Managing New Products and Services Case Study: Children First Ltd
Managing new Products and Services
Case: Children First Ltd.
Group 5 members:
Table of Contents
1. Answer Question 1: Page 3 2. Answer Question 2: Page 4 3. Answer Question 3: Page 6 4. Appendix 1: Marketing model Page 10 5. Appendix 2: Positioning Page 10 6. Appendix 3: Examples of several themes Page 10 7. Appendix 4: Calculation total cost in lifetime Page 11 8. Appendix 5 Example of potential revenues with more decorations Page 11
Case answers
Question 1.
By using the marketing model (Appendix 1) we recognize the following differences in the original and second product line: | 1st product line | 2nd teen line | Customers | 0-6 years | 7-18 years | | Parents decide | Parents and children decide | | Homogeneous target group | Non homogeneous target group | Competitors | Imports, mainly from Scandinavian | Seems unknown | | MDF and wood veneer versus full wood | Seems unknown | | 50% above local competitor’s prices | 25% above local competitor’s prices | Collaborators | Furniture dealers specializing in the children market | | | Simple product; sufficient marketing communications: ‘mouth to mouth’ | Complex product; insufficient communications | Company | External market focus | Internal company focus | CFL did not perform appropriate market research of the customer’s needs and wants. CFL was convinced of the success of its new product (“ cute baby syndrome” ). As a result CFL failed in targeting and consequently the teen line did not succeed.
CFL tried to target a different group of customers without doing proper market research. By offering a conversion kit, the new line “grows” with the age and needs of children, making it unnecessary to buy new furniture. By altering the price setting, the ten year guarantee and the conversion kit, a whole new product was introduced instead of a line extension. The new price resulted in lower
Case: Children First Ltd.
Group 5 members:
Table of Contents
1. Answer Question 1: Page 3 2. Answer Question 2: Page 4 3. Answer Question 3: Page 6 4. Appendix 1: Marketing model Page 10 5. Appendix 2: Positioning Page 10 6. Appendix 3: Examples of several themes Page 10 7. Appendix 4: Calculation total cost in lifetime Page 11 8. Appendix 5 Example of potential revenues with more decorations Page 11
Case answers
Question 1.
By using the marketing model (Appendix 1) we recognize the following differences in the original and second product line: | 1st product line | 2nd teen line | Customers | 0-6 years | 7-18 years | | Parents decide | Parents and children decide | | Homogeneous target group | Non homogeneous target group | Competitors | Imports, mainly from Scandinavian | Seems unknown | | MDF and wood veneer versus full wood | Seems unknown | | 50% above local competitor’s prices | 25% above local competitor’s prices | Collaborators | Furniture dealers specializing in the children market | | | Simple product; sufficient marketing communications: ‘mouth to mouth’ | Complex product; insufficient communications | Company | External market focus | Internal company focus | CFL did not perform appropriate market research of the customer’s needs and wants. CFL was convinced of the success of its new product (“ cute baby syndrome” ). As a result CFL failed in targeting and consequently the teen line did not succeed.
CFL tried to target a different group of customers without doing proper market research. By offering a conversion kit, the new line “grows” with the age and needs of children, making it unnecessary to buy new furniture. By altering the price setting, the ten year guarantee and the conversion kit, a whole new product was introduced instead of a line extension. The new price resulted in lower