hang time

Hang Time

• Karrie PeltonKarrie Pelton is from Seattle, Washington and will also be graduating in April from BYU with a Business Management degree.

• Jared ThompsonJared Thompson is from Utah/Idaho is graduating in April from BYU with a degree in Business Management and an emphasis in marketing.

• Hillary DummarHillary Dummar is from Midway, Utah and will graduate in December in Business Management.

• Marisa EvansMarisa Evans is from Cincinnati, Ohio and is a senior at BYU, graduating in April.

Calibur Consulting

What is Hang Time?

• A group of three individuals from Utah who have developed add-on equipment for trampolines designed to increase the benefits and usage of the trampoline.

• Hang Time’s acrobatic rig, one-on-one basketball court, and safety-netting wall can be used for individual or family enjoyment.

What is Hang Time?

• With this new product, Hang Time is focused on providing a safe and fun product to its customers. The product strives to offer people an enjoyable experience at a reasonable cost.

Objectives• Marketability of the product

• Possible names of the product

• Suggested retail price of the product

• Consumers’ perceptions of the product

Methodology

What is a Frame?

List of population elements from which to select units to be sampled.

-People within Salt Lake and surrounding counties who either own a trampoline or who are planning on purchasing a trampoline within the next year.

-We were to survey people with various income levels.

-Conducted random surveys with qualified respondents in Provo, Pleasant Grove, Sandy, Midway, Murray, Bountiful, and Layton.

-Intercept surveys in Provo Towne Center Mall and the Spanish Fork Good Life Expo.

Our Frame…

Sample Size

A statistically significant sample size (n) can be determined by the formula:

n = Z2*Variance

(Acceptable error)2

*Z is the level of confidence expressed in standard errors.

*For the .05 level of confidence used in this study Z=2 standard deviations.

The population variance was determined by taking a smaller pre-test of 15 respondents and calculating the variance of the pre-test answers to question # 15, one of the most important questions on the survey.

Q.15 reads…How likely are you to purchase this product?

Definitely

Probably

Not Sure

Probably Not

Definitely Not

-The answers were assigned a value on a 1 to 5 (definitely to definitely not) scale. The mean (3.33) and standard deviation (.0617) were then calculated. The variance equals the pre-test standard deviation squared.

-Lastly, the acceptable error selected by Hang Time and Calibur Consulting was set at 5%. -Plugging these numbers into the equation, this study required a sample size of at least

55 respondents

to be statistically significant.

Secondary Research

What is Secondary Research?Previously gathered data.

-We met with the designers to define and understand the objectives.

-Researched all the comparable products they could find.

-We obtained printouts of each, including pricing information where available.

Primary Research

What is Primary Research?

New data gathered to help solve the problem at hand.

Included: Mail, Phone, Door-to-Door, and Mall Intercept Surveys

Mail—10 random people got a package—a cover letter, a survey, three pictures of the product, two computer-generated designs of the product, and a self-addressed, stamped envelope.

0% response rate by the data analysis cut-off date.

Phone/Mail—When a person agreed to be interviewed, we asked them the first nine questions. After asking the nine questions, we sent them the mail survey package.


Door-to-door and mall interviews—immediate response-- accounted for all of the 60 surveys we included in our data.


QuestionnaireDivided questions into sections that would obtain customers’ perceptions of the afore mentioned set objectives.

These sections included: Trampoline Usage Q’s. 1-8(Rated from Not at All to Heavy Use)

-Fall -Winter-Spring-Summer

Interest in Components Q. 9-Acrobatic rig-Safety net-Basketball Hoops

Naming Q. 10-11

-Hang Time

-Sky Ball

-Rotation Station

-Aero Gym

-Gyrobics

-Air Ball

-Net Center

-Tramp Mate

-Jump Ball

Feature of Product Design Q. 12

-Quality

-Safety

-Ease of Assembly

-Attractiveness

-Practicality

Rated on a scale from 1-7

(Poor to Excellent)

Also included a “Not Sure” category

Factors in Purchasing Decision Q. 12

-Fun-Price-Safety-Brings Family Together-Keeps kids occupied-Health Benefits-My kids want one

• Rated on a scale from 1-7 (Not Important to Very Important)

• Also included a “Not Sure” category

Pricing Q. 14-16

Demographics Q. 17-18

Additional Comments

Focus Groups

What Are Focus Groups?

Participants who are led by a moderator in an in-depth discussion on one particular topic or concept.

The goal is to learn and understand what people have to say and why.

The emphasis is on getting people talking at length and in detail about the subject at hand.

The intent is to find out how they feel about a product, concept, idea, or organization; how it fits into their lives, and their emotional involvement with it.

We conducted three focus groups:

-Consisted of current 3-4 trampoline owners located in South Jordan, West Jordan, and Heber City.

-To show our appreciation to our volunteers, we paid them $10 each.

Limitations

Sampling Error Reduce the sampling error by using a large sample size. We used a completely random sample. Our sample size included Salt Lake and the surrounding counties. We used a 5% margin of error, which means that there is a 5% chance of receiving a sampling error. Non-Response ErrorInitially we started conducting the survey by telephone and mail; however, we found our non-response rate to be high. Thus, we switched to conducting door-to-door surveys and mall interviews, which consumers have a more favorable attitude towards. Response ErrorFor example, when conducting question #8,

What % of time do you use the trampoline for recreation or for exercise? 4 respondents misunderstood the question. The respondents’ percentages did not add up to 100, thus causing response error. Surrogate Information ErrorThe working prototype of the product was not complete Thus, respondents’ decisions in the surveys and focus groups reflected their understanding of the product based on the given information. Any discrepancy between the actual and perceived quality or design may have caused surrogate information error.

Primary Research

Trampoline Usage

Trampoline Usage

• Respondents: 58 current trampoline owners 2 planning to purchase

in the future

• Likelihood to buy: (Cross-tab, using chi square)• Age – not significant at the .05 level• Seasonal use – not significant at the .05 level

• Recreation: 91%• Exercise: 9%

Interest in Components


“How interested would you be in each of the following trampoline add-on products?”

Not Very Interested Interested

Interest in rig: 1: 42% 2: 10% 3: 5% 4: 8% 5: 17% 6: 8% 7: 10%

Interest in hoops: 1: 32% 2: 3% 3: 5% 4: 12% 5: 20% 6: 10% 7: 18%

Interest in net: 1: 28% 2: 2% 3: 10% 4: 8% 5: 18% 6: 10% 7: 23%


606060N =

Safety-nettingBasketball HoopsSpotting Rig

8

7

6

5

4

3

2

1

0

Summary of Responses—Interest in Components


•The pattern of results is statistically significant

•Likely due to the high number of 1’s

•Regression analysis:

•Interest in the spotting rig is not a predictor of whether they were likely to purchase (R square of .074)

•Interest in basketball hoops and in safety netting are statistically significant predictors (at the .05 level) of whether they were likely to purchase (R squares of .254 and .243 respectively

•Suggestion: Focus on hoops and netting in marketing efforts

Naming

NamingAccording to the mean, the most popular of the suggested

names are listed below:(Survey results rated on a scale from 1-7; Poor to Excellent)

» 1. Hang Time = 4.05

» 2. Air Ball = 3.81

» 3. AeroGym = 3.79

» 4. Sky Ball = 3.63

We are confident that the true population mean for each of these categories falls within 5% of the stated mean.

Naming Boxplot

Features of Product Design

(On a scale from 1 – 7; Poor to Excellent. Perceptions were based on pictures of the product)

– Quality 59% rated the quality above average

– Ease of Assembly 75% were indifferent– Practicality 41.4% rated the practicality above

average– Attractiveness 30.4% rated attractiveness above

quality– Safety 38.5% perceived the product

is safe

Conclusions

Factors in Purchasing

Factor in Purchasing

Conclusions(Scale 1-7; Not important to very important)

-Fun 61.7% rated very important-Price 56.7% rated very important-Safety 76.7% rated very important-Brings Family Together 31.7% rated above average-Keeps kids occupied 28.3% rated very important-Health Benefits 20% rated above average-My kids want one 26.7% rated very important

Pricing

“How much would you expect to pay for this product?”

PricingExpected Price

•Range: $45 to $6000

•Average expected price: $543

•Median expected price: $400

•Two major outliers ($2000 and $6000)

•Removing the two outliers, the average and median expected prices were $410 and $375 respectively

• Regression analysis showed that neither income, age, gender, nor purchase price of the trampoline were significant predictors of what people expected to pay

PricingLikelihood to Purchase

19.0%

24.1%

46.6%

10.3%Definitely not

Probably not

Not sure

ProbablyHow likely are you to purchase this product?

PricingLikelihood to Purchase

•Neither age, gender, income level, purchase price of their trampoline, nor what they expected to pay for the product were statistically significant predictors of whether they were likely to purchase

•Multivariate regression using age, gender, and income as determinants of whether respondents would purchase showed no statistical significance

•The above factors are not significant characteristics of the target market (broad target market)

PricingPrice Level

•Five different price points on surveys

•Respondents most likely to purchase at the following levels (in order):

(Rated on a scale of 1 to 5 with 1 being most likely to buy)

$399 -- 3.18 mean, 3.0 median

$1199 -- 3.91 mean, 4.0 median

$599 -- 4.00 mean, 4.5 median

$799 -- 4.33 mean, 5.0 median

$999 -- 4.67 mean, 5.0 median

•Crosstabs between likelihood to purchase w/o price and likelihood to purchase at given price points are not significantly different than what would be expected to happen by chance—suggests inelastic demand for the product

Pricing$1199 Price Point

Definitely not

25%Probably

8.3%

Not Sure

16.7%

Probably not

50%

“Would you purchase this product for $1199?”

Pricing$1199 Price Level

•25% “probably” or “not sure”

•75% less than “not sure”

•Regression: Likelihood to buy w/o price was a statistically significant indicator of whether they would buy at $1199 (R square of .316)

•This suggests inelastic demand for product (quantity purchased less sensitive to changes in price)

•Question #15 was a predictor of question #16


Definitely not

66.7%

Probably not

33.3%





•Regression: Almost no correlation between the same two variables (R square of .008)

•EVERY respondent dropped their likelihood to buy at least one step

•Something about the $999 price level respondents did not like


Definitely not

66.7

Probably

8.3%

Not Sure

16.7%

Probably not

9.3%






•Significant at .01 level—99% confident that this correlation did not happen by random sampling chance



Definitely not

50%

Probably

16.7%

Not Sure

16.7%

Probably not

16.7%



•33.3% “probably” or “not sure”

•66.7% less than “not sure”


•Significant at .01 level—99% confident that this correlation did not happen by random sampling chance



Definitely not

18.2%

Probably

36.4%

Not Sure

27.3%

Probably not

18.2



•63.7% “probably” or “not sure”

•37.3% less than “not sure”

•Regression: Correlation no longer statistically significant at .05 level (R square of .281)

•More respondents increased their likelihood of purchasing after hearing the $399 price point.

•Something about the $399 price level respondents liked

PricingEstimated Market Share

•Comparison with historical follow-up studies on purchasing intent and purchasing behavior with a different product (non-pesticide pest control)

•Assumptions:

•63% of consumers who “definitely will buy” actually purchase within 1 yr.

•28% of consumers who “probably will buy” actually purchase within 1 yr.

•12% of consumers who “probably will not buy” actually purchase within 1 yr.

•3% of consumers who “definitely will not buy” actually purchase within 1 yr.

•For “not sure” category, take the mean of 28% and 12%--20% used for estimate

Limitation: Derived from data related to another product and estimated % for “not sure” category


“How likely are you to purchase this product?”

Definitely Buy: 63% x 0% = 0%

Probably Buy: 28% x 10.3% = 2.88%

Not Sure: 20% x 46.6% = 9.32%

Probably Not: 12% x 24.1% = 2.89%

Definitely Not: 3% x 19% = 0.57%

15.67%

Estimate: 15.67% of trampoline owners would likely purchase




Probably Buy: 28% x 8.3% = 2.32%

Not Sure: 20% x 16.7% = 3.34%

Probably Not: 12% x 50% = 6.00%


12.41%





Probably Buy: 28% x 0% = 0%

Not Sure: 20% x 0% = 0%

Probably Not: 12% x 33.3% = 4.00%

Definitely Not: 3% x 66.7% = 2.00%

6.00%

Estimate: 6% of trampoline owners would likely purchase




Probably Buy: 28% x 8.3% = 2.32%

Not Sure: 20% x 16.7% = 3.34%

Probably Not: 12% x 8.3% = 1.00%


8.66%





Probably Buy: 28% x 16.7% = 4.68%

Not Sure: 20% x 16.7% = 3.34%

Probably Not: 12% x 16.7% = 2.00%


11.52%





Probably Buy: 28% x 36.4% = 10.19%

Not Sure: 20% x 27.3% = 5.46%

Probably Not: 12% x 18.2% = 2.18%


18.38%


PricingConclusions

•The greatest market share would likely be gained by $399 price point

•A retail price of $599 would be closest to what respondents expected to pay for the product and would likely still have relatively high market share

•The $1199 price point would bring the highest gross margin, would likely have a relatively high market share, and may work due to the apparent inelasticity of demand

•The numbers for the $1199 price point show an inverse relationship between income level and likelihood of purchasing

•Other than the bullet above, neither age, gender, nor income were statistically significant determinants of how likely respondents would be to purchase at any given price level

Note: Studies show that people will pay 20% more for a product than indicated on surveys.

Demographics

Demographic Statistics

Mean and median age of respondents was approximately 40

28 males and 32 females were surveyed

Income:

•37% non-response to this question

•Categorized into 6 income categories:1=under 20,000 2=20,000-39,999 3=40,000-59,9994=60,000-79,999 5=80,000-99,999 6=100,000 or more

•Mean income 4.26, median 4.0, standard deviation of 1.5

Focus Groups

Focus GroupsInitial Reactions

• If you miss your shot with the basketball, you have to get out to get the ball. The net around the outside needs to go higher.

• I don’t like how the tramp is divided in the middle with the bar. I am sure my kids would somehow crash into it.

• I don’t want the acrobatic rig if I have to be outside supervising my children the entire time they are using it.

• Not all tramps have the same leg spacing…how is this tramp “one-size fits all?”

• Is the netting secured around the bottom? It looks like one could easily fall out.

• I am concerned about the poles being sturdy enough to support the weight of individuals when using the acrobatic rig.

• I don’t want to have to pay for the whole product including the safety netting if I already have it.

Focus GroupsInitial Reactions, cont.

Focus GroupsHow would your family react?

• My kids already push the tramp under the basketball hoop outside. On the cement the trampoline seems to be really stable. They play for hours.

• I think the family would use the trampoline more.

Focus GroupsAssembly

• Looks manageable, but definitely would take 2 people.

• Depends on how it really is assembled.• I probably wouldn’t mess with it. • I would rather pay someone to come out and

assemble it than to do it themselves.• It looks like it would take a long time to assemble.

Focus GroupsNames – Group #1

Jump Ball -3Air Ball - 2Tramp Mate - 2Hang Time - 2

-Suggested Names:

-All-in-one…something

-Tramp-o-Ball

-Chosen names from those given by the moderator:

-Sky Ball

-Rotation Station

(The focus group DID NOT like Tramp Mate.)

Focus GroupsNames -- Group #2

Focus GroupsNames – Group #3

• Hang Time (most liked)

• Net Center

• Rotation Station (least liked)

Focus GroupsExpected Selling Price

• What if I just want the basketball stuff and not the acrobatic rig?

• I wouldn’t want to pay anymore than what I paid for the trampoline.

• Around $400, no less than $250• Only a couple hundred dollars…each of the

components would only be about $50 - $100 each.

• Perhaps four or five hundred…only because I have bought add-on equipment previously and I know how much it costs.

• I would be willing to spend up to $1,000 if it looked like a quality product. This product looks extremely cheap…I would not spend $1,000 on it. Improve the product by doing the following:– Paint the bars so they look nicer and do not weather as

quickly– Do a higher quality netting

Focus GroupsExpected Selling Price

Focus GroupsProduct Purchasing Locations

• Wal-Mart• Costco• Any Sports Store (Gart Brothers)• Home Depot/Lowe’s (somewhere where they will

assemble it for you.)• Home Shows• Internet • Not off the Internet, want to look at it and get

questions answered

Focus GroupsOther Information

• This product needs structural redesign.• Use netting with smaller holes…kids will get hands and

fingers stuck in it easily and could easily get injured. • Use higher quality products to build it…make it look

like it is worth $1,000• Is there a way you could lower the pad in the middle so

kids CAN jump over it…like a hurdle? • Attach a third pole in between the two already there…

then attach the pad to the pole and there would no longer be a pole in the middle.

Laddering

Q. When you bought your trampoline what affected your purchase? A. Price, home entertainment Q. Why is home entertainment important to your purchase? A. Outdoor entertainment that gets my kids away from the television, but keeps them at home

and gets them outside exercising is very important. Q. So, saving money is important for you?

A. I have a large amount of children and am a stay at home mom. Being a one income family keeps things tight around the house.

Q. What are your financial expectations when purchasing recreational equipment? A. Spend money on something that the entire family can enjoy. The other people will want to

join in on and encourage usage. Q. So, spending time as a family is important to you?

A. Yes, things that help to strengthen our bond and family unity is great. Q. How would you value a product that you saw would bring your family together?

A. Great, if it was applicable to family situation. My kids are grown up now so a pool for example might be something I would look into.

Example Laddering:

Value:

This person values strengthening her family unity. She wants the entertainment they choose to benefit the whole family unit and strengthen that unit, but at a reasonable price.

Conclusions

ConclusionsObjective 1: Determine the

marketability of the product.

Objective 2: Determine Possible Names for the Product.

Objective 3: Suggested Retail Price.

Objective 4: Consumer Perception of the Product

Objective 1Determine the Marketability of the Product

The target market for this product includes the following factors:• People who already own a trampoline• People who have young children• No specific income (A person at any income level is just as likely to buy the

product)

The likelihood of purchasing this product includes the following statistics:

• Definitely Not 19.0%• Probably Not 24.1%• Not Sure 46.6%• Probably 10.3%• Definitely 0.0%

Objective 2Determine Possible Names for the Product

The four most popular names from the survey are the following (rating on a scale from 1-7, with seven being the most favorable):

• Hang Time 4.05

• Air Ball 3.81

• Aero Gym 3.79

• Sky Ball 3.63

Suggested names from respondents including the following:• Tramp-O-Ball

• Aero Fun Center

• High Flyin’ Dunkin’ Ball

• Jumpin’ Dunk

Objective 3Suggested Retail Price

• People would most likely purchase at the $399 level, followed by $1199, $599, $799, and $999 levels

• Income was not a determinant of the whether or not respondents would by at any price level except at the $1199 level, where there was an inverse relationship to income

• The $999 price level looked especially unattractive to respondents

Objective 4Consumer Perception of the Product

Survey Results (On a scale from 1 – 7; Poor to Excellent. Perceptions were based on pictures of the product):

– Quality 59% rated the quality above average

– Ease of Assembly 75% were indifferent

– Practicality 41.4% rated the practicality above average

– Attractiveness 30.4% rated attractiveness above quality

– Safety 38.5% perceived the product is safe

Recommendations

Recommendations1. Have an engineer evaluate the design of the product to determine

safety and liability concerns as well as the structural integrity of the materials used.

2. We suggest shooting for a retail price point of $1199, 399, or 599, depending on company objectives. Further research may be desired to determine the most appropriate price point.

3. Four of the following names should be used for the product

- Hang Time

- Air Ball

- Aero Gym

- Sky Ball

Questions ?

hang time

Documents

new product

product methodologyframewhat

fun product

hang time

product possible names

product consumers perceptions

product suggested retail

pretest standard deviation