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New Mobile Phone Device for the Elderly

Dec. 6, 2011

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Agenda

1. Background2. Proposal3. Marketing Research Technique4. Features Tested in the Study5. Conjoint Analysis Results6. Simulations (‘What-if’ Analysis)7. Product Features Recommendation8. Market Segmentation Analysis9. Target Market Recommendation

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Background

• July 2011: Japanese cell phone manufacturer, Kyocera, launched the “Mi-Look” in Japan cell phone specifically designed for the elderly GPS tracking system, movement sensor , emergency

buzzer & notification system highly visible large font sizes and easy to use color-

coordinated buttons Changing social conditions in Japan have created a need for this type of product - 23% of the total population over the age of 65

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Background

• Similar changing social conditions here in Canada In 2006, a record 14% of the total population was over the

age of 65 Seniors make up the fastest growing age group

• High growth potential in the Canadian mobile phone market The value of the mobile phone market increased by 16%

from 2005 to 2009 The % of Canadian households that have mobile phones

increased from 64% in 2005 to 79% in 2009

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Proposal

• We are proposing the introduction of a new mobile cell phone device for the elderly, similar to the Mi-Look

Mobile phones have become increasingly complex Elderly people, especially those who live on their own,

should be able to stay connected with their families/friends

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Market Research Technique

• To determine the optimal product with the best features/attributes, we used the conjoint analysis technique A complete profile of 16 potential products (cards) was shown

1 at a time to respondents in a survey Respondents were asked to rate their likelihood of purchase

on a scale of 1 to 7

• To determine our target market, we conducted a segmentation analysis 11 demographic type questions were asked at the conclusion

of the survey

• We conducted mall intercepts in order to administer the survey a sample of 560 was received

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Product Features Tested in the Study

Features Levels

GPS Tracking Yes/No

Emergency Notification Buzzer Yes/No

Movement Sensor Yes/No

Button Type Keyboard Type/Touch Screen

Battery Life 18 hours/24 hours

Voice Recognition Yes/No

Call Functions Automatic answer with speakerphone/Must be physically answered

Price $200/$250/$300

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Conjoint Analysis Results

• A measure of the relative value or worth that consumers place on a feature and level

Utilities

Feature Highest Utility Placed on...GPS Tracking Having GPS capabilities

Emergency Notification Buzzer

Having an Emergency Notification Buzzer

Movement Sensor Having a Movement Sensor

Button Type Having a Touch Screen

Battery Life 24 hours (as battery life goes up, utility goes up)

Voice Recognition Having Voice Recognition

Call Functions Automatic answer with speakerphone

Price $200 (as price goes up, utility goes down)

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Conjoint Analysis Results

Importance Values• A larger range of utilities means that customers put more value on that feature

• Higher value was given to those features that can ensure safety (GPS, emergency, movement) rather than those that are more there to make the device “fancy” (buttons, voice, call)

Importance Values

gps 22.3

emergency 13.9

movement 10.6

buttons 8.7

voice 9.6

call 9.3

battery 7.5

price 18.1

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Conjoint Analysis Results• A mean was calculated for each card

The card with the highest mean of 5.4 was:

GPS Tracking: YesEmergency Notification Buzzer Strap: YesMovement Sensor: YesButton Type: Keyboard typeBattery Life: 18 hoursVoice Recognition: YesCall Functions: Automatic answer with speakerphonePrice: $200

• These combinations of features are not feasible at a price point of $200 this is the “Ideal” product choice• Therefore, simulations must be conducted to determine how changing

different features of the device will affect demand – share-of-preference is calculated

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Simulations (“What-If”) Analysis

Base Case : Mid-Priced, Mid-FeaturedFeatures Base Case

GPS Tracking NoEmergency Notification YesMovement Sensor YesButton Type KeyboardBattery Life 18 hoursVoice Recognition NoCall Functions Physically Answered

Price $250

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Simulations (“What-If”) Analysis

Which single features increase demand?

• GPS increases demand most!!

GPS

Voice Recognition

Button Type

Battery Life

Emergency Notification Buzzer

Movement Sensor

Call Functions

Base Case

0 10 20 30 40 50 60 70

59% (+9%)

52.9% (+2.9%)

50.7% (+0.7%)

50.2% (+0.2%)

47.4% (-2.6%)

47.4% (-2.6%)

52.8% (+2.8%)

50%

Share-of-prefernece % for Changes to a Single Feature

Yes to No

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Simulations (“What-If”) Analysis

Which multiple combinations of features increase demand?

• GPS + Touch Screen Increases demand significantly

• GPS + $300 People will pay more for the GPS capability

• Voice Recognition + $300People will pay more for the voice recognition function

• Movement Sensor + $200People prefer price that is $100 less vs. movement sensor

function• Call Functions + $200

People prefer automatic answer function vs. a price that is $100 less

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Simulations (“What-If”) Analysis

Alternatives:Features Alternative 1

Premium Alternative 2

Base CaseAlternative 3

Cost Leadership

GPS Tracking Yes No YesEmergency Notification

Yes Yes No

Movement Sensor No Yes NoButton Type Touch Screen Keyboard Touch ScreenBattery Life 18 hours 18 hours 18 hours

Voice Recognition Yes No NoCall Functions Automatic

with speakerphone

Physically Answered

Physically Answered

Price $300 $250 $200

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Product Features Recommendation

Features Alternative 1Premium

GPS Tracking Yes

Emergency Notification

Yes

Movement Sensor No

Button Type Touch Screen

Battery Life 18 hours

Voice Recognition Yes

Call Functions Automatic with speakerphone

Price $300

• Market is not saturated

• Higher potential than in Japan

• Create new niche market

• The features are consistent with the findings of the analysis

• Capture a large market share

• Charge the premium price

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Market Segmentation Analysis

Which group is more likely to purchase?

• Men vs. Women? There is no significant difference

•1 or 2 person household vs. 3 or more person households? 1 or 2 person household – slightly

• Young (<35) vs. Older (>35)? Older people – slightly

• Single vs. Married/common law? Single people – slightly

• Has an elderly person in their lives vs. does not? With an elderly – tremendously

• With elderly caregiver experience vs. with none? With experience - moderately

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Market Segmentation Analysis

Which group is more likely to purchase?

• Income: Low vs. Mid vs. High

• Household: Small vs. Medium vs. Large

• Age: Young vs. Mid-aged vs. Old

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Market Segmentation Analysis

Which group is more likely to purchase?

• Income: Low (<$20K) vs. Mid vs. High

• Household: Small (1-2) vs. Medium vs. Large

• Age: Young vs. Mid-aged vs. Old (55+)

Most Likely No Difference

Most Likely No Difference

No Difference Most Likely

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Market Segmentation Analysis

Who are more likely to be what?

Who Likely to

1 Men Women Have caregiving experience

2 Single Married Have caregiving experience

3 Young Old Have a smartphone

4 Young Old Have an elderly person in their lives

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Target Market Recommendation

Recommendation Young people (less than 35) are more likely to have a

smart phone + older people are more likely to purchase the product + don’t necessarily have a smart phone themselves

= the device should be as simple and easy to use as possible

Primary target: 35+ and FemaleSecondary target: People with caregiver

experience

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Thank You!

Questions?