Product_Offering

Product Offering Our objective is to create a product that we can market utilizing the concepts learned over the next several weeks. To start, we had to consider our population and the potential for our products acceptance in the market. Understanding the market need is the first action necessary when deciding to launch this product and considering all of the potential challenges and opportunities that may accompany it. According to the article by Fuchs et al (2010) “it is not the company that determines the specific designs to be marketed but rather its customers.” We had to determine the potential for consumer interest. Market Needs and Market Growth Customer expectations today have surpassed many trials and tribulations dealing with products and services. My team and I are proposing to introduce a new product called Thermo Express. This is a thermos that can brew coffee and tea on the go. The back chamber of the thermos holds the coffee or tea bags while it drips into the bottom compartment. The two main advantages of this product is that it’s green, meaning it’s good for the environment and will eliminates the excessive use of cups and perishable items. Secondly, due to the economic state, people can really save money by using this and not constantly buying coffee or tea bags. The Coffee and Tea Market has been a fast growing business and continues, even in the recession, to climb new heights. There is said to be 45 nations today that export coffee and 32 that import which is a large amount. “Coffee is one of the most valuable primary products in world trade, in many years second in value only to oil as a source of foreign exchange to developing countries. Its cultivation, processing, trading, transportation and marketing provide employment for millions of people worldwide. Coffee is crucial to the economies and politics of many developing countries; for many of the world's Least Developed Countries, exports of coffee account for a substantial part of their foreign exchange earnings in some cases over 80%.” (Organization) “In all aspects of tea production, consumption and export, India has emerged as the world’s leader because it accounts for 31% of global production.” (Indian Tea) This market has been around for some time and steadily increasing and this product would be a great asset to this market because it caters to a segment of people that are coffee and tea consumers. Also to insure the market needs and make sure that our product is worth producing, questions can be asked like: 1.) What will be the price of the product' 2.) Would our product be accessible in our targeted market' 3.) Will it meet the needs and expectations of the customer' The answers to this survey will help us gain knowledge into this market of people we are targeting. Product Specifications The Thermo Express is a thermos that brews coffee/tea while on the go. Its product specifications include a back chamber installed with a coffee press that brews and drips the liquid in the front chamber while a front spout allows for easy drinking while driving or commuting to work. It is powered by a lithium battery and is made of stainless steel that can accommodate 16 oz. of brewed coffee or tea. It has a simple but elegant appearance that appeals to working people. SWOT Product Analysis Strengths The Thermo Express has a strong market potential for working people who are driving or commuting to work. Having instant freshly brewed coffee without having to wait in line or dropping a couple of bucks every morning are good incentives for customers. Since a customer that uses this product will save money, it is a recession-friendly product. Likewise, the elimination of paper cups makes it product eco-friendly. Weaknesses The product needs to be recharged from time to time; a perceived inconvenience to a customer. Also, since the container holds only 16 oz of liquid, a heavy coffee drinker could view the need to refill as an added chore. The back chamber of the thermo express contains a mechanical device, a coffee press that could malfunction. Opportunities Currently, customers are aware that accumulating non-biodegradable trash poses danger to our environment so eco-friendly products flood our stores. The use of Thermo Express fits nicely with the social and environmental objectives of an existing market. Threats The technology on this product can be copied and marketed easily by other well known manufacturers. Though the product will be protected by a patent, the risk of the product being copied can spell loss of sales. Company analysis Strengths Zojirushi Corporation’s history dates back to 1918 as a manufacturer of glass-lined bottles. Since then, the company has set industry standards for vacuum installation technology. Its strength lies in the use of cutting edge technology in manufacturing products that bring ease and convenience to customers. According to the company’s website, the corporate philosophy is improving customers' quality of life through creation of innovative products. The current products include air-pot water dispensers, thermal carafes, stainless steel bottles, stainless mugs, rice cookers and bread-makers. The corporate headquarters are located in Osaka, Japan and subsidiaries are located in Bangkok, Hong Kong, Shanghai and Shenzhen. In the United States, 22 service centers are located in different states while there are 5 service centers in Canada. Weaknesses The company is relatively unknown in the United States. The brand is not often seen in department stores like Macy’s but its bread makers and rice cookers are known in Asian communities. By not being an established brand in Mexico, marketing this new product would pose a huge challenge. Opportunities In the United States, a thermos that brews coffee or tea on the go has a large potential. Declining supermarket sales of coffee have been offset by increases in coffee consumption away from home (Buzby & Haley, 2007). Coffee is still the number one beverage for adults in Canada with 63% of Canadians over 18 drinking coffee every single day; it is among the top 20 items purchased in grocery stores (McAlpine, S. 2003). Threats Intense competition is a big threat to the business. If thermo express becomes a success, a number of companies in the United States and Canada that have the technology can easily manufacture a similar product and sell it through existing market channels. Currently, brand names like Thermos, Sunbeam, De Longhi, Krups, Bosch Tassimo, Kitchen Aid and Cuisinart are some of the more popular manufacturers of coffee brewers/makers and espresso makers in the United States. Conclusion We firmly believe that the opportunities and strengths identified in our SWOT analysis outweigh the weaknesses. Our initial outreach maximizes the consumer interest in the product as evidenced by the high demand for coffee in these two countries. The Thermo Express meets the demand for consumer benefit and allows for the ease of use at a reasonable cost. As the company’s philosophy is innovation and quality of life we are confident our product will meet all of our expectations and especially those of the consumer. References McAlpine, S. (Aug 2003). Winning with coffee: a message from the Coffee Association of Canada. Canadian Grocer, Vol. 117, Issue 6, S1 About Zojirushi Corporation. Retrieved March 21, 2010, from http://www.zojirushi.com/aboutzojirushi/corporation.html Buzby, J. C. & Haley, S. Findings: Diet and Health. (June 2007). Amber Waves. Wahington. Vol 5, Issue 3, 1-5 International Coffee Organization (n/a), Story of Coffee, retrieved March 21, 2010 from: http://www.ico.org/coffee_story.asp Teauction.com (2000) Indian Tea, retrieved March 20, 2010 from: http://www.teauction.com/industry/indiantea.asp Fuchs, C., Prandelli, E., & Schreier, M. (2010). The Psychological Effects of Empowerment Strategies on Consumers' Product Demand. Journal of Marketing, 74(1), 65-79. doi:10.1509/jmkg.74.1.65.