Business Project random fun

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COVER PAGE

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DECLERATION

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EXECUTIVE SUMMARY

The following report has been undertaken to estimate the sales of an All In One breakfast maker. The

product will allow for a full English breakfast to be made by incorporating a toaster, bacon grill, and

an egg cooker. Through the report the general outh African en!ironment and competiti!e products

were e!aluated. Taking these into consideration, the market was then analysed before a product target

market was established. A market sur!ey was then drawn up to collect responses from potential

customers. The sur!ey was drawn up to create a basic understanding on if the target market would

accept the All In One and how they would !alue it. These responses were analysed, and a base for

sales predictions could be made. Optimistic, realistic, and pessimistic sales forecasts were then drawn

up, and it was concluded that a!erage sales of 2" """ units a year could be forecasted. This could also

be increased if a new model of the product was released. This newer model would better satisfy the

customers# desires.

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TABLE OF CONTENTS

%O&E' (A)E.......................................................................................................................................i

*E%+E'ATIO...................................................................................................................................ii

E-E%TI&E //A'0..................................................................................................................iii

1. E&I'O/ETA+ AA+0I.....................................................................................................1

1.1 (olitical en!ironment...................................................................................................................1

1.2 Economic en!ironment................................................................................................................1

1.$ ocial and *emographic en!ironment.........................................................................................$

1. atural en!ironment....................................................................................................................$

1. Technological en!ironment..........................................................................................................$

2. E&A+ATIO O3 %O/(ETITIO................................................................................................

$. /A'4ET /I-.................................................................................................................................5

$.1 (roduct........................................................................................................................................5

$.2 (lace............................................................................................................................................5

$.$ (romotion....................................................................................................................................5

$. (rice.............................................................................................................................................6

. T7E /A'4ET A* T7E ('O*%T TA')ET /A'4ET...........................................................8.1 The market...................................................................................................................................8

.2 The target market.......................................................................................................................1"

. ('O*%T *E%'I(TIO............................................................................................................11

5. IT'/ET E* TO %O++E%T *ATA................................................................................12

5.1 /arket ur!ey 9uestionnaire Template.....................................................................................12

5.2 ur!ey analysis..........................................................................................................................1$

6. A+E 3O'E%AT........................................................................................................................1

:I:+IO)'A(70...............................................................................................................................16

A((E*I-.........................................................................................................................................1;

E<tra Information (ertaining to the product Inspiration..................................................................1;

%ommunication that e<plains product to market..........................................................................1;

9uestions asked...........................................................................................................................1;

The 3ollowing (ages %ontain The Answered 9uestionnaire...........................................................2"

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TABLE OF FIGURES

3igure 1= nemployment rate of outh Africa >6?.................................................................................2

3igure 2= &alue Added to )*( from 1;;8 to 2""8 >26?.........................................................................23igure $= The All In One :reakfast /aker...........................................................................................11

3igure = @%ur!e showing the realistic sales forecast.........................................................................15

LIST OF TABLES

Table 1= A compilation of estimates of annual per capita personal income by race group in 2""" 'ands

and relati!e to hite le!els, 1;16@2""8 >2? ........................................................................................;

Table 2= Tabulated ales 3orecast for the (roduct...............................................................................1

Table $= rban populations of outh African pro!inces >2$?...............................................................1;

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1. ENVIRONMENTAL ANALYSIS

The ability to sell a product is an important criterion in the product de!elopment. This ability is

controlled by the en!ironment, and therefore the product has to be accepted by the en!ironment being

in!estigated. En!ironmental factors include political, economical, social, natural, and technological

>1?, and these will be discussed further.

1.1 Political eni!on"ent

The political en!ironment fundamentally consists of laws and regulations BconstitutionC, go!ernment

Bpolitical systemC and pressure groups. In terms of political system, the republic of outh Africa is a

constitutional democracy, which consists of a three tier go!ernment system. The republic consists of a

local BmunicipalitiesC, (ro!incial and ational go!ernment, which form the first, second and third

layer of the go!ernment respecti!ely >2?. (ressure groups are groups that influence legislation and the

go!ernment course of action >$?. An e<ample of this would be %OAT B%ongress of outh African

Trade nionsC, which is in an alliance with the go!erning A% BAfrican ational %ongressC party.

The interference of pressure groups may impact a products upbringing or success, and therefore the

analysis of pressure groups and the go!ernment at hand is crucial in product de!elopment.

:usiness legislation has been increasing at a constant rate. 3actors concerning competition,

en!ironmental and product safety, and pricing ha!e been ha!e been implemented or modified o!er the

years. The outh African competition law and policy, for instance concerns itself with increasing

competiti!e nature, and ridding of the economic power abuse instilled by firms Be.g. monopolyC >?.

outh AfricaDs (olitical system implements certain labour laws, en!ironmental laws BEn!ironment

conser!ation act BE%ACC, and trade restrictions BTrade and Trade policy in outh AfricaC, which also

induce a constraint on product de!elopment.

1.# Econo"ic eni!on"ent

The economic en!ironment consists of aspects that influence the amount of consumers and their

purchasing power Bi.e. interest rates, economic cycle and stage of the economyC.The outh African

economy is a free market economy. A free market economy is an economy for which prices and

decisions are determined by supply and demand. According to Dtatistics outh AfricaD the population

of outh Africa from mid 2"11 was estimated to be ".86 million >?, of which ,"1",;8" were ta<

payers Bwith respect to ta< returnsC >5?.The unemployment rate is uite high, measuring around 2$.;

F at the end of 2"11 according to DTrading EconomicsD >6? B'efer to 3igure 1C. The amount of outh

African consumers contributing to a newly introduced products success is mainly restricted to the

employed portion of the economy.

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*uring the recent recession in outh Africa Blate 2"""Ds C, there were less outh African consumers

due to the crisis, howe!er reco!ery seems well on its way and growth seems fairly close to what it

was. There e<ists howe!er another problem arri!ing to outh AfricaDs economy. *ue to parts of the

EuroGone being in recession, a multi@national debt crisis greatly affects the European and American

economy. This badly affects the outh African economy because of rising inflation and damaged

foreign trade

3rom 3igure 2 below, it can be seen that the outh African economy is trending to higher

manufacturing and 3inance )*(, e!en higher than pre!iously fundamental mining )*(. This

represents a more first world en!ironment.

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Fi$%!e #& Val%e A''e' to GDP (!o" 1))* to #++* ,#-

Fi$%!e 1& Une"/lo0"ent !ate o( So%t A(!ica ,-



1.2

Social an'

De"o$!a/ic eni!on"ent

The social en!ironment consists fundamentally of peopleDs beha!iour, their communities, and their

conditions and way of life. According to DA'(D Bouth African 'egional (o!erty etworkC, " to

" percent of the population is li!ing in po!erty >8?. (laces in outh Africa such as )auteng ha!e high

le!els of po!erty, as the population growth rate is higher than the housing supply. The social

en!ironment is negati!ely affected in such circumstances.

outh Africa is referred to as the Drainbow nationD, due to the di!ersity amongst the people#s culture,

language and ethnicity. In terms of ethnic groups, according to Dtatistics outh AfricaD, the black

population make up 6;. F, white population make up ;.1 F, coloured population make up 8.; F and

IndianHAsian population make up 2.5 F. The religion in outh Africa is greatly dominated by

%hristianity at about 6$. F >;?. In terms of language, outh Africa has 11 official languages, ranking

as one of the countries with the most official languages. The Education system pro!ides compulsory

primary education for children between 6 and 1 years old. The secondary education pass rate for matriculates in 2"11 was 6".2 F, which is uite high compared to pre!ious years. Of the matriculates

2.$ F ualified for :achelors studies, which is also an impro!ement >1"?.

1.3 Nat%!al eni!on"ent

The natural en!ironment consists of natural recourses needed by marketers, and the effects on nature

itself >11?. outh Africa ranks highly in the world in terms of natural recourses and biodi!ersity. The

mining of minerals and ores was the foundation of the outh African economy. /inerals and Ores

such as gold, coal, platinum and diamonds make large re!enue earnings in terms of e<ports. In an

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agricultural aspect around 1$F of the soil can be culti!ated, and the agricultural e<ports are beneficial

to re!enue earnings, e!en though outh Africa is not self@sufficient in the agricultural yields >12?.

1.4 Tecnolo$ical eni!on"ent

The technological en!ironment offers new and impro!ed opportunities to marketers. outh Africa#s

technological en!ironment focuses on such things as the integration of technological systems into the

population, as well the de!elopment of the technology field in general. The go!ernment has made an

obecti!e to implement high technology reliance into the economy in order for outh Africa to be able

to compete with foreign manufacturing. outh Africa is not !ery well known for the creation of new

technologies, for instance the automated pool cleaner J4reepy 4rauly# is one of only a few outh

African de!elopments. The reason for the lack of technological de!elopment can be attributed to the

fact that only a small percentage of outh Africans are educated at the le!el reuired for such

de!elopment. This combined with the fact that the outh African economy does not emphasise

technological de!elopment due to more pressing needs, has resulted in an economy with little

dependency on technology.

#. EVALUATION OF COMPETITION

The direct competition of the proposed product is limited to a few products that are a!ailable on the

market at the moment. hile conducting research of similar products, only two brands were found to

be producing goods that would be considered direct competition.

The first of these brands is :ack to :asics K, an American house ware manufacturer that started in

1;61 as manufacturer of home canning and food processing products. The company offers a large

range of kitchen products, including appliances for making popcorn, warm drinks, etc. In eptember

2"", :ack to :asics launched their Egg L /uffin Toaster, which sold "" """ units in its first year,

and was the number 1 selling product for 9 2"" in the category MToastersN >1$?.

The first Egg L /uffin Toaster model that was released was the M:ack to :asics TE/"" Egg@and@

/uffin 2@lice Toaster and Egg (oacherN. This unit is capable of toasting two slices of bread, and

poaching an egg at the same time within minutes, uickly creating the components of a breakfast

sandwich, after which it automatically shuts off. The egg poaching tray can also be used to heat a

!ariety of meats. In addition to this function, the poaching tray can also hard boil eggs. This model

retails at $$.;; BPA' 252, 2$C >1?.

The second model offered by :ack to :asics is the M:ack to :asics TE/"" @lot Egg@and@/uffin

ToasterN, which is !ery similar to the TE/"" model, but is a larger model that can toast slices of



bread, poach two eggs or boil up to 8 eggs. It is also capable of defrosting products such as croissants

and bagels. This model retails between of .;;@;.;; BPA' 2.2 to 52, 82C >1?

either of these products are a!ailable in outh Africa in local retailers, but are a!ailable for online

purchase from websites such as AmaGon.com. This ob!iously entails shipping fees and fluctuatinge<change rates that would increase the prices.

Another product a!ailable on the market that poses direct competition is the M%hefscape TE/(' @

lice Egg and /uffin ToasterN. This toaster is !ery similar to the :ack to :asics TE/"" model. It

is a !ery similar design and the same features functions, but has a higher price of 5;.16 BPA'

$5, "6C. This product is also only a!ailable through online purchase >15?.

As the products stated abo!e were priced in American *ollars, the local prices were calculated using

the rates of e<change on the 25H"$H2"12 >16?.

Other products that could be considered direct competition are con!entional de!ices for preparing

toast, bacon and eggs, i.e. ormal toasters and a frying pan and sto!e. These de!ices howe!er reuire

more effort to operate, since they are separate de!ices, and a frying pan reuires constant attention to

correctly cook food without burning it.

Any other form of a breakfast meal could constitute to indirect competition to the considered product.

This includes things such as breakfast cereals B%orn flakes, 'ice %rispies, etcC, cooked porridges

BOates, pap, etcC, yoghurts, fruit, snack bars, pancakes, scones, sweet and sa!ory muffins, etc. ome

of these products are more or less in the same price bracket of a breakfast of bacon, eggs and toast,

and the considered product pro!ides the con!enience of making the breakfast in a small amount of

time with a little effort.



2. MAR5ET MIX

2.1 P!o'%ct

The all in one breakfast maker is based on the con!entional bread toaster that one may find in most

kitchens around the world. The proposed product is a logical e<tension of the con!entional toaster.

Instead of a toaster that only makes toast, the all in one breakfast maker is a breakfast unit that allows

the user to make toast as per usual with the addition of being able to cook bacon and boil, poach or fry

eggs Q all at the same time. The product may also be used to perform one function at a time thus

allowing for !ersatility. The product will be sold with a limited@time warranty to assure customers of

the product#s uality. The main risk when selling a product like this is lack of interest. /any potential

customers will be wary to buy such a new type of product as they will not be sure how it works or

how it will fit in to their e<isting kitchen appliances. *etails of how these risks will be reduced will be

co!ered in the M(romotionN section.

2.# Place

The channel through which the product will be sold will be through large appliance suppliers and

general wholesalers such as @Home, Game, Macro and Pick’nPay Hypermarket. The transport of the

product from manufacturing point to the outlet will be done by an e<ternal transport company as the

cost of buying transport !ehicles and employing dri!ers is too high for such an early stage of the

business. 3or the con!enience it offers, this product will also be a!ailable for purchase online. *etails

of online ad!ertising will be discussed in the M(romotionN section. *eli!ery of the product from

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online sales will be contracted to a deli!ery company. It would not be necessary to open an outlet to

sell this product as the supply channels are already well established and the cost of opening an outlet

cannot be ustified with only one product. This product is intended to replace the toaster in e!eryone#s

kitchen Q the intention is for this product to last for a long time as it becomes a standard appliance in

all kitchens along with the microwa!e, blender and food processor. (lace relates to the product as the

product is a shopping product Q a product that is not bought e!ery day and is usually only bought after

considering all the other competitors >18?.

2.2 P!o"otion

(romotion of this product will mainly include print media and electronic media to target the final

customer. Emphasis will be placed on the brand name of the product so as to create a buGG for the

brand in case the brand wishes to e<pand to other products in the future. ome ad!ertising will occur

through the outlet#s promotion channelsR specifically tele!ision ad!erts and newspaper supplements.

As mentioned in the M(laceN section, it is not intended for the product to be sold through Verimark or

Glomail as these outlets promote products using tele!ision infomercials Q which while often effecti!e,

infomercials de!alue the product through non subtle and often annoying ad!ertising. To effecti!ely

focus the ad!ertising towards the target market, the product will be ad!ertised using Google and

Facebook ad!ertising. These ad!ertisement platforms allow for targeted ad!ertising through word

recognition software >1;?. This will allow us to find potential customers that are already looking to

buy appliances online. The ad!ertising should not put forward the notion that the supplier is desperate

to sell the product but rather the ad!ertising should entice the potential customer to desire the product.

As this is a new product, initially potential customers will be wary to buy it as they are unsure of its

operation, reliability and uality. To o!ercome this problem promotion of this product will also

include public demonstrations at conferences and outlets which will allow the potential customers to

get familiar with the operation of the product.

2.3 P!ice

Once the total cost of the business to manufacture, package and ad!ertise the product has been

calculated, the cost per unit can be calculated. The business will seek to minimise these costs to

increase profit. The price of the product will include this cost. /ark@up will be added to the price to

make up the profit per unit. %ompetition for this product is low as many of the people sur!eyed ha!e

not seen a similar product. This will allow the business to function as a monopoly Q where the selling

price will be determined by what price the customer is willing to pay for the product and not on what

competitors are selling their product for. According to the sur!ey, potential customers would be

willing to pay around '$" for this product. The product will be sold for a once off price. o credit

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terms will be offered on this product as the price will simply be too low to offer any other method of

payment other than a simple once off payment.

3. T6E MAR5ET AND T6E PRODUCT TARGET MAR5ET

3.1 Te "a!7etAn e!aluation of potential buyers in the market must be made. The market for initial business plans is

solely the South Africa market. The market must be e!aluated in segments so that buyers can be

identified. To identify the market, three different ways in which the market is di!ided Bamongst

othersC in this report, are industry, demographics, and psychographic.

The tandard Industrial %lassification %ode B.I.%.%C is a way in which industries are classified.

7ousehold appliances are classified with a .I.%.%. code of $5$; >2"?, with the first number

indicating that this industry is classified under manufacturing. The manufacturing industry has been

seen to be growing !ery fast in outh Africa. /anufacturing comes in as the second largest sector, in

terms of !alue added to the )*(, of the country with a contribution of 15, 2 F >21?. Although a lot of

this wealth contribution is from sectors aside of household appliances, it shows that manufacturing is

growing in outh Africa, and has attracted interest from in!estors.

*emographically speaking, there is not much segmentation of the market as the product can be

pitched to many people across races, genders, and ethnicities. :reakfast is often said to be the most

important meal of the day, and most people do eat breakfast. 7owe!er, the market can be

demographically segmented by income, as the product will be !iewed more as a lu<ury than a

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necessity. outh Africa has a !ery poor distribution of wealth, with high income ineuality amongst its

people. This can be seen by an e!aluation of its )ini coefficient. The )ini coefficient measures the

ineuality of income distribution. A )ini coefficient of Gero means wealth is eually dispersed

amongst the people. A )ini coefficient of one B1""FC e<presses ma<imum ineuality among !alues.

This would imply one person has all the wealth.

*e!eloping countries such as outh Africa tend to ha!e a )ini coefficient of around B"FC >22?.

7owe!er, largely because of apartheid, outh Africa has a much higher coefficient. An e<ternal

e!aluation sets outh Africa#s )ini coefficient at 5$, 1F in 2""8 >22?. A more in depth internal

e!aluation by The chool of *e!elopment tudies at The ni!ersity of the 4wa@ Pulu atal sets the

)ini coefficient of outh Africa at ",; B;FC >2$?. This indicates that a !ery small percentage of the

population recei!es most of the wealth of the country. :y understanding the workings of the )ini

coefficient, it can be said that about 2"F of the population recei!es half the income. This tells us that

although there are few prospecti!e buyers, these buyers ha!e an e<tremely high buying power, and

can afford to buy lu<ury items. The All In One breakfast machine can be classified as a lu<ury.

The ne<t segmentation to be looked at will be the psychographic segmentation of the market. Through

independent sur!eys, it can be seen that roughly $$F of the urban population of outh Africa, the self

gratifiers, would be the main target market for the All In One >2?. These people ha!e been described

as Mli!ing for the momentN, as ha!ing Man abo!e a!erage propensity to taking risksN, and are said to be

in!ol!ed in Mconspicuous consumptionN. This tells us that a third of the urban population would be

inclined to maybe try a new brand or product. Also it can be seen, by the following Table 1, >2?, that

the white population of outh Africa controls a lot of the country#s wealth.

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Ta8le 1& A co"/ilation o( e9ti"ate9 o( ann%al /e! ca/ita /e!9onal inco"e 80 !ace $!o%/ in #+++ Ran'9

an' !elatie to :ite leel9; 1)1-<#++* ,#4

1"



This tells us that the white market segmentation should be looked at specifically as well. 2F of the

urban white population are classified as JInno!ati!es# >25?. These people are said to be Mopen to

changeN and find Mstatus through ownershipN. 2F of the urban white population is also termed

J:randeds# >25?. These people are said to be Mmaterialistic and status consciousN and ha!e a desire to

Mflaunt their possessionsN.

3.# Te ta!$et "a!7et

These different segmentations of the market tell us that our base market to look at would be a

percentage of roughly $F of the urban population. These people would be interested in buying a

lu<ury high end, but practical product such as the all in one breakfast maker. This percentage will be

decreased further when you focus on those people who would find real functionality and usefulness in

the product. This will be the people who are pressed for time during the breakfast hours of the day

Bsuch as students, parents, and busy business peopleC, as well as people whom are health conscious, as

the product incorporates healthy cooking techniues by remo!ing oil from preparation.

:y personal estimates Bas there is no specific dataC, these sort of people account for about @1"F of

the urban population. %ensus data tells us there were 8,"2,"5$ people in the urban population

B'efer to Table $ in Appendi<C as of uly 2""6. ith a recent rise in urban population, it can be

deduced that the target market siGe is around 2"" """ people.

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2

1

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4. PRODUCT DESCRIPTION

3igure below shows a detailed image of the product to be sold. The product consists fundamentally

of a toaster combined with egg cooking plates and a grill Busually for baconC. The idea behind the

product is that toast, eggs and bacon could be prepared simultaneously. The toaster itself is capable of

toasting four pieces of bread simultaneously. There are two egg cooking plates Brefer to the image

bellow, point 1C connected onto the toaster, which can be disconnected when reuired Bi.e. the eggs

ha!e finished cookingC. The time and heat for the egg cooking is !ariable and can be altered by knobs

connected to the toaster B2C. The grill B$C, also connected to the toaster, has a large enough surface

area for se!eral pieces of bacon. The grill has a grease tray run out system to reduce fat content in the

food being prepared. The cooking surfaces of the egg cooking plates and the grill are non@stick which

ensures easier cleaning and a longer lifespan of the surfaces. All three of the appliances that make up

the product are powered by electricity, and the surfaces are chrome plated.

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Fi$%!e 2& Te All In One B!ea7(a9t Ma7e!



=. INSTRUMENT USED TO COLLECT DATA

A sur!ey was conducted to attain information from potential customers. 'efer below for the

uestionnaire template and the Appendi< for the answered uestionnaires.

=.1 Ma!7et S%!e0 >%e9tionnai!e Te"/late

Na"e an' S%!na"e&

Contact Detail9 ?cell no.@&

• Is breakfast an important meal to youU

• *o you eat breakfast e!ery dayU>0H?

If yes, what do you eatUIf not, why notU

• 7ow much time do you ha!e to eat breakfastU

• ould you enoy a breakfast of bacon, eggs and toastU

• If you had time e!eryday, would you eat bacon, eggs and toast for breakfastU

• 7ow do you enoy your eggsBsunny side upHwell doneH scrambled, etc.CU

• 7ow much would you spend on a toasterU

• ould you buy an appliance that makes bacon, eggs and toast all at onceU

• 7ow much would you spend on an appliance that makes bacon, eggs and toastU

• hat would your ideal breakfast consist ofU

• *oes the aesthetics of a toaster matter to youU

• hat features would you like to see a!ailable on a toasterHkitchen applianceU

Tan7 Yo% (o! 0o%! ti"e

=.# S%!e0 anal09i9

The initial approach of the sur!ey was to in!estigate how important breakfast is as a meal to

consumers and how much time they spend on breakfast. These are important points to in!estigate, as

the success of the All In One :reakfast /aker depends on whether or not the potential customer

1$



!alues breakfast as an important meal, and whether they ha!e sufficient time to eat a breakfast of

bacon eggs and toast. The potential customers were therefore asked whether or not breakfast was

important to them and how much time they ha!e in the morning to eat breakfast. All of the

inter!iewed candidates confirmed that breakfast was in fact an important meal to them. This confirms

the basis of the purpose of this product. The potential customers indicated they ha!e an a!erage of 1@

2" minutes with which they can eat breakfast. This should be sufficient time for a consumer to make a

breakfast with the All In One :reakfast /aker and enoy eating it.

As part of finding out whether the All In One :reakfast maker is rele!ant to the potential customers,

they were asked what their daily breakfast consisted of, and if they would also enoy a breakfast of

bacon, eggs and toast if it was a!ailable to them. The response from the potential customers as to what

they usually eat for breakfast mostly consisted of either toast or cereal, but eggs and yoghurt were also

common responses. As to whether or not the candidates would enoy a breakfast of bacon, eggs and

toast, the maority confirmed that they would in fact enoy such a breakfast.

In addition to finding out if the potential customers would enoy a breakfast of bacon, eggs and toastR

they were also asked whether or not they would actually but the All In One :reakfast /aker. This was

to determine whether or not the potential customers are actually interested in the product, which is an

important part of sur!eying the market. The response to this uestion indicated that ;"F of the

potential customers said that they would buy the All In One :reakfast /aker, which is a positi!e

result. The sur!ey also asked if the potential customers would eat a breakfast of bacon, eggs and toaste!ery day, and the results were split with "F saying yes, and "F saying that although they would

enoy this breakfast, they wouldn#t eat it e!ery day. This can concluded by saying that although some

customers wouldn#t utilise the All In One :reakfast /aker e!ery day, the maority is still interested in

buying the product.

The market sur!ey uestionnaire then went into the pricing of the product. There is no current product

on the outh African market that is in direct competition to the All In One breakfast maker. As a

result, the market sur!ey forced potential customers to !alue the All In One in comparison to other

household appliances that they would probably ha!e. As the nearest a!ailable product would be a

con!entional toaster, the sur!ey asked the customer to associate a price to a toaster. +ater on, it then

asked how much they would pay for the All In One. e could now ha!e a realistic price range in

which we could work for sales. The candidates !alued the breakfast much higher than the toaster as

e<pected. The a!erage budget for the breakfast maker, across all 1" inter!iew responses, is '28.

The pricing of the product will be based on a strategy of taking all costs, and adding a profit

percentage. As such, a firm middle ground would ha!e to be found when final pricing can be

calculated after an e!aluation of all costs. This price could possibly be e<tended higher than the

sur!ey !alue, to between '$"" and possibly as high as '" once costs are considered. This is

1



because the strategy should rather incorporate a price skimming approach into the sales strategy. (rice

skimming would be a better option as the product is considered a lu<ury item and would also be

introduced to the outh African market as a monopoly. Also, it#s assumed that customers would, with

limits, buy the product for its functionality rather than its price.

The market sur!ey then went on to ask potential customers if they had any recommendations or

features they would like to see added to the All In One. This was done so that a better understanding

of customer wants could be established. This would help with the design of future product models

andHor possible features that could be made a!ailable as accessories to the All In One. Accessories

could increase business profits substantially. It was uickly understood that customers are di!erse in

their preference of egg preparation. hile the maority of the respondents prefer their eggs poached,

there are a few who prefer boiled or scrambled eggs. *ifferent attachments could be added to the

product, in the form of accessories, such that an egg could be boiled. Another attachment accessory

could be a bigger egg cooking plate so that omelettes could be made.

A lot of good design ideas were also put forth which can be incorporated into future design

considerations. The product should try and ha!e a fold up feature so that it takes up less space in a

kitchen. Also, the product should be a!ailable in a range of colours and tones. This is because the

product is a lu<ury, and is likely to be used in furnished kitchens. This means that the product should

adapt to the general aesthetics of the kitchen. Another possible e<tension to future designs is to allow

the product to be run using gas or batteries. This would e<pand the product target market substantially.outh Africans are known to e<perience freuent power outages during the year, especially during the

colder months of winter, and as such the product would be more widely accepted as a way to cook

during outages. This idea would also e<pand potential customers to include camping and hiking

fanatics.

-. SALES FORECAST

1



:ased on the discussions stated abo!e a target market of 2"" """ persons will find the functionality

appealing and would be able to afford to purchase the product. Of these possible 2"" """ people only

1"" """ would ha!e the personal preference to actually want a full English breakfast and due to the

sur!ey undertaken, people already hold confidence in the products that they own. 7owe!er, this

number would be increased due to the J(roudly outh African# campaign encouraging the population

to purchase outh African products. This product is also uniue thereby monopoliGing the market

which intern generates a greater amount of people in the target market.

:ased on discussions between the group members, an estimated life span of an ordinary toaster was

found to be appro<imately years. As the product takes the placeHincorporates a toaster, this would be

the ideal time line for the product sales forecast. ince this product being discussed is completely new

to the market, the initial sale would be low until people become confident and aware of the product.

Ad!ertisement would ha!e to be pushed out in full force during this stage. easonal effects will not

generate a huge factor in the sales of the product. A possible small increase could occur during the late

o!ember and *ecember period due to the %hristmas season as this product could be considered as a

no!elty item.

The estimated increase in the target market due to the factors discussed abo!e would ideally 12" """

persons with a more realistic number being 8" """ persons due to the factors discussed abo!e. *ue to

unknown future economic conditions a pessimistic number for the sale market would be up to " """

persons. Table $ below shows the sales for the optimistic, realistic and pessimistic forecasts.

Ta8le #& Ta8%late' Sale9 Fo!eca9t (o! te P!o'%ct

Sales forecast Sales over product

lifespan

Yearly sales

Optimistic 120 000 40 000Realistic 80 000 20 000Pessimistic 40 000 10 000

The !alues recorded abo!e do not take into account the start@up phase. The start@up phase will be

!isually represented in the s@cur!e figure below.

15



Fi$%!e 3& S<C%!e 9oin$ te !eali9tic 9ale9 (o!eca9t

(lot 1 abo!e shows the initial product through its four year life cycle. The initial section increases

slowly as the product is still new to the market. A noticeable le!elling occurs between the middle of

year 2 and year $ indicating a stable sale of the product due to saturation and possible competitors

entering the market. A new product would then ha!e to be created to replace the old one. (lot 2 shows

a new product with added functionality entering the market. As the company would ha!e recei!ed

feedback from the customers, the new product would be perfected increasing the demand for the new

product thereby raising the profit margin of the company.

Although the sale forecasts proected abo!e are smaller than many of the competitors, this product

was focused on a smaller market allowing for the buying power of the market to be lower.

16



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1. %hapter $ @ %o@operati!e )o!ernment. South African Goerment !nformation. >Online?

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2. Sna''on; D R. 3irm Accountable decisions. page 82.

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. >Online? http=HHwww.oecd.orgHdataoecdH2H1$H2;861.pdf.

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8. Introduction. South Africa (egional Poerty +etork. >Online?

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Electric 7eld Top pot in DToasterD %ategory in 9 2"". )he Free ibrary. >Online?

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1. :ack to :asics TE/"" Egg@and@/uffin 2@lice Toaster and Egg (oacher. Ama/on . >Online?

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smidVAT&(*4I4-"*E'LtagVshopGillaXre!X16$@2"Llink%odeVasnLcreati!eV$;";$Lcreati!eAIV:"""92450.

18



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1;



APPENDIX

Ta8le 2& U!8an /o/%lation9 o( So%t A(!ican /!oince9 ,#2

Et!a In(o!"ation Pe!tainin$ to te /!o'%ct In9/i!ation

Co""%nication tat e/lain9 /!o'%ct to "a!7et

This simple kitchen appliance is capable of producing a well@rounded breakfast without much

difficulty. It makes toast, while at the same time producing eggs and a couple of strips of bacon. The

unit can toast bread as well as bagels, muffins and croissants. The non@stick egg poachers and bacon

grill don#t reuire oil, and along with a remo!able crumb and grease tray, the de!ice makes cleaning

up easy. ith heat settings to select your preferred cooking method, a satisfying breakfast can be

achie!ed in matter of minutes.

>%e9tion9 a97e'

:efore product was selected=

• hat products could benefit consumers in their daily li!esU

• hat siGe business are we interested inU• Are we offering a product or ser!ice, or bothU

• hat gaps are there in the marketU

After product was selected=

• 7ow will the eggs be cooked, bacon grilled and bread toastedU

• hat will the design look likeU

• hat kind of eggs do consumers likeU

• 7ow much do consumers !alue a warm breakfastU

• hat features would the market respond to positi!elyU• hat siGe should the product beU

2"



• 7ow much will production costU

• hat is our profit marginU

• here will start@up capital come fromU

Te Folloin$ Pa$e9 Contain Te An9e!e' >%e9tionnai!e

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