SaveMe Necklace - Market and Its Needs - Case Study Example

1. Elevator Pitch The product slogan is ‘Buy the SaveMe necklace and be safe’. The product can be worn round the neck as an ornament but it also acts as a form of protection from intruders. The necklace has a 12DB siren alarm that rings when the owner is in danger. The product has a ring that is designed by combining a number of minerals such as gold, platinum and silver in a variety of proportions to come up with the benefit of scaring away intruders whenever they attempt to attack the wormer, thus the name SaveMe. 2. The Market and its Needs SaveMe necklace will be important in serving two purposes. First it will act as jewelry for ladies and thus become a significant product in their decoration. In addition, necklace has been designed to solve the problem of insecurity for the ladies or any person who possesses it from intruders by ringing its alarm whenever the owner is in danger thus alerting the public about the danger and ensuring the owner is rescued. The target market for the SaveMe necklace are ladies in the UK or other parts of the world where they are likely to come across insecure environments where people are likely to attack them or make them insecure. For instance, it targets ladies who leave jobs late in the night for homes in the UK so that they can be protected from gangs and robbers in the streets by ringing whenever they are in the danger of encounter with the gangs. In the UK, the size of the market is estimated to be about 12 million ladies of whom 2 million are aged between 14-18 years, 3 million are aged between 18-24 years, 3 million are aged between 24-30 years and 4 million are aged between 30-40 years. The geographical distribution of the target population in various cities is illustrated in the table below. City Percentage of target population Actual Number (Million) London 10 1.2 Birmingham 15 1.8 Manchester 20 2.4 Lancaster 15 1.8 Hereford 25 3 Cambridge 10 1.2 Bradford 5 0.6 TOTAL 100 12 Table 1. Geographical distribution of target population in the UK In terms of income it is expected that 25% of the target customers will be those that earn between £ 750-900 per month, 10% will be those that earn between 901-1050 per month, 35% will be those that earn between £ 1051-1100 per month and 30% will be those that earn above 1100 per month. Thus, it implies that the target market has a high income that will create the right demand for SaveMe necklace. This market is expected to grow due to a number of factors. First, there has been increased population of people in the UK who work at night and face security challenges, thus the product will be of great use to them. Secondly, high cases of insecurity such as rape cases have greatly increased and ladies will find the product useful in ensuring their safety from people who try to abduct them. Another reason why the market is expected to grow is that ladies in the UK have sown increased interests in jewelry such as necklaces and based on the fact that SaveMe necklace will serve two purposes, it will be highly demanded by ladies when effective promotion has been done. 3. The Product/Service SaveMe necklace will serve the function of a necklace as well as a protection for the user. This will be achieved by wearing the necklace round the neck and thus acting as a decoration but when the owner is in danger of being attacked, its alarm will ring automatically thus sensitizing the public about the danger in which the owner is. This will ensure the owner is rescued and impacts of being attacked or robbed of personal belonging will be avoided. The key features of the necklace are chains that go round the neck and the ring that is composed of a combination of minerals such as gold, silver, platinum and diamond that gives the necklace a beautiful look. Inside the ring, there is an alarm that is designed to sense any danger that the owner is experiencing such as being attacked by robbers of rapists. By sensing the danger, the alarm rings automatically in a loud tome that sensitizes the public to come to the scene. This ensue that owner is rescued. Due to the fact that ladies are most likely to be attacked, this necklace will be beneficial to them as an ornament as well as a protection. 4. Alternatives and Competitors Competitors in the sales of the SaveMe necklace will be the manufacturers of other types of necklaces which serve the purpose of ornaments for ladies. In some cases, ladies will be attracted to other designs of necklaces and it is expected that this will affect the sales of SaveMe necklaces. However, there has not been any company involved in production of necklaces that have alarms, thus the functionality of the alarm will be of great importance in ensuring competitiveness of SaveMe necklaces. The unique selling pint will be convincing customers about the ability of the necklace to ring an alarm whenever they are in danger, a functionality that is not available in other types of necklaces. This will ensure they are attracted to the product and become loyal customers. Some of the most popular necklaces that will contribute to competition are listed below. Figure 1. Swarovski Amorous Mix Heart Pendant sold for £79 Figure 2. Swarovski Ivory Pendent sold at £ 35 Figure 3. Diamond Horse-shoe necklace sold at £56 5. Market Entry The first customers will be attracted through joint venture. This is where the producing company will find another company involved in a similar business and engage in joint ownership and control of property rights and operational activities. This will ensure the business is able to share risks and take advantage of the experience of partner business such as the existing customers of the partner business to improve its profitability. Market entry strategy will also involve setting up distribution centers where agents will be employed to stock and distribute the products to the final consumers. They will also ensure customer awareness is enhanced through explaining how the product functions. The longer plan is to benchmark from the partner business strategies such as methods of sales promotion and using these strategies in setting up businesses that are independent from the partnership. However, this will be implemented after a period of cooperation with the partner business in the joint venture. 6. Application of 4Ps of Marketing During marketing process for SaveMe, the company will apply 4Ps’ of marketing strategies to ensure the product is effectively marketed. The 4 P’s that will be used include product, place, pricing and promotion. For instance pricing will involve setting a price that is not too high to be afforded by the consumers while also ensuring the company does not incur losses as a result of sales of the product. Product concept will involve coming up with a design which is pleasant to consumers in appearance and not too bulky to be carried around by users who have bought the product. Place will involve ensuring the product is distributed to the right distribution centers where demand is high and consumers informed about the availability of the product. Promotion will be achieved through the use of various forms of media such as printed media, personal selling and mass media such as radio and television. 7. SWOT Analysis The main strengths of the product is that it is unique in its functionality and there is the possibility that it will be highly demanded by people who have senses of paranoia about the safety of their lives. It will be highly demanded based on the need for people to protect themselves. Strength is that it is less bulky and the manufacturer will incur less distribution costs in its distribution. The main weakness is that most people are not aware of the function of the product and it will not be easy to convince users about its functions and how it can contribute towards. The main opportunity is that there are currently many people in the UK who have complained about being insecure thus the product will be useful in satisfying their safety needs. In addition, the product is new in the UK market and will face little competition such as those who produce similar products. The main threat is that there is the possibility of low demand due to low customer awareness in the initial stages of production which may have an impact on sustainability of the business. 8. Financial Outlook It is expected that the size of the market in the UK for SaveMe product will be 12 million people when the product has been promoted effectively and customer awareness is created (Cafferky & Wentworth, 2010). However, it will be expected that the people will be willing to buy the necklace at a price that other necklaces are sold such as a price that ranges from £30 to £70. The cost of production will include the fixed costs and the variable costs. The fixed costs will constitute the required capital for the business. This is illustrated in the table below: Area of expenditure Amount £ (Million) Premises renting 10000 Electricity Cost 5000 Utility Cost 15000 Machinery cost 20000 Total 50000 Table 2. Capital required for starting the production of SaveMe necklace It is expected that the sales price for a single SaveMe necklace will be £70 while the variable cost of producing a single necklace will be £50. This involves the cost of transporting the raw materials, and labor involved in production of a single necklace. In order to determine the quantity that will need to be sold in a month in order to break-even, the Break-even point calculation will be applied. This is calculated as follows: BEQ=Fixed Costs/ (Sales price of a unit product- Cost of a unit of product). From table 2, fixed costs amount to £50000, Sales price of a unit necklace is £70 and cost of production of a unit necklace is £50. Thus, BEQ= 50000/ (70-50) = 2500 This implies that the producing company will need to sell 2500 SaveMe necklaces in a month in order to break-even. If everything goes wrong, the loss will be composed of fixed costs and variable costs. This will be: Total Costs= 50000+50*2500= £ 175000. This implies that if everything goes wrong, the total loss will be £175000. References Böhm, A. (2009). The SWOT Analysis. München: GRIN Verlag. Cafferky, M. E., & Wentworth, J. 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