Marketing Group Project

BUAD 3361-90

Ja Morgan

Sierra Myers

Ben O’Brien

Hunter Thomas

Lindsey Raker

Abstract

The following work a process of product development and marketing from start to finish. As a group, we brainstormed potential product ideas until landing on the one that received the best reaction and support. Once we decided that our product would be a stackable washer and dryer that switched clothes automatically, we began to fine tune our product descriptions and specifications. We then decided where to sell this product and how to price it. Moving forward, we began discussing the best way to market our new washer and dryer combination. We go into depth on why direct digital marketing will be the most effective strategy for us and discuss how we will implement it. We also include how we will use personal selling, sales promotions, and public relations. This work will heavily discuss our competitors and how we will combat the competitive market that we are entering. From there we will review our SWOT analysis and explain the strengths, weaknesses, opportunities and threats we may experience. We then decided on our marketing segmentation and included explanations of our geographic, demographic, psychographic and behavioral ideas. Moving towards our final steps, we settled on the position strategy. For this we have chosen more for less. Next, we list and explain how our product is different from our competitions. Lastly, you will see our ideas and plans for branding, labeling and packaging our product.

Concept Testing

Product Concept One

A stacked washing machine and clothes drying system that will automatically switch the clothes from the washer to the dryer (via a hatch on the bottom of the washer) once the washing cycle is complete. This will eliminate the need to switch clothes to the dryer, additionally eliminating musty odor from your clothes.

Product Concept Two

Alternatively, there would be a single unit that would function as both the washer and dryer. Once the wash cycle has completed, the machine will then change functions and dry the clothes. This machine option will appeal as a space-saving option for consumers.

Product Concept Three

This machine would be either a stacked or single machine with a smaller capacity to better serve customers with limited laundry space. This would be advantageous for those living in small houses or studio apartments as it would save space compared to the regular sized washer and dryer.

Concept Testing Review

Overall, the concept reviewers gave positive feedback of the product idea. They liked the convenience of having a washer that automatically moves the clothes from the washer to the dryer. The product reviewers also stated that they believe this product would save them time in their daily life.

However, there were some ideas that the product reviewers would like to see added on to the product. One additional feature that the product reviewers would like to see would be an app that would tell the user when their clothes are done. Another additional feature that the product reviewers would want for the product would be the ability to load multiple loads of laundry at the same time.

Marketing Mix

Product

Do you often forget to switch your laundry in a timely manner? Do you love the idea of washer dryer combo but don’t want to give up the quality of your separate washer and dryer? This washer and dryer stackable combination is the solution for you. Our product is a 4 cubic foot washing machine combined with a 4.5 cubic foot dryer. With the washing machine stacked on top of the dryer the system measures to 82’’ tall.

After loading clothes into the washing machine, the system will wash the clothes. When the cycle is complete a hatch will open, and the clothes will drop into the dryer and automatically begin the drying cycle. This new item will eliminate the need to switch clothing.

● 82” tall x 21” wide x 40” deep

● 4.5 cubic feet separate washer and dryer space

● choice between electric or gas operation

● Product comes in white or matte black

● Both the washer and dryer have front load door

Place

Due to our company being small, in the early stages of sales we are going to have to rely heavily on the area we are located for in person sales as well as trying to push online sales. We would try to first advertise customers to visit our warehouse, because that is where we would gain the most income from product sales as we are skipping distributor and retailer costs allowing for a direct marketing channel. Along with personal sales we would also push to have our products sold at local appliance retailers, though it is an indirect channel it would allow for our product to be seen by more customers and potentially increase sales. With local retailers we would distribute our own product as it would skip the costs of having to use a distributor as well as only leave the retailer as an intermediary. This strategy would benefit us greatly, due to no distributor middle man and deliveries would be timely and would allow our company to have better relations with the retailers.

Along with in person sales another way to sell our product in the early stages would be to sell online. Customers would be able to purchase our product on our own website, as this would provide them with the best deals and it would also give them the most information about our company and product. Selling our product through other online retailers would also be a very strong potential option as it would definitely increase the amount of customers seeing our product. Amazon would likely be the best option, as we wouldn't be able to get our new product onto many other sites such as Walmart or Target. Also selling our product on Amazon would be the smartest option as we could ship our products directly from our warehouse, and only pay a small fee for using them as the retailer.

Price

For our product pricing strategy, we will utilize market-penetration pricing. We will utilize this strategy because it will enable our product to be sold to the largest number of buyers and will allow us to build brand loyalty across different markets.

For our price adjustment strategy, we will utilize discount and allowance pricing. This will encourage prospective buyers who need to purchase more than one unit to choose our product over another alternative. Buyers prefer to purchase what they think is the best deal for them and if we offer this type of pricing it will hopefully create the right balance between volume of sales and overall cost of production.

Our Competitor’s prices:

● Whirlpool 2.8 cu. ft. Smart All-In-One Washer & Dryer (price $1,529.99).

● LG - 4.3 Cu. Ft. 14-Cycle Washer and 8-Cycle Dryer Electric Combo - White (price $1,799.99)

● GE -2.4 cu. ft. White High-Efficiency 120-Volt Ventless Electric All-in-One Washer Dryer Combo (price $1,399).

The price that we will charge for our product will be $1,500. This price will allow us to appeal to different types of buyers in the market and will promote the idea that our product is for buyers of all types.

Promotion

Because we are just starting out, it will be beneficial for us to tackle direct and digital marketing by targeting and teaming up with social media influencers who we believe to be our target market and build contracts to test, review and advertise our product. In addition to this, we would be sure to have a large social media presence such as daily feed posts, Instagram, and Facebook Story Takeovers controlled by the media influencers we have chosen. This high presence would allow our customers to chat with the company directly through their social network of choice to ask any questions or submit orders. This will also give consumers a first hand look at how the product works and performs in daily life.

To begin our advertising process we would ask local retailers and businesses who sell appliances and similar goods to advertise our specific product in their already produced content. In addition we would work with our selected target market that we carefully select and use for direct and digital marketing to advertise our product in exchange for free or discounted machines. In addition to this we would have paid promotions on all social media platforms as well as streaming networks such as Hulu and Youtube. Because of the added expense we would not heavily rely on any print promotion. We do not believe that it would be beneficial because of our target market.

Using personal selling would be beneficial for our company. Because we are just starting off, everyone of us wears multiple hats, so we would all be salespeople to any potential customers. We do have a warehouse that we would be able to have our machine on display for customers to view and interact with. We would be able to communicate directly with the customer and answer any questions about our combo machine, which would also help build relationships.

Our company would utilize sales promotion by using Trade Promotions and Business Promotions. We would use trade promotions when dealing with the appliance stores to offer appealing promotions for them to carry our brand of machine. The way we would do this would be by offering a discount of $100 for each machine purchased. We would only do this promotion for a limited time, about 6 months, until we feel confident that our company and brand is known within the communities. Because our customers would be buying local and supporting our business, we would also be able to offer free delivery and installation within a certain mile range of our warehouse

Because we are a fairly new business and have a small team, we will rely heavily on our public relations skills for promoting our new product. It will be important for our company to strengthen public affairs to build and maintain local community relationships. By placing a focus on maintaining relationships, this will help ensure our customers will return in the future when it is time to replace their machine. One way we could help spread the word about our company would be to have a special event, a news conference for example, where our PR specialists would go on air to talk about our company and our brand new machine combo. It would be important to discuss why potential buyers should shop with our company.

Value Proposition Statement

Compact and superior washing and drying with convenience.

Competitive Review

For our stacked washing machine and clothes drying system we will have many competitors. Washing and drying machines are a household necessity. Our product has the ability to pass clothes from the washer to the dryer after the wash cycle is complete. Although no machines currently have this ability, there are still top selling appliances who have other advanced settings. The two main competitors for our idea will be the LG WM3900HWA and the Samsung WV60M9900AV.

Competitor One

LG is one of the more popular brands in the world today. It isn’t just a laundry company, it is also other things for home appliances and air solutions like refrigerators, dishwashers, vacuum cleaners, etc. They make things for home entertainment such as TV’s, PC’s, monitors, etc. They also have a series of phones that they have made as well. LG’s headquarters is located in Seoul, South Korea. In 2018, the global sales were at 54.4 billion. The company has about 140 operations worldwide employing over 70,000 people. Washers and dryers are more technologically advanced than ever before. The LG WM3900HWA has the ability to power clean sizable loads in under 30 minutes and can operate and troubleshoot with the Smart Home app (“LG Electronics.”). Aside from their advanced levels of efficiency, this washer and dryer can also be controlled from a smartphone or voice command devices. According to “LG Electronics.”, this washer and dryer can alert you when your clothes are clean as well as start a load of laundry with a voice command. As far as drying capabilities, it has turbo steam and Sensor Dry, which measures and auto adjusts moisture levels to ensure that clothes are completely dry at the end of each cycle (“LG Electronics.”). Other important features include LG steam dryer which removes wrinkles and Smart Diagnosis which helps diagnose problems over the phone or through the app.

Competitor Two

Samsung is a similar brand as LG because they make the same products, so they are a competitor. Samsung is probably more known than LG. Samsung had a total number of revenues in 2018 that was around $208 billion. In 2017, their number of employees was around 320,600 people. Samsung sells many things such as mobile devices, like the Galaxy, which is one of the more popular phones today. They also sell TV’s, home audio, computing, and other appliances such as refrigerators, microwaves, vacuums, etc.

The Samsung washer and dryer system is a high-efficiency FlexWash which means that it is one machine with two washers. This competitor has the ability to run two separate loads of laundry with different settings and options (“Samsung 6.0.”). Like the LG washer, it also has Steam Wash and the ability to control the wash from your smartphone. According to “Samsung 6.0”, “VRT Plus Technology reduces vibration 40% more than standard VRT for quiet washing.” Like the washer, the drying machine also can dry two different loads at one time. The Samsung 6.0 has a multi-steam technology that can steam away wrinkles, odors, and bacteria. This dryer has a vent sensor where it detects duct blockages and reminds you to clean your vent. One significant difference between the LG and the Samsung washer and dryers is that Samsung has an Eco-friendly option that uses up to 25% less energy for every load (“Samsung 6.0”). This option not only benefits one's electric bill, it is also a more environmentally friendly option.

Although the Samsung and LG washer and dryers have impressive tools, the ability to move a load of laundry from the washer to the dryer without the labor is a convenience that only we have to offer. Ultimately, although these machines are tough competitors, they do not have the commodious technology that our product does.

SWOT Analysis

Strengths

Strength 1. Convenient and Innovative Products- Our company strives to produce convenient and innovative products. It is important to our company that we only produce products that are not yet on the market.

Strength 2. Collaborative Company- Our small group company works well and effectively together. Our ability to use our resources to communicate quickly and efficiently is one of our strengths.

Strength 3. Technology Friendly Employees- Our staff is open to change and innovation. We are constantly aware of new technology and easily able to learn more about it and how to use it. We strive to add new systems.

Strength 4. National Shipping- Because we are based in a Midwest location we excel in national shipping. Because we are centrally located, we have many options.

Weaknesses

Weakness 1. Limited International Shipping- Our ability to ship internationally (besides Canada can be difficult and expensive because we are far from coastlines.

Weakness 2. Limited Resources- Because of being such a new company it is difficult to obtain the resources that big companies like LG have.

Weakness 3. Still Learning and Growing- We as a company are not as experienced as other companies and it will take further schooling, expos, and conferences to learn more about company management and organization.

Opportunities

Opportunity 1. Enhance Product Delivery- It is possible in our future to collaborate and partner with a delivery service that would make distribution simpler. This would also make it possible to eliminate or lessen an area that focuses purely on distribution and delivery within.

Opportunity 2. Online Customer Service and Troubleshooting Help- We will work hard to afford maximum online and over the phone troubleshooting and help. This will add convenience for our customers.

Opportunity 3. Increase Shipping Possibilities- In the future will work towards opening a center on a coast to increase shipping possibilities.

Threats

Threat 1. Competitive Market-There is already a lot of washer and dryer companies that may have more resources to do bigger and better things for a lower price. This is because they are stable well-known companies that have been around for decades.

Threat 2. Similar Products- There are washers and dryers that exist as a combined (1 machine) situation. They do not do as well of a job as separate machines. While our hope is to be the in-between of these two products it could be problematic that there are already similar more established companies doing something similar

Threat 3. Election Year- With this being an election year it has been forecasted that regardless of the election outcome the US could face a recession afterwards. That combined with current policy could make necessary imports and exports difficult.

Market Segmentation

For our washer and dryer combination, we will be targeting individuals who are living an independent and active lifestyle. We think this group of people will be attracted to our product because of the simplicity our product offers. With today’s fast-paced environment, the ease of starting a load of clothes and knowing they will be dry when you return for them will be a strong selling point for us.

Geographic

To narrow down the geographic regions we wanted to target for our new product, we took several factors into account. First, we knew that in order to be successful in selling our product, we needed a target area that was largely populated to give our product great appeal. Secondly, we knew that the area we picked also needed to have a positive outlook for future growth to help with our product sustainability. For these reasons, our geographic segmentation resulted in our company choosing to target both the south and west regions of the United States- specifically Arizona, California, and Texas. According to the US Census (2019), they were 3 of the top 5 states with the fastest-growing cities in the United States. This information is beneficial to us because where there is population growth, there will likely be an increased buyers market. These two geographic areas also have the highest percentage of households who have both a washer and dryer (Siebens, 2013, p. 2).

Demographic

While evaluating and deciding what demographic area would best suit our washer and dryer product, we took several factors into consideration. The geographic regions we selected helped support this decision. According to a Census report (Siebens, 2013, p.2), individuals in the age range of 45 to 64 years old are the group with the highest percentage of washing machines within the household. It was stated that 66.8% of households with the head of household in the age of 45 to 64 own a washing machine and clothes dryer. Knowing these statistics, it is clear that this is the age we will focus our target on.

We think this age will be beneficial for our product because over time, appliances need to be replaced or upgraded. Naturally, if a person already has a washer and dryer in their household, they will be more likely to replace theirs when the time comes. An obstacle we may face is convincing our target audience to try a new brand; one they likely haven’t heard of before. Our reasonable selling price should appeal to our audience, which may help them ‘give us a try.’

Psychographic

Because of the ease and convenience offered with our product, we believe that the psychographic segment that will be the most beneficial for our company to target will be those individuals with busy and active lifestyles. Because of our certain target age range, focusing on those individuals in the middle-to-lower working class should maximize our selling potential. As discussed earlier, focusing on this social class will give our product the appeal needed because it will be more affordable with our selling price. We also feel that our company will attract those who tend to be “trend setters”, since our company is new, they may be the first in their region to buy our product.

Behavioral

For behavioral segmentation, we would like to focus on those customers who share a desire to get similar benefits out of their washer and dryer. The main benefit we can promote having would be convenience, since our machine has a hatch that will automatically move clean clothes from the washer to the dryer. Our company should also appeal to those who are cautious with their spending habits, as our affordable price will help attract new customers.

Positioning

The position strategy we have chosen is more for less. We will strive to have higher quality products and service but to keep our prices similar and equal to our competitors. It is important to our company that we are able to give the customers the best service possible. It is equally as important that we work to limit price increases.

Differentiation

Our product differentiates itself from the competition due to it being the first product of its kind on the market. With an automatic transfer hatch that drops clothes from the washer into the dryer it will allow for a more hands free and efficient experience. This feature would not only save time, but it would also eliminate many issues with leaving your clothes in the washer too long. Having this revolutionary feature would help pave a way for our product on the market due to it being the only of its kind. Though the market for washer and dryer combos is competitive, the features that this product provides would benefit many lifestyles of today's consumers.

The main competitors in the market of our product lack the technology that we would be using allowing our product to break into the scene. A recurring trend in this market is that almost all the companies have very similar products that lack innovation. All the competitors still require the need to transfer your clothes manually from washer to dryer where our product would automatically transfer the clothes and start drying immediately. With this our product would have a clear advantage in a key aspect that consumers have not seen before, this is how we plan to differentiate ourselves from the competition.

Branding

Our brand name is AWADE, which stands for Automatic Washing and Drying Exchange. We felt like this is a good name for our product and it is easy to say. For our symbol, we are going to have the letters of our brand name on the bottom of the logo which is a blue washing machine that shows little bubbles on the inside of it. Our background is a dark gray/black color with white lettering on our name.

Packaging/Labeling

Our package will come in a cardboard box that is fit to the size of the washer/dryer. On all the sides of the box it is going to have our name on the bottom and the top. On one side it is going to have our logo in the middle of the box. On the next side of the box it’s going to have the model of our machine and also what is in the box. We will also have safety precautions on how to not damage the machine when opening it or moving it.

References

“LG Electronics.” The Home Depot, www.homedepot.com/p/LG-Electronics-4-5-cu-ft-High-Efficiency-Ultra-Large-Smart-Front-Load-Washer-TurboWash360-Steam-Wi-Fi-in-White-ENERGY-STAR-WM3900HWA/30416125

“Samsung 6.0 .” The Home Depot, www.homedepot.com/p/Samsung-6-0-Total-cu-ft-High-Efficiency-FlexWash-Washer-in-Black-Stainless-WV60M9900AV/301226226?irgwc=1&cm_mmc=afl-ir-10078-456723-bestproducts.com&clickid=UQNxpfwTfxyORR7wUx0Mo3cjUknTsZX9MVKw0s0.

Siebens, Julie. “Extended Measures of Well-Being: Living Conditions in the United States: 2011.” United States Census Bureau, Sept. 2013, www.census.gov/history/pdf/sipp-data-appliances.pdf.

US Census Bureau. “Fastest-Growing Cities Primarily in the South and West.” The United States Census Bureau, 23 May 2019, https://www.census.gov/newsroom/press-releases/2019/subcounty-population-estimates.html