Title of the Project/Case: eHelmetz
(Group Assignment 1)
Course: PGCBM 32
Name of the faculty: Dr Ashis K Pani
Subject: Leading Digital (LDDB17-3)
Submitted by (In case of Group):
Group No.:- 9
Mr. Nandam Suryaprakasharao DB17011
Ms. Poonam Patnaik DB17039
Mr. Rajesh Alevoor Kini DB17080
Mr. Siva Divakar Rajesh Kommuru DB17023
1. Define on what your business intends to sell. The product/service may be free, but has to be something with international audience/consumers and generate revenue.
eHelmetz is a range of smart motorcycle helmets which is highly customizable according to user’s preferences. It is the right fitment for the Bikers who need more than just a helmet especially for Long distance riders, Moto Vloggers and Passion/Hobby Riders, Premium bike riders, and Cross country riders. eHelmetz is a range of biker helmets which is highly customized according to user’s preference. The product offers a high degree of safety and wide range of features to the users.
To use advertising, promotion and other forms of communication to persuade Indian and International consumers to demand the product, the Pull strategy will help in high brand loyalty and high involvement in the category, when consumers are able to perceive differences between brands.
This is a first of its kind helmet offering such a wide range of attributes which would be a delight for any new-age biker. Needless to say this will enable the brand to create a large and loyal consumer base due to the competitive pricing and the vast range of features which no other helmet currently offers. With the ever growing market of android smartphones and digital devices to make life easy for people, eHelmetz would surely capture the new age biker’s imagination and fancy. It will be the next sensation which everyone would die to lay their hands on. It would create a new chapter in the history of smart helmets.
• This is a unique product which offers two tiered protection with Cushioning/padding and extra slim liners to absorb force of impacts and airbags that are deployed based on the pressure.
• Anti-glare visor and detachable.
• Easy washable cloth (high absorbent) lining to make inside cushion and riders hair last long from wetness like sweat or rainy conditions.
• Product Quality Leadership – We aim to be the product quality leader in the market, we strive to be premium and safety product with high level of quality and status.
• Our Market Survey suggested that consumers would buy 10000 units each month
• We are charging a price that covers its cost of producing, distributing, and selling the eHelmetz.
• Since there is tough competition in regular helmet market, we created break away positioning by creating a different ladder all together.
• We base eHelmetz price basis our customers’ perceived value, which is made up of product performance, delivery channels, warranty, and esteem.
2 Define the business aspects well. What would be your primary and secondary source of revenue?
Business Aspects: In every business it is necessary to have a fabulous business plan. With this we can figure out profit, loss, investment, cost of production and other things that are necessary for a healthy business. We have to go through the plan very well before the final launch of our brand.
We need to decide if our brand will manufacture helmets for bikes, bicycles, skating or anything else. Since helmets are protective gears, one has to be very particular about quality and size. We need to do a lot of research before launch of any brand or product. The success or failure of any product or brand totally depends upon the customer. So, have to take timely feedbacks from the people who will use our product. Know about their likes and dislikes for the product. They are the best judge.
We will also undertake a detailed and rigorous testing phase where we will offer riders to use our helmet and test it. Based on these live tests, we would take a comprehensive feedback which will in turn enable us to improve the product and make any changes if necessary. We would do the test in the same way new pharmaceutical drugs are tested by giving placebos. Within the test group we would distribute eHelmetz to some randomly selected riders and the rest of the riders would get some of the other available products in the market without them knowing that they are actually not using eHelmetz. This will ensure that the test brings out only genuine results and will serve as an authentic source of feedback and critique.
Needs Trend Growth
Primary research shows that bikers need more than a helmet, with certain features that gives a seamless riding experience. Eg GPS, Bluetooth, and rear-view.
Nowadays, Helmet aficionados not only want helmets for law compliance and safety but also look for Comfort, Additional Safety, Convenience, and Customizable.
The two wheeler market is largest in India which is expecting a growth of 9-10 % in coming year. This will generate sufficient demand for helmets. The downside is, we may not have repetitive customers, as generation may move to 4 wheeler segment in next 5 to 8years.
We have identified 2 types of revenue sources,
Primary Source of Revenue
A. Basic – Used only for the sake of compliance and short rides, cheap in cost, no protection.
B. Commoner – Basic protections at normal speeds, ISI certified and Branded
Secondary Source of Revenue
A. Top End – Offers good protection, stylish, with selective features like sun shades, modular etc. good looks, costly.
B. Premium – All feature loaded, High end, for the Tech Savvy, people who are willing to pay more for features. Basically the Elite or the Premium Class people will more focused for marketing.
C. Mountain Rallies – We would sponsor quite a few mountain rallies across the country and give out our premium helmets to the winners. This will serve multiple purposes of revenue generation, brand building and recognition.
3. What are your core capabilities?
• Easy to maintain
• Easy to service and upgrade
• Easy to repair and get spare parts
• The user can customize his requirement over and above the basic feature mentioned, can buy a basic helmet and can opt for retro fitted later.
• Bluetooth based Voice interactive device with noise cancellation, gives hands free control on various tasks that driver can perform without stopping the bike.
• Intercom facility between eHelmetz, connects to fellow drivers while on rides.
• GPS (voice based directions) integrated with headphone, can be used for driving directions and for other to track the rider.
• Rear-view visibility mirror fitted above the eye view inside the shell, to keep an eye and see what’s coming behind you.
• Style – Helmets are available in wide range of designs and colors.
• Customization – Persistently work on customization process in order to sustain in the competitive market. The helmet offers a high degree of safety standards. The biker gets delighted by providing high quality rear view mirrors, blue tooth, GPS system, etc. Providing continues growth in the quality of the product and reduction in the cost.
• Durability – The helmet quality is improving continuously by standard inputs and raw materials. This will enrich the operating life time of the helmets.
• Reliability – Maintaining an outstanding reputation by delivering reliable products. Try to reduce the malfunction and damaged helmets.
• Repairability – Providing ideal repairable functions like the users can fix the issues themselves within no time.
• Warranties ; Guarantees: eHelmetz assured the customers by providing guaranty and service warranty for 5 yrs. eHelmetz customers are extremely benefitted by extending the warranty by paying little extra amount.
4. How does the business deliver value to its clients? How does the network with its partners/collaborators (value chain) add to its core competencies?
• High level of safety
• An integrated communication system which makes Bike riding comfortable
The business delivers the above two desired values. The most important value delivered is high safety. The target customers are high speed bikers riding high end motorcycles. These will be typically biking enthusiasts who will be riding long distance and through different types of terrains. Safety will be of prime most concern considering the heterogeneous traffic and poor compliance to traffic rules, especially on highways.
It is also seen that bikers are known to move in groups or participate in rallies. A group of bikers always finds it a hassle to communicate with each other. Lot of the time can be saved, if bikers can coordinate and drive without having to stop. Another concern for bikers is the weather conditions which may require them to be cautious or even halt temporarily. An integrated system, which gives weather information, best routes or even tips from fellow bikers can go a long way in making biking a pleasant experience.
• Easy to maintain
• Easy to service and upgrade
• Easy to repair and get spare parts
The perceived values seen by the customer are mentioned above. The most important feature of this helmet will be that it is easy to maintain. All serviceable parts will be DIY (Do It Yourself) with demos available at the company website.
Since communication technology changes rapidly, the company offers free upgrades of all communication modules for first 2 years. Most of the software upgrades will be pushed through wireless module. Any hardware upgrade or repairs will be managed seamlessly, when the bikers give their bikes for servicing. When the bikes are not available during servicing, it is likely that the helmet will also be not in use. This is the ideal time to upgrade as the biker will not feel any downtime. All this will be coordinated with servicing center when a prior appointment is taken by biker for servicing. The registration number of biker will help identify the helmet model so that servicing and spare parts readiness can be ensured.
5. What is the cost structure in the industry vis-a-vis that of the firm?
Cost allocation is an important process for a business because if costs are misallocated, the business might make wrong decisions to overprice/underpriced a product or invest unnecessary resources in non-profitable products. To maximize profit, we find every possible way to minimize costs. While some fixed costs are vital to keeping the business running, we always review the financial statements to identify excessive expenses that do not provide any additional value to core business activities. The cost structure of the eHelmetz consists of several contents. The cost structure is not static. It has been oscillating with the customer demand. The primary costing parameters are as follows.
Research ; Development cost: The research team is continuously working on to develop the product design and technology implementation in eHelmetz. The R;D cost posses of Industrial Design, Computer-Aided Design and the software development in order to upgrade the product regularly. The overall R;D cost is 30 percentage of the all cost of the firm.
Manufacturing Cost: It include material cost, overhead cost, production cost, labor cost, packing cost, and equipment cost etc. The majority of the cost structure is based on the manufacturing process under continuous quality audits. As per the product line, there are several models of helmets are designed continuously. The material cost and production cost are choose as accordance with product customized
Inventory holding cost: The crucial part of the ecommerce business of eHelmtz is depends on the best practice of the Inventory holding cost. The best strategies are implemented in order to minimize the inventory holding cost.
Other costs: There are several costs which enable in the eHelmetz firm like quality assurance, sales force, market research advertising cost, promotion cost, distribution cost etc.
6. How is the value proposition unique and sustainable in the long run?
“Core value proposition is to provide riders the convenience of performing more tasks in a hassle free manner without having to lose time on trivial tasks”
There are various brands available in the market that sells helmets at different price ranges based on the body and built of the helmet which differs in safety standard levels, this is something that we do not follow, all the models or variants of our helmets are of same quality and same make that provides enhanced safety which exceeds standard safety regulations, Our variants or models are mainly differentiated based on the features available for selection to the customer that will enable them to customize the specifications based on the need and budget. Also gives the flexibility to customer to upgrade with additional features whenever necessary.
• Bluetooth based Voice interactive device with noise cancellation
• Intercom facility among same brand helmets
• Active GPS tracking
• Rear-view mirror
• Customizable Interior Paddings
• Automatic day/night anti-glare visors
The above mentioned features support our argument that the value we provide to the customer is unique as there is no helmet that is available in the market with all these features in-built as a product that is available with support, service and maintenance.
These features are derived and designed as a result of careful analysis after conducting surveys at primary and secondary level targeting various segments of users, this is one of the reason for us to market the helmets customizable is to suit the needs of most of the user segments. This is one of the key ; unique elements that is being offered in the helmets industry.
Our network of support and service that is built around the product as explained in the value chain section is one of our major strength that will enable us to support our products for long run which should be one of the major factors for any brand or product to sustain in the market for a long time. Our second major strength is the option where we give the user the flexibility to choose the right feature in the right time, which makes our customers to come back to us for addition of features addressing the need of customer retention.
7. How does the firm manage its distribution channels and relationships/liasions with the customers?
The distribution channels operated by the company can be classified into upstream distribution channel and downstream distribution channel. The upstream channels will be designed in a way to reduce inventory and warehousing costs whereas the downstream channels will be managed with a direct selling model to customers based on real time demand so as to not have excess or unutilized stock lying unused. This is particularly necessary as technological changes may make some of the electronic parts outdated or redundant.
The upstream distribution channel comprises of all vendors like helmet raw materials, Bluetooth and wireless manufacturing OEMs and visor manufacturers. These will operate on Pull strategy where the consumption by customer will drive the supply. The company will follow a Kanban kind of model where al consumptions by customers are tracked real time and conveyed back to its suppliers. The suppliers will then aggregate the demand into lot sizes suitable for them, taking into account the transportation costs.
The company to customer is direct selling with a zero channel distribution and will rely entirely on internet based websites or mobile based apps to get orders from customers. The maintenance of the website and apps will be from third party providers as the company would like to focus on its core business.
The last mile connectivity with customer will be delivered through courier services. The courier services will in turn be using multi-mode transport. It is necessary to integrate the tracking and delivery mechanisms with courier services, to give a seamless experience to the end customer for reliable delivery.
Following are different means which will be used for promotion which will convey the value preposition to customers
• Advertisement in newspaper and automotive magazines.
• Point of sale materials Poster/Sticker in bike/car dealership and electronics stores.
• Radio/TV ads.
• Outdoor adv on hoarding on public places.
• Affiliates on different automotive online websites like teambhp.com, autoportal.com etc.
• Demo of product at petrol bunks and electronics stores.
During introduction and growth phase of product continuous advertisement will be given in order to generate brand association.
• Premium positions/Banners of advertisement in online e-commerce portals.
• Direct email about the product and its value preposition to emailing list.
• Advertisement on Social Media- Facebooks pages/posts/videos, Twitter , Google ad , Search preference , You tube videos.
• Mobile marketing – ads and SMS, e-commerce app notifications.
• Discounted price coupons.
• Customer oriented – Getting shelves in Store/Eye catching position in selective stores authorised to sell the product.
• Trade oriented –Selling allowance for distributors.
• Online contest on road safety.
• Seminars and Awareness camp on driving safety awareness.
• Handover goodies/premiums in public places.
• Sponsorship of bike/car racing events.
8. How is the targeted customer contacted, acquired and retained?
One of the biggest challenges helmets market face is getting word out to the people who are most likely to become our customers. In fact, the whole goal of all helmets market is to “get the right message to the right person at the right time.” As marketers we also make sure we can do this at the best price possible. As a marketer, our primary goal is to find ways to identify who these people are so that you can create marketing campaigns that speak to them directly. This might sound pretty obvious, but too often marketers assume that what they offer the world has universal appeal and that their target audience is “everybody”! As much as we would all like to believe that, it’s never true and can get in the way of creating effective marketing campaigns that do talk to the right people. A customer can be sorted any number of ways based on an almost infinite number of criteria. But your customer is unique to our brands, so we’re going to want to identify the factors that can be used to create a better connection between their potential needs and what our company offers. Continuously thinking about how our target audience gets information by several channels like Television , Radio, Newspapers, WebPages, Online search campaigns.
Customers who have a high net worth which is defined by the frequency and volume of purchases made over a significant period of time are referred to as high value customers. Sometimes this term is also used to refer to customers who have a high potential for growth in accounts. Businesses spend a considerable amount of resources and energy towards acquiring new customers. While lead generation is important, what is even more crucial is retaining these customers especially the ones who provide the helmet business with regular cash-flows. Existing customers will be more receptive to up-sells and cross-sells than a new customer. Approach high value existing customers and provide them with bundled offerings at reasonable rates cut out exclusively for them. Marketers can use loyalty programs that are point based or use discount-based rewards along with redemption schemes to ensure that customers keep returning to our brand.
The best way to win new customers is through word of mouth of existing ones. Existing customers should be rewarded for referring new customers either by providing rebate checks or discount coupons or any other practice which would incentivize them to spread the word.
It is important to always delight high-value customers with superior customer service. For this purpose, we should have highly trained customer service representatives manage these high-value customers. High value customers should be immediately moved to the beginning of the wait queue and call routing systems should promptly connect them to trained customer service representatives immediately.
9. What are the sources of revenue and the structure of the same?
The primary sources of the revenue are the unit sales of the eHelmetz through ecommerce. This contributes around the 73 percentage of the total income of the firm. Our revenue structure ensures we are in touch with our customers’ needs; our growing global network ensures we are where they need us to be. The critical part of the revenue is based on the stetting the price of the product based on certain factors to sustain in the competitive market
Pricing Objective: Product Quality Leadership – We aim to be the product quality leader in the market, we strive to be premium and safety product with high level of quality and status
Demand: Estimating Demand Curves – Our Market Survey suggested that consumers would buy 10000 units each month
Estimating Cost: We are charging a price that covers its cost of producing, distributing, and selling the eHelmetz
Analyzing Competitors Costs, Prices: As Market research suggested there are no competitors in this category and eHelmetz creating a breakaway position
Price Method-Perceived Value Pricing: We base eHelmetz price basis our customers’ perceived value, which is made up of product performance, delivery channels, warranty, and esteem
Final Price: As per the category of the design of the helmet and technology built in it , customer interest and their economic position, we are provide a wide verity of products the prices are in the range of Rs 4999 to Rs 9999 . The category of the helmets as follows
• Price of Basic variant = around Rs. 4999
• Price of Luxury variant = around Rs. 6999
• Price of Premium variant = around Rs. 9999
The production and sales of our firm is best supported by the service centers, we are located in all the major cities to provide the best and satisfactory encroachment to eHelmetz,s customers. The service centers are widely spread across the country. The service providers respond within a time to resolve the issues of the customers. The spare parts of the eHelmetz , those are unique, reliable and durable. The revenue from the eSpare business is around 12 percentages as per the revenue structure. The second most revenue source of the firm is spares. The valuable equipment like blue tooth, GPS, server, headsets and mirrors etc also include in the spares of the ecommerce. The other revenue channels include software up gradation and special equipment etc.
10. What kind of technology setup would you have? How would you leverage technology competence for sustainable competitive advantage?
Our Brand of helmets is where “Safety and Technology comes together” or “Safety meets Technology”. Going by the feeling that technology to help better the safety.
We are marketing these products both online as well as offline, hence, we need to have an eco –system that connects both the systems and keep them in sync such that management of inventory becomes hassle free. We have decided to build this ground up – starting bottom build first and then go up connecting the business cycle. So, starting with distribution system then booking system or ERP system for each and every and every retail outlet partner be it big or small which allows us to keep a track of the inventory at various levels and then front-end site at customer level which will be our e-commerce site. Post building these systems at various levels, integrating them to work in tandem such that the information is passed and broadcasted across systems on real-time basis. Some of the major capabilities that we achieve by having such an eco-system are listed below in brief for your reference.
1) The number in the inventory system is updated even if the customer books a helmet in the e-commerce site or picks it up from a shelf off our partner outlet.
2) The details of our customer collected from the retail partner system or e-commerce system are immediately updated in to our customer database
3) In cases where the customer is booking the helmet in our e-commerce site, the information is immediately passed to the delivery system that enables or helps in planning the product delivery along with our logistics partner.
Having an updated technology system and keeping up with trends help us in improving the performance which enhances our user experience in order to maintain the advantage in this dynamic and highly competitive market from the established players or from the competition that emerges from the new entrants. Technology competence always allows us to provide the latest technology to our customers in form of new products or upgradable products which helps us retain the customer for longer period and overcome the competition and to always maintain the advantage or edge over the competition. We realize and appreciate the fact that technology is a very key aspect of any form of Business to sustain/ maintain or gain advantage in this competitive generation.
11. Describe in brief how this business plan would be different if it could be implemented only on a non-internet venture.
The model of the current business plan is completely dependent on the selling online through internet using websites and mobile apps. If this has to be implemented without using internet, the following changes will have to be made
• The upstream suppliers are also internet based and this will affect supply and turnaround time for supply. With no real time inputs on consumption of parts, production will have to be based on anticipation of needs, which may result in under or over production. This will result in need to introduce warehouses downstream, to store supplies/parts to fill the supply gap.
• There will be need to introduce a vast distribution network in major cities of India. Each distribution center will have to stack up products at regional level and probably sell it to retailers. Retailers will need big showroom in at least one city per state and in bigger states, at least 2. The zero channel distribution will end up as a multi-channel distribution network, escalating prices and reducing margin.
• The supply chain will be complicated through introduction of wholesalers and retailers, resulting in lesser margin for seller and higher cost to customer
• The product is already placed in higher price bracket for elite customers and is not volume based. Any further increase in prices will result in further escalation of product price, resulting in lesser volumes as customers may not be willing to buy it at very high price.
• Based on service records and spare parts purchased, data analytics will be used for anticipating needs of customers and enhancing customer experience. This will not be possible in non inter net implementation as collecting of data and analyzing them manually would be a huge time consuming tasks with turnaround time exceeding the purpose of the data collection.
• Marketing and advertising will be adversely affected as the strategy is to use social media like Facebook and WhatsApp to advertise and reach out to potential customers. Classical advertising will be expensive if mediums like newspaper and televisions are used for brand promotion. AR (Augmented reality) used to virtually get the look and feel of the helmet will also be not possible without internet enabled services for the same.
The conclusion is that a non-internet based venture will be ineffective for the company if it needs to respond to customer needs. Instant feedbacks from customers will help enhance the product from time to time, resulting is sustainability. Any plans for a global sales cannot be possible without internet based eBusiness model.