Autosafe Products Ltd. Has Recently

Autosafe Products Ltd. Has recently developed their state of the art automotive safety device for the age four through twelve sectors. This device is called the Autosafe Seat Belt Height Adjuster, its intended purpose is to prevent children from "placing their arms over a seat belt" (Autosafe, npg). The following report will provide an in-depth analysis of the desirability and market sustainability of this product. Through careful examination of the automotive safety industry and other competitors as well as economic factors of scope and scale, a greater understanding of the potential for Autosafe's newest offering will be achieved.

The Marketing Environment:

An understanding of the marketing environment for Autosafe's Seat Belt Height Adjuster must closely examine both the scope and scale of the automotive safety industry and the automobile industry as a whole. Through a comprehensive PEST analysis, a greater understanding of the market susceptibility and sustainability of this product can be achieved.

The political framework for the current automotive safety industry is very favorable for the expansion of new safety equipment. The government has increased its rigid policy on automotive safety on both a national level as well as many locally sponsored initiatives that will have a positive affect on the automotive safety market. In the last year, new regulations "aimed at improving road safety through appropriate use of child restraints" were adopted by the Road Safety Ministry on a national level (AutoIndustry, npg). The inevitable result is that stiffer penalties and stricter enforcement are now being put into play to increase safety procedures. This ideally complements Autosafe's seat-belt product since it specifically affects the target consumer base. New policies dictate that all children over three or more years old must use "an appropriate child restraint when traveling in cars or goods vehicles fitted with seatbelts" (AutoIndustry, npg). The importance of this particular policy is that it shifts the attention of child providers to create a flexible solution to seat-belt safety for their children. This political shift will dramatically benefit Auto safety by creating an increased demand for their product. At the same time, the automobile industry is also providing sparks of initiative to dramatically help Autosafe. Industry giants such as Toyota, Ford and GE have all announced a redoubled push towards greater accountability in seat-belt technology for children (HAWTHORNE, NPG). As a result, this atmosphere could connote a greater likelihood of strategic partnerships with major automobile producers in the future. The patented technology innovation of Autosafe could possibly be a complementary device for major auto manufacturers given the current legal and social emphasis on childhood safety.

From an economic analysis, Autosafe is adequately positioned within the market to take advantage of several converging economic factors. First, the development of greater automobile safety regulations means that the risk of traffic violations are far more economically damaging than the additional cost of protective equipment. At 12.99 pounds per unit, the Autosafe safety-belt product is an affordable option for most families with children. Other similar products within the market are marketed for as much as 39.99 per unit (HAWTHORNE, NPG). The strength in price competition implies that Autosafe has a distinct advantage in cost. Since the government has not provided any adequate supplements to their new laws on seat-belt enforcement, it can stand to reason that cheap and efficient products such as Autosafe seat-belts could easily corner the market and gain a tremendous market share. Since this industry has relatively low participation, Autosafe can fully take advantage of new demand to leverage its existing stake within the industry.

The social appeal of Autosafe is that it is extremely convenient and cost effective. The target audience of Autosafe, middle class families, is the exact demographic that owns the most automobiles. The appeal of affordability combined with the efficient and easy to understand design of the product will be attractive to the particular social class in question. Furthermore, the no frills solution will be much more appealing to middle class consumers than more high-technology options. On these fronts it appears that Autosafe has a distinct product advantage because their product is targeted towards the proper audience.

From a technology perspective, the Autosafe safety-belt has demonstrated several attractive features that will be essential to its success. On a foundational level, the key promotion of such a product is safety. Through Autosafe's dummy testing, it is shown that it has the technology to ensure perfect use of seat-belts for children aged four through twelve. However, the product at the same time suffers from the lack of uniqueness; there are many other players on the market currently who provide similar technology although not within the same price ranges. Technology therefore is Autosafe's biggest weakness because the market is currently saturated with similar products within comparable price ranges. Autosafe has not fully demonstrated a "unique" and distinctive technology advantage for its product.

To better under the market position that Autosafe currently wishes to occupy, a SWOT analysis of one of the automotive safety industry leaders will help shape a better picture of Autosafe's competitive landscape. Buckle Buddy is a product featured by My Precious Kid LLC, a company that specializes on designing safety equipment for children. Buckle Buddy has much particular strength that is associated with its design as well as cost and efficiency. The primary strength of this product is that it is extremely easy to use, with only one applied part; a plastic device that allows better adjustment of seatbelts, this product advertises itself as increasing comfort and safety for children. The design of this product means that it is lightweight and extremely easy to apply and use. As a result, it is viewed by consumers as a "no-hassle, no frills" option for child automotive safety. Furthermore, since this patented technology is so easily produced, the advertised price is only 6.99, which is substantially lower than the majority of child seat-belt products on the market today. The overall efficiency of design and affordability of this product is its main strength.

However, the Buckle Buddy does have several weaknesses, primarily that although it does help increase the comfort of most seatbelts for children it does not provide an ideal fit for most children. Aside from this technology issue, Buckle Buddy also has an extremely poor marketing tactic since it only provides sales online and through national retailers, it does not reach a wide enough audience to dominate the niche market. As a result, Buckle Buddy is an excellent product, but its actual results in terms of practical application are poorer than other industry competitors.

The opportunities for Buckle Buddy is tremendous, there is a strong market for their product because it is so cost effective and relatively efficient for its price. The increased legal scrutiny on child safety in the automobile sector has made such a product far more desirable than in past years. Buckle Buddy's ability to adapt to a better distribution and marketing technique for their product could allow them to dominate the lower-end niche market for such products.

The principle threat to Buckle Buddy is the slew of new products that are coming into the market due to increased demand. Products such as the Autosafe seatbelt could strongly impact the sales of Buckle Buddy because it presents a much better technological innovation within this sector. Price wars could become inevitable as more and more similar products come on the market. Although currently Buckle Buddy is at the very low end of the cost spectrum, when higher end products begin to become more affordable it could dramatically reduce the desirability of Buckle Buddy as a consumer product.

In general, the automotive safety industry is a growing market. It has expanded from a small specialized niche market to a multiple operator competitive landscape. Recent changes and greater awareness of the implications of automotive safety has also increased the desire for safety belt related improvements for children.

Possible influences on the market will depend strongly on governmental regulation and overall vehicle safety. As more automobiles come with state of the art safety technology, the market for additional safety measures may decrease. However, tighter protocol on a national and local level could on the other hand create greater demand. The demand for this industry is in many ways very artificially created and thus strongly dependent on several underlying factors.

Segmentation

The market segmentation for the automotive safety industry in application to safety belt technology is split between three distinct tiers. Infant car seats, children's seat belt adjusters, and adult seat belt adjusters, all three of these product segments have multiple competitors and are increasing in intensity through a variety of reasons. Autosafe's primary segmentation strategy is to solely focus on the children's seatbelt consumer base. This consumer base is the largest of the three segments because it provides for a broader age range, but also because there is less market saturation than with the other two segments.

The target market for Autosafe's newest product is family consumers with children between the ages of four to twelve. This segment is very liquid in that demand is artificially created through either legal enforcement or through excess protective instincts. As a result, the market itself is very fickle and although this target market has a very strong participation rate, it is a very volatile and price sensitive market. There are several problems with this target market that Autosafe will be challenged by in promoting their product. The most important is in the product specific nature of this consumer base. Consumers within the target market are extremely aware of the "luxury" nature of this safety product, and therefore are extremely sensitive to design as well as price. This implies that Autosafe must be both the winner within the design and price category in order to become a competitive force within this niche market. Target consumers are looking for a design that is ideally suited for their children, but that is also low maintenance in installation and use. There are several products already on the market that features such a design such as the Buckle Buddy discussed in the last section; however Autosafe enjoys a unique technology advantage in its product as it guarantees the perfect fit of their product.

Although its price is relatively expensive compared to certain other products, it is medium ranged compared with high end products within the market. It is inevitable that within this target market, a price war will ensue and therefore Autosafe must be prepared to lower its price to become more competitive.

One of the primary concerns within this target market is that market positions are constantly weakening due to increased competition. This is especially true within the past year due to the influx of Chinese manufactured products that has flooded the worldwide market. Since Chinese and other Asian manufacturers are able to produce such products with significantly lower cost, they will always out compete on cost. They are currently flooding the market with products that are at least half if not more discounted than mainstream brands. This dramatically impacts the positioning of Autosafe within the target market. While before it could have positioned itself as a low cost provider of children's seatbelt adjusters, its product now must be positioned as a technologically superior and brand superior product to Chinese imitators. Since it can no longer compete on price effectively as long as Asian manufacturers develop a strong presence within the market, it can still retain a strong market share if they adapt their position to a quality-based position. There are several challenges to this, the most important concern being that such a position could very well backfire on Autosafe since its technology is not significantly superior in quality to many other products on the market. Despite these challenges, Autosafe's primary advantage is that it has entered the market at a time when demand is high due to safety concerns and government regulations; as a result it must create an immediate brand for itself as a quality leader. Since safety products are products that centers upon the concept of perfect usage, consumers will be much more attracted to products that guarantees product usage than superior price.

The competitive landscape within this target market is increasing because of social and political factors. However, the expansion of the competitive landscape has been overshadowed by an increase in demand for such products on the market. The key for Autosafe is to position itself as a recognized brand leader because the slew of foreign and domestic competition can begin a price war rather than quality war.

Marketing Communications

Marketing communications becomes one of the central concerns for Autosafe and other industry players in an attempt to gain a dominance of the market share. The marketing strategy of current players within the target market is decentralized and at times highly ineffective. Since this is a niche product, marketing ploys are traditionally grassroots rather than full marketing initiatives. However, with a product market where differentiation is not substantial, it is imperative that market communications be performed at an optimal level with limited resources.

The preferred method of most competitors within the market is to use retail marketing rather than direct marketing. One such example is the LooPo Seatbelt Adjuster. This product has been on the market for three years and it's primarily-based within the United States, although it now has a European office attempting to gain greater market share. The product depends on agreements with retail giants such as Wal-Mart and Price-Cut to stock and promote their products. This strategy is effective in the sense that LooPo increases its exposure to a wider selection of consumers because they are credited with the legitimacy of large retailers. At the same time however, it leaves itself with a low selling point since it must compete with other retailed products that are similar in design and features. As such, LooPoo is forced to brand itself as a convenient and cheap consumer product that competes with similar products on price (in this case 7.95 for two units).