Abstract

The Keen Home Smart Vent is the debut product released by Keen Home Inc.,
Keen Home Smart Vent
developers of home automation systems and related services.

William Maisey, Rohit Louis and Hansen Pang

Word Count: 1418

Executive summary

The Keen Home Smart Vent is the debut product released by Keen Home Inc., developers of
home automation products and services and was co-founded by Ryan Fant and Hussain
Nayeem (Bloomberg.com, 2016).

This report considers Keen Home Inc. and their debut product: The Keen Homes Smart Vents
capacity to succeed as an emergent brand, in the Australian and New Zealand markets for
home ventilation. The infancy of the market and rapid growth in research and development of
smart-technology indicates that this field has the capacity to be incredibly lucrative.

Consideration and analysis of both the micro and macro environments surrounding Keen
Home Inc.s Smart Vent will be conducted in order to understand the potential strengths,
weaknesses, opportunities and threats associated with the product. Potential marketing
strategies for the product will be presented in conjunction with examination of its marketing
mix.

Factors which either facilitate or inhibit the penetration of The Keen Homes Smart Vent into
the market, are able to be addressed through the implementation of a dynamic and
appropriate market strategy. This means that maximization of value throughout the chain
must be established by sourcing cost efficient and reliable suppliers, whilst gaining the
confidence of suitable intermediaries to ensure the product can be placed and promoted in
such a way that it will attract consumer attention over and above their competitors.

1
Table of Contents Page

SECTION 1: INTRODUCTION 3

SENTION 2: GENERAL MARKET OVERVIEW 3

2.1 MICROENVIRONMENT
2.1.1 The Company 3
2.1.2 Customers 3
2.1.3 Competitors 4
2.1.4 Suppliers 4
2.1.5 Intermediaries 4
2.1.6 Publics 4

2.2 MACROENVIRONMENT
2.2.1 Demographic 5
2.2.2 Legal 5
2.2.3 Natural 5
2.2.4 Technological 5
2.2.5 Economic 6

SECTION 3: PRODUCT SPECIFIC OVERVIEW

3.1 Product category overview 6
3.2 Trends and Market 6
3.3 Product
3.4 Price
3.5 Place
3.6 Promotion

SECTION 4: CONCLUSION

SECTION 5: BIBLIOGRAPHY

2
SECTION 1: INTRODUCTION

In a new era of technological innovation and development in conjunction with ever-

increasing product intelligence, the use of smart technology is increasing.

Smart technology refers to products which react to external input, with the integration of
virtual cognition (KnowIT, 2011). These products are created and utilized to maximise
product performance, ease-of-use and cost efficiency. This provides opportunity to develop
and augment existing technologies with advanced and modernized product functions.

The Keen Home Smart Vent allows for mobile climate control of the home, with management
of the climate able to be individualized to the extent that it is like having a thermostat in
each part of the home (Keenhome.io, 2016). Smart-linked products, as a category are
entirely emergent, with their potential and capacity for lifestyle integration far from realized.
The novelty of this technology is highlighted by the fact that the first smart-phone was
released less than ten years ago, in 2007 (Arthur, 2012).

In this report, the strengths and weaknesses of The Keen Home Smart Vent as a product will
be analysed, as well as current and potential opportunities and threats within the home
automation products and services marketplace will be reviewed. In addition to a market
overview, a product specific review will be conducted. In this review, the Keen Homes
implementation of marketing mix will be conducted, whereby the product, its placement,
pricing and promotion will be investigated.

SECTION 2.1: Microenvironment

2.1.1 The Company

Keen Home Inc. was conceived in 2012, when the co-founders pitched their product concept
to New York Universitys Entrepreneurs Challenge. They have grown to include a further 10
individuals in the company and can currently be found in 100 households (Keenhome.io,
2016). The HVAC market size, in which Keen home operates is valued at $82billion growing
4% between 2011 and 2016 (Ibisworld.com, 2016). The rate of market development is
exceptionally facilitative for Keen Home to grow dramatically.

3
2.1.2 Customers

The basis for Keen Home Smart Vents target market is a homeowner, whether that is a
landlord or own property holder. Due to more than 60 per cent of first home buyers now
being married and having children before they can afford to buy their first home (ABC News,
2014), it is probable that the customer base for this product will be working families looking
to upgrade their homes. As this product is a non-essential purchase, individuals with
heightened disposable income, are more likely to be inclined to purchase it. This implies that
the customer base for this product is home-owners, likely part of a nuclear family, whose
financial situation is comfortable enough to address non-essential wants.

2.1.3 Competitors

Competitors include: IRIS, EcoVent, XFINITY Home, IntelligentHome and the NEST
Thermostat (Forbes.com, 2015). Many of these companys products operate similarly to Keen
Home Smart Vent, for example Ecovent utilize the same automatic vents, monitoring sensors
and wireless control technology that Keen Homes product does. In order to effectively
compete against these other companies, Keen Home will need to focus on a strategy of
innovation and product differentiation, possibly adapting a concentrated marketing strategy.
Having raised some $1.52m to bring their product to the market (Burns, 2014), Keen Home,
are as well-equipped as they can be to make in-roads into the HAS market.

Within growing markets, small firms such as Keen Home, often face major threats from
existing companies, particularly if competitors are larger and in possession of superior
resources (Rajagopal, 2015). This allows competitors to more efficiently place and promote
their product, often at a lower price. It is possible that the established nature of competitors
products could also present itself as a weakness through a lack of innovation. Keen Home can
review competitor product designs and pricing strategies and attempt to deliver an improved
strategy, turning potential threats into opportunities. This product has competitive advantage
in that Keen Home have managed to keep the price of the product low, whilst offering a high
quality service, this means that prospective customers are highly likely to purchase the Smart
Vent other providers products.

4
2.1.4 Suppliers

The primary supplier for Keen Home is ZigBee. Zigbee is a component installed with the
Keen Home Smart Vent providing a wireless personal area network to connect the Smart Vent
with the phone. It plays a significant role of the Smart Vent to carry out the automatic system.
Zigbee is an important link in the customers value delivery system and an indispensable
input in the production line. Therefore, it is better to develop a long term relationship with
Zigbee to maintain a stable provision of product and high quality.

2.1.5 Intermediaries

Alongside promoting and selling their own product, Amazon acts as intermediary for Keen
Home Smart Vent. It is an internet based retailer acting a role of reseller to help Keen Home
selling the Smart Vent. Amazon is a leading global retailer, providing convenient online
service to its customers. Statista stated that Amazon has more than 300 million active
accounts in 2015 (Facts, 2016). With such a large customer bases, this would help facilitating
the promotion and sales of Keen Home Smart Vent so as to create a greater customer value
and satisfaction for the customers.

Currently, the smart vent is only retailed online. Keen Home hope to have their product
retailed in nationally recognised stores (such as Harvey Norman) as it will signify a superior
market offering than their competitors. However, they will lose significant portions of sales
income in third party reseller costs.

2.1.6 Publics

The financial public such as bank has an actual or potential impact on Keen Home. As Keen
Home is a newly founded company and a relatively small business. They raised $1.52 million
to bring the Smart Vent to the market from various ventures organization (Matt Burns, 2014).
It shows that the capital of Keen Home is insufficient and has a risk in long run operation.
The banks therefore have a great influence in lending funds to Keen Home for further
company extension or sustainable operation. Government would also have a potential
impact on Keen Home Smart Vent. It can impact the product safety and truthful advertising of
the product. Safety issue about the extra pressure on the HVAC system brought by the Keen

5
Home Smart Vent may be arisen. Furthermore, the numbers of cost saving and electrical
conservation will be tested by the government departments.

SECTION 2.2: Macroenvironment

2.2.1 Demographic

Keen Home Smart Vents is produced by a relatively young team, who will hope to benefit
from cultural shifts which emphasise and advocate greener technologies. Increased awareness
and cultural acceptance of the climate change phenomenon will benefit Keen Home as they
seek to launch their products to a new generation of home owners. This product is aimed at
generation Y individuals, recently entered onto the property ladder. These individuals are
more inclined to embrace new technologies than the previous generations (Baby Boomers
and Gen X). Keen Home will hope to establish customer lyalty with this demographic, so that
they continue to have selling potential in the long term. The product is not segmented by
characteristics such as gender or race, as the product is hoping to be utilized by as wide an
audience as possible.

2.2.2 Legal

It is obligatory to follow legal regulations (such as The Ozone Protection and Synthetic
Greenhouse Gas Management Act 1989) in relation to refrigeration and air conditioning
products. In order to be tendered in Australasian markets, Keen Home must ensure that their
product is fully compliant with the standards of Australian and international regulatory
bodies. This is to avoid liability for injury as a result of product malfunction and to ensure
that environmental considerations are adhered to (more information can be found at
http://www.environment.gov.au/ (Environment.gov.au, 2016).

2.2.3 Natural

Keen Home apply a high degree of value to energy conservation and efficiency in their
production of Smart Vents. With increasing natural influence on marketing, Keen Home must
ensure that they use environmentally sustainable processes, due to social acknowledgment of
raw materials becoming scarcer. The Smart Vent promises to be more efficient than other
products on the market, meaning that the performance of the product will achieve the desired

6
results at a lower energy cost in line with current global attitude trends. This area of the
market offering is a strength, as it fits contemporary global, social attitudes towards
environmental awareness.

2.2.4 Technological

Keen Homes innovative product is undoubtedly influenced by the development of new

technologies. Currently, Keen Home are experiencing trouble with connectivity from phones
to their device, leading to mixed initial reviews and dissatisfaction with their current offering
(Priest, 2016). Keen Home will also need to maintain regular and consistent monitoring of the
used technology, in relation to their competitors. In order to succeed, Keen Home must ensure
that their offering is a superior product to competitors such as EcoVent Systems
(Ecoventsystems.com, 2016) who also seek to capture a large segment of the emerging
market for smart vents. In order to continue their initial ethos of innovation and cutting edge
technology, Keen Home requires significant investment in research and development (R&D).
This product has been designed in an era of technical revolution, in which intricate and
customisable control of equipment is possible. This is largely due to the multi-functionality of
smart phones, and their capacity to be used as a remote. With 89% of Australians owning a
smart phone (Budde.com.au, 2016), this pre-requisite requirement for product use is highly
unlikely to limit product accessability. Smart phones are far more dynamic in their ability to
manually control equipment in comparison to their classic predecessor.

2.2.5 Economic

Keen Home undoubtedly have the potential to expand in size and profitability. Opportunistic
economic factors, such as further market development and consumer desire to invest in more
efficient appliances. Shifting sociological attitudes towards energy efficiency and saving
money on utility expenses will drive growth in the smart vent industry up. The market
offering itself is strategically priced to be affordable and influence the greatest market
penetration. This increases its customer potential by not limiting availability through
economic factors. This is important as their demographic group are likely to be limited in
spending power, as it is likely the initial costs of entering the housing market would have
consumed most of their available finances. This is subject to changes depending on the global

7
economy, with customer funding being heavily influenced by fluctuations in economic
affairs.

SECTION 3: Product Specific Overview

3.1 Product overview

The Keen Home Smart Vent provides users with the option of adjusting the climates in
various zones of the home in order to reduce electricity consumption and to increase user
comfort. The product is offered broadly in the Home Automation Systems (HAS) market.
This industry aims to provide a technological solution to automate the electrical and
technology based tasks in a home. (Techopedia.com, 2016), more specifically HVAC
categories (heating, ventilation, and air conditioning) (Digitaljournal.com, 2016). Hence the
products market is the ventilation and air conditioning segment of the HAS market. The core
product is ventilation, with the actual product being smart controlled ventilation. This product
is potentially augmentable through associated product services, such as free installation.

3.2 Trends and Market

In an industry which is expected to reach a value of $20.00 billion by 2020, growing as a rate
of 25.90% between 2014 and 2020 (Digitaljournal.com, 2016). Keen Homes offering has
great potential in this blooming market. Wired and wireless technologies such as BACnet,
LonWorks, ZigBee, EnOcean, Bluetooth, Z-wave and Wi-Fi are also expected to drive
innovation in this market as they provide flexibility and platforms from which companies can
launch products which meet customer wants. However, barriers to market growth exist in the
form of security fears such as the hacking systems and a lack of compatibility with devices,
apps and products.

3.3 Product
This product is the first market offering from Keen Home, with the companys start-up

occurring recently. The core product is an air conditioning ventilation system. Integrated with

smart phone connectivity and operation, the actual product includes automated control and

8
smart phone connectivity. This product is potentially augmentable through associated product

services, such as free installation. The product has made a largely positive impact within their

market. CNET reviewed the product at 6.6/10, with performance being highly rated (8/10),

but product features being the weakest component at 5/10 (Priest, 2016), this indicates that

further product augmentation will be improve the product. Considering that the product is

regarded well in its core aspects, indicates that it is in a position of great opportunity to

become a major player in the HAS market. Keen Home Smart Vent has a promising future

provided that Keen Home can improve product features in the coming years.

3.4 Price
Keen Homes entry into the HAS industry exposes them to a market under monopolistic

competition, as there a limited number of sellers. This market structure is suited to a market

penetration pricing strategy. This would prove particularly effective in this emerging market

as there are few customers with loyalty to other brands, enabling Keen Home to capture as

many customers as possible. Through their market penetration based pricing strategy, Keen

Home can move towards capturing customer loyalty and adapting their pricing, depending on

other macro-environmental economic factors. Characterized by over levels of disposable

income, the Keen Home Smart Vent must be priced in an affordable fashion, so that it is not

dismissed by potential customers, in favour of cheaper competition. Furthermore, with their

product being positioned towards Generation Y, a price skimming strategy is unlikely to be

effectively as this group has less disposable income as opposed to other generations. Keen

Home might consider adopting a product bundling price strategy where they could offer the

actual product bundled (augmented) with installation and connectivity support in order to

penetrate the Australian market.

9
3.5 Place
The placement and distribution of the Keen Home Smart Vent must be determined by a
thorough analysis of relevant micro and macro-environmental factors. At the present time,
Keen Home utilise direct marketing channels in order to deliver products to Australian
consumers. Although Keen Home are a relatively new start-up, it can be suggested that the
company consider retailers as part of their value delivery system.

3.6 Promotion
The most significant factor to consider when developing the promotional mix is to increase
consumers awareness of the features and usefulness of smart vent technology. As exposure is
the most important factor at the present time, Keen Home must focus on multi-channel
advertising if they are to succeed in the Australian market. Given the micro environmental
factor of the characteristics of the target market, social media exposure would be a potent tool
in raising customer awareness and incentivising consumption, as people in the Generation Y
bracket are avid users of social media.

SECTION 4: CONCLUSION

10
SECTION 5: BIBLIOGRAPHY

ABC News. (2014). Average age of first home buyer rises into the 30s. [online] Available at:
http://www.abc.net.au/news/2014-10-02/first-home-buyer-average-age-increases/5785382
[Accessed 17 Apr. 2016].

Arthur, C. (2012). The history of smartphones: timeline. [online] the Guardian. Available at:
https://www.theguardian.com/technology/2012/jan/24/smartphones-timeline [Accessed 17
Apr. 2016].

Bloomberg.com. (2016). Keen Home Inc.: Private Company Information - Businessweek.

[online] Available at: http://www.bloomberg.com/research/stocks/private/snapshot.asp?
privcapId=241188188 [Accessed 17 Apr. 2016].

Burns, M. (2014). Keen Home Raises $1.52M To Bring Its Smart Home Vents To Market.
[online] TechCrunch. Available at: http://techcrunch.com/2014/10/29/keen-home-raises-1-
52m-to-bring-its-smart-hvac-vents-to-market/ [Accessed 17 Apr. 2016].

Budde.com.au. (2016). Australia - Mobile Communications - Smartphones, Tablets and

Handset Market - BuddeComm. [online] Available at:
http://www.budde.com.au/Research/Australia-Mobile-Communications-Smartphones-
Tablets-and-Handset-Market.html [Accessed 23 May 2016].

Digitaljournal.com. (2016). Global & US HVAC (Heating Ventilation and Air

Conditioning) Industry, 2015 - Press Release - Digital Journal. [online] Available at:
http://www.digitaljournal.com/pr/2870167 [Accessed 17 Apr. 2016].

Ecoventsystems.com. (2016). Ecovent Systems. [online] Available at:

https://www.ecoventsystems.com/ [Accessed 17 Apr. 2016].

Environment.gov.au. (2016). Compliance - Refrigeration and air-conditioning, Australia.

[online] Available at: http://www.environment.gov.au/protection/ozone/rac/compliance
[Accessed 17 Apr. 2016].

Facts, A. (2016). Topic: Amazon. [online] www.statista.com. Available at:

http://www.statista.com/topics/846/amazon/ [Accessed 16 May 2016].

Forbes.com. (2015). Forbes.com HAS Competitors. [online] Available at:

http://www.forbes.com/morinsights/2015/07/15/whats-driving-home-
automation/#2a61fbf8153f) [Accessed 17 Apr. 2016].

11
Ibisworld.com. (2016). Heating & Air-Conditioning Contractors in the US Market Research |
IBISWorld. [online] Available at: http://www.ibisworld.com/industry/default.aspx?
indid=1945 [Accessed 17 Apr. 2016].

Keenhome.io. (2016). Keen Home. [online] Available at: https://keenhome.io/ [Accessed 17

Apr. 2016].

KnowIT. (2011). What is smart technology?. [online] Available at:

http://knowit.co.nz/2011/08/what-is-smart-technology [Accessed 17 Apr. 2016].

Priest, D. (2016). Remember those falling smart vents? They don't do that anymore.. [online]
CNET. Available at: http://www.cnet.com/products/keen-home-smart-vent/ [Accessed 17 Apr.
2016].

Priest, D. (2016). Remember those falling smart vents? They don't do that anymore.. [online]
CNET. Available at: http://www.cnet.com/products/keen-home-smart-vent/ [Accessed 23
May 2016].

Techopedia.com. (2016). What is a Home Automation System? - Definition from Techopedia.

[online] Available at: https://www.techopedia.com/definition/29999/home-automation-system
[Accessed 17 Apr. 2016].

12