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Copy of LG Watch Phone
Transcript of Copy of LG Watch Phone
T ` Quantitative Analysis Conclusions Mobile phones account for 18.5% of all consumer electronics products (the second highest market share) and are a well-developed market. This is therefore a case of product development, there is a brand new product that needs to be introduced to an existing market. Controllable Variables Uncontrollable Variables Small Canadian Market
Possibility of replication
Consumers’ tastes Target market:
Tech savvy males with a relatively high income bracket
The first wearable cell phone that uses top quality materials to resemble luxury watches
Features: touch screen, text to speech, voice recognition, waterproof protection, alarm, calendar, Bluetooth & 3G connectivity
Enter market with penetration strategy
Compete with current iPhone prices
Sports magazines, TV ads in between games, and celebrity endorsement
Nationwide in Canada
Multiple distributors such as the big name carriers, Rogers, Fido & Telus and also Koodo & Virgin Strengths
The watch phone is the first one of its kind. LG is the first company to produce a product with smart phone features on a wrist watch device:
Convenience is an important strength.
There is no need to hold the phone while making a call, even when making a call, your hands are free.
Small size accommodated a waterproof device
Two functions in one phone: shows a watch when the phone is not in use Weakness
The price of the watch phone is very high compared to its competitors: the price is set at US$1290 with a 12 to 24 month contract compared to its competitors price that don’t go over US$699.
Since it’s the first product of its kind, users might not get attracted to the product at first because they are not used to it.
It may be perceived as inconvenient to use such a small device.
Mobile phones are one of the most important products consumed by people.
The popularity of product miniaturization is growing in the portable sector of electronics: this might enlarge the target market to which the marketing plan is addressed.
LG has an influence all over the world; therefore the new product will be able to attain more people. Threats
LG is confronted with an important competition. Brands like Nokia are very respected due to the high quality of the materials used for the cell-phones.
LG detains only 5% of the market share of the top consumer electronics brand, the electronics industry is really concentrated. Outline Marketing Problem
Conclusions Positioning Map High Price Low Price Highly innovative Not innovative LG Watch Phone Nokia Samsung iPhone Jing An
Elsa Stern Consumer electronic sales in 2008 Market (2009 Projection)
Predicted growth rate of consumer electronics sales in 2009 is 11.3%.
Assume this applies regionally as well
World: $739B* (1+11.3%) = $822.5B
North America $141.11B* 1.113=$157.06B
Mobile phones account for 18.5% of volume share in electronics product.
Thus, Mobile phone sales in North America
18.5%* $157.06B = $29.06B
Confirms public opinion of market size Costs
Research and development costs have already been incurred
Advertising costs are to be determined
Skimming (high initial price): the research and development costs will be quickly covered if high demand, the margin will become positive quickly
Penetration: low introduction price strategy, margin will be stable, however longer to break even
Use penetration to break into market
Break-even analysis is impossible due to unknown costs from R&D Niche market, high price, high innovation
Stress innovative, revolutionary product
Lower the price, for a "penetration" strategy
Expand market with separate promotional plans and product development
"his" - hi-tech
"her" - fashionable, investigate possible association with high profile fashion companies (Kate Spade, Marc Jacobs, Michael Kors )
Seek celebrity endorsements Motorola