The Collapsible Lunch Box Idea - Essay Example

? Executive Summary The idea of producing a collapsible lunch box came after the consideration of a number of business ideas. It is quite crucial to take an assessment of the market and list some of the possible business ideas that can be explored and ventured into. The first idea involved whether we were capable of producing folding chairs. This idea failed due to the fact that after its assessment it was discovered that the production of folding chairs would cost too much. The second idea was the production disposable mats. This idea was quite a viable but it was ruled out after assessing that in order to reach to this final product it would involve quite a number of different processes. The feasibility of a business idea demonstrates how practical it is to put the idea into action. In line with this we had other options such as the production of a modified pub tray. The idea was a good one but we did not have information about the technical aspect of the product as how it would function. In addition the production of a modified pub tray would require too much work from sub contractors. Another feasible idea involved the production of plastic water cups. We discovered that the demand for this is too high and it would be quite difficult to produce enough to meet the demand. In this case consumer satisfaction is an essential aspect worth consideration if a business idea is to be adopted. Final considerations were the idea of a producing a washing machine dial or a collapsible lunch box. After adequate evaluation and comparison of the two it was seen that the market for the washing machine dial would be too small to make meaning profits. The understanding reached upon in this was that the dial would only be fit for one variety of machines while there are hundreds of models and variations of machines in the market. The ultimate decision thus settled on the production of a collapsible lunch box. This is a simple and feasible business with a good market demand. Table of Contents Background and history 4 Description of the product 5 Market description 6 competition 7 manufacturing plans 8 marketing strategies 9 cost/benefit analysis 10 contingency plans 10 conclusion 12 work cited 14 Table of Contents 3 Background and history The history of lunch box dates back in the mid 19th century. An American museum keeper by the name David Shayt pins this evolution to this century providing some of the examples of lunch boxes that were developed. These examples include a woven basket that had a handle and a fancy box made of wood. With the former a handkerchief would be used to warp up a meal then put inside the woven basket. The latter is believed to be used by only the rich people. These lunch boxes were but a result of increased industrialization. With the Americans working away from their homes in places such as factories it was then deemed impractical of them going home for lunch on a daily basis. This is what brought about the necessity of lunch boxes as something that would be used to protect meals and allowing for their transportation with simplicity. Various have in the past been in the manufacture of lunch boxes. Schooling children have always created a market lunch boxes with materials such as vinyl and plastic being used for this market. For the adults the most common materials for their lunch boxes are metallic in nature for instance aluminium or tin. These materials are used for purpose of increasing robustness of the lunch boxes and that may last for a long time. The year is 1954 in Sudbury in the region of Ontario a miner by the name Leo May invented the aluminium lunch box. The idea of this lunch came as a result of him accidentally crushing his lunch box made of tin. History has it that the Mickey Mouse the first character lunch box made of tin was produced by Frey, Paeschke and Geuder in 1935. In the 1950 the Aladdin industries came up with a creation of the first lunch box meant for children basing their invention on Hopaong Cassidy a show on the television. This lunch box kit had a good market especially due to its introduction during the time when children opened schools after their holidays. In the first of introduction this lunch box made a sale of 600,000 units with each costing at a fair price of $2.39 USD. In the 12950’s the television industry was experiencing immense growth. This led manufacturer to discover an avenue for potential sales of lunch boxes at the time up to the 1980’s. Some of the manufactures during this period include the American thermos, the ADCO liberty, Landers, Kruger Company, Okay industries, Clark and Fray Company. Plastic was first used in making the handle of a lunch box. At a later time it was then as a material for making the entire lunch box. It was in the 1960’s that the first lunch box made of plastic was molded. Lunch boxes made of vinyl were first seen in the year 1959. Some changes were introduced in the design aspect of a lunch box in the 60’s. The new design included a vacuum bottle in the inside of the lunch box. Moving into the 70’s plastic bottles were incorporated into the design that had an insulated foam from which was originally a vacuum bottle made of steel with a glass line in the inside and a stopper made of rubber or rather cork. Into thee 70’s the Alladin industries manufactured glass liners which underwent replacement later in the years by the plastic ones. Over the years advancements have been made in regard to lunch boxes with people trying to create something that will fully meet and satisfy the needs of users. Description of Product The collapsible lunch box will be designed in such a manner it can be compressed into a 3 in one design. That is a lunch box, a collapsible and a food tray. This product will be produced of two different colors to meet the tastes and preferences of the users that are for the boys and for the girls. The boxes are to be made colorful as well in the eyes of the user so as to meet some of the psychological orientations of the users. It is always know that children like things that are colorful and appealing. The collapsible lunch box will take the shape of a cuboid with the approximated dimensions being - 25-30X8-12X23-27. Robustness is an important aspect of any given product. This product will have the capability of lasting up to two years considering aspects of reckless usage by children. The design of the product will demonstrate safety for the children. The edges will be made round to ensure that children are not hurt when using the products. Another very important feature of the product is the weight. It will be made to weight not more that 500g. This will make sure that children will not have any problems as afar as lifting the box is concerned. As far as the physical characteristic s of the product is concerned an issue arose as to whether the tray is to be located in the inside or rather in the outside of the box. The decision reached at is that the product will made in a way that the tray fits inside the box. Some of the reasons attributed to this design include; It will be easier for the retailer to put design on the outside as the tray would have already been fitted inside hence not acting as a hindrance. The product will have a better look with an artistic aspect. As far as health and hygiene are concerned with the tray in the inside it will be more hygienic with ensure cleanliness of the inside of the box. With the tray inside the box it will be easier to contain crumbs and mess instead of the tray being outside resulting to the mess being left on the table for cleaners. Market Description The market for the collapsible lunch box will be composed of children aged between 5-8 years. This business proposal targets this market due to the fact that between this ages children are small and their degree of making decisions as far as their preferences is concerned will be highly limited. This makes their guardians or parents being the buyers not to have too much scrutiny on the product but only consider the functionality and features as these are the most important aspects. The 5-8 years is an easy market to deal with as compared to children of ages between 8 and 11 who have developed the behavior of considering alternatives. Over the past years the market for lunch boxes has been in the increase during the demand from people of products that can enable children carry food from home characterized by efficiency in portability and effectiveness in the package capacity. The collapsible lunch box meets has all the properties demanded of a lunch in the market. Most importantly it is an easy to carry handle product that is safe and lasts for long in consideration of reckless behavior of children. The targeted market is about 3 million children. Market penetration is an important aspect of consideration within the marketing strategy. This being anew product the estimated maximum market penetration is expected to be 10% which translates to 300, 000 children. This is a competitive base to start with. The distribution of the product will be through companies for instance Disney who will put their designs on the box. The main reason behind this is that children are known receptive to cartoons. The Disney advertising company can therefore play quite a major part in the marketing and distribution of the collapsible lunch box. The aspects of packaging of this product as well as the point of sale will follow after the enhancement of the design. Competition In regard to competition the collapsible lunch box is a unique product with unique and more attractive from other companies. The fact that it can compressed into a 3 in 1 product sidelines all the other varieties of lunch boxes in the market. In this case this product will have quite some great strength in countering competition. The collapsible lunch box is made of an optimum quality material that will enhance the durability of the product. The different shape of this product is quite attractive including the combinations of design and the colors in accordance with the tastes and preferences of children. The collapsible lunch box has an added advantage as far as hygiene is concerned. This box ensures that food remains fresh for a longer period of time. There most important features that will propel and enhance performance of this product in the market include; collapsibility, durability, attractiveness and the reasonable pricing. The world is developing day after day with people desiring more advanced, efficient and effective products that will be able to satisfy their needs. In line with this the collapsible lunch box provides a better solution over lunch boxes produced by other manufacturers. It offers an alternative to have different varieties of meals to be well placed in one box with divisions and which can be made small for easy transportation. The starting price pricing of the product in the market is quite customer friendly in comparison to what other manufacturers are offering. In this case the collapsible will be able to have an added advantage against the other lunch boxes in the market and hence acquire a wider market share of the share. Manufacturing Plans The process of production of collapsible lunch boxes will require a clear out line of the costs to be incurred during manufacturing. For production machines and tools will be needed. The total cost for these has been calculated to be ?43,000. In the manufacturing process the volume of plastic, capacity will require a great deal of precision and accuracy for the production of the expected product. As far as manufacturing of the product is concerned the break even will be at 3.3 weeks of production. This will be based upon the maximum production capacity being satisfied by the demand in the market. Marketing Strategies The distribution of the collapsible lunch boxes will start at the Disney store. Dinsey has well established name including its reputation within the region. From this point of view the product will encounter little or no resistance during introduction in the market. Some other major companies such as the Hugo have indicated great interest in participating in the distribution process. The company’s letters of endorsement and intent have been included in the section of appendix of this new product. Attractive labels from other companies which children are receptive about are good avenues to explore so that the product may develop some additional value of attraction which is as well a good marketing strategy. Labels portray a good image of the product especially if the labels are linked to companies with a good reputation and in the eyes of the targeted market they valued. A program will be introduced that will aid in crating awareness of the product in the market and persuading customers to purchase it. The program will as aid in demonstrating the functionality of the product to customers. Most importantly this program will greatly assist in increasing the chances for the better penetration of the product for the first in the market. Various aspects of the product will be emphasized upon in the marketing process such as the collapsible lunch box is capable of being compressed three times its original size. Aspects of how safety it is for usage by children and the robustness connected to it will as well be essentai.ly important for promotion of more sales. On line marketing will in addition contribute towards a better market penetration. This is due to the fact that a lot of people are now using the internet and with a little advertisement and description of the product it will undoubtedly perform well. Cost/benefit analysis The approximated revenue per month for the sale of collapsible is ?76,800. From this amount subtraction the total costs estimated to be incurred of ?24,620 the profit will turn out to be ?52,180 which is quite a good start considering the fact that it is a new product and in its introductory stage. The above estimations were arrived at after evaluations being carried relation to the costs of labour incurred in addition to other expenses including for the purchase of the lunch box material. The labor cost per week was estimated to be ?1,000 per week and it would remain constant for the rest of the year. Projection after a year reduction in costs of production to maximize on the revenue would constitute a reduction in labor cost to ?600 per week. The total revenue was approximated with the retail price per collapsible lunch box being ranged between ?5 and ?10. Calculation of gross profit per box was found to be ?3.6. From all this computation the maximum number of boxes expected to be produced within a week would be 4,800. Further projections indicate that the produce will increase to 2,880 after a period of one year. Contingency Plans In the process of planning and coming up with the strategic objectives for the production of collapsible lunch boxes a contingency plan is already suggested that will be made effective if the goals are not achieved. In this case the contingency plan constitutes two zones for acceptability. That is the zone of financial objectives and the other one for meeting sales. In regard to the two zones a negative deviation of 10% from the sales expected as well as on the returns that have been projected on the assets will undergo acceptance. On the other hand incase the objectives of sales and the returns on investment turn out to be below 90% of what will be projected there are a number of actions that will be pursued. They include; 1. In case of unacceptable levels of sales within the first year: the manufacturing company will handle this issue by doubling their promotion in the stores of Disney and Hugo among others. The sales people administered by the company to market its product will engage in promotional activities during weekends when shopping is at the peak in the shopping malls. Incase within one month of in-store promotion sales do not increase advertisement of the product in shopping circulars that are produced weekly will be resorted to for a period of one month. 2. Incase of unacceptable liquidity of the business: anytime time that the business will indicate lack of liquidity an evaluation will be carried out of the procedures involved in the manufacturing company involving accounts receivable. The main aim will be to ensure that the periods of payment are just and that receiving of payments is carried out on time. In addition the projections of the cash flow will as well be assessed in the determination of whether the unforeseen layouts of cash are burdening the financial status of the business. 3. Incase of unacceptable returns in regards to equity: if asset returns and owner’s equity fall below the levels that have been accepted assessment will be carried out. This will involve analysis of per unit cost in production as well as in marketing within the selling price. Incase the margins are found to be too thin increasing the price of the product will be put under consideration. Nevertheless, due to the fact that there are non collapsible lunch boxes already in existence in the market and at a much lower price, the sales that will have been lost due to the increased price will render this alternative unsuitable for the product to be sold in the stores. The manufacturing Company will thus carry out an evaluation of opportunities in line the minimization of the cost of production. In addition it will have to assess some of the distribution and marketing alternatives that will aid in promoting and creating more awareness to the public in regard to the existence of this product and the fact that it is new. Conclusion The collapsible lunch box stands quite a great chance of performing quite well in the market this. The design of the product will demonstrate will in itself enable the product attain a competitive edge against other varieties of lunch boxes in the market. Some crucial features incorporated in the model of the lunch box such as collapsibility, durability, attractiveness and safety for the children will act as a point of strength for the company to capitalize upon during the demonstration activities within the marketing strategy. A crucial aspect worth noting is the market targeted and how applicable for use this product is to this market. In line with this it is worth noting that safety for children is probably the most crucial point that will be considered by the customers. This issue has well been addressed by the new collapsible lunch box. It will have edges that will be made round to ensure that children are not hurt when using the products. In addition another feature that is deemed most crucial for the product to be able to serve the target market is the weight. The product will be made in such a manner that the weight will not be more than 500g. This will make sure that children will not have any problems as afar as lifting the box is concerned. this business proposal of producing collapsible lunch boxes proves to be quite a viable one bearing in mind that there are limited processes involved to arrive to the final product and that the staring costs are not that high. This product will close a need gap in the market for lunch boxes that can be compressed hence creating a foundation for an immensely big reputation for the industry and hence increased performance and growth of the company in the coming years due to the expanded market. Work cited Reeds and Kitta “The Zen of Proposal Writing: An Expert's Stress-Free Path to Winning Proposals” Three Rivers Press, (2002). Read More