Marketing Segmentation and Targeting in Hospitality and Education Sector

Our group is trying make a product and the information of our product is in the document( get basic information of product from "business plan 1 team 7"), based on the document and professor's comment on the right( the doc name Team 7 marketing research bp), do market research for part d in the doc. Another file includes example of how to do D part (market segments).

Group 7: H2Glo

Gavin Doran, Paton Marion, Alex Lee, Eric Spiniello, and Anthony Varnas

THE COMPANY, CONCEPT AND PRODUCT(S) OR SERVICE(S)

a) The Company and the Concept

Our company, H2Glo, produces a small object that drops into reusable water bottles and tests the cleanliness and overall quality. A common problem with water bottles currently is that people use them for long periods of time without washing, and do not know if the water they are drinking is clean.  The average athlete's water bottle contains 313,499 colony forming units compared to the average dog toy which has 2,937 colony forming units.  This would also allow people to test water quality such as tap water or water from a fountain to ensure it is safe to drink.

The reusable water bottle industry is a huge market in the United States. According to a Fact.MR study, the reusable water bottle industry reached an $8 billion valuation in 2018, and has continued to grow by 3.1% year over year. 

While the reusable water bottle industry has enjoyed a surge of popularity, there are a lot of concerns with the safety of using them. Water bottles are made from many different materials including plastic, steel, aluminum, copolyester, polycarbondate, etc. Depending on the type of material, there could be large safety concerns. For example, BPA is an endocrine-disrupting chemical used to harden polycarbonate bottles and form protective lining in aluminum bottles. According to the National Toxicology Program, there are some concerns with BPA with health.

In addition to potential safety concerns with the bottle itself, unclean water is also a problem in the United States. According to USA Today, the EPA estimates that as many as 63 million Americans (about one fifth of the country) are exposed to unsafe drinking water, due to neglect in the infrastructure.

Typical harmful minerals that can contaminate water include arsenic, radon, among other chemicals and pesticides. These chemicals can cause diseases such as Hepatitis A, diarrhea, shigella, E.coli, among others.

b) The Product(s) or Services(s)

The product would be dropped into water to test the overall quality and display the results through various glowing color changes on a scale from green to red. The device could be reused or left in the bottle for a constant display of purity. We would have one product line for the device but would include a variety of shapes and sizes to match the type of water container the customer is using; this could range from a standard water bottle to camelbaks and sippy cups.

c) Entry and Growth Strategy

Since people with reusable water bottles make up such a large industry, we intend on entering slowly and carefully, and expanding later on.. First, we plan to enter our product in the IBWA (International Bottled Water Association) convention and trade show to get feedback and constructive criticism.  Since the majority of college students today own water bottles, a college campus would be a great place to start and gage interest. After promoting and selling the product there, we plan on going to other college campuses and cities surrounding them.

We want the majority of our sales to be online, through vendors such as Amazon as well as our own website. However, we also plan on securing contracts with big box retailers to sell our product as we grow. Once we have the base product, we also plan on expanding by possibly creating designs on the product such as sports logos to make the product look more appealing.

THE INDUSTRY ANALYSIS

a) Identify Industry & Sector

The industry we are targeting with our product is the health & wellness industry. The sector we plan to enter within this industry is water purity as our product will give you real time feedback on the quality of the water in your water bottle.

b) Industry Size and Annual Growth Rate

The size of the the health & wellness industry is currently $4.2 trillion. From 2015 to 2019 there has been a steady 12.8% growth in the industry. This shows us this industry has been regularly growing in recent years as consumers are willing to spend their money on health & wellness products.

c) Structure of Industry at Present

The current structure of the industry is there are two major players in the health & wellness industry. These two players are Procter & Gamble and Johnson & Johnson. However there are many small players in the wealth industry in the form of start ups. From our research we came across countless different companies that offer their own specific product in the health & wellness industry. Each being unique and not holding much market share in the overall industry.

d) Key Trends in the Industry

As technology is growing and people’s concerns about health are increasing, new trends will occur in the industry. Our trends include high technology and people’s minds of health. Nowadays, people pay more and more attention to their health situations, that create plenty of market shares from a lot of developed countries. Moreover, the reason for the rise of the water bottled market is due to the increase in demand for convenient water bottles and the consciousness of the threat of non--decomposable water bottles. Also, We can tell the trend of economic growth through these years, like China, people have more disposable income and the average level of education is rising rapidly. This trend shows that people gain more time to “develop their livelihoods” when their lives are getting better.  Besides, the technology we possess will help us to build up an unprecedented product for the customers.

e) Key Success Factors for the Industry

One of the key success factors is the fact that people continue to be concerned about health and drinking high quality water. People need to be concerned enough to spend money on products like ours that improve overall well-being.

Also, people need to continue to use reusable water bottles, particularly ones without expensive built in cleaners.

According to IBIS, another key success factor is access to a highly skilled workforce. With something as complicated as testing water for bacteria and chemicals, we would need the right team to carry out our goals and ensuring the product is running smoothly compared to our competition. In addition, proximity to key markets is also very important. Laboratories/factories need to be located close to clients for quick delivery. Lastly, potentially keeping up with changing regulations is very important as well. As the EPA might release new standards for clean water, we need to ensure our product is up to date and can test all of them.

f) Standard Financial Ratios for the Industry

Below, we have key statistics from IBIS about the water and air quality testing services industry.

As you can see by the statistics above most of the key indicators look good for the industry. Revenues are growing and annual growth is very impressive at 4%. This can tell us that its a good time to be entering the industry. Although profit margin is decreasing by 12.8%, we do not consider it a big deal, as it is normal for the industry and sometimes it can take years to turn a profit. The number of businesses are also growing which tells us the industry can support more companies entering.

MARKET RESEARCH AND ANALYSIS

e) Competition and Competitive Edges

Our competition would include water filtration companies such as Britta; however, they only “clean” the water instead of informing the customer whether the water is safe to drink. Additionally, Britta systems cannot be taken on the go when water testing is the most important. Other competitors could be water bottles with the capability of cleaning water such as LARQ; however, they are extremely expensive and less versatile. An example of indirect competition could be seen when analyzing ZEROWATER’s line of products. ZEROWATER produces a stick-like product that allows you  to test for the numbers of contaminants (in parts per million) in your glass of water. However this product is not able to be kept in your water bottle as you can only dip one end into the glass. In addition to its imobile nature, this product does not test for the bacteria that can build up in water bottles.

Through our research, we found that competitors such as Brita have a very healthy mix of e-commerce and brick & mortar sales. When walking into the kitchen section of any retail store, there is a good chance you will see Brita’s line water testing products. The same is true when searching for water testing products on Amazon. Brita products are almost always at the top of the search results which shows it has a very healthy online presence as well as a strong presence in actual B&M stores.

https://my.ibisworld.com/us/en/industry-specialized/od6068/about