THE BEACH CARRIER Mary Ricci has a new product concept The B

THE BEACH CARRIER

Mary Ricci has a new product concept, The Beach Carrier, that she is ready to bring to market. Ricci is creative, optimistic, enthusiastic, flexible, and motivated. She is willing to put substantial time into developing and bringing The Beach Carrier to market. Although she lacks capital, Ricci is unwilling to license or sell the pattern to a manufacturer; she is determined to maintain control and ownership of the product throughout the introduction and market penetration phases. Ricci believes there is a significant amount of money to be made and refuses to sell her product concept for a flat fee.

THE PRODUCT

The Beach Carrier is a bag large enough to carry everything needed for a day at the beach, including a chair. When empty, the bag can be folded down to a 12-inch by 12-inch square for easy storage. The bag’s 36-inch by 36-inch size, adjustable padded shoulder strap, and various-sized pockets make it ideal for use in carrying chairs and other items to the beach or other outdoor activities, such as concerts, picnics, and barbecues. The bag can also be used to transport items, such as ski boots, that are difficult to carry. Manufactured in a lightweight, tear-resistant, fade-proof fabric that dries quickly, the bag will be available in a variety of fluorescent as well as conservative colors.

COMPETITION

Currently there are two competitive products sold online that Ricci felt would compete with The Beach Carrier. The first one, found at www.shadeusa.com, is the “Caddy Sack” and is advertised as a backpack-type473product that can hold a beach chair, an umbrella, a boogie board, and even a small collapsing table. There is also an outside pocket for a towel, a snorkel, or fins. It is available in three colors and is priced at $16.95. Ricci purchased one of these and felt that it would not hold all the items advertised at one time. The chair had to be very small, and room for extra beach accessories was very limited. This item was ideal for someone biking or walking to the beach with gear for only himself or herself.

The second item is called the “Wonder Wheeler” and can be found at www.4thebeach.com. It looks similar to a two-wheel shopping cart that might be used to carry purchased groceries while walking home from the store. This product is advertised as having oversized wheels; it weighs less than 10 lbs. and folds up easily. It can hold a significant amount of beach gear, such as multiple chairs, an umbrella, a cooler, beach towels, and toys. It has a list price of $59.99, and Ricci felt that even with the advertised oversized wheels it would be cumbersome to maneuver on the sand. Its high price was also felt to be a negative for many consumers.

MARKETING RESEARCH

Ricci commissioned a consulting company to perform a feasibility study for the product, which included a demographic profile, cost estimates, packaging recommendations, and a patent search. The patent search revealed the above-mentioned products and a chair that could be folded and carried as a small tote bag that could also hold a few small beach items. None of these were felt to be a threat to Ricci’s product, and she was optimistic that a patent could be obtained.

A focus group was used to determine potential consumer response. Results of the focus group indicated that several features of the product should be modified. For example, the material was perceived as durable; however, the fluorescent color was see-through and considered “trendy,” lessening the perceived quality of the bag. The size also represented an issue, as the bag was perceived as much larger than necessary.

MARKET POTENTIAL

People who use suntan and sunscreen products have been identified as the primary target market for The Beach Carrier. Research indicates that 43.9 percent of the adult U.S. population, or 77,293,000 people, use suntan and sunscreen products. Of these, 57.8 percent are female. Assuming that women are the primary purchasers of beach bags, the potential market is estimated at 44,675,000. Beach bags are replaced every three years. The primary market for suntan and sunscreen products is described in Exhibit 1. The marketing share objectives for the first year of The Beach Carrier’s sales have been determined based on the following assumptions:

People who use suntan and sunscreen products represent the market for The Beach Carrier.
Most men do not buy beach bags; consider women only (57.8 percent of population).
Women buy new beach bags every three years on average; that is, one-third will buy a new bag this year.

Based on these assumptions, the unit sales needed to achieve market share objectives of 1, 2, and 5 percent of the total market during the first year of The Beach Carrier’s sales are shown in Exhibit 2. Ricci is targeting 1 percent of this potential market. Regional market share objectives can be developed from the same data as seen in Exhibits 3A and 3B.

STRATEGY

Ricci investigated several methods of marketing The Beach Carrier, including selling it in upscale (i.e., Bloomingdale’s) or discount (i.e., Wal-Mart) stores, licensing the product concept to a manufacturer, selling the idea for a flat fee, selling the bag to corporations for474use as a promotional item, selling it on the Internet, and setting up a mail-order operation. Ricci believes that the mail-order option, while requiring the most effort, will provide higher margins, lower risk, and the overall best fit with Ricci’s strengths and weaknesses, her market penetration objectives, and her limited financial resources. The Internet could also create opportunities, but Ricci was unsure of this option.

ESSAY QUESTIONS

1. What is the nature of the product? What are its strengths and weaknesses?

2. What are the limitations to the assumptions Ricci has made in determining the market
potential? What risks do these present?
3. How can Ricci protect her product design?
4. What are the pros and cons of the mail order marketing strategy? What are the pros and cons of alternative distribution methods?
5. What are some of the manufacturing issues Ricci will face?
6. Is the financing sufficient to fund the roll out of the Beach Carrier as planned?

ASSIGNMENT

1. Review the entire case starting on page 473 of the textbook.
2. Answer the six questions listed above.
3. Your answers must be in essay style. Minimum 1- 2 paragraphs each.
4. Use the questions as the header for each section of the essay.

Solution

Answer 1. The product is a bag to be used for carrying items to the beach. It is big enough to carry all the items that will be required to the beach for one day. It is 36-36 inch when opened making it big enough for keeping items and 12-12 inch when folded which makes it easy for storage.

Strengths of this product can be that it can carry all the items required at the beach in one day together. Hence the hassle of carrying too many bags xann be saved. It is big and easy to carry with adjustable padded straps. It has various sized pockets appropriate for carrying all types of items. It is made up of light weighted, tear resistant and fade proof fabric which makes its life longer.

It weakness could be that the fabric of the bag is a see through one diminishing the quality and the size of it is more than that may be required for the customer.

Answer 2. The limitations to the assumption made by Ricci are that for estimating the market for beach bags she considered the suntan and sunscreen buyers. And from them she further categorised it to females only being the ones to purchase beach bags. She also assumed that beach bags are replaced every three years. Based on this assumption she estimated that one third of the females buying suntan or sunscreen will buy beach bags this year. Risks involved in these assumptions are that the buyers of suntan and sunscreen products do not stay fixed every year. It is also not necessary that 1/3 of them may require that bag this year. And keeping the market assumption so limited will not let the product to bring expected returns on sales.

Answer 3. Ricci can protect her product design by getting a patents right for it.

Answer 4. Mail order marketing strategy could require a lot of effort to operate. Arranging for the delivery of the product after the order will require efficient manpower. Perfection of time management will also be required in it. Though all these disadvantages are connected to it, it is still the most beneficial strategy of marketing for Ricci as it will give higher returns, low risk, require less finance for marketing and best fit for the nature of business.

Other distribution methods could be expensive as Ricci is short of capital finance. They could involve a complex marketing process. And could be time taking too. Risk of damage of products in long process of marketing is involved. More manpower is required for using complex distribution levels.