Steven Harris looked up to see Todd Smith striding across the student parking lot at the University of South Carolina.
“Hello, Todd!” Steven responded as he finished locking his car door.
“Are you going over to the registrar’s office to pick up your class schedule and register?” Todd asked as he neared the car.
“Yeah, guess I’ve got to do it. I’m not too excited about starting school again, even though we are seniors. I had a great summer.”
“Wow! Is this your car?” asked Todd, admiring the new red Mustang convertible.
“You’ve got it. That’s one reason my summer was so good. This was the third year that I’ve Worked with my brother’s yard maintenance service in Myrtle Beach. Not only did I have a good time, but with the money I saved from the three summers I was able to buy this car.”
“I’m impressed. I notice you parked way out here away from any other cars.”
“You bet. It didn’t make much difference with my old Chevy, but I sure don’t want thoughtless people denting the sides of my new car. People really dented the sides of my old car, especially in these student parking lots with their narrow spaces.”
“I know what you mean,” responded Todd. “I got here yesterday and stopped at student housing to pick up my dorm room key. I purposely parked diagonally across two spaces to protect my car. I was only in the office a few minutes, but when I came out a campus cop was writing me a $20 ticket! He wouldn’t tear it up either.”
“What a way to start a new year!”
“You know,” added Todd, “there ought to be a law against banging doors into other people’s cars. Or someone should come up with some way to protect car doors. Those rubber strips that manufacturers put on never seem to be in the right place.”
“I agree,” replied Steven, “or maybe cars should have a device that automatically dents the other car in return. Maybe that would make people more careful!”
Steven and Todd both laughed at the thought of such a device and began to dream up other wild ideas to solve the problem as they walked toward the registrar’s office.
Over the next several days, Steven found himself thinking more and more about the problem of preventing side-panel damage. He had always been a tlnkerer, and he had fairly well developed mechanical instincts. With the job outlook for college graduates in the doldrums, an entrepreneurial venture began to look attractive.
In his marketing class, Steven had learned how companies develop new products, and this semester he expected to learn about business start ups in his small-business management class. With this exposure and his knack for tinkering, perhaps he could develop and market a product for the automotive market.
Steven remembered one of his professors dis- cussing the success of the people who had launched Auto Shades, the cardboard panels used behind auto wind- shields to keep cars cool. AutoShades’ inventors had succeeded because their product really worked. Further, because they could print on the panels, companies could use the product as a sales-promotion tool. Steven believed that if he could design a device to protect car doors that also served an advertising function, he too. could be successful, lie began to think more seriously about developing such a product.
Seeking practical new ideas for product concepts, Steven mentioned his project to a friend, a recent graduate with a degree,in mechanical engineering. The engineer suggested a panel, perhaps made of rubber, that would attach to the outside cf the car door. The panel would have to be lightweight, impact resistant, and water- proof. Steven bought a panel of natural rubber and began experimenting. However, after spending many hours on this prototype, he discovered that a section of rubber large enough to protect the doors would be very expensive and would weigh over 50 pounds.
Finally, after talking to numerous suppliers of resilient materials and visiting several trade shows, Steven found a unique foam that showed promise. Manufactured by a local firm, MiniCell 200 (M200) was light-weight, impact absorbent, and relatively thin (1/2 inch). The driver could roll it up for easy storage. M200 also had several drawbacks, however. It was expensive, could not be exposed to sunlight, and tore easily.
Steven thought he could resolve these problems by finding a fabric cover for the foam. He experimented with a material that had a sunlight blocker and high tear resistance, and came in a variety of colors. However, the material did not readily accept screen printing, an attribute that Steven believed to be necessary for the project’s success. Steven discussed this problem with the manufacturer. Several weeks later, the manufacturer had developed a new way to treat the material so that it accepted printing. The material would cost 75 cents per square yard.
Having worked his way through the cover-material issue, Steven began experimenting with methods for attaching the panel to a car. He knew ease of use would be critical to his product’s success, as it had been for AutoShades. Steven finally decided to use magnets, which could be easily attached to the foam, making the product easy to use. Equally important, the magnets cost only about 30 cents per foot.
Steven also spent an entire afternoon selecting a name for the product. He evaluated several names, such as DoorGuard, DDent, DentGuard, AbsorbaDoor, and DoorMate. On pure instinct, he chose DoorGuard.
Steven now had a name, but he realized that he still did not have a completed product. If he used only the magnets to attach the product to a door, what would prevent someone from stealing the panels? After trying several unsuccessful theft-prevention ideas, Steven settled on a cable that attached to the foam panel. After attaching the DoorGuard panel to the door, the user would toss the other end of the cable inside the car, then close and lock the door. Anyone who tried to steal the device would tear the panel, making it useless. The cable cost 15 cents per foot, and he would need 3 feet per panel.
Steven believed he had now developed the perfect product. It absorbed impact from other car doors, resisted theft and water damage, stored easily in the trunk or back seat, and accepted screen printing. DoorGuard would extend slightly beyond the door on a two-door car. On a four-door car, it would just cover both doors.
Steven next turned his attention to producing the new product. He knew that he did not have the time, experience, and money to make the product himself, but he was concerned that contract manufacturers might charge too much to produce DoorGuard. As a result, he approached organizations like Jobs for the Handicapped and Goodwill Industries that might assemble products less expensively. He eventually found an organization that could do everything needed to assemble and print one set of two panels for between $3 and $4.
Almost as an afterthought, Steven considered price. Remembering that his marketing professor, had discussed cost-plus pricing in class last year, he developed a schedule of costs. Based on a total cost of $14.74 per complete set of two panels, Steven used a 100 percent markup on cost (and a little psychological pricing) to arrive at a suggested retail price of $29.95 per set. Now that he had designed, named, and priced the product, Steven considered what market he would attack.
Steven knew that he should research the market potential, but believed that he had little basis for developing a reasonable estimate of DoorGuard’s sales potential. Still, using secondary sources, he found that there were 122.8 million cars in use in the United States, nearly 80 percent of these cars were at least three years old; 50 percent were at least six years old. Because there were no products comparable to DoorGuard on the market, Steven wasn’t certain what portion of the car owners would purchase the new product. AutoShades appeared to be about the only close comparison, but there was a huge cost difference: AutoShades cost from $1.49 to $6.00, whereas DoorGuard would’cost nearly $30.00. Many companies gave away sun shades as advertising specialties; few companies would do the same with DoorGuard.
Still, Steven believed that DoorGuard targeted a wide-open market and that with the right marketing approach DoorGuard would be a winner. He knew that last year’s new car sales in the United States totaled 9,853,000. Few new-car buyers purchased factory installed body-protection packages, instead choosing fancy radios, air conditioners, cruise control, and other options. Steven felt that a person paying $15,000 or more for a car would pay a reasonable price to protect it. This helped to explain,the success of AutoShades. Sales had started slowly for the initial sun shade—a piece of plain cardboard. But once the creators added graphics and messages to their products, AutoShades’ sales heated up. In 1988, sales exceeded $20 million.
Steven dreamed about such spectacular sales results for DoorGuard. If he could capture just 5 percent of the new-car market, he would, be selling nearly 500,000 sets. And sales to only 5 percent of the owners of the 122,800,000 cars on the road would generate sales of more than 6,100,000 DoorGuard sets. With such heady potential in mind, Steven began to think through the details of introducing DoorGuard.
The Marketing Approach
Proceeding cautiously, Steven consulted a local patent attorney who informed him that she would have to conduct a patent search before applying for the patent. The search would cost him $500 and the application process another $1,500 to $2,000.
Strapped for cash, Steven looked for a less expensive alternative. He found that anyone could perform a patent.search. Every state has a depository for patents. All he had to do was visit a depository and conduct a computer search to see if any similar patents existed. Steven also learned that it took an average of two years for the patent office to approve a patent. During that period a competitor could copy and sell the product. Although inventors could sue the competitor after the patent office issued the patent, many inventors had insufficient funds to bring suit. Steven decided, however, to seek the patent on his own.
Steven next considered three different approaches for distributing the product. First, Steven thought that he might interest a national retail chain, such as Sears or K Mart, in carrying the product—both had large auto-supply departments. When he considered catalog sales, two catalog-companies came to mind as potential distributors—Sharper Image and BrookStone. These catalogs reached people who could afford to purchase DoorGuard. Catalog companies had lower overhead and, therefore, lower markup, finally, Steven considered selling direct to large companies such as R. J. Reynolds or Anheuser-Busch who could offer the product as an advertising specialty or premium item. If car owners accepted DoorGuard as readily as they had accepted AutoShades, these companies could tap a large market. Furthermore, because of their associations with auto racing, these companies might have a strong interest in the product. Steven wondered which of these distribution avenues would be best, or if he should consider others.
When Steven returned from class late one Thursday afternoon, he felt tired but excited. With the pressures and costs of his senior year, Steven’s time and resources were scarce. Despite all of his development work, DoorGuard was still just an idea. He realized that he had no concrete notion about how to proceed. He knew that DoorGuard could be a great product but now realized how complicated it would be to take the idea to the market. He pulled out his yellow legal pad and started a new list of things he needed to do on the project. He glanced out the window at his new car, parked in the far corner of the parking lot. Steven smiled to himself. “Still no dents,” he thought, “and I’m going to keep it that way.”