1. Never Flat Mary Lopez Chief Executive OfficerToni Alugbue Chief Performance Officer Spencer Castillo Chief Financial Officer Trenton Templeton Chief Operating Officer John Collins Chief Innovation Officer1

2. Energy Return Wheel2 3. Overview Part One - Assessment Selection of Product Target Industry Target Niche Part Two Action Product Plan Distribution Plan Pricing Plan Promotion Plan3 4. Product Selection John Collins4 5. Energy Return Wheel Replaces inflated tubes with a rubber tread stretched over carbon nanotube reinforced composite rods Conserves potential elastic energy and converts to forward motion5 6. Comparative Product Scorecard 10Never Flat Energy Return Wheel has the highest score (188.5/9.4) Key advantages Newness/Trendy High Value/Low cost DurabilityWe can win with the Energy Return Wheel6 7. Utility Analysis of Industry 10Never Flat has highest score (188.5/9.4) Biggest advantage in form utility Value in use vs. cost Ease of useKey superiority in differential advantage Unique and Trendy Never Flat can win in its industry7 8. Trend AnalysisOnce again Never Flat has a large advantage with a ratio of 0.96 Biggest advantage is in technology and socially/culturally Based on trends we can win with our product8 9. Can We Win With this Product? Never Flat Energy Return WheelTest Utility Analysis TotalRedline Freaky XSpecialized Ground ControlTrek Bontrager All-WeatherGiant PX-1190.51071111021219.525.355.555.16.05Trend Analysis Total29/3013/3013/3013/3011/30Trend Analysis Ratio0.960.40.430.430.36Utility Analysis AverageNever Flat is the best option Product is innovative, trendy, high value in use/low cost, cultural advantage Industry potential is high High scores demonstrate we can win with this product9 10. Target Industry Trenton Templeton10 11. Competitive Product ScorecardHighest score is the Never Flat Energy Return Wheel (190.5/9.525) Key advantages in High value vs. cost, trendy/newness, and life cycleWe can win with this product11 12. Target IndustryOligopoly All competitors in maturity or decline Attack Trek decline and largest market share Never Flat is the only company in introduction and marketing We can win in this industry12 13. Industry Triangle-Sports Authority, Big 5, REI-Performance Bike, Mom and Pop Bike StoresTrek has the largest market share and is furthest into decline Trek has the largest market share and is furthest into decline13 14. Niche Selection Spencer Castillo14 15. Micro Matrix The Energy Return Wheel would be most valuable to competitive bikers and triathletes15 16. Triathlete Demographics CategoryDescriptionAge38Ethnicity88% WhiteIncome$126,000 1Male : Female60:40Hours of Usage (per week)12.1Dollars per year$4000Marital Statues66% marriedReason for Participation95%- For the personal challenge 87%- To stay in shapeNumber of Participants1,992,000 (in 2011)Magazine Subscription percentage64%Main part of the countryCalifornia, Florida, and ColoradoTriathletes are married, middle aged white men with significant buying power 21 http://www.usatriathlon.org/about-multisport/demographics.aspx 2http://www.reuters.com/article/2013/07/29/us-fitness-triathlon-idUSBRE96S08H2013072916 17. Utility BundleNever Flat has competitive advantage in form, time and information17 18. U.S. Clear DaysSouthwest has the most optimal weather for the use of the Energy Return Wheel18 19. Triathlon Locations in Southwest California: 1st in triathlon participants1 2nd in USA Triathlon adult membership2 At least 50 triathlons per year31http://www.usatriathlon.org/about-multisport/demographics.aspx 2http://www.sfia.org/reports/113_Triathlon-(Traditional-Road)-Participation-Report-2013 3Simplymaps.com/triathlons19 20. Product Plan Toni Alugbue20 21. Primary Goal At least $10 million in sales with $4 million in revenue (at a 40% profit margin) by the end of the first fiscal year21 22. Secondary Goals Become the leader of innovative bicycle tire technology by patenting at least one new technology per year Become sponsor of USA Triathlon and USA Cycling teams and present at all major competitions to promote tire Sell 3 tires per store per day (based on unit price of $300 at 56 stores)22 23. Strategy Differential Advantage: maintain a high level of differential advantage by investing at least 25% of sales revenue to research and development Brand loyalty: maintain a high level of communication with niche market of competitive cyclists through associations, magazines, and competitions Sales management: Monitor daily sales by store and offer incentive (larger percentage of sale) for increased sales. If daily requirement is consistently not met, pull product from store23 24. Trend Analysis Product Launch StageEnergy Return Wheel Growth Stage-High Performance TireFocus Trends1. 2. 3.Maturation StageFitness TireFall Out Stage-High End Performance Tire New Life Cycle Stage-Never Flat Bicycle1. 2. 3.Technological Innovation-Unique energy return system allows for greater speed and performance Economic-Long lasting and durable, it will allow customers to cut down on their spending Time-Users can spend less time in maintenance since it is mostly unneeded. Technological Innovation- Use of an imbedded chip is revolutionary Connectivity-Chip will allow information about the tire, terrain, and speed instantaneously Green Movement-Introduction of new green tire recycling program Technological Innovation-First tire to keep track of fitness related statistics Connectivity-Tire will provide users with more information than ever before Health and Fitness-Tire will provide information on Heart Rate, Calories, etc. Competitive Edge-Self Coaching application will allow users to train better than competitors Technological Innovation-Lighter and thinner than ever before Social and Cultural-Embedded chip will now be able to send information and stats directly too social media Convenience-Chip will now have bike map as well as tire performance information New Technology-Lighter frame with rechargeable battery for energy boosters Competitive edge-Highest performing bicycle yet Fitness-Rechargeable battery will allow people to train longer and more effectiveNever Flat will focus on the growth stage for distribution and advertisement purposes Technological innovation, Connectivity, Green Movement24 25. Maslows HierarchyThe Energy Return Wheel satisfies self actualization, esteem, and safety www.psychology.org/maslow.html25 26. Distribution Plan Trenton Templeton26 27. Distribution Plan Product Goals Primary Goals -Achieve $10 million in sales at a 40% profit margin-Sell three products per day per store at a price of $300 per product, with a total of 56 storesSecondary Goals -Sell a total of 56,000 products in the first year -Make 20% of sales through the web to reduce expenses associated with selling through retailers27 28. Strategy for Distribution Plan Distribution Plan Web Sales 20% Just-in-Time Competitive Advantage: 2 day shippingCoverage Store Locations: Satellites outside of big citiesStore Types Specialty ShopsTransportPromotions Companyowned Trucks Sponsoring Matt Chrabot Demos at triathlons28 29. Distribution Channel Make 20% sales through webSalesStores (80%)RetailerWeb (20%)Consumer Triathletes spend 3 hours per day on email/web-surfing1 Get the product to the consumer quickerMake 80% sales through stores Specialty bike retailers command 52% of market sales in terms of dollars2Consumer1http://www.usatriathlon.org/about-multisport/demographics.aspx 2http://nbda.com/articles/industry-overview-2012-pg34.htm29 30. Summary Summary Unit price Sales per day per store$300 3 tiresRequired units sold per year56,000Number of cities30Number of states10Number of warehouses2TransportationCompany owned trucks% of sales through web20% of total salesDistribution strategySelectiveIn order to reach $10 million in sales, Never Flat will utilize Selective distribution 20% of total sales through web Sell three tires per day per store 30 31. Pricing Plan John Collins31 32. Pricing Plan Goals and Strategy Pricing Goals Primary Goals -10 million in sales at a 40% profit margin-Sell 40,000 units in first 182 days at a price of $300 to breakeven, assuming costs of 60% Secondary Goals -Gain a market share of 10% in first year and 50% by maturation-Make 20% of sales through the web to reduce expenses associated with selling through retailers StrategyDescriptionSkim StrategyEnter the market in the introduction stage at a high price to attract innovators and early adoptersPull StrategyAdvertise directly to triathletes - more likely to respond to recommendations from other triathletes1, as opposed to retail advertisements1http://www.runskiprun.com/demographics-of-triathletes/32 33. Composition of Sales and Break Even Analysis Retail Sales $16,000,000Web Sales $4,000,000Total Sales 40,000 units3 units/day/storeTotal Sales Cost Break Even Costs % Fixed Total Fixed Costs % Variable Variable Cost per unit Unit Sales to break even Unit Sales per day to break even Unit sale per day per storeBreak Even Analysis Retail Web $16,000,000 $4,000,000 .60 .60 $9,600,000 $2,400,000Total $20,000,000 .60 $12,000,000.60 $5,760,000.60 $1,440,000.60 $7,200,000.40 $120.40 $120.40 $120$9,600,000/$300= 32,000 units 32,000 units/182 days= 175 units$2,400,000/$300= 40,000 units 8,000 units 8,000 units/182 219 units days =44 units175 units/56 stores = 3 units/day/store--33 34. Pricing Plan Over Life Cycle Second product release to Triathletes will gain market share and brand recognition$150034 35. Summary Pricing Goals Primary Goals -10 million in sales at a 40% profit margin-Sell 40,000 units in first 182 days at a price of $300 to breakeven, assuming costs of 60% Secondary Goals -Gain a market share of 10% in first year and 50% by maturation-Make 20% of sales through the web to reduce expenses associated with selling through retailersAmount Total unit sales per day219 unitsTotal daily revenue$65,700Revenue in six months$11,957,400Revenue in one year$23,914,80035 36. Promotion Plan Mary Lopez and Spencer Castillo36 37. Goals Primary GoalsSecondary Goals $10 million in salesAchieve 60% product awareness in target niche of triathletes 25,000 likes on Facebook and 10,000 followers on Twitter and Instagram37 38. Strategy Achieve sales of 3 units per day per storeCreate brand loyalty through strong word-of-mouth campaign and publicity at cycling events Engage consumer through interactive social media campaign Enlist support of spokesperson to back products features Maintain differential advantage throughout products life cycle38 39. Media Mix Thousands of Dollars35 30 25Radio - 4%20Billboards -13%15Magazines -18%10Web -25%5Social Media -40% Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun0Centered towards the beginning of cycling season Geared towards web and social media Triathletes spend 3 hours per day on email/web-surfing1 1http://www.usatriathlon.org/about-multisport/demographics.aspx39 40. Channel Mix IntroductionGrowthMaturationWord of MouthSpreads through talk93% of triathletes gave purchase advice to 12+ people in past year1Spreads through talk about our product at competitionsPublicityMatt Chrabot -Target spokesperson who is an avid, innovative cyclist with committed fan base2Niche magazines such Explore other venues as such as publications Bicycling, Triathlete, a nd USA TriathlonAdvertisingHighlight form, safety, and time saving utilityIntroduce new features as they become availablePersonal SellingSet up tents at triathlons showing the technological advantages of Never FlatHave demonstrations Promote new at conventions headed features of products by proactive social media team1http://www.runskiprun.com/demographics-of-triathletes/ 2http://www.mattchrabot.comPassed on to fellow athletes during training for competitionsHighlight continued differential advantage40 41. Message Design Category Key FeaturesKey BenefitsKey Maslow/Utility TriggersSocial hooks/TrendsContextDescription 1. Eliminates flat tires 2. Reduces energy requirements 3. Social media connectivity 4. Range of personalized statistics to improve performance 1. Eliminates flat tires 2. Easy to use 3. Saves energy 1. Self Actualization 2. Esteem 3. Safety 4. Form UtilityFocus on differential advantage Highlight safety and form utility, high self actualization of triathletes Environmental awareness and technology trends Key Words and Phrases ResistanceBeadSyntheticRollingBootMulti-compound1. Environmental awareness 2. Technology 3. PersonalizationPressureClincherCarbonPunctureElastomerNanotube1. White, affluent married males 2. 30-40 years old 3. Attractive to innovators and adopters of social/technological trendsFlatTreadSewablesApexThreadsThreads per inchAttackFoldingDiameter41 42. 42 43. 43 44. AdvertisementsTriathletes are responsive 69% purchased advertised products3 61% likely to upgrade to new gear4 Represents target niche (White male triathlete, 30-40 years old) Value statement highlights differential advantage Drives to webpage3,4http://www.runskiprun.com/demographics-of-triathletes/44 45. 45 46. 46 47. Conclusion Based on the extensive research and analyses of the product and market, Never Flat is confident that the Energy Return Wheel will win47