COVER PAGE

DECLERATION

EXECUTIVE SUMMARY

The following report has been undertaken to estimate the sales of an All In One breakfast maker. The
product will allow for a full English breakfast to be made by incorporating a toaster, bacon grill, and
an egg cooker. Through the report the general South African environment and competitive products
were evaluated. Taking these into consideration, the market was then analysed before a product target
market was established. A market survey was then drawn up to collect responses from potential
customers. The survey was drawn up to create a basic understanding on if the target market would
accept the All In One and how they would value it. These responses were analysed, and a base for
sales predictions could be made. Optimistic, realistic, and pessimistic sales forecasts were then drawn
up, and it was concluded that average sales of 20 000 units a year could be forecasted. This could also
be increased if a new model of the product was released. This newer model would better satisfy the
customers desires.

TABLE OF CONTENTS

COVER PAGE.......................................................................................................................................i
DECLERATION...................................................................................................................................ii
EXECUTIVE SUMMARY..................................................................................................................iii
1. ENVIRONMENTAL ANALYSIS.....................................................................................................1
1.1 Political environment...................................................................................................................1
1.2 Economic environment................................................................................................................1
1.3 Social and Demographic environment.........................................................................................3
1.4 Natural environment....................................................................................................................3
1.5 Technological environment..........................................................................................................3
2. EVALUATION OF COMPETITION................................................................................................4
3. MARKET MIX.................................................................................................................................6
3.1 Product........................................................................................................................................6
3.2 Place............................................................................................................................................6
3.3 Promotion....................................................................................................................................6
3.4 Price.............................................................................................................................................7
4. THE MARKET AND THE PRODUCT TARGET MARKET...........................................................8
4.1 The market...................................................................................................................................8
4.2 The target market.......................................................................................................................10
5. PRODUCT DESCRIPTION............................................................................................................11
6. INSTRUMENT USED TO COLLECT DATA................................................................................12
6.1 Market Survey Questionnaire Template.....................................................................................12
6.2 Survey analysis..........................................................................................................................13
7. SALES FORECAST........................................................................................................................15
BIBLIOGRAPHY...............................................................................................................................17
APPENDIX.........................................................................................................................................19
Extra Information Pertaining to the product Inspiration..................................................................19
Communication that explains product to market..........................................................................19
Questions asked...........................................................................................................................19
The Following Pages Contain The Answered Questionnaire...........................................................20

TABLE OF FIGURES

Figure 1: Unemployment rate of South Africa [7].................................................................................2

Figure 2: Value Added to GDP from 1998 to 2008 [27].........................................................................2
Figure 3: The All In One Breakfast Maker...........................................................................................11
Figure 4: S-Curve showing the realistic sales forecast.........................................................................16

LIST OF TABLES
Table 1: A compilation of estimates of annual per capita personal income by race group in 2000 Rands
and relative to White levels, 1917-2008 [25] ........................................................................................9
Table 2: Tabulated Sales Forecast for the Product...............................................................................15
Table 3: Urban populations of South African provinces [23]...............................................................19

1. ENVIRONMENTAL ANALYSIS

The ability to sell a product is an important criterion in the product development. This ability is
controlled by the environment, and therefore the product has to be accepted by the environment being
investigated. Environmental factors include political, economical, social, natural, and technological
[1], and these will be discussed further.

1.1 Political environment

The political environment fundamentally consists of laws and regulations (constitution), government
(political system) and pressure groups. In terms of political system, the republic of South Africa is a
constitutional democracy, which consists of a three tier government system. The republic consists of a
local (municipalities), Provincial and National government, which form the first, second and third
layer of the government respectively [2]. Pressure groups are groups that influence legislation and the
government course of action [3]. An example of this would be COSATU (Congress of South African
Trade Unions), which is in an alliance with the governing ANC (African National Congress) party.
The interference of pressure groups may impact a products upbringing or success, and therefore the
analysis of pressure groups and the government at hand is crucial in product development.
Business legislation has been increasing at a constant rate. Factors concerning competition,
environmental and product safety, and pricing have been have been implemented or modified over the
years. The South African competition law and policy, for instance concerns itself with increasing
competitive nature, and ridding of the economic power abuse instilled by firms (e.g. monopoly) [4].
South Africa's Political system implements certain labour laws, environmental laws (Environment
conservation act (ECA)), and trade restrictions (Trade and Trade policy in South Africa), which also
induce a constraint on product development.

1.2 Economic environment

The economic environment consists of aspects that influence the amount of consumers and their
purchasing power (i.e. interest rates, economic cycle and stage of the economy).The South African
economy is a free market economy. A free market economy is an economy for which prices and
decisions are determined by supply and demand. According to 'Statistics South Africa' the population
of South Africa from mid 2011 was estimated to be 50.587 million [5], of which 4,010,980 were tax
payers (with respect to tax returns) [6].The unemployment rate is quite high, measuring around 23.9
% at the end of 2011 according to 'Trading Economics' [7] (Refer to Figure 1). The amount of South
African consumers contributing to a newly introduced products success is mainly restricted to the
employed portion of the economy.
1

Figure 1: Unemployment rate of South Africa [7]

During the recent recession in South Africa (late 2000's ), there were less South African consumers
due to the crisis, however recovery seems well on its way and growth seems fairly close to what it
was. There exists however another problem arriving to South Africa's economy. Due to parts of the
Eurozone being in recession, a multi-national debt crisis greatly affects the European and American
economy. This badly affects the South African economy because of rising inflation and damaged
foreign trade
From Figure 2 below, it can be seen that the South African economy is trending to higher
manufacturing and Finance GDP, even higher than previously fundamental mining GDP. This
represents a more first world environment.

Figure 2: Value Added to GDP from 1998 to 2008 [27]

1.3
Social and
Demographic environment
The social environment consists fundamentally of people's behaviour, their communities, and their
conditions and way of life. According to 'SARPN' (South African Regional Poverty Network), 40 to
50 percent of the population is living in poverty [8]. Places in South Africa such as Gauteng have high
levels of poverty, as the population growth rate is higher than the housing supply. The social
environment is negatively affected in such circumstances.
South Africa is referred to as the 'rainbow nation', due to the diversity amongst the peoples culture,
language and ethnicity. In terms of ethnic groups, according to 'Statistics South Africa', the black
population make up 79.4 %, white population make up 9.1 %, coloured population make up 8.9 % and
Indian/Asian population make up 2.6 %. The religion in South Africa is greatly dominated by
Christianity at about 73.5 % [9]. In terms of language, South Africa has 11 official languages, ranking
as one of the countries with the most official languages. The Education system provides compulsory
primary education for children between 7 and 15 years old. The secondary education pass rate for
matriculates in 2011 was 70.2 %, which is quite high compared to previous years. Of the matriculates
24.3 % qualified for Bachelors studies, which is also an improvement [10].

1.4 Natural environment

The natural environment consists of natural recourses needed by marketers, and the effects on nature
itself [11]. South Africa ranks highly in the world in terms of natural recourses and biodiversity. The
mining of minerals and ores was the foundation of the South African economy. Minerals and Ores
such as gold, coal, platinum and diamonds make large revenue earnings in terms of exports. In an

agricultural aspect around 13% of the soil can be cultivated, and the agricultural exports are beneficial
to revenue earnings, even though South Africa is not self-sufficient in the agricultural yields [12].

1.5 Technological environment

The technological environment offers new and improved opportunities to marketers. South Africas
technological environment focuses on such things as the integration of technological systems into the
population, as well the development of the technology field in general. The government has made an
objective to implement high technology reliance into the economy in order for South Africa to be able
to compete with foreign manufacturing. South Africa is not very well known for the creation of new
technologies, for instance the automated pool cleaner Kreepy Krauly is one of only a few South
African developments. The reason for the lack of technological development can be attributed to the
fact that only a small percentage of South Africans are educated at the level required for such
development. This combined with the fact that the South African economy does not emphasise
technological development due to more pressing needs, has resulted in an economy with little
dependency on technology.

2. EVALUATION OF COMPETITION

The direct competition of the proposed product is limited to a few products that are available on the
market at the moment. While conducting research of similar products, only two brands were found to
be producing goods that would be considered direct competition.
The first of these brands is Back to Basics , an American house ware manufacturer that started in
1971 as manufacturer of home canning and food processing products. The company offers a large
range of kitchen products, including appliances for making popcorn, warm drinks, etc. In September
2005, Back to Basics launched their Egg & Muffin Toaster, which sold 500 000 units in its first year,
and was the number 1 selling product for Q4 2005 in the category Toasters [13].
The first Egg & Muffin Toaster model that was released was the Back to Basics TEM500 Egg-andMuffin 2-Slice Toaster and Egg Poacher. This unit is capable of toasting two slices of bread, and
poaching an egg at the same time within 4 minutes, quickly creating the components of a breakfast
sandwich, after which it automatically shuts off. The egg poaching tray can also be used to heat a
variety of meats. In addition to this function, the poaching tray can also hard boil 4 eggs. This model
retails at US$33.99 (ZAR 262, 23) [14].
The second model offered by Back to Basics is the Back to Basics TEM4500 4-Slot Egg-and-Muffin
Toaster, which is very similar to the TEM500 model, but is a larger model that can toast 4 slices of

bread, poach two eggs or boil up to 8 eggs. It is also capable of defrosting products such as croissants
and bagels. This model retails between of US$54.99-59.99 (ZAR 424.25 to 462, 82) [15]
Neither of these products are available in South Africa in local retailers, but are available for online
purchase from websites such as Amazon.com. This obviously entails shipping fees and fluctuating
exchange rates that would increase the prices.
Another product available on the market that poses direct competition is the Chefscape TEMPR 4Slice Egg and Muffin Toaster. This toaster is very similar to the Back to Basics TEM4500 model. It
is a very similar design and the same features functions, but has a higher price of US$69.17 (ZAR
536, 07). This product is also only available through online purchase [16].
As the products stated above were priced in American Dollars, the local prices were calculated using
the rates of exchange on the 26/03/2012 [17].
Other products that could be considered direct competition are conventional devices for preparing
toast, bacon and eggs, i.e. Normal toasters and a frying pan and stove. These devices however require
more effort to operate, since they are separate devices, and a frying pan requires constant attention to
correctly cook food without burning it.
Any other form of a breakfast meal could constitute to indirect competition to the considered product.
This includes things such as breakfast cereals (Corn flakes, Rice Crispies, etc), cooked porridges
(Oates, pap, etc), yoghurts, fruit, snack bars, pancakes, scones, sweet and savory muffins, etc. Some
of these products are more or less in the same price bracket of a breakfast of bacon, eggs and toast,
and the considered product provides the convenience of making the breakfast in a small amount of
time with a little effort.

3. MARKET MIX
3.1 Product
The all in one breakfast maker is based on the conventional bread toaster that one may find in most
kitchens around the world. The proposed product is a logical extension of the conventional toaster.
Instead of a toaster that only makes toast, the all in one breakfast maker is a breakfast unit that allows
the user to make toast as per usual with the addition of being able to cook bacon and boil, poach or fry
eggs all at the same time. The product may also be used to perform one function at a time thus
allowing for versatility. The product will be sold with a limited-time warranty to assure customers of
the products quality. The main risk when selling a product like this is lack of interest. Many potential
customers will be wary to buy such a new type of product as they will not be sure how it works or
how it will fit in to their existing kitchen appliances. Details of how these risks will be reduced will be
covered in the Promotion section.

3.2 Place
The channel through which the product will be sold will be through large appliance suppliers and
general wholesalers such as @Home, Game, Macro and PicknPay Hypermarket. The transport of the
product from manufacturing point to the outlet will be done by an external transport company as the
cost of buying transport vehicles and employing drivers is too high for such an early stage of the
business. For the convenience it offers, this product will also be available for purchase online. Details
of online advertising will be discussed in the Promotion section. Delivery of the product from
6

online sales will be contracted to a delivery company. It would not be necessary to open an outlet to
sell this product as the supply channels are already well established and the cost of opening an outlet
cannot be justified with only one product. This product is intended to replace the toaster in everyones
kitchen the intention is for this product to last for a long time as it becomes a standard appliance in
all kitchens along with the microwave, blender and food processor. Place relates to the product as the
product is a shopping product a product that is not bought every day and is usually only bought after
considering all the other competitors [18].

3.3 Promotion
Promotion of this product will mainly include print media and electronic media to target the final
customer. Emphasis will be placed on the brand name of the product so as to create a buzz for the
brand in case the brand wishes to expand to other products in the future. Some advertising will occur
through the outlets promotion channels; specifically television adverts and newspaper supplements.
As mentioned in the Place section, it is not intended for the product to be sold through Verimark or
Glomail as these outlets promote products using television infomercials which while often effective,
infomercials devalue the product through non subtle and often annoying advertising. To effectively
focus the advertising towards the target market, the product will be advertised using Google and
Facebook advertising. These advertisement platforms allow for targeted advertising through word
recognition software [19]. This will allow us to find potential customers that are already looking to
buy appliances online. The advertising should not put forward the notion that the supplier is desperate
to sell the product but rather the advertising should entice the potential customer to desire the product.
As this is a new product, initially potential customers will be wary to buy it as they are unsure of its
operation, reliability and quality. To overcome this problem promotion of this product will also
include public demonstrations at conferences and outlets which will allow the potential customers to
get familiar with the operation of the product.

3.4 Price
Once the total cost of the business to manufacture, package and advertise the product has been
calculated, the cost per unit can be calculated. The business will seek to minimise these costs to
increase profit. The price of the product will include this cost. Mark-up will be added to the price to
make up the profit per unit. Competition for this product is low as many of the people surveyed have
not seen a similar product. This will allow the business to function as a monopoly where the selling
price will be determined by what price the customer is willing to pay for the product and not on what
competitors are selling their product for. According to the survey, potential customers would be
willing to pay around R350 for this product. The product will be sold for a once off price. No credit

terms will be offered on this product as the price will simply be too low to offer any other method of
payment other than a simple once off payment.

4. THE MARKET AND THE PRODUCT TARGET MARKET

4.1 The market
An evaluation of potential buyers in the market must be made. The market for initial business plans is
solely the `South Africa market. The market must be evaluated in segments so that buyers can be
identified. To identify the market, three different ways in which the market is divided (amongst
others) in this report, are industry, demographics, and psychographic.
The Standard Industrial Classification Code (S.I.C.C) is a way in which industries are classified.
Household appliances are classified with a S.I.C.C. code of 3639 [20], with the first number
indicating that this industry is classified under manufacturing. The manufacturing industry has been
seen to be growing very fast in South Africa. Manufacturing comes in as the second largest sector, in
terms of value added to the GDP, of the country with a contribution of 16, 2 % [21]. Although a lot of
this wealth contribution is from sectors aside of household appliances, it shows that manufacturing is
growing in South Africa, and has attracted interest from investors.
Demographically speaking, there is not much segmentation of the market as the product can be
pitched to many people across races, genders, and ethnicities. Breakfast is often said to be the most
important meal of the day, and most people do eat breakfast. However, the market can be
demographically segmented by income, as the product will be viewed more as a luxury than a
8

necessity. South Africa has a very poor distribution of wealth, with high income inequality amongst its
people. This can be seen by an evaluation of its Gini coefficient. The Gini coefficient measures the
inequality of income distribution. A Gini coefficient of zero means wealth is equally dispersed
amongst the people. A Gini coefficient of one (100%) expresses maximum inequality among values.
This would imply one person has all the wealth.
Developing countries such as South Africa tend to have a Gini coefficient of around (40%) [22].
However, largely because of apartheid, South Africa has a much higher coefficient. An external
evaluation sets South Africas Gini coefficient at 63, 1% in 2008 [22]. A more in depth internal
evaluation by The School of Development Studies at The University of the Kwa- Zulu Natal sets the
Gini coefficient of South Africa at 0,59 (59%) [23]. This indicates that a very small percentage of the
population receives most of the wealth of the country. By understanding the workings of the Gini
coefficient, it can be said that about 20% of the population receives half the income. This tells us that
although there are few prospective buyers, these buyers have an extremely high buying power, and
can afford to buy luxury items. The All In One breakfast machine can be classified as a luxury.
The next segmentation to be looked at will be the psychographic segmentation of the market. Through
independent surveys, it can be seen that roughly 33% of the urban population of South Africa, the self
gratifiers, would be the main target market for the All In One [24]. These people have been described
as living for the moment, as having an above average propensity to taking risks, and are said to be
involved in conspicuous consumption. This tells us that a third of the urban population would be
inclined to maybe try a new brand or product. Also it can be seen, by the following Table 1, [25], that
the white population of South Africa controls a lot of the countrys wealth.

Table 1: A compilation of estimates of annual per capita personal income by race group in 2000 Rands
and relative to White levels, 1917-2008 [25]

10

This tells us that the white market segmentation should be looked at specifically as well. 24% of the
urban white population are classified as Innovatives [26]. These people are said to be open to
change and find status through ownership. 25% of the urban white population is also termed
Brandeds [26]. These people are said to be materialistic and status conscious and have a desire to
flaunt their possessions.

4.2 The target market

These different segmentations of the market tell us that our base market to look at would be a
percentage of roughly 35% of the urban population. These people would be interested in buying a
luxury high end, but practical product such as the all in one breakfast maker. This percentage will be
decreased further when you focus on those people who would find real functionality and usefulness in
the product. This will be the people who are pressed for time during the breakfast hours of the day
(such as students, parents, and busy business people), as well as people whom are health conscious, as
the product incorporates healthy cooking techniques by removing oil from preparation.
By personal estimates (as there is no specific data), these sort of people account for about 5-10% of
the urban population. Census data tells us there were 48,502,063 people in the urban population
(Refer to Table 3 in Appendix) as of July 2007. With a recent rise in urban population, it can be
deduced that the target market size is around 200 000 people.

11

5. PRODUCT DESCRIPTION
Figure 4 below shows a detailed image of the product to be sold. The product consists fundamentally
of a toaster combined with egg cooking plates and a grill (usually for bacon). The idea behind the
product is that toast, eggs and bacon could be prepared simultaneously. The toaster itself is capable of
toasting four pieces of bread simultaneously. There are two egg cooking plates (refer to the image
bellow, point 1) connected onto the toaster, which can be disconnected when required (i.e. the eggs
have finished cooking). The time and heat for the egg cooking is variable and can be altered by knobs
connected to the toaster (2). The grill (3), also connected to the toaster, has a large enough surface
area for several pieces of bacon. The grill has a grease tray run out system to reduce fat content in the
food being prepared. The cooking surfaces of the egg cooking plates and the grill are non-stick which
ensures easier cleaning and a longer lifespan of the surfaces. All three of the appliances that make up
the product are powered by electricity, and the surfaces are chrome plated.

1
3

2
12

Figure 3: The All In One Breakfast Maker

6. INSTRUMENT USED TO COLLECT DATA

A survey was conducted to attain information from potential customers. Refer below for the
questionnaire template and the Appendix for the answered questionnaires.

6.1 Market Survey Questionnaire Template

Name and Surname:
Contact Details (cell no.):

Is breakfast an important meal to you?

Do you eat breakfast every day?[Y/N]

If yes, what do you eat?
If not, why not?
How much time do you have to eat breakfast?

Would you enjoy a breakfast of bacon, eggs and toast?

If you had time everyday, would you eat bacon, eggs and toast for breakfast?

How do you enjoy your eggs(sunny side up/well done/ scrambled, etc.)?

How much would you spend on a toaster?

Would you buy an appliance that makes bacon, eggs and toast all at once?

How much would you spend on an appliance that makes bacon, eggs and toast?

What would your ideal breakfast consist of?

Does the aesthetics of a toaster matter to you?

What features would you like to see available on a toaster/kitchen appliance?

Thank You for your time!

6.2 Survey analysis

The initial approach of the survey was to investigate how important breakfast is as a meal to
consumers and how much time they spend on breakfast. These are important points to investigate, as
the success of the All In One Breakfast Maker depends on whether or not the potential customer
13

values breakfast as an important meal, and whether they have sufficient time to eat a breakfast of
bacon eggs and toast. The potential customers were therefore asked whether or not breakfast was
important to them and how much time they have in the morning to eat breakfast. All of the
interviewed candidates confirmed that breakfast was in fact an important meal to them. This confirms
the basis of the purpose of this product. The potential customers indicated they have an average of 1520 minutes with which they can eat breakfast. This should be sufficient time for a consumer to make a
breakfast with the All In One Breakfast Maker and enjoy eating it.
As part of finding out whether the All In One Breakfast maker is relevant to the potential customers,
they were asked what their daily breakfast consisted of, and if they would also enjoy a breakfast of
bacon, eggs and toast if it was available to them. The response from the potential customers as to what
they usually eat for breakfast mostly consisted of either toast or cereal, but eggs and yoghurt were also
common responses. As to whether or not the candidates would enjoy a breakfast of bacon, eggs and
toast, the majority confirmed that they would in fact enjoy such a breakfast.
In addition to finding out if the potential customers would enjoy a breakfast of bacon, eggs and toast;
they were also asked whether or not they would actually but the All In One Breakfast Maker. This was
to determine whether or not the potential customers are actually interested in the product, which is an
important part of surveying the market. The response to this question indicated that 90% of the
potential customers said that they would buy the All In One Breakfast Maker, which is a positive
result. The survey also asked if the potential customers would eat a breakfast of bacon, eggs and toast
every day, and the results were split with 50% saying yes, and 50% saying that although they would
enjoy this breakfast, they wouldnt eat it every day. This can concluded by saying that although some
customers wouldnt utilise the All In One Breakfast Maker every day, the majority is still interested in
buying the product.
The market survey questionnaire then went into the pricing of the product. There is no current product
on the South African market that is in direct competition to the All In One breakfast maker. As a
result, the market survey forced potential customers to value the All In One in comparison to other
household appliances that they would probably have. As the nearest available product would be a
conventional toaster, the survey asked the customer to associate a price to a toaster. Later on, it then
asked how much they would pay for the All In One. We could now have a realistic price range in
which we could work for sales. The candidates valued the breakfast much higher than the toaster as
expected. The average budget for the breakfast maker, across all 10 interview responses, is R284.
The pricing of the product will be based on a strategy of taking all costs, and adding a profit
percentage. As such, a firm middle ground would have to be found when final pricing can be
calculated after an evaluation of all costs. This price could possibly be extended higher than the
survey value, to between R300 and possibly as high as R450 once costs are considered. This is
14

because the strategy should rather incorporate a price skimming approach into the sales strategy. Price
skimming would be a better option as the product is considered a luxury item and would also be
introduced to the South African market as a monopoly. Also, its assumed that customers would, with
limits, buy the product for its functionality rather than its price.
The market survey then went on to ask potential customers if they had any recommendations or
features they would like to see added to the All In One. This was done so that a better understanding
of customer wants could be established. This would help with the design of future product models
and/or possible features that could be made available as accessories to the All In One. Accessories
could increase business profits substantially. It was quickly understood that customers are diverse in
their preference of egg preparation. While the majority of the respondents prefer their eggs poached,
there are a few who prefer boiled or scrambled eggs. Different attachments could be added to the
product, in the form of accessories, such that an egg could be boiled. Another attachment accessory
could be a bigger egg cooking plate so that omelettes could be made.
A lot of good design ideas were also put forth which can be incorporated into future design
considerations. The product should try and have a fold up feature so that it takes up less space in a
kitchen. Also, the product should be available in a range of colours and tones. This is because the
product is a luxury, and is likely to be used in furnished kitchens. This means that the product should
adapt to the general aesthetics of the kitchen. Another possible extension to future designs is to allow
the product to be run using gas or batteries. This would expand the product target market substantially.
South Africans are known to experience frequent power outages during the year, especially during the
colder months of winter, and as such the product would be more widely accepted as a way to cook
during outages. This idea would also expand potential customers to include camping and hiking
fanatics.

7. SALES FORECAST

15

Based on the discussions stated above a target market of 200 000 persons will find the functionality
appealing and would be able to afford to purchase the product. Of these possible 200 000 people only
100 000 would have the personal preference to actually want a full English breakfast and due to the
survey undertaken, people already hold confidence in the products that they own. However, this
number would be increased due to the Proudly South African campaign encouraging the population
to purchase South African products. This product is also unique thereby monopolizing the market
which intern generates a greater amount of people in the target market.
Based on discussions between the group members, an estimated life span of an ordinary toaster was
found to be approximately 4 years. As the product takes the place/incorporates a toaster, this would be
the ideal time line for the product sales forecast. Since this product being discussed is completely new
to the market, the initial sale would be low until people become confident and aware of the product.
Advertisement would have to be pushed out in full force during this stage. Seasonal effects will not
generate a huge factor in the sales of the product. A possible small increase could occur during the late
November and December period due to the Christmas season as this product could be considered as a
novelty item.
The estimated increase in the target market due to the factors discussed above would ideally 120 000
persons with a more realistic number being 80 000 persons due to the factors discussed above. Due to
unknown future economic conditions a pessimistic number for the sale market would be up to 40 000
persons. Table 3 below shows the sales for the optimistic, realistic and pessimistic forecasts.
Table 2: Tabulated Sales Forecast for the Product

Sales forecast

Sales

Optimistic
Realistic
Pessimistic

lifespan
120 000
80 000
40 000

over

product

Yearly sales
40 000
20 000
10 000

The values recorded above do not take into account the start-up phase. The start-up phase will be
visually represented in the s-curve figure below.

16

Figure 4: S-Curve showing the realistic sales forecast

Plot 1 above shows the initial product through its four year life cycle. The initial section increases
slowly as the product is still new to the market. A noticeable levelling occurs between the middle of
year 2 and year 3 indicating a stable sale of the product due to saturation and possible competitors
entering the market. A new product would then have to be created to replace the old one. Plot 2 shows
a new product with added functionality entering the market. As the company would have received
feedback from the customers, the new product would be perfected increasing the demand for the new
product thereby raising the profit margin of the company.
Although the sale forecasts projected above are smaller than many of the competitors, this product
was focused on a smaller market allowing for the buying power of the market to be lower.

17

BIBLIOGRAPHY
1. Chapter 3 - Co-operative Government. South African Goverment Information. [Online]
http://www.info.gov.za/documents/constitution/1996/96cons3.htm.
2. Snaddon, D R. Firm Accountable decisions. page 82.
3. Kotler, Armstrong. Principles of Marketing (14th edition). Page 81.
4. [Online] http://www.oecd.org/dataoecd/52/13/2958714.pdf.
5. Statistical Release. Statistics South Africa. [Online]
http://www.statssa.gov.za/publications/P0302/P03022011.pdf.
6. Payments for assessed tax. South African Revenue Service. [Online]
http://www.sars.gov.za/home.asp?PID=74731&ToolID=2&ItemID=74734.
7. South Africa Unemployment Rate. Trading Economics. [Online]
http://www.tradingeconomics.com/south-africa/unemployment-rate.
8. Introduction. South Africa Regional Poverty Network. [Online]
http://www.sarpn.org/documents/d0001005/index.php.
9. [Online] http://www.statssa.gov.za/timeseriesdata/pxweb2006/Database/South
%20Africa/databasetree.asp.
10. Matric pass rate improves to 70.2%. South Africa info. [Online]
http://www.southafrica.info/about/education/matric-050112.htm.
11. Kotler, Armstrong. Principles of Marketing (14th edition). Page 78.
12. Natural resources in South Africa. South Africa Web. [Online]
http://www.southafricaweb.co.za/page/natural-resources-south-africa.
13. Egg & Muffin Toaster(TM) Becomes Overnight Sensation; New-to-Market, Multi-Function Small
Electric Held Top Spot in 'Toaster' Category in Q4 2005. The Free Library. [Online]
http://www.thefreelibrary.com/Egg+%26+Muffin+Toaster%28TM
%29+Becomes+Overnight+Sensation%3B+New-to-Market,...-a0142397912.
14. Back to Basics TEM500 Egg-and-Muffin 2-Slice Toaster and Egg Poacher. Amazon . [Online]
http://www.amazon.com/dp/B000B18P96/ref=asc_df_B000B18P961951581?
smid=ATVPDKIKX0DER&tag=shopzilla_rev_17320&linkCode=asn&creative=395093&crreativeASIN=B000B18P96.
15. Back to Basics TEM4500 4-Slot Egg-and-Muffin Toaster. Amazon. [Online]
http://www.amazon.com/dp/B000QA1224/ref=asc_df_B000QA12241951581?
smid=ATVPDKIKX0DER&tag=shopzilla_rev_17320&linkCode=asn&creative=395093&creativeASIN=B000QA1224.
16. Chefscape TEMPR 4-Slice Egg and Muffin Toaster. Amazon. [Online]
http://www.amazon.com/dp/B000WQ2K6Y/ref=asc_df_B000WQ2K6Y1951581?
smid=ATVPDKIKX0DER&tag=shopzilla_rev_17320&linkCode=asn&creative=395093&creativeASIN=B000WQ2K6Y.
18

17. Exchange Rate. [Online] http://www.exchangerate.com/.

18. Snaddon, D R. Firm Accountable Decisions - from Ideas to Business Plans. Johannesburg : Picsie
Press.
19. Google. Interest-based advertising: How it works. [Online] 2010. [Cited: March 27, 2011.]
http://www.google.com/ads/preferences/html/about.html.
20. Standard Industrial Classification (SIC) Code Lookup. [Online]
http://www.epa.gov/enviro/html/sic_lkup.html.
21. South Africa's economy: key sectors. Media Club South Africa. [Online]
www.mediaclubsouthafrica.com/index.php?
option=com_content&view=article&catid=37:economy_bg&id=111:sa-economy-key-sectors.
22. GINI index, Data. The World Bank. [Online] http://data.worldbank.org/indicator/SI.POV.GINI.
23. Adl Bosch, Jannie Rossouw, Tian Claassens and Bertie du Plessis. A Second look at
measuring inequality in South Africa: A modified Gini coefficient. Working Paper No 58, Conclusion,
pg 9.
24. Johan Botha, Johan Strydom, Annekie Brink. Introduction to Marketing. s.l. : Juta Academic,
Chapter 4: Segmenting the Market, Table 4.7 South African Core Values based on the Sociomonitor
Survey, pg 73.
25. Leibbrandt, M. et al. (2010). Trends in South African Income Distribution and Poverty since the
Fall of Apartheid. s.l. : OECD Publishing, Chapter 1: TRENDS IN SOUTH AFRICAN INCOME
DISTRIBUTION AND, pp. Employment and Migration Working Papers, No. 101.
26. Johan Botha, Johan Strydom, Annekie Brink ,. Introduction to Marketing. s.l. : Juta Academic,
Chapter 4: Segmenting the Market, Table 4.7 South African Core Values based on the Sociomonitor
Survey, pg 73.
27. South Africa's economy: key sectors. Media club South Africa. [Online]
http://www.mediaclubsouthafrica.com/index.php?
option=com_content&view=article&catid=37:economy_bg&id=111:sa-economy-keysectors#manufacturing.

19

APPENDIX

Table 3: Urban populations of South African provinces [23]

Extra Information Pertaining to the product Inspiration

Communication that explains product to market

This simple kitchen appliance is capable of producing a well-rounded breakfast without much
difficulty. It makes toast, while at the same time producing eggs and a couple of strips of bacon. The
unit can toast bread as well as bagels, muffins and croissants. The non-stick egg poachers and bacon
grill dont require oil, and along with a removable crumb and grease tray, the device makes cleaning
up easy. With heat settings to select your preferred cooking method, a satisfying breakfast can be
achieved in matter of minutes.
Questions asked
Before product was selected:

What products could benefit consumers in their daily lives?

What size business are we interested in?
Are we offering a product or service, or both?
What gaps are there in the market?

After product was selected:

How will the eggs be cooked, bacon grilled and bread toasted?
What will the design look like?
What kind of eggs do consumers like?
How much do consumers value a warm breakfast?
What features would the market respond to positively?
What size should the product be?
20

How much will production cost?

What is our profit margin?
Where will start-up capital come from?

The Following Pages Contain The Answered Questionnaire

21