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-type 473 product 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 for.
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?