EDUDORM ACADEMIC SERVICES

The Sponge Bed

The Sponge Bed

Founded by: Emily Buck, Niklas Helmick, Navya Maddali , Wesley Turner, Kunhong Yao

Executive Summary

The Sponge Bed, founded by a team of five college students, was a product launched with a goal in mind. The Sponge Bed is a product designed so that you never have to clean dishes with a dirty sponge again. Our unique product is a sponge disinfectant which sanitizes sponges using UV lighting. Our competition are companies that use soap cleaner to clean sponges, which includes companies like Lysol wipes or Bounty. This reusable product differentiates itself from competitors because it extends the lifespan of a household product, the sponge, and provides a cleaning agent that will be sanitary for your dishes. This environmentally friendly product targets the Generation X middle class homeowners, who will use our easy 3-step setup guide to easily transform their dirty, food particle filled sponge brand new again.

Mission Statement

Our mission is to promote a healthier lifestyle to our customers while offering an environmentally friendly product by reducing waste.

The Marketing Environment

Demography: (Opportunity) The biggest demographic category is age, and in the United States today, there are currently 3 different age groupings of the population, Baby Boomers, Generation X, and The Millennials. Generation X, consists of about 51 million people, and contains people who were born from 1965-1976. This generation of people have adapted to modern technology, and put it to use. The people at this age also have families and households, and that is why we are targeting this generation as an opportunity for The Sponge Bed. Although this is the smallest of the three groupings of the United States demography, they are the most educated, and will receive our product very well. The Sponge bed is a practical product for the average family to have in their home, and by marketing it to this Demographic, we will see the best results.

Economic: (Opportunity) The current economic trends in the United States depict consumer spending as key fuel to the growth of the economy. Plus, income growth has improved. For Sponge Bed, we see this as an opportunity to push our product. Our low price of $24.99 is very affordable for our target market. Additionally, increased household cash flow would lead people to be looking for a product like Sponge Bed; A product that will save them money in the long run with a small initial investment in the short run.

Natural: (Opportunity) Recently, many articles have been released stating about the cleanliness of sponges. In fact, the average household sponge is 200,000 times dirtier than a toilet seat and the bacteria count amounts to 10 million bacteria per square inch. The bacteria found in these sponges is far from harmful, and could lead to serious sickness and even paralysis. This is a huge opportunity and selling point for The Sponge Bed because the Sponge bed gets rid of all of this bacteria. Typically, you need a cleaning agent of above 60 degrees Celsius combined with disinfectant to thoroughly clean a sponge. Instead, consumers who purchase our product would receive a tool that cleans their sponge effortlessly, and hands free. By providing this information to the consumers, we would be able to steer them to buy our product to keep their kitchen safe and sanitary.

Technology:

Political: (Opportunity) The political microenvironment consists of regulations, pressures from government agencies, social movements in society, and influences from the political environment. As of recently, there has been a social movement towards environmentally conscious products. The lifespan of regular sponges is only six to eight weeks, which means a lot of waste is created by people replacing the sponges. Also, each sponge takes over a year to decompose, which means they would have to be placed in landfills. The Sponge Bed solves these problems, and goes a step further. The Sponge Bed’s sponges come with a lifetime warranty, but are recommended to be changed every 6 months. Another social movement being made is household cleanliness. Today, there is a lot of modern medicine, but there are also a lot of ways to get sick. As mentioned before, an average sponge contains millions of bacteria that carry many illnesses. The Sponge bed solves this problem as well. The UV rays not only disinfect the sponge, but leave it free of any harmful bacteria.

Bibliography:

McCain, Bruce. "Five Key Economic Trends to Watch in 2016." Forbes. Forbes Magazine, n.d. Web. 18 Apr. 2016
Williams, Amanda. "The Kitchen Sponge Is 200,000 times Dirtier than a Toilet Seat - and Could Even Lead to PARALYSIS." Mail Online. Associated Newspapers, 20 Nov. 2012. Web. 18 Apr. 2016.
"Generation X and The Millennials: What You Need to Know About Mentoring the New Generations." Generation X and The Millennials: What You Need to Know About Mentoring the New Generations. Diane Thielfold and Devon Scheef, Aug. 2004. Web. 18 Apr. 2016.

Consumer Buyer Behavior

The Sponge Bed is a premier household cleaning product targeted to 30 year old middle-class homeowners, mainly with families. As a new and unfamiliar brand in the familiar product category of household cleaning items, customers will go through a limited decision making process when choosing our product. During this decision process the customer will want to research our product through customer reviews to determine that it is a reliable product that delivers the benefits as advertised. Other information search resources that would allow our target customer to become aware of the benefits of The Sponge Bed are informational brochures and sales associates. As the first item of its kind, there will need to be an informational aspect presented in The Sponge Bed marketing plan to guide customers to their purchasing decision.

Culture:

Culture is a large influential factor for any consumers buyer behavior. As it will ultimately drive the decision as to who will purchase The Sponge Bed, understanding the potential cultural values of our target customer is an important part of the overall marketing strategy. Generation X is the basis of our target market as they are likely to make purchases that will improve the lifestyle of themselves and their families. This will create the customer’s need for the project and drive their purchase decision.

The “green” and environmental factor that The Sponge Bed offers, by reducing waste and extending the life cycle of the common sponge, is also a contributing factor of the cultural buying behavior of the customer. The idea that of being “eco-friendly” by buying our product will generate a want for the product for consumers that are consciously aware of their impact on the environment, which is a general cultural characteristic of Generation X.

Personal: When considering the purchase of The Sponge Bed, consumers will think of how it can benefit both themselves along with the rest of their family. The head of the household will more than likely be the one considering the purchase, and knowing that it will improve the lifestyle and health of their family will greatly influence their purchase decision.

Another personal aspect of the target customers buying behavior will be their economical status. Although The Sponge Bed has long term economical benefits by extending the life of the kitchen sponge and ultimately reducing the need to buy replacement sponges, the initial cost will be a considering factor for families that don’t have excess funds. Due to this initial cost, our product is targeted to middle class families under the category of Generation X.

Psychological: There are a handful of psychological factors that will effect a potential customer's decision buying process. Someone who is not inhabited with a clean lifestyle wouldn't be concerned with cleaning with a disinfected sponge and therefore would not be interested in purchasing The Sponge Bed. On the other hand, a head of the household, who is concerned about the health and wellbeing of their children, along with their own, would be interested in an item that will help to keep surfaces cleaner and more sanitary. A customer who is environmentally cautious would be interested in a sustainable product such as The Sponge Bed, which reduces waste from paper towels and disposable sponges.

Part of the marketing strategy for The Sponge Bed will be to educate potential customers as to how dirty the typical kitchen sponge is. This will generate a need for our product and create a larger potential customer base. It is suggested that your common kitchen sponge is replaced every two weeks, however the average user keeps them for much longer. Through advertisements and infomercials, making these facts known will make consumers aware that our product will be beneficial to them.

Social: Social factors will also come into play, as our product will be marketed towards primary middle-class customers. Low income families will not be looking to purchase excess household cleaning products and will usually stick to necessities. The upper class is more likely to have a cleaning company for their house, and would therefore not worry about a product such as The Sponge Bed. The middle-class will act as the target market, as they usually clean and have the available funds to purchase premium items such as The Sponge Bed.

Segmenting/Targeting

Geographic:

Continent: North America

Country: United States of America

Neighborhood: Urban/City

Population Density: 500,000+

We have chosen these specific demographics to because it targets areas of high pollution and dust. This geographical target market is very populated and already suffers from increased pollution. Consumers that are aware of their cities’ pollution will be more inclined to purchase The Sponge Bed as they are conscious of the need to deal with the increased dust and mold in their homes. Our main target cities include New York City, Boston, Los Angeles, suffer from an increased amount of cigarette smoke, gas stoves, leaky roofs, water damage that lead to mold contamination, cockroach and mouse infestation approximately three times more than suburban homes. Targeting these areas will give us access to more people than if we were to target small towns in the mid-west.

Demographic:

Age: 18+

Gender: Male and Female

Family Size: Any

Income: $35,000+

Occupation: Any

Life-Cycle Stage: Young, single, single-parent, family with children, married

Religion: Any

Ethnicity: Any

Race: Any

Generation: Generation X

We are targeting mainly middle class-families in the Generation X demographic. This generation includes anyone born between 1965 and 1976. Most of the Generation Xers are parents, that put their family first, both children and aging parents, and career second. This generation prefers quality more than quantity that embraces the benefits of new technology. This generation is also the most educated generation to date and possess hefty purchasing power and therefore are the perfect consumers for our product. As this generation is knowledgeable about their environment, they understand the importance of keeping their household clean and prevent their children and parents from getting sick. Our product does not discriminate against any demographic markets and can also apply to other generations that include cooking and household cleaning in their daily lifestyle. With the increasing population in this country, homes will only get dirtier and require more maintenance. Without the proper upkeep of a home, children and adults can develop asthma and other chronic diseases. Our product, The Sponge Bed, targets those in any stage of the life cycle: young, single, single-parent, etc. as everyone involves cleaning into their daily routine.

Psychographic:

Social Class: Middle Class

Lifestyle: Succeeders and Explorers

Personality: Ambitious

As we are targeting those with a middle class income, our target market will belong to the middle class that will have intermediate or higher managerial, administrative, or professional positions such as managers, directors, bank clerks, etc. We assume that most of our consumers will be those that do household chores such as cleaning and cooking daily. This could be anyone from a single working women to a father of four. Our consumers put value into their house and are ones to keep their homes very tidy. Our consumers are those that like their space clean and organized with the security that their dishes and surfaces are sanitary and spotless. We target the psychographic areas through our design. From our slim shape, lifetime warranty, excellent quality, and product design, we appeal as a classical item that is appealing to all. We are targeting Succeeders as they have good work ethic, organized, stability, must have the best, and attracted to caring and protective brands such as something we see ourselves as. The Sponge Bed cares for its environment and only provides the best quality to its customers. We are also targeting Explorers as they look for the experience, challenge, new frontiers that are different, adventurous, and willing to try new brands. This target lifestyle group is pertinent to our product as it is one of a kind on the market. Our consumers will have an ambitious personality that are willing to try to change from their old habits of simply throwing out dirty sponges to being friendly to the environment and reuse their sponge for 6 months with our product.

Behavioral:

Consumers will benefit from the quality and convenience of The Sponge Bed. It’s easy 3-step setup guide will clearly explain how to properly insert the sponge into the “bed”, close the cover, and simply plug it into an outlet! Therefore, making this very user friendly and also as it would be used everyday, would make our product have a heavy usage rate and used on a regular occasion. We guarantee that our sponge bed will last many years with its lifetime warranty, but we recommend our customers change their sponge every six months. Therefore, we will retain our existing customers as our sponges have the utmost quality and durability that our customers will continue to buy from us. Upon release, everyone will be first-time users, but we guarantee that our product will be highly beneficial that we will have users coming back to our brand and therefore will be “hard core loyals”. Those that switch from the normal household sponge to our durable sponge will never be able to switch back after seeing the benefits and handiness of The Sponge Bed. Our customers will see the difference it makes in their daily lives, especially with the convenience of The Sponge Bed disinfecting the sponge in a matter of 15 minutes and able for reuse elsewhere. First we must provide awareness of our company and the brand as The Sponge Bed is new to the market. The target may not be aware of the need to change a sponge so often or unaware that this product even exists.

Position Statement

For homeowners who clean with sponges, The Sponge Bed is a cleaning product that disinfects sponges to make them reusable and sanitary.

Product

Describe your product using the three levels of product and explain why it would appeal to your customer. What are the benefits that address your customers’ needs and wants?

What is your Consumer-Goods Classification and what significance classification has to your company’s marketing execution? Explain your product’s brand name. Describe your packaging and what role[s] it may play in marketing and selling your product.

Pages 200- 215 in the book

convience product

Product quality

Product features

Product style and design

Branding + packaging

Week 8: Kunhong

Work on the Product section of the Marketing Plan. Specify the features and related benefits to the product. Identify the Core, Actual and Augmented characteristics and note the points of differentiation from competitive offerings.

Product of Sponge Bed and 2 sponges is $24.99, we also will sell 2 sponge package for repeat customers ($6.99)

Product Concept: identify:

Product configuration generally – features, benefits, attributes:

Features include;

- self cleaning sponge dish with cover

- UV disinfectant lights on dish cover

- 2 highly robust sponges that last one year. Recommend buying new set of sponges from the company every year (pack of 2)

- waterproof electrical cord

Benefits include;

cost effective over time
reusable/eco friendly
eliminates odor-causing bacteria
extends and preserves the life of your sponge

The Sponge Bed is a bacterial cleaning product that is proficient in sanitizing standard kitchen sponges through the use of UV lighting. The sponge bed is designed to meet the consumer's needs and is equipped with desired features to help the user perform his daily cleaning efficiently. The product is expected to meet the three levels of product which include the core, actual and the augmented product. The product’s core stage describes its benefits to the consumers. First, the product is a self-cleaning sponge dish with a cover to allow the consumer to clean the dishes and table surface leaving it spotless. Additionally, the new product has UV lights capable of disinfecting to allow maximum performance of the sponge. The product is useful to all households since it includes three highly robust sponges and a waterproof electrical cord. The actual product is described by the physical or tangible features of the product. The product’s unique feature is to take the form of UV lighting such that the rays from the object are directed to the sponge before applying it to the dishes or kitchen items to be cleaned. The augmented level of the product is described by other benefits attached to it for instance it is ensured to be affordable to all users in the targeted age. The product must give a directory guideline that will guide the user on how to use it and when. The sponge bed dealers shall offer repair services in case the product has been found with the damage.

The product is classified into convenience goods since it is more effective than other products that serve the same purpose. The product is a shopping good and the period of usage will make it to be purchased after a longer period of time due to its nature of reusability. The product can also be classified as specialty good by the fact that its price is more affordable compared to other products providing the same service. This kind of product classification advertises the product hence marketing the product. The product’s brand name is developed from the function it performs to the consumer which is especially sanitizing the sponge. This brand name is to be attached on the box containing the product. The product is contained in the box with different sizes depending on the size of the product and some information about the product is found on the outer part of the box.

The Sponge Bed has numerous benefits to the consumers in the following ways. First, the new product is unique in the market compared to other cleaning products such as Lysol wipes and Bounty. It is cost effective as the price is significantly lower than other cleaning products on the market. The product is meant to be used by 30-year-old middle-class homeowners; mostly with families hence, they can be able to save the cost of cleaning. Second, The Sponge Bed is an eco-friendly product. The product impacts can last longer and retain the same efficiency compared to other products in the market. Furthermore, the products ingredients include antibacterial agents that are capable of eliminating odor-causing bacteria on sponge washer. Besides, the sponge bed cleaner helps the consumer extends the lifespan of the sponge by preserving it with disinfecting UV lights and anti-bacterial agents.

The new product has many strengths compared to other competitor's products. Unlike Lysol wipes and Bounty, The Sponge Bed is designed to perform the same services more than once with the same unique strengths. The new product will cover a wider market compared to competitor's products since it is meant for middle-class homeowners who are the majority. The price of the product is relatively low compared to Lysol Wipes; this gives the sponged bed cleaner a competitive advantage in the market. The product is designed to meet the consumers' needs who are seeking for a cost efficient and a sanitary product for cleaning dishes and surfaces. The product has positioned and differentiated itself well among competitors since it is reusable and has an extended lifespan remaining sanitary after several uses. The product targets the major segment of the population aged 30 years and above; earn average income and family households that can benefit from the sponge bed disinfectant in cleaning dishes and surfaces.

Pricing

Price of The Sponge Bed with two sponges: $24.99

Price of 2-Pack Sponges: $6.99

Pricing per unit:

Standard sponge size: 4.5” x 2.7” x .6”

Product Dimensions: 5” x 3.5”

LEDs – 30 @ $.14 per LED = $4.2

PCB + electrical components + Charger = $2

Housing + acrylic sheet + draining tray + cover = $2.5

2 Sponges = $1

Total manufacturing cost = $9.70

Selling price of Sponge Bed with two sponges = $24.99

158% markup ($15.29 profit on each product sold)

Selling price for pack of 2 sponges = $6.99

699% markup ($5.99 profit on each pack of sponges sold)

A 6 pack of sponges retails for $5.64 on Amazon.com. It is recommended that each sponge be used for only 2 weeks before being thrown out due to bacterial contamination. This means a 6 pack of sponges will last for 12 weeks. With 52 weeks in a year, consumers will have to purchase 5 sponge packages to ensure they are always using a bacteria free sponge, amounting to $28.20 per year in sponges. Our product will extend the useful life of a sponge from 2 weeks to approximately 6 months, by developing both new robust sponges that will be far more durable than those currently existing and the Sponge Bed which will keep these sponges bacteria free throughout their useful life. Rather than using 30 sponges throughout the year, our product will allow the user to use only 2 sponges. Selling our product for $24.99, consumers will only need to buy our product once, followed by one package of sponges each year. This results in a savings of $3.21 in the first year, followed by an annual savings of $21.21, should they choose to continue purchasing our sponges.

With infomercials in mind as one of the main selling points, the price point we have set mixes well with the target audience we are aiming to market to. Once our product is compared with the cost of purchasing enough sponges to always be using a clean one, the initial price will be seen as very competitive in the market of cleaning products. There is no other product like this on the market, meaning the main competition is with reusable cleaning products such as Lysol wipes or other sponges. The added awareness we will bring to how dirty sponges are will have an added effect to making our product even more appealing. The 158% markup on the Sponge Bed will allow for money to be reinvested into added marketing campaigns as well as product revisions for the future. The price set will allow a large market share to be captured while also maintaining a strong return on investment. The additional 2 pack of sponges which will be sold in retail stores requires a higher markup since this product will only be bought once a year in most instances.

Place

Describe your marketing/distribution channel. Who are your channel intermediaries and what key roles do they play? What does your customer need from the channel intermediaries? What market coverage do you need to establish and show how that connects to your product offering [think exclusivity and luxury goods, for instance]. Develop a channel plan for your product – identifying intermediaries and their roles, degree of market coverage and what your channel intermediaries will do for customers in accomplishing the sale.

Our intermediaries will consist of distributors, wholesalers, Walmart, and retail locations such as Target, Bed, Bath, and Beyond, and Sears. Our product will be perfect for infomercials and the bulk of sales can be made through this form of promotion. Our company will be required to rent substantial warehouse space in order to store adequate amounts of our product for such sales. A shipping agreement should also be made with a company such as FedEx or UPS to cut shipping costs across the country.

Distributors will be our first and foremost point of contact with making sales into retail outlets. The purpose of our distributors will be to buy a large bulk of our product in order to promote and distribute to wholesalers. Distributors will be crucial in promoting our product to various wholesalers to reach retail locations in various areas. Our distributors can then handle storage of the product, sales to wholesalers, and shipment of the product post infomercial sales.

The wholesalers will have a somewhat similar function to the distributors in that they will buy the product in bulk and store it in their own warehouses. However, they will profit from sourcing the product in smaller quantities directly to retail locations. The smaller quantity purchase orders will result in higher prices of the product to those retail locations. Wholesalers will be very important in the channel design ensuring locations such as Target and Bed, Bath, and Beyond receive substantial quantities of our product. As this is a household product, ensuring our product is sold in these “home goods” type locations with other cleaning products will promote sales. Customers will benefit from being able to physically see the product in stores, though it is likely prices will be slightly higher than seen on the infomercial due to smaller quantity purchases from the wholesalers.

Additionally, Walmart acts as their own distributor and we will focus efforts to ensure our product can make its way onto Walmart’s shelves. This is a crucial retail outlet for our product since the price point is one that should be appealing to a majority of customers who would shop in Walmart. If customers were to see our infomercials but not immediately purchase our product, seeing the product again on store shelves could help reinforce the desire to purchase. Walmart would provide the ideal location to improve on these efforts. Additionally, similar to retail locations such as Target and Sears, customers will benefit by seeing the physical product. Walmart also has the added benefit of acting as its own distributor and will thus be able to keep prices competitively equal to those seen on the infomercials.

Our marketing efforts will be focused on undifferentiated mass marketing. We plan to offer one product that will appeal to a broad customer range. Our product focuses on keeping a sanitary and healthy environment in homes throughout the world. This is a message that resonates well with a vast majority of the population. Using undifferentiated mass marketing, we can save on marketing costs by selling one product with one message. Though this causes a vast generalization of the population and their wants/needs, the message being spread and the capabilities of the product are appealing to a large portion of the population and doesn’t need to take on a different strategy for each market segment.

Promotion

Develop an Integrated Marketing Communications mix and strategy for your new product:

State your communication objectives and consider how you might evaluate success.

Will you use push and/or pull promotion?

Describe which tools you will use in your promotional mix and why. You must use a mix of traditional and new media for an effective IMC campaign.

Create an advertising slogan or tagline for your product that can be used across your communication mix.

Week 11: Kunhong

The promotion of the sponge bed will involve both television channel and social media platform to advertise and interact with consumers. The majority of the target market own televisions sets hence it will apply to use television as the primary media channel of promotion and advertisement. The promotion strategy will include information about the sponge bed; it's packaging, price and effects to the consumer. Since the primary competitors of the Sponge Bed such as Lysol wipes and Bounty are using television for promotion, it will be advisable to adapt the same to remain competitive. The use of television in advertising is crucial since they need to demonstrate how to use sponge bed with motion pictures. This is where the use of infomercials will be of the most benefit in advertising the Sponge Bed. We can purchase larger amounts of airtime for a relatively cheaper price, which allows for adequate time to demonstrate the usefulness of the product while conveying the message of how dirty sponges really are, a fact most people don’t know. This will facilitate a wider market coverage to the target group.

In addition, the promotion strategy will involve opening a social media platform that will enable the company to interact with consumers. The target market is the working class who can afford computers and the knowledge of using social media platforms. The social media platform will offer a chance for the consumers to post their feedback about the product and their recommendations. The competitors are moving digital, and there is the need to catch up with the technology. The online advertising has proven beneficial to many organizations. The online platform will allow the company to see who accessed our company website. This will enable us to improve the performance of the sponge bed to meet the needs of the consumers more. Besides, the online platform will contain the company slogan and the relevant information about the product such as; packaging and distribution channels for easy access by the consumers.

The budget for the product promotion and advertisement will be equally distributed within these two media of communication. Television advertisement will cover the motion pictures and demonstrations of the sponge bed to the prospective consumers. This will run on the primary television programs during night hours when the target consumers are watching. The target market is working class and rarely are they at home during the daytime; hence, the television advertisement will only be aired during night hours. The social media advertising budget will cover the cost of different platforms such as Tubemogul, to enable online interaction with the potential buyers.

Week 14: Peer Evaluation form and submits it to their facilitator.

‘The Sponge Bed’ bathes your sponge in UV light to clean and eradicate all bacteria from the sponge.