Product Assignment

Product Assignment
Zaid Asfoor
Semiramis Amirpour
Marketing 3300.001
December 6, 2013

Product Assignment

Technology is the Future

In this new era of rapid technological advances, the dependency on technology increases
at a steady rate. Every company is looking for different ways that can lower production costs,
research and development costs, and increase profit which results in technological innovation.
The designed product, to help improve the quality of life, is called Car Machine. Car Machine
will improve the quality of life by making it easy to identify different cars by simply taking a
photograph of the car in question. The vision statement for Car Machine is to have the app in
70% of dealerships in Dallas, Texas, and at least have 40% of males in Dallas to download the
app within a time span of one year. Car machine hopes to generate at least 40% awareness of our
new product which would lead to almost $500,000 in profit, within the first year. Furthermore,
Car Machine will not only give the model of the car but also any modifications on that specific
car, the retail price, and where the closest version of the car is available for purchase. However,
while Car Machine can be accessed by anyone with a smartphone, it will only be emphasized for
a select target market.
Target Market
The target market selected for a product greatly influences its success or failure. The
target market chosen for Car Machine was males whom range from 15 years old to 25 years old,
and have an income between $11,000 and $25,000 (Figure 1). The target market was selected in
which our data provided the majority of people interested in our app. The primary data was
collected by asking a survey about Car Machine that included: dichotomous, semantic
differential scale, likert scale, and fixed alternative questions. The questionnaire asked for age
group, income level, gender, education, home residence location, owning a smartphone, app

Product Assignment

purchasing and use frequency (Figure 3). For everyone who took the questionnaire, 40% of
males were very likely and likely to recommend the app to others, 0% of females were very
likely and likely to recommend the app to others, 10% of females were unsure if they would
recommend it to others, 10% of males were unsure if they would recommend it to others, 10% of
males were not likely to recommend it to others, and lastly 30% of females were not likely to
recommend it to others (Figure 2). This target market was selected because the vast majority of
the samples are males whom range from 15 years old to 25 years old and have an income
between $11,000 and $25,000. Furthermore, when this sample is applied to the number of
residents who live in Dallas, Texas, 1,241,162 residents, the number of people who are most
likely to buy this product is 496,465 people; 40% of the total number of residents in Dallas. With
an increase in the number of potential customers, the ability to generate more profit becomes
feasible. After each month Car Machine has been on the market, the company will perform a
SWAT analysis to help determine its strengths, weaknesses, opportunities, and threats. At the
moment, the strength of this product is that there is no other competitor that delivers the amount
of information with simply a picture. A potential weakness of this product is that because there is
not a product extremely similar to this, consumers have to believe in the product, which may take
time. By releasing this product to the public masses and car dealerships, the opportunity to
receive more potential customers, and thus maximize profit, is greatly enhanced; however, a
potential threat can arise from the newly obtainable profit. This can serve as a major incentive
for other companies to develop technology that could compete with Car Machine. Another factor
that can help determine the target market is the 4 Ps of marketing.
4 Ps of Marketing

Product Assignment

It must be noted that the four Ps of marketing play a crucial role in determining the
target market and are used to solve any marketing issues that may arise. The four Ps of
marketing are product, place, price, and promotion. These controllable factors help discover the
consumers wants and needs. By properly identifying the consumers wants and needs, our
product, Car Machine, can elicit maximum profits and consumer satisfaction. The increased
customer satisfaction will encourage each individual to talk about how much they enjoyed Car
Machine and will approximately tell three people. This trend will continue and Car Machine
purchases will increase.
Product Superiority
Car Machine is an app that does not have many competitors, at this point in time. The
points of difference in this app compared to others are the amount of detail you could get from
simply taking a picture of the car. In doing so the cars accident history, retail price,
modifications on the current car, and similar cars found in dealerships available for sell will be
provided. This is possible because when the picture is taken, the license plate will be run through
different government databases that could give the model of the car and any damage reports.
Furthermore, Car Machine is programmed to detect any modifications from the basic model of
that car. Because of the sheer amount of information that can be obtained, Car Machine has a
transcendent intranet; it is very user friendly.
Product Life Cycle
In this era of technological advancement, numerous products have a very compendious
life cycle which consists of an introduction, growth, maturity, and decline. Because of the low
level learning required to use this product, Car Machine will be expected to have a relatively

Product Assignment

short introduction, but longer growth period. In the introduction stage, innovators will purchase
the product because of their want to be the first individuals to own the product. As the product
goes into the growth stage, the individuals purchasing the product will be the early adopters and
early majority. Then the late majority and laggards will purchase the product. By knowing the
progression of potential customers, we can effectively market Car Machine that would have low
barriers to adoption: usage, value, risk, and psychological. With the low levels of barriers,
consumers will be more willing to accept the product faster which creates a faster need for the
product. This need will spread faster throughout the community allowing for higher profits.
Preliminary Pricing Strategy
A penetration pricing strategy will be used to gain the highest market share. Car Machine
will be set at a low price of $0.99 to deter competitors from creating a product and entering into
this market. To help recover research and development costs, $150,000, we would need to sell
150,000 units until the break-even point is reached; however, an estimated 500,000 units are
expected to be sold during the first year. Therefore, Car Machine will produce a profit of
$350,000.
Channels of Distribution
With the majority of smartphone users having either an IPhone or Android, a major
partner with be Apple and Linux. By having both of these companies use our product, the
number of potential customers can go from the 1,241,162 residents who live in Dallas, Texas, to
the millions of people across the world who have access to a smartphone.
Other key partners would be the different car dealerships. Because Car Machine can
determine the model of the car and what dealerships provide them, the dealerships have an

Product Assignment

incentive to part take in Car Machine as it would enhance their sales and general awareness in
the community. It would allow for the car dealerships to have more exposure in the market as a
surplus of individuals will have Car Machine that can direct them to the car dealership.
By having a short channel of distribution, the prices can be kept low as many countries
impose pricing constraints or tariffs. By avoiding those constraints, Car Machine does not have
to be concerned about dumping or the gray market.
Promotion Strategy
To promote Car Machine, many different advertising strategies will be engaged. The type
of advertising will be directed toward our target market which consists of Generation Y and
Millennials. Both Generation Y and Millennials share the same love of technology, therefore,
marketing to these demographics will ensure the highest profitability rate. When marketing to
Generation Y and Millennials, it is necessary to product position it correctly. When first thinking
about the product, both these demographics should think of a fun, easy way to characterize cars;
however, if this is not the case then product repositioning is needed.
One way to help popularize Car Machines is to run commercials for it through other car
apps, such as carfax and igasup. This exposure to the public will help create the image Car
Machine desires and significantly enhances the word of mouth advertisement, as well.
Furthermore, by having a Facebook and Twitter account, the technological lovers of Generation
Y and Millennials can be reached almost instantaneously. Lastly, car dealerships can help
promote Car Machine because it increases their visibility to the general public may have a
positive influence on their sales.
Conclusion

Product Assignment

The dependency rate on technology constantly rises. Car Machine effectively uses the 4
Ps of marketing to satisfy the consumers wants and needs. Furthermore, through the use of data
collection and analyzation of the data, the appropriate target market can be designated. The
selection of the target market is imperative because the pricing and promotion strategy can differ
for various target markets. For this particular target market, the majority of the interested
individuals were Generation Y and Millennials. Both of these demographics differ from the
previous generations of Baby Boomers and Generation X because of their need of technology.
Their lives constantly revolve around applying technology to help diminish and ease different
tasks. For previous generations, they would take initiative and acquire substantial research before
making a decision; however, these impetuous generations are fixated on immediate pleasure. By
having an app that allows for the detailed specifications, Generation Y and Millennials would
have immediate pleasure and can actively educate the user on the specifications of a certain car.
As time progresses and more competitors enter into this market, the use and efficiency of these
apps will increase rapidly. The efficiency translates into more development of technology that
will be used to enhance sales and become a common part of purchasing a vehicle.

Product Assignment

Appendix:
Figure 1 (shown below)

Number of People in Different Age

and Income Levels
2.5
2
Number of 1.5
People
1

15-18

0.5

19-25

25-40
40+

Income Levels

Figure 2 (shown below)

Likelihood of Recommending an App to

Others
Males that are Very
Likely/Likely to Recommend
30%
40%

Females that are Unsure to

Recommend
Males that are Unsure to
Recommend
Males that are Not Likely to
Recommend

10%
10%

10%

Females that are Not Likely to

Recommend

Product Assignment

Figure 3 (shown below)

Market Research Questions:
1. What is your age group?
a. 15-18
b. 19-25
c. 25-40 d. 40+
2. What best describes your income level?
a. 0-10k
b. 11k-25k
c. 26-35k
d. 36k+
3. What is your gender?
a. Male
b. Female
4. What best describes your level of education?
a. High school b. Associates
c. Bachelors or beyond
5. Do you live near or in Dallas, TX?
a. Yes
b. No
6. Do you have a smart phone?
a. Yes
b. No
i. If yes, how often do you use apps?
a. Daily
b. Weekly
C. Monthly
7. How often do you purchase apps?
a. Daily
b. Weekly
C. Monthly
8. How often do you use those apps?
a. Daily
b. Weekly
C. Monthly
9. Would you be interested in an app that could recognize a car with just a picture?
a. Yes
b. No
10. If our new product would be available today, how likely would you to be to recommend
it to others?
a. Very Likely b. Likely
c. Unsure
d. Not likely