On Tuesday, each Smart project team was given a 15 minute time period where they were scheduled to come in and discuss the progression of our surveys and project. When the OK to Drive team met, we changed up quite a bit of our survey. Professor Spotts helped us arrange our questions in a way that did not make our survey sound accusatory to bar owners. Additionally, we realized that we asked questions that we wanted to know before they knew about the product, and questions that we wanted to ask them after reading a little bit about the product. The same goes for a survey for the patrons of the bar. So, to start off we asked the bar owners about their setup with arranging precautionary measures of overdrinking at their location. We then ask them about any legal issues they may or may not have encountered in their years of operating business. As for the patron survey, we start out by asking them about the legality of their drinking by assuring that they are 21 years or older. Then we ask them about their typical week. This includes disclosing information about how often they drink and how much they drink, their usual arrangement for getting home, if they believe that drinking and driving is an issue, if they have been directly or indirectly impacted in any possible way by this action, and how important it is that they get home in a safe manner. Once the bar has answered their set of questions before introducing the product, and the patrons have answered their set of questions, it is then time to introduce the product to them. In order to assure that the product is presented in the exact same why by each member of the smart project team, we decided to disclose the product portion of our value proposition canvas to formally introduce the product to the businesses and patrons. This shows that the information disclosed is consistent and one member is not describing the product in any way different to our consumers.
OK TO DRIVE:
Breathalyzer Activated Lockers
Product: What is it? How will it help
me?
Experience
Breathalyzer
activated lockers will be set up in restaurants, bars, and event venues. Upon
arrival, patrons are required to hand in their car keys in the same way they
show their proof of identification. The patron will walk over to the quad
stand, scan their fingerprint, and will automatically be assigned to an
available locker. Patrons will be required to put their car keys into the
locker. Other items will be allowed in the locked, but at the risk of patron
not passing the breathalyzer test. When leaving the bar, the patron will check
in via fingerprint scanner and once again, take the breathalyzer test. The
fingerprint scanner prevents any issues of theft, and avoids people taking the
test for others. The digital display will show the locker number if the
operator passes the breathalyzer test. If the operator were to fail the
breathalyzer test, then information regarding how they would obtain their car
keys at a time when they are legally
sober will appear. Information on how to return home that night will also be
displayed instead of their designated locker number. We hope for the bars to be
given a quick and easy way to enforce safety and security to decrease legal
ties with accidents and tragedies in the future. We hope for patrons at the bar
to feel safe. We want them to not feel tempted into drinking and driving, and
we want them to see this as a positive experience rather than a negative. We
hope that this will be an efficient way to solve this pain-point of drinking
and driving. Additionally, we hope that consumers will promote this method of
security and safety so they understand that the bar or venue has society’s best
interest in mind.
Features
The
quad stand an apparatus in where a cube is placed on a stand. All vertical
sides of the cube are the same; for they have a digital display, fingerprint
scanner, and breathalyzer.
●
Breathalyzer
activated lockers
●
Fingerprint
scanner to detect identity of patrons
●
Disposable
tubes to regulate sanitation
Benefits
●
Limits
the ability for drivers to operate a motor vehicle while under the influence of
alcohol
●
Prevents
liabilities being traced back to bars and restaurants by enforcing this as a
company policy
●
Provides
a method of reducing the number of fatalities linked to drinking and driving
●
Keeps
the road safer by limiting operators of vehicles to be consuming alcohol in
that surrounding town and neighborhood of venue or bar
●
Gives
bars and restaurants a good reputation
o
Shows
that they care about the overall well-being of their customers, and not just
their money, by investing in this product
After disclosing information about the product, it is important to find out what they think. We asked bars the following questions:
1) How do you think that this product
would affect the action of drinking and driving in your area?
2) What problems do you envision being associated
with this product?
3) In what ways do you think that this
product will affect your image? Positive or negative? Please explain.
4) How would you enforce security provided by this
product? (Ex: Bouncers, police, etc.)
5) Would you be willing to hire employees to oversee
this product?
6) Some customers may be dissatisfied with having to
give up their keys…
In
what ways could you make consumers more accepting of this product? (Ex:
Discount, free entry, free drink, etc.)
7) How much would you be willing to pay for a product
like this?
8) Would you be willing to reserve a
space in your bar for this innovation?
We asked patrons the following questions:
1) Would you
buy and/or use this product if it was an optional
service at restaurants, bars, and event venues?
2) How do you
think that this product would affect the action of drinking and driving in your
area?
3) What
problems do you envision being associated with this product?
4) In what ways
do you think that this product will affect you or your friends and family?
Positive or negative? Please explain.
5) If this was
a required process by the venue of
your social gathering, would your feelings toward the product change in any
way? Please explain.
6) Please try
to imagine a situation where you walk into the bar and are required to hand in
your car keys. Explain your reaction to this new experience.
7) If it was a
mandatory process among admittance to the bar, how would that make you feel?
Would you be angry or upset? Would you be happy or excited?
8) If bars implemented this product into their venue, would you
change the location of your future social gatherings?
9) We
understand that some customers may be dissatisfied with having to give up their
keys… In what ways do
you think the bars and venues could you make consumers more accepting of this
product? (Ex: Discount, free entry, free drink, etc.)
10) Please
explain your feelings if you were
liable of the people operating machinery while consuming alcohol, instead of
someone else, like the bars for instance.
11) If the
product was available as a rental, for house parties and small gatherings,
would you take the time to rent a product like this when you are the host of
the party, and not a guest?
12) Would this
process make you feel agitated? Or, would it make you feel safe?
13) How much
time would you be willing to spend on a line for this service? How long in
duration do you expect it to take?
14) How much
would you be willing to pay for a product like this?
We truly believe that these questions will help us determine our market and the level of need or want of the product.
Thursday
Although I was not in class on Thursday, we had to read Chapter 19 for the class. This chapter talked about pricing and helped when I tried to apply those processes to the OK TO DRIVE smart project.
Price is what is given up in an exchange to acquire a good or service. Price is an important aspect of a product. According to our textbook, price plays two roles in the evaluation of product alternatives: as a measure of sacrifice, and as an information cue. Personally, I immediately connect value to price. Before taking this class, I would think that something was valuable based on whether or not is was expensive. As a consumer, I felt that I could only make my purchases that were expensive to fit in with the crowd. For example, I would buy UGG boots, or Hunter Rain boots, which were priced high, because I thought the high price was associated with the quality. I still do this to this day. I am content with paying a high price for something, because I automatically assume that it will give me a high quality service or product.
Setting the right price on a product is a four step process:
1) Establish Pricing Goals: Pricing objectives fall under three categories, (1) Profit Oriented, (2) Sales Oriented, (3)Status Quo. It is important to consider trade offs before deciding how to price your products. It is also important to make sure that it is a realistic goal.
2) Estimate Demand, Costs, and Profits: After setting a pricing goal, it is important to estimate how many people will buy your product, how much it will cost you to make the product, and how much profit you will make by estimating how much you'll make in revenue and subtracting the costs it took you to make your product.
3) Choose a price strategy to help determine a base price:
A price strategy is a basic, long term pricing framework that establishes the initial price for a product and the intended direction for price movements over the product life cycle. A company's freedom in setting the price for their product depends on the market conditions and the other elements of the marketing mix. If a company releases a product that is quite similar to others in the market, its price will be dependent on their competitors prices. Therefore, they are restricted. In order to succeed, they would want to be in the range of their competitors prices so they are not too overpriced, but not too underpriced either. On the other hand, if a business is coming up with a totally new product that has never been on the market before, they will have less competitors, and then have more freedom with pricing since they are setting the baseline for that type of product. There are three basic approaches of price strategy. They are (1) Price skimming, (2) Penetration Pricing, and (3) Status Quo Pricing. Price skimming is used for new products when the product is perceived by the target market as having unique advantages. Others will use skimming and lower prices over time. Price skimming is a policy where a company charges a high introductory price, often coupled with heavy promotion. Penetration pricing is very different from price skimming. Penetration pricing charges a relatively low price for a product when it is rolled out as a way to reach the mass market. It means lower profit per unit, so to beak even, it requires a high volume of sales. This tends to be the most effective in a price sensitive market. Status quo pricing means charging a price identical or very close to the competitor's price. The disadvantage of this pricing technique is the strategy may ignore price and demand. This is mainly used in small companies.
4) Fine-tune the base price with pricing tactics: After companies understand both the legal and the marketing consequences of price strategies, they should set a base price. Fine-tuning techniques do not change the level of the general price, but they do result with changes within that general price level. Fine-tuning pricing tactics include:
- Discounts
- Geographic Pricing
- Strategies
Fine-tuning strategies help companies adjust for competitions in certain markets..
SMART PROJECT: OK TO DRIVE
For pricing, we are a brand new product. There is no other product like ours, so we have flexibility with the amount we want to price our product. We do not have anyone to look at to compare/contrast prices with. Since we do not have direct competition, we could charge as much as we want and get away with it. But, we still want the price to be attractive to customers.
For our breathalyzer activated lockers, it is important to determine how price sensitive our customer will be.
Elastic
- Price Sensitive
- Bars will be hesitant to invest if it is super expensive
- New product and they don't know what this will do for their business yet
Inelastic
- Value outweighs price
- Value is important
- Safety
- Prevention of fatalities
- Price could go up if it was made regulated
- Mandatory product, mandatory high price
These pricing strategies that we learned in Chapter 19 are very important. Price is often seen as the value of the product. You want it high enough to make your product seen as valuable, but not too high where no one can afford to buy it. Price can often make or break a company, so it is something we definitely need to focus on when we work on our SMART projects.
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