Case A: Bio-Clear Air Purifier

BA 230 - THW - 1:00 - 2:20 PM

Group 4 - RANDOM
FLORENDO, Nicole Alexine V.
PAZ, Paola Joana F.
SAMSON, Alyssa Lorraine N.
UY, Julieanne Patricia C.
 Executive Summary

BIO-CLEAR air purifier was brought to the Philippine market in 2005. Its introduction
to the market was deliberately done as it would be the first of its kind to penetrate the
Philippine market for microclimate adjustors. However, after a year, target sales were not
met and there were a number of unsold inventories. This study addresses the problem on
sales performance by re-positioning and establishing a specific target market for BIO-
CLEAR. Four frameworks were used in analyzing the product and its environment, namely,
SWOT analysis, analysis of the current market segmentation, analysis of the current
position, and analysis of the current 4 Ps of the product. From the analyses done, it can be
said that BIO-CLEAR has no specific target market. It is clear that there is a big potential for
the product in the Philippines because of the current environmental conditions. However, it is
seen as another product comparable to electric fans, air conditioners, air purifiers, etc
There is also no clear marketing strategy for the product.
With the insights gathered from the analyses, it is recommended to narrow down the
target market to those who can really afford the product, the upper tier of the market, and to
those who really need it, health care institutions. An awareness of the current environmental
conditions, rising levels of air pollution, and the threats it poses to the general public can also
be done in order to attract more patrons for BIO-CLEAR as this will instill fear and the
immediate need for a product that will filter the air. Also, in order to generate more profit, it
can also be recommended that only the most expensive model will be made available due to
the sophistication of its features. Delivery of units to the rural areas must also be limited, and
just concentrate on harnessing the sales potential in the urban areas. Lastly, to further
promote BIO-CLEAR to the general public, it should be marketed to offices, clinics,
hospitals, etc
Statement of the Problem

In order to improve the sales performance of BIO-CLEAR, RW & Company needs to

re-position and establish a specific target market.

Analysis

In order to arrive at a suitable recommendation for Mr. Wan and RW & Company, an in-
depth analysis of the product and its environment will be done using four frameworks.

I. SWOT Analysis

Strengths
BIO-CLEAR is the first product in that has the ability to improve the quality of
air in an enclosed environment. It is dual purpose as it ionizes and filters the air at the
same time. The product is available in five (5) models based on the level of controls,
and each model has a different price point. Control options range from being
completely manual to being completely automated.

Weaknesses
First and foremost, the product is not popular and unknown to the majority.
Although available in 5 different models, the units all look the same and available
only in one color, which is cream on gray. The sole purpose of the product is to filter
air; however, this can only be used indoors, and is not portable, as it weighs
approximately seven (7) kilos. Also, BIO-CLEAR is difficult to use during the summer
season because rooms must be closed in order to prevent contamination of air; this
can be a nuisance whenever the weather is too hot.

Opportunities
With the increasing numbers of cars in the country, pollution levels are also
rising. As mentioned, more chest patients admitted to the Lung Center of the
Philippines have illnesses linked to air pollution. Another opportunity for the product
is that it is the first in the local market.

Threats
The primary threat to BIO-CLEAR is the vast number of competitors already
available in the country. Anything that changes the climate in enclosed spaces is
considered to be a competitor, which includes electric fans, air conditioners, air
ionizers, etc

II. Market Segmentation

Lifecycle
Parents who have young children, especially infants and toddlers, and desire
to raise them in a pollution-free environment.
People who live in the urban cities, especially those who live beside the
highways and main roads, because they are highly exposed to traffic-related air
pollution.
Families whose member/s has asthma and allergies particularly to dust.
According to a study on the prevalence of asthma in 12 Asia Pacific countries, about
12% of the Philippine population are suffering from asthma.
People with lung and cardiovascular diseases, as exposure to air pollution
further aggravates their condition.
Income
Monthly Household Income Models that they can afford

P8,000 and below -

P8,001 P15,000 -

P15,001 P30,000 2101, 2102

P30,001 P50,000 2101, 2102, 2103, 2104

P50,001 and higher 2101, 2102, 2103, 2104, 2105

Occupation
Those who work in the service industry like hospitals, wellness clinics and
spas are considered in the target market. Doctors are most likely to purchase this
product, as they know how to take preventive actions for airborne diseases.
People who work in places exposed to air pollution like manufacturers and
chemical plants.

Education
The air purifier might be affordable for people whose educational attainment
is any of the following: College, Bachelors Degree, Masters Degree, and Doctorate
Degree. They are well educated, and are aware and concerned for the condition of
their health and their family.
III. Current Position Mapping

The perceptual map above displays the market position of the BIO-CLEAR Air
purifier against its competitors and substitutes. The points-of-differences between
BIO-CLEAR, and its competitors would be the pricing as well as the benefits that
would be obtained from purchasing the product whether it would produce clean or
cool air. As seen above, in comparison to the other microclimate adjustors its price
point is definitely in between being expensive and affordable being that the retail
price of the basic model is roughly 60 percent that of a typical air conditioner, while
on the other side of the spectrum the top model has a price that is about 50 percent
more expensive than the basic model. With regards to its value proposition, BIO-
CLEAR leans more towards the clean air feature along with air purifiers and ionizers.
On the other hand, its rivals the electric fan and air conditioner highlights their ability
to create a cooler microclimate that addresses hot weather.

IV. Current 4 Ps Analysis

Product
From a country that is highly polluted, an air purifier helps in filtering out the
dust particles and technically cleans the air. BIO-CLEAR Air Purifier offers the said
benefits. It comes in five models, which only differs in the control options - from
strictly manual, to one that uses sensor technology.

Place
Mr. Wan and his suppliers offered the product to approximately every Filipino
given the current environmental situation in the country. It was sold in every SM
Appliance Center; however, it was not very much accepted especially in the
 provincial areas. Even though some residents of Metro Manila tried using the
product, the sales were still not able to reach the companys break-even point.

Price
Not all Filipinos can afford buying an air purifier to clean the air in their
homes, especially because the models were offered at a very high price. The prices
ranged from 60% of how a regular air conditioners cost, to a price which is 50% more
than the basic models.

Promotion
Evidently, the company doesnt have a clear target market. The product was
offered to everyone which affected the number of supply orders, and the costs. Their
limited funds did not give them the chance to promote the BIO-CLEAR Air Purifier in
a more effective way and made them rely dependently on sales discount promotions
of SM Appliance Centers.

Recommendation

I. Recommended Positioning

Based on a study around 43.3% of chest patients were found to have

ailments that were caused by air pollution and smoking. In 2003, a fatal flu
Severe acute respiratory syndrome or SARS caused a worldwide panic.
Government agencies were in a panic trying to determine the best counter
measures to prevent the outbreak in their countries. Global health scares are
usually the main drivers of sales for companies that are promoting germ fighting
products. These epidemics gave rise to the antibacterial mania, with the influx of
different variations of hand gels and the like. Similar to that of Beijings situation,
wherein theyve already issues two red alerts regarding the toxic haze that
shrouds the city.

Since Metro Manila is known to have one of the worlds worst conditions in
terms of ambient air quality the team believes that we should capitalize on the
antibacterial manila. Although BIO-CLEAR Air Purifier does not exactly prevent
these aforementioned airborne diseases, the team believes that we should
capitalize on the antibacterial mania. An article was released early last year
entitled Fear sells and Were all Buying: How marketers channel dark forces to
channel in Millions which solidifies the theory that fear mongering does indeed
work.

Being that the Philippine market has yet to identify itself as a Beijing in the
making; RW & Company should direct their marketing efforts to a niche whose
immediate concern is to have a germ-free environment such as hospitals.

II. Recommended Target Market

Based on the analyses done, it can be concluded that Mr. Wans company
had a very wide target market. Their initial plan for the air purifiers was to serve
everyone in the Philippines given the countrys increasing levels of pollution.
However, considering practicality, not everyone can afford, and is concerned with
clean air. Hence, it is recommended to narrow down the size of the target market
to those who consistently needed the benefit that BIO-CLEAR Air Purifier can
provide health care institutions.
 It can also be said that Filipinos are not yet fully aware of what the current
environmental condition can do to their health. Thus, as a form of product
introduction to our country, it is best that RW & Company, in the meantime, focus
on patients, most specially those who suffer lung diseases, who are at large could
be found in the hospitals or clinics.

III. Recommended 4 Ps

Product
With the smaller target market, it is recommended to limit the number of
models available, selling only model 2105. Because the company is now focused
on selling their product to higher classes, it is better to offer a product that will
maximize the whole purpose of selling it.

Place
Aside from SM Appliance Centers, BIO-CLEAR Air Purifiers must also be
distributed and sold in other appliance centers like Abenson. However, in terms of
nationwide promotions, it is best to limit the delivery of units to provincial stores. It
is also recommended to do a market research in the Greater Manila area so RW
& Company could focus more on selling in the urban areas.

Price
With the products current price, the company may now be able to go beyond
and cover the companys costs, given that RW & Company now caters to a
smaller target market.

Promotion
It is suggested that RW & Company also supply to medical equipment stores,
hospitals and clinics to further promote the product and the benefits it offers.