Excerpt from Case Study:
New Product Advancement
Nanda Residence, in 2011, is usually starting to have difficulty. The company fundamentally has a individual item, Clocky, which has been on the market for many years. The company provides in this time introduced some variants on the noisy alarms theme, although has but to be successful in different other business. The founder, Gauri Nanda, is unsure of what the next step ought to be, given that she is unsure of what the issues are while using company.
The latest situation is usually that the flagship item, Clocky, is definitely nearing the conclusion of the regular product life routine in this category, something that is usually evidenced by the fact that prices are slipping to spur demand, and the company is generally selling to existing clients. The 2 newer goods also seem to appeal the most to existing clients. Nanda Home got introduced a line of hand bags, but this venture failed for deficiency of distribution, however the product was apparently popular with those who purchased. No financial records were presented in the case.
This kind of report will give you some insight into the issues at Nanda Home. There are many potential reasons why the company is beginning to struggling, including some not mentioned in the case. This evaluation will business lead us to some conclusions about the best course of action for Nanda going forward.
Standard Analysis regarding Company Product
Nanda Residence is operate by Gauri Nanda, who is handling basically the entire business herself. Which means that she must split the roles in the business, and she is worried that there are several roles she’s not performing as well as she could. Much like many entrepreneurs, she is more comfortable tinkering and picking out new tips than she actually is with the daily running from the business, specifically with respect to revenue. Nanda Home is a one-product company, approximately. Sales malfunctions were not presented, but over the past five years, the Clocky has been the revenue and income driver in this company. There is little in the case material to suggest that the Ticky or Tocky can replace the Clocky, and in addition they have not had the capacity to generate the same degree of mass media exposure pertaining to Nanda Home, either.
At this point, the company provides very limited assets. It is not known what their balance sheet looks like, but Nanda Home has one person operating everything, one hit item at the end of its your life cycle, with no new strike products on the horizon. The person in control is basically flailing about buying a new product which could drive the organization forward, although at this point anything she has is just a concept. Although she had a success with her initial concept, it can be highly strange for a great inventor to obtain multiple progressive, gradual hit products. It seems quite evident the strategy five years ago should have been to seek the services of a marketing expert, and perhaps a finance/operations person, so that Nanda could give attention to new product development, in order to get something in the pipeline. This lack of foresight is unfortunate, and today Nanda is in a tough situation with respect to approach going forward. The lady must tend to either press a little bit more away of Clocky, or risk being forced to abandon the company.
The product life cycle is definitely estimated between 3-5 years, which will put Clocky in the decrease phase from the life cycle. The current position of the item – discounts are had to drive revenue, and sales mostly go to existing buyers – helps the idea that Clocky is in the fall phase from the product life cycle. While Nanda is concerned about whether Clocky is a “fad” or certainly not, she is ignoring the big picture reality that Clocky always had a life, and now that life is almost up. She forgotten the bags on the launch phase, which is unlucky, but it really does mean that there may be potential to pick-up that organization idea once again. The Ticky and Tocky are not much more than extensions of Clocky, but with no Clocky personalisation, which is a tiny bit silly. But even with Clocky’s brand, these products happen to be unlikely to warrant a similar publicity since Clocky, and so do not have such upside.
This leaves the company without a practical product inside the pipeline, and three potential products that this might be able to get time with (so to speak) and one product at the end in the life cycle. Nanda should have the figures on this, but the case does not provide them – exactly how much time does the company have got with its current product mix and cashflow?
Given that one of the main options for Nanda is always to try and revitalize Clocky, it can be worth considering a number of the product features. First, the merchandise meets an appealing market want, in that a large number of people within our culture will be sleep-deprived and have trouble getting out of bed in the morning. The item is a “want” for its consumers. The biggest potential market is with all the 25-34 demographic. The biggest query for Nanda is to figure out what the potential market for Clocky is – what sort of penetration can it anticipate? It may have reached that level. She suspects there is untapped market, however it could very well be that the opportunity to record the full potential market is long gone.
Thus, Clocky offers a reasonably unique item feature. You will find substitutes, consist of alarm lighting, but to duplicate the exact function and feature of Clocky would require a kludge like inserting one’s phone on the other side from the room. Clocky is consequently superior in what it does than any of the fair substitutes. This has an important implication – so long as this advantage has value, and the benefit is challenging to imitate, Clocky still has value. With more powerful marketing and distribution, Clocky may still be inside the maturity stage of the support life cycle. In the event that so , this would buy the firm more time to develop another item.
There are two key issues, then, with trying to squash more product sales out of Clocky. Is that their features will be imitable – there are counterfeits and imitations. Nanda’s likelihood of launching a prosperous lawsuit, or even serving a CD towards the offenders, can be minimal. Thus Nanda should ensure that the counterfeiters tend not to gain a foothold on the market, something that could be achieved through better division, i. electronic. clogging up the channels to ensure that no imitations can be easily obtained. Right now, mail buy through Canada and soldout of a container in the back again alley will be the main circulation channels for the knockoffs, and those are poor circulation channels. Clocky should be able to maintain its monopoly.
The other issue with the Clocky, in that case, is that there is an coverage problem. Because product is exclusive in the features it offers, and is also priced above its close substitutes (regular alarm clocks), and people possess alarms on their phones, customers will have to particularly look for Clocky to find this. This is the heart of the current situation – the only folks who buy Clocky are individuals who know it exists, and that quantity is not growing. In the event that Nanda may increase the number of individuals who are aware of Clocky, then Nanda can easily increase the sales of Clocky.
The additional two items do include potential, and a case both equally for keeping all of them, and for trimming them from your lineup. The products offer the chance to extend the brand name, thereby rejuvenating the product your life cycle the two for them as well as for the original Clocky. While self-evident to Nanda, the market might not recognize the text between Tocky and Clocky and Ticky and Tocky. Clocky is a brand which includes value, and she is certainly not using that brand to assist sell the other goods. Moreover, the other products are fundamentally going to cannibalize sales from Clocky. There are opportunities to integrate new technology to update the Clocky, that is certainly probably the place that the brand exts should be. Although further, the brand name extensions pertaining to Clocky require the Clocky name.
Last but not least, there is the division challenge. When a product is advertising well, and especially early in its life routine, it will have usage of serious syndication channels, like major stores. At the end than it life routine, with almost no marketing support and whatever we can suppose are slower sales, there is not any real possibility of getting division for Clocky. The good news for Nanda is usually that the company can sell online, and that includes as a thirdparty retailer at Amazon. If Nanda sell via Amazon online and its own website, and offer free shipping, it will have an attractive proposition to get consumers, and it will gain reach with the 4th-largest retailer in the world (behind Wal-Mart, Costco and Home Depot). The opportunity price in carrying Clocky is leaner for Amazon online, which makes it
