stair climbing trolley market

A330MED: Product Development Strategies (Group Assignment)

Table of Content

1. Individual Contribution for the Group Course work...........................................................3

2. Problem statement....................................................................................................................4

3. Product planning.......................................................................................................................6

3.1 PEST Analysis..................................................................................................................................6

3.2 Identify potential competitors...........................................................................................................8

3.3 Market research..............................................................................................................................10

4. Product Specification..............................................................................................................13

4.1 What is product specification?........................................................................................................13

4.2 Product identification......................................................................................................................13

4.3 Identify customer needs..................................................................................................................15

4.4 Considered factors when constructing matrices..............................................................................17

4.5 Matrices to be used.........................................................................................................................17

4.6 What customer’s needs are satisfied by the matrices......................................................................19

4.7 Final product specification..............................................................................................................20

5. Concept Generation................................................................................................................24

5.1 Identify three product concepts.......................................................................................................24

5.2 Discuss each product concept.........................................................................................................26

5.3 Choose and justify product concept to be used...............................................................................30

6. Analysis of the innovated product.........................................................................................31

6.1 Market Consideration......................................................................................................................31

7. Marketing & Financial Analysis............................................................................................33

7.1 Micro & macro environment...........................................................................................................34

7.2 Stage Gate process..........................................................................................................................37

7.3 NPV calculation for stair climbing hand truck (Concept 2)............................................................39

8. Conclusion...............................................................................................................................43

9. References:...............................................................................................................................44

1


2


1. Individual Contribution for the Group Course work

Darshana Rajapaksha (Team Leader):-

Develop the outline of the project report, literature review, script writing, report writing

Chamara Rathnataka(Team Member):-

Literature review, data compiling and report writing

Nalin Gamage (Team Member):-

Literature review, data compiling and report writing

3


2. Problem statement

Stair climbing hand truck is a perfect product for carrying loads towards the up and down on the

stair case. In day to day life, it’s very useful for carrying heavy loads such as pieces of furniture,

household appliances and the like, up and down a staircase. Main advantage of this product is

allows it to be readily moved while loaded, more particularly up and down a stair.

Stair climbing hand truck

Figure 2.1

(Source-Tooled up- Stair climbing hand truck) [Online image])

Basically, it include of at least one handle at its upper part ,main frame, bottom frame, pair of

wheel frames, pair of brackets, 6 wheels & wheel assembly. The wheel assembly comprises a

pair of rotary arms which are rotatable connected to the brackets.

In basic models, some problems were identified. Such as,

Lot of effort is required to adjust the inclination of the hand truck for provide stable

transportation of the loads.

As a result of operator gets out of control when climbing the stair, the accident will occur

due to the load roll back.

These trucks have a pair of ground engaging wheels which wear quickly because of the

heavy load bearing downwardly directly on the wheels.

4


Another problem is used only for small stairs because of the size of their wheels which is

limited to a maximum diameter due to the star-shape plate.

Need more space to be keep away when not use.

Only luggage type goods can be transport but Small items cannot be filled.

Cannot easily handle by one person due to manufacturing weight of the hand truck.

Innovation should do for improve hand truck for moving loads upstairs and downstairs while

ensuring a controllable transportation of the load along the staircase.as well as low cost.

Solutions for above given problems are shown below,

An accident can stop by using proper break system to stop on the middle of

the stairs.

Wear of the tire can reduce by increase the hardness & grip the tiers.

Small items can be filled after adding galvanized steel plate for main frame.

Uses hot dip galvanized plates for reduce manufacturing weight of the hand truck.

5


3. Product planning

Currently in Sri Lanka there are only few stair climbing trolley manufacturers that can be find.

And any of them haven’t mass production. But there are some imported stair climbing trolley in

the Sri Lankan market. Because of their high price due to high shipping cost, they are unable

gain enough market share. There are some basic stairs climbing trolleys in currently excise in Sri

Lankan market. Most of these products are unable satisfy the customer needs for their money.

Therefore we choose to do innovation to basic stair climbing trolley.

3.1 PEST Analysis

Figure –Pest analysis for stair climbing hand trolly.

Figure 3.1

6


Political factor

Since raw materials account for large number of industry turnover, the government of Sri

Lanka, should reduce taxes for import steel. Especially for Hot dip galvanized pipes &

hot dip galvanized steel plate.

The government should give some technical Knowledge and training for develop this

product as a Sri Lankan product.

Economic factor

Initial cost for this product is high. In rural areas, it is difficult to introduce these kind

products due to high market price.

Production cost may be increase due to Rising fuel bill and a rising in interest rates.

To avoid a cut in production, companies will consider about the exports for non-

developed countries.

Due to the increase of economy, urbanization also increases. As a result of this, lot of

urban people lives in flats & multi story buildings.so, this product definitely become a

must need product for their day to day requirements.

Social factor

The number of upper-class and upper-middle class families use this product in their day

to day household needs.

The young generation those who have low income, have good opportunity to join with

manufacture/sale of this product to increase their income.

Technology

By using new technology, weight can be reducing by use of lightweight materials.

By introduce new welding technologies (thermite & spot welding),

Strength can be increase.

7


3.2 Identify potential competitorsPorter’s five forces model

This is one of famous industry analysis model that use in the world. Porter’s five forces model is

use to determine the competitive intensity and to analyze the competitive strength and position

of a corporation. This model is used to identify whether new products, services or businesses

have the potential to be profitable.

Porter’s five force model.

Figure 3.2

Competitive Rivalry within an industry: By doing innovation to the stair climbing trolley can gain sustainable competitive advantage. Eg: Adding safety feature called “Anti-lock” (wheels are stopped when they are rotating backward). Using modern advertising methods like internet advertisement, publishing thro social network, can get advantage in marketing. Adding optional features with flexibility will help to be competitive in the market.

Threat of new entrants: Some foreign firms can invest in Sri Lanka because of low cost productions. But by been local brand, we can go to the customers easily by knowing their needs. By improving after sales service is help to gain customer loyalty to established product brand.

8

http://en.wikipedia.org/wiki/Customer_loyalty


Threat of substitute Products: After introducing this product in to the market, some companies might think to come to this market. Currently there isn’t many substitute products in the local market. Due to high import tax and high shipping cost it is very difficult enter to local market for international brands.

Bargaining power of customers: One of main feature in this product is low price. So it is easy to keep customer satisfied with low price. There are three different models for three different price levels. Therefore buyers can get their product according to their own affordability. Thro better distribution channel, product can easily deliver to customer. So it helps save the time and money of the buyer.

Bargaining power of Suppliers: Main materials used in the trolley are galvanized plates and bars. Currently there are enough suppliers can be found in the market. Due high exchange rate, prices of these materials are going high. But reduction of tax in material(Steel) is increase the availability. Therefore it will minimize the bargaining power of the suppliers.

9


3.3 Market research

Ideas of the market situation and the preferences of the consumers are exactly need before

launching a product to the market. Company should identify consumer’s desires, as well as

whom has the ability to buy this product & areas for distributed. According to these data

Company get an idea about the performances of their product among the market and how the

distribution is potential.

To increase the market condition, company has a fine awareness about the distribution of the

places such as Luxury houses, Factories, Hospitals, Offices, and Super Markets. This can give

rough idea about the amount of product according to the preferences of the consumers.

Population of Sri Lanka by district

(source-http//www.statistics.gov.lk)Figure 3.3

10


To understand the customer needs and their idea about this product, we did a research by using round 100 people in 6 districts. For the identifying the market research we ask several questions from each customer. Sample of customer survey sheet is attached in the appendix .

In survey we ask “Do you want to use stair climbing hand trolley to ease your work?” and the answers were categories in to district wise.

Colombo Galle Matara Kaluthara Rathnapura Badulla0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

NoYes

Table 3.1

According to the chart, most people in Colombo, Galle (urban) like to use stair climbing trolley. People in Badulla and Rathnapura district less like to use this product. That means people in urban areas are more likely to use this product. Therefore distribution network must more force on the urban areas.

Another question we ask in the survey is “What price would you expect to see this product to be offered?” and the answers are categories in to three groups.

11


Colombo Galle Matara KalutharaRathnapura Badulla0

2

4

6

8

10

12

Below 5000Between 5000-7500Over 7500

Table 3.2

This charts shows more people in Colombo and Galle like to spend more than 7500 rupees for stair climbing trolley. That means if the product good, urban people are willing to pay more their product. If the product is around 5000-7500 rupees, more people are willing buy this product.

Chart given in the below shows what aged people are like to buy this product.

This chart clearly shows that the people aged over 45 are more likely to use this product. Therefore the advertising & market strategy focus on these aged groups.

Table 3.3

12

Under 25 25 - 34 35 - 44 45 - 54 55 or over0%

5%

10%

15%

20%

25%

30%

35%

40%


4. Product Specification

4.1 What is product specification?

Customer needs are generally expressed in the “language of the customer”. They provide little

specific guidance about how to design and engineer the product.

To make the idea of “What the product has to do” development teams usually create a set of

specifications. Although, product specifications do not tell to how to address the customer

needs, but it support to achieve in order to satisfy the customer needs. The list of product

specifications is also one of the key information system used by the team throughout the

development process.

4.2 Product identification

Following are the currently existing products in the market;

01.) Multipurpose Hand Trolley

Equipments or goods fell off easily when filled with a large quantity. Possibility to being dropped and damage goods while transporting. Small items cannot be filled. Hasn’t ability to climb stairs.

Figure 4.1

Multi-purpose Hand Truck

[Online image]

02.) Multi-Purpose Metallic Trolley

Hasn’t ability to climb stairs. Difficult to handle by a person. High technique design. Big packing space. Expensive product.

Figure 4.2

13


GLOBEX Trolley Stair climber

[Online image]

03.) Stair Climber Hand Truck-01

Stability of the cart is not sufficient. Equipments fell off easily when filled with a large quantity. Hasn’t proper break system to stop on the middle of the stairs. Small items cannot be filled Only languages type goods can be transport

Figure 4.3

GINORMOUS Sealey Sack Truck

Stair Climbing 150kg Capacity

[Online image]


Stability of the cart is not sufficient. Equipments fell off easily when filled with a large

quantity. Hasn’t proper break system to stop on the middle of

the stairs. Small items cannot be filled

Figure 4.4

ABE Product and Services LTD

Trolley Selector [Online image]


Stability of the cart is not sufficient. Equipments fell off easily when filled with a large

14


quantity. Hasn’t proper break system to stop on the middle of the stairs. Small items cannot be filled Expensive product.

Figure 4.5

ebay120kg H Duty Stair Climb

ing Flat Bed Hand Truck Trolley

[Online image]

Following are the problems encountered with each existing product

Pricing : If a cost is moreover high it will be caused to decline the product share

of the market)

Product is bulky : required separate space to store. (Almost all the products in the market

require more space to store.)

Climbing of stairs : when the product traveling on the stairs. Stability of the system is an

important factor.

Heavy : weight of the product is very important feature. Product should be

handling by one person.

Protection of goods : It is very vital the protection of goods while moving by using trolleys

without fall off.

4.3 Identify customer needs

No. Part of the product Needs Importance

Rating

1 wheels Wheels rotate easily without any friction 1

2 wheels & wheel axial Easy to move without applying a much force (smooth 1

15


move)

3 try wheel unit Smooth climbing on stairs 1

4 bottom plate Less percentage of weight effect to arms while climbing with goods

1

5 trolley frame Trolley can pull without bending body while climbing

2

6 side cover plates Prevent drop and damage of the goods while transporting

2

7 handle Smooth comfortable handle 4

8 trolley frame Easy to clean 4

9 break system Can stop middle of stairs 5

10 height changer Adjust the height of the bottom weight plate 5

11 trolley frame Can be used for lift up plenty of commodities 1

12 completed trolley Light weight 1

13 completed trolley One person can handle 1

14 completed trolley Low price 2

15 completed trolley Long lasting 3

16 completed trolley User friendly quality product 1

17 completed trolley Limited space required to store 4

18 completed trolley Stability (Balancing while moving through the staircases)

1

19 completed trolley Product should have good value for money 1

20 completed trolley Capable of being use in both indoor and outdoor environments

4

21 completed trolley Materials used for the product should be recyclable 5

22 completed trolley Product should not dissipate any harmful radiation or chemicals

3

23 completed trolley Product should not cause damage or pollute the surrounding

4

24 completed trolley Attractive product shape 3

25 completed trolley Allows easy replacement of worn parts 216


26 completed trolley Last a long time with no need for repair or maintenance

1

27 completed trolley Trolley has to be handle a weight of at least 80kgs plus equipment

2

28 Powder coated painting

Can choose several of colours as prefer 5

29 Powder coated painting

Steadiness colour to the product 2

Table4.1

4.4 Considered factors when constructing matrices

Matrices should be complete: In practice several matrices may be needed to completely reflect

a single customer need.

Matrices should be dependent: Specification also indicates what the product must do, but not

how the specifications will be achieved. When consider the variables used in product

development some are dependent some are independent.

Matrices should be practical: Matrices will be directly analyzable or observable properties of

the product that can be easily evaluated by the team.

Some needs cannot easily be translated into quantifiable metrics: That matric is subjective

and would be assessed by panel of customers.

17


4.5 Matrices to be used

Metric No.

Need Nos.

Metric Importance

Rating

Units

1 1 Frictionless wheel rotation 1 N

2 3 Wheel sizes 1 mm

3 3,18 Balanced wheel unit 1 mm

4 4,11,18 Bottom plate fixed with transferring the center of gravity of weight towards the wheels

2 mm

5 5,7,11,

13,18,24,

26,27

Trolley frame with proper dimension 1 mm

6 6,11 Include side cover plates 3 mm

7 8,24 Proper smooth structure 1 mm

8 9 Easy & quality break system 5 N

9 10 Movable bottom plate 5 mm

10 12,13 Total mass 2 kg

11 14,1519,

20,21,22,

23,26,27

Use materials to production 3 -

12 16,17,18,

19,20,23,

24,26,27

Complete trolley design 1 -

13 28,29 Attractive and quality enamel colour painting of the product

3 -

14 14 Unit manufacturing cost 1 -

15 8,25 Time to dissemble/assemble for maintenance 2 -18


Table4.2

4.6 What customer’s needs are satisfied by the matrices

Table4.3

19


4.7 Final product specificationFor achieve this purpose cost model should be prepared.

4.7.1 Develop a cost model of the product

The goal of this step of the process is to make sure that the product can be produced at the target

cost. The target cost is the manufacturing cost at which the company and its distribution

followers can make adequate profits while still offering the product to the end customer at a

competitive price.

Concept-01: Trolley with fixed bottom and base with hot dip galvanized plates

Component Qty High Price

Rs.

Low Price

Rs.

High Total Price

Rs.

Low Total Price

Rs.

Wheels 6 Nos. 375.00 350.00 2250.00 2100.00

½'' Hot dip galvanized pipe

20'-10'' 1500.00

(19'-0'' length)

1350.00

(19'-0'' length)

1645.00 1481.00

Cutting & bending (Hot dip galvanizedsteel pipe)

350.00 300.00 350.00 300.00

2mm (3'-0''x1'-6'') Hot dip galvanized steel plate

1 No. 3320.00 (36''x96'' Sheet)

3120.00

(36''x96'' Sheet)

622.50 585.00


1 No. 3320.00 (36''x96'' Sheet)

3120.00

(36''x96'' Sheet)

207.50 195.00

Cutting & shaping (Hot dip galvanized steel plates)

125.00 120.00 125.00 120.00

4mm (0'-9''x0'-6'' x0'-3'') Hot dip galvanized steel plate

1No. 6540.00 (36''x96'' Sheet)

6240.00 (36''x96'' Sheet)

77.00 75.00

20


Ball bearings 2 Nos. 170.00 150.00 340.00 300.00

12mm Welding rods 0.5 kgs 280.00 240.00 140.00 120.00

½'' Rubber bushes 2 Nos. 20.00 15.00 40.00 30.00

Assembly 600.00 500.00 600.00 500.00

Powder coated painting 550.00 500.00 550.00 500.00

Total 6947.00 6306.00

Table4.4

Concept-02: Trolley with bottom and base with hot dip galvanized plates and shrinking side

plates with hot dip galvanized plates


Rs.

Low Price

Rs.

High Total Price

Rs.

Low Total Price

Rs.

Wheels 6 Nos. 375.00 350.00 2250.00 2100.00


30'-10'' 1500.00

(19'-0'' length)

1350.00

(19'-0'' length)

2435.00 2191.00

Cutting & bending (Hot dip galvanized steel pipe)

350.00 300.00 350.00 300.00


1 No. 3320.00 (36''x96'' Sheet)

3120.00

(36''x96'' Sheet)

622.50 585.00


1 No. 3320.00 (36''x96'' Sheet)

3120.00

(36''x96'' Sheet)

207.50 195.00


2 Nos. 3320.00 (36''x96'' Sheet)

3120.00

(36''x96'' Sheet)

605.00 568.80

21



125.00 120.00 125.00 120.00


1No. 6540.00 (36''x96'' Sheet)

6240.00 (36''x96'' Sheet)

77.00 75.00




Assembly 600.00 500.00 600.00 500.00

Spray painting 250.00 200.00 250.00 200.00

Total 8042.00 7284.80

Table4.5

Concept-03: Trolley with moving hot dip galvanized bottom plate


Rs.

Low Price

Rs.

High Total Price

Rs.

Low Total Price

Rs.

Wheels 6 Nos. 375.00 350.00 2250.00 2100.00

22



20'-4'' 1500.00

(19'-0'' length)

1350.00

(19'-0'' length)

1606.00 1445.00

¾'' Hot dip galvanized pipe

0'-8'' 2000.00

(19'-0'' length)

1850.00

(19'-0'' length)

70.00 65.00

Cutting & bending (Hot dip galvanized steel pipe)

350.00 300.00 350.00 300.00


125.00 120.00 125.00 120.00


1No. 4900.00 (36''x96'' Sheet)

4680.00 (36''x96'' Sheet)

417.00 398.00


1No. 6540.00 (36''x96'' Sheet)

6240.00 (36''x96'' Sheet)

77.00 75.00

1''D - 1'-6''L Square Threaded bar

1No. 3200.00

(6'-0'' length)

3000.00

(6'-0'' length)

800.00 750.00

Top hand rotator 1No. 500.00 450.00 500.00 450.00




Assembly 800.00 650.00 800.00 650.00

Spray painting 250.00 200.00 250.00 200.00

Total 7935.00 7153.00

Table4.6

23


5. Concept Generation

Definition of a product concept:

A concept is a statement about projected product features (form or technology) that will yield selected benefits relative to other products or problem solutions already available.

The following criteria are looked for our concept:

Economies of scale needed in production volume

Technology the idea requires

Fit with manufacturing operations

Fit with marketing operations

A rough early screen was evaluated under the following factors:

Marker worth – attractiveness to target group

Firm worth – enhance the company’s competencies

Competitive insulation – can the product’s benefit be maintained

Idea generation is an ongoing process with contributions from inside and outside the

organization. Many market research techniques are used to encourage ideas including: channel

members, running focus groups with costumers, and the company’s sales force; encouraging

customer suggestions and comments via toll-free telephone numbers and website forms; and

gaining awareness on competitive product developments through secondary data sources.

One important research technique is generating ideas by from open-minded, creative thinkers

from inside and outside the firm.

5.1 Identify three product concepts

24


When identify the product concepts hand trolley should satisfied the key customer needs.

Generally when used properly, hand trolley can protect people from having back injuries and

other health problems that can result from lifting and carrying heavy loads.

Three product concepts were identified with their advantages and disadvantages as bellow.

Concept 01- Trolley with fixed bottom and base with hot dip galvanized plates

Advantages Disadvantages

Can easily move on stairs with its triple wheels Bottom frame fix to the base frame therefore

cannot move it

Product manufacturing cost is considerably

low

Small items can fill but difficult to move on

stairs.

Luggage type goods which width is more than

trolley base frame can easily transport

Concept 02- Trolley with bottom and base with hot dip galvanized plates and shrinking side

plates with hot dip galvanized plates


Can easily move on stairs with its triple wheels Bottom frame fix to the base frame therefore

cannot move it

Product manufacturing cost is moderate


trolley base frame can easily transport because

of shrinking side plates.

Perfect solution for carrying small items

25


Concept 03- Trolley with moving hot dip galvanized bottom plate


Can easily move on stairs with its triple wheels Small items cannot be filled

Bottom plate can move with relevant to the

equipment or luggage size

Product manufacturing cost is considerably

high


trolley base frame can easily transport

Bottom plate cannot move quickly

Difficult to carry heavy loads on bottom plate

Table5.1

5.2 Discuss each product concept

Concept 01: Trolley with fixed bottom and base with hot dip galvanized plates

Concept-01 engineeringdesigndrawings of the hand trolley as follows.

26


Figure 5.1

This trolley can move easily on stairs with its triple wheels. But bottom frame fix to the base

frame therefore it cannot move. Large size luggage type goods can transport easily while small

items difficult. Main advantage of this product is low manufacturing cost.

Concept 02: Trolley with bottom and base with hot dip galvanized plates and shrinking

side plates with hot dip galvanized plates

Concept-02 engineering design drawings of the hand trolley as follows

27


Figure 5.2

28


This trolley can move easily on stairs with its triple wheels. Trolley design with fixed bottom

and shrinking side plates with hot dip galvanized plates, therefore this trolley is perfect solution

for carrying small items as well as large size luggage type goods. Manufacturing cost of this

product is moderate.

Concept 03: Trolley with moving hot dip galvanized bottom plate

Concept-03 engineeringdesign drawings of the hand trolley as follows

29


Figure 5.3

This trolley can move easily on stairs with its triple wheels. Main advantage of this trolley is

bottom plate can move with relevant to the equipment or luggage size. But small type items

cannot be filled because there is no base plate with moving bottom plate, as well as heavy loads

cannot bear on moving plate which not strong enough. Further, this bottom plate cannot move

quickly. Main disadvantage of this trolley is high manufacturing cost.

5.3 Choose and justify product concept to be used

Concept selection is the process of valuing concepts with respect to customer needs and other

criteria, comparing the relative strengths and weaknesses of the concepts, and selecting one or

more concept for further investigation, testing or development.

For achieve the above purpose concept scoring is used to better differentiate among competing

concepts.

30


Concepts

Concept-01 Concept-02 Concept-03

Selection Criteria Weight Rating

Weighted score

Rating

Weighted score

Rating

Weighted score

Easy of handling

Light weight

Ease of manufacture

Durability

Manufacturing cost

Usefulness

Attraction

10%

20%

15%

15%

20%

15%

5%

4

5

5

4

5

3

3

0.40

1.00

0.75

0.60

1.00

0.45

0.15

4

5

4

4

4

5

5

0.40

1.00

0.60

0.60

0.80

0.75

0.25

3

4

2

2

3

2

4

0.30

0.80

0.30

0.30

0.60

0.30

0.20

Total Score

4.35 4.40 2.80

Rank 2 1 3

Continue No Develop No

Table 5.2

According to the results scoring, Concept-02 (Trolley with bottom and base with hot dip

galvanized plates and shrinking side plates with hot dip galvanized plates) scored best marks.

Therefore company production start with that product concept.

6. Analysis of the innovated product

6.1 Market ConsiderationAfter the product was introduced to the market, it’s very important to understand the how the

sales and profit changes with time. To understand this behavior there is analysis method in

marketing called product life cycle analysis. There are five stages in product life cycle.

31


Product development stage

Introduction stage

Growth stage

Maturity stage

Decline stage

Product life cycle

Figure 6.1

Product development stage– In this stage it is important to understand the current situation in

the market and identifying the market unidentified market needs. After that innovations need be

done to the product according to the customer needs. For that R&D must be stronger. Stair

climbing hand trolley has been develop to this concept.

Introduction stage – When the hand trolley introduce to the market following problems can be

occur

Low quantity of sales High advertising cost Low cash flow Distributors are hesitant to take new product

To minimize these problems there are solutions can be implement

Large promotion campaign to get consumers attraction.

32


Demand initially from “early adopters” Focused customer distribution network. Reasonable price

Growth stage - In this stage, sales are increasing rapidly. Therefore the profit also increasing. If

the trolley’s demand goes high the price of the hand truck can be maintained at high. If not, by

reducing the price can increase consumers’ quantity. Also in this stage cash flow can be positive.

And also the unit cost of trolley is can down due to high production. By expanding the

distribution and strengthening spending the promotion can improve the sale growing rate.

Maturity stage – This the stage is the most profitable. While sales continue to boost in this

stage but pace of the growth is at a sluggish speed. Simply due to the fact that brand awareness

is actually strong and marketing expenses will be reduce. In this stage stair climbing trolley is

getting older so the competitors may have be similar products. So there can be treats for market

share. To keep the stair climbing hand truck more time in this stage, there must be new

innovations need to be done to the product.

Decline Stage – In this stage sales are going down. The techniques that use in the trolley

become outdated. Because of sales are going low the unit production cost is going high.

Therefore the profit will be reduced. There some options can be done in this stage.

Keep up with the product assured in which competition will certainly exit. Reduce costs

in order to find more uses for the product.

Harvest it, reducing marketing support and coastline along until you can minimize

income can be made.

Discontinue the product whenever no more income can be made or there is new

innovative products need be introduce to the market.

7. Marketing & Financial Analysis

In financial analysis, company must be considered important things such as,

Identify the market potential.

Value of the target market.

Cost of the product.

33


General over head cost.

Necessary investment.

Rate of the product.

There are some competitors in the “stair climbing hand truck” market in sri lanka. So there is a

huge contest with those competitors in the market. At once, it is not easy to enter the market as

an innovated product and grab the customer’s desires. Top line and bottom line have clearly

identified and can make proper choice to develop the productivity simultaneously.

Value of the target market is another key factor in development process of the company.

Customers in the market can be categorized as domestic user & industrial users. So, requirement

of both parties may be different from the capacity and market price.

Cost of the product also plays an important role. So the total cost of this product may be varying

with the requirement of the customer. Price of the hot dip galvanized pipe & hot dip galvanized

steel plate are cost increasing factors of the product.

General overhead cost also consider at cost category. It mean, Maintains cost, salaries, wages,

building cost, electricity bills, marketing cost, transport cost, insurance cost, design cost must be

calculate as a cost.

To promote this product, the company should use “effective marketing strategies”. Advertising

is an ideal way to inform customer about this product. Such as, Newspapers and magazines,

Leaflets, Outdoor advertising billboards, FM Radio and television, Online Marketing & Posters.

It is not sufficient only from marketing; it should introduce to the Super-markets in the Colombo

region and main stores in Metro region. One week prior to the release of the new product it is

suggested to keep a poster in-front of selected super-markets regarding the new product. And

also collaborate with the company and super–markets can give a discount for the customers who

are the buyers of new product within this introducing month.

7.1 Micro & macro environment

Micro & macro environment are the two types of environment. Micro environment can be

divided into “internal micro environment” & “external micro environment”. The external micro

environment includes suppliers, customers and market intermediaries.

34


Supplier can control the material distribution. If they stop their distribution it will be directly

affected to the manufacturing process of the product. Sometimes it will be the end of the

production process.

Customer is the major factor of company’s destiny, who decides the life time of the company.

Intermediates are also directly affected to the business. Because they playing important role

between the customer and manufacture interface.

The internal micro environment can be divided into Management structure, organization strategies & Objectives.

Macro environment includes of demographics, economics, nature, technology, politics and

culture.

Figure 7.1

SWOT Analysis

SWOT analysis is an organized preparing method used to measure the Strengths, Weaknesses,

Opportunities, as well as Threats associated with any project or in a company venture. Any

SWOT analysis can be carried out for a product, location or individual. It requires specifying the

35


aim of the business enterprise endeavor or task as well as discovering the inner and outside

factors which are advantageous as well as unfavorable in order to be able for you to help

achieving which aim.

Figure 7.2

Here is the market SWOT analysis for stair climbing truck. By doing SWOT analysis we can

identify what are the Strengths, Weaknesses, Opportunities, Threats that the stair climbing truck

has.

Helpful Harmful

Strengths

Low cost product

Weaknesses

No market opportunity in rural

36


Internal Origin

Durability is high

Currently there aren’t any big

local competitors.

More features than ordinary

product.

areas.

Not a popular band.

There aren’t wide ranges of

models for different

consumers.

Distribution network is not

expanded.

External

Origin

Opportunities

Market is growing because of

new super markets and flats are

increasing

Solution for high lobour cost

Important duty is high for trolleys

therefore easy to competitive with

price.

Threats

Low cost products from china

Material cost can be increase

in future.

New technologies are coming

so quickly.

Big companies are opting to

use lifts

Table 7.1

7.2 Stage Gate process

Stage Gate process

Figure 7.3

In the Stage Gate process, lots of ideas arrives being brand fresh notions with various levels. Yet

irrelevant ideas are usually blocked from the top management of the system. Useful concepts

tend to be consuming to accounts. It's numerous stages such as “Scoping”, “build business case”,

37


“development”, “testing & validation” and “market launch”.

Following benefits may be accomplished by implementation of the Stage Gate process.

Speed up pace to the market.

Improved likelihood of product accomplishment.

Introduces discipline into an ordinary disorderly.

Reduce the re-work along with other kinds of the waste materials.

Improves concentrate by means of gates where poor project are usually killed.

Defines effective and efficient allocation of discourage sources.

Ensures any complete - no critical steps tend to be disregarded.

This stage gate process efficiently required to build profitable “business case” in the company.

First of all the company did “preliminary investigation” that is performed following the lots of

general market research .Lots of surveys was over to identified what is point in which consumer

required.

Plenty of urban consumers really desire to utilize the stair climbing hand truck for their day to

day household activities. The issue coming as a result of the selling price of the product is high.

This is actually the primary target market which usually company attempt to implement their

new product. After lots of studies, The Company discovers superb business case which others

were not included at present. Finally the company invented “Trolley with bottom and base with

hot dip galvanized plates and shrinking side plates with hot dip galvanized plates”. Determined

few errors are usually debug successfully as well as implemented excellent new product for the

target customer.

7.3 NPV calculation for stair climbing hand truck (Concept 2)

38


Assumed Discount Rate = 5%

Formula for Discount Factor = 1/(1+r)n

In here, r = Discount Rate

n = no of years

Assume the project is completed in year 0

Initial Cost for solar Refrigerator =100,000 .00

Expecting annual cost = 50,000.00

Expecting benefit in each year = 200,000.00

NPV analysis for coming 4 years.

7.3.1 NPV analysis for upcoming 4 years.

Discount factor, DF = 1/ (1+r)n ; where r = 0.05, n =1,2,3,4

Hence, Discount Factor for coming 4 years is shown below.

YEAR DISCOUNT FACTOR

00 1.00

01 0.95

02 0.90

03 0.86

04 0.82

Table 7.2

Calculate of NPV for stair climbing hand truck (Concept 2)

39


YEAR TOTAL

0 1 2 3 4

Cost © 100,000.00 50,000.00 50,000.00 50,000.00 50,000.00

Discount

Factor(DF) 1.00 0.95 0.90 0.86 0.82

Discounted

Cost (cxDF) 150,000.00 47,500.00 45,000.00 43,000.00 41,000.00 176,500.00

Benefit (B) 0 200,000.00 200,000.00 200,000.00 200,000.00

Discount

Factor(DF) 1.00 0.95 0.90 0.86 0.82

Discounted

Benefit(BxDF) 0.00 190,000.00 180,000.00 172,000.00 164,000.00 706,000.00

Discounted

Benefit-

Discounted

Cost (DB-DC) -150000.00 142,500.00 135,000.00 129,000.00 123,000.00

529,500.00

Cumilative

Benefits- Costs 150,000.00 57,500.00 192,500.00 321,500.00

444,500.00

NPV

Table 7.3

7.3.2 Return on investment (ROI).

ROI = Total Discounted Benefits - Total Discounted Costs x 100%

Discounted Costs

ROI = NPV x 100%

Discounted Costs

ROI calculation for stair climbing hand truck (Concept 2)

ROI = NPV x 100%

40


Discounted Costs

ROI = (529500.00/ 176,500.00) x 100%

ROI= 300%

7.2.3 Payback analysis

Pay back Analysis is another essential financial factor.

The Payback period of time can be a calculation for obtain a cash flow.

Payback collective benefit and also cumulative expense should not be zero & it should

be a positive value.

Large number of company have not greater perimeter associated with payback

Determine the payback period

The source as well as the budget of stair climbing hand truck innovation and also market

implementation by business financing loans, stakeholders assets to become retrieved the time of

payback decide in product planning stage.

Tabulation

YEAR CUMILATIVE COST

($)

CUMILATIVE BENEFIT

($)00 100,000.00 0.00

01 150,000.00 200,000.00

02 200,000.00 400,000.00

03 250,000.00 600,000.00

04 300,000.00 800,000.00

Table 7.4

Payback Period

41


Payback periodFigure 7.4

42

1 2 3 4 50.00

100,000.00200,000.00300,000.00400,000.00500,000.00600,000.00700,000.00800,000.00900,000.00

CUMILATIVE COST ($)CUMILATIVE BENEFIT ($)


8. Conclusion

In the current market, many kind of trolleys are available, but those are not in satisfaction

level with the customer requirements. Hand trolleys are used to transport, lifting recurring loads

like books, foods and gas cylinders etc. in places like houses, supermarkets, libraries and

hospitals. Trolley is often used by those who organize and stock merchandise in retail stores

restock. Store or move to upper level is not easy job; especially there are no lifting facilities. In

most of the building houses does not have elevators or escalators. Because of that People

required user friendly trolley for their day to day usage to carry goods and equipments up and

down through the stairs.

Any age group range especially in urbanized area needs that product rather than other areas.

Further this can reduce the human burden in their daily lives. When used properly, trolley can

protect people from having back injuries and other health problems that can result from lifting

and carrying heavy loads.

43


9. References:

1. Wesco Industrial Products Multi-purpose Hand Truck [Online image] Available from:

http://www.hiwtc.com/products/multi-purpose-hand-truck-268048-12145.htm

[Accessed 13/12/2012]

2. BASH-P INTERNATIONAL GLOBEX Trolley Stair climber [Online image] Available from:

http://www.bashpint.com/fire_safety/trolley_stairclimber.php

[Accessed 13/12/2012]

3. GINORMOUS Tolled-up.com Sealey Sack Truck Stair climbing 150kg Capacity [Online image] Available from:

http://www.tooled-up.com/Product.asp?

PID=26879&Referrer=affiliatewindow&source=affwin

[Accessed 13/12/2012]

4. ABE Product and Services Ltd TROLLEY SELECTOR Stair Climbing Trucks [Online image] Available from:

http://www.trolley-selector.co.uk/stair-climbing-trucks

[Accessed 13/12/2012]

5. Tool-Supply.co.uk 120kg H Duty Stair Climbing Flat Bed Hand Truck Trolley [Online image] Available from:

http://www.ebay.com/itm/120kg-H-Duty-Stair-Climbing-Flat-Bed-Hand-Truck-Trolley-/

180723573804?pt=UK_Lifting_Moving_Equipment&hash=item2a13f6e42c

[Accessed 13/12/2012]

6. Karl T Ulrich, Steven D Eppinger & Anita Goyal (2011) – Product Design & Development.

4th ed. TATA McGraw Hill Education Private Limited

44

http://www.ebay.com/itm/120kg-H-Duty-Stair-Climbing-Flat-Bed-Hand-Truck-Trolley-/180723573804?pt=UK_Lifting_Moving_Equipment&hash=item2a13f6e42c

http://www.ebay.com/itm/120kg-H-Duty-Stair-Climbing-Flat-Bed-Hand-Truck-Trolley-/180723573804?pt=UK_Lifting_Moving_Equipment&hash=item2a13f6e42c

http://www.trolley-selector.co.uk/stair-climbing-trucks

http://www.tooled-up.com/Product.asp?PID=26879&Referrer=affiliatewindow&source=affwin

http://www.tooled-up.com/Product.asp?PID=26879&Referrer=affiliatewindow&source=affwin

http://www.bashpint.com/fire_safety/trolley_stairclimber.php

http://www.hiwtc.com/products/multi-purpose-hand-truck-268048-12145.htm

stair climbing trolley market

Documents

Transcript of stair climbing trolley market