One Year Marketing Plan - Smart Shower

Tara Murphree, Morgan Pierce, Ken Brigger, Peter Hsiao, Noor Azab
University of Texas at Dallas
Dr. Rajaratnam
Table of Contents
A.) Executive Summary
B.) Situation and Environment Analysis
C.) SWOT Analysis
D.) Marketing Objectives
E.) Target Markets
F.) Positioning
G.) Product
H.) Price
I.) Promotion
J.) Place (distribution)
K.) Financial Projections
L.) Evaluation and Control
M.) Appendix
N.) References

A.) Executive Summary

In todays society, having a constant supply of clean water is a blessing that is commonly
overlooked; this has led to recent trends of excessive water usage across developed countries. In
an effort to raise awareness of the adverse effects which overconsumption can bring to both your
personal budget and the environment, our company has developed a product geared towards
becoming the staple of the modern bathroom.
Introducing the Smart Shower, the innovative shower system that works to reduce
water usage, raise awareness of overconsumption, and ultimately reduce costs of clean water use.
The Smart Shower is the first Green shower system to publicly launch and base its operations
in the United States.

B.) Situation and Environment Analysis

a.) Competitors: The Smart Shower has no direct competitors because it is the first
water-recycling shower to be introduced and sold in the United States. There are, however,
companies in Europe who design and implement similar products, but we do not expect much
influence or competition from them. This is due to the fact that we based our business solely in
America. The main competitors would be companies which sell and install traditional shower

systems. We introduced the Smart Shower to capitalize on an already existing, but lucrative
market. Our product will allow consumers to stray away from conventional shower systems and
choose a product which will have a high return on investment.
b.) Economic Factors: Because the Smart Shower bears a high installation fee, it is
imperative that consumers view the product as a functional investment rather than an
unnecessary luxury. The main economic factor that should be taken into consideration is the
consumers propensity to spend. According to a survey done by ING eZenomics, when asked
what season of the year they spend most of their money, more than 50% of individuals responded
with summer. Summer also happens to be the time of year where most families move;
therefore, most homes are bought and sold around this time. Given this information, our
company will choose to implement the most marketing efforts in the summer months. Ideally,
this is the time of year where the most families would consider upgrading the bathroom in their
current/ newly purchased home. Another economic factor that will affect marketing efforts is the
state of the national economy. For the last five years or so, the American economy has seen a
decline into a recession. In the current situation, families are more likely to consider purchasing a
product that will save them a lot of money in the long run. Smart Shower is a water management
system that fits this description and will dramatically aid families by cutting down utilities costs.
c.) Cultural/ Social Trends: In the last decade, the concept of environmentally friendly
goods has gained much popularity. What was once exclusive to environmentalists has become
much more mainstream and socially acceptable. For example, major companies nowadays
advertise their use of clean energy more frequently than ever before. By the same token, more
and more restaurants have begun advertising their usage of recycled, post-consumer content in
paper based goods such as their bags and napkins. By introducing the Smart Shower in an era

where going green is more popular than ever, sales are likely to reflect this newly found,
American fad.
d.) Technological Impact: Building on the newly found craze of going green
(mentioned previously), technological changes involving sustainable living have gained more
acceptance. Examples of this include increased production of hybrid vehicles, usage of solar
energy, and consideration of efficiency as a whole. Concern for the environment is increasingly
affecting the creation of products and services. This has created many more opportunities for the
Smart Shower, specifically in the American market. Because it is the first of its kind to be
produced and developed in the United States, the Smart Shower bears an advantage through
product differentiation. Another thing to take into consideration is the American obsession of
purchasing the newest, most advanced products. Take for example the new release of the iPhone
6 and 6 Plus. Millions of individuals were willing to pay top dollar and even camp out to own the
newest piece of Apple technology. Hopefully, the Smart Shower builds a hype of its own by
offering a water treatment system which is novel and appreciated.
e.) Political/Legal: In order to prevent the Smart Shower from being replicated, a patent
will be obtained prior to product launch. This will ensure that sales are not being taken away
from competitors with deceptively similar products. Additionally, our company plans on
promoting the Smart Shower through demos and testing stations in public pools and parks. It is
necessary to obtain the legal rights from the cities where the showers will be installed. Lastly,
state of American politics could potentially affect sales of the Smart Shower. For example, if the
current dominating political party stresses environmental activism and preservation, that is an
opportunity to seek endorsement from political bodies. This will give the Smart Shower an
opportunity to market through another channel.

f.) Natural Environment: As a result of gradual changes to the Earths climate and
global temperature rates, droughts have become more and more frequent in certain areas. This
has led to a new nation-wide awareness for reducing water consumption. As a result, the
potential market for eco-friendly appliances has also been created. Smart Shower has chosen to
introduce a water management system that will drastically help in this area.

C.) SWOT Analysis

Strengths

Weaknesses

-The Smart Shower is a new, innovative product

-Average consumers are apprehensive when

backed by extensive research

introduced to a new, intricate technology.

-Strong and productive management team

-Costly installation fees

-Core mission of Smart Shower organization is

-Expenses for occasional filter replacement

clearly established

-Recruiting and teaching employees the proper

-Large opportunity for extended savings on monthly

product knowledge

costs of living

-Management and time frame of installation

-Benefits the environment

-Shortages of equipment, tools, and machinery

Opportunities

Threats

-International and domestic market available

-Already established

hardware

-The Smart Shower is the first of its kind to be

competitors

launched and sold in the United States

-Pricing wars with other competitors

-Water is purified to a level which exceeds that of tap

-Installation permits

water

-Possible taxation on Smart Shower

and

utilities

-Many

potential

customers

because

of

commonplace the traditional shower has become

how

-Shower and

bath competitors have

more

accessibility to channels of distribution

D.) Marketing Objectives

Since our product is the first of its kind to be sold in America, the Smart Shower is in the
introductory phase of its product life cycle. Because of this, it is imperative that customers are
informed of our product and aware of its originality. The main marketing objectives will be,
therefore, to gain awareness. To do this, we have decided to showcase the Smart Shower via
demos in public places such as community pools, recreation centers, and parks. Our goal as a
company in the first year is to install Smart Shower stations in at least ten cities around the
United States. Depending on how sales turn out in subsequent years, we as a company will
decide how many more stations to install and whether to branch these testing stations outside of
Texas. As for the usage of those stations, that will be measured through the frequency at which
the filters must be replaced. By measuring the usage of testing stations in various locations, our
company gains vital information as to which areas will yield more possible sales. Similarly, the
Smart Shower will have its own social media pages on Facebook, Twitter, Instagram, and more.
This allows our company to promote the product through virtual advertising, a very costeffective and rather easy method. To measure the status and success of the social media pages,
the number of likes, followers, and retweets/shares/ etc. will be compared from a month to month
basis. Our goal as a company is to see a 5% growth of the number of fans each month. These are
the primary two methods we will market and promote the Smart Shower.

E.) Target Markets

Ideally, the Smart Shower should appeal to every individual who showers and bathes
regularly because it is an investment which can quickly and easily recover its own costs.
However, because of limiting factors such as a high installation fee, a daunting and intricate
concept, and uncertainty, not all people will embrace our product with open arms. The primary
target market of the Smart Shower is upper-middle class Americans who have been living in an
established residence. In theory, individuals who fall in this category of wealth are not yet filthy
rich and still care to cut costs where they can. In addition, because they are wealthier than the
average people, they undoubtedly have enough money to front for the installation of a Smart
Shower unit. The Smart Shower would also appeal to environmentally conscious consumers who
want to adopt a more sustainable lifestyle in their homes. While these individuals are more likely
support the Smart Shower for its environmental impact instead of its money-saving potential, this
allows our company to further segment the market. Aside from the consumer market, the Smart
Shower would also cater to other companies that develop residential houses themselves; this
allows our company to branch into the business-business market. House contractors, home
improvement stores, and architects are just a few examples of business based customers that
would be interested in the Smart Shower.

F.) Positioning
We will propose an innovative and resourceful product that drastically reduces an
individuals cost of living and harm to the environment.

Pricing Because of high labor, material, and overhead costs of the Smart Shower, our company
is forced to charge a high installation/ initial fee. However, in order to present customers with the
most value, we hope to tie that high initial price with superior customer service, product
longevity (warranties), and the promise of environmental preservation through partnerships with
green companies. Our goal is to persuade customers to view the Smart Shower as a secure
investment rather than an unnecessary luxury.
Advertising The main outlets of advertising for the Smart Shower will include social media,
internet ads, and product demonstration through testing units. In each advertisement, importance
will be highlighted on customer value and our own personal business principles. As a company,
we would like our customers to take pride in ownership of a Smart Shower. We want consumers
to believe that they are benefitting both themselves and the world they live in by purchasing a
Smart Shower. This motif will be prevalent in all advertisements.
Channel Decisions Our company bases operations here in Texas. To ensure efficiency, we will
choose to purchase the majority of necessary supplies and materials from local suppliers. By
keeping the initial operations local, this ensures that the costs of transporting goods back and
forth are reduced, allowing maximum efficiency. Similarly, because the materials do not have to
travel very far, carbon emissions from transportation are kept at a minimum. We plan on
following this business model for each area of expansion. This allows us to stay true to our
values with environmental preservation.
G.) Product Strategy
Aside from being the first green shower system to be sold in the United States, the Smart
Shower does differentiate itself from other shower designs in an array of ways. To start, the
Smart Shower will have a unique yet minimalistic design. As a company, we want to reflect the

values of conservation all the way down to the aesthetics of our product. Custom projects will
also be available, allowing customers the option to literally design the exact specifications of
their shower. This ensures exceptional customer service. Lastly, assembly of the Smart Shower
will utilize quality products in which a lifetime warranty will be offered. Through these
strategies, we hope to offer a unique product and service which cannot be replicated.

H.) Price Strategy

Our company has adopted a premium pricing strategy revolving around customer value.
The main obstacle our company must overcome is persuading the consumer that our product is
worth the high price point. Since we are the first to bring a product of this kind to market, we
have decided to provide customers with a promise of excellent service to further differentiate our
company. This will allow us to charge a higher price and therefore maximize our revenue during
the beginning phases of our existence. Because we are marketing the Smart Shower as a
premium product, we use only the finest materials to engineer our product . Naturally, our
research & development, production, and manufacturing costs were extensive. As a result, we
used a cost based pricing strategy to come up with the final selling cost . Our final price came out
to be $3,000.
I.) Promotion Strategy
Our company has chosen to utilize both push and pull strategies for promotion. The push
strategies will revolve around installing testing units in public parks, recreation centers, and
pools. Much like samples of food at grocery stores, this will give customers hands-on experience
and exposure to our product. However, the majority of our advertising budget will be allocated
towards pull strategies. These include internet ads, social media usage, and sponsorships from
other green organizations. All-in-all, our main advertising message will focus on making the

consumer believe that they need to jump on this opportunity to save not only their own money,
but also the world they live in. We plan on spending 70% of advertising budget on pull strategies
and 30% on push strategies.
Budget Calculation (Year 1):
Our company wants to budget 30% of net income towards advertising.
We plan on selling 150 units in year 1
Selling Price/ Unit = $3,000
Variable Price/ Unit = $972
Contribution Margin/ Unit = $3,000-$972 = $2,028
Fixed Costs/ Year = $2,750 x 12 = $33,000
Variable Production Costs

Price per Unit

Raw Materials

$550.00

Wages

$12.00

Assembly

$320.00

Manufacturer

$90.00

Total

Fixed Production Costs

Rent

$972.00

Price Per Month

$2,000.00

Utilities

$700.00

Maintenance

$50.00

Total
Profit (Year 1) = ($2,028 x 150) - $33,000 = $271,200
Budgeted Advertising Expenditure = 30% ($271,200) = $81,360
Push Strategies Budget = 30% ($50,940) = $24,408
Pull Strategies Budget = 70% ($50,940) = $56,952
J.) Place Strategy

$2,750.00

In addition to installing testing centers in public areas, the Smart Shower will be
distributed through retail home-improvement stores such as Lowes and Home Depot. They will
be sold in store directly from the distributing company through their sales associates or via
online through our personal company website. A big selling point we will offer to home
improvement stores in order to persuade them to carry our product is product differentiation.
Those retailers currently carry templates for traditional showers only. Our company can offer
them the first truly green shower system to carry, and possibly even demo, in store. This allows
our company to promote the Smart Shower in two primary channels: through the government
and

retail

companies.

K.) Financial Projections

Cost Break Down (Year 1):
Variable Production Costs

Price per Unit

Total Units (150)

Total Cost

Raw Materials

$550

$82,500

Wages

$12

$1,800

Assembly
Manufacturer
Total Variable Costs

$320

$48,000

$90

$13,500

$972

$145,800
Year 1

Fixed Production Costs

Price Per Month

Rent

$2,000.00

Utilities

$700.00

Maintenance
Total Fixed Cost

(12 Months)

Total Cost

$50.00
$2,750.00

Total Costs (Year 1) = $33,000 + $145,800 = $178,800

$33,000.00

Revenue
Selling Price

Units Sold (Year 1)

Total Revenue

150

$450,000

$3,000.00

Profit

Calculation

Total
Revenue
$450,000 - $178,800 = $271,200

(Year
Total

Costs

1)
=

Profit

L.) Evaluation & Control

As mentioned previously, the status of our social media and testing centers will be
evaluated on a month-to-month basis. This will also reflect our breakdown of the fiscal year.
Monthly sales targets will be set for the Smart Shower. After each month, actual products sold
will be compared with those budgeted. At that point, existing marketing programs will be
modified based on what is and what is not assisting in hiking up sales.

M.) Appendix (Pictures, Sample Ads, etc.)

N.) References
Technology - Orbital Systems. (n.d.). Orbital Systems. http://orbital-systems.com/technology/
Saving Water and Saving Energy. (n.d.). HE-251.
http://www.bae.ncsu.edu/programs/extension/publicat/wqwm/he251.html
Drought 2014: What You Need To Know. (n.d.). Save Our Water.
http://www.saveourh2o.org/content/Drought2014WhatYouNeedtoKnow
Hosta, H. (2014, April 3). THE ORBSYS IS POSSIBLY THE MOST ENERGY EFFICIENT
SHOWER IN HISTORY. WE LIKE IT..
http://www.ecohome.net/news/latest/orbsys-possibly-energy-efficent-shower-history
U.S. Drought Monitor. (n.d.). Regional Drought Monitor. Retrieved June 30, 2014, from
http://droughtmonitor.unl.edu/Home/RegionalDroughtMonitor.aspx?west
WhyGoGreen?
http://green.hotelscombined.com/Gyh-The-Business-Case-For-Sustainability.php

Images:

http://michieluv.deviantart.com/art/Water-Droplet-159624789
http://faucetground.com/glacier-bay-shower-head/
http://neeranjali.com/category/learn/