Market Analysis Summary
There is tremendous potential for a product that provides supervisors and parents with the control to monitor and encourage hand washing. Considering the large scope of our potential markets, we feel it is imperative to focus our limited resources on a particular geographic region where we can establish demand for our product.
After successful market penetration, we will begin implementation into the restaurant and hospital markets.
Market Segmentation
SAFEassure’s first product line addresses the day care market. CHILDassure will first be introduced in the Portland, OR area, before sequential expansion to additional day care markets. There are currently 516 day care facilities in the Portland Metro area.
After successful implementation in Portland, we will begin expansion into the greater Northwest. There are 3,414 day care facilities in the greater Northwest.
Successful penetration into the day care market will be followed by implementation into the restaurant and hospital markets.
There are currently 19,362 restaurants in the Northwest, followed by health care services, which includes 23,108 organisations in the Northwest.
Industry Analysis
The Industrial and Institutional soap industry, of which we are a part, is quite fragmented, but contains several well known main competitors: Gojo, Kimberley Clark, Dial, Provon, and SoftSoap, as well as generic brands that provide to distributors like Massco and Sysco.
The industry is stable and growing; between 1998 and 2003 it grew by an average of 4% annually. Within the I&I sector there is fierce competition for market share among the existing popular soap offerings, leading to lean profits on soap sales.
Distribution Patterns
Distribution in the soap industry is provided by regional providers.
These distribution companies usually serve a large portion of the market based on the respective size of the market, delivering to the organisations monthly or bi-monthly depending on demand and usage patterns.
Food services typically receive deliveries of cleaning products once a month. Hospitals typically have a distribution system that operates on monthly deliveries of large quantities. Restaurants typically have a weekly delivery schedule.
Competition and Buying Patterns
Commercial customers select soap based on the necessary minimum safety regulations for the intended user; restaurant and hospital regulations require anti-bacterial/microbial.
Customers will typically select a product based on price, distributor availability, and convenience.
Distributors will deliver a complete order of cleaning and maintenance products to customers. Major competitors sell to a variety of customers, including distributors like Sysco, who receive generic soap from bulk producers, then repackage and deliver it along with other products it sells, utilising the same distribution systems.