Saving the planet one shower at a time.Created by: Jon Carter, Micah Covert, Sam Rosenblum, Haley Stegall, Schuyler Zimmerman

SWOT Analysis

Strengths Eco-Friendly: MyEco Showerhead provides consumers with a water efficient showerhead that uses less gallons per minute than the market average and encourages users to spend less time in the shower. California is facing one of the most severe droughts in history, causing the government to encourage all citizens to lower water consumption, and MyEco Showerhead helps give them a way to do this (California Drought, n.d.)Unique Design: MyEco Showerhead has an aesthetically pleasing LED color display that shines different colors based on how much water the consumer has used. This color change is used by competitors to signify temperature change, but MyEco Showerhead is the only product that utilizes LED lights for water conservation purposes. This appealing design provides a clear and direct way to inform the consumer of their level of water consumption.

Product Development: MyEco Showerhead offers a new and unique element to an existing market. It does this by combining shower timing gages and LED shower lighting technology.

WeaknessLower Water Pressure:  MyEco Showerhead exhibits slightly less water pressure at 1.5 gallons per minute as opposed to the average 2.5, due to its water saving qualities. This is a disadvantage because according to Qualtrics, 63% of consumer respondents rate strong water pressure as a very important attribute in a shower head (Qualtrics, 2016). Qualtrics data also shows that respondents rated MyEco Showerhead lower in water pressure than the rival company DreamSpa (Qualtrics, 2016).Shorter Showers: MyEco Showerhead advises users to take shorter showers than they are accustomed to, which may be upsetting to some consumers. MyEco Showerhead recommends that users spend a maximum of 10 minutes in the shower; however, Qualtrics data shows that 22% of respondents take showers between 11-15 minutes long, and 7% take showers over 15 minutes long (Qualtrics, 2016).

OpportunitiesMarket Trends: Showering has become more popular than the traditional bath. However, at the same time, there has been an increased focus on conservation practices in the U.S. (Prnewswire, 2012). In addition, recovery in the construction sector spells growth for the shower heads and the shower panels market (PrWeb, 2012). This aligns MyEco Showerhead with the current market trends and allows the company to take advantage of consumers in an industry that thrives off the recovery of the construction sector. Market Growth: The shower head and shower panel market is projected to reach $2.86 Billion by 2017, and increase to $3.4 Billion by 2020 (PrWeb, 2012). With this projected industry growth, it is a great opportunity for MyEco Showerhead to capture part of the market share.

Threats Competitive Products: A variety of other companies offer shower heads with LED light technologies. In particular, DreamSpa All-Chrome Water Temperature Color-Changing LED Showerhead conserves water and changes color based on temperature (Chicmarket, n.d.). In a market saturated with similar products, this may make it difficult for MyEco Showerhead to stand out and compete. Well Established Vendors: The global bath and shower products market consists of numerous large and regional vendors that increasingly compete with each other to gain the maximum market share. The leading vendors in this market are Grohe, Hansgrohe, Jaquar, Kohler, and VitrA (Technavio, 2015). These well-established companies pose a threat to MyEco Showerhead gaining notoriety and becoming a strong player in this highly competitive market.

Segmenting, Targeting, and Positioning

Segmenting & TargetingBased on the percentage share of the market, women consume about 5.4% more of the green goods market than men, making females a stronger target for MyEco Showerhead (MRI

Reporter, 2014). Consumer focus will be on married people and homeowners since married people account for over 63% of the green market and homeowners account for 86%. The target age group for the shower head is 45 to 55 years old, as they account for the highest percent in spending for the environmentally friendly goods market (MRI Reporter, 2014). In addition, consumers with household incomes of $75,000-$150,000 tend to spend the most money on bath related goods (Bed and Bath goods, 2014). Given this data, MyEco Showerhead’s target consumer is Jane; a 50 year old married homeowner with a family income ranging from $75,000 to $150,000.

According to a primary research survey, 58% of respondents expect to hear about MyEco Showerhead through FaceBook advertisements, and 80% expect to purchase the product at home improvement stores (Qualtrics, 2016). This allows the target consumer to notice the product on their social media page and potentially buy it while out shopping at Home Depot or other home improvement stores. However, survey data also suggests that 54.8% of respondents expect to purchase the showerhead online via the company webpage (Qualtrics, 2016). To capture this part of the market, MyEco Showerhead is available to online consumers to ensure they can purchase from the comfort of their own home.

Positioning When creating MyEco Showerhead, there was great focus on two aspects: aesthetic appeal and water conservation. Since 66% of survey respondents rated aesthetic appeal as an important attribute to a shower head, it is critical that consumers are visually attracted to MyEco Showerhead. (Qualtrics, 2016). Additionally, 77% of respondents rated water efficiency as a very important feature to the product (Qualtrics, 2016). Because of these statistics, it is evident that water conservation and aesthetic appeal are both big concerns to consumers. Competing shower head products focus on one of these key points, but never both. The first group of competing products (1-5 below) are LED shower heads. These LED shower heads are aesthetically appealing. Some have over ten colors, while others imitate tropical mist. However, most of these colorful shower heads only have rudimentary water conservation features, if any.

The second group of competing products (6-9 below) are various forms of shower conservation technologies. These may be eco-friendly and economical, but they lack any sort of aesthetic beauty that group one displays. MyEco Showerhead is revolutionary because it is positioned as an environmentally conscious product with all the aesthetic appeal of an industry leading LED Showerhead. Competing product citations can be found in references section.

Product Strategy

Product FeaturesMyEco Showerhead is a stainless steel, water saving, LED shower head dispenser that has a water flow rate of 1.5 gallons/per minute and a water pressure of 0.1MPa - 0.6MPa (LED Shower Head (HY808), 2016). The product serves as a water saving, shower head with 12 LED lights. The LED lights are hydro-electrical, waterproof, and have the capacity to change to three colors: green, yellow, and red. As the shower commences, the water flow triggers the LED lights to the color green for the first 6 minutes. After 9 gallons have been used, the lights will change to yellow for 4 minutes. After a total of 15 gallons have been used, the LED lights will finally change to red (Wang, 2016). This flashing red lights indicate that the user has reached the maximum recommended water consumption and should get out of the shower. Additionally, the 100mm shower head will feature a digital clock display that includes the amount of gallons used.

Consumer Needs

According to Scarborough Research, “A new study… finds that American consumers continue to actively seek out ways to save money on everyday expenses” (PR Newswire, 2011). At the same time, there has been an increased focus on conservation practices in the U.S. (PR Newswire, 2011). MyEco Showerhead addresses this concern by making the consumer consciously aware of how much water they are using in the shower and reminding them to get out when the recommended gallon use is consumed.  As a result, this provides the opportunity for consumers to lower their monthly water bills. The survey data also shows that 67% of respondents rated water efficiency as an important feature to have in a shower head (Qualtrics, 2016). MyEco MyEco Showerhead satisfies this through the 1.5 gallons/minute flow and the compelling efforts to reduce the amount of time consumers spend in the shower. The American average for gallons used per shower is 17.2 (Our water matters, 2011). MyEco Showerhead gets people out at a maximum of 15 gallons but recommends less.

PackagingThe shower head is 235mm by 100mm by 40mm with a net weight of 220g (LED Shower Head (HY808), 2016). When shipped from Port Ningbo, China to Los Angeles, California, 50 pieces will be in each package, and each package will be 63.5cm, by 23 cm, by 46.5 cm (LED Shower Head (HY808), 2016). These packages are made from 100% recycled products. In fact, the packaging is made of tree-free packaging and from invasive plant fibers (Ecovative Sample Shop, n.d.). Although it is expensive to supply, packaging composition is not overlooked by MyEco Showerhead. It conserves product waste and fortifies MyEco Showerhead’s underlying message encouraging consumers to be eco-friendly.

   

BrandingMyEco Showerhead appeals to progressive, fun-loving, eco-friendly housewifes. To convey this persona, MyEco Showerhead is branded as a proactive company, with a product that is environmentally conscious. Furthermore, the brand image is made known through its exertive slogan: Saving the planet one shower at a time.

WarrantyAccording to Waterpik Showerheads support, after 2005, most shower products offer a limited life-time warranty (Frequently Asked Questions, 2016). Because of this, MyEco Showerhead will only cover and reship products if there are problems with craftsmanship.  

Distribution Strategy

When corresponding with John Wang from Cixi Yishuang Sanitary Ware Co., he estimated a cost per unit of $4.60 for 12,000 units (Wang, 2016). This Chinese company is ideal because of their affordability and the fact that they could meet a high number of specifications for the

product. The company plans to receive a standard of 12,000 units at a time. These 12,000 units will be shipped from Port Ningbo, China to Los Angeles, California, which will cost $1,000, or $.08 a unit (Wang, 2016).

A distribution center and office space are set to be purchased in the first year. The reason MyEco Showerhead is purchasing a distribution center is to store product and decrease the amount of time it takes to ship to retailers. The distribution center is 1,000 square feet and it is located in La Palma, Ca. The location is extremely close to the Los Angeles shipment drop off location and only costs $18,600.00 a year (12 Centerpointe Dr, 2016).

The company plans to transport MyEco Showerheads around the country through company employed truck drivers. As a new company, MyEco Showerhead is using its own transportation to ensure proper delivery times and to maintain positive relations with its intended retailers. This results in less accountability on third parties and creates a more efficient system of getting the shipments where they need to go, when they need to get there. MyEco Showerhead plans to purchase a commercial truck for about $40,000 and hire a truck driver for $15 an hour(2016 Mitsubishi Fuso, 2016). As the company evolves, more trucks are going to be purchased and more drivers hired.

MyEco Showerhead is focused on home improvement retailers because 79% of survey respondents expect to purchase MyEco Showerhead in a home improvement store (Qualtrics, 2016). In addition, 78.2% of home improvement products in the United States are sold at these retail locations (US Distribution-Home Improvement, 2015 ). MyEco Showerhead will be available in large home improvement stores such as Home Depot, Lowe’s, Bed Bath & Beyond, Menards, etc., These stores collectively account for 28.6% of all Home Improvement Retail sales, making them optimal choices for MyEco Showerhead (Home and Garden Specialist Retailers in the US, 2016).

Additionally, MyEco Showerhead will be available for purchase on the company website. The company survey discovered that 54.8% of people believed that they would find this product on MyEco Showerhead’s website (Qualtrics, 2016). The orders on this website will be delivered through USPS, which is cheaper than FedEx and UPS. To ship a 13 ounce package across four zones, USPS charges $3.47; whereas, FedEx and UPS both charge over $10.00 to ship the product (Rethink your Shiping, 2015).

Promotion Strategy

Advertising ThrustWhile many of MyEco Showerhead competitors such as Delta, Moen, and DreamSpa advocate aesthetic beauty and extensive shower features, MyEco Showerhead’s promotion strategy focuses on the company’s slogan, “Saving the planet one shower at a time.” This gives the company a unique channel of advertisement in the market.

One of the ways, MyEco Showerhead demonstrates its eco-friendliness is by donating money to The Soil and Water Conservation Society on a yearly basis. This corporate partnership is beneficial to the environment, as well as to MyEco Showerhead’s promotion goals. By obtaining a $3,000 annual silver corporate membership, MyEco Showerhead gains access to many advertising opportunities. These include: the ability to market upcoming product events through SWCS’s social media outlets, attend various water conservation conferences, demonstrate MyEco Showerhead on SWCS’s website, and be recognized through several publications (SWCS, 2016).

Pull StrategyMyEco Showerhead is focusing its social media campaign primarily on Facebook. The company survey found that 53% of potential customers expect to see MyEco Showerhead’s advertised on Facebook (Qualtrics, 2016). Such advertisements will focus on creating eco-friendly awareness, through the use of infographics and links to water conservation articles. These articles will include information on how to conserve water, different non-profits to support, as well problems associated with water loss. For example, there might be a link to an article by The Nature Conservancy that talks about how, “Within 10 years, most people on the planet will face life with water shortages” (Why is Our Water, 2016). Facebook generates 100 views per $24 or about 4.2 highly specific views per $1. Because of this, it is the primary focus of the company’s pull strategy (Prosser, 2013).

A small, but notable point is that MyEco Showerhead’s pull strategy will include promotions through the magazine such as Journal of Soil and Water Conservation and Conservogram, which come complimentary through the company’s corporate  membership with SWCS (SWCS, 2016).

Push StrategyAccording to Jacquelyn Ottman, “Green related products require soft-sell advertising as opposed to the more forceful hard-sell associated with push strategies.” (Ottman, J. 2014). Because of this, MyEco Showerhead is focusing more of its advertising costs towards pull strategies. That being said, there are two push strategies that the company intends to implement. The first is the use of visually appealing, in-store displays that have images of the product and infographics. These displays will appear in MyEco Showerhead’s key retailers, such as Home Depot and Lowe’s.

Second, MyEco Showerhead will team up with third-party affiliate, Gourmet Demonstration, which specializes in in-store demonstrations for products. This approach allows consumers to get involved in an educated conversation involving the benefits of using MyEco Showerhead in their home, which can increase product sales (Live Tasting Events, 2016).

Pricing Strategy and Financials

Pricing StrategyMyEco Showerhead plans to sell 23,690 shower heads at $39.99 per unit in the first year, creating $947,363 in revenue. The 23,690 unit sales was estimated by combining the total estimated exposures through the marketing channels and multiplying it by the quantity demanded of roughly 8.2% (Qualtrics, 2016).

MyEco Showerhead has an elasticity of demand of only .235, which is incredibly inelastic. When comparing the profit margins at $55 compared to $35, $55 seemed like the obvious choice; however, due to manufacturing changes and the company’s overvaluation of the product, MyEco Showerhead plans to price in the market for $39.99 (Qualtrics,2016).  

The base shower head costs $4.60 per unit to manufacture (Wang, 2016). There is an additional cost of $0.08 per unit to transport the shower heads from Port Ningbo to Los Angeles via sea freight. MyEco Showerhead also estimates a cost of $4 for the eco-friendly packaging and another $8 for the addition of the clock, which displays gallons consumed. This gives a total cost per unit of $16.68, upon arrival in America (Wang, 2016).

During the first year, MyEco Showerhead will become a silver member of SWCS, which costs $3,000 (SWCS, 2016). In the following years, the company will upgrade to a gold membership for an additional $2,000 each year. (SWCS, 2016). This is not the main source of promotional views with only 10,000, but it will be used to demonstrate the company’s eco-friendliness. MyEco Showerhead’s Facebook advertising will be the most expensive of the advertising costs. According to Marc Prosser, an advertisement receives 100 views for $24 or 4.17 views on the dollar (Prosser, 2013). MyEco Showerhead will allocate $60,000 to Facebook advertisements and expects to receive over 250,000 views.

MyEco Showerhead will also purchase in-store displays. For the first year, there will be 36 purchased displays at $212.22 per display (22 x 28 Acrylic Poster Stand, 2016). This will accumulate roughly 15,000 views in the span of a year. Finally, the individual demononstrations with MyEco Showerhead’s partner, Gourmet Demonstration, will cost $180.00 per presentation (Gourmet Demo, 2016). During each of the first three years, Gourmet Demonstration will conduct 35 live demonstrations on behalf of the company. This will yield the company an additional 15,000 views.

Transportation is another significant expense. In the first year, the company will purchase one 2016 Mitsubishi Fuso for $39,900 (2016 Mitsubishi Fuso, 2016). In addition, the company will hire a truck driver for $15 hour. He will be expected to work 40 hours per week for 50 weeks out

of the year, costing the company $30,000 per year. Assuming the driver drives 30,000 miles, the gas cost will be around $10,340 a year, depending on fuel costs at the time (Mitsubishi, 2016).

MyEco Showerhead hopes to be in every shower of a consumer’s household. To do so, MyEco Showerhead will offer a buy one get one 50% off promotion. Offer codes for this discount will be available to all consumers that complete a survey on the company website. This will entice the consumers to supply the company with useful data, involving demographics and dominant marketing strategies.  

Year 1-3 Estimated Financials

Appendix

Qualtrics Data

Figure 1 is showing the comparison of MyEco Showerhead and Dream Spa, its highest competitor. This figure is illustrating the different features and where the target market places value (Qualtrics, 2016).

Figure 2 is showing the comparison of MyEco Showerhead and Dream Spa, its highest competitor. This figure illustrates where males place their importance of the features (Qualtrics, 2016).

Figure 3 is showing the comparison of MyEco Showerhead and Dream Spa, its highest competitor. This figure illustrates where females place their importance of the features (Qualtrics, 2016).

Figure 4 illustrates male versus female on the pricing of MyEco Showerhead (Qualtrics, 2016).

Figure 5 illustrates annual income and how likely the target market would be to purchase MyEco Showerhead for $55 or $35 (Qualtrics, 2016).

Figure 6 illustrates shower users that take long showers versus short showers and then compares them with MyEco Showerhead’s price range (Qualtrics, 2016).

Figure 7 illustrates where MyEco Showerhead’s target market would expect to buy their product (Qualtrics, 2016).

Figure 8 illustrates how are MyEco Showerhead’s target markets lifestyle effects how much they would be willing to pay (Qualtrics, 2016).

Figure 9 illustrates how MyEco Showerhead’s target market compares how much they are willing to spend on the product and how eco friendly they rate themselves. Four and five being very eco friendly and one, two and three being moderate to not very eco friendly (Qualtrics, 2016).

Figure 10 illustrates how MyEco Showerhead’s target market compares how much they are willing to spend on the product and how often they recycle (Qualtrics, 2016).

Figure 11 this illustrates how MyEco Showerhead uses less water than conventionally

Figure 12 market growth in the close future

Price Elasticity

Discounting for IntentPrice Point A - $55 8.2% of people aware of MyEco Showerhead would by it.

Price Point B - $358.9% of people aware of MyEco Showerhead would by it.

If we expose 300,000 to MyEco Showerhead:Price Point A (55) Total Profit = $728,223.12Pirce Point B (35) Total Profit = $254,442.79

Elasticity of Demand = .235 MyEco Showerhead is  < 1 which makes the product inelastic

Figure 13 cost savings for MyEco Showerhead

Logo

Figure 14 Logo for company

Qualtrics Survey

Figure 16 Qualtrics Survey Positioning Maps

Figures 16-19 evaluates MyEco Showerhead and its competitors on aesthetic appeal, water conservation, water pressure, and water conservation.

Financials

Figure 20 the entirety of the company’s financials

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