Clean Bottoms

marketing plan

Aung Myo Myint

Table of Contents
Executive Summary 1

Product Description 2 Target market .. 3 Competitive Analysis .. 5

Positioning .. 6

Price .. 7 Place . 8 Promotion Media Strategy Statement .. 9 Copy Strategy Statement . 10 Trade Magazine Advertising . 11 Online Advertising 12 Tradeshow and Conferences ..... 13 Personal Selling 14 Test Market 14 Contingency Plan . 15 Financials 16 Projected Sales Volume 16 Annual Income Statement .. 16
Exhibits 18

Executive Summary
Clean Bottoms provides a 3-in-1 hands free toilet solution for public toilets. We focus our product offering towards hospitals. Our target customers are hospital executives and managers; our end users are patients, staff and visitors who frequent the hospital toilets. We are capitalizing on the opportunity of a new national health care policy that requires all hospitals to reduce infection rates by 2015. Currently, hospitals are required by the government to post their Hospital Acquired Infection rates, which motivates hospitals to pursue ways to lower their infection rates. Research also indicates that end users avoid public toilets due to unhygienic conditions as well as fear of infections. Moreover, hospitals are places where risks of infections in toilets are high, thus, Clean Bottoms positions itself to solve hospitals problems of hygiene and infection with the 3-in-1 toilet solution. The main product is a toilet seat cover that features an automatic toilet seat cover dispenser, automatic flush and disinfectant dispenser. The product benefits include ease of use that even accommodates handicaps, promotion of hygiene through hands free operation and reduction of infections with disinfectant. Our competitors are traditional toilets, automatic flush toilets and paper seat covers. Although each of them has some features that are similar to Clean Bottoms, none of them offers the same complete package as Clean Bottoms. This gives us the first mover advantage to satisfy our target audiences needs with a complete, hands-free toilet solution. Clean Bottoms is priced at $550 each and installation is free for orders of at least six units. We will contract with Home Depot as our main distribution partner due to its nationwide reach and home installation service. In return, we plan to share up to 20% of our revenue with Home Depot. Orders will be taken online at our main website, through phone and at Home Depot. Promotion efforts will be focused towards advertising in trade magazines such as Infection Control Today and American Journal of Infection Control because these are the magazines read by most of our target customers- hospital executives and managers. Clean Bottoms will also advertise online through banners and newsletters at health related websites and online visitors will be redirected to Clean Bottoms website where they can view video demonstrations and online displays of our product. In addition, we plan to participate in annual tradeshows and conferences that are held for specific topics related to improving hygiene and infection control. Personal selling will also be used to educate hospital executives, promote sales and establish relationships with them for repeat purchase. Before product launch, we plan to test market in Chicago, New York and Los Angeles, the three most populated cities in the US. If our test market results are unfavorable, our contingency plan is to revise our product and to test market again in three new cities. We project first year sales volume of 720 units, assuming 60 hospitals buy 12 units each. First year revenue is projected to be $396,000 and net profit is projected to be $168,000 by the end of year 3.

Product Description
Clean Bottoms is a 3-in-1 hands free hygiene solution that consists of an automatic toilet cover dispenser, automatic flush and automatic disinfectant dispenser (See Exhibit 1). Waving a hand over the toilet cover sensor makes the old plastic wrap rotate into the attached trash compartment where it is destroyed. A new plastic cover simultaneously replaces the old plastic wrap. To prevent misuse, the seat cover dispenser has a timer function that pauses dispensing for a few minutes after a new cover is dispensed. In addition, the automatic flush sensor flushes the toilet by itself after a person stands up from the toilet seat. This sensor is installed along with the toilet seat cover. The automatic flush is paired with the automatic disinfectant dispenser. Our secondary research reveal that when the toilet is flushed, bacteria and germs spread through the air through water particles1. To combat the spread of infection, the automatic disinfectant dispenser dispenses antibacterial solution after the automatic sensor flushes the toilet, preparing it for the next use. Our research also reveals that bacteria can stay alive on a toilet seat for up to 4 hours, thus, the spread of bacteria such as Hepatitis A, the Herpes virus and other diseases through direct contact with toilet seats is serious. The hands free solution prevents the spread of bacteria and infection through direct contact with any part of the toilet seat. Moreover, the relative ease of waving the hands in order to operate makes it easy for elderly and handicapped. Furthermore, users no longer need to cover up the toilet seats with toilet paper, which creates plumbing problems when large amounts of toilet paper are
1

Professor of microbiology at the University of Arizona, Dr. Charles Gerba, who is still active in JanSan research, presented "Micro-organisms in Public Washrooms" at a media briefing sponsored by Scott Paper Company.

flushed at the same time. Eliminating plumbing problems decreases repair costs for toilets as well. The main benefits of our product can be summarized as follows: Addresses and eliminates infection/bacteria Guarantees optimum hygiene conditions Promotes ease of use and neatness Accommodates children and handicapped Reduces plumbing problems Proven cost effective in the long run

Target Market
At first, we targeted high-end customers such as high-end shopping malls and fine dining restaurants. However, after contacting their managers and talking to them, we learned that they do not really need advanced features for their toilets because their toilets are not really frequented by their customers. Moreover, our surveys and talks with the end users (toilet users) at these high-end locations revealed that 40% of end users do not use these public toilets because they perceive that public toilets are not hygienic. We decided to research for a new target segment that includes movie theaters, airports, and rest stops where large numbers of people frequent the public toilets. We contacted the managers through email and phone, and handed out surveys and interviewed them. The results we received from them were not positive because although cleanliness was a priority for them, the costs of the product outweighed their perceived benefits. Then, we learned about the new national policy for hospitals that by 2015, hospitals will be evaluated for infection

rates and unless those rates are below a certain level, they will be penalized on Medicare reimbursements2. This gave us a new direction for a new target market where we decided to target hospital executives and managers. We learned that hospitals want to promote cleanliness and low rates of infection. The toilet is one of the places where bacteria and infection spread, thus, the executives are focused on keeping their infection rates to a minimum by making the toilets as less infectious as possible. Our end users are staff, patients and hospital visitors who will be frequenting the toilets at the hospitals. Our secondary research for our end users revealed that 60% of Americans do not sit on public toilet seats because they are unhygienic3. Thirty percent of Americans refuse to use public restrooms. For our end users, toilets are potential areas where infections and bacteria spread as well. Patients and staff are vulnerable to the spread of disease unless the hospital is clean. Moreover, hospitals require easy to use products for its patients and handicaps. Hospital managers want to keep their hospitals clean and allow end users to safely use their toilets. Currently, there are approximately 6000 hospitals in the US4. Through our primary research with 14 hospital managers and executives, we found out that they are figuring out ways to keep infection rates under control. To quote one hospital executive Dr. Brennan, her company spent $3000 for her last month to attend three conferences to learn and discuss about infection control. We believe that Clean Bottoms effectively satisfies the hospital executives needs for a more hygienic toilet solution, keeping infection rates low

2 3 4

http://www.eapdhealthcarelaw.com/providerreimbursement/ http://cleanseats.com/toilet_seats/view/article-2.html

http://www.ahd.com/state_statistics.html

and accommodating handicapped users through ease of use. By keeping their toilet infection rates low with Clean Bottoms, hospital executives will be saving large amounts of money for not preventing penalization by the federal government.

Competitive Analysis
Currently, Sani-Seat (Clean Bottoms original company) does not have direct competitors that provide automatic toilet seat dispenser solutions in the US. However, there are competitors competing with Clean Bottoms on specific features of the product. First, there are companies such as American Standard5 and Toto6, which provide automatic flush toilets that are similar to Clean Bottoms automatic flush feature. They use sensor technology to sense whether the toilet user has finished using the toilet and flushes the toilet automatically. However, they do not have features such as automatic toilet seat dispenser and the automatic disinfectant dispenser paired together with automatic flush, thus, automatic flush toilets still face problems with no disinfectant and dirty toilet seat covers. This leads us to the second type of competitors paper seat covers. Before the user uses the toilet, he or she dispenses the toilet seat cover manually from a dispenser that is usually attached to the wall inside the toilet stall. Then, the user places the paper cover over the toilet seat. The paper cover protects the users skin from coming into direct contact with the toilet seat. After the user has finished using the toilet, the user recycles the

5 6

http://www.americanstandard-us.com/bathroom-products/commercial-flush-valves/ http://admin.totousa.com/Product%20Downloads/03664R,%20Automatic%20Flush%20Valve,%20OM,%20EN,%2 0V.01.pdf

paper cover. However, the paper seat covers are inconvenient and they allow the possibility of the user touching the toilet seat when putting on the new paper cover. This is where Clean Bottoms shine in terms of its features and benefits by providing the automatic toilet seat cover dispenser where the user does not have to worry about manually putting on the plastic seat cover, which also eliminates the chances of him or her coming into contact with the toilet seat itself. The third competitor is the traditional toilet seats, which provide less convenience and less cleanliness than the other competitors mentioned above. However, for commercial use, traditional toilets are declining because the public has been more aware of the spread of infections and bacteria. Clean Bottoms solves this problem by providing a hands free solution that prevents the user from getting into contact with bacteria and infection and promotes cleanliness at the same time. Please see Exhibit 2 for SWOT Analysis. Positioning Clean Bottoms positions itself so that it fulfills the primary needs of our buyers and end users. The perceptual map below displays how Clean Bottoms is positioned against its main competitors in terms of its main benefits of cleanliness and ease of use.

Clean Bottoms

Clean Bottoms positioning statement can be summed up with the following statement: Clean Bottoms addresses infection control and eliminates bacteria among other competing hygiene alternatives by promoting cleanliness in a streamlined consumer convenient way.

PRICE
We are pricing the Clean Bottoms 3-in-1 solution at $550 to the end user. 2000 plastic wraps are included in the purchase price. Additional plastic wraps can be purchased as well and the price for each box with 2000 plastic wraps is $70. Moreover, we are selling to Home Depot, our main distributor at a 20% discount at $440. Price breakdown for Home Depot is in the Exhibit 4. The minimum order of 6 Clean Bottoms is required for the free

installation service. Moreover, the buyer can save $82 if he or she buys three Clean Bottoms because the power block for the toilet can be shared between three Clean Bottom units. Commercial automatic flush toilets sell for around $250 to $350. Toilet seat cover dispensers sell for around $ 40 to $150 depending on whether the dispenser is made of plastic or metal. Plastic seat covers sell for around $30 per 250 covers. Commercial traditional toilet seats sell for around $150 to $250. Clean Bottom is priced higher than our competitors; however, our added benefits justify for the higher price increase for our specific target market of hospitals which concentrate on cleanliness, hygiene and infection control. Hospitals are working towards reforming their hospitals in accordance with the new national health care policy that will come into effect in 2015 about keeping their infection rates below a certain level. Not conforming to the new infection control standards is more costly for the hospitals compared to purchasing and installing Clean Bottoms.

PLACE
We plan to sell our product through national distributors such as Home Depot. We believe that Home Depot can be an advantageous distribution partner for our company because they have stores nationwide7. When we decide to launch our products nationwide, we can sell our products through Home Depot. Moreover, Home Depot has service and installation personnel who helps installs products for a fee. We will negotiate a performance-based contract whereby Home Depot will have an in store display of Clean Bottoms and have installation personnel for Clean Bottoms. No special training is required

http://maps.google.com/maps?hl=en&safe=off&client=firefox-a&hs=YZs&rls=org.mozilla:enUS:official&q=home+depot+in+US&um=1&ie=UTF-8&sa=N&tab=wl

to install Clean Bottoms because as of now, Sani-seat, our parent company, have instructions for installation posted online. Customers used to go online in order to check the instructions for easy installation. We are willing to give Home Depot 20% of our revenue for this contract, which is the percentage we used to calculate our income statement. However, we hope we can negotiate a percentage that is lower than 20%. In addition to selling our products through Home Depot, we will have our own website where we will accept orders. However, these orders will be redirected to Home Depot in order to fulfill installation requests.

PROMOTION
In accordance with our research within the health care industry, competitor and target market analysis, which revealed that the best ways to reach our target market would be through trade magazines, trade shows and conferences, personal selling and web advertisements, we decided on a diversified marketing strategy. All advertising should be targeted to hospital executives and management who serve as the primary target market. The goals of our marketing plan are to spread awareness, build customer interest and initiate sales. Our Media Strategy Statement is as follows: Our primary target market is hospital executives and management. Medical trade magazines and online advertising are a great choice for effective media vehicles in order to reach our primary target audience. The main magazines of interest are Infection Control Today and American Journal of Infection Control. This method of

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advertising gives us the reach of 45,000 magazine subscribers. Infection Control Today also has a total of 77,000 hits a month on their website, this is a great opportunity notified for online advertising. We plan to spend $30,000 during the first year, $25,000 during the second year and $20,000 during third year of operations. Spending more during the first two years is intended to raise more awareness for our product compared to competitors. Moreover, advertising will only be done for the duration of six months before September where our target audiences complete their budget proposals for the upcoming year. Copy Strategy Statement Clean Bottoms serves as a 3-in-1, hands free bathroom experience, which is perfect for public restrooms, especially those that are frequented by known users with infection. All advertising should be targeted to hospital executives and management who serve as the primary target market. The Clean Bottoms product addresses infections control by eliminating bacteria. The product guarantees optimum hygiene conditions and accommodates the handicap. Through assurance and comfort, consumers of our customers have been more than satisfied and are happy to use the restroom. Clean Bottoms aims to advertise itself in a professional manner that promotes a higher quality and cleaner lifestyle. All advertising mediums will take a comparative tone, where side-by-side comparisons with competitive products will be demonstrated to prove that Clean Bottoms is a new, innovative, state of the art toilet.

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TRADE MAGAZINE ADVERTISING From our primary research, we found out that two most popular trade magazine that many hospital executives and managers read is Infection Control Today8 and American Journal of Infection Control9. They read these magazines to keep themselves up to date with new ways of controlling, preventing and lowering infections, latest products, medicines and procedures for dealing with infections. American Journal of Infection Control
AJIC is the official publication of the Association of Professionals in Infection Control

and Epidemiology (APIC), a multi-disciplinary international organization. AJIC publishes peer-reviewed articles and original research across the broad field of infection prevention, control and epidemiology, including quality management, occupational health, patient safety, and disease prevention. The journal also publishes recommended practices, guideline and policy commentary for infection prevention and control from APIC and its collaborating organizations. American Journal of Infection Control is published 10 times a year and has around 15,000 issues currently in circulation. Infection Control Today Infection Control Today provides news regarding HAIs (Hospital Acquired Infections), products & services, guidelines & regulations, compliance and quality control. In-depth feature articles delve into all aspects of infection prevention including hand hygiene, sterilization, environmental hygiene, anti-microbials & vaccinations. Infection Control Today has 30,000 subscribers.

8 9

http://www.infectioncontroltoday.com/ http://www.ajicjournal.org/

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93% of subscribers are employed in hospitals 84% of subscribers have direct purchasing influence on infection control products The audience for these two magazines are infection control professionals (ICPs),

administrators, hospital epidemiologists, risk managers, occupational health professional and patient safety personnel. This includes nurses, physicians, microbiologists, sanitarians, researchers, and others involved in infection control who work in acute care, long term care, home health and public health settings. ONLINE ADVERTISEMENTS In additional to trade magazines, we will advertise online such as

InfectionControlToday.com. Infection Control Today is the industry leader that provides the latest industry news, education, comprehensive coverage, regulations & guidelines, products & services, quality control and technology related to the industry. Some statistics on how many people utilize this website: 177,400 average page views per month 77,700 average monthly visits 61,300 average monthly unique visitors In addition to providing online news, Infection Control Today provides the ICT ENewsletter, which has 20,000 weekly e-newsletter subscribers. Another good feature about this website is that it provides Buyers Guide, which features the industrys most complete resource directory that offers information on thousands of infection control

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suppliers and service providers. Clean Bottoms can promote our product through the Buyers guide section as well. Clean Bottoms plans to advertise in banner ads that are run alongside Infection Control Todays editorial content and we believe it is a very effective way to increase brand awareness and drive visitors to our online website. In addition to banners, we will use target ads where we can focus on targeting all unique visitors when they enter our site, embed our message into the editorial content stream on the home page or advertise on the landing page for a specific category and reach targeted visitors. Our web advertisements will direct online users to our website where we will have video demonstrations and product displays online. TRADESHOWS AND CONFERENCES Clean Bottoms plans to attend industry specific trade shows where we will have opportunities to meet and network with hospital executives, managers and other decisions makers. In the healthcare industry in the US, tradeshows and conferences are held almost every day. However, we are only aiming to attend tradeshows and conferences that are focused on infection control, sharing new procedures to promote cleanliness and hygiene. These are the examples of tradeshows and conferences that are held annually that we have researched that fits with our product and our target market: 2011 Annual APIC Conference (Baltimore) June Building Design and Engineering Approaches to Airborne Infection Control (Boston) August

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Healthcare Facilities Symposium & Expo (Chicago) September

PERSONAL SELLING We believe that personal selling is the most effective form of marketing for our type of product. We will hire sales representatives who will make appointments with hospital manager or executives and perform product demonstrations. They will be trained so that they are knowledgeable about our competitors products as well as Clean Bottom products so that they can be more persuasive when selling Clean Bottoms. Sales personnel will also be required to attend the trade shows and conferences to promote our product through networking. Sales personnel will be establishing and maintaining long term working relationships with hospital managers and executives to encourage repeat purchase. Hospitals that bought the first 12 Clean Bottoms may decide to retrofit all their remaining toilets with Clean Bottoms.

TEST MARKET
We plan to test market in three largest cities in the US: New York, Los Angeles and Chicago10 (Exhibit 6) in 2012. These cities are highly populated, thus there are a large number of hospitals in these cities. In New York City itself, there are over 50 hospitals without taking into account the hospitals that are outside of the immediate downtown area. The big population also suggests that these hospitals are more frequented. Moreover, hospitals in these three cities are required by the government to post their HAI (Healthcare Associated Infections) results to the public, which adds incentive for hospitals in these

10

http://www.infoplease.com/ipa/A0763098.html

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cities to strive to lower their infection rates11. Currently, 26 states have laws that require all their hospitals to publicly publish HAI rates. We will proceed with market testing for a year in order to learn about our top line sales, average purchase price, trial rates, margins, repurchase rate and market share data. Contingency Plan: If our market test fails, we will postpone our product launch while we tweak our product features and pricing strategies. After our revision, we will test for another six months in three new cities Houston, Phoenix and Philadelphia, which are the next three biggest cities in US. We chose new cities for our contingency plan because we do not want previous marketing efforts in the previous cities to affect our market testing. Thus, we chose new cities as a fresh start for new market testing. According to this contingency plan, we will officially launch the product late by six months, thus, we will need to hire more sales personnel for more aggressive personal selling in order to capitalize on the new national hospital policy of infection reduction by 2015. Thus, expenses for sales personnel will increase but we will also expect higher increases in revenue due to more aggressive sales efforts.

11

http://www.hospitalinfection.org/reportingbill.shtml

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FINANCIALS
PROJECTED SALES VOLUME (see Exhibit 7) We plan to achieve sales by the latter part of 2013 around September and October. This is the period where hospitals usually submit their budget proposals for the next budget year and this is where we assume that most of the buying decisions will be made. We initially assume that we will be able to sell to 60 hospitals during the first year, each hospital buying 12 Clean Bottoms units. However, sales are expected to increase by 60% during 2014 because hospitals need to complete their reforms for lower infection rates by 2015. During 2015, we expect to sell to 163 new hospitals because by then, these hospitals will have received news from other hospitals about the severity of the penalty for not conforming to lower infection rates and Clean Bottoms ability to prevent the spread of infection. Thus, we expect late buyers who will try to retrofit their toilets with Clean Bottoms to protect themselves from penalties during 2015. ANNUAL INCOME STATEMENT ( See Exhibit 8) We project first year revenue of $396,000 from selling 720 Clean Bottoms at $550 per unit. We subtracted the 20% that we give to Home Depot for distribution and

installation service. Our advertising is more aggressive during the first two years because we are aiming to penetrate the market, raise awareness and build reputation first. Salaries and wages are accounted for hiring 2 sales people during the first year who will go to hospitals and do product demonstrations and the travel expense is accounted for those 2 sales people. We will hire a third salesperson during the second year to push more

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sales because hospitals are more motivated to purchase hygiene and infection control products due to the closing deadline for infection control reform of 2015. According to our conservative estimates, we project to make a loss during first year, however, by second your, we will have recouped the losses and by third year, Clean Bottoms will be making $168,000 in profits.

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Exhibit 1

Exhibit 2: SWOT Analysis Strength: - First mover advantage - Cleanliness catered towards the new health care policy for infection control - Ease of use Opportunity: - Opportunity to penetrate the target market because of new reform initiatives in the hospitals for infection control by 2015 Weaknesses: - Priced higher than other alternatives - Brand recognition

Threat: - Competition can make their version of a hands free solution

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Exhibit 3: Marketing Mix Product Clean Bottoms offers a 3 in 1 bathroom hands free experience. The product encompasses an automatic flush with sensor, disinfectant dispenser (toilet cleaner) when flushed and an automatic plastic seat cover. Clean Bottoms is the ultimate in toilet seat protection. With the simple wave of a hand, Clean Bottoms presents a fresh, clean, untouched hygienic surface for each use. An internal timer prevents abuse and wasted plastic covers. Clean Bottoms fits all standard toilets. Its adjustable attachment makes installation as simple as mounting a regular toilet seat. Locked away inside the Clean Bottoms ABS plastic housing is sanitary roll of plastic wrap. With each revolution, the used seat cover is destroyed and can never be used again. An electronic counter tells you when a new roll is needed. The plastic wrap roll is made of High Density Polyethylene and has been tested and approved by dermatologists. The Clean Bottoms solution is priced at $550, and a minimum order of 12 toilet seats per customer includes the service for installation. Although the price is higher than its alternatives, its benefits outweigh the price for its target market. Clean Bottoms can be purchased through our main distributor Home Depot which also provides the installation service. The product can also be ordered through the Clean Bottoms website. The promotions part of the marketing plan are points of purchase displays, web advertisements, trade magazine advertisements, promoting at tradeshows and conferences related to our target market.

Price

Placement

Promotion

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Exhibit 4: Minimum pricing for distributor Automatic Seat Cover Dispenser: $ 134.95 per seat each Plastic wrap: $ 64.00 per box of 10 Roll Transformers: $ 41.00 each Batteries: $ 41.00 each12 Charger and Tray : $ 41.00 each Flusher: $80 Disinfectant: $30

Exhibit 5: US Cities

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Consumer can choose to operate with batteries or with power transformer.

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Exhibit 7:
2013 Projected Sales Units Growth % 720 2014 1152 60% 2015 1958 70%

Projected Sales Units

2500 2000 1500 1000 500 0 2013 2014 2015 Projected Sales Units

*Assumptions: Each Hospital buys 12 Clean Bottoms each.

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Exhibit 8: Projected Income Statement

2013 396,000 79,200 198,000 118,800 2014 633,600 126,720 316,800 190,080 2015 1,077,120 215,424 538,560 323,136

Revenue Commission COGS Gross Profit SG&A Advertising Salaries & Wages Travel Expenses Total SG&A Net Income

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $ $

30,000 80,000 10,000 120,000 (1,200)

$ $ $ $ $

25,000 120,000 15,000 160,000 30,080

$ $ $ $ $

20,000 120,000 15,000 155,000 168,136

**Please note that in our financials, we did not account for repurchasing from current customers. All sales are made to new hospitals.