Ventilation Blocks - Untapped Design and Distribution

The Present Situation:

Have you noticed those square-shaped, flower-designed precast concrete ventilation blocks in every room of a typical household, whose purpose is to facilitate air flow?

Have you ever observed how these products, for ages, tend to have almost identical shapes? This is not due to any building regulations limitations but rather a result of habit and, perhaps, minimal creativity.

Furthermore, these ventilation products are exclusively available at precast concrete manufacturing sites. You can't simply walk into a nearby general hardware store and purchase precast ventilations.

This prompts the question: could there be better designs? Is there room for improvement in distribution methods?

 

Context

 

ü  Ventilation is an essential building need. Every building must have ventilation.

ü  Precast concrete ventilation blocks are the most widely used because they are considered more robust as say when compared to plastic blocks.

ü  There is a rise in the number of residential houses. (7,379,485 own their houses, 4,660,027 staying in rental houses(KNBS). Contribution to GDP 2000 – 10.5 %, 2022 15.4%)

ü  By anecdotal evidence we see increased competition in precast products making businesses.

ü  The barriers to entry to precast concrete making businesses is low.

ü  Moulds are sourced from the same common general sources.

ü  There is low specialization among   precast concrete products makers

ü  Discovery by strategic location is the main way through which precast concrete businesses get known. (How can a precast concrete ventilation making business be visible and provide convenience to as many customers as possible beyond its location?)

ü  The bulk and somehow delicate nature of precast concrete products mean that consumers will, keeping everything constant, seek to purchase form the most conveniently located business.

ü  Visibility plays a big role in discovery.

ü  There are now plastic ventilation blocks, although they are yet to get mass adaption. The precast concrete still reigns and we project it will by virtue of price and properties.

ü  There are low loyalties in the ventilation blocks business.

ü  There is no proper or strong ventilation blocks business.

 

 

The Opportunity    

The opportunity exists is in making more creative precast ventilation blocks. More captivating designs than is presently available in the market.

Opportunity is in becoming a specialist ventilation maker. And branding as so.

Opportunity exits is in new distribution methods that puts the ventilations right on the face of those building houses.  For instance, breaking with tradition and distributing ventilation and distributing through general hardwares shops.

 

 

The Distribution Opportunity
 

In precast concrete products, visibility plays a significant role in discovery, either through location or proactive sales efforts. Discovery eventually translates to sales.

 

However, a significant aspect of discovery is location. Nonetheless, even a strategically located business can only trigger a limited amount of discovery.

 

The higher the foot traffic and exposure, the greater the chances of encountering consumers with buying intent who actually make purchases.

 

So, how can a precast concrete ventilation block business increase discovery given the limitations of location?

 

One approach is to access more consumers with a strong purchase intent.

 

This raises the question: is it possible to distribute concrete ventilations in a manner similar to other building materials?

 

Building materials, such as cement, pipes, and paint, are predominantly distributed through hardware shops. Manufacturers, importers, or other dealers supply these products, selling them wholesale to hundreds of hardware shops. The hardware shops then add a markup and sell retail to consumers.

 

Could the same model be used for precast concrete ventilations? Selling through hardware shops? After all, consumers at hardware shops often have a high purchase intent, as they are typically involved in construction projects.

 

Has this approach been attempted before? Can it be successful?

 

Conversations with hardware shop owners reveal concerns about dead stock, handling, storage, and breakage. However, these seem to be general concerns about precast concrete products, rather than specific to each product. Hardware shops often categorize ventilation alongside culverts. Moreover, these shops already stock tiles, which share many characteristics with precast concrete ventilation products.

 

Addressing the anxieties of hardware shop owners could lead to them stocking ventilations. The key is to offer incentives in terms of design, margins, profits, and ease of handling.

 

The goal is to access high-intent consumers who visit hardware shops, placing the products prominently. Most of these consumers are involved in construction projects, which likely require ventilations.

 

The strategy should focus on addressing the anxieties of hardware shops, including margins, design, storage, packaging, and marketing.

 

For example, packaging ventilations in boxes, with quantities of 4, 8, 24, etc., could be effective. Additionally, providing well-designed displays for hardware shops to showcase the products, along with branded brochures for customers to take, could enhance visibility.

 

To alleviate concerns about dead stock, initially selling on consignment could be an option. This involves leaving the products with hardware shops, with payment made when items are sold.

 

 

How It Would Work

ü  First, you would devise new and fresh designs for ventilation molds, aiming to offer designs that are exceptionally refreshing compared to the common types available in the market.

ü  Next, you would manufacture ventilations using these molds.

ü  Your specialization would be in ventilation products, with the goal of establishing yourself as an authority in this niche.

ü  You would also implement proper marketing strategies aimed at creating visibility and positioning yourself as the go-to source for ventilations.

ü  In addition to the traditional distribution method where builders come directly to you, you would establish partnerships with hardware stores to display and sell your ventilations. This would involve treating ventilations similarly to floor tiles, displaying and distributing them through hardware stores.

 

Characteristics of the Product

ü  Have traditional designs.

ü  Have fresh designs.

ü  New designs every month.

ü  Embossed with brand name.

ü  Ability to create custom designs for larger projects.

ü  Relevant innovations.

ü  Collaboration with architects and other building professional for new kind of designs.

 

Product Possibility

A specialist well branded ventilation making business. It will differentiate by design, variety, distribution and branding.

Revenue Model

Margins after cost of production and distribution.

 

Validation

ü  Precast concrete products still being used.

ü  Existing precast concrete businesses.

ü  Use of precast concrete products.

ü  Use of precast concrete products.

ü  Increasing competition

 

Back of the envelope Calculations

In the most basic sense, precast concrete is made from sand, cement, and sometimes quarry dust. The ratios vary among businesses, often involving compromises and inconsistencies aimed at cost-cutting.

The most rudimentary ratio is 1:3 cement to sand. Many compromises are made in an effort to reduce costs.

Ventilations are typically priced lower, averaging Kshs. 70, with profit margins averaging 30%, resulting in profits of about Kshs. 20 per ventilation block.

A standard three-bedroom house (neither too large nor too small) will typically require at least 16 ventilations. This emphasizes the importance of selling in high volumes to generate significant profits.

Keeping everything constant and With a great product and robust distribution system its possible to sell hundreds in a day.

Thus, there is a clear need for a distribution system that facilitates the sale of high volumes.

 

 

Process

-      Establish location

-      Observe the type of designs in the market

-      Come up with new designs

-      Have the moulds make

-      Get a production site

-      Get raw materials

-      Start production

-      Design and implement marketing plan

-      Start selling

 

Challenges

ü  In protecting designs from being copied.

ü  In convincing some hardware stores to stock.

ü  In producing competitively and at the lowest cost.

 

Haters

Objection: "Your new designs will be easily copied

Counter: "By the time they are copied, we will have already sold many units. Additionally, we will continually produce new designs, maintaining our lead in the market."

Objection: "Hardware stores won't stock your products."

Counter: "Why not? With the incentives we offer, they will undoubtedly stock our products."

Objection: "The margins are too low to be shared by a reseller."

Counter: "We will focus on efficient and bulk production. Furthermore, our strategy aims for high volumes, ensuring profitability for both us and the reseller."

 

Resilience to economic downturns

A slowdown in the building sector will negatively affect the business, but not to a level where we can't sell ventilation blocks, as there are still houses being built. The goal is to capture market share from existing suppliers.

 

Competitors

Existing precast concrete manufacturers

Purchase frequency

Once per month

 

Critical Success Factors

·         Design: Innovative and attractive designs are essential to stand out in the market and attract customers.

·         Efficient Production: Efficient and cost-effective manufacturing processes are crucial to ensure competitive pricing and timely delivery.

·         Distribution: A well-planned distribution network is necessary to reach as many of the target as possible.

·         Branding: Great branding strategies to help build brand recognition, trust, and loyalty among customers, setting the business apart from competitors.

What do you think ? Please leave a comment below.