Slide 1IntroductionAdvantages OfferedPreliminary AnalysisPreliminary AnalysisPreliminary AnalysisCompetitive LandscapeCompetitive LandscapeBusiness ModelKeys to SuccessMajor HurdlesViabilitySlide 13TEAM 3SLEEP COMFORT SYSTEMNancy Kao, Diana Lindstrom, Tony Machacha, Pat O’ConnorIntroductionA 2002 National Sleep Foundation poll found that 74% of American adults are having difficulty sleeping a few nights a week or more39% get less than seven hours of sleep each weeknightMore than one in three (37%) are so sleepy during the day that it interferes with daily activitiesAdvantages OfferedNo mold and mildew issues like water-based competitorsLeakage is not a problem like water-based systemsPossible Energy-Star SaverTax rebate for consumersSleep and health benefitsThrough temperature regulationPossible cost savingsVersus running heat or AC through house or room all nightPreliminary AnalysisIndustryPoised for entry – few competitorsThose that exist aren’t well marketedVery few use air as the cooling agentVery few offer temperature regulationHeating/cooling within half a degreeReduces humidityNothing is described as eco-friendlyOnly need 1,000 BTUPreliminary AnalysisChannelAvailable online for purchase“Great” websites like chilitechnology.com and drinights.comHeating (electric) blankets/mattress pads are available through retailersCustomerIn US, most are directed to individualsMarketed to those who need a cooler or warmer bedIn China, heating/cooling blankets are used in hospitalsPreliminary AnalysisSegmentsMiddle to Upper Income ClassesPrices range from $50-$500+Luxury itemPossible latent needWomenMenopausalPurchasing PowerMedical ConditionsSleep disorders, feversCompetitive LandscapeCompetitive LandscapeBargaining power of buyersHigh - buyers will look for low/reasonable costSomewhat market dependentThreat of substitute productsHigh – other products offer cooling/heating features in different forms (i.e. air conditioner, fan, electric blanket, etc)Few use air cooling and offer temperature regulationBargaining power of suppliersHigh – few 1,000 BTU AC unit (inelastic price)Low – many blanket manufacturersThreat of new entrantsLow - need FDA approval on health benefits and passing testingOutsourcing issues because AC unit of this size is hard to findRivalryModerate – currently no products offer the same value however the concept could be easily imitatedBusiness ModelMarket ChoiceRetail (in-store locations)Replacement product (electric blanket, AC, heat, etc)Sleeping comfort, eco-friendliness, long term cost savingsOnline through retailer websitesBed Bath & Beyond, Macy’s, TargetMarketingOnline ads, print ads, eventually TV spotsStrategically placed on specific websites and in magazinesKeys to SuccessProduct form and function must earn its place in people’s sleeping placesFinding the ideal entry marketHospital, hotel, sleep centers…?Finding the ideal first customerInitial pricing must be accurateEst. starting price at $500, decrease to $100 over timeEst. profit margin of $250/unit initiallyMajor HurdlesMarketing a new-to-market product involves encouraging a change in customer behaviorEducating potential users about product’s benefits and use will be a challengeGap in the cooling unit sizes available Current AC unit five times more powerful than specs. Smaller AC units actually get costlier below 5000 BTU Alternative cooling units too small and scaling these up makes them very costly and prone to higher rates of failure Need to be bridged cost effectivelyAppearance!!!!ViabilityPositivesAppealing value propositionTo date, there’s an unfilled market gapPrototype has been invented, tested and validated by the inventorsIt works!Inventors experienced in high-volume manufacturingKnow how to drive down costsUncertaintyToo many bells and whistles for the average
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