4.0
Market Analysis
Digital Universe, Incorporated (DUI) will offer design engineering and consulting services to anyone who needs expertise regarding breath analyzers as well as anyone who needs a system designed and developed. The market for breath analyzers is currently growing very rapidly. There have been many documents published that show an increase in the number of alcohol-related traffic accidents. Consumption of alcohol does not only presents risks behind the wheel of a car, but also can cause long-term damage to one’s health, as it is becoming apparent that many consumers are unable to make a healthy decision of when to stop drinking. The breath analyzers engineered at DUI are intended to aid the users in making a safer decision regarding this manner. There is also a market for breath analyzer systems in law enforcement. Though this market is not currently as large as the entertainment industry, it is also growing very rapidly. The very accurate breath analyzers used by law enforcement officials originally served as the standard to which the DUI products were measured up to. As more research is done and more sophisticated systems are developed, the Mississippi Highway Patrol is showing an interest in our breath analyzers. Also, manufacturing companies are beginning to do the same type of research that is being done at DUI. As the manufacturing world seeks to become more and more efficient, new and more accurate systems that are able to meet the needs of these consumers will be needed to allow for analysis of current processes. 4.1 Market Share
Currently, the DUI has a very small market share that is steady. Alchohawk is a customer of DUI that employs our expertise with current breath analyzer systems as well as design services for the Portable BAC Analyzer. The Portable BAC Analyzer is a product that was originally developed by DUI and was manufactured by Alcohawk. 4.2 Customer Needs
Customers in the breath analyzer market require systems that can perform accurately regardless of the environment in which they are used. As accurate breath analyzer systems are often quite expensive, some customers will also need systems that are relatively inexpensive as well. These will mainly be consumers of alcohol rather than law enforcement officials. DUI will cater to these customers by designing inexpensive, but accurate breath analyzer systems that are reliable enough to be used in research. DUI will also provide consulting services to help researchers use the breath analyzer technology that they already have to solve their problems. However, not all breath analyzer customers have concerns about price. The field of law enforcement is concerned with breath analyzers that are as accurate as possible, regardless of the price. For these customers, DUI will provide design high-performance breath analyzer systems with a focus on an automatic periodic calibration system, as well as a manual calibration
system. A great deal of expertise is often required to operate such systems properly. Because of this, DUI will provide consulting and on-site assistance and expertise as necessary to ensure that the device is operated properly. 4.3 Attracting Customers
Breath analyzer technology is a somewhat general market. Advertising campaigns on television and radio would likely work well in targeting consumers. Another method to attract and maintain customers in this market is to build a reputation of excellence and expertise in breath analyzers with previous customers. DUI has done this with its first customer, Alcohawk. In addition to building a reputation, sales visits will be made to several different breath analyzer manufacturers to promote the products and build a customer base from which to expand the business. 4.4 Pricing Strategy
In general, the pricing strategy that DUI will employ is one that will incorporate the cost of development into the price. DUI will mainly contract with customers to design new breath analyzers to meet the specific needs of that customer. Prices will vary greatly based on the needs of the customer, the constraints of the system, and the time required to design and develop the system. DUI will also offer consulting services to provide expertise in breath analyzer systems to customers who need that expertise for whatever reason. The standard consulting fee will be $200 per hour. In addition to the above services, DUI will sell its products, such as the Portable BAC Analyzer for a retail price that is four times the price to manufacture the product. This will provide a large profit margin, but still allow us to sell the product for a reasonable price. 5.0 Strategy and Implementation
To build a customer base, the Digital Universe, Incorporated will begin by making sales visits to several different breath analyzer manufacturers. There will be two purposes of these visits. First, we will demonstrate the accuracy of the breath analyzers and offer them to these companies for a specific price. Second, we will offer our design services to these companies to design a new breath analyzer system that will allow more accuracy and reliability. All three of the founders will be involved in these visits and presentations. Maintaining and expanding a working customer base will be the focus of the company for the next six months. Once our customer base was established and new projects were contracted, the management responsibilities were divided. Jodie Williams is in charge of sales and marketing, continuing to expand the customer base and garner new projects for DUI. Jodie is responsible for staying in touch with customers to ensure that their needs are being met and they are happy with the service that they are receiving. Neil Egger will manage the engineering division. Neil will manage the teams of engineers that design the new breath analyzer systems. Trey Fox will manage the research division. Trey will work in conjunction with Neil to engineer new products. Blake McMullan will manage
the consulting division of DUI. The consulting division will handle any technical difficulties that a customer has with a product. Also, any customer that needs expertise for any reason on any aspect of breath analyzer technology will contact the consulting division for assistance. 5.1 Budget
When we launched the business and began to expand our customer base, the Digital Universe, Incorporated needed $200,000. Almost half of this went toward marketing and developing an initial customer base from which to expand. Another $5,000 went toward obtaining the proper licenses, legal coverage, and permits. The final $50,000 went toward actual development of the initial projects that were obtained from the marketing and sales visits to breath analyzer manufacturers. The table below shows the start-up funding that was necessary and how that funding was obtained. Each of the three founders contributed $50,000 to the start of the company.
Start-Up Requirements Start-Up Expenses Legal, Licenses, Permits Equipment, Software Marketing Other Total Start-Up Expenses Start-Up Assets Needed Starting-Day Cash Other Assets Total Assets Long-Term Assets Total Assets Total Requirements Funding Initial Investment Neil Egger Jodie Williams Trey Fox Blake McMullan Total Investments Current Liabilities Accounts Payable
$5,000 $50,000 $100,000 $20,000 $175,000
$25,000 $0 $25,000
$25,000 $200,000
$50,000 $50,000 $50,000 $50,000 $200,000
$0
Borrowed Other Liabilities Total Current Liabilities Long-Term Liabilities Total Liabilities Table 1. Start-up Budget
$0 $0 $0
$0