MAR431 New Product Development - IKEA new Wireless Charging Desk Product Launch
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Pace University MAR431 New Product Development Group Project (Presentation Version) Task: Idea Generation, Concept Evaluation, Product Development, Launch Introduction of a new generation of technology furniture: RAGNVARD. Empowered Design. A unique customizable design desk that allows to charge a multitude of mobile devices through surface contact.
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MAR431 New Product Development - IKEA new Wireless Charging Desk Product Launch
- 1. Jonathan Kirkland, Andrew Burakov, OertaTrepca, Jeff Schneider MAR 431 - NEW PRODUCT DEVELOPMENT
- 3. Hi, I’m Ragnvard! Welcome to Sweden. RAGNVARD. Empowered Design.
- 4. Jonathan Kirkland Product launch with price skimming strategy
- 9. Novice •“Technology has a limited impact on my life.” Apprentice •“Technology is changing my life.” Journeyman •“Technology is an important part of my life.” Wizard •“Technology is life.” Experian Simmons 2010 Technology Report Oerta
- 10. “WIZARD” Early adopters of new technology More likely to be unemployed Single, Men Aged 25-35 OertaExperian Simmons 2010 Technology Report “Journeyman” Early majority for new technology More likely to be married with children Single, Men Aged 30-45
- 11. What are Wizards like? WIZARD Pay anything for electronic products I want (Index 203) Spend more time play video games than watch TV (200) I'm 1st of friends have new electronic equipment (196) Interested receiving advertisements on cell (193) Likely purchase products see advertised on my cell (186) Experian Simmons 2010 Technology Report Oerta
- 12. What are Journeymen Like? Journeymen Doing more shopping/internet than before (Index 210) Like to hear about products/services by email (200) Internet change how I shop for products (194) I spend less time read magazines b/c internet (188) Internet changed way I work (184) Experian Simmons 2010 Technology Report Oerta
- 13. Online activities • Video games • Download Movies • Chat forums Computer/Video Game Brands • Sony Vaio • Xbox Cell Phones • iPhone • Boost Mobile • Song downloading, music player, messaging Experian Simmons 2010 Technology Report Oerta
- 14. Online activities • auctions • personal ads/dating services • listen to satellite radio online Computer/Video Game Brands • Apple Mac • Game Boy Cell Phones • Sony Ericson • T-mobile
- 15. The Ikea Customer & Technology Shopped at Ikea within last 3 months. Own an apple iPod Index: 199 I’m always first among my friends to have the latest in electronic equipment Index: 172 I love to buy new gadgets and appliances Index: 144 I try to keep up with developments in technology Index: 142 Far above average early adopter Index: 129 Experian Simmons 2010 Technology Report Oerta
- 16. RAGNVARD’s Chasm • By garnering the enthusiasm of the innovators and early adopters in the beginning, we are able to create the primary market interest needed to obtain the early majority • By surpassing the “chasm” that divides technology wizards and some journeymen we will be able to reach the vast majority of consumers that identify as apprentice’s Oerta
- 17. Media Multi-Tasking OertaExperian Simmons 2010 Technology Report
- 18. Preference of Media Outlets Experian Simmons 2010 Technology Report Oerta
- 19. A strong positioning on product benefits 25 to 35 year olds rely heavily on their cell phones in their daily life: - stay on top of the news, - connect with their social network - express who they are. - use extra features extensively: Internet, gaming, multimedia, researching. Those activities consume a lot of energy and batteries exhaust quickly. A convenient way of charging mobile devices automatically improves life quality Jeff Schneider “staying connected” “convenience”
- 20. TV Commercial • 30-second spot • Negative aspects of wires and uncharged devices in our daily lives The solution: the wireless charging desk, RAGNVARD! Production costs: $250,000. Prime-time spots: $5,000,000 Jeff Schneider
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- 36. Jeff Schneider Print Advertising Repeated full page advertising -GQ, with a focus on lifestyle -Wired, with a focus on technology -The Economist, with focus on globalization -Forbes, with focus on success and career Estimated costs: $500,000 MRI* Total '000 Proj '000 Pct Across Pct Down Index Wired 2549 614 24,1 1,8 159 GQ 6518 1562 24 4,5 158 The Economist 2644 602 22,8 1,7 150 Forbes 5,111 952 18.6 2.7 123 Fall 2011 Media - Demographics - Head of Household 25-34, Total Adults
- 37. IKEA Catalogue Cover Release: August 2014 Circulation: 212 million copies Jeff Schneider Release: August 2014 Circulation: 212 million copies Design RAGNVARD, wireless charging desk $850/ea
- 38. Online Advertising Intensive online promotion strategy 1. Company owned channels 2. Social media 3. Third-party websites Increased targeting opportunities Easier access to younger demographics Jeff Schneider
- 39. Page Skinning Product specific Rich Media Advertising Jeff Schneider
- 40. Jeff Schneider Instagram Contest Duration: 2 months prior to product launch Prize: New RAGNVARD desk for best submission Costs: $5000 Includes: -Contest tab on statigr.am -Feature in Newsletter -Contest Management Platform -Participant Contact Database
- 41. Facebook Advertising Jeff Schneider CPM cost: $0.5 to $1.20 CPM Total Costs: $150,000
- 42. Jeff Schneider Display & Rich Media Advertising Interstitial Advertising “a splash page displayed before an expected content page. The interstitial is typically displayed for about 20 to 30 seconds before taking the viewer to the desired content page.” Targeted websites: www.nytimes.com www.mashable.com Estimated costs: $300,000 X
- 43. “Furniture goes digital” - Times Square Event - RAGNVARD desks available for trial - Billboard streaming every 30 minutes -Content: Tweet hashtags in real-time 20 desks can be won over weekend - Live roundtable with influential tech bloggers to discuss the opportunities of combining design, technology and furniture. Jeff Schneider
- 45. Availability Population Age: 25-34(%) Base Arizona 6,553,255 12.7% 832,263 California 38,041,430 14.3% 5,439,924 Colorado 5,187,582 14.6% 757,387 Connecticut 3,590,347 12.0% 430,842 Florida 19,317,568 12.2% 2,356,743 Georgia 9,919,945 13.5% 1,339,193 Illinois 12,875,255 13.8% 1,776,785 Maryland 5,884,563 13.4% 788,531 Massachusetts 6,646,144 13.1% 870,645 Michigan 9,883,360 11.8% 1,166,236 Minnesota 5,379,000 13.6% 731,544 New Jersey 8,864,590 12.7% 1,125,803 New York 19,570,261 13.9% 2,720,266 North Carolina 9,752,073 12.9% 1,258,017 Ohio 11,544,225 12.3% 1,419,940 Oregon 3,899,353 13.7% 534,211 Pennsylvania 12,763,536 12.1% 1,544,388 Texas 26,059,203 14.3% 3,726,466 Utah 2,855,287 15.7% 448,280 Washington 617,996 14.1% 87,137 219,204,973 29,354,603 * Percentages based on http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid= ACS_11_1YR_S0201&prodType=table • Only 20 States have an Ikea • Only 12-16% of people in these states are 25-34 years old Andrew
- 46. 2014 July August September October November December Develop A Prototype Carry Out In-house Testing Get User End Feedback Refine Product Based On Feedback Set Up Machine Equipment For Mass Production Develop Logistical Systems RAGNVARD launch IKEA catalogue launch IKEA website product skinning ads Instagram Contest TV Commercial Times Square Event In-store demonstration Print Advertising Facebook Ads Video Interstitial Ads 6-Month Timeline Andrew
- 47. skimming
- 48. Corporate Social Responsibility • For every charging table sold, Ikea will donate a percentage of the proceeds to the ikeafoundation in order to benefit children and families living in poverty all over the world. • The ikeafoundation will have helped over 100 million children by 2015. OertaIkeafoundation.com
- 49. Ikea’s Commitment to the Forests While working with Ikea’s on staff forest specialists and our suppliers, the charging table will be made of wood from trusted sources, thereby limiting the affect on the world’s forest. Ikeahas worked toward using more socially conscientious materials since the 1990’s. Proceeds from the charging table would be allocated towards Ikea’s annual scholarship for students from Russia, Poland, Latvia, Estonia and Lithuania to study sustainable forestry at the Swedish University of Agricultural Science. The scholarship is available for students every year. OertaIkea.com
- 50. Cost Estimate And Price BESTÅBURS $270 X 55%*= $143 Table Surface Area/ Area Of 1 Coil 1030/5.5 ≈ 187 Price Of Transmitter X Coils Needed $3# X 187 ≈$562 Subtract Wholesales discount (50%) ≈ $281 IDTP9030 TRANSMITTER Cost: $424 Price: $850(100% Profit margin) * Based on a rounded Profit margin taken from the COGS on the Consolidated Income Statement # www.mouser.com/ProductDetail/IDT/P9030- 0NTGI/?qs=sGAEpiMZZMtEG0FVrTlw%252buwq7j9oGsalnge2V%252bNt744%3d (estimated value) Andrew
- 51. Sales Forecast Sales Goals - Approximately double sales volume to 170,000 units sold in 2016 - Increase awareness and sales ratios to 1%, currently at .05% in 2016 - Increase awareness to 85% of the Base by 2016 2014 2016 Total Base 29,354,603 29,354,603 Total Awareness (75%, 85%) 22,015,953 24,951,413 Total Availability (70%) 15,411,167 17,465,989 Sales (.05%, 1%) 77,056 174,660 US Population 313,900,000 Population with an Ikea In State 219,204,973 Availability Ratio 69.83% Andrew
- 52. A promising 3-year Profit & Loss Statement 2014 2015 2016 Sales Volume 77,000 110,000 170,000 Price: $850 $800 $750 Net sales $65,450,000 100% $88,000,000 100% $127,500,000 100% Cost of Goods Sold ($424/Table) $32,641,000 50% $46,640,000 53% $72,080,000 57% Gross Profit $32,809,000 50% $41,360,000 47% $55,420,000 43% Operating Expenses Administrative $3,272,500 5% $4,400,000 5% $6,375,000 5% R&D $9,817,500 15% $13,200,000 15% $19,125,000 15% Promotion Expenses Advertisement $6,505,000 10% $8,800,000 10% $12,750,000 10% CSR $1,309,000 2% $1,760,000 2% $2,550,000 2% Total Operating Expenses $20,904,000 32% $28,160,000 32% $40,800,000 32% Net Income $11,905,000 18% $13,200,000 15% $14,620,000 11% Employees (Avg Salary: $40,000) 81 110 159 Andrew
- 53. Control & Update • RAGNVARD will have monthly scheduled tests to monitor performance of the product on a wide scale • Audits on the product will be taken weekly in order to maximize sales performance and focus our sales strategy on markets that bring the highest ROI. • Re-allocation of merchandise based on performance will occur monthly on the RAGNVARD charging desk Oerta
Notes de l'éditeur
- Product slogan will emphasize both benefits and will build on the innovation effect in the consumers’ mind.
- Fleur de Noyer – Chest of drawersDuracell PowermatStandard cableTeknion Powermat
- People are encouraged to envision their own furniture piece of the future and submit it through an Instagram post or upload it directly to the contest page on Statigram. The hashtags#EmpoweredDesignand #FurnitureOfTomorrowhave to be attached to each post in order to enter for a chance to win the brand new RAGNVARD desk as soon as it is released.
- Next we used the ATAR Model
- In order to estimate a price, I first multiplied Besta Burs $270 retail price by the cost of goods sold ratio reported in Ikea’s annual income statement and found an estimate cost of $143. I then found a electronics retailer that sold transmitters at $3. By cutting the Wholesale retailer out we estimated that covering the surface area of the table excluding a 1 inch border plus the table itself would cost approximately $424. Then a 100% markup would make the final price $850. Over time the profit margin will have to go down as competitors develop more substitutes for our product.