Launching Google Glass: a marketing plan to overcome the innovation curse Group 5 I EMBALJ2014 I Marketing I November 2013 Table of contents: 1. Introduction………………………………………………………………....... 4 2. The consumer need: What problem is Google Glass solving?……… 4 3. The marketing strategy: The 4 P’s of Google Glass…..……..………… 5 3.1 Privacy…………………………………………………………………… 5 3.2 Positioning………………………………………………………………. 6 3.3 Platform………………………………………………………………….. 7 3.4 Promotion………………………………………………………………... 8 4. The market potential: Scenario-analysis of consumer uptake….…... 9 4.1 Market potential for wearable technology…………………………….. 9 4.2 Market potential for Glass-like devices……………………………….. 10 4.3 Actual market captured for Glass-like devices………………………. 10 4.4 Potential share for Google of this market…………………………….. 10 4.5 Revenue for Google in 2014-2018 period……………………………. 10 5. Summary: Overview of recommended marketing strategy…………... 11 2 ‘If your plan is to educate the market, you’re in trouble’ David Arnold, Adjunct Professor Marketing, London Business School 3 1. Introduction: assumptions and focus of the marketing plan Will Google Glass be the next logical step in how we ‘explore and share our world’ or will it suffer the same fate as the Segway: overhyped and underperforming? With more than 80% of product launches ending in failure how can Google Glass avoid a similar scenario? This plan outlines our marketing recommendations for a successful launch and how Google can reach mass adoption in the next four years. This timeline can be split into three phases (figure 1) however we will mainly focus on the challenges in the first two crucial years after initial launch. This plan first identifies the needs that Google Glass is addressing and then structures our recommendations around the key challenges identified in those first years (Privacy, Positioning, Platform and Promotion – the 4 P’s of Google Glass). Figure 1: The 3 phases and 4 pillars of our recommended Google Glass marketing strategy 2. The consumer need: what problem is Google Glass solving? Modern technology and especially smartphones have a lot of features that people value and are willing to pay for. However, there are usability issues with smartphones that could be improved with technological innovation. Wearable devices, which allow you to monitor, observe or share any type of relevant information, can improve the task or activity, which you are performing at a particular moment in time. Some examples of specific needs are: • Wearable devices that allow you to monitor speed, location, heartbeat and distance while running, biking or even skiing. • Setting up impromptu meetings within a conversation by tapping the device, viewing your calendar and confirming through speech recognition technology. • General information about your surroundings, such as city tours or museum visits. • Improving leisure activities such as golf by enhancing the way you absorb information and make better-informed decisions. Further to these specific examples of customer needs there is a less tangible, but arguably much more powerful, need that Google Glass addresses. This is the modern need to be constantly connected, in touch and never missing out. This can be easily observed through the explosion in social media over the past ten years and in particular websites such as Twitter, Facebook and Flickr. The average consumer now checks their phone 150 times a day (Kleiner Perkins, 2013) and this number is only going up. By providing a wearable device, with a heads up display and integrated voice commands Google Glass is able to meet this, and the other identified needs, by allowing consumers to interact with technology without interrupting the task / real world activity that they are doing. 4 Companies also have started to re-consider how they can incorporate wearable devises into their businesses to enhance efficiencies. At this moment the most important profession in which wearable devices are used is medical care. But other professions are following suit, primarily in the manufacturing industry, where processes can be monitored in real time and any system or machine failures can be addressed instantly in order to ensure a smooth flow of the production process. In any industry where improved efficiency can enhance productivity Google Glass could become an integral part of strong operations management. 3. The marketing strategy: The 4 P’s of Google Glass One can argue that the only way to achieve real growth is to create brand relevance (rather than preference) through transformational innovation that creates completely new categories therefore making competitors irrelevant (Aaker, 2012). So the upside of launching an innovative product like Google Glass is clear. In reality however the innovation curse first needs to be overcome. Research has shown there is a mismatch of nine to one (or 9x) between what innovators think consumers desire and what consumers really want (Gourville, 2006). Google will need to tap into the psychology of behavioral change and convince consumers that these gains outweigh the losses by a factor of 3. To do so Google will have to get each of the 4 P’s for Google Glass right: privacy, positioning, platform and promotion. Figure 2: The 4 Ps of Google Glass 3.1 Privacy Since its announcement, Google Glass has sparked discussion about whether it would compromise the privacy of people who would no longer be able to control when their personal information, image or even preferences were being recorded or shared. Consumer Watchdog has described Google Glass as “one of the most privacy invasive devices ever” and called on Google to give citizens a way to remove videos or photos taken of them by the device. Google CEO Larry Page has received a formal letter from the American Congress outlining several areas of concern regarding privacy. This is a sensitive topic for a company whose most valuable asset is the trust of its users and that has made the news several times in recent years related to privacy concerns. In that context, Google’s marketing strategy should consider some additional modes of segmentation beyond merely demographics that would allow Google to target the segments most responsive to the characteristics of Google Glass as well as those skeptical about this product. Figure 3 shows a suggested segmentation according to privacy concerns and level of technology adoption, which allows Google to direct the appropriate amounts of promotional attention to different segments. With this in mind the following strategies are suggested for each Figure 3: Privacy segmentation framework segment. Ambassador (A) strategy: Based on research about Wearable Computer Devices from SurveyMonkey, this group represents about 20% of consumers. They are early adopters of technology, without any 5 major privacy concerns, and it is usual for this group to own several gadgets, as they want to be the first to experiment with new devices and its features. Considering this segment is naturally motivated by hype, Google should approach these consumers as their ambassadors to the market, inviting them to join “The Glass Explorer Program”. Designed for developers and consumers to test Google Glass, and gauge how people will want to use it, this program has a significant potential to contribute to the mass adoption of the product. Neutrals (N) strategy: Google should focus very little time/effort to Neutrals as, although they have few privacy concerns, they also are not open to embrace new technology, representing a market still some steps behind the adoption of such an innovative product like Google Glass. Besides that, they are the least representative segment of the market, with only 17% of consumers, making clear this is not a key segment for Google. Potentials (P) strategy: This segment has privacy concerns as well, but in general is more open to being convinced as they show patterns of behaviour and consumption open to adopt new technologies, even though they still want to feel safe about it (inevitability of progress attitude). Google should put most of the focus on this group as, by definition, they are the most sensitive to Google campaigns. Potentials represent 23% of the market, but have a much higher reach, being the key to influencing Skeptics, due to their similar apprehensions. Due to their crucial importance for the success of Google Glass, Google should have a program specifically focused on privacy issues, inviting Potentials to give their feedback. Suggestions around privacy features and settings should be incorporated into its products, increasing the acceptance of Potentials, whilst still educating this segment and reinforcing Google’s commitment to their privacy concerns. Skeptics (S) strategy: Even though Skeptics represent 40% of the market, focusing efforts on this segment may not be a good strategy, as it could only raise more critics regarding the privacy risks offered by Google Glass. However, not working this segment may negatively impact the adoption of the product by the other segments. Indeed, Skeptics are the most susceptible to criticise the product, due to their low level of understanding about the possibilities offered by technology devices and its high privacy concerns. So, Google should adopt a user-friendly approach when explaining the features available in its product, educating the customers and illustrating why the concerns are unfounded. Example: demonstrating which are the explicit signals presented by the device to make people aware of what is happening whenever it is in use. The promotion section later on is closely linked with this strategy. Privacy Recommendations • Focus privacy initiatives on segment P, due to its high potential impact on the market. • Communication with A should focus on features and functionality, motivating hype. • Should not ignore Skeptics, due to potential negative impact. 3.2 Positioning Once Google has addressed the privacy issue the next step is to position the device in such a way that consumers feel it’s worth the investment. In our opinion Google should be positioning Google Glass as an affordable, easy to use improvement to everyday life, which is accepted by society because of clear user etiquette.