Team Paper: Mi-Case

Team Paper: Mi-Case

Sydney Breidenstein
Dana Berghahn
Taylor Caprara
David Cohen

TowsonUniversity
ProfessorPeev
MKTG445001

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Team Paper: Mi-Case

I. Executive Summary

Based out of Sydney, Australia, we offer a luxury travel product at an affordable

price. Our product Mi-Case is a durable phone case infused with the technology from a

wireless travel router, essentially allowing the user to create their own high-speed

wireless connection using their existing service provider. By activating the phone case, it

will create a personal password protected Wi-Fi network that you can connect to through

your smartphone. Our technology uses existing 3G/4G/LTE coverage and allows you to

connect your mobile device to the phone case, avoiding excessive data usage. Mi-Case is

essentially a portable personal Wi-Fi hotspot that enables you to set up your own secure

Wi-Fi network.

When creating Mi-Case, we focused our primary target market on traveling business

workers in Australia. We used research from the Australian Bureau of Statistics along

with Australian Travel Trends to calculate the actual amount of employed Australians

over the age of fifteen who travel for business purposes. Once calculated, our primary

target market equaled 610,000 traveling business workers, of which we then determined a

penetration rate of 13% or 78,000 consumers. With a first year projection of 78,000 units

to be manufactured and sold, we then researched product pricing.

After extensive research, in order to calculate the price of our product Mi-Case requires

two materials to manufacture, both will be purchased in bulk on a weekly basis from our

chosen wholesaler providers. The first being protective phone cases that fit a variety of

smartphone models and the other a Small Wireless Travel Router. The phone cases will

be purchased from Case Escape for $3.25 a piece (Case Escape, 2016). The second

material required for the production of Mi-Case is a Small Wireless Travel Router that is

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capable of supporting all 3G, 4G, and LTE network devices. The wholesale provider of

these routers will be Alibaba, who will sell us our desired amount of routers for $24.60

per unit (Alibaba, 2016). The manufacturing costs to produce our product include an

annual warehouse leasing fee of $46,000 (CommercialView, 2016), an equipment cost of

$9,900 per machine (GlobalSources, 2016), and employee salary costs that vary

depending on the consumer demand of our product. All said and done, the production

cost of a single Mi-Case is $50.10 in the first year of sales, therefore we will sell each

Mi-Case for $120.00 leaving us with a profit of $69.90 for every unit sold or a 40%

return on interest.

Based off of our product price and primary target market, Mi-Case recognizes portable

wireless travel routers as its biggest competitor. While wireless travel routers are capable

of creating their own Wi-Fi networks, our product holds a much higher value due to its

unique structure. Mi-Case is compatible with all 4G, 3G, and LTE networks and

functions at a much higher rate than the leading competitors, allowing potential

consumers to communicate at a more efficient rate. Also, Mi-Case is a 2-in-1 product that

infuses the technology from a wireless portable travel router with a durable phone case,

keeping you connected and protected at all times.

As previously stated, being a new luxury business product, Mi-Case is expected to face

challenges when entering the technology market. The main challenges we may face

would be the duration of battery life and the dimensions of the case itself. The

dimensions of the case allow your smartphone to be protected at all times, eliminating the

risk of damage when dropped. As for battery life, Mi-Case has an expected life of six

hours at full function. Therefore, decreased operating times will extend the battery life

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when not functioning at max speed. Mi-Case has looked into future manufacturing

abilities of added technology to charge itself along with your phone, but will not be

releasing additional product information until their three year projected revenue has

surpassed itself.

II. Market Audit and Competitive Market Analysis

1. Analysis of Relevant Trends

When analyzing our relevant trends we based our product off of the Top ten strategic

technology trends for 2015 (ARN,2015). The first trend listed is Computing

Everywhere, which is ideal for our product because it enhances the Wi-Fi connection of

your mobile device. The article later states that Australian businesses need to prepare to

evolve into 'digital businesses' and that they will see a huge disruption to the marketplace

for every industry, according to Gartner research director, infrastructure software,

Michael Warrilow ( ARN, 2015). According to The Sydney Morning Herald, in 2011

ownership rates of a smartphone have skyrocketed from 37% to 64.6% in 2013 (Godfrey,

2013). These trends depict that an increased amount of Australians are becoming tech

savvy and also supports the fact that Australia has one of the highest rates of smartphone

usage in the world. Additionally, ABC news reported in 2013 of the 3,800 consumers

under the age of thirty surveyed, that nine out of ten were addicted to their smartphone

and every one out of five were checking their smartphone every ten minutes (Australia,

2013). Therefore, it was determined that the majority of Generation Y Australians were

considered to be addicted to their smartphones. Since such a high rate of the Australian

population relies on their smartphones on an everyday basis, we believe our product

would be a great way to penetrate the technology market.

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2. The Product: Consumer Needs, Benefits, Competition, and Positioning

In todays society, there is a constant need for consumers to always stay

connected. Mi-Case addresses this need by allowing constant communication between

business workers and their employer while on the go. Also, its unique features such as

being a 2-in-1 durable phone case makes it convenient and beneficial for our users while

differentiating our product from local competitors. With a regular wireless travel router

you must plug the device into your phone while carrying it separately. This can be very

inconvenient while traveling because you are most likely juggling your phone, the router,

traveling gear, and any other necessary work supplies at one time. Since the technology is

built into Mi-Case, you will always have a free hand to carry any additional travel or

work supplies.

The next feature that differentiates Mi-Case from its leading competitors is its

compatibility with many devices. The technology we are using is compatible with 4G,

3G, and LTE networks. Most travel routers are only compatible with one or the other,

leaving some users behind if their device uses another network, giving Mi-Case the

competitive advantage. Finally, Mi-Case performs at a faster speed than most other

wireless travel routers. Mi-Case will function at a speed of 300 Mbps whereas many

other wireless travel routers operate at speeds of 100-150 Mbps. This feature is essential

to traveling business workers due to the need for constant communication with their

employers, employees, or clientele while on the go.

When positioning our product, the top direct competitors for our product are wireless

travel routers. These devices can generate wireless connections, like our product, but

have very limited options. One must purchase a specific router that is compatible with

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their service provider network. Next, there are a variety of size and speed options to

choose from, which affect the price of each wireless travel router. This can become an

issue when changing service providers and needing faster operating speeds, ultimately

causing the consumer to have to purchase a new device to satisfy their future needs.

As for our indirect competition, phone accessories are our main concern. These

accessories include phone case companies such as an Otter Box, which is known for their

cases being very durable, Mophie, which has an extra battery built into their casing, and

Lifeproof, which prevents your phone from being damaged by water. The one thing these

cases do not offer is the unique and secure Wi-Fi component, which gives our product the

comparative advantage. Our case also provides password protection for your devices

secure network. This will set us apart by having the case owner create their own personal

and unique password that will lock out all other devices from being able to breach their

personal Wi-Fi network.

3. Target Market
Of the total Australian population, our target market consists of consumers ages

fifteen and over, making up 82.15%. Within this range, 11.6 million people are employed,

making up 61.4% of those fifteen years of age and over (Travel Trends, 2016). We then

wanted to create our market penetration rate to focus primarily on traveling business

workers, so we researched how many people travel in Australia, which was 6.1 million

people, of which 10% travel specifically for business purposes, providing us with our

primary target market of 610,000 Australians (Travel Trends, 2016). Therefore, in our

first year of production, our projected penetration rate is 13% of our primary target

market, calculating to 78,000 units to be sold.

4. Pricing: Cost Structure

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Table 1 displayed below lists both materials that are required to manufacture a

single Mi-Case, the wholesale provider that will supply each material, the device

compatibility each material is capable of supporting, and the price at which one unit of

both materials will be purchased for.

Table 1. Manufacturing Materials

Material Wholesale Device Compatibility Price per
Provider Unit

Phone Case Case Escape iPhone: 7/7s, 6/6s, 6/6s Plus, $3.25
5/5s/5c
Samsung Galaxy: S7/S6/S5,
Note 7/5/4

Wireless Travel Alibaba 4G/3G/LTE $24.60

Router

Total $27.85
Source: (Case Escape, 2016), (Alibaba, 2016)

The first material required for manufacturing a Mi-Case is a phone case that is able to fit

a variety of smartphone models. These phone cases will be provided by Case Escape, a

wholesale provider of high-quality phone cases, specifically catering to iPhone and

Samsung cell phones. Case Escape is able to provide our company with protective phone

cases that fit all iPhone and Samsung smartphone devices. The models of smartphones

this wholesale provider will sell us include all iPhone 7/7s, 6/6s, 6/6s Plus, 5/5s/5c

models and Samsung Galaxy S7/S6/S5, Note 7/5/4 models. Case Escape will sell each

unit for $3.25 with any order over 5,000 units (Case Escape, 2016). The second material

required in the production of our product is a Small Wireless Travel Router that is

capable of supporting all 4G, 3G, and LTE network devices. The wholesale provider of

these routers will be Alibaba, an e-commerce company that focuses on selling a large

variety of products in large quantities. Alibaba will supply our business with Small

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Wireless Travel Routers at a rate of $24.60 per unit (Alibaba, 2016). In total, both

materials necessary for the production of a single Mi-Case will cost our company $27.85

per unit.

In addition to the material costs displayed in Table 1., other fixed and variable costs

associated with the production of Mi-Case include annual warehouse leasing costs,

equipment costs, and employee salary costs. These manufacturing costs are displayed in

Table 2 below.

Table 2. Fixed and Variable Manufacturing Costs over a 3-Year Period

Year 1 Year 2 Year 3 Total

Warehouse $46,000 $46,000 $46,000 $138,000

Equipment $29,700 (x3) $59,400 (x6) $89,100 (x9) $178,200

Employees $1,660,000 $1,860,000 $2,140,000 $5,660,000

Total $1,735,700 $1,965,400 $2,275,100 $5,976,200

Source: (CommercialView, 2016), (GlobalSources, 2016), (PayScale, 2016)

The above table includes both fixed and variable manufacturing costs associated with the

production of our product. Our company will lease a warehouse located in Sydney,

Australia that is capable of supporting the manufacturing, storing, and shipping of Mi-

Case. This warehouse will cost $46,000 a year (CommercialView, 2016). In addition to

this annual fixed cost of $46,000, two variable costs are also necessary in the

manufacturing of our product. These variable costs include the annual equipment costs

and employee salary costs. The equipment used in operation is the ZJMECH Technology

Co. machine. This machine is used to integrate both the phone case and the technology of

the wireless travel router together, ultimately producing a Mi-Case. Each ZJMECH

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Technology Co. machine will cost $9,900 and is capable of producing roughly 75 Mi-

Cases daily, or 27,375 Mi-Cases annually (GlobalSources, 2016). In the first year of

operation we expect to sell roughly 78,000 units. In order to meet this demand our

company will purchase three machines, which will cost $29,700. In the following years

of production, we will purchase an additional three machines annually to meet our

projected product demand. The last variable cost factored into our total manufacturing

cost of our product includes the employee salaries of our workers. The salary at which

each worker is paid correlates directly with the specific position an employee holds

within the production process. The projected increasing product demand of Mi-Case will

require more employees, in which case additional workers will be hired accordingly

(PayScale, 2016).

Pricing: Projected Revenue and Target Market Reach

Table 3 displays the projected revenue and percent of our original target market

that our business has sold to over a three-year operation period. This table lists the annual

projected units sold, income before production costs are subtracted, production costs,

revenue generated, and percent of target market reached.

Table 3. Three-Year Revenue Projection and Percent of Target Market Reach

Units Income Production Cost Revenue % Target Market
Sold Reached

Year 78,000 $9,360,000 ($3,907,800) @ $5,452,200 13%

1 $50.10/unit

Year 156,000 $18,720,00 ($6,310,200) $12,409,80 26%

2 0 @ $40.45/unit 0

Year 234,000 $28,080,00 ($8,791,380) $19,288,62 38%

3 0 @ $37.57/unit 0

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Total 468,000 $56,160,00 ($19,009,380) $37,150,62 77%

0 0

By the end of the third year at market, we estimate to have sold roughly 468,000 units,

generating approximately $37,150,620 in revenue, and is projected to have reached at

least 77% of our original target market.

Pricing: Competition
Table 4 lists a few of Mi-Cases top competitors and each of their specific

characteristics compared to that of Mi-Cases. These characteristics include the rate of

speed at which each product functions at, the size dimensions of the product, the network

compatibility of the product, and the market price at which each product is sold.

Table 4. Product Competitors and Specifications

Product Speed Size (LxWxH) in Compatibilit Price

inches y

HNET: HW-GB3 Wireless 50 4.2 x 2.5 x 0.65 4G $50.00

Router Mbps

Strong Rising: EL976 High 100 3.74 x 2.36 x 0.7 4G/LTE $70.00
Speed LTE Router Mbps

Sentar: R95 Mini Travel 150 3.66 x 2.32 x 0.56 4G/3G $58.00
Router Mbps

Mi-Case 300 4.5 x 2.31 x 0.63 4G/3G/LTE $120.0

Mbps 0

Source: (Alibaba, 2016)

We have recognized other wireless portable router retailers as our largest competitors.

Typically, wireless portable routers run anywhere from $40-$80 and although Mi-Case

has a set retail price of $120 which is slightly higher than that of our leading competitors,

it is clear from the table above that Mi-Case holds a much higher value than the

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competition due to several key factors. One being that Mi-Case functions at a much more

efficient speed of 300 Mbps, as opposed to its competitors whose most competitive speed

sits at 150 Mbps. Secondly, Mi-Cases size has dimensions that are almost identical to its

competitors. With that being said, unlike Mi-Case, the competitors products lack

convenience due to the fact that their product is not physically attached to the device for

which it is built to complement. Mi-Case is completely unique compared to its

competition by being the only wireless portable router that is actually attached to the

users phone while also doubling as a protective phone case. The convenience of having

the product attached to the users device at all times while also acting as a protective case

for their cell phone makes the Mi-Case a much more usable product for wireless portable

router consumers. Lastly, Mi-Case is compatible with all 4G, 3G, and LTE network

devices where the competition is only able to support one or two of these networks.

Because of this, the Mi-Case user is able to operate with all smartphone network

providers. These key factors separate Mi-Case from its leading competitors, deeming it a

much more desirable product to potential consumers and, in turn, will be more willing to

pay the premium price of $120 for our product.

5. Distribution
To maximize the distribution of Mi-Cases we have created an online website

where you can purchase our products. Once all online payments have been verified, our

warehouse manufacturers will ship our product using flat rate boxes that cost $2.10 for 10

units from the Australian Postal Corporation. Our product weighs about 80kg, so we

would utilize their small flat rate satchels that allow us to send up to 500g with the

dimensions of 335 x 220mm (Flat Rate Satchels, n.d) . The Australian Postal Corporation

also has a program for businesses to join called Business 250, this ultimately gives you

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discounted prices, up to 10% off, and flat rate prices if your business will be shipping

over 250 units per annum (Business 250, n.d). With our goal of distributing 78,000 units

in the first year, surpassing 250 units this will not be an issue.

6. Promotion and Costs

In-store promotions, such as having local electronic stores carry our product, and

billboards will be our main form of promotion along with our promotional website. We

want to target Australia's top electronic stores such as JB Hi-Fi, Dick Smith, and Kogan

to carry and promote our product in stores. Then we will use billboards as a major portion

of promoting our product, the smaller 6x3m billboard sites range from approximately

$1,900 to $3,600 per month, print cost is approximately $500 and installation starts at

$395 per site (FAQ on billboards, n.d). Totaling up to a maximum amount of $4495.

Finally, we have built a promotional website using Wordpress that allows users to gain

more information about our product by accessing product description, projected revenue,

Q&A, and objective pages conveniently located throughout the website (Berghahn,

2016).

7. Weaknesses and Threats

Many weaknesses, and threats are more than likely to occur when bringing a new

product into the market. The biggest weakness Mi-Case faces is the battery life duration.

The battery life of Mi-Case is six hours, but depending on the amount of work being done

within this six-hour time span may cause Mi-Cases battery life to deteriorate faster. With

this weakness, the threat of our competition being able to directly charge a wireless

portable travel router separately from your phone causes concern. Another weakness we

could potentially face is the fact Mi-Cases dimensions are thicker than your average

durable phone case. However, we believe this challenge will resolve itself over time

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because as smartphones become more sleek and fragile, consumers want to protect their

devices with thicker, heavy duty, durable phone cases. The final threat Mi-Case might

face could be the potential for Australian phone companies to offer unlimited data plans,

targeting traveling business workers, that will not slow down after X amount of their

data has been used.

Overall, Mi-Cases mission is to successfully enhance communication between

traveling business workers with their employers, employees and clientele by creating a

secure wireless network with our 2-in-1 phone case while keeping consumers connected

and protected at all times.

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Team Paper: Mi-Case

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