Market Demand / Potential
I chose to consider the market demand and market potential of bagless vacuum cleaners in North America. “In the past few years, these products have risen (by the most conservative analysis) to 20 percent of upright units and lately 40 percent of the dollars. As the industry set sales records, nearly all its growth came from bagless. Even Hoover, which publicly decried cyclonic action as less efficient, bowed to the inevitable and introduced its version of bagless in mid-2000 -- and quickly became a volume leader (Beatty, 2002).” Why are bagless vacuums so popular? “The reasons have long been accepted. Consumers find it convenient not to hunt down and change bags; less messy to empty a cup; and important to know how full is the receptacle. These are step-up features, and consumers are willing to pay a premium for the technology (Beatty, 2001).” Current demand seems to be high. A “spot check of some chain stores in the New York area showed that for uprights, displays gave bagless nearly equal space. The average was seven SKUs with cups and eight machines requiring paper or cloth bags. For bagless full-sized models, prices spanned from $115 for a Hoover on sale at Kohl's and $128.82 for
It would seem that a vacuum would not be a product with a great deal of sales potential. After all, how many vacuums can one family really own? But, according to appliance magazine, the real phenomenon of the vacuum cleaner market, is the number of families that own multiple vacuum cleaners. “About 60 percent of U.S. families have two or more full-size vacuum cleaners in their homes and 30 percent of them have at least three.” I also consider bagless vacuums to be a product with great potential because of their long-term value. Bagless vacuums retail for about the same price as competitive bag vacuums, but end up being a lower cost to the consumer since there are no replacement bags to purchase. I think that Fantom’s falure was in their use of infomercials to establish brand awareness. When the Fantom idea began to hit, other established vacuum cleaner manufacturers released vacuum cleaners using the same bagless concept (Hawthorne Direct, 2002). The established names in the vacuum industry won more business than the originator of the concept. Wal-Mart's GE unit to $280 for Hoover's best -- and it's higher in specialty stores (Beatty, 2001).” In surveys nearly 50 percent of customers said they preferred bagless in 2001, and considering the declining costs of
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Approximate Word count = 866
Approximate Pages = 3 (250 words per page double spaced)
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