MARK 201 NEW PRODUCT PROPOSAL

Benchwarmer, the heated chair lift Group:

Sebastien Tremblay Benjamin Kerr Hayley Boyd Samuel Atalla Caroline Canning

TABLE OF CONTENTS

Identification of New Product3 Macro-environmental Impact7 Secondary Data & Sales Potential...12 Segmenting & Marketing.....14 Marketing Mix.16 Bibliography....20 Appendix.21

Identification of the New Product

What is the product? Our groups product is a chairlift for ski & snowboard resorts that is fully heated, to insure user warmth in the coldest of environments. It will provide comfort for riders on their way to the top of the mountain. The product itself would be a heated seat on the chairlift, able to accommodate 2 4 people. Each seat will be individually heated, with a battery pack as the primary heat source. The seats will be made of leather to insure durability. There will be optional add-on features available to purchase as well, allowing the client to customize their chairlifts. Some add-ons include: a pole holder & speakers. The pole holder would allow the skier to have their hands free at all times without having to worry about dropping their poles. The speakers allow the skier or snowboarder to be immersed in the desired ambience of the resort. The bar that users generally hang onto & lean their skis/snowboards on will be connected to the battery, which will be strategically placed underneath the chairlift. The battery will receive a charge every time it completes its circuit, ensuring that it is constantly charged. Why this product? Our group thinks that the heated chairlift would be a successful business-tobusiness product because there is already a significant percentage of skiers and snowboarders who enjoy the sport, but not the subzero conditions that accompany it. This would entice ski resorts to upgrade their facilities, in order to meet the needs of their market. Furthermore, there is already a base market for heated skier and snowboarder gear, including heated gloves, helmets, thermal jackets, as well as removable heat packs for boots. The introduction of a heated chairlift would allow many skiers and snowboarders to continue practicing the sport, even if the current conditions were too low for their initial liking. This would prevent skiers and snowboarders from leaving during extreme conditions, allowing the ski resort to generate higher revenue, due to increased traffic on their mountain. Although the product itself would be relatively expensive upon initial purchase, we believe that it will offer a high return on investment. We believe that its implementation will give resorts that decided to invest and upgrade their facilities a comparative advantage over their competition. Where is our market for this product? The test market for our product is Quebec. We want to see how our product fares on a relatively small scale before exploring other geographical opportunities. Geographic segmentation tells us that this province has a high ratio of winter sport enthusiasts, quite a large amount of snow in the winter seasons, and a large quantity of ski resorts. Quebec also offers is a broad demographic to segment. Regardless of age and sex, one can dislike the cold. This is advantageous to us because it broadens the scope of those that we can positively impact with our product, helping resorts develop better relationships with their clientele. This will,

in turn, aid us in developing an excellent business relationship with our primary clientele, the ski resorts. The main pull for the product will be to hold customers and attract new customers. We will attract new business partnerships by offering them a product that can turn their resort from mediocre to state of the art. Owners will see the advantages of this, because it will make their resort a more sought after destination amongst the winter sport community. Skiers and snowboarders alike will feel the comfort that our lifts provide, and come to the conclusion that the resort has their comfort held as its highest priority. Nobody enjoys himself or herself when theyre freezing. Once our new customers are acquired, we will work closely with them to maintain the heated chairlifts, and, in turn, build a stronger business relationship. It will hold current customers by allowing them to stay on the hill longer with much less discomfort. How will businesses find out about this new product? With trade shows, business-to-business magazines and presentations, we will be able to get the word out and inform those who matter of this new, innovative technology: companies in the industry. The appeal will be that the heated chairlift gives a more luxurious feel to the ski resort.

SOURCES
1) www.Nielson.com Nielson can help us with everything from developing our promotional strategies to giving us a vast quantity of research data to further inform ourselves. We, however, are primarily interested in their market research analysis & promotional strategies.

2) www.ipsos.com We are very interested in Ipsos ability to help us test ideas and concepts, as well as aid us with industry solutions (Travel & tourism seems to suit our needs best).

MACRO-ENVIRONMENTAL IMPACT
ECONOMIC ENVIRONMENT The main problem with regards to the economic impact will be if the weather fairs for a good ski season. If temperatures are on the rise every year for example, then this could have a very dramatic effect on our product, limiting the appeal. The resort purchasers of our products will need the appropriate capital to buy our product, being unable to have the desire to purchase the heated chair lift unless they feel they are in a financially comfortable situation. Skiers in general have a mid to high level of income, with high consumer confidence. This plays into the sale of our product because without the ski community, there is no justifiable need for the heated chair lift. If one year Quebec experiences very cold weather and low snowfall, this could drive many of the skiers away. The resort may find it more appealing then to buy our heated chair lift for next season, with the prediction that more people will ski because the ride up the mountain wont be as cold. The economy is one of the biggest macroeconomic factors to have an impact on the sales of our product, from the purchasing confidence of the resort to the desire to ski by skiers.

POLITICAL ENVIRONMENT Here are a few ways that political events could have an impact on our product: 1. Green movement, the effects of climate change: Some banks won't lend money to any resort below 3,000 feet, because the fear is that these resorts will have increasing periods without snow, and increasingly shorter seasons. If people start to worry about a ski resort's "footprint, then our product might become unfashionable. If getting back to nature, cross country skiing, and sleeping in cabins becomes a trend, then energy intensive creature comforts such as the lifts you are selling will be seen in a negative light. 2. Energy prices: Political decisions about energy sources will be the main impact with regards to the political macro environment. With a global energy crisis at hand, there will be a strong opposition to instituting a product that further consumes more than necessary, which would be readily available to political opposition. Here's a snapshot of the overall energy costs for running ski resorts in Aspen in 1999. You'll see electricity is by far the main cost. 7

http://peakstoprairies.org/p2bande/skigreen/Ch%203%20Measurement.pdf Electricity $1,869,253 26,231,512 kWh Fuel $325,748 Natural Gas $472,790 Propane $3,457 Water $281,295 Solid Waste $265,763 TOTAL $3,218,306 Here are the costs broken down just for lifts: The electric lift used almost $700,000 worth of electricity (equal to 38% of the total electrical use at the resort), More than 10 million three hundred thousand kilowatts, and produced more than ten thousand two hundred and fifty tons of CO2. The point is that any political decisions that lead to higher energy costs will make your lift, which uses more energy, less attractive to resort managers. 3. New ski resorts in controversial place: Google "controversial new ski resorts" and you find places with political opposition to the proposed developments across the northern half of the globe: Bulgaria, Sochi in Russia, Turkmenistan, as well as closer to home in places like Washington state and British Columbia. Political developments such as the emergence of environmental groups, particularly in historically non-democratic states, could have a great impact on whether proposed resort developments take place or not. This will in turn have a great impact to the growth of the market for our product.

NATURAL ENVIRONMENT The natural environment will play a large role in the sales of our product. There will be Readily available raw materials Partnership with the physical environment for sustainability The modern day chairlifts are currently made from mainly steel as the frame and foam like material with PVC covering for the seat. These materials will be available to purchase with ease due to the fact that there is a large market for both steel and PVC. Initial cost to attain these materials will be the major cost of the product Will have minimal upkeep. With cold weather being preferable, there will be a greater inclination to purchase our product. The subject of sustainability and a low carbon footprint are also very important to the sale of our product, not only to the purchasing customer (ski resorts) but also to the skiers using the chairlift. Energy saving will be key for the heated chair to stay an attractive alternative to regular unheated chairlifts. This is why having the lowest

possible energy consumption will be the best option. There will be a greater acceptance of the product if it has a lower impact on the environment, therefore with technology that will charge the seat warming battery would be introduced. This would help to reduce the overall cost of electricity, thus having a lower effect on the environment.

CULTURAL ENVIRONMENT Since our target is Ski Resorts across Quebec, yet our product directly benefits the resort in questions target customers, the location of the resorts will have a large part to play in the target markets values, perceptions, preferences & behaviors. A family in the Tremblant area is likely to be wealthier than one in the town of Mont St-Bruno, for example. This could potentially change their stance on the aforementioned topics. 1) Primary & Secondary Values Baby Boomers: they believe in living a healthy lifestyle Generation X: believes in family first, leaving a small environmental footprint, and a healthy lifestyle (as passed on by their parents) Generation Y: they are naturally tech savvy, yet have adopted the values of being environmentally friendly, living a healthy lifestyle & strong family values through previous generations). We can make these values coincide with our demographic positioning by conducting research as to the given population of each demographic in each ski resorts region. Peoples Views on Organizations: The bottom line is that the general public trusts us less. We feel that if we were to showcase our heavy involvement in making our environmental footprint as small as possible, this would benefit us in terms of sales. To acquire the EnergyStar stamp of approval would give us the exact image we seek. At our trade shows, it will show to resorts that we are thinking about more than just profits, and are conscious of our surroundings. It could also help the resorts use our product to develop a stronger connection with their clients, as it shows that they promote the use of environmentally friendly products.

 10 DEMOGRAPHIC ENVIRONMENT Our target demographic is a business owner who has a ski resort that they are looking to upgrade technologically. We will be targeting resorts with high altitudes (& thus longer chairlift rides & colder atmospheres) such as Le Massif, Mont Orford, Le Massif du Sud & Owls Head. Our demographic, other than this, will be difficult to segment. We are a relatively new product, and will be generating interest in our product through heavy utilization of trade shows & business-to-business magazines. Generation X: They are starting families, are concerned with energy efficiency & always put the family first. Baby Boomers: They have the most money & time and could see skiing as a decent vacation. Generation Y: They are young, thrill-seeking individuals who love being active.

Skiing and Snowboarding isnt cheap, and is done largely in-group settings. Families, groups of friends tend to plan trips. These people are thrill seeking, active, explorative individuals. They are paying roughly 40-50$ a day to ski and snowboard, and therefore, expect an exceptional experience. When they go to a ski resort, they expect excellent accommodations & a light, pleasant atmosphere. It is OUR duty to make out chairlifts fit the needs of this demographic in order for our target businesses to se a use in our product. This is the best way to generate sales. We need our chairlifts engaging (speakers to deliver music on an otherwise non-ambient ride) and heat (to make that long chairlift ride more pleasant) Many resorts have different specialties. For example, Mont St-Sauveur is best known for its state of the art snow-park, and therefore, we must incorporate youthful accessories to that chairlift (speakers, stickers). A mountain like Mont Tremblant is mostly known for its family friendly atmosphere, and therefore, we must allow the owners of Mont Tremblant to adjust the chairlifts to meet their specific target markets needs. Customization is key to satisfying all potential clients with 1 single product.

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 11 TECHNOLOGICAL ENVIRONMENT New products are constantly being redesigned and improved, therefore in order to seem viable and attractive to customers, a unique advancement must be added to the present technology, in this instance, the chair lift. By adding a heat source to the seat of the chair, a dramatic difference will be made to the riders journey up the mountain. Quebec is the perfect place to test for such a market, with its cold weather conditions and many available mountains for riders. Heat technology already exists in many modern vehicles and garments so the technology is readily available and needs only slight adjustments for chair lift application. Advancing the technology of the chair in this way will create the opportunity for skiers and snowboarders to stay out on the mountain longer, as they will not be driven home early because they are cold. Additionally, riders will have a more comfortable journey up the slopes, and will not be stiff with limited joint movement for their way down. It is important to note that with new creations in the technologic environment, safety has a high impact on the market of new products. If the chairlift is thought to have more risks for riders due to the addition of a heated battery source, then companies will not want to invest and become liable for malfunctions. Consequently, the lift must be tested many times and confirmed as completely safe to use.

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SECONDARY DATA & SALES POTENTIAL PART A & B

SOURCE #1:

"Ski & Snowboard Industry Update." Running to Stand Still: Why Growing the Sport Matters Now More than Ever. Canadian Ski Council, 011/2011. Web. 4 Apr 2012. <http://skicanada.org/_assets/files/model for growth november 2011.pdf>. The above graph presents the estimated total number of active domestic participants in snow sports market in Canada, as well as the average number of days skiing/snowboarding by Canadian active participants. These statistics are compiled on a per-year basis starting from the 2001-2002 winter season to the 2010-2011 one. The average number of days spent skiing/snowboarding by domestic Canadians has consistently increased, from 5.5 in 2001-2002 to 7.1 in 2010-2011.

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Beyrouti, Monique. "More Skiers and Snowboarders are Visiting Canadian Ski Areas." Travel Log. 19.1 (2000): 1-14. Print. This above source is a good source to use for determining an appropriate market size for our product because it deals with the issue of number of skiers and snowboarders. This number is essential in finding out the potential market size because without these additional skiers, it could mean the success or failure of a ski season. With the data provided, we can view different trends of ski tourism and what different provinces have done to increase the flow of skiers and snowboarders.

SECONDARY DATA & SALES POTENTIAL PART C

A potential price for our product would be approximately $4,000 Canadian per chair, which would seat three passengers. This was estimated based on the sale of a chair lift advertised online by Summit Lift Co. As stated at this site, this company is asking for $ 216, 011.04 Canadian for a three person chair lift that is comprised of 18 towers and has the capacity to transport 1, 800 persons/ hour. However, when looking at this cost it is important to note that this includes the entire set of all parts involved in the chair lift, such as towers and cables. In our product though, we are just looking to sell the chair itself. Therefore, the estimated price of $ 4,000 was determined by taking the overall number of chairs, 156, and dividing it by the number of seats in each chair, 3, which totals 52. From here, the overall price from Summit Lift Co. is divided by 52, equaling approximately $ 4,000. Additional factors that helped Summit Lift Co. and us determine a cost for our product included the slope length, vertical rise of the mountain and height needed for towers, power and projected speed needed to generate the lift from energy source, and capacity of the chair. Furthermore, the year of production of the chair and current market conditions will also have a pull on price fluctuations and creation costs of the chair. http://www.summitliftco.net/images/Garaventa_3_Seat_Detachable.pdf

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Segmenting & Targeting

Part: A
1) Primary Target Market Our primary target market will be business owners (ski resorts) in the Quebec region. This is a test market for the time being. Depending on profitability and product reception, we will expand. Geographic: World country: Canada. Country region: Quebec City or metro size: over 4,000,000 (slated to surpass 8,000,000 in 2012) Density: The areas we are targeting are rural. Many are located in the Laurentians, however, there are mountains in suburban areas (such as Mont StBruno) Climate: Quebecs climate is unique in that it incorporates both a maritime & mountain climate. Chances of precipitation & heavy snowfall are high. Operation Relevance: Since our company is based out of Quebec, transportation of our goods is kept to a minimum. Interaction and relationship management with our clients is highly interactive. We are able to respond to their needs quickly and efficiently. Sustainability: We feel that keeping our test market in the Quebec region is sustainable. Our group will not get too large, therefore reducing the risk of our resources being spread thin. It is large enough, however, to effectively see how the market reacts to our product (This region also enables us to measure our effectiveness before embarking on a nationwide marketing plan). 2) Secondary Target Market (Target audience) In order to attract out primary target market, we must offer them a product that their target market will see as beneficial, therefore giving their business a competitive advantage. The secondary target market is active males & females in the Quebec region who enjoy winter sports. Geographic: World country: Canada Country region: Quebec Country or metro size: roughly 8,000,000

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 15 Density: The areas we are targeting are rural. Many are located in the Laurentians, however, there are mountains in suburban areas (such as Mont StBruno) Climate: Quebecs climate is unique in that it incorporates both a maritime & mountain climate. Chances of precipitation & heavy snowfall are high.

Demographic: Age: From 12-64 Gender: Male & Female Family Size: Any size Family life cycle: Single, Young, Married, No children, Married with children, Married without children. Income: from $20,000-$100,000+ Occupation: Essentially anything. All that matters is that they enjoy skiing or snowboarding & live in the Quebec region. Generation: Baby booners, Generation X & Generation Y (teens & young adults) Behavioral: Occasion: Regular & special occasion users. Benefits: Service, Convenience, Quality. User status: Potential user, first time user, and regular user. User rates: Light, medium and heavy user. Loyalty status: none, medium & strong loyalty. Attitude toward product: Enthusiastic, indifferent, skeptical, trusting.

SEGMENTING & TARGETING

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PART B
Which target market are we choosing? The ski resort owners in the Quebec region. Quebec is our test market, since we are operating from within the region; our production & transportation costs are kept to a minimum. Also, Quebecs Geographics allow us to target many mountains (both in rural and suburban areas) for our product. We feel that by staying in Quebec for the time being, we can measure the effectiveness and demand for our product without too high of a risk, sustain demand & keep operational costs to a minimum.

MARKETING MIX
PROMOTION As stated in the segmenting & targeting segment of our proposal, our companys success relies heavily on our product being admired and seen as useful by the ski resorts target market. If the owners see no use for our product, then we will make no sales. It is for this reason, and under this model, that we have developed the following promotion plan. It will help us penetrate the market and generate legitimate buzz about our product with those who matter the most, the ski resort owners. The advertising mediums we will be utilizing are: LinkedIn: This website is an exceptional way to branch out your business to others who are in the field or are interested in what you do. The main users for LinkedIn are professionals. There are infinite amounts of industry experts and ways to connect with those who truly matter. o Why LinkedIn? We are a new company, promoting a new product; therefore, our budget for advertising must be spent wisely. We need to exploit the fact that this medium is a free way of establishing potentially fruitful business relationships. It is also a great source of reference for all those who are interested in our product and how it can help their business. * Development of a website: it is critical to have an excellent website. To meld with our LinkedIn account, we want to develop a state of the art corporate website. It will deliver all pertinent information that potential business partners need, as well as have some entertaining aspects that will allow us to showcase our products in action. Trade Shows: it is paramount to our business plan that we attend every pertinent trade show in the Quebec area. Owners must see our product and feel the quality

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 17 of our craftsmanship in order to truly appreciate the value it can bring to their resort. This will be where the bulk of our promotion budget is spent. o Why Trade Shows? They are an excellent way of demonstrating our product in front of an audience that is, for the most part, in our target market. There is very little clutter, and we have a great opportunity of formally developing business relationships. Becoming a corporate sponsor for popular events in Quebec: o Shake Down: This snowboard competition is a weekend long ordeal, in which the best snowboarders from across the world compete. It would be excellent exposure for our brand if Mont St-Sauveur (the host of the event) would agree to let us sponsor some facet of the event and for the professionals to see our chairlifts and publicly comment on how warm it keeps them. * Magazines: to have a small segment dedicated to explaining our new, cool product will also help us garner a buzz within out market and help get our product out of obscurity and into the minds of every skier and snowboarder. It will help garner a curiosity for our brand, which, with our website, will help users learn how they can connect with us. It must be said that, since we are still in the test market stage of development, that our trade shows, event sponsorship and magazines will remain local. It is important that we conserve our resources. It is for the same reason that we are going to apply a rifle strategy, since we know our target market and want to focus completely on them, as opposed to using the shotgun approach and wasting valuable advertising dollars for a new company who has invested quite a great deal into this new product.

PRICE When approaching the pricing plan of our chair lifts, we must look at the current demand in our primary target market; business owners of ski resorts in the Quebec region. Additionally, we must look at other factors that will affect the price of our product; these include the companys fixed and variable costs, the external competition from outside companies, and the companys overall objectives. In relation to fixed costs, our company will have no control over certain expenditures within the production and sales levels. Examples of these costs include expenditures such as current interest rates, heating, and executives salaries. This being said, the variable costs will vary during the production process of our product. The chair lifts will currently only be produced and distributed in Quebec, leading us to believe our costs in relation to gaining raw materials, packaging, and distributing our product will be kept at a reasonable level. As this is still a test market for our company, our price ceiling is linked to how valuable customers perceive our chair lifts to be. To elevate this perceived value in our customers eyes, we plan on taking a value added pricing approach. This means attached

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 18 value added features and services will be factored into our product to differentiate it from competition, elevate its value perception, support higher prices and build pricing power. Such heightened features include the heated battery pack, the leather seat exterior, and added on additional features like pole holders and speakers. Moreover, by increasing our level of pricing power, we will be able to justify higher prices and margins for our product without losing our market share. Price competition will be eliminated on the basis that customers feel it is worth spending more money on our chair lifts, due to the fact that they are perceived to have superior quality to those of competing brands. Consequently, while our company is aware we are taking a risk in creating a new high priced product, our objective is to achieve a level of target profit pricing, where our company will either break even or make the profit we are seeking.

PRODUCT The product that our company will be creating is a heated chairlift for the ski slopes located throughout Quebec, Canada. As previously mentioned we will be targeting the major companies who will buy our product and utilize it in their chairlifts throughout Quebec. The product itself was developed by our company. There are small electronic heating pads located within the natural seat pad of the chairlift itself. These new electronic heating pad also contain a thermometer in them which can be monitored within the chairlift control booth. The person controlling the chairlift can set the temperature that the heated seats will heat up to. This product will also come with a limited one year warranty that will cover defects or malfunctions within the first year of its installment. The primary purpose of this product is to create an even greater sense of luxury to an already luxurious sport/hobby. The secondary purpose is to attract more people to the ski slopes and have them stay longer. Most people go home because they become too cold to continue skiing; this is a way to warm you up while waiting to ski down the mountain. The more comfortable people are, the more likely they are to purchase another lift ticket at that same mountain. The longer people stay at the mountain due to their comfort, the more likely they are to purchase concessions. This is precisely what will attract the companies in Quebec to buy our product and incorporate it into their product. More sales for the Ski Mountains mean more and better contracts for the companies who build the chairlifts. This particular product can come at different levels, which will also carry into the pricing plan. Aside from the basic product, the companies who buy our product will have the option to purchase an extended warranty varying from 3 to 15 years at various pricing scales. There will also be an option to purchase a yearly maintenance package. The maintenance package will include yearly post season maintenance to make sure that all the heated lifts are working properly and everything is calibrated.

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PLACE Our product, the heated chairlift, will be sold exclusively in the Quebec market for the first few years of production. By allowing our product to start here, we will be able to get a good gauge of how the product fares. Furthermore, it provides a smaller, more controlled environment where we can see how the product is performing with regards to technology acceptance and effectiveness. This also keeps the maintenance of the heated chairlift easier to control, having to have fewer distribution and maintenance centers, all being closer to the business consumers ski hills. Since our product is new and we are entering an existing market, chair lifts, our product falls onto the product development area of the product/market expansion grid. As seen in price, this will increase the price compared to an unheated chairlift. With regards to our channel distribution, we will be using a direct channel from us, the supplier, to the consumer. We will ship directly from our manufacturing facility/warehouse to the customer via logistics (mainly trucking) providing a minimal amount of channel conflict. By using a business marketing channel, we the producer, can sell directly to the business consumer. This means that the channel length will be shorter and more effective especially since we are operating within small range, namely southern central Quebec. Another option, if the demand is growing faster than expected, is to use a multi channel distribution system, where we, the producer, act as the parent organization and have a multichannel distribution that goes as follows, Producer Distributor Dealers Business segment. This would be most effective if we were working outside of Quebec or if the demand grows at a faster rate, however since we are not, the best-suited option for the immediate moment would be to go from us, the producer, directly to the business segment. With all of these plans implemented, we can provide the most effective, cost and consumer relationship service possible.

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BIBLIOGRAPHY

"Ski & Snowboard Industry Update." Running to Stand Still: Why Growing the Sport Matters Now More than Ever. Canadian Ski Council, 011/2011. Web. 4 Apr 2012. <http://skicanada.org/_assets/files/model for growth november 2011.pdf>. Beyrouti, Monique. "More Skiers and Snowboarders are Visiting Canadian Ski Areas." Travel Log. 19.1 (2000): 1-14. Print. http://peakstoprairies.org/p2bande/skigreen/Ch%203%20Measurement.pdf http://www.summitliftco.net/images/Garaventa_3_Seat_Detachable.pdf www.Nielson.com www.ipsos.com

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APPENDIX
Page 3: What, where & why this product? Page 4: How will businesses find this product? Page 5: Source 1 Page 6: Source 2 Page 7: Macro-environmental Impact: Economic Page 7-8: Macro-environmental Impact: Political Page 8-9: Macro-environmental Impact: Natural Page 9: Macro-environmental Impact: Cultural Page 10: Macro-environmental Impact : Demographical Page 11: Macro-environmental Impact: Technological Page 12: Secondary Data & Sales Potential: Source 1, Figure 6 Page 13: Secondary Data & Sales Potential: Source 2 Page 13: Secondary Data & Sales Potential, Part C Page 14-15: Segmenting & Targeting, Part A Page 16: Segmenting & Targeting, Part B Page 16-17: Marketing Mix: Promotion Page 17-18: Marketing Mix: Price Page 18: Marketing Mix: Product Page 19: Marketing Mix: Place

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