Bottlieb Innovations, Inc. is a start up company that produces a product that will change the landscape of land assessment. Bottlieb’s Digital Geographer, a simple device, uses patented technology that calculates the area around a walked perimeter.
This plan contains marketing and financial strategies that will be used to guide management during the first year of production. The plan employs the most conservative numbers and projections.
Bottlieb Innovations, Inc., can be found in Escondido, CA. The facility covers approximately 1,500 feet and is located close to freeways. It includes office, workshop, and assembly spaces as well as plenty of parking.
George S. Bottlieb, the president and CEO is responsible to product design, development and sales. He also manages overall business management. Jay Rosenburg Jr. is the vice president and shares responsibility for business management. He focuses on marketing, finance, and operations. Because the company is small, the president and vice-president will initially be responsible for tasks such as product assembly and packaging, order processing and shipping. As the company grows, additional management personnel will be hired. Production personnel will initially be contracted from temporary employment agencies to eliminate the overhead associated with benefits.
The company will offer a competitive bonus plan to reward outstanding company performance. A bonus plan will be implemented, along with the chance to work for a company with tremendous growth potential. This should help attract and retain key personnel.
The company has created and is planning to manufacture a simple device, called the Digital Geographer. It will calculate the area from a walked perimeter in a fraction the time required by current area measuring techniques that rely on distance measurement wheel technology. The Digital Geographer has very few components so its manufacturing is expected to take little time.
No fair comparisons can be made between the functionality of Bottlieb’s Digital Geographer and the distance wheels offered by a range of other manufacturers. The Digital Geographer turns complex area measurements into an easy task. The Digital Geographer eliminates the need for multiple measurements, large estimations, complex geometric calculations, and many hours of calculation. It now requires only the ability to walk and push one button. The importance of accurate area measurement is well known by contractors. It is possible to reduce costs by better understanding the job’s scope in a competitive market.
Bottlieb Innovations, Inc. builds its products using local suppliers for materials and services. The company owns molds for making plastic components such as the wheel and encoder box.
Plans are underway for a follow-up product called the DG-3000. The DG-3000 will utilize two wheels and a differential based technology, rather than an electronic compass to determine directional changes. Bottlieb Innovations is also developing plans for future products that include software interfaces, as well as future iterations of the DG-3000 which may utilize a Global Positioning Satellite (GPS) system.
Analyses have shown that measuring wheels generate an average of $100M in global sales each year, with an average price of $50 (U.S. Dollars). Worldwide, approximately two million distance measuring wheels are sold each year. Bottlieb Innovations projects that approximately one-third the market’s demand is due to customers needing to calculate area and distance, rather than distance measurement. This estimate suggests that there could be a demand for 600,000.+ units annually in the area measurement segment.
Bottlieb Innovations is able to capture just 1% of the market, which will result in a company selling 6,000 units every year. As long as the market recognizes and values the superiority of the Digital Geographer and customer buying habits can be changed, the market potential is very strong.
There are three major market segments in the distance-wheel industry:
- Construction, which includes appraising, engineering and smallscale surveying.
- Agricultural, large-scale surveying.
Bottlieb Innovations will target existing buyers from 10 to 18𔈁.
Distance wheels are used in construction, surveying, and small-scale appraising industries. The Digital Geographer is targeted to buyers who use their digital distance wheels for measuring area. Bottlieb’s first sales will go directly to California’s rapidly-growing construction industry. However, the company plans to quickly expand its domestic as well as international sales.
Bottlieb’’s product is unique in that it represents a leap of technology. There are no direct rivals for the Digital Geographer product. Bottlieb hopes to sell the Digital Geographer in a large portion of current distance wheel markets. The current distance wheel market: Rollertape, Measure Man, TruMeasure, and Rollersure can be considered Bottlieb’s competitors.
Competitors in the distance wheel market typically sell through tool distributors. Some of the larger wheel sizes are sold through distributors of agricultural supply. Distributors take care of the product placement and customer service issues. Also, distance wheels can be purchased at large retailers of home improvement products (e.g. Home Depot
It is difficult to predict future growth in the measuring wheel industry due to the many privately-owned companies operating in it. Although worldwide growth in construction is a strong indicator that the market is growing, Bottlieb Innovations does not necessarily anticipate a unit sales growth in the measuring wheel industry over the next few years because it expects to gain market share from the existing market. Bottlieb’s growth depends less on the total market size expanding than it is on generating excitement and interest for the Digital Geographer.
Bottlieb believes that direct marketing and product image will help Bottlieb Innovations increase the demand for their products in the region, state and nation. This should happen within five years. Bottlieb Innovations will focus its efforts on global expansion after achieving initial success in domestic markets and securing favorable Web-based orders.
Financial ProjectionsBottlieb Innovations’â€™s sales forecast assumes a steady, non-seasonal increase and an average revenue level of $425 per product. We can lower the price for the Digital Geographer if we have significant sales volume. Our suppliers offer substantial discounts when producing larger quantities. However, we won’t allow the price to drop in order to cut into our profit margin.
Although it is hard to predict how many customers will pay $600 for a digital geographer, we anticipate that the number of units per month will increase to 100 within the first year. If demand for the product turns out to be greater than expected, the facility in Escondido is capable of producing up to 500 units per month. The company expects to make excellently large profits on sales by Year 2.
Bottlieb’s management aims to make the business financially viable within one year from the beginning of production. Production is scheduled to start in the third quarter. You can increase production as quickly as you need. If demand is strong, it may be increased to 500 units a month in the current facility.
Management’s challenge is to generate enough interest for the product in local and regional distance-wheel markets to reach sales of 100 units per month by the last month of Year1. This will ensure that the profitability goal is met, and will allow for further expansion into national and global markets.
Bottlieb Innovations is driven to ‘#8220;through constant innovation and creativity to extend the overwhelming potential of technology to practical and accurate, time-saving devices which enable increases in customer productivity. Bottlieb’s management believes this combination is essential to invent, market and produce breakthrough products.
Bottlieb Innovations’ only product is the Digital Geographer, but the founders and their management are always evaluating market feasibility for a variety of innovative product concepts.
The Digital Geographer product revenue is expected to be used to improve future iterations as well as to help fund research and development for new innovative products in possibly unrelated fields.
1.3 Keys for Success
- Bottlieb’’s Digital Geographer is so innovative, it creates an entirely new market. Bottlieb’s management has targeted distance-wheel customers and needs to convince them of Digital Geographer’â€™s additional value.
- You must ensure exceptional product quality, as your company’s reputation will first be built by users and word-of-mouth advertising.
- Financial health is dependent on accurate production planning, cost control, budgeting, and financial forecasting.
- The temptation to concentrate only on growth, while neglecting profitability, must be avoided.
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