Current Situation

Company
Nanda Home is the founded by Nanda, An MIT graduate which herself is
some sort of celebrity. Her name itself is a brand with a lot of equity. During
the past four years she leveraged this equity to sell Clocky. She utilized
press and media to popularize and introduce Clocky and increase consumer
awareness and information. She is spending a lot of time taking care of every
business function from resolving product development issues to marketing
and sales.
However, she know that when her popularity declines, she needs another
lever to sell the product. This means she has to market her product. She has
to spend money on marketing efforts. She also knows she needs a real
organization to replace her as a one-man (or better to say one woman) team.
Even though working as a one-man team worked for her when the scope of
activities were limited, she definitely needs an organization with a coherent
structure and well-trained, experienced marketing and sales staff as the
scale of work grows. Working all alone leaves her no time to spend on new
product innovation.
The important issue to mention here is that Nanda have drawn a lot of
attention without getting prepared for it. In other words, there was no
deliberate plan of action to draw Media attention to this new product. As a
result, sustaining this situation is tough and requires planning and effort. An
unorganized success can only be sustained by organized effort.

Product
Nanda designed Clocky for those who have problem getting out of bed. She
then added personality to his product to target those who buy an alarm clock
just because its cool. Nanda differentiates its product through design. This
includes differentiated pet-like aesthetics and features and functions
provided i.e. jumping out of nightstand . We also know that both Clocky and
its successors Ticky & Tocky are essentially fad products. This means If
Nanda wants to stay in business, this business has to be continuously
innovative. This in turn means Nanda has to innovate new products
continuously.
One option is to create a set of design principles to be used by others and
forwarded to her. She then can invest on innovative ideas which adhere to

her design standards and principles. Coca-Colas vice president of global

design established four core principles. Each design should reflect bold
simplicity, real authenticity, the power of red and a familiar yet surprising
nature.
The table below depicts sales and revenue during the past four years of
operations. From this table we can infer that Clocky is in the Decline phase
of its life cycle. It has passed through the introduction, growth and maturity
phases in the past four years. Flattening sales is a very good sign that the
product is in the declining phase:
Year

Sales

2006 2008

220,000

2009-2010

More than 80,000

Year

Revenues

2007

$2.2 million

2008

$1.5 million

2009

$0.99 million

The dramatic drop in sales and revenues would be a result of many factors
including the inherent fad nature of the product, lack of an integrated
marketing strategy, emerged competition in the market and of course
recession.

Product Line Extension

When a product is in its declining phase, we have the option of a product line
extension so that the life cycle curve shifts up. This means buying some time
till the new product again falls in its decline stage. Nanda has introduced
Ticky and Tocky as two new versions of Clocky with more features,
improved differentiated aesthetics (Toy-like appeal) and similar functionality.
Even though new product introductions would help the business survive,
there is risk of cannibalizing Clockys market specially because Ticky is
priced quite similar to Clocky.

She also have the option of the extending product line by introducing new
specialized versions of Clocky such as Football Clocky and Clockiddie. There
is lower risk of market Cannibalization for this products as they are
essentially targeting different needs. These again would be appealing to
some consumers with different needs and wants.

New Product Development

Idea generation
Regarding the process of idea generation, she has the option of interacting
with customers to test level of acceptance of new products among
consumers and potential issues. She can also interact with consumers to get
insight, understand their needs and wants and come up with new product
ideas.
Current important decision to make is:

Whether to stick with alarm clocks and innovate new products that fit
into this category or
Whether to introduce new innovative products which share the same
humanized technology trait?

Current generated ideas in Alarm Clock category are:

Football Clocky
Clockiddie
Enabling Clocky and similar products (Ticky & Tocky) to connect to
internet through WIFI technology
Integrating alarm clocks into social networks such as Facebook and
Twitter.

Current generated ideas in other categories are:

Follo, a personal assistant Robot

ambulatory houseplant pot
Spitlet

Idea Screening
Nanda has to screen out some poor ideas as mentioned above. The
development costs of each product requires screening out many ideas in
favor of the best idea. A set of product design standards or principles would
help in screening out ideas and choosing the best idea.

Concept development and testing

Once the best ideas are chosen, Nanda has to develop the ideas and interact
with consumers to test these concepts. She has conducted focus groups to
get market insight and test new developed ideas.

Marketing strategy development and business analysis

Nanda has not engaged in this stage of product development for any new
products.

Consumers
Consumers who were interested in Clocky showed interest to the product
even before Nanda commercializes her product. The implications of this are:
1. Nanda is able to interact with consumers in order to get insight.
2. Nanda has not put much effort to popularize her product.
a. In latter product introductions, she would be able to use this as a
lever. However, at the same time current consumers would not
necessarily be interested in other products.
i. This emphasizes the necessity of putting together an
integrated marketing strategy.
Some consumers loved Clocky and some despised it. If you are a normal
person which can easily use your mobile phone alarm to wake up, chances
are you hate Clocky because of amount of noise and discomfort that it would
create. This fact is highlighted by the results of ZMET consumer interview
where many pictures depict a sense of annoyance and hatred toward alarm
clocks. This means when considering market positioning, we have to be
aware of this fact. Even when tied up with other features and appealing look,
the product would still not appeal to many people. Choosing the target
market wisely with regard to these facts is important because otherwise a lot
of marketing money would be spent ineffectively.
Morevoer, many people she had talked with had either heard about Clocky
but were not sure where to buy it, or were just learning about the product for
the first time. This signifies the fact that consumers are aware but not
informed . Nanda has to come up with marketing strategies to increase
awareness and inform consumers. The fact that product has been dropped
by some retailers such as Bed, Bath and Beyond shows the fact that
consumers are not well informed about product.
Another important aspect of consumer behaviour is their level of
involvement. We would say for Clocky, the level of involvement is medium.

Its definitely not a low involvement product as consumers undergo a

cognitive process to make the decision to buy the product. However,
compared to high involvement products such as cars or apartments, we
would say Clocky fits in the middle. This again signifies the necessity of an
integrated marketing communication strategy crafted based on the
Hierarchy of Effects Model. As discussed earlier, many consumers are not
informed (knowledge stage bellow) about the product.

Consumer Research
The first consumer research undertaken lacks quality of data. In each section
of the survey , a significant percent of records has been collected as Not
Applicable which makes it hard to draw any conclusion. The data also misses
some critical points. As an instance, do people who buy Clocky just because
its cool use its alarm to wake up? Or do they just use it as something fancy
on their desk?
Having said that, there are some points which we can infer from consumer
research. Firstly, nearly half of consumers bought Clocky as a gift. Moreover,
most consumers heard about Clocky through Press and word of mouth. This
again highlights the fact that consumers awareness is mostly a result of
Nanda appearance in press and word of mouth. This would initially be a good
low-cost means of product promotion but in larger scales of activity and
latter stages of product life cycle, these means become ineffective.

Channel
Nanda currently distributes Clocky mostly through retailers (US-International)
and her website. Amongst retailers, Upscale retailers such as Sharper Image
and Brookstone are more interested in the product. However, Clocky did not
appeal to mainstream retailers and Nanda efforts to distribute Clocky
through mainstream retailers was not successful. The only remained option
in this category is Target.
Small retailers and boutique shops ask for higher margins (50%) and as a
result are not a choice for Nanda. She also found many companies are
interested in providing Clocky as a corporate gift to the employees or
customers. Her website has been constantly used as one the main channels
of distribution.

Competition
While competition is not intense in the niche market Nanda focusing on,
there are a few potential competitors who draw attention:

Smart phones: All have alarm clock feature

Users of smart phone alarms are probably not among potential
consumers of Nanda products because consumers can easily
snooze the clock several times.
Zeo sleep coach
Is more expensive ($150-250)
Is more complicated and not as easy to use as Clocky, Ticky and
Tocky
Puzzle alarm clock
Has similar features
Similar price of $50.
Is not as easy to use as Clocky finding the pieces of puzzle would
be inconvenient.
Counterfeits
Priced lower than Clocky
Are not as safe as Clocky

Price
Clocky is offered on a regular price of $39 and special chrome version of $45.
The marginal costs for Clocky were initially around 18$ and were decreased
to $8-12 after four years of operations (Economies of scale).
Pricing Ticky and Tocky is a decision Nanda has to make. Given that their
marginal costs are two and three times higher than Clocky, how should she
price the new products to mitigate the risks of market cannibalization?
Current offered prices are $50 for Ticky and $70 for Tocky.

Brand
Currently, Nanda products are offered by a name which has not been related
to any particular brand name. There is a lot of equity in Clocky as a brand.
Nanda has to make the decision of whether to offer all of her products under
one brand which serves as an umbrella (house of brands) or whether stick to
the current situation of one brand name for each product?

Decision making and alternatives

The main decisions Nanda has to make are around three main categories:

Product
Branding approach
Marketing strategy

Product
Which products to develop next?
Her alternative are as follows:
1. Develop product in the same Alarm Clock category
2. Develop products in new categories which share the same quality of
humanized technology.

Branding approach
Which brand approach to take?
Her alternatives are:
1. A separate brand name for each product
2. House of brands
Is she is to stick with the latter choice, what to choose for this house of
brands?
1. Nanda Home
2. Another name which reflects the element of Humanized technology

Marketing strategy
Is it necessary to change the marketing strategy for Clocky?
How to market Clockys successors ?
This in turn would be translated into other decisions:
1. Channel of distribution
a. Upscale retailers
b. Mainstream retailers
c. Website
d. Corporate gifts
e. Small retailers and boutique shops
2. Price
a. Decrease Clockys price

b. Keep Clockys price

c. Price Skimming for Ticky and Tocky (50 and 70)
3. Target market & Positioning
a. Fun market
b. Need market
c. Gift market
d. People who suffer from Narcolepsy

Evaluating alternatives
Product
1. Develop product in the same Alarm Clock category
a. Pros:
i. Is less risky
ii.Requires less manufacturing and development costs
iii.Newly emerged competition and presence of counterfeits
b. Cons:
i. Similar target market limits marketing promotion options
ii. Makes innovation harder
iii.Typically extends product line which results in a few more
years of sustained sales so demands higher frequency of
innovation
2. Develop products in new categories which share the same quality of
humanized technology.
a. Pros:
i. Provides various options and facilities market positioning
and promotion around Humanized technology
ii.Enables Nanda to address new consumer needs and wants
and virtually new target markets
iii.Less competition because of the innovative nature of the
product (highly differentiated)
iv.Higher margins
b. Cons
i. Is generally more risky
ii.Generally has higher development & manufacturing time
and costs
iii.Typically has high sales and marketing costs
Brand
Which brand approach to take?

Her alternatives are:

1. A separate brand name for each product
a. Pros
i. Each product has its own identify and success or failure of
other products does not affect it dramatically
ii.People would not recognize all brands as related to the
same producer
b. Cons
i. Brand equity which results from synergy created among
house of brands is not realized.
ii.Marketing expenditure is generally higher and less efficient
2. House of brands
a. Pros
i. Marketing expenditure is more efficient as it improves
marketing appeal of the whole family of products
b. Cons
i. Failures or practices of each of the brand names would
affect the others (Dove is a very good example when its
campaign for real beauty has been compared to other
brands under the name of Unilever )
If she is to stick with the latter choice, what to choose for this house of
brands?
1. Nanda Home
a. Pros
i. Has the element of home which reminds consumers of
products related to or utilized at home.
b. Cons
i. Does not have the main elements of humanized
technology and Alarm Clock
ii.Would distort consumer perception of the product
2. Another name which reflects the element of Humanized technology

Channel of distribution
a. Upscale retailers
i. Pros:
1. Clocky was already successful in this category

b.

c.

d.
e.

2. Upscale retailers are willing to provide the product

3. Generally higher margins are expected here
ii.Cons:
1. Only a certain group of consumers buy from upscale
retailers, others are not reached out
2. Less control over the channel comparing to zerolevel channels
Mainstream retailers
i. Pros
1. A whole new consumer category would buy the
product. (Regarding the potential target market, not
all consumers behave the same way when they
decide where to buy the product. Many people
would just buy stuff from mainstream retailers)
2. Nanda was not traditionally successful in dealing with
mainstream retailers probably because of relatively
high price of Clocky. Her only option in this category
is Target.
ii.Cons
1. Lower prices are expected which results in lower
profit margins especially when compared to upscale
retailers
2. Less control over the channel comparing to zerolevel channels
3. Is less adaptive comparing to website
Website
i. Pros
1. Enables Nanda to start interactive marketing which
would be more effective in getting consumers
engaged
2. Would help Nanda to acquire more market insight
3. Is a Zero-level channel, this means Nanda has more
control over the channel
4. More economic (lower costs, higher margins)
5. Is more adaptive, no need to commit to a certain
member for a specified time.
ii.Cons
1. Less potential buyers when compared to retailers
Corporate gifts
Small retailers and boutique shops

i. Pros
ii.Cons:
1. Lower profit margin
Price
1. Decrease Clockys price
a. Pros:
i. Would increase demand especially among value-priced
buyers by stretching product-line
ii.Would help extend product life cycle
iii.Makes product more appealing to mainstream retailers
iv.Increased number of sales
b. Cons
i. Very low profit margins
2. Keep Clockys price
a. Pros:
i. Higher profit margins
b. Cons:
i. Would result in the product be out of the market
3. Price Skimming for Ticky and Tocky (50 and 70)
a. Pros:
i. Would Appeal to upscale consumers
ii.Higher margins
iii.Has the option of lowering the price after a specified time
period to grab more market share
b. Cons
i. Fewer number of potential customers as a result of higher
price
Target market & Positioning
1. Fun market
a. Pros:
i. Potential point of difference
ii.Is significant
b. Cons
i. A potential conflict between general unpleasant perception
of alarm clock in consumers mind and the concept of a
fun, cool alarm clock
ii.Can be replicated by competitors
iii.Segment size is hard to measure

2. Need market
a. Pros:
i. Segment is measurable
ii.Is significant especially when take into account the
international market
b. Cons
i. Many consumers in need of this product would have
already bought one of the products so future innovations
would not appeal to them again
3. Gift market
a. Pros:
i. Is supported by the survey results
ii.Is significant
iii.Size of the segment can be measured
iv.There is less potential conflict between consumer
perception of alarm clocks and provided image
b. Cons:
i.
4. People who suffer from Narcolepsy

Recommendation
To decrease price of Clocky so that mainstream retailers are more willing to
provide the product. Ticky and Tocky price would be the same (0 and 70)
and will be offered through the website and upscale retailers. This mitigates
the risk of market cannibalization. Nanda should stick to current alarm clock
market at least until other innovative ideas are mature enough to be
introduced in the market. For now Nanda has to target Gift and Need market.
She also has to follow the same strategy of Product Line Extension through
new innovative products in the alarm clock product category such as
Clockiddie and Football Clocky. Regarding the brand, she has to create a
house of brands but with a new brand names which highlights the main
important elements of humanized technology and alarm clock that wakes
you up.
1) Nanda has to offer Clocky in mainstream retailers such as target and
newer products such as Ticky and Tocky, to upscale retailers. When

2)

3)

4)

5)

6)

time passes Ticky and Tocky would reach the declining phase of their
life cycle, then she moves them to mainstream retailers and offers new
products in upstream retail market. She offers all products in her
website.
Nanda decreases the price of Clocky to $25-30 because of lower
marginal cost of product ($8-12). Nanda has to use Price screening
method for Ticky and Tocky starting from current set prices of $50 and
$70. This makes Clocky more appealing to the mainstream retail
market and mitigates the risk of cannibalization. When Ticky and Tocky
reach their declining phase, she decreases the price enabling her to
stretch the product line. She introduces new innovative products to the
upscale retail market.
Nanda gradually offers new innovative products such as Clockiddie to
the market to extend current product line. This approach buys her
time. In the meantime, she continues to work on other innovative ideas
around humanized technology (not necessarily in the alarm clock
market). She has to turn the current one-woman-team to a organized
team of product development and innovation, marketing and sales. In
other words she has to establish a small innovative company with a
structure that promotes agility.
Regarding the brand, Nanda has to create a house of brands but she
has to change the current name Nanda Home with a more relevant
meaningful brand name which highlights her vision of humanized
technology.
Nanda has to use her website to interact with consumers and acquire
more insight toward consumer needs, wants and behaviour. Currently
Nanda does not have a clear marketing strategy. Even though some
target markets are identified, they are not resulted from insight into
consumer behavior. She has to come up with a clear marketing
communication strategy resulted from consumer surveys and tied with
market positioning and promotion strategy. She has to promise to
provide value that she can deliver. Nanda should target need market
fun and gift market with her alarm clock product category. She has to
continue promoting product in the international markets.
Nanda has to highlight product ease of use, safety, appealing look and
special features and functions to differentiate her alarm clock to those
of her competitors.