Charmed Technology
Case Presentation
March 9, 2005
Jennifer Love
Constance Chow
Jackie Fisher
Todd Nguyen
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Agenda

Main Issues

Recommendations based on Main Issue

How Recommendation was derived

Action plan for Launch

Expected Results
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Problem:

Whether or not to mainstream launch the CharmIT device
Key Issues :

Is the CharmIT wearable computer is ready for mainstream release

Is the mainstream market ready for the CharmIT device

If launched, how should the wearable computer be positioned, priced
and promoted

How should the company’s internal resources be allocated to ensure
the greatest possible success for the CharmIT device
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Recommendations:

Focus on product improvement and build credibility

Expand Marketing and Sales team while reallocating Engineering staff

Two Phase Product Launch
— 1st Generation limited launch targeted at Lead Users
— 2nd Generation mainstream launch targeted at New Economy Workers

Position technology as a “Lifestyle Enhancing Device” and capitalize on
Buzz marketing through unorthodox promotional events (ex: fashion
shows)

Launch 2nd Generation in approximately 1 year
— Create bundled CharmIT packages
— Retail bundle for $2,500
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Interim Objective:
Use 1st Generation to improve technology, educate consumer and build
credibility for the technology
Benefits:
•
Shortened Product Development Phase leading to a significantly improved product
•
Provides time to expansion of application software
•
Provides time for expansion of support networks
•
Allows for reallocation of scarce resources
Risks:
• May forfeit first mover advantage
• Product development make take longer
• Required Support networks will still have limited availability
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Final Objective
Launch 2nd Generation CharmIT as Windows Based, Lifestyle Enhancing
Device for the New Economy Workers within 12 month period
Benefits:
•
Leverage existing base of users and application programs
•
Use of established and highly recognized software increases credibility of the
technology and potential adaptation rate
Rejected Alternative: Use of Nanix O/S and Applications
•
Limited because device will only work with other Charmed devices
•
No established user base of Nanix system (would have to create from scratch)
•
Early adopters do not prefer the Nanix system
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Final Objective
Launch 2nd Generation CharmIT as Windows Based, Lifestyle Enhancing
Device for the New Economy Workers within 12 month period
Benefits:
•
Already positioned as a fashionable, trendy device in consumers minds
•
Guerrilla and Buzz marketing for product have been successful in the past
•
Unique point of differentiation – speaks to emotional instead of logical
•
Easily relatable for consumer as a device which adds value through “enhancement”
Rejected Alternative: Launched solely as a high technology oriented device
•
Public adaptation curve would be greater
•
Harder to educated consumer as they have to establish their own meaning/value for the
product
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Final Objective
Launch 2nd Generation CharmIT as Windows Based, Lifestyle Enhancing
Device for the New Economy Workers within 12 month period
Benefits:
•
Disposable income to purchase the product
•
More tolerant of ‘bugs’ in device
•
Willing to provide valuable customer feedback to Charmed
Rejected Alternative 1: Focus on Gamers
•
Too much of a niche market to start and not trendy enough to stimulate critical mass
purchasing
Rejected Alternative 2: Focus on Wall Street People
•
Will not tolerate any bugs in systems
Rejected Alternative 3: Focus on University Students
•
No disposable income for such purchase
•
May not be able to completely replace a PC at this time in development
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Final Objective
Launch 2nd Generation CharmIT as Windows Based, Lifestyle Enhancing
Device for the New Economy Workers within 12 month period
Benefits:
•
Provides time to alleviate product bugs and improve product offerings
•
Opportunity for customer feedback
•
Allows Re-engineering of technology and packaging based on feedback – increases
likelihood of adoption
•
Allows more time for the expansion of support networks
Rejected Alternative: Immediate Mainstream Launch
•
Serious issues concerns about bugs and limited application offerings
•
Very little promotion on the product currently
•
Environment is not ready to support a wireless device (very few blue tooth enabled
devices)
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Implementation
Short Term (next 3 months)
•
Continue sale of 1st generation device and encourage customer feedback
•
Restructure internal resources around product and application development
•
Discontinue all investment in Nanix
Medium Term (3- 12 months)
•
Hire Marketing VP and Sales Director
•
Test Windows compatible applications on system
•
Invest in ensuring product’s wireless connectivity is functional
•
Create partnership strategies with 3rd party peripheral device suppliers for an “all-in-one”
product offering
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Implementation
One Year and Beyond
•
Launch sleek and trendy bluetooth enabled 2nd generation device targeting “new
economy” workers
•
Expand current promotions to include fashion as well as mainstream magazine. Use
unorthodox promotional strategies that highlight product design and functionality ex:
fashion shows
•
Distribute via web and high-end electronic/computer stores
•
Monitor sales and continue to improve functionality of product
•
Launch “new and improved versions” annually and expand target segment to include
“Wall Street” and “Gamers” segment
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2nd Generation Device Upon Launch
Product
•
Bundled product that includes all required (one stop shopping)
•
Peripherals purchased in bulk from supplier at a discounted price and bundled with
CharmIT device to be sold to consumer
•
Small and Sleek and new age design
•
Wireless connectivity and Bluetooth technology are standard features
•
Product is highly compatible with Windows and most mainstream applications
Price
•
Retail price including peripherals should be $2,500
•
Competitive with other manufactures who create specialized products
•
Positions product as a premium while managing consumer price/value expectations
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2nd Generation Device Upon Launch
Promotion
•
Promote as a fashionable device that enhances ones overall lifestyle
•
Focus promotion on popular mainstream and fashion magazines ex: Times and G.Q.
Distribution
•
Discontinue 5 purchase unit minimum
•
Continue to leverage the website and expand sales to high-end retail electronic and
computer stores
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2nd Generation Device Upon Launch
Market Position
•
Sell a fashionable and technologically credible product that lives up to the performance
claims stated by the organization i.e. enhances users lives
Sales Volume
•
Expected that 4,800 units will be sold at a retail value of $2,500
•
Expected volumes are lower than projected due to micro segmentation
Revenue
•
Revenue potential is expected to be $12 million in first year of launch
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Financial Projections
P ric e /U n it
P ro je c te d D e m a n d (u n its )
P ro je c te d C h a rm IT re ve n u e (m illio n )
B est C ase
2001
2002
$ 2 ,5 0 0 $ 2 ,5 0 0
3000
9170
$
7 .5 0 $ 2 2 .9 3
E x p e c te d C a s e
2001
2002
$ 2 ,5 0 0 $ 2 ,5 0 0
2000
4800
$ 5 .0 0 $ 1 2 .0 0
W o rs t C a s e
2001
2002
$ 2 ,5 0 0 $ 2 ,5 0 0
1000
1800
$ 2 .5 0 $ 4 .5 0
C o s t/U n it (firs t 3 0 0 s o ld )
P ro je c te d C o s t/U n it (a fte r 3 0 0 )
P ro je c t M a n u fa c tu rin g C o s ts (m illio n )
P ro je c te d N e t R e ve n u e (m illio n )
$ 1 ,9 0 0
$ 1 ,4 0 0
$
4 .3 5
$
3 .1 5
$
$
$
$
$
$
$
$
G ro s s P ro fit (firs t 3 0 0 u n its )
G ro s s P ro fit (s u b s e q u e n t u n its )
Charmed Technology Case Presentation
24%
44%
$ 1 ,3 0 0
$
12
$ 1 1 .0 0
1 ,9 0 0
1 ,4 0 0
2 .9 5
2 .0 5
$ 1 ,3 0 0
$
6
$ 5 .7 6
1 ,9 0 0
1 ,4 0 0
1 .5 5
0 .9 5
$ 1 ,3 0 0
$
2
$ 2 .1 6
48%
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