliers, and customers nationally would help promotion and pricing because the information would be updated on a regular basis which leads to quick accessibility. Political • The advantage of our product environmentally would be that the consumer is able to control the temperature of water, which would lead to less water waste. The disadvantage would be the disposal of the older product. Legal • It would be harder to inform the consumer of the product and any new offerings if you can not get the consent from the individual to collect, use, or disclose their personal information. • Federal legislation deals with quality standards, packaging, labelling and advertising therefore there would be no misrepresentation. Competition Review • General Electric’s marketing position focuses on imagination, pureness and to progress. GE’s strategy is for their products to be of high quality[5]. • Moen’s marketing position for their product is to be unique, durable, and reliable[6]. • Delta wants to give the consumer confidence that they get the highest level of quality and technological advancement[7]. Distribution Review The supply of our bathroom accessories are heading both to other businesses and to the final consumers. The basic demand of bathroom products comes from the construction of new homes. • Many high-end bathroom products are purchased for the purpose of remodeling and enticing the final consumers. A good relationship with the interior design business is also essential because this market grows rapidly and some of this business can for allow a large market share. • The other channel is the household equipment retailer chains such as Home Depot. This will allow the do-it-yourselfers to purchase our products at their leisure. SWOT Analysis Strengths The strength of the product is the product itself. The A.I. system can save the information which is already preset by the users. The users can easily to adjust the thermostat to their favourite temperature of water. This feature can prevent accidents caused by adjusting the temperature of water, and it also conserves water and the helps the environment. Weaknesses The primary weakness of the product would be that the public may reluctance to accept the Aquastat as a necessary product with in their household. The Aquastat may be hard for the general public to accept because of the innovative technologies behind the idea of Aquastat. Opportunity We believe that this product will become a trend across North America. In fact, since our standard of living has been improving, people desire higher living qualities. Recent trend of low mortgage rates facilitates a remodelling boom. This will increase the demand of high-end products. We have the opportunities to sell our idea to 3M, Moen, and General Electric. In the future, we can also develop the expanding Internet market for our products; we can sell our products to some Internet retailers like “E-bay” in order to achieve customer satisfaction. Threats Internet marketing may be hard to develop because we are not sure of the demand that online customers have for bathroom fixtures. The other threat could be that the decline of households with children. If the primary consumer group is the family with children, our sales may be limited. The competitors may follow and introduce similar products in North American market. Facing a tough competition may create a problem due to the foreign competitors’ cheaper price.[8] The European companies may be also a treat. They are already familiar with similar products. Objectives and Issues Objectives 1. To establish a market for water temperature thermostats. 2. To satisfy the customers needs of education and technology. 3. To educate people on the amount of water wasted and the number of scald burns related to the bathtub and shower. Issues 1. How do we introduce our product into the market' How do we approach potential customers in this market' What challenges will be presented as we enter' 2. What educational method would be best be received by consumers in relation to the amount of water waste and bathtub accidents' How do we education people that this is the technology that they need' What proof is required to prove to customers who are unreceptive to changes in technology' 3. How receptive will customers be to extreme statistics' How do we present this information to a large amount of people' What types of media would be most beneficial for our product and company' What types of companies could we associate ourselves with to present a greater awareness' Value Proposition There are many valuable attributes that are associated with the Aquastat, including health and safety. The programmable functions on the water resistant Aquastat allow for reduced water wastage while adjusting the water to the desired temperature. Due to the design of the product, slight changes in water temperature are made much more quickly and easily. The design of the Aquastat water thermostat makes it unnecessary to use the difficult and sometimes annoying traditional water temperature regulators. The programmability allows for up to six individually programmed settings that can be recalled with a single button. The ease of temperature adjustment and pre-programmed settings reduce the occurrence of burns and scalding of small children. Marketing Strategy Chosen Target Market One of the major target markets that we wish to present our product to is families with young children. We have chosen this market due to the number of accidents and deaths that have occurred due to scald burns from faucets. The number children aged 0 to 6 years, who are injured due to burns or scalds in the bathroom is a large percentage. The greatest is children under the age of two. They represent 67.5% of all injuries associated with tap water[9]. Our purpose of targeting this market it to educate parents on the epidemic of child related accidents due to tap water and present a solution to them. As well we plan to target this market, as a family consumes a lot of water and throughout the day there may be up to 5 showers a day. When adjusting the water temperature before a person enters a shower there is a lot of water waste. This is due to current temperature dials being inaccurate. Other Potential Segments: As clients of B2B business, the difference of the customers’ business area does not create problems during they ask similar requirements. Therefore, we need to deal with the three segments of the bathroom equipment market altogether. We will act as a supplier to the different types of businesses, and the sales to the final customers will have a supporting role to our revenue. Currently, we may promote our sales to the end customers but we do not deal directly with the end consumers. We can establish a direct web sales system; however, it costs money and can mean too many lines. To escape any inefficiencies, focusing on the original three lines is enough. Positioning: Aquastat is available through well known retailers that position the product at eye level on the end of aisles relating to bathroom fixtures and products. The product is accompanied by a display that explains the environmental, health, and safety benefits associated with Aquastat. Although there are currently no competitors with identical products, similar products while in the same area do not have displays that are as eye catching or informative. The displays allow customers to become informed on the product as well as how it can solve safety issues in their home and family. Other products made by Aquafixes are also nearby to allow consumers to relate the new product with the outstanding quality of the Aquafixes brand. Marketing Research: • We will need to research patents to see if our innovation has already been thought of or being implemented in Canada and globally for future expansion into global markets. • We should do market tests on our ad’s effectiveness and any legal issues pertaining to advertising in the different provinces. Another perspective would be to do it globally. • We would have to look at ethical issues from the point of view of the four P’s. Product • The Aquastat would benefit everyone because you will be able to set the temperature setting to your preference. It remembers each person’s different preference up to 10 persons, and each person can set for each different situations. We provide basic settings such as morning, evening, fatigue, and light shower, etc. • The setting and control is easy. We aimed to be able to control even without the manual. • Our product would be of high quality and present unique features and packaging (We would use recyclable materials used to create packages, more information on labels, larger print labels for our aging population)[10]. Price • Our strategy would be to have a one-price policy and a penetration pricing policy[11]. It is fair to each consumer; therefore, leads to loyalty. The penetration-pricing policy is good if the market to buy at a high price is small and because we expect strong competition in the future[12]. • In order to be successful and to make sure our final consumer would benefit, we would offer rebates for a specified time period in conjunction with the BC Hydro Water Smart Program. Place • Our primary customers are contractors that build houses or remodel. Here the major concern is the mass-size contracts which are easier to forecast the needs. It is more critical to keep the inventory available anytime, and not to fail in meeting any deadlines. In the future, as the product line become wide, this task will be harder. • Our retailing business will rely on primarily the special types of super centers such as Canadian Tire or Home Depot. We can also expand our distribution using the other normal retailer chains. Here, we need to follow each retailer’s different requirement. We may prepare the continuous supply of small quantity over the wide area of distribution network. • Our effort must be focused on the efficient network of production, inventory, and the delivery system to each business. A good MIS will be required. Promotion • In our time-line, the first target is the construction or interior design business. First, as an introduction step, we have to focus on the unique difference of our product. We can use the word of mouth promotion by our personnel, with the support of mass advertising in the construction, interior design, and plumbing fixture magazines. As we grow, we can also advertise by supporting the related business associations’ activities. It is critical to use trade shows such as NKBA (National Kitchen and Bathroom Association) shows for initial promotion. • Next, to hold a market share, keeping a good relationship with each business is required. Our sales division’s personal ability to establish good and honest relationships and the relevant management decisions on any rebate or price discount for each situation will be needed. We can encourage the sales personnel using continuous promotion plans based on the sales volume they performed. • For all of these channels, it is critical to attract final customers because they will take part in the decisions. First, we need to create the final customers’ need. Initial mass advertising activities will be required. Home remodeling magazines will be good for the advertising. The next expansion of our business will head to the final customer’s Do-It-Yourself market. Action, Budget, Control Action Programme: We will try to have a final design of the product before the end of 2004. We will begin to manufacture the product. . During the time of manufacturing, we will promote our product—put commercials on TV and in magazines. The cost may be high to put commercials on TV, but it is the most effective promotion. Also, we may give a discount for the pre-order so that we will have a certain demand and revenue before the product comes out. When the product is available in the market, we will try to create an image for people that Aquastat is a high quality and necessary product; our product will save the environment and the consumer’s money. Therefore, we believe that Aquastat will increase sales vertically, and it will become a trend for households in 2006. Budget: 1. Money needed: To begin the production and marketing of the Aquastat, Aqua Fixes will require a minimum of $200,000. The investors of Aqua Fixes will provide this income partially. In addition, we will apply to local Water Smart programs, local Hydro companies, and local municipalities for Federal and Provincial grants. Any additional finances that are required will be sought from a bank in terms of a Bank Loan. 2. Expected Sales: During the first year when the Aquastat is released for purchase by the consumer, we expect to have net sales that amount to $350,000. Projected net sales for 2005 are expected to increase slightly as people become more familiar with the benefits of the Aquastat. We expect net sales of $500,000. As for 2006, Aqua Fixes is projecting vast awareness of the product and net sales to increase to $875,000 dollars for the fiscal year. 3. Expected Expenses: Three major expenses that will make up the bulk of the expenses related to the production and marketing of the Aquastat. These include Research and Development, Advertising and Promotion, and Fixed and Variable production costs. We project that Research and Development will amount to approximately $400,000, Advertising and Promotion, $250,000 and Fixed and variable costs are projected to amount to $350,000 per fiscal year. Controls: Three main controls that we will implement are: • Sales Data – we will gather sales data from retailers that carry our product to evaluate sales levels. • Financial Statements – our company will analyse the financial statements to determine relevant information for our product. • Conduct Surveys – we will conduct surveys to determine consumer perceptions of the Aquastat both qualitatively and quantitatively References • British Columbia (2004). British Columbia Housing Starts for Urban Areas and Communities. Retrieved November 19, 2004, from BC Stats. http://www.bcstats.gov.bc.ca/data/dd/handout/HSTART.pdf • Lahart, J. (2003, June 16). Housing Just Keeps Going Up. Fortune, 147(12). 100+, Retrieved November 24, 2004, from ABI/INFORM Global database • Kazakina, K. (2004, April 30). Weekend Journal; The Home Front—details: Dressing up the Bathroom Sink. Wall Street Journal, pp. W8, Retrieved November 19, 2004, from ABI/INFORM Global database • NAHB Public Affairs (2004). Housing Facts, Figures, and Trends 2004. Retrieved November 22, 2004, from http://www.nahb.org/publication_details.aspx'publicationID=20§ionID=4 • Statistics Canada (2001). Profile of Canadian families and households: Diversification Continues. Retrieved November 19, 2004, from E-Stat database http://80-www.statcan.ca.ezproxy.cariboo.bc.ca/english/Estat/licence.htm • http://www.geappliances.com • http://www.moen.com • http://deltacom.deltafaucet.com Appendix A: Group Members and Student Numbers Jun Choi 9492077 Gerald Etienne 9132294 Heidi Budnaryk 9473779 Tawnya Hamilton 9439735 Matthew Lai 9469588 Appendix B Housing Starts, under Construction and Completions, seasonally Adjusted[13] [pic] ----------------------- [1] Kazakina, K. (2004). [2] British Columbia (2004). [3]NAHB Public Affairs (2004). [4] Married couples with children decreased from 55% in 1981 to 44% in 2001 of all families in Canada. Couples with no children increased instead, from 34% to 41%. Statistics Canada (2001). [5] http://www.geappliances.com [6] http://www.moen.com [7] http://deltacom.deltafaucet.com [8] As the difference in quality between North-American-made and, for example, china- made decreases, the low-tech producers lose the competitive edges, according to a investor’s view. See Lahart, J. (2003, June 16). [9] CHIRPP Injury Reports [10] www.smallbusinessbc.ca [11] www.smallbusinessbc.ca [12] www.smallbusinessbc.ca [13] British Columbia (2004). British Columbia Housing Starts for Urban Areas and Communities. Retrieved November 19, 2004, from BC Stats. http://www.bcstats.gov.bc.ca/data/dd/handout/HSTART.pdf