Beruflich Dokumente
Kultur Dokumente
(NTADBM)
Instructors: Prof. Rakesh Basant, Economics and CIEE (IIM) Prof. Deval Kartik, Strategic Design Management (NID) Prof. Bhavin Kothari, Strategic Design Management (NID) Prof. Jignesh Khakar, New Media Design, (NID) Academic Associate: Vijaya Rajeshwari
Group 7
Lohit Ahuja | Nikita Iyer | Priyanshu Dubey | Tusshar Saigal
Table of Contents
Need Identification.................................................................................................................................. 1 Introduction ............................................................................................................................................. 1 Purpose and Benefits of the Device .................................................................................................... 1 Technology & Design ............................................................................................................................. 2 Existing Security (Physical Lock and Key) system ............................................................................ 2 Anatomy of old system ................................................................................................................... 2 New System with Digital Key ............................................................................................................ 3 What is NFC?.................................................................................................................................. 3 NFC based Working Model ............................................................................................................ 3 Architecture of Design Solution ......................................................................................................... 4 Scenario .................................................................................................................................................. 5 Without Mobiloc ................................................................................................................................. 5 With the use of Mobiloc ..................................................................................................................... 6 Business Model ....................................................................................................................................... 7 What is being sold and the associated assets needs?........................................................................... 7 Customer Insights ............................................................................................................................... 7 Product Development on the basis of Customer Insights ................................................................... 8 Segmentation, Targeting, Positioning (STP) ...................................................................................... 8 Segmentation................................................................................................................................... 8 Targeting ......................................................................................................................................... 8 Positioning ...................................................................................................................................... 9 Product, Pricing, Advertising & Promotion and Place ....................................................................... 9 Product ............................................................................................................................................ 9 Pricing ............................................................................................................................................. 9 Advertising:................................................................................................................................... 10 Promotion:..................................................................................................................................... 10 Place: ............................................................................................................................................. 11 Sales and Distribution Channel ......................................................................................................... 11 Revenue Model ................................................................................................................................. 12 Standard Model ............................................................................................................................. 13
Customized Model ........................................................................................................................ 13 Marketing, Sales and Distribution Model ......................................................................................... 14 Economic Logic ................................................................................................................................ 14 Market Study................................................................................................................................. 15 Market Analysis ............................................................................................................................ 17 Financials ...................................................................................................................................... 18 Bibliography ......................................................................................................................................... 22
Need Identification
Theft is a major concern across genders and all age groups. There is a constant fear to safeguard valuables for short and long periods of time. But this involves a lengthy tedious process of the current physical lock and key system which users have no choice but to follow or if not followed, forego their valuables. It is this problem that we are trying to solve where users can lock and unlock their valuables through digital key mechanism by cutting down on the process time and ensuring a safer security system through new technology applications to the current combination lock and key system.
Introduction
MOBILOCS is an innovative security device that will empower users to safeguard their valuables through their smart phones. There are two parts of Mobilocs one is physical lock with digital receiver and second is smartphone which can communicate with the lock and thereby giving user a one-click option to lock and unlock all the devices one owns.
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from levers, wheels, gears, and cams. During the mid-20th century, locks became more sophisticated and automated and started to incorporate electrical and electronic mechanisms. But now information is valuable too and most of it is held inside hundreds of millions of computers that are all linked together through the Internet. Modern locks that protect computers are based on encryption which is a way of securing information using complex mathematical processes.
When
the
correct
key
is
inserted,
the
gaps
between
the
key
pins
(red)
and driver pins (blue) align with the edge of the plug (yellow).
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When
the
gaps
between
the
pins
get
aligned
with
the
shear
line,
What is NFC?
Near field communication (NFC) is a set of standards for smartphones and similar devices to establish radio communication with each other by touching them together or bringing them into close proximity, usually no more than a few centimetres. NFC standards cover communications protocols and data exchange formats, and are based on existing radiofrequency identification (RFID) standards.
short range of 5 cm, the user will have to get the phone within range of the lock to change its state.
What really happens is that the NFC enabled phone simply reads data from the NFC tag inside the lock to identify the state of the lock. Once the state has been identified the user can change the state of the lock by writing a new state in the NFC tag inside the lock. The NFC reader inside the lock will read the data from the NFC tag and tell the micro-controller inside the lock, about this change in state. The micro-controller controls the locking mechanism i.e. the solenoid. The solenoid is basically acting like an automatic latch. The latch closes in lock state and the latch opens in open state. The NFC reader will tell the micro-controller about the state of the NFC tag and the micro-controller will open or close the lock with the help of the solenoid.
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Scenario
Without Mobiloc
User travels with luggage
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Business Model
What is being sold and the associated assets needs?
In Mobiloc we will fall under the highlighted category of Manufacturer & Inventor. Types of Rights Sold? Financial Creator Distributor Entrepreneur Financial trader
Types of Asset involved? Physical Manufacturer Intangible Inventor Human Human creator Human distributor
Wholesaler/Retailer IP trader
Landlord
Financial landlord
Physical Landlord
Intellectual landlord
Contractor
Broker
Financial broker
Physical Broker
IP broker
HR broker
As the technology doesnt have a close precedent hence we can claim ourselves to fall in the Creator category. Secondly our assets are physical and intangible because we will be selling the products through 2 channels: 1. Outsourced manufacturing and then selling in the market i.e. B2C selling of physical goods. 2. Giving licenses to top players in market (like VIP) so that they can design the lock according to their needs and earning royalties from them. This is B2B selling of intangible IP.
Customer Insights
Mobiloc is an amalgamation of innovative thinking by group & focussed group discussions. As part of focussed group discussions we interviewed 2 groups of people in a train while travelling a return trip from Ahmedabad & Delhi.
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Few of the key points that emerged from those consumer discussions are: 1. Travellers especially in train are quite wary of their luggage. 2. Cautiousness about luggage protection is independent of the class you travel in the train. Reason for this are: a. Passengers board & de-board the train midway. b. Secondly no stringent measures are taken by Indian Railways in restricting the unreserved persons from travelling in reserved bogies. c. Lastly the master keys exist for almost all locks currently in the market. 3. Carrying key is majority of times a pain as the only place it can be placed is in the pocket post locking the luggage. 4. Passengers are willing to spend almost 100% premium amount if new solution can promise them a peaceful sleep during their journeys.
1. Under male section 15-25, 25-40 & > 40 years of age group 2. Under female section 20-30 years of age group only because this is the primary womens section which travels by them. Elsewhere they are accompanied by family.
Pricing The prices for the above said locks will be as below
1. Standard Lock - The average cost of a good physical key lock in the market is Rs. 40. As customer s are willing to pay 100% mark-up on existing products hence we would be pricing Mobiloc Standard version at Rs. 99/piece. We are expecting to earn a net margin of Rs. 15 on every unit sold.
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2. Customized Lock Model Here as we are giving them licenses hence we are concerned about the royalty only. Given the fact that this model will increase the exposure of Mobiloc (through pre-installation in well-known companies products) & would serve as good marketing and promotional tool for Mobiloc hence we have kept the royalty as Rs.5 /installed piece sold. 3. The application to control the locks using smartphones would be made freely available in iPhone, android and Nokia app stores. This will reduce the switching costs for customers. And in the coming years we will also try to get this application pre installed in some Smartphone manufacturers.
Advertising:
E-marketing campaign with more focus on mobile ads would be launched to target smart phone users. So the marketing channels used would be internet, email, mobile and bag/suitcases stores. Within the internet we will be taking help of primarily 2 platforms: 1. YouTube Channel Channel creation is not a costly affair. And this is significantly cheaper than creating & launching a TVC. Here we will include viral ad videos. Moreover through this we will be able to channelize our effort to our target customer only. 2. Website It is very necessary as any authenticated product in todays market is adjudged by its internet presence. Hence making a website would be of prime importance. Here products technical specifications, its price list, store availability; bug reporting centre etc., all will be there.
Promotion:
1. We will certainly keep away from discount based promotion. 2. Instead we will come up with promotional schemes which can improve our product, generate sales for us and off course create the buzz about our product. 3. To have such a scheme we will organize a temporary stall in malls, where people can come & give suggestions, where all products can be displayed and product can be sold also.
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Figure 1: Yearly Advertising & Promotion Expenditure (Details in Economic Logic Section)
Place:
The product will be made available at following places: 1. Book stores at Railway Stations & Airports because here most of our target population is expected to turn up. 2. Tie up with luggage specific stores in common markets (like Lajpat Nagar), super markets (like Shoppers Stop) and hyper markets (like Reliance Mart)
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Figure 2: Number of salesperson required as direct sales force (Details in Economic Logic Section)
2. Indirect Sales Channel This channel will comprise of conventional sales route i.e. Distributor followed by wholesaler then to retailer and finally to customer. The ramp up for this team will be a bit fast rate as they need to sell our flagship product i.e. Standard lock model. They will get in touch with every kind of person involved in sales channel be it distributor, wholesaler and retailer & convince them to hold our product. The ramp up this sales force is given as below:
Figure 3 : Number of salesperson as indirect sales force (Details in Economic Logic Section)
Revenue Model
Using the current NFC-enabled smartphone users in India and the growth rate of such users, the market size of these locks have been estimated. As one user could buy multiple Mobiloc for multiple bags, the effective market for digital locks is much bigger and as a first mover,
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we hope to capture most of the market share of it. The number bags of different kinds sold in last few years by various brands and by unknown brands and the respective growth rate data have also been collected and projected for next four years.
Standard Model
1. Organised Sector The penetration of Mobilocs in branded suitcases/bags market is expected to be higher than organised sector and thereby expected captured market share of Mobiloc has been increased from 1% in 2013 (launch year) to 15% in 2016. The calculations for revenue and profits have been made using these assumptions and the total revenue from organised sector for year 2013-16 is Rs. 16.92 crore. 2. Unorganised Sector The penetration here is low as the NFC-enabled smartphone users buying unbranded locks would be low. The captured market share assumptions here are 0.1% in 2013 increasing to 1% in 2016. The revenue calculated from this sector for years 2013-16 is Rs. 5.85 crore.
Figure 4: Yearly Expected Revenue from sales of Standard Model (Details in Economic Logic Section)
Customized Model
The initial partnership with VIP is going to get minimal revenues to the tune of Rs. 7.7 lakh. From the second year 2014, the partnerships will increase and the total revenue for years 2013-16 is expected as Rs. 1.69 crore.
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Figure 5: Yearly Royalty Earned from Customized model (Details in Economic Logic Section)
E-marketing campaign with more focus on mobile ads would be launched to target smartphone users. So the marketing channels used would be internet, email, mobile and bag/suitcases stores.
Economic Logic
The steps for arriving at economic logic and the numbers are given below. The Red filled cells are expected values in coming years.
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Market Study
1. Calculate the total value of travel bags market in India.
Category Data Rs Million Backpacks Laptop Bags Handbags Luggage Travel/Sports Bags Travel 2011 10,681 7,045 20,105 33,501 10,059 81,391 2012 11,482 7,552 21,000 34,874 10,155 85,063 2013 12,320 8,107 21,968 36,409 10,247 89,051 2014 13,256 8,723 23,000 38,411 10,345 93,736 2015 14264 9386 24081 40524 10443 98667 2016 15348 10100 25213 42753 10542 103858
Figure 6 : Total value of travel bag market segregated into different categories (Source: Euromonitor, 2011)
2. Calculate the average price of each category in the market. We will be removing the handbag category from above data because that is not our target product
Average Prices Backpacks Laptop Bags Handbags Luggage Travel/Sports Bags Rs. 1250 1600 NA 5500 1800
Figure 7 : Average Price of various categories prevailing in the market (Source: Primary Data collection)
3. From above 2 tables we can extract the number of units made in each category.
No of units made yearly Backpacks Laptop Bags Luggage Travel/Sports Bags 2011 8,544,640 4,403,125 6,091,073 5,588,500 2012 9,185,520 4,720,125 6,340,800 5,641,611 2013 9,856,080 5,067,063 6,619,800 5,692,944 2014 10,605,120 5,452,125 6,983,891 5,747,000 2015 11,411,085 5,866,450 7,368,007 5,801,569 2016 12,278,302 6,312,260 7,773,249 5,856,656
4. Get the market share data. An important observation over here was that close to 80% of the market is under unorganized sector.
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Travel Goods Company Shares % Company VIP Industries LTd Samsonite South Asia American Tourister Fastrack Targus JanSport Asia Nike Puma Reebok India President Bags Khadim India Case Logic Adidas India Marketing Superhouse Gucci India Pvt Ltd Shopper's Stop Aristocrat Luggage Others Total
2011 5.05 5.00 1.65 1.50 1.07 1.00 0.50 0.62 0.45 0.20 0.20 0.28 0.23 0.12 0.10 0.14 NA 81.89 100
5. Then we identified who all the top players in each of the categories:
Top 3 players in each category Backpacks Fastrack American Tourister JanSport Asia Laptop Bags Targus American Tourister President Bags Luggage VIP Samsonite American Tourister Travel/Sports Bags Adidas Reebok Nike
Figure 10 : Top 3 market players
6. As our product is closing linked with usage NFC technology hence we then collected data
Figure 11 : Number of NFC enabled phones expected in coming years (Gartner, 2011)
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Market Analysis
1. Assumption: Industry Wide Market Shares are approximated for individual categories also. Because of lack of category specific market share.
2. Hence now calculating the number of units produced in each category by each of the top 3 players.
Backpacks ( No. of units for top players) 2011 Fastrack 128,170 American Tourister 140,987 JanSport Asia 85,446 Total target Backpacks 354,603 Laptop Bags ( No. of units for top players) 2011 Targus 47,113 American Tourister 72,652 President Bags 8,806 Total target Laptop Bags 128,571 Luggage ( No. of units for top players) VIP Samsonite American Tourister Total target Luggage 2011 307,599 304,554 100,503 712,656
Sports Bag ( No. of units for top players) 2011 Adidas 12,854 Reebok 25,148 Nike 27,943 Total target Sports Bag 65,944 Total Units 1,261,774
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Financials
Standard Model 1. Assumption: a. We will be launching in year 2013. b. In organized market we are expecting to capture market share of 13% till 2016. c. In unorganized market we are expecting to capture market share of 1% by 2016. Based on the above assumptions we have the following Standard Mobilocs sold in market in coming years.
2011 Travel Market (in units) 24,627,338 Organized Sector (%) 18.11 Industry Growth 2.10% OS Penetration 18.11 Organized Sector (units) 4,460,011 Market Share (Capture, Assume) Mobiloc units sold (in organized market) 2012 2013 25,888,056 27,235,887 2014 28,788,136 2015 30,447,111 2016 32,220,468
18.49 4,786,782
Unorganized Sector (%) 81.89 UOS Penetration 81.89 81.51 81.12 UnOrganized Sector (units) 20,167,327 21,101,274 22,094,131 Market Share (Capture, Assume) 0.10% Mobiloc units sold (in unorganized market) 22,094 Total Mobilocs Sold 73,512
2. Assumption : a. Being a premium product we will be pricing it at Rs. 99/piece b. We are expecting a margin of Rs. 15/piece Based on the above assumptions and Total Mobilocs sold we will be computing the money available for advertising & promotion budget for us.
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2011 Total Revenue (Rs.) COGS Cost of Normal Lock Cost of chip Cost of NFC tag Cost of 1 Mobiloc Total COGS
2012
Expected Margin for 1st year Expected growth in margin Expected margins in various years Total expected margins
Money available for Selling & Advertising Expenditure 1,764,281 9,329,328 17,192,625 25,369,201
3. Assumption: a. Considering 50% of above amount is available for advertising & 50% for sales force development b. Consider 1 sales person for this channel will be paid Rs. 360000 per annum Based on the above data we will be computing the advertising mix for subsequent years & sales force strength.
2011 Advertising & Promotion expenses available Advertising & Promotion Mix Youtube Website Mall Promotions In store Promotions Print Media Radio Total 2012 2013 882,140 2014 4,664,664 2015 8,596,313 2016 12,684,600
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2011 Selling & Distribution Expense available One selling person will take Sales force strength
2012
2013 882,140
2014 4,664,664
2015 8,596,313
2016 12,684,600
360000 pa 2 13 24 35
Customized Model 1. Assumption: a. We will be launching this product from 2013 onwards b. As for this we will be just negotiating with top market players and providing them with the licenses hence here we expect that we will be conquering 30% market share by 2016 c. The royalty is equal to Rs. 5 per piece. By using above assumptions we can calculate the total royalty earned as follows:
2011 Travel Market (in units) 24,627,338 Organized Sector (%) 18.11 Industry Growth 2.10% OS Penetration 18.11 Organized Sector (units) 4,460,011 Market Share (Capture, Assume) Mobiloc units sold (in organized market) 2012 25,888,056 2013 27,235,887 2014 28,788,136 2015 30,447,111 2016 32,220,468
18.49 4,786,782
2. Assumption: a. We will be deploying 100% of royalty earned for sales-force development in 2013 followed by 75%, 60% & 50% in 2014, 2015 & 2016 respectively. b. Salary for 1 sales-person here will be Rs. 500000 per annum. Increased salary because better skill set person is required to negotiate with top notch companies.
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Figure 18: Sales force required for negotiating with big companies for customized Mobilocs
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Bibliography
American Tourister Inc. (n.d.). American Tourister India. Retrieved from American Tourister: http://www.americantouristerindia.com/ bgr. (n.d.). Retrieved from bgr: http://www.bgr.com/2011/11/22/more-than-50-of-all-smartphoneswill-be-nfc-enabled-in-2-3-years/ Catalyst, C. (n.d.). Retrieved from Slideshare: http://www.slideshare.net/ConvergenceCatalyst/ccindia-2012-smartphones-outlook DataMonitor. (n.d.). DataMonitor Database. EuroMonitor. (n.d.). EuroMonitor Database. Luggage, B. (n.d.). Bags luggage. Retrieved from Bags luggage: http://www.bags-luggage.com/ Naaptol. (n.d.). Bags prices. Retrieved from Naaptol: http://www.naaptol.com/buy/fashion/bags/travel_bags.html Samsonite Inc. (n.d.). Samsonite India. Retrieved from Samsonite: http://www.samsoniteindia.com/ Shukla, G. (n.d.). Retrieved from Android OS: http://www.androidos.in/2012/02/android-to-capture50pc-of-indian-smartphone-market-2012-analyst/ trak. (n.d.). Retrieved from trakin: http://trak.in/tags/business/2012/02/16/indian-smartphonemarket-growth-overview/ VIP Inc. (n.d.). VIP Bags. Retrieved from VIP: http://www.vipbags.com/ VIP Inc. (n.d.). VIP Industries. Retrieved from VIP Industries: http://www.vipindustries.co.in/vip/Common/UI_Templates/HomePage.aspx?res=P_VIP Wikipedia Inc. (n.d.). NFC. Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Near_field_communication Wikipedia. (n.d.). Microcontroller. Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Microcontroller Wikipedia. (n.d.). Solenoid. Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Solenoid Wolpin, S. (n.d.). Retrieved from dvice: http://dvice.com/archives/2012/05/is-nfc-and-smar.php Wordpress. (n.d.). Retrieved from Wordpress: http://researchsurveys.wordpress.com/2012/06/27/india-smartphone-market-operatingsystem-analysis-forecast/
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