Final Presentation - Marketing 20100

SafeAir, Inc.

“Leaders In Bathroom Innovation”

Nazur AhmedAidan Fitzgerald

Eric Kullberg Captain- John Maier

Isaac Song

Presentation Presentation OverviewOverview

1. Product Selection1. Product Selection

2. Analysis of Target Industry2. Analysis of Target Industry

3. Selecting the Target Niche/Market3. Selecting the Target Niche/Market

4. Product Plan4. Product Plan

5. Distribution Plan5. Distribution Plan

6. Pricing Plan6. Pricing Plan

7. Promotions Plan7. Promotions Plan

1. 1. Product SelectionProduct Selection







SafeAir, Inc.SafeAir, Inc.

The InnovationThe Innovation“Eliminating Bathroom Odors at the Source”

Factors Fresh-It Aqua -Skipper

Smart -Cast

MegaFlex -121

Baser -Doors

1. High Value in use/ low cost to make 9 9 8 7 9

2. Prote ction 8 7 7 9 2 3. Ea se of use 9 6 8 8 9 4. Diffe rentia l a dva nta ge 9 9 8 7 7

5. Ra te of te chnological cha nge 9 8 6 6 5

6. Type a nd de gre e of compe tition 8 9 6 4 7

7. Unique and tre ndy 9 8 7 5 8 8. She lf spa ce a t reta il 7 7 8 7 8 9. Prior use pa tte rns 6 5 8 9 9 10. Afforda ble 7 4 8 7 9 11. Ne wne ss 9 9 7 7 9 12. Divis ibility 9 9 9 6 5 13. Rate of use 9 6 8 8 9 14. Durability 8 9 8 9 9 15. Life Cycle 9 7 8 9 8 16. Ba nka ble 9 7 9 8 9 17. Funda me nta l tre nds 9 9 9 9 6 18. Size of ma rke t for like products 9 7 9 9 6

19. Consume r purcha se pa tte rns 9 7 7 9 6

20. Web frie ndly 8 9 9 7 9

Total 169 151 157 150 149

Ave rage 0.939 0.838 0.872 0.833 0.828


*Fresh-It is the most competitive of all products available.










2. 2. AnalysisAnalysis of Target Industryof Target Industry








Air Freshener Air Freshener IndustryIndustry

Large Industry Sales with Growth

Total Industry Sales: $1.52 Billion

22%

13%

18%

47%

S.C. Johnson & Son, Inc. Reckitt Benckiser PLCProcter & Gamble CompanyOther

22% of Industry is $299.2 Million4.8% Growth

United States Home Air Fresheners: 2007

Need only .65% of Industry Sales

Mintel Research

$10 Million/$1.52 Billion = .0065



Stage of Maturation; Lacking InnovationFactors Fresh-It Glade Scented

Oil Fan Febreze TrueAir Miracle Seat Air Wick Freshmatic

1. High Value in use/ low cost to make 9 6 5 4 6

2. Protection 8 1 4 8 1

3. Ease of use 9 7 7 2 7

4. Differential advantage 9 2 4 7 2

5. Rate of technological chan ge 9 2 4 5 2

6. Type and degree of competition 8 2 2 7 2

7. Unique and trendy 9 3 5 6 3

8. Shelf space at retail 7 9 8 4 8

9. Prior use patterns 6 8 7 2 8

10. Affordable 7 9 8 3 8

11. Newness 9 2 4 6 2

12. Divisibility 9 5 3 2 5

13. Rate of use 9 6 5 8 4

14. Durability 8 4 4 8 3

15. Life Cycle 9 2 3 9 2

16. Bankable 9 6 4 2 6

17. Fundamental trends 9 4 7 8 4

18. Size of market for like products 9 4 5 2 3

19. Consumer purchase patterns 9 7 5 1 7

20. Web friendly 8 6 7 5 6

Total: 169 95 101 99 89 Average: 0.938 0.527 0.561 0.55 0.494

•Fresh-It has competitive advantage over other products in the Air Freshener Industry

Epinion.com Amazaon.com



Stage of Maturation; Lacking InnovationTrend Fresh-It Glade Hidden Pleasures

Febreze TrueAir Miracle Seat Airwick

Freshmatic

Trend towards health concerns + - + + -

Ease of use + + + - +

Increase in product offerings + + - - +

Innovation drives growth + - + + -

“Natural” is good for you + + + + -

Aromatherapy + + - - -

Targeting the affluent + + - + -

Alternating Scents - + + - +

Specific smells + - + - -

Specific areas of home + - - + -

Cleanliness + - - - -

Does not contain phthalates + - + + -

Allegergen -reduced fresheners + - + + -

No O -zone effect + + + + +

Affordability - + + - +

Freshness as Key Fragrance + - - - +

Length of use + - - + -

Natural/Food Scents + + - - +

Diffusers Transform Market + - - + -

Differential advantage + - + - -

Eco -friendly + - + - -

No Aer osol + + + + -

Removes Odor / Odor Eliminator + - + + -

Not aesthetically disruptive + + - + -

Scents that smell like food + + - - +

Not a fire hazard + - - + +

Population growth drive sales + + + + +

Total: 25 13 15 15 10

Average of Trends Ridden: 0.926 0.481 0.556 0.556 0.370

SafeAir, Inc. provides a product best utilizing trends of consumers compared to industry leaders.

Fresh-It rides trends almost 2X that of its next best competitor.

Marketresearch.comEpinion.com

Mintel ResearchAmazon.com



Stage of Maturation; Lacking Innovation

•Competitive advantage provides industry analysis

•Technological change occurs infrequently and in small increments

•Reckitt has a large enough market share to acquire $10 million in sales

•Enough growth in industry to avoid wrath of large corporations

•Low comparative trend ratio - vulnerable



Stage of Maturation; Lacking Innovation

Production Selling Marketing

P & GFebreze TrueAir

.561

S.C.JohnsonGlade

Scented Oil Fan

.527

ReckittFreshmatic

.494Other<.4

SafeAir, IncFRESH-IT

Attack

SafeAir, Inc. will effectively focus on selling the product to a specific consumer











3. 3. Selecting the Target Niche/MarketSelecting the Target Niche/Market






The Five W’sThe Five W’s

• When?– Late fall and early winter, inevitable onset of flu and cold

season• Where?

– Specialty stores like Bed Bath & Beyond (80%)– Online retailers (20%)

• Why?– Added safety features and physiological benefits– Personal and Family Health

• What?– Fresh-It Unit with two air fresheners, different colors, and

one health protection filter and continued innovation• Who?

– Health conscious female with children in the home


Consumer NeedsConsumer NeedsWhat Needs does Fresh-It Best Fulfill

Safety:9Dangerous germs are removed from the

bathroom affecting health and wellness of families.

Physiological:9Provides a system of removing otherwise inhaled

unclean air inside the bathroom.

SafeAir, Inc.SafeAir, Inc.Self-Actualization: 7Esteem: 8

Belonging and Love: 7

Safety: 9

Physiological Needs: 9 •Fresh-It will provide consumers with a product fulfilling the most basic and fundamental human needs

Target Niche AnalysisTarget Niche AnalysisSafeAir, Inc.SafeAir, Inc.

Criteria

Cost Value/Use

Use Pattern

Market Size Access

Optimize Utility

BundleWeb Use License Clubs

Spc. Mag.

Spc. Media

Spc. Web Pg.

Health Concerns

Hours Per

Week Total AverageSoccer Mom 9 8 9 9 9 9 0 6 8 8 8 9 3 95 0.81Day Care Operator 9 8 9 9 9 9 9 0 3 3 8 9 9 94 0.80Plumbers 7 6 9 8 6 5 9 0 7 2 4 4 9 76 0.65Engineers 7 5 7 5 5 9 9 0 7 2 1 6 6 69 0.59

Homeowners 9 9 9 9 8 9 9 1 9 8 9 7 6 102 0.87Nanny 6 6 6 7 6 6 9 0 2 2 4 7 6 67 0.57On-Line Shoppers 9 8 9 9 8 9 0 0 9 9 9 8 8 95 0.81Bed and Breakfasts 9 9 5 9 8 9 9 0 4 7 8 9 8 94 0.80Grade School Teachers 6 5 6 3 6 5 9 0 8 2 1 8 9 68 0.58Household Fairs 8 9 4 9 8 9 5 5 9 8 9 8 2 93 0.79Book Clubs 8 7 7 9 7 7 0 9 9 9 9 8 7 96 0.82

Gym Mom 9 8 9 9 8 9 0 9 9 9 9 9 5 102 0.87Personal Maid 9 9 5 6 8 4 5 0 3 2 2 9 6 68 0.58Cooking Class Mom 9 8 6 9 9 6 0 9 9 9 8 8 6 96 0.82

*Fresh-It can best targets the needs of the homeowners association and gym moms more than other hobbies/occupations.

Target Niche Target Niche DefinitionDefinition


Upper middle-class, Midwestern female age 25-402 or more children aged 8 and up Homeowner in a suburban location in proximity to major cityGoes to the gym at least 3 times a week lasting approximately an hourUses air fresheners in home every day for a sense of cleanliness

Marketresearch.com












4. 4. Product PlanProduct Plan





Goals and StrategyGoals and StrategyPrimary Goals• Attain $10 million in Sales - 40% profit margin

• Develop brand name recognition

Secondary Goals• Create substantial differential advantage with new technologies

• Establish .65% Market Share to outperform the shakeout of competition

• Break into the oligopoly as the industry matures and be labeled a “diffuser”

• Provide the highest level of customer service and support.

Strategies• Possibility of acquiring stronger patents with buyout of Miracle Seat

• Develop and release new patentable technology over the Fresh-it’s life cycle.

• Develop relationship with technology companies

• Time the response and release new products as the competition releases responses to Fresh-it’s old products.


Differential Differential AdvantageAdvantage


•Significant competitive advantage with competitor products but…

•How will SafeAir, Inc. maintain differential advantage over Fresh-It’s Life Cycle?

•And combat the releases of competitor copies?

1

2

3

4

5

Fall out

Product 1:- Add Scents

Product 2:- Longer Filter Life Variety of Scents Better Aesthetic

Product 3:- Digital Display of Time & Filter life

Product 4:- Stronger Filter UV light Purification Product 5:

- Display of # of Germs killed Diversified to entire house Compatibility with Computer Program

- What’s Wrong Score

- What’s Wrong Score

- Product Score

- Product Score

- Product Score


Product Life CycleProduct Life Cycle













5. 5. Distribution PlanDistribution Plan




Goals and StrategiesGoals and Strategies

SafeAir, Inc.SafeAir, Inc.Primary Goals• Attain $10 million in Sales - 40% profit margin

• Sales per day per store of 2 Fresh-It Units


Secondary Goals• Maintain one week’s supply at retail level of product• Keep production to retail location time to 15 days• 80% of sales in retail and 20% of sales on the web• Maintain a .3 competitive advantage over competitors• Maintain at least an average product utility of 8.6• Dominate at least 10% of air freshener and air purifier prime shelf space at retail

level

Strategies• Establish Just-In-Time inventory system to minimize out-of-stock at the retail

level.

• Sell directly to retailers without using a wholesaler and cover the additional costs created by this goal.

Needs Analysis &Needs Analysis &Channel DesignChannel Design

Specialty StoreSpecialty StoreSales/Day/Store: sales/week Sales/Day/Store: sales/week

Fresh-It Sales per Day per Store: 2Refill Sales per Day per Store: 2Scents Sales Per day per Store: 4

Approx. 88 StoresApprox. 88 Stores730 Units/Year X 88 Stores X $100 = $6,424,000.00 730 Refills/Year X 88 Stores X $15 = $963,600.00 1460 Scents/Year X 88 Stores X $10 = $1,284,800.00

Total Retail Sales: $8,672,400.00 Estimated web sales 20%: $2,000,000.00

Total Sales for Fiscal Year: $10,672,400.00

Stores per city – Assume avg. of about 6 stores/city88 stores / 6 stores per city = 15 suburbs

4 Midwestern states - Ohio/Michigan/Indiana/Illinois

40% in Northern Illinois Will not use wholesaler for 88 storesSmall quantity currently available at each store


Presentation Overview








11. Product Selection. Product Selection





6. 6. Pricing PlanPricing Plan





Secondary Goals• Sell at reasonable/attractive price for consumer in order to keep sales increasing

– Maintain competitive price to make profit

• Break-even as early as possible in year one

• Protect the equity of the Fresh-It brand

Strategies• Skim Pricing to break even sooner with higher price

• Pull marketing to advertise to customers and pull them into purchases

• Price based on competitors “Value in Use”


Price FlexibilityPrice Flexibility


Miracle Seat Fresh-It FreshMatic

Maslow Utility

36 42 18

Utility Bundle

37 42 19

Total 73 84 37

Ratio .811 .933 .411

Flexibility 1.1467 2.2702

Pricing $397 $45


Pricing StructurePricing Structure

Fixed Costs = 70% Total CostsWeb Sales account for 20% of total sales Total Stores: 88

Needs Analysis Annual SalesFresh-It Sales/Day/Store: 2 Fresh-It Sales/Year/Store: 730Refill Sales/Day/Store: 2 Refill Sales/Year/Store: 730Scents Sales/Day/Store: 4 Scents Sales/Year/Store: 1460

Product Pricing Cost Structure Profit MarginFresh-It $100 Fresh-It 38%Refill Cartridges $15 Refill Cartridges 70%Scents $10 Scents 83%

Web Sales 80%

Revenue Calculations Profit Calculations$6,424,000 Fresh-It : 38%*$6,424,000 $2,441,120

$963,600 Refill: 70%*$963,600 $674,520$1,284,800 Scents: 83%*$1,284,800 $1,066,384

Total Retail Revenue $8,672,400 Web Sales: 80%*$2,000,000 $1,600,000Estimated Web Sales $2,000,000 TOTAL PROFIT $5,782,024TOTAL ANNUAL REVENUE $10,672,400 TOTAL PROFIT MARGIN 54%

Break-Even AnalysisTOTAL COSTS/YEAR $4,890,376 Break-Even (Sales) $3,968,853TOTAL FIXED COSTS/YEAR $3,423,263 Break-Even (Years) 37%TOTAL VARIABLE COSTS/YEAR $1,467,113 Break-Even (Days) 136

Contribution Margin $9,205,287Contribution Margin Ratio 86%

Assumptions: Fixed Costs = 70% Total Costs

Fresh-It (730 Units/Year*88 Stores*$100)Refill (730 Refills/Year*88 Stores*$15)Scents (1460 Scents/Year*88 Stores*$10)

Presentation Overview














7. 7. Promotions PlanPromotions Plan



• 2 sales per day per store by first 3 months


Secondary Goals• Increase in sales of 15% over next 6 months• 10% shelf penetration in retail stores

• 50% awareness among Gym Moms by 1st year

• Be covered/reviewed by 3 niche magazines within first 3 months

• Build image as must-have household appliance

• Provide the highest level of customer service and support

Strategies• Rely on word of mouth to drive demand and trigger innovation explosion

• Utilize publicity to further drive demand as new products introduced


•Begin advertising three months before launch

•Pull method

•Skim method to achieve target niche sales.

•Place ad in each local newspaper around the 6 stores/city locations

•Radio promotions for 6 months during and after pre-launch period

•Launch www.safeair.com to conduct online sales

•Heavy reliance on Magazine, and Internet


Media MixMedia Mix

MonthsPre-

LaunchDec. Jan. Feb. March April May-Aug

Radio $15,000$12,000

$8,000 $5,000 $5,000 $5,000 $22,000

Direct Mail

$5,000 $5,000 $5,000 $2,000 $2,000 $2,000 $14,000

Website $10,000 $5,000 $2,000 $2,000 $2,000 $2,000 $10,000

Co-op Ad

$14,500$10,500

$4,500 $4,500 $4,000 $4,000 $28,000

Other $25,000$10,000

$6,000 $5,000 $5,000 $5,000 $34,000

TOTALS $69,500$42,500

$25,500

$18,500

$18,000$18,000

$108,000

Budget Total: $300,000

MonthsAugust

15thSeptembe

r November

15th

Radio $3,000 $3,000 $9,000

Direct Mail $1,000 $1,000 $3,000

Co-op Advertising

$2,000 $3,500 $9,000

Other $5,000 $5,000 $15,000

TOTALS $11,000 $12,500 $36,000

Total Prelaunch Costs:

$69,500

Pre-Launch Budget

Total Media Budget

http://www.safeair.com/

E-Mail AdE-Mail Ad

Magazine AdMagazine Ad

www.safeair.comwww.safeair.comSafeAir, Inc.SafeAir, Inc.

SummarySummary

SafeAir, Inc.SafeAir, Inc.1.1. Fresh-It is a superior productFresh-It is a superior product

2.2. Fresh-It will win in the industryFresh-It will win in the industry

3.3. Found specific target nicheFound specific target niche

4.4. Developed 7-10 year product planDeveloped 7-10 year product plan

5.5. Created efficient distribution planCreated efficient distribution plan

6.6. Established fair & competitive pricingEstablished fair & competitive pricing

7.7. Developed effective promotion planDeveloped effective promotion plan

Final Presentation - Marketing 20100

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