Refocusing the raincoat target market

After calculating the market size for motorcycle raincoat in Indonesia, we decided to narrow our target market to premium buyers. They are the ones that use motorcycles as a result of limitations in car regulations, the unpredicatability of traffic conditions in Indonesia's big cities, and bad public transportation. These customers are value-driven, which means that they can afford to buy premium products and quality-conscious.

There are two broad product categories that most manufacturers sell right now, the generic/low end products and the premium ones. We see an opportunity to offer our product with the price range in between these two categories. We want to target both the price-conscious and value-conscious customers, which buy raincoats within the price ranges of $4-$12 and more than $20. Thus, by offering a product with a price range $12-20 with a premium quality, we expect to attract customers that is "on the border." That being said, our initial strategy is to only sell our product to customers who buy raincoats online or in bike shops (in store, more generally) as they are the ones that will be willing to buy premium products.

Street vendors are also one of the raincoat distribution channels in Indonesia. In fact, they comprise the majority of raincoat distributors in Indonesia, which we estimate to be around 4,000-6,000 in the Jakarta region. However, they tend to sell generic/low-end products (within the price range $4-$12). Furthermore, they work in the informal sector, which means that we cannot force them to work under a specific contract, so the risk of them violating an agreement is high. These are the reasons we decided not to include them from our distribution channel consideration.

Lastly, we have decided to manufacture our product through outsourcing to a local manufacturer. The other two manufacturing options that we have considered are shipping the raincoat from China and build our own factory. We consider these two options as being unfeasible as the cost would drive the raincoat price above the price range we want to target. Moreover, by giving the order to local people, we hope to increase employment in Jakarta, which is quite a big problem right now given the large amount of homeless people and scavengers in this city.