Heat-Eze Case Study

Summary and important facts

Mark Tanner, a successful Canadian entrepreneur bought a right to produces a reusable chemical heating pad named Heat-eze for 250,000$ and obtained a patent on the product in Canada which would last 17 years. Heat-eze should be something new product in that industry which consists of a vinyl bag containing a sodium acetate solution and small stainless steel trigger. The other unique advantage is the pad is available in two temperature settings: 117 and 130 degrees Fahrenheit. Additionally, the pad has outstanding long heat retention which up to 2-3 hours. After having rights to produce the product Mark was needed to go for next step to hire experienced marketing manager. Richard McKay became that person with the salary of 75,000$ per year. Richard had extensive sales experience, including the introduction of new products to Canadian market. After being hired Richard decided that Heat-eze can be sold in three broad segments: 1. The medical treatment market, 2. Personal warmth (seat cushions, survival clothing, hand warmers). 3. Heating of inanimate objects (food service, industrial equipment).  After making marketing analysis Richard had decided that the medical treatment market can be the most demanded segment for Heat-eze. Next he met issues with competition which were Electric heat pad, Hot water bottle, instant hot pack, reusable hot pack and home pack. All they have different weaknesses and here Heat-eze has very high competitive advantage except high initial price. The next step was creating focus groups to evaluate chances reaching success. The focus groups were divided into three groups: Consumer market, institutional market and physiotherapists.  Were Identified all key uses, key product features, prices and benefits. After collecting all information, making analysis and getting results Richard decided to choose three distributors with 15% of requiring margin on their sales, Canadian Hospital products, Northern Medical and Quebec distributor. Richard added three salespeople to get more effect and they divided service responsibilities to home, institutional and Quebec market. All expenses for them approximately would be 60,000$ per year. Thus Richard begun the introduction to the market with optimistic expectance.  

Statements and problems.

The product:

• Different location of suppliers which made complicated for stable process of producing.
• The high cost of materials that demand significant financial invest.    

The market:

• Due to comparatively higher price Heat-eze doesn’t have advantage on the personal warmth and heating of inanimate objects markets.

The Medical Treatment Market

• The Heat-eze will be popular among old people but those old people have strict budget which will be main problem for them to buy.

The competition:

• The Heat-eze has superior comparative advantages in all sides but one thing that will be big problem is that all competitors have occupied the market and have their positions for some years rather than Heat-eze which is only introducing to the market.

Focus groups:

Consumer Market

• The group indicated that a warranty will be would be critical initial purchase decision.
• Some felt a towel cover could be provided for an additional sum.

Institutional Market

• Price is a major factor for older people on restricted incomes.
• Problem of the ability of cost effectiveness

Physiotherapists

• A need to guarantee treatment time and product life.

Heat-eze a reusable heating pad is really demanded and has outstanding advantages between other competitors but, there are still many problems to consider in terms of competition and what market segment to go after. Here we can see that it needs to develop an appropriate successful strategy in the market.