GREEN PRODUCTSECO-FINITY WATER MANAGEMENT SYSTEM

JESSE CURTIS, GILLIAN BRYSON, FILIPPO TALUCCIBUS 306 – MARKETING FUNDAMENTALS

SUMMER 2014PROFESSOR CAROL DAVIS

TABLE OF CONTENTS

TABLE OF FIGURES

Executive Summary:

Global warming has cause many environmental changes in the planet's eco-system.

Rising sea-levels, increasing global temperatures and changes in weather patterns have affected

our planet's water supply. This has led to a new state-wide awareness for reducing water

consumption and has resulted in a new market opening up for eco-friendly appliances that save

money and natural resources.

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One of the most wasteful uses of water today are showers systems. They are estimated to

use up to 5 gallons of water per minute, a daily shower of 10 minutes could waste up 50 gallons

of water. Green Products, LLC has chosen to introduce the ECO-finity water management

system, to take advantage of this relatively new market. This new and innovative technology can

reduce water usage, save money and become a long-term solution to conserving water.

Potential target markets include: Home/Apartment contractors, homeowners, high

school/college campuses and public restrooms. Target Geographic’s will focus primarily on the

west coast states suffering from severe droughts. California, and surrounding states including

Oregon, Nevada, Arizona and New Mexico. California and other neighboring states are

desperately needing to cut their water usage down in order to conserve what little resources we

have left.

The ECO-finity will appeal to business-to-business and business-to-consumer markets.

Primary consumer behavior factors will include both B2B and B2C, each will be looking for

products that will work with nature.

Market trends include sustainable living that has now gained mainstream acceptance and

concern for the environment is increasingly affecting the creation of products and services.

Going green is no longer attributed to being just for environmentalists, but has now become

mainstream.

Green Products has no direct competitors, but there are some products which are

similarly categorized to the ECO-finity Water Management System. The company will introduce

the ECO-finity Water Management System as an all-in-one filtration and water recycling shower

unit. It consists of a shower nozzle, a control panel (to select water temperature), a water

collection base, two copper 8ft. pipes, and the filtration system.

A marketing strategy will be implemented for a successful product launch. A survey was

conducted and the company found that 61.54% of the surveyors were in the 21-29 age range, and

were only willing to pay $100-$500 for this product. The resulted in data that proved the ideal

market would be middle to upper income families and older homeowners between the ages of

50-70.

Green Products will be positioned in two separate categories that will ensure for a

successful positioning within the market. The first category is by use/applications and by

quality/value. The ECO-finity will be positioned to appeal to consumers that are looking for the

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best solution to reducing water and monthly water costs. Green Products will promote that their

products are made of the highest-quality materials that will insure for long-term use.

Green Products’ ECO-finity will have a variable production cost of $884 per unit, which

will include raw materials, wages, assembly and manufacturing. In order to make a profit, the

company will have to exceed the break even numbers. Projected sales forecast about 230 per

quarter. Each ECO-finity unit will be sold for $2,000.

Green Products will use a selective distribution strategy and will consist of 5 distribution

channels: manufactures and suppliers, producer and marketers, distributors, business segment

and final consumer.

As any young company does, we expect to have some difficulties along the road but have

mapped out solutions to any possible problem. Green Products, LLC and the ECO-finity will be

more likely to succeed in the market place because of the extensive market research that was

implemented in the following marketing plan.

Situation Analysis:

One of the most wasteful uses of water today are showers systems. They are estimated to

use up to 5 gallons of water per minute (Saving Water and Saving Energy, 2014), a daily shower

of 10 minutes could waste up 50 gallons of water. This can lead to over 1,500 gallons of water

used for individual showers in one month. This number does not include other water uses like

dishwashers, lawn-watering systems and clothes washers.

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As a result of global warming, we have seen gradual changes in the planet's eco-system.

Rising sea-levels, increasing global temperatures and changes in weather patterns have affected

our planet's water supply. Days are becoming warmer and drier, making water a precious

resource during this dry-spell. Water is not unlimited and individuals are being urged to reduce

their water consumption. This has led to a new state-wide awareness for reducing water

consumption and has resulted in a new market opening up for eco-friendly appliances that save

money and natural resources.

Green Products, LLC has chosen to introduce the ECO-finity water management system,

to take advantage of this relatively new market. This new and innovative technology can reduce

water usage, save money and become a long-term solution to conserving water. By introducing

this eco-friendly water system to the home-improvement industry, it will give customers an

option to stray from conventional systems and have the option of going “green” and choosing a

product which will have a high return on investment.

Market Summary:

As of 2013, according to the McGraw Hill Construction SmartMarket report, the single

family green home market is worth $37 billion and the multifamily building market is worth $48

billion (SmartMarket Report, 2014). Water conservation appliances and fixtures make up an

important portion of this market. The SmartMarket report states 86% of builders and 82% of

remodelers implement water conservation fixtures while only 67% of builders and 69% of

remodelers use water conservation appliances (SmartMarket Report, 2014).

All of ECO-finity’s competitors are eco-appliances, meaning they are removable

products such as washing machines, dryers, refrigerators, and even shower heads. Fixtures on the

other hand include immovable items such as showers, bathtubs, sprinkler systems and virtually

any asset that is affixed to a house or building (Fixture, n.d). As seen above, water conservation

appliances are of lesser demand than water conservation fixtures such as the ECO-finity water

management system. Competitors like the WaterSense showerhead and the Hammacher smart

showerhead only reduce water flow or alert the user when ones shower has gone over the users’

predetermined time (EPA WaterSense, 2014 & The Pressure, 2014). These products, unlike the

ECO-finity water management System, provide a trivial fix to the problem, not a long lasting and

money saving solution. There is no other product on the market which reduces water

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consumption and spares the environment like the ECO-finity shower system does. Consumers of

the “green” markets are in need of a more efficient shower system and only ECO-finity provides

a true water filtration and recycling system that will revolutionize how consumers take showers.

Target Markets:

Include: Home/Apartment builders, Hotel Builders, College campuses and Homeowners.

Geographic’s:

The product launch will focus primarily on the west coast states suffering from severe

droughts. California, and surrounding states including Oregon, Nevada, Arizona and New

Mexico.      

Drought has become a growing concern across California and surrounding states. Last

year in 2013, was the driest year in record history, and there has been no change in conditions

which has led to a statewide drought emergency across the state of California. With over 60

million Californians, each rely on rivers, reservoirs and groundwater to supply their daily water

needs, whether it’s personal, business or farm use. Citizens have been asked to do their part and

reduce their water use by 20 percent, so that water resources are not tapped-out, leaving

California dry (Drought 2014: What You Need to Know).

California and other neighboring states are desperately needing to cut their water usage

down in order to conserve what little resources we have left. Installing a shower unit with a

closed loop system that recycles, purifies, and reduces water consumption is the next step in

conservation. The installation of this product will give homeowners and property developers the

chance to do their part and reduce their water usage in the shower for the sake of the

environment, but it also cuts down their costs on their water bill each month (U.S Drought

Monitor).

Demographics:

Green Products LLC has pinpointed a few demographic variables specific to the ECO-

finity shower system which we believe will be great determinants of our flagship products’

success. Our first variable is income. Naturally, we will target the wealthier sectors of the market,

as a premium price comes with a superior product like ECO-finity. Market studies show that

those with more disposable income are more inclined to purchase eco-friendly products (BSD

Global, 2013). Secondly, the size of a household plays a big role in our marketing efforts. Large

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families will inevitably consume more water and thus have higher water bills. By implementing a

water conservation system like ECO-finity, large families will greatly benefit from their ability

to reduce costs.

Our research has also shown that the older demographic, more specifically females 55-59

and males 65-69, are the greenest of consumers (Nable, 2008). This finding is quite logical,

considering this age group tends to be homeowners who have been working for some time and

have accumulated some wealth. Although the family size of the households mentioned above are

smaller, Green Products believes this age group will create the second largest demand out of our

target markets (behind housing developers) and will create positive word of mouth.

Behavior Factors/Psychographics:

Business-to-Business:

The ECO-finity will appeal to businesses in the home-improvement industry, where the

environmental factors include advanced eco-friendly technologies in home building or

renovations. These businesses will also be concerned with obtaining a product that is based on

sustainability, and will want to provide their customer base with the option of investing in

products that will benefit them in the long-term. Finally, ECO-finity will focus on businesses that

want to offer innovative home technologies that will last for years and will yield high return on

investment projects.

Business-to-Consumer:

One of the consumer target groups will include home owners in the mid- to high-income

levels. This group will include new and old homeowners, who are building from scratch or

renovating their current water systems. Each are similar, in that they want to find a long-term

solution to reducing water costs, while also raising the value in their current property with state-

of-the-art water technologies.

The first portion of this group are longstanding home owners, who are looking renovate

their current bathrooms, along with their shower systems. These consumers are both

environmentally conscious and are seeking products that are both beneficial for themselves and

the planet. This group will be attracted to the long-term benefits of installing the ECO-finity

water system.

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The second portion of the group, are the new home/property owners, which will consist

of individuals that are building their homes from the ground-up. They are consumers that are

looking to create the foundation of an eco-friendly home that will work with nature, not against

it. They may also have larger budgets when compared to renovators and may be more likely to

install the ECO-finity water management system as their homes official system.

In conclusion, the primary consumer behavior factors will include both B2B and B2C,

each will be looking for products that will work with nature. Consumes are searching for an

innovative product that will stray from conventional systems. They live a lifestyle that is eco-

driven, eco-aware and have the want to save money, resources and the planet. They strive to

create a cleaner future and feel like they are doing a small part by updating their water systems.

Market Needs:

Reducing water usage has become a necessity in recent years because of changing

environmental factors. There has been an increase of droughts and has reduced natural resources.

Individuals are being asked to reduce their water usage to lend their hand in reducing water

consumption during drought periods. Showers are a major factor in water usage - on average,

they use around 5 gallons of water per minute. This means an average family household of four

could potentially use over 6,000 gallons of water per month (based on a daily showers of 10

minutes).

Figure 1 – The below is based on the average costs of water in the USA (Measure Cost

Calculator, 2014)

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Figure 2 – below is the standard total cost of water in a mid-size family. (Measure Cost

Calculator, 2014)

In Figure 1.2, the total cost of water is estimated to be $1,986 which can be a large sum

for low- to mid-income families. Water costs can also increase with larger families or longer

shower times. By implementing the ECO-finity water management system, it will not only

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recycle water, it will reduce a customer’s monthly cost of water. The return on investment of this

eco-friendly water management system can reduce a family’s monthly water costs.

Market Trends:

According to Trend Hunter's Eco Trend Report, there are many environmental trends

occurring among us, from recycling initiatives to solar power projects. Sustainable living has

now gained mainstream acceptance and concern for the environment is increasingly affecting the

creation of products and services. Going green is no longer attributed to being just for

environmentalists, but has now become mainstream. It is now trending to live an eco-friendly

lifestyle and buy eco-friendly products. Whether it's eco-friendly clothing or solar panels,

environmentally friendly products are becoming more readily available to consumers who are

making green living a lifestyle choice (Eco Trend Report, 2014).

Over the last year, there have been numerous sustainable energy trends that have been

implemented into businesses all across the U.S. The U.S. EPA's Green Power Partnership

includes more than 700 organizations — from Fortune 500 corporations to mom-and-pop shops

to the public sector — that rely exclusively on renewable energy to cover their electricity use in

the U.S. through a combination of green power purchases and on-site renewable energy systems

(Hering, G. 2013). Efforts to enable smarter, more efficient transportation systems received a

tremendous push from the success of electric vehicles in 2013, companies such as Nissan, Tesla,

and Volkswagen are all launching models of hybrids, plug-in hybrids and all-electric vehicles

this year. While BMW says it plans to partner up with California based SolarCity to give electric

vehicle buyers easier access to solar-powered charging stations nationwide.

Energy efficiency gained momentum in 2013, with positive signals coming in the form of

new building codes, fresh investments, new corporate commitments and innovative products

cutting across industries. The Johnson Controls Institute for Building Efficiency's 2013 Energy

Efficiency Indicator finds that interest in energy efficiency rose sharply this year, as companies

around the globe increased investments in order to save cost, while enhancing brand image and

property value in the process (Hering, G. 2013).

There are a number of water trends that are occurring in many parts of the world

including increasing water demand, water scarcity and unsustainable supply, declining water

quality, unmet environmental, social and economic needs, changing expectations and climate

change. With that being said, regulatory approaches are being implemented in order to conserve

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the resources we have left. For example, freshwater regulations worldwide are becoming more

stringent, largely in response to concerns over the effects of water quality on public and

ecosystem health, governments are pursuing a variety of regulatory approaches for reducing

water pollution. Techniques include tighter discharge limits for pollutants and nutrients,

technology requirements, water use restrictions, and effluent rights trading. Jurisdictions in many

countries are restructuring freshwater subsidies. In some areas, subsidies have been restructured

to provide incentives for conservation, efficiency, and watershed protection (GEMI Water

Sustainability Tool).

Regulatory efforts are increasingly focusing on watershed-based management

approaches. Watersheds vary significantly in the amount of water they produce and the types of

activities they support both on-site and downstream. Many jurisdictions are turning to watershed-

based water management as a way to deliver more effective, locally-tailored solutions. In the

U.S., regulatory agencies are exploring watershed-based approaches to water quality protection.

For example, Total Maximum Daily Load (TMDL) approaches establish discharge limits for

local sources based on watershed health and assimilative capacity for pollutants (GEMI Water

Sustainability Tool).

Market Growth:

“Going Green”, a recent trend in the western world, has caught a lot of traction in the last

decade as consumers, governments, and firms are realizing that our resources are quickly

dwindling. Unlike most trends which often fade and are forgotten, “going green” is here to stay,

and within this “green” market, homebuilding and renovation are among the most lucrative sub-

markets. Silvio Marcacci writes that McGraw Hill Construction, a leader in the construction

market forecasts, published in its latest study that the “green home” building market could be

worth anywhere from 87 billion to 114 billion dollars. They also have found that by 2015, one

third of all builders will be implementing strictly green building practices. Additionally, by 2018,

84% of single-family home builders anticipate at least 15% of their home projects to be

environmentally conscious (SmartMarket, 2014). Environmental awareness and personal

responsibility to conserve more among all consumers is growing.

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SWOT Analysis

Strengths:

Green Products, LLC is a company that’s foundation is based on delivering eco-friendly

appliances for the home. They base their products on innovation and creativity to deliver a state-

of-the-art solution that stands apart from traditional products. The first product launch will be the

ECO-finity water management system. It is among the most efficient shower systems, new

patented technology allows it to recycle water and purify it to a re-usable state and can yield a

high return on investment.

Our products are a result of strong company standards and exceptional employees.

Executive level employees are carefully vetted to ensure a comprehensive knowledge of eco-

friendly industrial design and concepts. Passion in eco-products is a must to become part of our

support personnel and exceptional work ethic is celebrated within the company. We strive to fill

our company with thinkers, innovators and executors. By combining these three traits, we

believe it will lead to a stable company that can handle many challenges.

Green Products, LLC is a new business that is based on innovation. We stand out from

the competition in many different ways. We encourage ideas to be shared in any form and put no

limits on products. Innovation is the key to success at our company, which allows us to produce

and test products that will fit our customer needs, and not a order quota. We are dedicated to

bringing “green” products to life that are good for the environment and the customer. Each day is

spent trying to exceed expectations and deliver exceptional products straight to the home.

Sustainability is our goal, and we put environmental, social and economic issues to heart when

developing new products. We are the company of a cleaner future.

Weaknesses:

- No reputation yet because Green Products, LLC is a new start up company, we have yet

to establish ourselves as a force within the market. In order to obtain a competitive edge we need

to first build a good reputation.

- Marketing tactics. In order to compete with our strongest competitors, which are steam

shower units and energy efficient shower heads, we need make sure we are effectively marketing

ourselves as the most energy efficient shower system on the market.

- Skill of employees. Green Products, LLC employees’ consist of a small group of

knowledgeable executives and support personnel. The support personnel consist of newly

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graduated, passionate business and engineering majors just entering the workplace. Their

experience in working for a start-up company and striving to make it succeed is limited.

- Financing. Green Product, LLC have yet to establish a reputation on the market,

therefore have yet to see a return on their investment. ECO-finity water management system

needs to be a successful product on the market in order for the company to start making a profit.

Opportunities:

- Growing popularity of sustainable products. Individuals are choosing products that are

both safe for themselves and the environment, this new purchasing behavior among customers

can benefit Green Products, LLC opportunity to establish a strong reputation within the green

market.

- Changes in the planet’s environment. Global warming has contributed to severe

droughts in California and surrounding states, which has led to a state wide announcement

asking citizens to cut their water usage down. This has opened the eyes of many individuals who

now want to take action and ensure a sustainable planet for the future. They are more open to

solutions that will save the planet and reduce their uses of natural resources. By introducing

ECO-finity into the market it will take advantage of these new eco-friendly individuals wanting

to do their part in conserving water.

Threats:

As a company, we recognize the vast opportunity that is the “green” homebuilding and

renovating market. We expect other firms to replicate our product and enter this market with

similar innovation. As a precaution, we have two U.S and International patents for our filtration

and recycling system. For reasons analogous to those affecting the larger plumbing industry,

even during a recession, we expect our shower system to be nearly immune to economic

fluctuations. For the vast majority of consumers showers are taken daily and are part of people’s

routines in developed countries. Therefore, we find that there is an inelastic demand for a more

efficient shower system in regards to economic indicators such as Gross Domestic Product and

Consumer Price Index.

        However, no product or marketing strategy is perfect and threats will inevitably

be present. Because our product is of premium quality our production and manufacturing costs

will be high. One potential threat is the fact that manufacturers of our products’ components

could greatly raise our cost per unit. Therefore, to make our product profitable we would either

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have to raise the already high price of our product or use lesser quality material. Each of these

options would anger our customers and weaken our customer relationship.

        Although we do have patents on our proprietary technology, patent infringement

is still a possibility. If this were to occur, Green Products LLC would increase their legal fees. If

we were to lose a lawsuit regarding the validity of our patent we would lose sole ownership and

rights to the filtration and recycling system. This would cause large firms like LG, Whirlpool,

and General Electric to create a similar product and potentially put us out of business.

Competition:

Although we have no direct competitors, there are some products which are similarly

categorized and parallel our ECO-finity water management system. WaterSense and Hammacher

showerhead provide similar water conservation features. The WaterSense shower head reduces

water usage by anywhere from 20%-40% as compared to industry standard (EPA WaterSense,

2014). The Hammacher showerhead claims to use 30%-70% less water while still attaining

increased pressure (The Pressure, n.d). These showerheads regulate water flow at the shower

nozzle and reduce a half to a full gallon less (per minute) in comparison to the industry standard.

These shower heads are listed between $31.99 and $79.95. Not only are they sold online through

websites such as Amazon and Ebay, but these products can also be found in Home Depot,

Lowe’s, and Ace Hardware. Most of their promotions are done in magazines, online

advertisements, and web pop ups. They target home improvers and environmentally conscious

homeowners looking for a do-it-yourself installation.

Product Offering:

The ECO-finity Water Management System is an all-in-one filtration and water recycling

shower unit. It consists of a shower nozzle, a control panel (to select water temperature), a water

collection base, two copper eight foot pipes, and the filtration system. The process begins at the

control panel where the user can manually select his/her preferred temperature. The panel

regulates water temperature directly from the home’s water heater. The water then enters our

patented filtration system passes through three progressive stages of purification. At the end of

this process, 99.9% of all contaminants in the original water are removed. Following this, the

water continues on its cycle and exits through the shower nozzle. The used water which is

collected through the collection base re-enters the cycle and is directed through the copper pipes

to the filtration system once again. Some water (the contaminated portion) is lost during every

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cycle and disposed of through the home’s normal drainage system. To replace this loss of

volume, the control panel allows for one half liter to enter the system every twenty seconds. We

are the only company with a product of this kind on the market. The ECO-finity shower system

is the most advanced and environmentally friendly shower available, to date.

Installations are to be done by a licensed contractor or an Eco-finity technician. If

installation is not performed by an approved ECO-finity professional, our 5 year warranty will

not be recognized if problems do occur with our product. Repairs and even full replacements will

be made at no cost if the water management system were to fail in any way following an

authorized installation

Keys to Success:

The keys to success for Green Products, LLC. is to utilize our companys’ team of unique

and innovative thinkers to produce exceptional “green” products that meet the needs and wants

of the consumer. Another key to success is to establish a strong reputation within the “green”

market based off of the opportunities that both the market and environment has provided. The

growing popularity of sustainable products and the changes in the planet’s environment have

provided Green Products, LLC. an opportunity to enter a market where the ECO-finity water

management system can thrive and be profitable. What makes ECO-finity a successful product

are the water and energy saving capabilities, as well as higher comfort and cleaner water. These

factors that ECO-finity offers are what sets it apart from the other water-saving shower systems

out there on the market.

- Water savings will be up to and more than 90% water consumption. Due to the efficient

water recycling system. The all-in-one unit recycles water at your feet, cleanses it to drinking

quality, then returns it for re-use. To recycle the water coming out of it, a sophisticated filtering

system and pump is fitted directly beneath the shower drain in the floor. As the soapy, used water

flows into the drain, it's immediately purified and pumped right back into the shower to be re-

used again and again.

- Energy savings up to, and more than 80% of the energy consumption. As a consequence

of our recycling and purification process that makes it possible to re-use the heat of the rinsed

water. Because the water going through the filtration process is already heated when it leaves the

shower head the first time, it also takes much less energy to warm it back up to the desired

temperature and re-use it.

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- Higher Comfort level in shower activity, both compared to conventional showers and

other water saving solutions existing. Due to the precise temperature stability, water flow and

pressure which are working independently from other applications. Compared to other water

saving products this doesn’t decrease the water flow but can even offer using large shower

nozzles for increasing the comfort which means producing a steady pressure while having a

water flow over 5 gallons per minute.

- Cleaner water than regular tap water. Due to our patented recycling technology which includes

purification and heat recovery in real time the water quality is ensured to be above drinking

quality level.

Critical Issues:

With successes comes the outside influences that can become a critical issue for Green

Products, LLC and their ECO-finity water management system. One concern for the company is

the fact that it is new and could run out of funding, which would cause the company to halt

production of products and ultimately shut down all company activities. Also, Green Products

lacks industry reputation, and that could hurt how their customers view their products.

In terms of ECO-finity, there are many factors that could inhibit the growth in the market

place. One concern is the decrease in home ownership among younger generations, this could

cause future sales to decrease. The product offered is target towards customers who own their

home or are looking to renovate and would be hard to market if there was a limited audience.

Another negative influencing factor are the major renovations that have to be done to install the

ECO-finity water management system, which will result in secondary costs that vary by each

contractor. This may cause customers to deter from the product because of the additional costs

and labor that is not included in the base-case of the product. The negative influences above are

critical issues that have to be considered to succesful launch the ECO-finity into the market

place.

Marketing Strategy:

Green Products, LLC will provide the most advanced shower system on the market for

the environmentally conscious consumer.  If appliances like washers, dryers, and refrigerators

are becoming more energy efficient, why can’t fixtures such as showers do the same? It is our

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responsibility to improve our water conservation practices. Installing a new and more efficient

shower system is a big step in the right direction. The ECO-finity water management system is

the right choice for any consumer who wants to reduce their water consumption and significantly

cut their monthly water bill. The ECO-finity shower system is nature’s favorite shower, the

smartest way to stay clean and conserve.

Mission:

Green Products is dedicated to guiding you to a greener future by using innovative eco-

friendly technologies to ensure an effortless transition into a better world.  

Marketing Objectives:

Based on a survey that Green Products conducted, 61.54% of our sample were in the 21-

29 age range, it also showed that 34.62% of those surveyed would only be slightly interested in

purchasing the ECO-finity water management system and 76.92% are only willing to pay $100-

$500 for this product. Based off of these numbers, Green Products cannot market to the

millennials to achieve our sales because they cannot afford it.

Our goal is to focus on primary two target markets, housing developers and everyday

consumers. Housing developers will be interested in building environmentally friendly housing

developments and hotels. The ECO-finity will be target towards consumers who are primarily

large middle to upper income families and older homeowners between the ages of 50-70. We

will rely heavily on digital marketing, including emails and social media because it is the most

cost-effective way to get our product out there while we are working on establishing ourselves in

the market.

Financial Objectives:

In order to break-even, we must sell 636 units at $2,000 each. Green Products will

generate $1,272,000 in sales. If we follow our Break Even Analysis graph (See Figure #7), we

will begin to make a profit after selling the 637th unit. If expected units are sold, Green Products

will see $265,700.000 income before taxes. (See figure #6)

Target Markets:

Because showers are part of people’s daily routines in developed countries, ECO-finity’s

target market is relatively large. It includes home/apartment/hotel builders and homeowners, as

well as college campuses (locker rooms and dorms).

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Green Products LLC, will look to align itself with housing developers who are interested

in building environmentally friendly housing developments and hotels. Whether its tract homes

or apartment complexes, hotels or gated communities, Green Products will target housing

developers who will buy hundreds of units at a time. Green Products projects that

home/apartment/hotel builders will account for a significant portion of our sales. Additionally,

many colleges and universities are on the front lines of environmental movements, meaning Eco-

finity showers would gain great support from college administrators and students as well. This

would allow Green Products LLC to reduce acquisition cost of these customers.

Green Products LLC, will also target individual homeowners looking to renovate their

homes. Market trends show there is a growing interest in “green” renovations. As a result, home

improvement contractors and architects are seeing an increase in the amount of “green” projects

they are being hired to complete (SmartMarket, 2014). More specifically, the ECO-finity shower

will be targeted towards large middle to upper income families and older homeowners between

the ages of 50-70. Green Products has determined these two sub-markets within the larger

homeowner market will be the most heavily targeted. We believe large families will see the

greatest use in our product, as large families naturally consume and spend more.

With our product, large families will be able to cut expenses and reduce water

consumption. On the other hand, older homeowners are shown to be more interested in

environmentally friendly products (BSD Global, 2013).  Not only is this true, but this

demographic is also more willing to pay for a premium product like the ECO-finity shower

system, as they tend to be wealthier individuals. Considering these factors along with an

increasing demand for building environmentally conscious homes, Green Products LLC will

look to tailor marketing efforts toward these individuals.

Positioning:

Green Products will be positioned in two separate categories that will ensure for a

successful positioning within the market. The first category is by use/applications, the ECO-

finity will be positioned to appeal to consumers that are looking for the best solution to reducing

monthly water costs.

The second positioning category is by quality/value, positioning of the ECO-finity will

represent the products high value and quality in the market place. Green Products will promote

that their products are made of the highest-quality materials that will insure for long-term use.

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Lifetime warranties will be included on all purchases of products to further insure the customer

of the value and quality of the product.

Strategies:

Green Products will focus its efforts toward creating long lasting relationships with our

target markets. Our products are carefully constructed and engineered to produce incredible

results, therefore exceeding customer expectation and leaving them happy and “green” year after

year. We will provide exceptional customer service and ask for constant feedback of our product

and services in order to satisfy the needs of our consumers.

All of our marketing efforts will showcase our passion for aiding our environment and

conserving our resources. By marketing ourselves as an honest and reliable company who puts

the customer first, we will look position ourselves as the standard for the rest of the “green”

market.

Marketing Mix:

Pricing:

The ECO-finity shower is the only product of its kind, to date. Not only is the ECO-finity

one of the most efficient and advanced consumption reducing products on the market, but it is

the only water recycling and filtration shower system available as well. Due to this, Green

Products has adapted a premium pricing strategy. Since we are the first to bring a product of this

kind to market, we have decided to offer a premium price in order to maximize our revenue

during the beginning phases of our existence. Because we are marketing the ECO-finity as a

premium product, we used only the finest materials to engineer our product. Naturally, our

research & development, production, and manufacturing costs were extensive. As a result, we

used a cost based pricing strategy. Taking our premium offering into consideration and after

calculating our costs, our final price came out to be $2,000.

Distribution

Green Products will use a selective distribution strategy that will allow them to choose a

small number of retail stores, which will allow them to be able to access those retailers’ large

geographical areas. It will consist of 5 distribution channels: manufactures and suppliers,

producer and marketers, distributors, business segment and final consumer.

1.      Green Products will purchase high-quality materials from manufacturers and suppliers

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2.      Greens Products will build products and demonstrate to store representatives

3.      Store representative will then utilize distributors to get the product to individual retailers

4.      Retailers will sell products to the end consumer.

Retailers will include home-improvement stores like Home Depot, Lowes and Ace

Hardware and will be heavily relied to sell the product to the end consumers. Once at the point of

purchase, consumers will pay the retailers in full and receive a receipt. After purchase,

consumers can contact the Green Products customer service line if in need of additional help or

explanation.

Figure #3

Marketing Communications

Green Products will use a pull strategy starting with the first marketing channel using a

B2B strategy, selling our product to home-improvement stores that then create the medium

where the final consumer can buy the product. To market to these hardware stores, Green

Products will start with three teams of salespeople consisting of four members to each team. We

plan to start with the states suffering from severe droughts, one team will be stationed in San

Francisco, one in Los Angeles, one in Tucson, and another in Las Vegas. These salespeople

make up the personal selling aspect of our marketing communications. They are the face of

Green Products, dealing directly with other businesses, attending trade shows and fairs and

answering any questions consumers may have.

As mentioned before, Green Products will rely heavily on digital marketing. We will be

creating interactive brochures that will be shared both on our website, and direct mail. As well as

utilizing all our social media accounts to reach our target markets such as, Facebook, Twitter,

and LinkedIn.

After year one, Green Products will increase spending on the marketing mix. We will be

investing in television ads, featuring a commercial demonstrating the advantages of the ECO-

finity, as well as being a featured segment on the cable home shopping channel QVC. This ad

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will run primarily during the day, as opposed to prime-time night television, in order to reach

both stay-at-home parents and retirees who watch daytime television and to stay within

marketing budget.

Marketing Research:

To gather primary data we conducted an online survey. Based on our survey, which

gathered age group, showers taken per day, avg. shower time in minutes, and avg. monthly water

bill. We also briefly described the product and asked participants’ level of interest and how much

they would be willing to pay for a product with the described features. From this primary

research we were able to solidify existing presumptions we had about consumers, and gain

insight on showering habits and consumer preferences.

The goals of our secondary research were to determine what demographics were the

“greenest” consumers, as well as analyzing market opportunities and growth in the home

building and renovation markets. We used the McGraw Hill Construction’s Green Home report

to get a better understanding and quantify consumers’ growing interest in “green” home building

and renovation. Their responses only strengthened our belief in the potential of the “green”

market, which is estimated to near 100 billion dollars by 2016. We also were able to gather data

about green practices among different age groups of consumers from the ICOM Information and

Communications survey. These reports were fundamental in constructing our own market

strategies as we were able to better understand who our target consumers, and what markets

would be most beneficial for our company.

We will continue to gather more information on a regular basis, regarding the green

market and our target consumers. The market and economy is ever changing, meaning Green

Products must always have recent and relevant data in order to predict and respond to market

shifts and consumers preferences. We will conduct frequent surveys and encourage customers to

provide reviews and feedback on our products and customer service.

Additionally, we plan to track consumer trends within the “green” market on a quarterly

basis.  Testing and studies focused toward attaining information on which marketing tactics

prove to be most successful must be completed annually. Lastly, to produce more primary and

therefore more reliable data, Green Products will conduct a full market report and analysis on a

biannual basis.

Financials:

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Green Products’ ECO-finity will have a variable production cost of $884 per unit, which

will include raw materials, wages, assembly and manufacturing. In order to break even, Green

Products must sell 636 units to reach $1,272,000. In order to make a profit, the company will

have to exceed the break even numbers.

Figure #4

Figure #5

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Figure #6

Break-even Analysis:

In order to break even, Green Products must sell 53 monthly units or 636 total in the first

year at a unit price of $2,000. According to the sales forecast below, Green Products must sell

904 units or generate sales of $1,808,000. By the third quarter, they will begin to see profits.

Figure #7

Sales Forecast:

The ECO-finity is a new product and sales are expected to be low for the first year till the

company gains recognition in the industry. The company will aim to get their products into 50

Home Depot, Lowes and Ace stores located on the west coast.

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After the first year, the company and product will receive traction in the industry and

become better known as a high-quality product. The company should expect to increase sales in

year 2 to 1,200 units, and as a result of increased profits the company will invest more money

into their marketing mix. We expect the increase in advertising and marketing efforts to grow in

year 3, as a result units sold will be to at least 1,900.

Figure #8

Expense Forecast:

Below is an estimated breakdown of marketing expenses for the first year.

Figure #9

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Controls:

Green Products LLC, plans to measure units sold, revenue, accounts receivable, and cash

flow as well as fixed and variable expenses, accounts payable, and depreciation expense. These

will be the duties of the accounting department. We will also monitor statistical measures

pertaining to our target consumers. Most importantly we will track the age of our home owning

customers, the number of people living in our customers’ homes, and their geographical location.

For our housing development builders (college housing included), we will track what

type of housing developments install ECO-finity showers. The types of housing developments

include tract homes, urban developments, apartment complexes, gated communities, and hotels.

We will look to better understand which of these types of housing builders purchase and install

the ECO-finity shower system. Depending on the results of our customer tracking efforts we will

rank our customer types and adjust our marketing strategy accordingly.

Implementation:

To begin the implementation process of Green Products’ marketing plan, the company

must first find the manufacturers for the parts and materials needed in order to construct the

water management system. After the unit is constructed, it must be tested to ensure proper

functionality and meeting product feature requirements. These include proper control panel

functions, and meeting its filtration capabilities. While the unit is going through product testing

to ensure it is functioning at its highest possible level, Green Products will have a sales team

finding and marketing through personal selling to hardware stores that will sell the water

management system.

The next step in the implementation process is to make up contracts to start the

distributing process. Upon completion, the consumer can either hire a licensed contractor or a

Green Products technician to install the unit. After customers are satisfied with the installation of

their water management system, we will promote the customer feedback of the product to help

spread the word of how beneficial our product is to helping people save money on their monthly

water bill across the U.S. This will be accomplished through the interactive brochure sent as

direct mail to targeted consumers in strategic geographic areas suffering from droughts, as well

as through social media and the company’s website.

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Marketing Organization:

Green Products is a new company and will contain a small marketing department with

highly motivated individuals. It will include a director of marketing, supported by a marketing

manager. Both marketing director and manager will be supported by the two coordinators. All

four team members will then support the sales teams with marketing materials to sell the

products. Sales teams will represent the company and product by using personal selling

techniques. Sales and Marketing will communicate to each other to ensure effective selling and

support.  

Figure #10

Contingency Planning:

As any young company does, we expect to have some difficulties along the road. In our

particular instance, we foresee some possible problems for our flagship product, the ECO-finity

water management system. Our primary difficulty will be with the high price of the product.

With a premium price many consumers will shy away from purchasing our shower system.

However, the loss in units sold will be partially compensated for by a higher price per unit.

Additionally, we must promote to those skeptical consumers concerned with price that our

product will pay itself back (ROI) in less than three years.

Secondly, because our product is a fixture, rather than an appliance, it is difficult to

install and requires laborious renovation efforts. These labor and installation costs may cause

sales to existing homeowners to be lower than our expected values.

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We also may run into patent infringement issues with competing companies who will try to enter

the market. This will give rise to legal expenses. Although we are confident in our products

quality, there will inevitably be repair and maintenance issues that we will have to address in

order to increase product life. Our warranty and trained repair specialist have been put in place to

aid with these issues.

If we come across potentially catastrophic issues which will put us at risk of

company failure, drastic measures may have to be taken in order to keep our company afloat. Our

first step in recovering from a worst case scenario is to drastically cut expenses. Salaries,

manufacturing, and advertising costs would have to be redistributed and reduced. We would

determine who are largest buyers were, and primarily sell to those individuals. Additionally, we

could streamline our supply chain and eliminate any unnecessary steps or parties in the selling

process. If these methods of recovery do not suffice, we can sell our patent on the filtration and

recycling system or sign a licensing agreement in hopes of becoming profitable.

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