US electricity is mainly obtained from coal, natural gas, and nuclear power. It is estimated that about 40 percent of US electricity is obtained from coal while only 7 percent comes from renewable energy ( Cicala, 2015 ). Coal is an expensive and inefficient source of electricity. This has made it impossible for the government to lower the cost of electricity for business. However, the advancement in technology especially in the LED technology has enabled businesses to install modern LED bulbs which consume less energy and are environmentally friendly compared to traditional fluoresce bulbs. It is against this backdrop that this business plan proposal intends to develop a new advanced LED bulb that consumes less energy compared to existing products in the market.
Product Description
The new advance bulb will be developed by Beta Company and named Beta LED bulb. According to Long, Gosavi, Qin, and Noll (2012), using LED bulbs can help businesses to save more than $2500 over four years. The LED bulb proposed in this paper consumes 40 percent less energy compared to existing bulbs in the market. The development of the product employs high-end technology to ensure the new bulb consumes little energy, which will help businesses to achieve their goals of reducing operational costs. The reason why LED technology has succeeded in appealing to its customers is its significant ability to save energy compared to traditional fluoresce bulbs ( Jang, Kim & Lee, 2015). The new proposed LED bulb is an advance bulb that generates more light at a lower cost than existing LED bulbs in the market. One of the benefits that have been added in the proposed bulb is increased light and lifetime. The existing LED bulbs in the market have a service life of about 4 years but the advance LED bulb is expected to have a service life of 8 years. The additional 4 years and lower cost is expected to save customers a significant amount of operational cost
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Technology
The new LED bulb will employ advance technology to generate high-end lighting at a low cost. For instance, the proposed bulb is expected to consume 12 watts to produce enough lighting compared to existing LED bulbs that require about 17 watts to produce the same amount of light (Sun et al., 2013). This represents a 30 percent decline in operational cost at home and our businesses. Besides, the bulb will reduce ambient heat by a significant margin.
Pricing strategies
Pricing plays a critical role in determining how customers will perceive the new product. Before adopting a pricing strategy, it is imperative to understand customer behavior and the nature of the market. The LED bulb market is characterized by high price-sensitive customer behavior. There are many alternative products in this market, which makes it easy for customers to switch to other brands. In most cases, customers prefer to get the best return at the lowest price possible. Therefore, since the new advance LED bulb to require less cost to produce compared to existing brands in the market, the pricing for market entry will be slightly below its competitors.
Strategic challenges
One of the most difficult challenges that will determine the success of this new product is developing a strong brand name. According to Brexendorf & Keller (2017), a brand name creates a strong impression and memories on the minds of customers which determines whether they buy the product or not. The beta LED bulb will position itself as a low cost, cost-efficient, and long-life bulb to appeal to its customers.
Conclusion
In summary, the new advance LED bulb is expected to appeal to customers because it meets their need. First, it uses less energy to produce similar energy to existing bulbs in the market. Secondly, it is affordable and has a long service life than existing products in the market.
References
Brexendorf, T. O., & Keller, K. L. (2017). Leveraging the corporate brand: the importance of corporate brand innovativeness and brand architecture. European Journal of Marketing , 51 (9/10), 1530-1551.
Cicala, S. (2015). When does regulation distort costs? lessons from fuel procurement in us electricity generation. American Economic Review , 105 (1), 411-44.
Jang, D., Kim, R., & Lee, K. (2015). Correlation of crosscut cylindrical heat sink to improve the orientation effect of LED light bulbs. International Journal of Heat & Mass Transfer , 8 (4), 821-826.
Long, S., Gosavi, A., Qin, R., & Noll, C. (2012). Evaluating Useful Life and Developing Replacement Schedules for LED Traffic Signals: Statistical Methodology and a Field Study. Engineering Management Journal , 24 (3), 15-23.
Sun, B., Zhao, L., Wei, T., Yi, X., Liu, Z., Wang, G., & Li, J. (2013). Shape designing for light extraction enhancement bulk-GaN light-emitting diodes. Journal of Applied Physics , 113 (24), 243104.
