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Product Development Project Assignment 2
- MARKET ANALYSIS
- Product Description and Pricing (specific details)
H.O.M.E. kit product is new to the market and since it will be produced for the first time, there is no data for any previous products. H.O.M.E is basically a bag filled with either cleaning tools or cooking tools like cups, plates, pot, pan, grater, cutting boards, utensils, flashlight, towel, dustpan, and spray bottle etc. It could also be a customizable kit where the customer can mix and match tools by themselves. The bag has two sizes, a medium size H.O.M.E kit that can carry 21 products and a large size H.O.M.E kit Plus that can carry additional contents like a mini-vacuum, lightbulbs, batteries, and a toolkit. Each kit comes in a considerable weight that can be easily carried. For pricing, the suggested retail prices after penetration for these products are $60 for H.O.M.E kit and $90 for H.O.M.E kit Plus. According to an article by 13WMAZ, college students spend around $400-$700 when moving in to dorms. The starting price is $60 which is half if not less than other pot and pan bundles which can range from $100 to upwards of $200. With this low pricing H.O.M.E aims to attract many young customers (especially college students) that are struggling with money or do not have a lot to spend on unnecessary items for their apartments/houses. H.O.M.E developed this product based off the needs for college students, and with that in mind, H.O.M. E’s goal is to create to the cheapest alternative possible.
- Market Size and Trends
The market size that H.O.M.E aims to target at the start is approximately 25% to 30%. However, through sound marketing strategies and high-quality service, H.O.M.E expects the business to attract new and more customers and increase it’s target market. Recently the popularity of bundles or kits have become more apparent. For example, there are a wide array of services that offer pre made meals for people that find gathering all the ingredients and preparing the meal may take too long for someone with a busy life. Therefore, H.O.M.E would replicate this type of product but in the form of necessities needed when moving into a new college living situation. Young adults now are seeking the aspect of ease and simplicity so this product will align perfectly with that trend. Product Development Project. The target market provides a potential for increased growth because it incorporates a wide range of customers without restriction on specific demographics. Besides, more people are becoming technology savvy and are adopting the use of mobile phones and computers and embracing the convenience received through online shopping. Also, the convenience of kits being delivered at people’s doorsteps is drawing them to order online. The rate of growth of the target market is around 20% and this is expected to be more in the future. Moreover, various changes or trends are occurring in the makeup of the market. Another change is that the older generation has also embraced the idea of buying ready kits online and joined the market of young people who are the majority of consumers of online purchasing. In addition, with COVID-19 crisis, most people changed their shopping habits to online. Product Development Project. There is an accelerated shift from stores to e-commerce. According to Digital Commerce 360, COVID-19 has related boost in online shopping resulted in an additional $174.87 billion in ecommerce revenue in 2020.
- Competition (present and potential) and Barriers to Entry
H.O.M.E kit faces stiff competition as each company thrives to gain an advantage over other rivals. The existing companies are financially stable and therefore have the opportunity to offer tough competition. However, the market competition offers an advantage to customers as they get to receive quality services and businesses get to improve their operations and efficiency.
H.O.M.E faces several different levels of competition. Product Development Project. Its direct competitors include companies that also market these kits like Moving Day Survival Kit, moving care package, other smaller manufacturers as well as individuals who make these kits as gifts for their friends and families.
H.O.M.E has no many barriers to entry, meaning there would be stiff competition in the future. Some of the few barriers to entry in the industry relate to cost, quality, and means of transport. Product Development Project. The capital requirement is relatively high like the cost of purchasing adequate transportation modes like cars for all the drivers in the desired locations and the service costs. The other barrier is quality of the products as H.O.M.E must deliver a good quality product that last long and works effectively for consumers. The other barrier relates to the delivery modes that must be selected effectively based on speed and convenience. Besides, based on technological changes and advancement, the industry is likely to face high competition in the future.
- Position Relative to Competition
This section should be at least 200 words. The positioning should align with your value proposition. Make sure to reference where you retrieved the information when researching and hyperlink the source.
- Consumer Profile (specific details)
H.O.M.E kit will not restrict its target group to a specific demographic but all those individuals who are seeking the aspect of ease and simplicity and would like to order them online. Simply, it will target both men and women, elderly and young, different income classes as long as the consumer can afford the payment rate. Product Development Project. Most of the purchases will come from new apartment or homeowners, especially those in college, so college students could be the primary target market. H.O.M.E will target market constitutes consumers who are willing to pay a little extra cash to get their kits delivered to their front door without spending time visiting many shops. Individuals who value their time and speed of their orders as H.O.M.E ensures faster delivery of the kits within the minimum time possible.
- Retailer Aspects (types of retail outlets now and in the future and the level of customer service needed)
- This section should be at least 200 words. The retailer aspects should align with your positioning relative to competitors. Make sure to reference where you retrieved the information when researching and hyperlink the source.