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JetFan – Marketing Strategies
JetFan is a superior fan impeller technology. It can be modified to apply to a variety of applications and has already been incorporated into several prototype products that are suitable for commercial production and exploitation, including a computer chip-cooling fan, fiber optic light source cooling fan, a hairdryer and vacuum cleaner. JetFan will manufacture the impellers for these products and will supply JetFan impellers to CEEC fan manufacturers. In CEEC, HVAC and domestic appliance markets, product development will continue with a two-pronged approach:
- Identify OEM-driven needs for superior cooling applications and then collaborate with these lead user OEMs to develop the required fan unit specifications,
- Collaborate with fan manufacturer strategic alliance partners to develop, prototype, test and manufacture the required fans.
JetFan Ltd will utilize the established distribution networks of its strategic alliance partner through to the OEMs. By focusing on the manufacture and supply of fan impellers, JetFan Ltd circumvents the need to market and distribute complete fan units to OEMs.
Fan manufacturers will be able to increase their profit margins on ‘JetFan-enabled’ fans because OEMs are willing to pay a premium for fans with superior cooling performance. OEMs can readily bear a price premium on superior CEEC fans because the fan represents a very small percentage of the cost of compact electronic equipment. In high-end applications where chip cooling, for example, is a limiting factor on product miniaturization and no traditional fan can currently meet the required airflow, then the price is not relative to other fans. The price is relative to the value added by the fan to the end product and accordingly such a fan commands a substantial price premium due to the market advantage it offers the OEM. According to our research to date, fan manufacturers, OEMs and CPU manufacturers in Asia and North America have identified that they would be willing to pay price premiums for superior fans in proportion to the additional airflow (and therefore cooling) produced. For example, a fan with 40% greater airflow could command a 40% higher price. JetFan Ltd will adopt a price skimming strategy which will position the JetFan Revolution as a premium product, initially, for high-end applications such as portable computers.
Our market research interviews with fan manufacturers and computer OEMs show that a fan which enables more powerful laptop computers to be produced will easily command a significant premium, up to $10.00 or more per unit indicated one manufacturer. (Sunon’s smallest CEEC fan currently sells for $6.00.) Fan manufacturers have indicated they would pay as much as $2.00 for JetFan impellers in this application. Whereas that would increase unit production cost from $5.40 to $7.40, the manufacturers’ gross profit per unit grows from $0.60 to $2.60; i.e. from 10% to 26%. Over time, after high-end applications have been addressed, this pricing model will change from the above value-added approach to the more traditional cost-plus-margin model. The price skimming strategy will allow JetFan Ltd to gradually lower the price and enter additional markets and applications.
As explained in the Strategic Market Entry section earlier, JetFan Ltd will employ a three-pronged approach to promotion:
- Collaborate with CPU chip manufacturers;
- Promote the benefits of JetFans directly to OEMs; and
- Target fan manufacturers for strategic alliances and long-term supply arrangements.
Collaborate with CPU chip manufacturers
Collaboration with CPU chip manufacturers is currently under way. Recently Terry Day has been in discussions with Intel technical staff in comparing JetFan impellers to traditional fan impellers. An Intel engineer indicated that three 130mm JetFans will provide better cooling than the four 172 mm fans they had intended to use on an upcoming product. Such collaborations will provide strong support in promoting the benefits of JetFans to OEMs.
Promote the benefits of JetFans directly to OEMs
At the OEM level, relationship marketing will form the basis of the strategy, with JetFan Ltd representatives regularly meeting with the key decision,makers in lead user OEMs. The key trade shows affecting the CEEC markets will be attended. The features and benefits of the JetFan will be communicated to OEMs through conference presentations and publication of scientific testing results in trade journals. In addition, advertisements will be placed in trade journals and magazines that target decision-makers.
Ultimately, JetFan will also be promoted via strategic alliance partners’ catalogues of fans. These catalogues are used by the OEMs in determining their fan supplier(s). The project design engineers within OEMs specify the fan type to include in their respective products. JetFan will collaborate with the project design engineers and strategic alliance partners to modify the JetFan to meet these requirements.
Targeting fan manufacturers for strategic alliances
Leading fan manufacturers will be approached with a view to forming strategic alliances. The leading fan manufacturers in each market segment have been identified, and the larger manufacturers will be approached first. Preliminary discussions have begun with Sunon, Sanyo Denki and Delta. The marketing strategies are outlined in detail in Appendix 3.
|JetFan Technology Limited|
|Table of Contents||Appendices|
|0. Executive Summary
1. The Company’s Profile
2. Market Analysis
3. Strategic Market Entry
4. Marketing Strategies
5. Operational Plan
|Potential Product/Market Matrix
Management Team Resumes
The Cooling Fan Specification Process
|© JetFan Technology Limited|