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Product Scenario

"Air Purifier Market Size was valued at USD 6.3 billion in 2022. The air purifier market industry is projected to grow from USD 7.0 Billion in 2023 to USD 13.4 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 11.4% during the forecast period (2023 - 2030)."

Perfect Purifiers LLC (PP LLC) has been in the Air Purification business for over ten years. They specialize in producing three types of air purifiers.

• High Efficient Particulate (HEPA) Air Purifiers: HEPA filters suck in air through a special HEPA filter and push out fresh air. HEPA purifiers can trap air particles as small as 0.1 Microns.

• Spray Air Purifiers: These small and mobile purifiers spray air into a room or compartment and neutralize gasses or odors. PP LLC has options for cleaning agents to be included in the spray.

• Commercial Air Scrubbers: These are heavy-duty air purifiers used for industrial or commercial purposes. PP LLC produces both wet scrubbers and dry scrubbers.

Opportunity and Team

PP LLC believes they have an opportunity to improve upon their current HEPA air filter line and address a market problem. They have asked Robert Winston to be the Product Manager for this effort. Robert is assigned to Operations. Valerie Kumar will act as the Sponsor for all product initiatives. Valerie will provide funding to approve the Product Concept Document and the Business Case. A team is assembled with the initial goal of designing and developing several prototypes with various features. Initial funding of $30,000 has been allocated to support team resource needs during the Conceive and Plan phases. In addition, the team was tasked to develop value propositions and positing statements to support the ultimate product launch. Robert will work closely with the following team members. The team will meet every Tuesday afternoon to discuss the status.

• Sylvia Sanders: Marketing Lead • Hiroshi Tanaka: Lead Engineer • Ram Chopra: Design Lead • Maggie Jones: Product Owner • Sarah Newton: Project Management • Raul Hernandez: Operations Lead

Market Information

HEPA Air Filters are extremely popular. However, there are issues associated with their purchase. PP LLC surveyed many current buyers and users and analyzed the market problem. Here are some of the biggest shortfalls PP LLC hopes to address with its new HEPA Air Filter product line.

• HEPA filters are not designed to remove volatile organic compounds (VOCs) and viruses from the air. This is a shortfall. Customers want a purifier that eliminates as many of these contaminants as possible.

• HEPA filters cannot remove odors from the air. Many customers have stated they want a purifier to address this issue and clean the air.

• Some HEPA purifiers generate Ozone. This can harm the health of the user and the environment. Many customers state they will not purchase any product with ozone emissions.

• HEPA purifiers must be regularly maintained. They can become a breeding ground for mold and bacteria if they aren’t maintained. Customers state that they want a purifier with minimal maintenance needs.

• HEPA filters are recommended to be replaced annually. Replacement filters are expensive. Customers state they would like an improved solution.

• Some HEPA purifiers are noisy and distracting. The less noise, the better.

• Many HEPA purifiers only cover a small area. Customers want wider purification coverage at lower prices.

The Competitive Market

There are many HEPA Air Purifiers on the market. Some primary competitors include Donaldson Company Inc., Hengst, MANN+HUMMEL, Honeywell International Inc., and Daikin Industries Ltd.

However, no product eliminates many issues cited by customers. PP LLC believes the time to market its new product line is now. Consumers are increasingly concerned about the air they breathe and are looking for an optimal product solution. It is currently 5th January. PP LLC wants to launch its new line in the next six months to satisfy the summer season that hazardous air conditions have recently plagued due to a few circumstances. They anticipate the design will take three months, development two months, and beta testing one month.

Product Development

Robert and Valerie worked together and estimated initial costs of $80k to build three distinct prototypes with five features. They believe that returns will exceed $200k annually for two years, with an Internal Rate of Return of more than 200%.

Valerie will initially want to measure current versus post-launch market share, sales, revenue, and customer satisfaction. The new and improved purifier line fits well with the current PP LLC vision to expand sales and the current market by offering new and improved air filtration technology to benefit current and future customers.

The Engineering team believes they can improve upon the current HEPA line as follows in priority order. They plan to break out product design and development into three phases.

Phase Purifier Deliverables

Phase 1:

Design: January

Develop: March

• Develop a new dual HEPA purifier with an air freshener and cleaning option.

• Reduce noise levels by 50%.

Phase 2:

Design: February

Develop: April

• Introduce a new HEPA filter that is easy to remove and replace, less expensive than average filters, and extends filter life to one and a half years.

• Improve motor strength to increase filtration coverage by 50%.

Phase 3:

Design: February

Develop: May

• Eliminate or significantly reduce all ozone generation.

The goal is to have three basic purifier models at various pricing levels.

• The Basic Purifier: Reduces noise and ozone emissions.

• The Better Purifier: Reduces noise ozone emissions and increases motor strength.

• The Ultimate: Reduces noise ozone emissions, increases motor strength, includes the new and improved HEPA filter, and adds an air freshener and cleaning option.

Marketing Research Results

Sylvia did some initial research and learned the following:

• "56% of consumers who decide to purchase an air purifier for their home are above the age of 35. Households in the 25-29 age demographic are the least likely to purchase an air purifier, with just 7.4% doing so. (Kaz, Inc.)"

• "46% of homes with 2+ adults own an air purifier. Single parents with children own an air purifier just 3% of the time. (Kaz, Inc.)"

• Customers want a safe and efficient system that is reasonably priced and eliminates as many issues as possible that impact current HEPA air purifier offerings on the market. Ultimately, they want to ensure the air they breathe is clean and void of as many health dangers as possible.

• Sylvia assumes that PP LLC can increase revenue by 25%, expand its existing market by 10%, and reduce product returns by more than 50% once the new product line is launched.

Operations Overview

Raul Hernandez believes PP LLC can distribute its products through wholesale, retail, and online channels. PP LLC currently has a solid distribution channel network it can leverage.

Raul cited that engineering delays, cost overruns, supply chain issues, and distribution channel price increases are the primary risk factors. Raul recommended Sarah Newton to manage the project aspect of the launch. Sarah has a solid risk management background and numerous supply chain and distribution contacts she can work with to mitigate potential risks.