Answer

Business Plan for XYZ Company’s New Pet Tracking Device

Industry, Marketplace and Competitor Analysis

Industry Analysis

In 2019, the worldwide pet wearable marketplace size was valued at $1.6 billion and it is projected to grow at 4.3% compound annual growth rate (CAGR) between 2020 and 2027 (Väätäjä et al., 2021). Rising pet expenditure globally has been associated by the increasing disposable income in developing economies, like China and India, thus functioning as a crucial driving factor of the industry’s growth (Faucounau et al., 2019). Additionally, there is a growing awareness regarding animal health which has equally boosted the growth of the market over the past period (Kivikangas, 2018). The integration of Internet of Things (IoT) in pet wearable devices is predicted to have a substantial effect upon medical treatments as well as the diagnosis medical challenges of pets.

Fig. 1: US pet wearable marketplace size by technology between 2016 and 2027 ($ million) (Hammam et al., 2018).

Globally, wearable technology employed is exhibiting a swift in adoption as a result of its diversified applications in identifying and tracking, monitoring behaviours, diagnosing medical challenges, as well as the security and safety of pets (Hammam et al., 2018). The wearable devices assist pet owners in effectively tracking the everday activities of their pets and enable statistical tracking, like as rest calories burnt and rest pattersn, and heart rate monitoring (Borzęcka et al., 2016). The integration of different knowhows, like Radio Frequency Identification (RFID) and GPS for bettering the quality of life of companion pets has equally influenced the pet wearable marketplace and industry growth (Kivikangas, 2018).

Notwithstanding the availability of significant growth opportunities, among the crucial challenges for the industry include high power consumption and short battery life of pet wearable devoces. Most of the werable devices employ advanced knowhows that use a lot of power, like GPS and weireless networks, therefore needing frequent charging cycles (Thumala et al., 2015). Consequently, this minimizes battery life, therefore contributing to extra maintainence expenses for owners of pets, hwhich may hamper the growth of the market (Faucounau et al., 2019). Similarly, Kivikangas (2018) reasons that pet wearable devices’ high initial cost owing to the integration of high end knowhow is predicted to hinder the industry’s growth over the coming years, particularly across emerging economies. The implication is that XYZ Company has great opportunities in developing pet wearable devices that have better battery life and low power consumption.

Marketplace Analysis

Overview of the Market

As aforementioned, the wearable tracking device sector has great expansion potentials, with the pet wearable marketplace expected to increase to $1,720 million by 2024 from 2019’s $703 million at a 19.7% CAGR (Ramokapane et al., 2019). The expansion of the market is associated with the rising worries about pets’ wellbeing and health, rising pet humanization and pet population, surging IoT demand in pet tracking tools, along with growing expenditures on pets as a result of high disposal income (Adapa, 2016). The personal locator device sector is fairly new within the consumer marketplace. Nonetheless, the industry has been shown to have great potential of registering explosive growth owing to the rapidly falling knowhow costs, which as Borzęcka et al. (2016) reason, will allow consumers to utilize and afford a knowhow that was initially developed for, and by, the military during the 1980s. Kao et al. (2019) explain that pet tracking services will grow by more than $65 billion by 2025. The market segmentation for this paper concentrates on five areas of possible customers for the new pet tracking device. The choosing of the target marketplace has been influenced by failure of the segments to meet their individual needs for programmable, low-cost tracking devices by developing systems like that internally.

Market Segmentation

Family Consumers

With at least 898,000 children reported in missing in the U.S. yearly, the low-cost device will assist households worried regarding the whereabouts of their elderly parents, teens, children, and pets by allowing them to keep tabs upon the locations of their loved ones at any particular time (Faucounau et al., 2019). The device’s programming capabilities will permit families to set distance perimeter rules so that once the device’s wearer travels beyond a predefined distance from the base unit, the remote unit is activated automatically to inform the home base unit of the pet’s location, travel speed, and direct (Thumala et al., 2015). The tracking device that will be inserted in pets will, therefore, be a great asset in helping law enforcement agencies in getting back missing pets within the shortest time possible.

Studies show that missing pets who are eventually killed are often murdered within hours of disappearance (Hammam et al., 2018). The tracking device will, therefore, save significant lives by alerting the base unit immediately, assisting in prompt tracking and rescue by law enforcers. Another programming potential of the device is the ability to download all medical data/information, emergency numbers, contact information, among other information (Kao et al., 2019). With such information, pet owners will get prompt alert regarding their pets, allowing them effective attendance to the pets.

Original Equipment Producers

As the heavily concentrated markets of computer manufacturers and cellular phone carriers become extra competitive yearly, both segments are constantly seeking to add modern and new systems and technologies to attract consumers to their products and sometimes propriety services and products. The tracking device is designed to be employed with a home base unit, and there are great potentials to partner with cellphone manufacturers, cellular providers, computer manufacturers as well as resellers. The natural synergy between the new pet tracking device’s capabilities and this marketplace segment’s needs ought to prove to have a positive and large impact upon the awareness of the new device, and increasing revenues via positioning of the new product with this marketplace segment’s leaders. The understanding is that cellphone providers will incorporate the knowhow employed in the home base units into their phones soon. This move will prove priceless for the new pet tracking tool, as the new device is positioned in the marketplace as the leader.

Pet Supply Stores

The new pet tracking device is sufficiently small to fit onto pets’ collars. In partnership with large pet-supply chains and pet collar producers, the new tracking device will be extra accessible to consumers concerned of their pets wandering off.

Entry into The Market

According to Thumala et al. (2015), the crucial factors impacting the pet wearable marketplace are augmenting downstream demand as well as health consciousness. The impact of pet wearables upon health care system and cost effectiveness will role play in determining pet wearable usage in the future. The focus of present new entrants into the marketplace, as Punetha and Mehta (2014) opine, is upon service integration and product innovation. New companies, like Xiaomi, have integrated their pet trackers with human pedometers to offer extra fitness analytics and data for consumers. Other companies are working on developing communication standards, like NB-IoT, for pet monitoring (Borzęcka et al., 2016). The new standards of communication will increase functionalities of presently used sensor knowhows. However, the pet wearable marketplace is yet in its introductory stage of the life cycle of an industry. Several new entrants within the pet wearables marketplace are experimenting with their services

The entry hurdles for pet wearables are tremendously low, taking into consideration the consumer popularity. Ramokapane et al. (2019) highlight that the awareness of pet wearables will serve as among the major hurdles for new emerging companies to tackle. Production of imaginative pet wearable applications, according to Punetha and Mehta (2014), are required for sustenance within the pet wearable marketplace. Marketplace penetration of established players, as van der Linden et al. (2019) point out, is yet on the lower side. The increase of e-commerce for pet wearables will function as the growth propeller for the pet wearable marketplace.

Competitor Analysis

The crucial marketplace players in the pet wearable industry and marketplace are Whistle Labs (US), FitBark (US), Garmin (US), Link AKC (US), Tractive (Australia), GoPro (US), Motorola (US), KYON (Greece), Num’Axes/EYENIMAL (France), Felcana (UK), and Scollar (US) among the major players. See Figure 2 below. While most of these companies produce pet tracking chips that are put in pet collars, XYZ company’s new tracking chips is inserted in the pet, making it distinct from the rest. Since collar chips can easily be lost, the inserted one will never be lost once inserted.

Fig. 2: Company’s pet wearable devices’ description (Punetha & Mehta, 2014).

Marketing Plan

Target Market

The target market for the new pet tracking device will include consumers of smart collars, smart cameras, and smart harnesses products and consumers for processors, memory, displays, batteries, GPS chips, RFID chips, sensors, Bluetooth chips, wi-fi chips, and cellular chips, among others. Largely, the consumers of the above product categories are people in North America, Europe, APAC, and RoW.

Product/Service Strategy

Studies have demonstrated that there are various factors that drive upwards the demand for pet tracking devices. Ramokapane et al. (2019) explain that technological advancement along with the ability of tracking pet location globally is enhancing demand for pet tracking devices. Compactness, lightweight, dustproof, and waterproof are among the characteristics of tracking devices that consumers take into consideration when making buying decisions. Thus, in developing the new pet tracking device, the above factors will be employed. Moreover, GPS trackers use cellular network to locate objects or beings that they are put on. One crucial factor that makes purchasing decision for pet tracking device, thus, is perceived as the availability of cellular service providers within the location and compatibility of device. Therefore, in developing the new tracking device that will be inserted in pets, compatibility and availability will be taken into consideration.

Pricing Strategy

Within the pet wearable device industry, consumers are looking for the most efficient and effective products at the possible lowest prices (van der Linden et al., 2019). Nevertheless, Richardson et al. (2017) argue that various marketplace segments will place different stresses upon ease of utilization against cost or reliability, depending upon their budgets and needs. Notwithstanding the fact that stress will be placed upon certain facets of products differently for the various market segments aforementioned, the new tracking device will beat the competition on all dimensions and grounds.

Distribution Strategy

Various distribution channels will be employed since a big target market is targeted. A well-defined distribution channel, including distributors and supply stores across the main economies, will help reach as many consumers as possible.

Advertising and Promotion Strategy

Company XYZ will do a lot to monitor their social media presence: social media currently provides various avenues through which intended consumers can be reached (van der Linden et al., 2019). Through the social media platform, the company will send adverts as well as promotional content that helps them in reaching viable clients.

States Strategy

With new services and technologies continuing to emerge in the pet wearable industry, new standards for benchmarked and proper apaches to wearable electronic technologies and devices are continuing to emerge (Richardson et al., 2017).  Different economies are establishing agencies and bodies mandated with developing standards for pet wearable electronic equipment. The agencies also design and test wearable technologies. The major challenge that XYZ Company will have to address with regard to pet wearables are data privacy and collection involved in pet wearables. The enactment of new standards will assist the pet wearables sector to gain customary securities and compliances. The company will ensure that they focus upon privacy worries within the pet wearable marketplace by limiting data gathering and profiling to pets as well as avoiding profiling to pet owners (Väätäjä et al., 2021). The company will ensure that during instances of epidemics, like earthquakes and the coronavirus, it assists the communities by donating food and other supplies (Richardson et al., 2017). The company will also engage in community development initiatives by sponsoring activities, like sporting activities, among others.

Marketing and Sales Forecasts

To this end, smart collars are among the principal contributors to pet wearable marketplace. As such, demand for smart collars is likely to grow from working individuals who desire to monitor their pets effectively and efficiently (Väätäjä et al., 2021). Globally, employment rate is steadily rising, and owing to the long working hours and hectic lifestyle, smart-linked collars by pet owners enable them link with their pets even from workplace. Thus, demand for the devices is likely to rise in in the future. Similarly, the marketplace for sensor-based smart harnesses is equally anticipated to increase in the coming years. Therefore, the sales for the devices is likely to increase. See Figure 3 below for a pictorial depiction of the sales and marketing forecasts for pet wearable devices.

Fig. 3: Pet wearable markets by region ($ million) (Väätäjä et al., 2021).

Adapa (2016) also adds that North America is likely to continue holding the largest marketplace share in the future in as far as the marketing and sales of pet wearable devices are concerned. Rising trend towards pet humanization and adoption, increasing disposable income, as well as rising per capita animal health care expenses are among the major growth propellers of the pet wearable marketplace (Adapa, 2016). Increasing awareness of pets’ health and rising adoption of innovative pet care by an increasing number of technology-savvy pet owners are other essential factors driving the growth of the North America’s pet wearable marketplace.

Marketing Expenses

All the expenses that Company XYZ chain will engage in will be done through the various contemporary technologies as well as by word-of-mouth. Promotional activities will also be done through mainstream media and social media platforms to reach as many people as possible. Newspaper advertising, printed publicity materials, cost of running online adverts on various social media platforms, marketing teams’ salaries, personal selling costs, advertising agencies’ commissions, direct campaigns, mailing, and printing, as well as customer surveys and research costs will be incurred. Additionally, costs for branding, PR campaigns and crises management, website setup and maintenance, travel expenditures, webinars and video conferencing, design and development, samples and gifts, business cards, trade events and shows, as well as blogger outreach and search engine optimization services. Therefore, the marketing expenditure is likely to be high because there is a need to create awareness across the world to ensure that all the targeted consumers are reached.