Marketing .docx



Market Analysis California State University Monterey BayBUS 306-01 Fundamentals of MarketingYannick BerchtoldAshley CarrascoBrittany HardenAlexander RobinsonJoshua Tubridy October 20, 2013 Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc374309842 \h 4Market Analysts Section PAGEREF _Toc374309843 \h 5Situation Analysis PAGEREF _Toc374309844 \h 5Market Summary PAGEREF _Toc374309845 \h 6Geographics PAGEREF _Toc374309846 \h 6Demographics PAGEREF _Toc374309847 \h 7Behavior Factors/Psychographics PAGEREF _Toc374309848 \h 8Market Needs PAGEREF _Toc374309849 \h 8Market Trends PAGEREF _Toc374309850 \h 9Market Growth PAGEREF _Toc374309851 \h 9SWOT Analysis PAGEREF _Toc374309852 \h 10Strengths PAGEREF _Toc374309853 \h 10Weakness PAGEREF _Toc374309854 \h 10Opportunities PAGEREF _Toc374309855 \h 11Threat PAGEREF _Toc374309856 \h 11Competition PAGEREF _Toc374309857 \h 11Product Offering: The Solowinch PAGEREF _Toc374309858 \h 12Keys to Success PAGEREF _Toc374309859 \h 12Critical Issues PAGEREF _Toc374309860 \h 13Marketing Strategy Section PAGEREF _Toc374309861 \h 14Marketing Strategy PAGEREF _Toc374309862 \h 14Mission PAGEREF _Toc374309863 \h 14Marketing Objectives PAGEREF _Toc374309864 \h 15Financial Objectives PAGEREF _Toc374309865 \h 15Target Markets PAGEREF _Toc374309866 \h 15Positioning PAGEREF _Toc374309867 \h 16Strategies PAGEREF _Toc374309868 \h 16Marketing Mix PAGEREF _Toc374309869 \h 17Pricing PAGEREF _Toc374309870 \h 17Distribution PAGEREF _Toc374309871 \h 17Marketing Communication PAGEREF _Toc374309872 \h 18Marketing Research PAGEREF _Toc374309873 \h 18Financials PAGEREF _Toc374309874 \h 19Break-even Analysis: PAGEREF _Toc374309875 \h 19Sales Forecast PAGEREF _Toc374309876 \h 19Expense Forecast PAGEREF _Toc374309877 \h 19Controls PAGEREF _Toc374309878 \h 20Implementation PAGEREF _Toc374309879 \h 20Marketing Organization PAGEREF _Toc374309880 \h 21Contingency Planning PAGEREF _Toc374309881 \h 21References PAGEREF _Toc374309882 \h 23Executive SummarySolowinch Inc. wants to enter the market of extreme sports, more specifically water sports. The product Solowinch is a winch built to pull wakeskaters, wakeboarders, snowboarders, surfers, skimboarders and anyone else who needs to be pulled at high rates of speed. Furthermore, Solowinch is equipped with a remote control that is attached to the handle. This allows activating the servo motor from distance and therefore enables one to exercise the sport individually.The product we offer is unique in the market because the feature of the remote control is not offered by any other company so far. In addition, we use high quality components to build our product so that our customers get a reliable and durable good.Furthermore, there is a great possibility of growth in extreme sports markets. For instance, snowboarding participation in the United States of America has seen an increase of 7.2 million people since 1999 (Jones, 2008). In addition, the water sports industry is growing continuously and the United States have an estimate of 1.4 million wakeboarders at this moment. Another possibility of expansion is people who live close to bodies of water where water sports could not be exercised so far.The target market is the Millennial Generation, who is interested in extreme sports and is keen on the idea of practicing such sports at lower costs. Furthermore, the Generation X is included in our target market because lower income families are possible beneficiaries of our product offering. Nevertheless, Baby Boomers still are an important market group as they hold about 80% of the nation’s wealth (Kotler and Armstrong, 2013, p. 76). Even if they might not use our product for themselves, they could potentially buy it for their families and relatives.Solowinch Inc. has the goal of reaching a market share of 40% within the water winch market. Moreover, we want to obtain a 10-15% market share of the traditional extreme sports market. In addition, we wish to get more recognition to the market so that we can attract new people that have not considered doing water sports before. Moreover, we wish to break-even within the first year of operations. To achieve this goal we need to have a successful market entry, produce at lowest cost possible and be most effective and efficient. Therefore, success within the first year would be a great start to enter the market in a strong manner and allow us to reinvest the money within the business to grow continuously. One way to reinvest the money is to enlarge the marketing campaign we have to reach a larger audience, and consequently attract new customers.One of the threats to our business is that the competition adopts what we offer to their own products. Because they already have experience and a brand name in the market, it could be more feasible for them to adapt quickly to the Solowinch. For this reason, we must make an emphasis on the value we bring to the consumers so that they will still choose to purchase our product instead of the competition.Market Analysts SectionSituation AnalysisIn the market of goods that enable one to propel someone, there are a variety of products such as elevators, vehicles, and engines. Especially in the sports category, such goods are often used to propel people to a certain speed so that they can exercise the sport as they wish to.Now, the goods offered for these sportsmen are very limited. For instance in water skiing, the goods that are currently available to pull one over the water are either a powerful boat, jetski or a cable ski installation. All of these goods are pricy and require at least one person to drive or control the machine in order to pull the water skier over the water. In addition, “boats can be lots of work and require extreme care and regular maintenance” (Bostain, 2013). For this reason, a product that enables a person to utilize a propulsion mechanism by himself is a great benefit. If they wish to do their sport individually, or do not have the financial resources to pay for the existing products, they can use this product to engage in their activity. Moreover, in the survey we conducted, 70.5 percent of the people that never have engaged in any extreme sports are interested in doing so(Berchtold Y., Carrasco, A., Harden B, Robinson A., Tubridy J., survey, October, 2013). In addition, 77.3 percent of the people who participated in extreme water sports said they would like to actively engage in the sports where they normally would not be able to.Our device,The SoloWinch would pull one by the rope from the shore, using a remote controlled, rider operated winch system, comparable to how a boat pulls forward. This means that whoever wants to use It, can do so individually, without the need of having to rely on someone else. This is a great advantage compared to a cable ski installation, or other winch-type devices currently available on the market. According to our survey, 52.2 percent of the people are interested in extreme sports but, could not engage in such sports because they did not have any means of propulsion. (Berchtold Y., Carrasco, A., Harden B, Robinson A., Tubridy J., survey, October, 2013).Market SummaryThere are several products that can be categorized as extreme sport enabling devices such as a jet ski. They range in price from $1900 (the Pulldozer), all the way up to $3000, (the“Ridiculous winch”)(“RediculousWinches”, 2013). Currently there are four products to compete with; the Pulldozer, the Ridiculous winch, the Grinch and the X-Hive. These products are not nearly as expensive as a jet ski but enable many of the same watersport activities for their owners. Most importantly the ability to waterski,wakeboard & wakeskate as well as surf, or skim on any body of water. This is a great value to consumers who enjoy the exhilaration of extreme water sports but abhor the costs associated with boat/jet ski ownership or rentals. The joys of Tow-In surfing have always been reserved for professional surfers on the biggest breaks but now with the Solowinch, we can offer that experience to the general public.With our product everyone has the opportunity to tow into their own Teahupo’o and get rides they never thought possible. The winch is not only for water sports either; it can be used for any sport where extra propulsion is required such as snow sports, skateboarding, rollerblading, etc. When taking these sports into account, our target market and possible consumer pool substantially increases. Currently, there isn’t a product on the market that offers riders the ability to use and operate the machine with just one person. We believe that the ability to be operated and used by a single person would give our product a significant advantage over the competition. This is because all of the competing products require and extra person to operate the winch. Our product could potentially capture a large market share over other winch products because of this exclusive feature . GeographicsOur product is a tool that helps facilitate extreme sports and is, therefore, geographically focused around regions where those sports are frequently practiced. Working on a global scale but with an initial focus on American markets, we are not excluding any geographic areas but some are more marketable than others. For instance, large metropolitan areas will not yield as high of a demand as more rural areas or regions close to large standing bodies of water, mountains and the ocean due to the nature of our product.With our emphasis on extreme water sports, the geographic areas most important include those which have easy access to lakes, rivers, beaches . These regions have the markets associated with our product as well as the natural environment required for use of our product. Coastal areas allow for ocean riding and use of the winch from the beach. Lakes and rivers allow for a more traditional use and already have a large market for the water sports we are targeting.Rural areas are also important to out product because there is a wider range of space for outdoor sports and activities. The winch has multiple uses besides just for water sports, and consumers in these areas can use it in more versatile ways. The Solowinch can be used for snow sports, such as cross-country skiing, or skateboarding which expands the geographic diversity for our product. Using the Solowinch for skateboarding creates markets in suburban areas where skaters could use it to practice new tricks. The geographic locations are important and allows for versatile and creative use, whether it’s for private lakes/rivers, open fields, hills/mountain slopes, or other terrain.DemographicsOverall, our target market has a fairly general set of demographics. We serve a variety of consumers worldwide ranging in age from 12-68 including members of Millennials, Generation X and Baby Boomers. This taps into very different kinds of markets that will help maximize our potential output.We would also like to market towards the Baby Boomers because they are the oldest group of people in America with the most disposable income. They are the parents of Generation X and Millennials and they have to income to purchase these items as possible gifts. The Millennial Generation is our main focus and the group with the most interest in our product. Older Millennials are either finishing school or beginning their careers. With over 80 million people in just the U.S. alone, they have the largest population of any previous generation and are just beginning to enter the market as large influencers. It’s also estimated that by year 2017, the millennials will have more spending power than any other age group (Hanson, 2013). Generation X is also a very important demographic for us. These parents and adults have more established lives and are in a more mature, stable time of their life. Our product appeals to many income levels as not only a cost reducer in comparison to boats and other equipment, but also as a luxury to those who can afford to buy them for everyday use or vacation accessories. It works well in both a family setting and individual use and appeals to multiple genders, ages, races, and religions in any occupation at any education level. Behavior Factors/PsychographicsWe plan to market the Solowinch to middle and upper class consumers. Consumers that participate in the sports associated with our product will have disposable income that allows them to purchase some amount of ‘wants’ rather than only purchasing their needs. Within each group there are those who are looking for a new experience and are ambitious in pushing the limits of their sport. These are the heavy users who will purchase our product, not to replicate another sport, but to develop the use of our winch for new and different experiences.Another group is the users who need a way to ride by themselves. Many people don’t have access to boats or drivers that can adequately pull them. So, these riders need our product to allow them to ride by themselves and would also be regular users that make it part of their lifestyle.Market NeedsOur products gives the opportunity to participate in extreme sports without the high costs and low accessibility that typically accompanies those activities. With the Solowinch, we are addressing the need of affordability; our product is significantly cheaper than renting or owning a boat, successfully lowering costs and catering to that specific need. Another market need is that of accessibility. Our product allows users to engage in sports outside of the traditional environments. A person can use the Solowinch to successfully wakeboard at the beach or on a river. These options haven’t been readily offered to the public before, and now can be utilized by our customers. The final market need that is addressed is the convenience factor. Never before has an individual been able to participate in these sports by themselves. They would have always needed a driver to pull them or to operate the machine. Our user remote controlled winch allows someone to individually operate and use the machine. Our product successfully addresses multiple market needs by offering unique features and aspects not before seen on the market. Market TrendsWhile assessing market trends, we have discovered that extreme sports is a quickly growing industry. Extreme sports began in the early 1990 s and have grown immensely since (GIA, 2012) . Along with the growth of these sports, the needs of services have developed as well.The Winter Olympics and X- games are very important in the growth of extreme sports. Many people watch these events and sometimes discover new sports. Media coverage of the Winter Olympics and X-games is a very important trend for us. Television plays a critical role in the expansion of these sports. The coverage of these events made it possible for the world to see all of these sports in action. When the televising of these sports began many more people began to actively engage in them.The winch can be used with three out of five of the most popular extreme sport inline skating, snowboarding and skateboarding. If you cannot pick up enough speed, the winch can pull you and increase your speed rapidly. This is perfect for inline skating and skateboarding. The winch can also be used for snowboarders who need to practice in an area of flat land. If there is not enough hills ride, you can just have the winch pull you on a flat surface and practice tricks off a jump. Or it can simply replace the need for a chairlift. Many other winch systems offer similar benefits, but the feature that makes the winch stand out is that is remote controlled so anyone can do this alone and have total control. Market Growth As participation in common sports such as baseball and basketball goes down, participation in extreme sports continues to go up. Since 1999, snowboarding participation in the United States has seen an increase of 7.2 million people (Jones, 2008). The rapid growth of the extreme sport industry is due to the introduction of the X-games and the increasing number of spectators. The number of spectators has increased due to a larger coverage of events such as snowboarding events and surfing events . Many popular channels such as ESPN and AXN promote and broadcast these extreme sports, increasing their popularity. (GIA, 2012). According to the survey we conducted 100% of the people who have never participated in extreme sports, such as wakeboarding and snowboarding, would be interested in trying them. Also, according to the Global Industry Analyst “Boardsports market is set to witness growth, backed by factors such as fading impact of recession, increasing consumer expenditure, and increasing number of people participating in sporting activities” (GIA, 2012). Our survey also revealed that over 50% of them would consider engaging in extreme sports in areas they normally wouldn't be able to. This shows that the Solowinch would have demand because it would allow for athletes to be able to participate and practice these sports in areas that they normally wouldn’t. SWOT AnalysisStrengthsWhen it comes to producing our Solowinch there are strengths that we have that can help us produce and market the product to potential consumers. One strength that we have is the fact that the item can be made at a fairly cheap price and it was made out of items that are easy to obtain. There is working prototype model, so when we try to market the item to consumers we have the ability to say how it works. If there are going to be any problems our members would have already used the product we are trying to market. Another strength about this item is that our winch can be used on any place where water is located. It can be used on a river , mountains, on a private lake and, or at any beach. It can be used in the mountains or anywhere it snows as well, for the facilitation of snow sports.WeaknessA weakness of this item; the fact that once the winch is placed on the ground or boat for use, it has to stay there for the product to function properly. The winch cannot be moved back and forth from the water, the consumer must physically get out of the water and move it themselves. The fact that our winch is controlled by a remote is a weakness of the product because the batteries may dies while in use. A dead battery will make this item hard to operate especially when the user is finished using the winch. They will have to manually retract the rope. OpportunitiesAn opportunity that our company has with this product is the fact that there is a place in the market to advertise to those who specifically have large bodies of water on or near their property. The Solowinch can be used anywhere and it can helps create a niche market for people that are willing to pay top dollar for personal use on their property. Another opportunity that our company has with this product is the possibility of renting this product to a consumer. If a customer does not know how this product works or they are just visiting in a town close to a beach, they can use the product to see how they like it. This option will give consumers the opportunity to participate in watersports using our product without the hassle of taking it to and from every place they go. This option gives consumers who cannot afford to purchase the Solowinch the option to use the item. The possibility of consumers renting the product gives consumers who would have never thought of the idea of purchasing a winch the chance to experience the product.ThreatThe main threat that our company is able to foresee is competition. There are already competitors in the market with similar products to the Solowinch with more experience and with a more recognizable brand. What will set the Solowinch apart from the competitors is its remote controlled accessibility. The remote control allows the rider to control the experience without needing a partner or second hand. The Solowinch also has the ability to be moved from place to place and comes with an extended rope for a longer ride! Another possible threat would be the concept of regulatory needs in public places such as a beach. When in use there will be a time where there will be a long piece of rope crossing across the beach to the consumer in the water. Beaches are considered to be a place to bring the family and some consumers may think that is it dangerous for a child to be around such an item. If enough parents complain about this product it may be regulated to a certain place on the beach to be used that is away from the main beach area. CompetitionThere are major competitors in the market of recreational winch devices. They all offer essentially the same product with few minor differences mostly aesthetic. There are many competitors in the market such as Pulldozer, The Grinch, Xhive, and the Ridiculous Winch to compete with. Our biggest competition by far is the Ridiculous Winch brand. According to the website Ridiculous Winch (2013) sells the Ben Horan’s model for $3,149.00. “Since the development of our Pro Model winches, we've been providing the best known energy drink companies, christian camps, youth group associations, cable parks, online retailers, as well as riders from the entire spectrum of talent” (“RediculousWinches”, 2013). When it comes to product, place, price and promotion they solely focus on the customers needs and wants. They help make sure that their product is affordable and still accessible to the masses. Thier products is the most similar to our Solowinch. Product Offering: The SolowinchSolo Winch a machine for all boarding applications: Wake/Surf/Skim/Snow.Winch Systems are winches built to pull wakeskaters, wakeboarders,snowboarders, surfers, skimboarders and anyone else who needs to be pulled at high rates of speed anywhere. Consists of a Powdercoated steel construction frame, with hole mounts for staking or strapping to ground. A spool that can hold up to 2,000 ft of high tension line. Comes with 600 ft. of high tension line and tow handle. 9HP recoil start Robin Subaru EX 27 engine with Tav2 torque converter for smooth starts and an even pull.The maximum pull strength, for deep water starts, is 300 lbs. The top speed: 25 to 30 MPH depending on size of rider.There are attached wheels and detachable dolly cart for mobility,as well as easy positioning and transport.Sharp remote control (attached to handle) and servo motor (mounted to throttle) controls allow for one man operation. Therefore, the product we offer is an augmented product. Keys to SuccessAccording to the data from the Leisure Trends Group (Mintel Group, 2011), 118 million people of at least six years of age had practiced extreme sports at least once in 2009, and sales of extreme sports products had increased by 8.8 percent reaching 2.4 billion in 2010 according to an analysis of data from SnowSports Industries America RetailTRAK by the Leisure Trends Group. This shows that the extreme sports market, including water skiing, snowboarding, and others, has a lot of potential for attracting consumers for our product.Our market success depends on how much our product is desired. A big advantage of our product could be the convenience of being able to install our device with less outlay that is required for the competitive goods. Furthermore, the price is a very important factor that can be essential for the competitive advantage of our product as it is more affordable than the other products. In addition, our product is usable in places where it is nearly impossible or very difficult to use, such as waters that are inaccessible for boats. Moreover, our device is the only device that enables the user to activate the mechanism with a remote control so that for example a wake boarder can get in position and all he or she has to do is push the button for the propulsion to start. This feature of our product makes it by far more convenient for the user than any other product.Because of the advantages of our product, we hope that it will become a trend to attract the users. Moreover, many lower income consumers can be targeted because of our considerably lower price offering.One big vision we have is that we wish our product to reach all consumers that can use it for a partially or even totally different purpose, such as in the construction work. In addition, expanding abroad could be a very lucrative business, especially in landlocked countries with many rivers and lakes and/or mountains, such as Switzerland, where a pulling device as convenient as ours can be a great success.Critical IssuesA critical point is that our product, being a consumer want, can turn into a luxury good and be less and less affordable in the future because it is known that the income distribution has “created a tiered market” (Kotler & Armstrong, 2014, p. 82). The middle class is shrinking, the lower classes remain poor (Kotler & Armstrong, 2014, p. 82), and the median income has been decreasing since the recession starting in 2007 (Gongloff, 2013). This means that fewer people will be able to spend their money on expensive sports equipment and its components. Thus, this continuous shift in income can become a threat to our extreme sports markets, including our product.Moreover, another issue can be new competitors entering the market with similar products, especially if those are more efficient and powerful than our product. For this reason it is crucial to keep up with technological changes and to offer machinery to achieve high customer satisfaction. In addition, if substitutes of our product, such as boats and cable ski installations, were to become more affordable a part of our customers might turn back to those substitutes. This leads to a further problematic point, the perception that the target population has of our product. One might have the opinion that a towing machine, operating from the shore, does not provide the same sensation as the traditional boat does. As a result, this type of thinking can make a person reluctant to purchase our product.Changes in laws concerning the use of any machinery in certain natural areas can become a major issue. Our product would become prohibited in those areas, future sales will drop and previous customers might return the device and ask for refunds. Furthermore, lawsuits for any injuries and accidents incurred while using our product can be a tremendous financial burden and possibly force the business to foreclosure. That is why the legal aspect must be carefully examined and waivers of liability as well as warnings must be highly visible and clearly stated to the consumer.Marketing Strategy SectionMarketing StrategyThe target market is the Millennial Generation, who are interested in extreme sports and are keen on the idea of practicing such sports at lower costs. They have lower income and do not have disposable income that can be spent on excessive wants. Furthermore, the Generation X is included in our target market because lower income families are possible beneficiaries of our product offering. The Solowinch will be positioned as a high cost device that provides for those who want to have the utmost control within the extreme sport of their choice. Solowinch is a more convenient and less costly way for lower income people to replace a speed boat.MissionSolowinch Inc. wishes to provide sports enthusiast with a unique and accessible experience to extreme sports. Marketing ObjectivesSolowinch Inc. wants to have dominant market share of 40% within the water winch market. In addition we hope to convert and obtain 10-15% of the traditional extreme water sports market. By promoting and building the reputation of not only the Solowinch, but this emerging industry as a whole, we hope to expand and bring recognition to the market. With the use of endorsements, advertising and guerilla marketing, we hope to revolutionize the extreme watersports industry with the Solowinch as the focal point.Financial ObjectivesBy the end of our first operating year we want to at least break-even. In order to accomplish this objective we need to sell an average minimum of 112 units per month with a total of 1344 units for the year. In our second and third years in business we expect to start generating profits at increasing rates. Our second year objective is to have a 10% increase in sales which is equivalent to 11 units and $27,500 in profit per month. The following year we are shooting for a 15% increase in sales relative to the first year, which is equivalent to 17 units and $42,500 in profits per month. So in our first three years of operation we have a few financial goals that we hope to accomplish. We want to break-even in our first year as we enter the market and start building our reputation. From there we want to begin increasing revenues and to progressively increase profits. By the end of our third year we hope to have profits that are around $500,000.Target MarketsSolowinch Inc. has decided to make the Millennials or main marketing target. Their lifestyles most closely match the idea of having solo riders who are looking for a way to partake in the extreme sports by themselves and for a lower cost. The biggest difficulty with this group is their low, or lack of, non-disposable income. They do not have the extra funds to be spending on excessive wants due to the young stage of their lives. However, this generation does control purchasing power of older generations. This allows us to capitalize on the large buying power of the Baby Boomers while still reaching out and satisfying the needs of a younger generation (Carmichael, 2011).We also want to market towards Generation X because they are currently gaining their own capital and creating families making them an ideal marketing target. They are the most educated generation to date, and they possess hefty annual purchasing power (Kotler and Armstrong, 2013, p. 77).While gaining information on Generation X and the Millennials we found that the Baby Boomers are still a very important market group to Today’s baby boomers account for about 25 percent of the U.S. population but control an estimated 80 percent of the nation’s personal wealth (Kotler and Armstrong, 2013, p. 76).PositioningThe Solowinch is the top product of its class and is positioned above the four competitors in the market. It is the most expensive because it offers a superior product with unprecedented features and therefore operates in the “more for more” category. We offer the same basic functions as our competitors, a durable and portable winch system that allows users to ride without a boat. However, the ability to operate and ride alone is unique to our product and exponentially increases its value. Our customers find that the increase in price is well worth the added value and that is the key to our positioning strategy.StrategiesOur Marketing Mix was created to appeal effectively to our target markets. Therefore, we will use the right channels, such as social media, to pass our message to our target population. Furthermore, we must put an emphasis not only on the quality and convenience of our product but also on its uniqueness.In addition, the Marketing Mix should be focused on a strong entry in the marketplace and a active promotion so that as many people as possible are informed about the Solowinch. It is important that people become aware of the benefits of the product and how it matches their wants.Marketing MixPricingSolowinch Inc. pursues the Value-added pricing for the products. The reason for this is that we provide a high quality device with components manufactured by well known brands. In addition, the remote control is a unique feature that is not offered by any other competitor. This creates a major product differentiation that allows us to be above the price of the competition. Therefore our price will be $3,500 per unit which is between $350 and $1,600 higher than similar products offered in the market. We believe that because of the value-added, through the additional features and high quality, consumers will be likely to purchase the Solowinch.DistributionDistribution- online store, shipping and handlingBeing a new company and marketing a new product, we want to reach out to our consumers as good as possible. Therefore, we decided to adopt a multichannel distribution system because it allows us to reach out to different segments. This approach will also help to make as many potential customers as possible aware of our product. There are mainly two channels through which we want to distribute the Solowinch (see Figure below). The first channel is direct sale to the end user through our own online store and other websites, such as , where we will offer our product. The second channel of distribution will be through different local and national retailers that will offer our product in their stores. For instance, a local retailer could be the Boarder Nation store in San Jose and a national retailer could be Sports Authority.Through the direct sale we wish to reach out to those people who are searching for our product, or a similar product, on the internet. This segment will mainly consist of people that shop online and look for products on the internet. On the other hand, those people that are looking for water sports equipment but do not especially know about our product, or do not shop online, are reached through the retailers.Marketing CommunicationThe marketing communication mix we selected consists of word-of-mouth influence, buzz marketing and nonpersonal communication channels. Our selection was determined by factors such as costs, the outreach of the channel and how our target consumers can best be targeted.Through the word-of-mouth influence, we want to make our friends and acquaintances, especially those who have an interest in water sports, aware of the product we launch. After, we will ask them to spread the word so that they talk to their fellow sport mates, friends and families about the Solowinch. Another way to market promote our product will be to use a famous wake boarder, Dean Smith, who spreads the information about our product in the water sports community. As nonpersonal communication channels we will put advertisements in magazines, such as “Water Ski”, because there we have the ideal target audience. Moreover, we will make use of online media to deliver our message. One way is to create videos, post them on and share them. Besides, we will be active on social media websites and forums to inform our target population about the Solowinch.Marketing ResearchThe primary market research was based on a survey we conducted this semester. We were able to gain insight on the current perspective of how consumers would react to the introduction to our product the Solowinch. Our secondary research came from the information we gathered to gain a deeper understanding of the current market for winch’s. A lot of our secondary information deals with winches that are already on the market. This information helped us define our winch and make it different from others items in current market. The market for extreme sports is increasing and additional research can be done to better service the growing market. Financials Break-even Analysis:In order for us to break-even we need to sell at least 112 units every month and produce revenues of around $200,000. Our financial objective was to break-even in the first year and here is the analysis chart:Sales ForecastAs we become more recognized and distinguished in the market and in society our sales will continue to increase. After the first year we expect for sales to pick up, but not too drastically. We’re projecting 10%and 15% increases for the second and third year respectively as can be seen in this figure:Expense ForecastWe have estimated fixed marketing costs of $1,000,000 for the first year. This amount includes the cost for creating our website, the advertisement in magazines, the costs incurred at expositions and any kind of personel costs related to marketing. Also within the amount are the costs of sponsoring a sportsman and the creation of videos that will be posted on social media. Because as owners we can do much of the online advertisement ourselves, we do not planned to compensate ourselves in the first year of business. The variable marketing costs will mainly consist of rebates we allow in order to sell our new product. These rebates may vary depending on the deal with the customer and can vary between 5% and 20% of the sales price. Therefore the variable expenses may be between $175 and $700 per unit. There will be no variable costs for sales commissions and for bonuses to reward achievements of sales goals in the first three years of our business.ControlsThe product Solowinch will be evaluated by the number of units that are sold within the first year. If we are able to break even for our first year, it means we had a successful entry into the winch market. Success within the first year will help us create a timeline for our ultimate goal of gaining 10-15% market share in 10 years. We plan to monitor how similar products are selling in the water winch market compared to the Solowinch. A market share analysis is necessary to the success of the product. We will need to measure market size,growth rate, share, and segmentation. Target market share will be taken into consideration as well as business continuity plans, emerging opportunities, SWOT analysis and key players in the market. If applicable we will survey consumer buying habits. We will learn who is willing to pay for our product and what target market is less likely to purchase our winch. Thus, helping Solowinch Inc. manage our marketing strategies. will survey consumer buying habits. We will learn who is willing to pay for our product and what target market is less likely to purchase or ImplementationImplementation will begin by creating contracts with suppliers. We will use a Subaru brand engine so that we may endorse product quality and recognition. We will introduce our product to the market by endorsing a popular wake boarder such as Dean Smith. We will showcase the Solowinch in all the extreme water sports events and allow customers to test it and purchase it as well. We plan on moving our target market from the consideration phases to the discovery phases by stationing three Solowinches in lakes that are highly visited by water athletes(Gerrmann, 2012). We plan to station the Solowinches in Lake Tahoe, California, Lake Michigan, and Blue Lake, Florida. The Solowinch will only be promoted in these areas for a 3 month summer period. We will have sales representatives at each station introducing the Solowinch and allowing for customers to test it and also purchase it. We will also be an online based company, we will ship all of our products to our customers. We will have a contract with FedEx so that we may be able to ship our products quicker and at a wholesale price. We will also use retailers such as sports authority, in order to sell the Solowinch. Marketing OrganizationOur Marketing team will consist of an estimated 28 people not including our distributors. We will have a group of four people control the public relations and advertising. The rest of the 24 members will make up the sales team. We will have five people specialized in showcasing the winch at all extreme sporting events. There will be five summer lake assistants at every lake to assist the customers in using the Solowinch and promoting it. Our last 4 member of the sales team will be in charge of online sales. this includes managing the website, keeping track of orders and making sure everything is running properly with the online business. Contingency PlanningA company difficulty that we may experience is creating the fact of gaining our own capital to create the winch. The company will have to have the funds to produce our product for consumers that want the product to purchase it. In addition Solowinch Inc. may find it difficult to pay to advertise the winch. Advertisements can get expensive and we may unable to afford it’s not in our budget to market our product on TV, radio and film. A possible risk that Solowinch Inc. will be taking is entering a market that is established. The idea of the Solowinch is not new, we are creating an enhanced version of other winches available. A company that already produces a winch can make alterations to their current products and gain a bigger market share. A worst case scenario would be that we can’t get the product out on our own and that we would have to sell the product through another company. One alternative path to solving this problem would be to create a partnership with another company and we are able to produce our product but we are still able to make sure our product is our own. Another alternative solution to this problem would be to have another company sponsor the making of our Solowinch. We would be able to have a bigger name associated with our product that may help it gain notoriety in extreme water sports. References (2013). A lil About Us, Retrieved from (February 10, 2012). Global Demand for Extreme Sports to Surge, Backed by Increasing Participation and Spending, According to New Report by Global Industry Analysts, Inc. PRWeb, Retrieved from Bostain, J. (2013). Tips on Buying a Boat Suitable for Boat-Towed Water Sports.Retrieved from , M. (2011, June 07). Stat of the Day: How Millennials Affect Boomer Spending. Retrieved from , E. (2012, May 31). Where to Wakeboard: A bucket List. Retrieved from . (2012) Prices retrieved from Gongloff, M. (2013, September 17). Median Income Falls For 5th Year, Inequality At Record High. Retrieved from Dodge Creative. (2013, June 18). Millennials – 80 Million Strong and Ready to Spend.Retrieved from , L. (2008, May 20). Extreme Sport Growing in Popularity. Retrieved from , P. and Armstrong, G. Principles of Marketing. (2014) (15th ed). Upper Saddle River, NJ: Prentice Hall Mintel Group Ltd. (2011, March). Action and Extreme Sports.Retrieved from ................
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