th
Mission Statement .............................................................................................. 3

1) Identification of a new product ....................................................................... 4
1.1. Class product reference................................................................................................................... 4
1.2. Product description ......................................................................................................................... 5
1.3. Reasons why it will succeed ............................................................................................................ 7
2) Macro-environmental impact ......................................................................... 7
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3) Secondary data and sales potentials ............................................................ 11
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4) Segmenting and targeting ............................................................................. 15
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5) Marketing mix .............................................................................................. 19
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Reference ......................................................................................................... 26
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Due to the class discussions that repeatedly returned to the success of Apple products, the group was inspired to pursue a good (inclusive of a service such as GPS, movie downloads, etc.) that could deliver end users with entertaining and functional applications in a trendy format. And with that, the smartglasses concept was conceived.
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Overall, the group was somewhat familiar with the US military’s use of the Head-Up Display (HUD) and helmet-mounted displays (HMDs). This technology was introduced in the 1970s and 1990s respectively. Hence, there was the sense that in this new millennium, the ‘smart’ equipment technology would be all that much more refined and readily transferrable to a compact recreational and/or utilitarian gadget to be promoted to all persons.
The reference material was viewed and printed from the www.defenseindustrydaily.com
website re JHMCS: Fighter Pilot “look & Shoot” Helmets’ Upgrade, Ups & Downs
Equally of interest was the June 9 , 2009 National Geographic blog posting entitled, “Smart
Eyeglasses Display Data for Objects You're Looking At” because it represented the application we were looking for. For example, the blog immediately stated that if a ‘word’ or ‘object’ is stared at, related information pertaining to said word or object would be called up on the glasses. For further encouragement, comment feedback noted possible similarities with the smart eyeglasses and 3DTV. In consideration that Samsung, Sony and Panasonic started selling affordable 3DTVs this past spring in
Canada, it seemed very realistic that we too could provide this entertainment in a more portable manner such as lightweight glasses; and cash in on the lucrative entertainment technology sector that is providing Apple and Research in Motion (RIM) with so much success.
The Smart Eyeglasses were viewed and printed from NATGEO News Watch blog at http://blogs.nationalgeographic.com
.
What really caught our attention was when we met as a group and two of the team members spoke of the TED Ideas worth spreading website and loaded up the Blaise Aguera y Arcas demos augmented reality map video.
The augmented reality map presentation was able to incorporate the technological features that we’ve seen with Google map, cell phone videoing, 3DTV, and tele-referencing. Blaise Aguera y Arcas’ addressed the capturing of both cartography and imagery, as well as broadcasting the panned scenery with such fluidity, that his presentation convinced us that our insITe© product would be a viable product for today’s market; whether it be applied for business, research and development or simply used for recreational purpose. http://www.ted.com/talks/blaise_aguera.html
is the link for the augmented reality map video.
TED Ideas worth spreading is a website that promotes itself as “Riveting talks by remarkable people, free to the world” and right now, it’s delivering exactly that. Hence, the insITe© product is not simply a futuristic concept but rather was identifiable with what TED is promoting and one that meshes with other current technological goods and services being introduced on the global market by Apple, RIM,
Sony, etc.
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-GPS: It will use an apparatus similar to Google and Yahoo maps which will be able to recognize where a person is on the street, and show directions to where a person needs to go.
-3D: it will feature an application which will be compatible with 3D Televisions which will allow users to watch 3D movies and shows.
-Movies: with insITe © consumers will be able to watch movies on their glasses. They will be able immerse themselves in the action, with our 3D lenses and headphones attached to the arm of the glasses.
-Video camera: the video camera will be used as a sensor that takes snapshots of whatever the consumer is looking at. The camera will be able to be turned on and off. The camera will be able to connect the pictures taken to either its GPS device if a person wants directions, or the internet.
-Projector: this projector will be embedded in the arm of the glasses. The projector will be able to display the information received from the web onto any hard surface including your hands.
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For example, say I am walking in the grocery store and I get to the soap aisle. It is my intention to want to buy the most sustainable soap. So I put on my insITe © glasses and I look at one detergent.
The camera takes a picture of the detergent, connects it to the internet where then it projects all the relevant information onto any hard surface, including your hand. You can touch the information being projected like a simulated touch screen. So for instance say you got on a site and one key phrase was
‘sustainability report’. You could touch this phrase and get a report to see how sustainable the detergent is, very quickly and very efficiently. Once you do this for all the detergents you want to compare, then you would choose the detergent that most interests you.
The way that we have decided would be most conducive in attaining these features, is to shape the experience around a heads-up display (H.U.D). The H.U.D. is a practical way of representing the digital realm because it complements the main way in which we interact with the environment, through our eyes. We have designed a sleek pair of sunglasses that can be worn in comfort and will provide a platform for attaching the electronics. The H.U.D. will be projected along the inside of the glasses using the same small projectors that are available on new generation cell phones. The image of the display can be skewed to fit the entire viewing area using computers.
All of the electronic components are small enough to fit in the arms of the glasses, which will be made of a hard plastic. The outer portion of the arms will have a nice thin sheet of aluminum for aesthetic purposes. Along with the projector, the glasses will include an outward facing 5-megapixel camera in parallel to the users field of view. The camera will be continuously running, taking in information from whatever the user is looking at. The computer will be loaded with recognition software that can deduce and identify different features of the environment as they appear on camera.
For instance, the computer could recognize a product off a store shelf and instantly give the user feedback on that product. It would also be able to follow hand gestures made by the user in order to navigate through the H.U.D’s menu system.
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The system will be very similar to the way many mobile devices have gone, in terms of simplicity. By limiting the number of selections needed to activate an application, and by allowing the computer to make intuitive selections based on context, the interface should be rather simple to use.
Many of the applications will be continuously engaged or activated through the environment as they become relevant. The computers will be able to access meta data through it’s built in WiFi and cellular network. Having access to the internet also allows for custom user programs to be incorporated at any time. Open access to the source code will allow easy adaptation of existing programs as well as newly created ones, which sparks creativity in a similar way that the Apple apps do.
insITe © makes it easy for users to watch their favorite movies and television in 3D with stereoscopic vision. The internal storage device allows for a collection of entertainment files to be accessed, such as, books, photos and even music. Pulling the ear bud headphones out of their locked position is the arms, triggers the sound to turn on. In addition to having other standard cell phone components (accelerometer, Bluetooth, led flashlight, infrared, etc…), the outer frame will only require a few buttons in order to power up the device, turn on and off the light, and to answer an incoming phone call. Variants of the product would allow for features like the LED light to be removed and swapped out for an infrared beam or extra storage. This port feature is similar to pc cards in older style laptops.
We believe this product will be successful because it is an innovative approach to the future of usability in mobile devices. insITe © will differentiate itself apart from similar concepts because of the way it allows the virtual and real environment to occur together at the same time. This kind of revolutionary product will be the first foothold in the climb towards the next generation of technology through augmented reality. Much in the way that Apple’s iPod revolutionized mobile devices, our product will take it to the next level. Early adopters of this product will set the example of what people will come to expect out of a mobile device for years to come.
We understand that there are forces outside of our company which will not only affect how we promote insITe ©, but the sales potential for our product. Although there are threats posed by these forces, ultimately as long as we are well prepared, we can take advantage of these forces which lie outside of our control. The macro-environmental impact consists of six main forces – demographic, economic, natural, technological, political and cultural forces - which impact our sales potential. The three most pertinent macro-environmental forces which will have the most impact on our sales are demographic, economic, and technological forces.
Demographic forces are of particular importance because they are the basis of our market and have such a huge impact our segmentation and targeting plans. In Canada we are undergoing many changes to our populations. Domestically, Canada is expected to exceed 33 million by 2011 i . The most important factors in this population growth is the fact that Canada is getting older, and Canada is becoming more multicultural, and that there has been a change in Canadian household income.
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There are three particular major segments to the Canadian population: Baby Boomers born between
1947 and 1966, Generation X born between 1967 and 1976, and Generation Y born between 1977 and
1994 ii . Our product is meant to be used as an entertainment device with applications which will allow for individuals to solve their everyday problems. We know that our product is more appealing to the younger generation hence why we are seeking to market our products to generation x and generation y, or those individuals who are aged between 16 and approximately 40. Furthermore we are interested in the tech savvy group which is generally younger.
Because the population is getting older, we understand that we will have a smaller segment of the population to target. This will have a high degree of impact on our sales because the less people we have to sell insITe © to in Canada, the less profit we make. Hence it increases the importance of us gaining as large a market share as possible in the introductory and growth stage of the product.
Another demographic change that is relevant to our product is the changing Canadian household.
Now, as compared to the past, there has been an increase in dual-income households as women are increasingly employed and contribute to household income. This is important because higher household income means more money available to buy products such as ours for leisure and hence an increases sales potential. We as a market need a middle class to make profit and in Canada a large percentage of Canadians are middle class. In Canada the median household income is $50,000. Even better is that in Quebec, where we plan to first introduce the product, 34.5% of families have a household income of $80,000 or more. This shows a strong middle class and this will positively impact our sales.
Another factor which contributes to the changing Canadian household is where these families are located. Interprovincial moves from rural to urban to suburban, means that there will be an increased number of individuals who live in the city and surrounding neighborhoods. Technology is more appealing to urban than rural areas, and having a large population in the cities means a larger target market.
Canada is increasingly becoming more diverse as a population. When our product would read the maturity stage of its life cycle, we would have to cater to these diverse needs , not just ethnic but sexual diversity and disabilities. We would have to ensure that our tech savvy users can personalize their smart glasses to match their personality However in the introduction stage our product has to be basic enough that it is user friendly and captures all the diverse markets. This will lead to line filling where we will have to provide insITe © in different colors, shapes, shades, and different language features. Line filling will not be as costly in the maturity stage, since we would have economies of scale.
Finally, education is an important factor. Having a better educated population means several things for our marketing and for targeting our product. Better educated consumers mean that they look for higher quality in the products that they buy, and are less susceptible to gimmicks. Hence we will have to provide very precise and detailed information about our product online, and in store. When promoting these products in store we will have to properly train all our associates on how the device works
(especially since it is a new product). Training will be costly and as an expense will have an impact on
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our profit margin. Second, higher educated Canadians – those with University degrees (Bachelors and
Masters) - tend to have higher incomes and can afford better quality, higher priced goods. Also important to note is that those with higher incomes are more tech savvy and more interested in technology than an undereducated rural population.
An important facet to economic forces is income and income distribution and consumer spending patterns. In the introduction stage of this product, individual consumer spending is important during this economic downturn; consumer demand and buying power have taken a hit. This is a major factor because now consumers are more skeptical of what they buy, opting rather to buy what they feel is a quality product and not a fad. This will affect our sales potential dramatically because as a new technological product, if consumers feel that what we offer is redundant they will not buy it.
Also in this economic downturn our chances of failure have increased as we are not an established product. This economic downturn also affects our sales due to price. We cannot price insITe © too high or else no one will be interested in our product. However, if we price it too low at the introductory stage consumers may still not buy because they feel that it is a cheap product, and in the future we will have less leeway to make price adjustments, as the technology gets older.
Furthermore, if consumers feel that it is a fad, they will not buy our glasses. In another way our glasses may have potential as entertainment products are bought during a recession by people so they can ‘get away’ from all of their problems so there is hope there.
This, with regards to our product has one of the highest degrees of impact on our product, and the sales of our product. One of the reasons this is the most relevant force is because technology changes very quickly, and substitutes to our product can penetrate the market relatively soon after we have introduced our product. Understanding that we will be working in a specific time frame (from its introduction to when another substitute product comes along) we have a limited time to promote and capture as large a market share as possible.
We are very well aware that with changing technology, the new replaces the old very quickly. Due to this, we will constantly have to be investing in research and development and be on the lookout for new technologies in order to not find our product outdated. This is expensive and will impact our profits considerably; however it will lead to us being a leader in the market. Furthermore, because other substitute products will be on the market, we will have price competition and will have to lower prices and this will lower our profit margin as well.
The internet is a huge force which can either help or hurt our product. First the internet can help the promotion and sale of our product by creating another safe and very accessible medium through which potential consumers can get to know our product and buy our product in the comfort of their own home.
As a seller, we can reach a wider audience, and eliminate intermediaries and directly market our products (without stores and long term commitments) which can reduce our costs and increase efficiency.
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However, because the internet is convenient; it provides buyers with greater product access and selection. The internet can severely hurt the sales of our product if there are other competitive alternatives out there. Nevertheless we feel that our smart glasses will have such outstanding quality that it will be able to compete when competitors arrive in the market.
Natural resources mostly affect the design and what the product is made of as these will have an effect in the price and the appeal of the product. How and where it is made has an impact on costs which will have an impact, price and finally sales. Generally natural resources such as plastic and petroleum are becoming scarcer, and low supply increases the prices of these goods. This can have a negative impact on our sales if our cost of production is high. Hence, since our glasses will be made in part from hard plastics we need to ensure that we can get recycled materials to lower our costs, rather than extracted raw materials. Recycling will be more sustainable environmentally and economically.
First and foremost, as marketers for this product we must ensure that we do not infringe any laws or regulations. Furthermore, since legislation regarding technology is rapidly changing we must ensure that can keep up with them. With regards to the political environment, what will have a degree of impact on our sales are issues concerning social responsibility such as whether insITe © is made from recycled plastics.
Furthermore, we need to ensure that insITe © is in line with Canadian safety codes and regulations, especially since this product is very complex. The political stability of a Canada is not a factor as Canada is a stable and safe place for business. However, when we cast our nets wider by the use of the internet, we need to ensure that those nations we sell too are receptive to international buying, and that the government have an efficient bureaucracy with efficient customs handling, good market information and other aspects conducive to business.
Even though our product is a new product, the political environment will not likely have a high degree of impact on our sales, besides the regular taxes, customs and regulation for the design of our product to ensure safety.
In Canada and much of the industrialized world, there is a primacy on getting information quickly.
This is a good atmosphere for our product because it will appeal not only to the tech savvy who seek entertainment but individuals who need current and up-to-date information to make the best decisions possible. This sort of capability with insITe © will allow us to expand into other segments of society which we plan on targeting during the maturity stage of the product.
Overall the cultural environment beyond having an acceptance of the role technology, and the primacy on current information does not have too much impact on the sales of our product.
Conclusion
It is important to note however, that as a company we cannot change everything such as an aging population, geographic changes and economic forces. We do understand however that there is way more of a benefit for us to take a proactive approach to designing marketing strategies that will help us get through and embrace the marketing environment, rather than reactive to it.
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This evaluation will be used to identify potential insITe© users, to predict possible future growth for our company as well as to discover would-be information gaps. This information will help us to assess whether there will be enough of a market for our product in Quebec.
Sources of Information
Most of the information was selected from Quebec sources as we will initially market our product in
Quebec. However, some sources were taken from Statistics Canada as well as from private polls like
Harris Decima, Ipsos Reid, The Globe and Mail, The Montreal Gazette, and Leger Marketing.
We looked at the averages in Canada of the average household and found that the median household income in Canada is $54,047 (Canadian Average $59,090). As well, the average household disposable income is: $46,615 (Canadian Average $55,541).Canada has an average household net worth of $212,078 (Canadian Average $351,282) and the percentage of Canadians aged 25-39 is 21.1 per cent
(Canadian Average 20 per cent). (The Globe and Mail)
Population of Quebec
We will initially market our product to the Quebec population, which, according to Wikipedia, as of this year, (2010) the population is: 7879,167. ( http://fr.wikipedia.org/wiki/Qu%C3%A9bec )
Quebec Revenue Statistics
According to Quebec statistics, as of 2007 there were 224,175 single Quebecer’s whose total revenue was $50.000 or more (7.9%). In addition, the number of families which had $80,000 or more total revenue was 740,284 (34.5%). However, we can also look to the statistics of families in Quebec to see the amount of families whose total revenue is $80,000 or more to see that we need to target those aged from 18 to 49. This is a huge market in Quebec and we can see that we need to target those customers with available disposable income for entertainment and recreation purposes and we will seek to make long-term solid relationships with these customers.
Distribution of family unities according to the income slice, in Quebec, 2007, reads as follows; the average male income was $30,940, the average female income was $28,249. Additionally, the average single person’s income was $26, 039, whereas the families with no children had as disposable income
$61, 826, and the families with children had $54, 332.
3.1.2. Education Level of Target Customers
As well, we will be targeting a customer with more education as they tend to have more disposable income; the income of those with no high school education was $32, 255. For those who had post secondary education the sum was $46,704. Finally, the university graduates had the highest disposable income of $69,780. (Quebec Statistics, http://www.stat.gouv.qc.ca/donstat/societe/famls_mengs_niv_vie/revenus_depense/revenus/revfam_t ab1.htm
)
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The first graph shows the population of Quebec in 2008-which signifies that there is a large segment of the population who are between the ages of 40-60 in 2008. The second graph displays the forecasted population of Quebec in 23 years. In 2031 there will be a large segment of the population who will be between the ages of 30-54. This demonstrates that there will be a sizeable portion of the population in
Quebec available as potential customers for our company and our products.
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We are targeting two different populations for our potential customers; the Generation Xers: Ages 29 to
49 and Generation Years: ages 8- 28. This is a large population and because of this reason, it could be exceptionally profitable. This population will continue to age and looking back we see that statistically, from 1956 to 2006, the median age of the Canadian population went from 27.2 years to 38.9, (which was a gain of more than 10 years over a span of half a century). By 2056, the median age is supposed to reach 46.9 years, which will be almost 20 years higher than it was in 1956. (Statistics Canada, http://www41.statcan.ca/2009/3867/cybac3867_000-eng.htm
)
Gender Statistics
As seen in the graphs of the population of Quebec defined by sexes and by ages, our target population will continue to grow fairly evenly across the sexes. Our product will be aimed at both sexes.
Despite the fact that more men may be attracted at the outset, the numbers show that women offer a large market as well. The Entertainment Software Association of Canada (ESA) states that the age of the average gamer is 35.8 and that 64.3 per cent of gamers are male and 34.9 per cent are female. http://www.theesa.ca/
We at insITe© appreciate that the employment numbers are up in Quebec and that Quebec, since
2009 has grown the fastest in the employment growth rate of all the provinces in Canada.
We looked at employment figures as our target population will most certainly need to be employed. We discovered that in June, employment increased by 30,000 in Quebec and the unemployment rate dipped 0.2 percentage points to 7.8%. Quebec apparently is holding strong against the problems and recession which has hounded the United States in the past few years. In fact, since July 2009, an overall employment increase can be seen in Quebec –and this has been the greatest of all of the provinces at 3.0% (+117,000).] http://stat.gouv.qc.ca/publications/referenc/pdf2009/QCM2009_ang.pdf
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3.1.6. Retail figures in Quebec
The retail sales in May were down 1.8 per cent from April (mostly due to the car sales), but metropolitan
Montreal's sales were up 2.37 per cent to $4.01 billion. According to the Montreal Gazette: “National retail sales were up 5.2 per cent year-to-year, with the economy recovering from the recession, with new car dealers up 6.9 per cent, used car dealers down 6.4 per cent, furniture and home furnishings up
5.7 per cent, clothing and accessories up 8.4 per cent and health and personal care up 4.8 per cent.”
(The Montreal Gazette, July 23, 2010, http://www.montrealgazette.com/business/Quebec+retail+sales+down/3311705/story.html#ixzz0vfCzn h8t )
3.1.7. Average Disposable Income
We wanted to know what the average single person would have to spend, as well as the amount for couples with and without children. We considered the average disposable income for single persons (as of 2007), which was $46,204, and compared this to the average disposable income for couples (with no children) which came to $51,833 and then for couples with children the figure was $70,143.
Moreover, we needed to determine if there could be enough of an interest in another technogadget. According to a new survey for Globe Drive, done by Harris Decima, apparently 40 per cent of people love their G.P.S. systems and do not want to leave their homes without it.
(Harris Decima http://www.news1130.com/news/techknowledge/article/69623--canadians-love-theirgps )
Since our product will also function as a G.P.S. unit, we considered this to be essential information as this tells us that our product can become as indispensible as or even more so than the G.P.S. units.
Figures for Computers and Video Consoles in Canada
We determined that 96 per cent of Canadian families own at least one computer and that 48 per cent of Canadian households have a video console. These figures are important when we want to know how many Canadians will have use for our product. Since our insITe© glasses can be used for video games and the internet, these figures tell us that there is a sizeable market for our product.
(Entertainment Software Association of Canada http://www.theesa.ca/ )
3.1.9. Media Usage of Target Customers
In another study by Ipsos Reid, media usage was found to be biggest between the ages of 18 to 34.
The study looked at the way internet and mobile devices have transformed the way that people communicate and how frequently Americans and Canadians participate in social networking. This is noteworthy because from this we know that this age group is a potential huge market for our product.
(Ipsos Reid, http://www.ipsos-na.com/news-polls/pressrelease.aspx?id=4534 )
Survey of Top Gift Ideas for Father’s Day
Finally, we looked at Future Shop’s top nine gift ideas for Father’s Day. This survey was conducted by Leger Marketing to find out what would be the most popular gift ideas to give to men. Taking a national sample of 1,551 adults 18 years of age and older, 897 were fathers with children, the results were:
1.
Sony BRAVIA 46" 1080p 240Hz 3D-Ready LED HDTV
2.
LG Blu-ray Disk Player Apple 16GB iPad With Wi-Fi
3.
Sony 15.5" Intel Core i3 330M 2.13GHz
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4.
Bose SoundDock Portable Digital Music System
5.
Sony 6" Reader Touch Edition
6.
TomTom World Traveler Edition
7.
Motorola Bluetooth Headset
8.
Klipsch HD Theatre 300 5.1 Speaker System
9.
ConnectPro Services (Home Theatre Installation, Computer & Car Audio Services
This survey tells us that our product should fit perfectly with these products as some of the features of our insITe© glasses will work and/or replace these products. (Leger Marketing for Future Shop 2010, http://www.futureshop.ca/en-CA/futuregeneration/green.aspx
)
The goal of insITe© vision wear is to foster the right relationships with the right customers over a lifetime. Because insITe© glasses provide its wearers with immediate multimedia and telecommunication access, we anticipate that it will appeal to the masses within the age and generation demographic segment but will restrict our introduction phase to the tech savvy group. Who are the tech savvy group? They comprises of the hip Generation Y who are known for their fluency and comfort with computer, digital, and Internet technology and Generation X who are today’s urban professionals that catch onto trends but not gimmicks. (Kotler, Cunningham, Armstrong. P. 92.)
For the product debut, we will launch multifunctional glasses called ' InsITe © '. The product will provide entertainment applications, visionary, communicative, GPS enhancement. Initially, we will target tech savvy users whose income is between 35K and 100K per year. We are looking at a price of
$599.99 per unit which could be affordable for this target market, also we are targeting customers whose interest in technology is high and is part of their daily lifestyle and these people are usually in big cities within Quebec such as Montreal and Quebec City. In evaluating our target market for insITe©, we selected market segments that accounted for market innovators, students, families with combined income 80k or more, and singles (male or female) whose income is 35K+ from generations (Y, X ). We have chosen this group because we feel that they get the most use out of insITe’s entertainment technology and applications.
Upon launching of our new product, our target market will be limited to the mentioned above customers (slow penetration of the market) until we reach a maturity stage of our product. At the maturity stage we would expand the applications available and cater to the following groups:
 construction & engineers
 architects

Police department

Transportation (STM, AMT, etc…)

Military
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We are targeting college and university students (who on average fit into Generation Y - spanning the years of 1997 to 1994), as they are usually the market innovators for the newly released hi-tech devices. In our goal to make InsITe© a revolutionary device in the world of modern technology, we recognize that the means-to-the-end is best to capitalize interest and buzz with youth (tweens and teenagers) to that of college and university students in the early introduction phase to ensure a longterm product loyalty.
Also we targeted customers with an income of 35K and over per year to tap into middle and upper class of society. Reason being that the unit price for a device will be approximately $621 which positions it a little higher that cell phones, personal digital assistance, portable DVD players, etc. and not so readily affordable for lower income earners/households. (This price is the cost of a unit plus the markup and the cost of a unit is considerably high due to the high spending on R&D to make sure the product has no effects on the human health whatsoever).
Our new segment in later stages will be civil & construction engineers, police department,
Transportation systems (STM and AMT) with the development of the features of InsITe© by adding more technical applications that would be a good help for professionals either in engineering or in the field of transportation, police or military which will help us to make long term contracts with big companies or governmental departments.
With insITe© digital glasses being a new player in the field of media convergence, it was essential to understand its segment and target demand long before realizing the product. However, its novelty provided a challenge for benchmarking purpose. So the product was deconstructed for studying the market share and viability. Since the insITe© technological platform is built on cellular phone technology, the cell phone industry was an integral component of our research.
A Statistics Canada Residential Telephone Service Survey of 2008 provided geographic and moderate age demographics of cell phone use. It reported that 74.3% of Canadian households have a cell phone with Quebec households just marginally lower at 65.5%. ( http://www.statcan.gc.ca/dailyquotidien/090615/dq090615c-eng.htm
August 6, 2010.)
However, it is anticipated that both the Quebec and Canadian percent will increase, as the survey finds ‘younger households’ to be more inclined to have a cell phone rather than a conventional landline.
As well, the Canada’s Office of Consumer Affairs (OCA) article The Expansion of Cell Phone Service writes,
“ At the end of the first quarter of 2006, there were 16.8 million wireless subscribers in Canada, implying a strong and sustained year-over-year growth rate of 11.9% (Statistics Canada 2006) 1 .“
( http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02267.html
August 6, 2010.)
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The Canadian Population by Age Group (2005) assigns 41% of the population to the tech savvy market. (Kotler, Armstrong, Cunnigham. P.87) From the finding of the OCA report The Expansion of Cell
Phone Service we learn that wireless ownership is highest within the 18-54 age group. (See below table.)
Since the communication sector has been increasing each year from 2005 to 2009, according to the
Consumer Price Index, household operations and furnishings, by province – Canada, insITe© can only foresees long-term growth for itself in this sector.
With insITe© vision wear offering multimedia and telecommunication, a feasibility study of disposable income for recreational purpose was essential to understanding our target markets.
According to Statistics Canada’s Household and spending expenses, the 2008 average expenditure per household in Montreal was $63,974; whereby, $3,095 of it was attributed to recreational expenditure.
This represents a 5% (0.048516) spending pattern for household entertainment.
The Consumer Price Index (CPI) release of July 23, 2010 reports, ”that In the recreation, education and reading component, prices rose 0.4% after falling 0.2% in the 12 months to May. Consumers paid
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more for cablevision and satellite services. However, prices for video equipment and computer equipment and supplies fell.” The decrease of this period may be attributed to the economics concerns of the period. For example, this same reports that consumer prices rose 1.0% in the 12 months to June, following a 1.4% increase in May. In consideration that the Consumer prices account for food, shelter, clothing, transportation, health and personal care; the increase of 0.4% in recreation assures us continued spending in the recreational domain amidst economic slowdowns.
( http://www.statcan.gc.ca/subjects-sujets/cpi-ipc/cpi-ipc-eng.htm
August 8, 2010)
Consumer Price Index and major components, Canada
Relative importance 1
June
2009
May
2010
June
2010
May to
June
2010
All-items 100.00
2 115.1
Not seasonally adjusted
(2002=100)
116.3 116.2
% change
-0.1
Recreation, education and reading
12.20 103.8 103.6 104.2 0.6
NB: This table has been modified to present “Recreation, education and reading” spending only.
June 2009 to June
2010
1.0
0.4
4.2.3. Economic Indicators:
In review of the 1 st quarter 2010 Economic indicators table below, we see that there is an increased change from the previous year for A) Personal expenditures on consumer goods & services and B)
Personal disposable income; however, the chart records a decline for C) Personal savings rate within this same period. This is another indicator that recreational spending continues despite a precarious economy.
Economic indicators, by province and territory (monthly and quarterly) (Canada)
Most recent period
Change from previous period
%
Canada
General indicators
Change from previous year
Personal expenditure on consumer goods and services(SAAR, $ billion chained, 2002)
Personal disposable income(SAAR, $ billion)
1st quarter
2010 834.1
1st quarter
2010 980.5
1.1
0.6 percentage points
3.6
2.5
Personal savings rate(SAAR, percent) 1st quarter
2010 2.8 -0.7 -2.4
Source: Statistics Canada, CANSIM, tables (for fee) 187-0002 , 377-0003 , 379-0006 , 379-0027 , 380-0001 ,
380-0002 and 380-0004 .
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NB: This table has been modified to present “Personal expenditure on consumer goods and services, Personal disposable income, and Personal savings rate only.
5.1.1. Core benefits
The benefits that we expect insITe© to instill in our customer and investors, are our affordability to manufacture and positioning in existing support networks. Our company will also be the first to deliver a multi faceted heads up display system for pedestrian use. Aside from the baseline structure, that make up the G.U.I. (graphic user interface) and recognition software, insITe© will be an integrated platform for all 3 rd party applications and databases. This gives our R&D program a competitive advantage in the mobile device industry. Until recently, mobile devices would have to create their own applications tailored to their operating system. insITe© will use Universal Binary that makes it cross compatible with personal computers. By having a familiar look and feel to the product, our customers will be able to adopt the technology more easily.
5.1.2. Augmented products
A possible avenue available to us, to further develop our product, is to further reduce the space needed by all the electrical components. With less bulk and weight, we would be able to offer sleeker designs. It would lead to an important increase of appeal towards an indiscrete technology worn on the face.
Different variants of the glasses can be made to offer our customers a choice in the overall design and colour of the product. This allows the customer the chance to have a product that fits more in tune with their individual lifestyle.
Each model will allow for a standardized amount of vacant space that is designated as an expansion bay. In the initially released model, the expansion bay will be occupied by a standard microphone package. In future models, we will introduce new accessory plugs that can add to or enhance the functionality of insITe©. This capability also makes it easier, for customers who purchase our product, to develop their own uses for insITe©. When we expand into new markets such as the medical and military industries, this feature will prove useful. These hardware accessories will be sold separately from the glasses and will include features such as; extra memory, microphone extensions, radio receivers and transmitters, infrared and ultraviolet lights.
With the availability of cheap cell phone parts through their respective manufactures, our product will be able to negotiate costs amongst different competitors. After we are established and have made a significant return, insITe© will be able to manufacture our own components and release an all in one pair of, “elite” glasses. These glasses will offer subscription lens use. These custom lenses will have integrated photocromatic shade technology that changes dark in the sun. The addition of subscription lenses to our product line, will allow our company to reach more customers through usability. Also we will be able to sell our product to a target of people buying new glasses through companies like
Lenscrafters©.
On the software side of our augmented services, we will begin to produce our own line of applications. Custom operating systems will also be needed for specialized uses of our product, which we optimize for individual contracted clients.
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5.1.3. Design and quality
insITe©’s design is smooth and clean with flush seems that give a polished look to the glasses. The inspiration for the design comes from a contemporary futuristic imagery in multimedia today. The style we have chosen is consistent with what people consider to be, “cutting edge,” without straying too far from the style of today. We feel this direction adds to the quality that is perceived by our prospective customers.
The interface was designed around the notion of having a button less surface. This translated into the use of a virtually interactive surface that tracks the movement of the hands and then relays the input back to the user. The device doesn’t require an external controller or button layout, so we were able to limit the buttons on the headset to two. One button is for the power and another for the answering of incoming calls. insITe© looks much more like a normal pair of glasses that people would normally wear, compared with other attempts that have been made by related products. Our customers will bring with them the same responsible behavior that they have with average reading glasses. With the sealed components and lack of loose pieces, we expect our product to be a lasting quality item.
5.1.4. packaging
insITe© will be packaged in a clean black rectangular box with a simplistic representation of the glasses on the top. On sides of the box will be a series of images depicting our product in situ and a sample of features in use. The Logo will appear on the sides and front with a list of features and description on the back. The minimal design of the packaging will help qualify insITe© to our customers as high end. Companies such as Apple© use this approach when packaging their iPhones and it has been very successful for them.
In the box, we will provide the customer with a lens cleaning cloth and a carrying pouch to increase a positive post consumer reaction. The pouch also provides a first line of defense towards the degradation of the product and will reduce the cost of repair.
5.1.5. Discounts
Special corporate discounts will be given to large orders made by businesses that want to implement our device into their practices. Education discounts will be made available through partnerships with Universities across North America. Employees of Best Buy, Future Shop and future distributors will be offered a discount to encourage knowledgeable insight into sales representative.
Applications for discounts can be made online on our website or over the phone with customer service.
5.1.6. Customer service and warranty
Customers of insITe© will be able to take advantage of our personal customer care network, online and over the phone. Indirectly we will also be able to serve our customer through our distributors and sales staff. Any questions concerning repair or defection will be delegated to insITe©’s main customer service channels.
In case our product breaks down or has a defect, we would supply training to the “RocketFish
Mobile” team, which is a subsidiary brand of “Best Buy” that focuses on providing onsite services to repair mobile devices at the “Best Buy” branches. If the defects with the product is beyond their expertise, the client will then be prompted to send the product back to the manufacturer by mail so that we can fix it or replace it with another pair of insITe© glasses.
A standard 1 year warranty will come with insITe© upon purchase. Because our product has electrical components, the warranties will not cover any liquid or physical damage. An extended 3-year
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warranty will also be available for an additional fee that will cover the cost of up to 3 screen lens replacements. With the addition of the extended warranty, we expect to have a high initial return in revenue for our company.
5.1.7. Set up
The ease of using insITe© glasses is made even easier by the competent sales representatives who are trained how to inform customers about our product. In store, sales representatives will help to setup the device by demonstration its key features and adjusting the alignment of the interface.
Demonstration models will be supplied to each store to allow sales staff and customers to experience insITe© before purchase. This is a common practice in cell phone stores and it is successful in creating excitement and aids the consumer in making an informed purchase decision.
There are internal and external factors involved in the pricing of our InsITe © smart glasses. Based on internal factors, the price of our glasses must reflect our marketing objectives and take into consideration our product. Since InsITe © is a new technological product on the market which is not easily duplicated, we want to take advantage of this and charge as close to our ideal price as we can for these glasses.
The simplest way for us to come up with a number is by using the cost-plus method of pricing as it is simpler to determine a price than value-based pricing as consumer values are hard to measure.
The Canadian population by age group assigns 41% of Canada’s population as tech savvy. (Kotler,
Armstrong, Cunnigham. P.87)
We currently have a population of a little over 33 million Canadians. 41% of 33 million is approximately 13.5 million Canadians. Having this we know that at the introduction stage, most of our potential clients will be innovators. This amounts to about 2.5& of the potential clients. 2.5 % of approximately 13.5 million Canadians is 270,000 people. Hence we expect within the first year to move
270,000 units of InsITe © glasses. The cost of making simple eyeglasses is very minimal.
InsITe © will have many of the similar features as the iPhone, except with an added projector. The cost form making an iPhone is $187.51. The cost of the projector we will be using - the Pico projector which is a very small but high quality projector – costs between $40 - $50 to manufacture. Taking the highest possible cost, InsITe © will cost approximately 237,51$ to make per unit. These costs are high since we are the first to come up with the idea. Our variable costs will be 10$, and our fixed costs will be
$400,000. (rent, wages, ect).
Unit cost = $237.51 + 400,000 =$238.99 per unit
270,000
We would like to make a 60% profit margin on this product. Therefore,
$238.99 = 597.48
(1- 0.60)
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Therefore we will round up and charge $599.99 for insITe.
The major reason why we have opted for such a large profit margin is because once competitors have entered the market we will have to lower our prices. We want to ensure that we set the price high enough in order to make continue make profit during the later stages of this product’s life cycle.
Second, because this is a brand new technological product, we cannot put the price too low, or else our target market and consumers in general may perceive out product as a cheap product and may not buy
insITe©.
In the introduction stage of development, we will rely on pre-fabricated parts from cell phone manufactures such as Nokia and Motorola. In order to maintain control over product design, insITe© will be assembled and packaged within the company. With a few additions in technologies that separate our product from an iPhone©, the estimate cost to produce insITe© will fall around 230$. Once we begin to manufacture our own parts we expect to cut the number down to 190$.
An internal factor, that will affect the price, is to recoup the costs of the research and development process. insITe© is ground breaking innovation, and it will take a significant amount of planning and engineering lasting a few years.
Another cost will come from the development and appropriation of software that will make up the operating system. A more basic interface will be developed initially to speed up development. We will continue to develop this software over the years and release them through downloadable updates.
Costs for licensing key contributors’ databases will also have to be factored in. A strong partnership with companies, such as Google©, will be necessary to incorporate the consumer with the staples of the online environment.
External factors, that will allow us to charge more for our product, will be our perceived value towards the customer. insITe©’s elegant design and innovative approach to the way we see the world, builds us a sense of prestige with our customers.
Our company wants to keep demand of our product up, so that we can fulfill our mission of imbedding this new technology in the everyday operations of society. In order to capitalize, as much as possible before duplicate technology emerges, we will raise the price slightly more in the short term.
When competitors start to emerge, we will have a cushion to coast on and we can undercut the competition.
5.3.1. Market coverage
For our market coverage we are using the selective distribution strategy since we want to reinforce the idea that our high end product insITe © is; unique, it is highly functional, and it can only be obtained through strategically chosen retailers which will give the client the perception that insITe© glasses are more difficult to obtain than an electronic device which could be found at any type of store.
5.3.2. Selected distributors
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In the introductory phase of our marketing scheme, the insITe © glasses are only going to be distributed to growing, award winning specialty retailers who sell consumer electronics such as Best
Buy; http://www.bestbuy.ca/en-CA/home.aspx
and Future Shop; http://www.futureshop.ca/enca/home.aspx
.
Best Buy has been operating since 1983 and has proven to be a fierce and top notch competitor since it has won titles such as “company of the year” and was placed in the top ten “most generous corporations of the year” by Forbes in the years 2000’s. Future Shop is a division of Best Buy and is continuously growing as “Best Buy Canada LTD.” This is another choice retailer for our product as it covers geographical areas which the Best Buy franchises do not yet occupy, while providing similar services and brand imagery which we want to be associated with such as; up- to-date, fast service, quality products and reliable repair services.
Within these retailers, we would at first select franchises which are located in richer areas of the city, in order to maintain the image of prestige of the product. For example, we would chose to sell
insITe © glasses at the Best Buy located in Pointe Claire in the Fairview mall which is conveniently located within the proximity of various suburbs filled by the middle class, upper class and where the lifestyle is family oriented. This is a perfect environment to tap into our target market, since our product will be known to be expensive and prestigious but will also be within the affordability range of the customers who shop in this area.
Another great location to start distributing insITe© glasses would be at the Future Shop in downtown Montreal on St. Catherine’s ( 460 St. Catherine Street West ). This particular location is beneficial for the launch of the glasses since it is on the affluent part of the busy St. Catherine’s street of
Montreal for downtown shoppers; it is in reach of the Eaton shopping Centre, Place Ville Marie and
Place des Arts, which are big underground outlet malls and beautiful, rich locations which attract tourists and customers daily.
Once the insITe© glasses are successfully adopted by our target market and we have made some line stretching and line filling; we will open our own insITe© glasses store and our own online store where we would provide our services and discount deals to customers internationally. Similarly as our selected retailers, we would choose locations in rich areas of the city, initially placing our stores in the largest cities of each Province. Our stores will be designed in such a way to convey the qualities we want to be associated with; sleek, clean cut, useful and modern.
5.4 Promotion
In our selected retail stores (“Best Buy”, “Future Shop”) we want to place our product at the center of the lane facing the entry door. Doing so will enable the clientele to come in contact with the product when they have slowed down their walking from entering the store and are exploring what is around them.
We also would permit clients to test them out in the store under supervision of a clerk. Eventually we will permit salespersons to wear insITe © glasses to help them with tasks around the store thus
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reinforcing the idea that these glasses are useful and will keep you up to speed in everyday situations towards the clients, this will also familiarize the salespeople with the glasses and enable them to promote them thoroughly to curious shoppers.
We would choose the month of October to make the insITe © glasses available on the market in our retail stores, when families are starting to think of their Christmas shopping list, this will also enable the population to familiarize themselves with the product.
Through our estimations and studies of how many people are interested in purchasing the product, we will supply our selected retailers the product under our estimated number to create a sensation that the product has been successful in sales at this time of the year, where it is critical for clients to purchase gifts for Christmas. After boxing week, we will release a second lot of our products in stores, after gaining hype over the successful sell on Christmas day. This strategy will also enable the company to save money over shipping, should the product not be successful in its sells, and we can reconfigure a marketing scheme.
At our insITe© stores, we offer clients membership cards which enable them to collect points on purchases related to our brand. These points will enable clients to download applications on the internet which will enhance the glasses; they can also choose to receive a gift related to the glasses at our store: protection case for the glasses, maintenance kit and other types of electronic devices. This will enable us to build long lasting relationships with the customers and make the interest in the product last longer.
Initially our pull strategy would be to advertise in fun, cheeky and stylish commercials on the television which are played during popular sitcoms and informative shows which are related to fashion, electronics, medical drama and crime drama.
We will generate low costing promotion buzz by lending these shows our prototypal product as a prop to introduce to the viewers the concept and the potential of the insITe © glasses while famous actors, who have a following, are associated with the glasses. For example we would submit one of our glasses to the crime drama “CSI Miami” so that characters who play as investigators, and are in constant need of the latest technology, would use these glasses to figure out a crime.
We would do the same for informative shows which review the latest technology such as “Electronic playground” which caters to an audience interested in video games. We would make our insITe © glasses very present on the “TECH” channel, which targets audiences who are interested into the latest technology available on the market.
In terms of fashion, we would collaborate the designing of the glasses with a designer/design firm possessing a household name and who specifically designs for a youthful population, such as “Carrera” glasses. Doing so will enable our insITe © glasses to be promoted in fashion shows and magazines where the “Carrera” brand usually appears.
We would also make use of the social media marketing strategy by advertising on the internet on highly frequented websites such as msn.ca, youtube.com, and other websites used as a main opening page. Our online ads will be in video form which plays before “youtube.com” videos or they can be made by web designers in flash and will be interactive with the user.
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When the insITe © glasses has been successfully adopted and we have our online store, we will enable customers the option of choosing custom skins designed by popular artists and designers for their glasses.
Our nonprofit marketing strategy will be made viable through a downloadable application where customers can donate a chosen amount of money to a selected donation.
We will also organize a collaborative donation, where we will encourage users to submit their recordings of their experience with donation foundations affiliate with the insITe © glasses. This will create a positive experience for the users, since they associate the glasses with volunteering experience, it will also create a marketing buzz when the users will post their recordings on websites to share their stories and experience to the world on the internet.
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5.
Entertainment Software Association of Canada (2010). http://www.theesa.ca/
6.
Future Shop (2010). http://www.futureshop.ca/en-CA/futuregeneration/green.aspx
7.
Harris Decima (2010) http://www.news1130.com/news/techknowledge/article/69623-canadians-love-their-gps
8.
Ipsos Reid (2010). http://www.ipsos-na.com/news-polls/Default.aspx
9.
The Montreal Gazette (July 23, 2010). http://www.montrealgazette.com/business/Quebec+retail+sales+down/3311705/story.html#ixz z0vfCznh8t
10.
Stats Canada (2010). http://www41.statcan.ca/2009/3867/cybac3867_000-eng.htm)
11.
Stats Quebec. (2010) http://stat.gouv.qc.ca/publications/referenc/pdf2009/QCM2009_ang.pdf
i Pg. 87, Principles of Marketing ii Pg. 87-92, Principles of Marketing
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