The purpose of the report is to set up an eco-friendly business.Living better is a trade off between conflicting desires: to do better by the planet, and have all the comforts that come with destroying it. Nothing sums that up better than the aim of the eco shower heads: to have as strong a stream as a regular shower, while using less water,(Buist, 2018).I intend to manufacture an eco shower head. The eco shower head would control the flow and spray pattern of water.This would directly affect in water consumption.According to research a larger shower head with bigger holes uses more water but isn't necessarily more powerful than smaller one because that depends on the water pressure and type of shower,(Which?, 2018).The aim for this product is that people understand the importance of water conservation and switch to eco-showers.This would bring about a change in the environment that is less water consumption,save on water bills and electricity and at same time providing people with pleasure of bigger and better spray than the typical shower head.The consumers who purchase it wouldn't regret it as they could spend more time in shower without worrying about water usage and the bill.The product is very basic,every day use so it could be popular but effect of new business idea could have mixed reviews particularly for the early stage where the product may still not be well defined.(Burns,2016)
I intend to have a sole have an sole proprietorship.An individual proprietor owns and manages the business and is responsible for all business transactions. A sole proprietor can own the business for any duration of time and sell it when he or she sees fit.There are no specific business taxes paid by the company. The owner pays taxes on income from the business as part of his or her personal income tax payments,(Archive.nytimes.com, 2018).It would be beneficial as it would have minimal legal costs of forming a sole proprietorship and have complete control as well as decision-making power over the business.To receive finance for the business I would use personal funds and take some loan from bank.This way the funds would be limited as a startup so if the business doesn't work the company would not be in heavy debts,(Yourbusiness.azcentral.com, 2018).
COMPETITIVE NATURE OF THE ENVIRONMENT
Every business needs to calculate and evaluate the risk factors,(Burns,2016).This is done in order to be aware of the risks involved and being well prepared for them.Using the Porters Five Forces(Porter M.E,1980)
ENTRY OF THREATS:-
New entrants to an industry brings new capacity and a desire to gain market share that puts pressure on prices costs, and the rate of investment necessary to compete. Particularly when new entrants are diversifying from other markets, they can leverage existing capabilities and cash flows to shake up competition.( E. Porter,1996).The eco-shower head is fully new concept which has not been till now in the market.After the product is launched the competition would increase as more people would come in the market.
BARGAINING POWER OF SUPPLIERS:-
The number of suppliers of key aspects of a good or service, how unique these aspects are, and how much it would cost a company to switch from one supplier to another. The fewer the number of suppliers, and the more a company depends upon a supplier, the more power a supplier holds.(Staff, 2018)
The number of competitors and their ability to threaten a company. The larger the number of competitors, along with the number of equivalent products and services they offer, the lesser the power of a company. Suppliers and buyers seek out a company's competition if they are unable to receive a suitable deal. When competitive rivalry is low, a company has greater power to do what it wants to do to achieve higher sales and profits,(Staff, 2018).
BARGAINING POWER OF BUYERS:-
The ability customers have to drive prices down. It is affected by how many buyers or customers a company has, how significant each customer is, and how much it would cost a customer to switch from one company to another.(Staff, 2018) The smaller and more powerful a client base, the more power it holds.As being a unique product in the market, the customers prefer trying it as it's a new product with no alternatives.
THREATS OF SUBSTITUTES:-
Competitor substitutes that can be used in place of a company's products or services pose a threat. if customers rely on a company to provide a tool or service that can be substituted with another tool or service or by performing the task manually, and if this substitution is fairly easy and of low cost, a company's power can be weakened.The bargaining power increases when there is an alternative to the product so the seller has to sell the product demanded by the customer.
Marketing plan is a road map providing the company with direction towards reaching the business objectives.It needs to be referred to and assessed for result frequently.It gives clarity of who your market is which makes it easier to find the desired customers.Also helps in focusing in the correct market and provides direction,(The Balance, 2018).With the help of marketing mix which is all about right product in the right place,at the right time and at the right price will find the suitable customers for the eco-shower heads,(The Marketing Mix, 2018)
A product is an item that is built or produced to satisfy the needs of a certain group of people. The product can be intangible or tangible as it can be in the form of services or goods,(The Marketing Mix, 2018).The product here built to satisfy the needs of certain group of people is an eco-shower head.The shower head not only improving the spray and fall of water but also reduces water consumption by 75percent.The product is very basic but is a bit expensive than the usual shower heads because the materials used are better and different.The product would have a dominant growth as it will be the only product in the market available for purchases when manufacturing commences.
The price of the product is basically the amount that a customer pays for to enjoy it,It is also a very important component of a marketing plan as it determines your firm's profit and survival. Adjusting the price of the product has a big impact on the entire marketing strategy as well as greatly affecting the sales and demand of the product,(The Marketing Mix, 2018).The best pricing strategy would be to have 2 different types of shower head initially from the price range of not very expensive to expensive.This would cater a variety of customers as for the start.
Promotion refers to all the activities undertaken to make the product or service known to the user and trade,(The Economic Times, 2018).It can boost brand recognition and sales. Promotion is comprised of various elements like,Sales Organisation,Public Relations,Advertising,Sales Promotion,(The Marketing Mix, 2018).It also includes advertising, word of mouth, press reports, incentives, commissions and awards to the trade,consumer schemes, direct marketing, contests and prizes.For the shower head the company would give free installation as the product is already going to be a bit expensive,hold campaigns showing the consumption of water with the usual shower head vs the eco shower head.All the various elements would be needed to be applied so that customers get aware of the product.
Positioning and distribution of the product should be done in a place that is accessible to potential buyers.This comes with a deep understanding of the target market. The distribution strategies are intensive distribution,Exclusive distribution,Selective distribution,Franchising.The shower head should be positioned and distributed in such a way where the customers are keen on trying the new product,(The Marketing Mix, 2018)
The firm shall produce its own shower heads. There are a variety of shower heads costing £80. The firm will opt for a loan from the bank to purchase the machinery as it is a high investment. Initially the firm will be manufacturing 100 shower heads, with an increase in the demand the company starts manufacturing more of it. The production cost of each shower head goes up to £20-£25 per piece. Further on there will be varieties of shower heads in the market which can successfully run the business. (Chrome, 2018)
The eco-shower head was an idea that came up to me by realising how much water is being wasted when we shower each day.Then i was looking up what can we do about it and realised how about if we start up the most basic product that is the shower head.This product would save almost 75percent of water usage .All the people who are not able to get clean water for drinking and shower would get it.The cost of product is bit expensive then the usual one but for later is saves on water bills,electricity and water consumption.The customers would feel the difference and for betterment of the environment.
IMAGE 1:-Eco-friendly shower head
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2) Which?. (2018). Eco shower heads buying guide - Which?. [online] Available at: https://www.which.co.uk/reviews/water-saving-shower-heads/article/how-to-buy-the-best-eco-shower-head/eco-shower-heads-buying-guide [Accessed 13 Apr. 2018].
3)Burns, P. (2016). Small business and entrepreneurship. 4th ed. Bedfordshire: Macmillan.
4)Archive.nytimes.com. (2018). Advantages and Disadvantages of Sole Proprietorships - New York Times. [online] Available at: https://archive.nytimes.com/www.nytimes.com/allbusiness/AB4113314_primary.html?mcubz=1 [Accessed 13 Apr. 2018].
5)Yourbusiness.azcentral.com. (2018). Sources of Investment in a Sole Proprietorship. [online] Available at: https://yourbusiness.azcentral.com/sources-investment-sole-proprietorship-12432.html [Accessed 13 Apr. 2018].
6)The Balance. (2018). How to create a marketing plan for your home business.. [online] Available at: https://www.thebalance.com/what-is-a-marketing-plan-1794426 [Accessed 13 Apr. 2018].
7)The Marketing Mix. (2018). Marketing Mix Definition - 4Ps & 7Ps of the Marketing Mix. [online] Available at: http://marketingmix.co.uk/ [Accessed 13 Apr. 2018].
8)The Economic Times. (2018). Definition of Marketing Mix | What is Marketing Mix ? Marketing Mix Meaning - The Economic Times. [online] Available at: https://economictimes.indiatimes.com/definition/marketing-mix [Accessed 13 Apr. 2018].
9)Staff, I. (2018). Porter's 5 Forces. [online] Investopedia. Available at: https://www.investopedia.com/terms/p/porter.asp [Accessed 13 Apr. 2018].
10) Chrome, M. (2018). Save Water Save Money Surprisingly easy. [online] Save Water Save Money. Available at: https://www.savewatersavemoney.co.uk/products/view/570/mira-eco-shower-head-chrome.html [Accessed 13 Apr. 2018].
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