Clocky free essay sample

ANSWER 1. For justifying recommendations with respect to target market segment(s) and positioning option(s) for CLOCKY, I analyze the following: Target market segment(s) 1. CLOCKY should be targeted towards the gift (fun-based) segment based on my analysis. Exhibit 8 of the case shows that the older the customer, the more inclined he/she was to purchase CLOCKY as a gift for someone else. Younger customers were more interested to purchase a CLOCKY for themselves. Exhibit 8 also shows that the maximum number of counts responding to CLOCKY’s interest to purchase was in the 26-35 age group, and 26. % considered to buy this as a gift. This segment overlapped with the 25-34 year olds who were used to hit the snooze button maximum (57% of them hitting daily) compared to the fastest risers, as mentioned in the case. This segment of people was likely to be the fastest switchers. Exhibit 8 also shows a steady number (896+557) = 1453 counts aged 46 and over with about 63% of intent to purchase a CLOCKY as a gift. These people were likely to be less switchers and could be leveraged upon CLOCKY’s target segment to translate their decision into purchase. To the higher aged persons, CLOCKY is more like Know-Feel-Do (Utilitarian Instrumental Product and buying decision process). Price is a trade-off variable here to them. Here, consumer satisfaction is actually expectation confirmation – and the loyalty is reward for performance relative to competitors. The relationship with CLOCKY is repeat, word-of-mouth, premium. Nanda can greatly leverage upon this relationship to increase CLOCKY’s business while targeting the right segment of people (aged above 45). CLOCKY can also appeal to Feel-Do-Know (Expressive Product and buying decision process), where it is bought of liking and impulse. Price is also a secondary concern here. Here, consumer satisfaction is actually â€Å"brand image self congruity† – and the loyalty is â€Å"affective commitment†. The relationship with CLOCKY is commitment and self-concept advocacy, both of which Nanda can leverage upon while increasing CLOCKY’s business while targeting the right segment of people (aged between 18 and 45). The target segment of gift is also consistent with the consumers’ behavior based on Maslow’s Hierarchy of Needs and Freud’s theory of being motivated by subconscious motivations. CLOCKY can generate a lot of interest through promotion of consumers who feel good about owning a CLOCKY and gifting it to someone of their love, and this can be good for Nanda initially at the time of bringing CLOCKY first to the market. Later on, she can incorporate the health issues (sleep benefit et al) and other value-add features once she has already got a bit of market share as CLOCKY’s start selling. Positioning options: 1. From my analysis, CLOCKY can be positioned initially as a pet-like fun device, good and cute to look at, nice to feel, that helps a person have a funny wakeup. She should position CLOCKY as a human-like funny person who demands attention in the morning and wakes up humans, just like their cute pets. The positioning in the area of gifts can have a very subtle message with the wakeup process. Without even stressing the health-related benefits et al. , Nanda can cleverly push CLOCKY as being both a nice looking human-like gift that in reality helps people overcome their sleep disorders. Even if the health stuff et al is not explicitly mentioned along rigorous medical terms, it is a major benefit that comes with purchasing CLOCKY as a fun gift item. The pitch that Nanda should make while positioning CLOCKY initially in the gift market is to appeal to the aesthetics and fun of the device, at the same time pointing out in the fun way why it makes wakeup so much easier. Based on the target segment of gift (fun-based), Nanda should position CLOCKY to fulfill the basic consumer psychology of the motivation of having a fun wakeup with a human-like pet device. This is a major motivation for consumers and Nanda can beautifully take advantage of this. It’s a sustained, increasing motivation and need for consumers. Based on Maslow’s hierarchy of needs, she can gradually move her customers up the consumer psychology matrix through better communications and positioning, but leveraging on fundamental psychological need of humans will immensely help CLOCKY reach out to masses and help in huge market proliferation. Positioning along the lines that CLOCKY is a product that addresses a basic human need will immense help CLOCKY get its first sales. The willingness to pay high premiums for satisfying this need is hugely advantageous to CLOCKY. Based on leveraging this consumer psychology, Nanda can greatly increase the value of CLOCKY’s brand. Consumers are willing to pay a premium for CLOCKY mainly because of their rational benefits (CLOCKY’s functionality, trust of Nanda, Quality, Familiarity and Availability of CLOCKY), emotional benefits (their personal preference to own a fun wakeup device – CLOCKY) and symbolic benefits (meaning of owning a CLOCKY as a fun, good-to-look, fashionable gadget) This will also help CLOCKY to build a unique brand. The promise it can make is –â€Å"have fun in waking up each morning†. It can deliver on this promise and gain consumer trust and credibility. ANSWER 2: For justifying recommendations with respect to product, pricing distribution and promotion strategies for CLOCKY, I analyze the following: Product: 1. CLOCKY should mainly be differentiated in its looks (e. g. more colors) and its feel (e. g. softness to hold) to give a wide range of design looks. Given the fact that Nanda has only one product to offer, achieving variety through more designs in color and texture will help CLOCKY appeal more to the gift segment. This will also not cost her much. 2. Nanda should also try and file a trademark protection for â€Å"CLOCKYâ„ ¢Ã¢â‚¬  soon, just to make sure that no one else can infringe on her device name or brand. However, this might be difficult to enforce for a startup, but she should certainly file for trademark protection. Nanda is operating in a mature market with near-perfect competition. There are many players already in her target market and the barriers to entry are very low. She also risks potential imitations and knock-offs. The power of buyers is huge, with very low switching costs, and the power of suppliers is fairly low (based on Porter’s 5 Forces analysis). CLOCKY is also susceptible to improved technological innovation, and runs the risk of being obliterated should a better technological design of the device comes through successful that lowers the device’s cost. CLOCKY’s Product Life Cycle (PLC) would decline fairly fast (about a year from my experience, which happens for any electronics innovation). Usually customers are open to purchasing new products from innovators and early adapters early on in the product lifecycle (especially when it comes to gifts and consumer electronics), after which it declines. Nanda thus must seriously consider rolling out new products derived from CLOCKY during its ongoing product lifecycle. One option is to have out co-branded CLOCKY accessories that are sold alongside CLOCKY. CLOCKY is a device that cannot be upgraded much on its own internal computing structure. Hence, the value-add to customers is not much based on the device improvements, actually. The key value-add to customers is the product features, and the benefits that CLOCKY bring in to have a funny wakeup. Nanda thus runs the risk of sustainable product differentiation. She definitely needs to build the CLOCKY brand and protect it from infringement, thereby holding on to CLOCKY’s position in the target gift market. Usually, in the gift market, the brand of a device commands a lot of purchase power, and Nanda could gradually move CLOCKY in this direction. She can also re-position her product as benefiting health, based on how CLOCKY sells and based on the profile of the buyers and their needs. Nanda is currently located in â€Å"New Products – Current Markets† in the North East Corner of Ansoff’s matrix with her CLOCKY product. Her core focus is on product development strategies. Soon, with CLOCKYs sales increasing, she will move to the North West Corner where she has to think of market penetration. Then she will move to the South West Corner for expanding CLOCKY to new markets, where she needs to know of market development strategies. She has to think of her options in her current location in Ansoff’s matrix. Her actions comprise of new product development (developing CLOCKY’s design better (especially related to looks and aesthetics) and preparing for mass manufacture (reducing the time of bring CLOCKY to the market, possibly through outsourcing manufacture in China) and 4 STPs (Segmentation, Targeting and Positioning) primarily based on Product, Promotion, Price and Place. Pricing and Distribution: 1. Nanda should keep the price of CLOCKY close to $40 per piece. This is mainly because she needs market penetration. And to get market penetration, she needs to sell more numbers of CLOCKY. Essentially, the key for a startup company is the time to break-even. Nanda does not have a lot of capital funding to sustain her business. Hence, the key is to offer a reasonably low price and try and capture as much market volume as possible. 2. Nanda should try and sell CLOCKY through her own website (maximum) and through boutique and gift shops (small number) CLOCKY’s profits are dependent on its price, cost of production and volumes sold. From the case, it states that Nanda estimates that the cost of production of CLOCKY is about $15 per unit. If manufactured in China, the total estimate comes to be around $20. If she prices CLOCKY at $40 per unit, and can cut down on CLOCKY’s distribution channel costs, this price would be quite profitable for her – as the price is good for a large Willingness-to-Pay for a gift for the value CLOCKY offers. She would be able to break-even very soon. In order to take advantage of this $40, Nanda needs to cut down on her distribution channel costs. From the case, partnering with retailers who have above 100% markup price will not work for Nanda at the inception of launching CLOCKY. Partnering with gift shops and boutiques is one option, but the majority of CLOCKY units should be sold through the internet. This is also a good attempt to make CLOCKY appear scarce in the market, and create demand. If consumers perceive CLOCKY of being of high value and is not available and accessible very easily through common outlets, it will create demand for CLOCKY. Nanda can greatly leverage upon this pull strategy of CLOCKY in her distribution channel to create more number of CLOCKY units sold. Nanda has a website called http://www. clocky. net (from the case) where interested CLOCKY buyers enter their details and register their interest. Nanda can easily enable buyers to actually order CLOCKY from this same website. It is a classic case of B2C marketing. The distribution channel would be very short and wide, and involve minimum costs for Nanda. Once she gets the online orders, she can coordinate the shipping of CLOCKYs from her manufacturer. Nanda has options of premium pricing, penetration pricing, economy pricing and price skimming with CLOCKY. She can go for Premium Pricing if she can pitch CLOCKY’s message to the right angle about addressing consumers’ basic motivational needs. She can go for price skimming once CLOCKY has been selling a lot. However, even if she goes for Premium Pricing, she does not keep the price very high. A double-the-price of production is good enough for Nanda. Nanda can also go for psychological pricing, responding to consumers’ emotional levels, if her marketing pitch is well along this direction. Promotion strategies: 1. CLOCKY’s message should be quite clear while making its brand promise: it jumps from the air and runs away, making you chase around it and have a fun wakeup. The fact that this is a human-like, personalized device should be the key pitch in promotion strategy. . Nanda should use the internet (along with her own website) to offer deals and update consumers about CLOCKY’s latest activities. Given the fact that her immense PR and media exposure is generating lots of hits on her website, she can use her own website http://www. clocky. net to offer promotions and create consumer purchase influences. 3. Nanda should leverage upon her immense PR and media exposure to build a large word-of-mouth marketing base at the initial stages of launching CLOCKY. This will greatly help in cutting down her advertising costs for CLOCKY. The immense publicity that Nanda is receiving can help position CLOCKY’s brand initially. The publicity can help generate awareness about CLOCKY, and coupled with internet-based blogs and product reviews, immensely helps in word-of-mouth marketing. Word-of-mouth marketing is often a crucial pillar of initial success for a startup company selling a consumer product like a gift. The publicity that she is getting is very good for advertising CLOCKY. Given the fact that Nanda does not have a large budget for advertising, the media publicity can help her greatly. Nanda’s PR and media exposure, as a proxy to CLOCKY’s IMC and promotion strategy, will greatly help Nanda enhance CLOCKY’s brand perception through: a) Reaching CLOCKY’s message at the right time and place to the right customer b) Developing consumers level of understanding and behavior with CLOCKY c) Correctly positioning CLOCKY’s brand in terms of points? of? difference and points? of? parity. d) Motivating consumers to consider purchase of the CLOCKY brand, especially while providing pitch to addressing their fundamental motivations and needs. e) Creating strong brand associations of CLOCKY with Nanda herself.