Business Proposal
Brittanie Nye
ECO 561
December 5, 2014
Don Olsen
JR-FLEX Youth Helmet Business Plan:
As a parent, I understand how fast kids grow. That being said, if your child in into motorsports you know how expensive it can be to purchase new helmets every year! On average youth helmets cost between $80-130. If you are lucky that helmet will last all year. However, chances are that it will be too small within 6 months. My solution to this very frustrating and expensive problem is to create a youth helmet that adjusts to your child as they grow. The shell of the helmet will be lightweight in order for younger children to be able to keep their heads stabilized, go through rigorous safety ratings to ensure that you are getting the best for your little ones, emergency release padding, the option of tinted visors, and great noise reduction to reduce the chances of hearing damage.
JR-FLEX will offer youth helmets that grow with the child. Recent trends have shown that more and more children are entering into the motorsport industry, whether they are riding with their parents or are riding their own motorcycles. Over the last 5 years children have increasingly saturated the motorsport industry with about a 5% increase each year.
Elasticity:
This product is relatively elastic due to there being no other product such as this one on the market. Every youth motorsport helmet currently on the market has a life span of about 6 months to a year due to children growing. Our new line of youth helmets will be more suitable to the growing market because they will be able to fit the children longer. This product is relatively elastic due to there being no other product such as this one on the market. Every youth motorsport helmet currently on the market has a life span of about 6 months to a year due to children growing. Our new line of youth helmets will be more suitable to the growing market because they will be able to fit the children longer. The larger portion on income in relation to the product will also increase the elasticity of demand. However, this will not make a large impact on the elasticity do to the higher costs for the helmet being a marginal difference in the grand scheme of the portion of income that would be devoted to purchasing the helmet.
There are many different things that impact the elasticity of a product. One thing that impacts the elasticity of a product is the pricing of the product. The price of the JR-FLEX will result in an increase of elasticity due to the fact that it will be a more expensive product than what the consumers are currently exposed to. However, the increase of the price elasticity will be minor. These helmets will run in the $250 range whereas most youth helmets are in the $100-150 range. Another thing that impacts the elasticity of a product is the changes in quantity supplied. Once the product is established and in higher demand, we will be able to order larger batches of items at a lower cost, therefore reducing the overall cost per item (decreasing marginal costs). In turn this will also allow the company to increase marginal revenue. As the consumers grow more comfortable with our product we can offer sales on our helmets leading to an increase in total revenues for the company. By offering sales on the helmets that would allow the company to further saturate the industry by providing a product at a price that everyone can afford.
Market Structure:
After doing some research on the motorsport industry it appears that the market structure for the JR-FLEX is a monopolistic competition. This is due to there being a large number of sellers of youth motorsport helmets. This will require JR-FLEX to find selling strategies that help distinguish our product from the competition such as materials used, safety features, noise reduction, etc. Using better materials and enhancing the safety features of youth helmets would target the safety conscious parents and youth racers and should make