Description of the company, its goals, its competencies:
The Start-up: Nanda Home (founded in 2005)
The Founder: Gauri .
The business proposition: Nanda Home creates cute, clever products that are intended, in the words of its founder, to "humanize technology." Clocky, the little robot is manufactured in and sold online and in design boutiques.
Just two years after she started, Nanda has sold more than 35,000 Clocky units. Available in white, blue, mint, orange, pink etc the device retails for around $50 and is available through NandaHome.com and a variety of boutiques and local retailers. Nanda is looking to expand distribution through partnerships with retailers such as Brookstone and Sharper Image.
Nanda has made numerous national media appearances in newspapers and magazines and on television programs such as "Good Morning America." She also gained attention by winning the Ig Nobel Prize for Economics in 2005 for "Clocky." She has several other products in the works in addition to Clocky, all designed to bring technology into everyday life in unexpected ways. Currently, Nanda Home sells "laptop cozys" for protecting personal, portable computers, and stylish handbags designed for carrying laptops along with personal belongings.
Nanda has been a hot item in the news, and Clocky has been featured The Today Show, The Big Idea, The New York Time 'Year In Ideas,' ID & Dwell, to name just a few. Clocky can be purchased in 45 countries. The company will launch 2-3 new products in early 2010.
Situation Analysis:
SWOT Table:
SWOT ANALYSIS
Firm’s Cost Structure:
Capital raised till Jul, 2007: $80,000 from family.
Market potential: The market for gadgetry is large, accounting for $145 billion in the in 2006, a 13 percent increase from 2005, according to the . The group estimates that the average American spends $1,200 on electronics annually. Meanwhile, consumers seem to be increasingly willing to pay a premium for design--witness the proliferation of , Razr phones, and stores.
Revenue projections:
2007: $1 million
2008: $3 million
2009: $4 million
Cash-flow picture: The Company broke even in February 2007, after only two months of sales, and Nanda expected to have cash flow of $650,000 in 2007. In 2008 she projected $2.1 million in cash flow and by 2009 $3 million.
Competition Analysis:
Table 1:
Table 2:
Chart 1 below depicts the multidimensional positioning relative to competitors.
Chart 2 below depicts the perpetual map of Clocky and competitors of two most important traits - efficiency and intimacy(as approximation of all features, which create personal attitude to the product).
PEST factors:
Political Influences:
?
Economic Influences:
Constant demand for efficient alarm clocks
Social influences
Consumer preference can shift to other substitutes or new innovated alarm clocks.
Technological Influences
Use of more R&D and technology can improve operational efficiencies
Channel Partners:
Target or other stores liked trhe product. Teaming up with a store like Target will allow to reach a broad market. Target will allow to strike a nice balance between the product being viewed too seriously (Brookstone) or taken too lightly (Home Shopping Network).Nanda wants to stress the fact that Clocky is a fun product with a good function. Target will maintain the image of Clocky as an alarm clock with a difference, it is not a toy neither it is a piece of machinery
Buyer Analysis:
Nanda has classified the segments according to the behavioral approach, and using benefits that buyers seek as the variable for segmentation she has identified two main buyer groups.
NEED MARKET: Composed of people who have serious difficulties waking up each morning with a standard common alarm clock.
FUN MARKET: Composed of people who might see Cocky as an amusing appliance, a nice robotic household pet.
According to the information given in the case, Nanda considered the FUN segment as target market, which presents a bigger potential market size (it covers both people with and without huge wake up difficulties while the need market will cover only the latter), and therefore a higher sales potential. As stated in the case, Nanda believed this segment is less risky because positioning Clocky as a product that would change buyers’ morning patterns for the better might raise consumer expectations to a level that would be difficult to deliver on consistently. Also debuting Clocky for the fun market would aid to later repositioning.
Nanda was concerned, however, that may be at risk of being a “here today, gone tomorrow” technology( classified as a fad item).
However, it is possible to recognize fads early and leverage its popularity into a product with a staying power, for example by introducing new functionalities or introducing a new series of design and features.
Strategy:
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Marketing Program:
The Product:
clocky®
The Runaway Alarm Clock
The alarm clock that runs away and hides when you don't wake up. Clocky gives you one chance to get up. But if you snooze, Clocky will jump off of your nightstand and wheel around your room looking for a place to hide. Clocky is kind of like a misbehaving pet, only he will get up at the right time!
Features:
Set your snooze time, 0-9 min, Snooze once before he runs away, Choose 0 and he runs right away, Can jump from up to 3 feet, Moves on wood and carpet, Press snooze to view time at night, Screen flashes when beeping/running, Alarm beeps in random pattern, Clocky is small: 5.25" x 3.5" x 3.5", Want him to stay put? Disable wheels, Early low battery warning, Colors: almond, aqua, coco, raspberry, and chrome.
Retail channel and Distribution Plan:
Nanda decided to pair up with the Home Shopping Network, or a similar Channel because paiting up with large retail stores like wal-mart and target would entail a margin. Such a venture potentially offered a more cost-effective way of reaching millions of cutomers, but it also bore the risk of inadvertently branding clocky along the likes of questionable home appliances and miracle weight loss pills. Main retail channel now is mainly internet stores(including Nanda’s web-site). Since main target audience is aged between 18-45(76% of Nanda’s mailing list) and therefore is expected to be using internet. Since it’s a standardized product it doesn’t really physical contact with customers in order to make purchase decision.
Promotion:
Nanda gave over 50 radio interviews, including some with outlets such as National Public Radio and the British Broadcast Corp(BBC). Other notable media attention included print publications like Guardian UK, USA Today, New York Daily News, Chicago Tribune, the Boston Globe, the LA times, the New York Times and Reader’s Digest. Nanda also began making appearances on TV programs, including the Discovery Channel’s Daily Planet and Beyond Tomorrow, Fox News and CNN. After initial media attention, Nanda created website After winning Ig Noble prize rgere was huge jump from 5000 to 35000 in number of viewers to her website. She also created a mailing list for further clocky development updates.
Pricing:
The variable costs of production for Clocky is $15. Adding other costs Shipping of $1, warehousing and packaging of $1, credit card processing fees of $1 and returns(15% of $18) of approximately $3, we have total variables equal to $21.
Regualr alarm clock is priced at $10-$15. Puzzle alarm clock is priced at $50. Statistics suggested that the customers buying alarm-clocks tend to and are prepaired to pay more for an alarm-clock that meets their needs. So Nanda decided to set the price of clocky around $50.
