MicroFridge: The Concept
1. What needs does MicroFridge meet? What value does it create? For whom? Write a sentence, a “user benefit statement,” that sums up the essence of what Bennett is offering, and makes it clear who is his target market. MicroFridge meets the need for hot, freshly cooked food and preservation of food within a single compact microwave/refrigerator/freezer unit. The value addition in this innovation is its current-limiting safety feature (up to 10 amp), which would help ensure safety from fire as well as other electrical hazards that any electrical equipment without this feature is prone to. It creates value for college students who wish to have fresh food within the comfort of their dormitories, but aren’t allowed to cook within the premises due to the strict college policies. It also creates value for other consumers outside the college limits. In a single sentence, Bennett’s offering can be described as: “Cook your food fresh or store it for future relish, Microfridge is a device that students and adults alike will cherish.” 2. How should Bennett price it? Domestic appliance manufacturer Sanyo is willing to supply the finished product to Bennett at $263.00 per unit. Bennett should price it based on the additional premium the students are willing to give for the extra, safe features that MicroFridge offers, and also on the return he wishes to obtain. 3. How should he communicate with his key marketplace decision makers to move them from awareness to interest to purchase? First of all, he should hire an advertising agency to create innovative advertisements for his product to create awareness amongst the public that there exists a product called MicroFridge. He should visit various dealers and distributors in the areas close to where his prospective market exists (college-going students) and promote the USPs of his product. Once sufficient interest has been generated, he can trigger the prospective buyers’ interest first purchase by adding certain promotional offers like discount for first 100 customers, complementary product offers with MicroFridge etc. 4. Think about channels of distribution. Could he sell direct through a sales force, and / or through distributors and/or retailers? How should he do that? a. Bennett can utilize direct door-to-door selling effectively in the initial stages, with product demonstrations, in order to increase the visibility of MicroFridge as well as make the consumers aware of the excellent features of the product. As discussed in the case, most people are apprehensive of buying a new innovation because of the uncertainty of its success, and hence showing live demonstrations can significantly increase people’s chances of buying it. b. Bennett can also have tie-ups with a few established distributors and set up small showrooms within their premises to display MicroFridge.
“RHINO” Almirahs 1. What mistakes did Mr. Basu commit during all these years? Do you see a pattern? a. Mr. Basu did not do proper market research. He should have studied the consumer preferences, their taste patterns, whether they would really warm up to the idea of a new brand when strongly established brands offering the same features already exist in the market. b. Correlation between Quality and Price: Mr. Basu just assumed that people would want to buy his product because the cost is moderate and quality is high; in reality, he should have considered the option that consumers can consider his product to be of low quality because of its lower price. c. Place: Mr. Basu tried to sell a high-quality product in an area like Ultadanga which was a cheap-and-low-quality product market. d. Channel: Mr. Basu did not focus on using the dealers and distributors as a major resource for marketing his products, because they have a huge, established reach and existing customer base. e. Before diversifying and taking orders from the defense, Mr. Basu should have analyzed whether his equipment is suitable for manufacturing those products, which would have helped him prevent inability to fulfill orders as well as further losses. 2. What should he do in Short term? a. Mr. Basu should have used the cash available to him to give attractive discounts to the distributors in order to push sales and move the static supply chain. b. Since the quantity of the unsold items is a limited number, Mr. Basu can also aim at selling them through his contacts (friends, relatives etc.) in order to get revenues and clear off the immediate interest installments/part of his term loan. c. Once he is able to sell his finished goods, he will also be able to persuade the bank to give him more loan for raw materials and expenses, with which he can create a different set of almirahs which falls more in the price range and expectancy range of the consumers. 3. What should he do in LONG TERM? a. An intensive market research should be conducted to assess consumer preferences and taste patterns, what are their needs, requirements, what do they like/dislike in an almirah, level of convenience, budget, price points, distribution network research etc. b. Mr. Basu should focus on Brand-Building of his products over a long period of time, in order to create and maintain a loyal customer base. c. He should also increase the type of products in his offering to cater to more customer segments, in order to increase the market for his products. d. Mr. Basu can offer customized solutions to customers, with modular fittings, that gets incorporated in a standard framework. Customers can make their selections on what chambers they want, how many compartments, compartment size etc. e. Mr. Basu should use Lean Six Sigma in his processes, in order to increase the efficiency and effectiveness in the process of manufacturing steel almirahs, as well as to reduce waste.
