chill otto Join the Chillebration
Karell Blancaflor, Cherifa Chatti, Alex Kalb, Stephanie Villarruel
NRF Student Challenge 2015
Table of Contents Executive Summary & Company Overview......................................................................................... 01 Target Market Needs Assessment....................................................................................................... 02 Target Market Needs Trends......................................................................................................... 03-04 New Product Design Concept...................................................................................................... 05-06 Competitor Analysis............................................................................................................................. 07 Distribution Plan................................................................................................................................... 08 Marketing Plan & Timeline..............................................................................................................09-13 Financial Analysis................................................................................................................................... 14 Conclusion & Final Recommendations................................................................................................ 15 Works Cited
Executive Summary Chill-otto is the best choice for binge watchers, home entertainers, and sports viewing enthusiasts versus the alternatives like messy coolers and ordinary ottomans because it is both STYLISH and CONVENIENT. At first glance, it appears to be a beautiful ottoman perfect for your great room, family room or even “man cave.” In reality, ice cold drinks are an arm’s length away with no hosting stress of missing your party and/ or cleanup necessary. Chill-otto partners with Target to launch in July 2016. Our omnichannel marketing (social media, publicity, product placement, in store displays, etc.) dovetails with Target’s ongoing efforts for maximum impact.
Company Overview Target is an upscale discount retailer that does not compromise quality in their products. They provide on-trend merchandise in a clean and appealing environment. Target is consistently delivering value and convenience to their customers. With over 1,500+ stores in the United States, Target serves as the perfect retail partner for chill-otto. Our partnership brings chill-otto to our target market in the most attainable way. Target’s strategic focus is to create an exceptional guest experience and design for innovation to increase sales in 2015. Chill-otto is well positioned as a lifestyle product within the Target home innovation remodel and will contribute to achieving their focus.
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chill otto
Renee
Eric
Jane
Renee is an avid lover of blogging and enjoys posting about her new recipes, knack for home decor, and products she loves. Renee is married and has two rescued dogs, one French Bulldog and one Pug. She and her husband love to try new restaurants and visit the farmers markets on Sundays. In the evenings after work you can find she and her husband watching Scandal with their two dogs.
In Erik’s free time he enjoys spending time at home watching TV and catching his favorite sports highlights on ESPN. Amongst Erik’s friends, Erik is the football game day host. Every Giants game is considered a BIG day. He enjoys inviting friends over to his bachelor pad to watch the game. He loves being caught up with current events and learning new things.
In Jane’s free time she enjoys reading Better Homes and Gardens and watching the Food Network. With her kids in high school, she and her husband are spending more time on their own hobbies. Jane often hosts small get togethers at her house, including her annual Oscar’s Party.
Binge Watcher Female Age: 35 Grand Rapids, MI Teacher
Sports Enthusiast Male Age: 26 New York City Accountant
Home Entertainer Female Age: 44 Seattle, WA Full-Time Mom
Target Audience Demographics: Age: 25-44 Income: $35,000-$74,000 Marital Status: Married Gender: Male & Female Geographic Location: South & Midwest
They are working professionals who live in urban and suburban areas. They enjoy binge watching, home TV viewing entertaining, and sports home viewing events. They are constantly on the lookout for new quality product designs that have dual purposes. They do not mind spending those extra dollars for multi-functionality. Chill-otto users range from young males having Sunday night football get togethers to women gathering for the season finale of Empire.
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TARGET MARKET TRENDS 03
Binge Watching Recent research from Harris Interactive and Netflix states that binge watching is the new normal.
92% of binge watchers associate positive feelings about their experience.
Viewing Parties: Viewing parties are when someone invites friends over for one sole purpose; to watch something on television. Why catch up on your favorite shows with your friends the next day when you can watch together? Sites like marthastewart.com and popsugar.com even have tips on throwing the best viewing parties.
Hybrid Space When looking at home theatre trends, David Berman finds that people are taking more of a hybrid approach. Many people want the home theatre experience, but they don’t want to limit the room to just one use. Multi-functional furniture is one of the top 10 furniture trends of the decade.
“I Do” According to “The 27 Best Places To Register,” it is no secret that the retail giant Target has become hugely popular. Additionally, The Knot Market Intelligence Bridal Registry Study, states Target is amongst the top three wedding registry retailers.
TARGET MARKET NEEDS
Research Objectives
-Understand consumers’ TV watching habits -Investigate furniture buying behavior
Quantitative: Based on our survey of 100 people, 94% of participants said they get up from the couch one or more times during their TV viewing to get a beverage or snack.
21% of participants rate functionality as the most important furniture attribute.
Qualitative: Social Media Listening
Social media listening data depicted an issue with people having to get up multiple times for beverages. People do not like hassle or interruption when they are relaxing watching shows, movies, or sports. Those who were hosting parties were frustrated with the constant maintenance and cleaning while hosting. The beverages are never kept cold for long or the ice melts and water makes a mess.
DIY Multi-functionality: Hacks people make to fix the problem.
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New Product Design Concept
chill otto Rationale The chill-otto is an ottoman multi-functional cooler targeted to all the binge-watchers, home entertainers, and sports home viewing enthusiasts. It is a stylishly designed interior accessory that is suitable for the great room, family media room, man caves or other entertaining areas. The chill-otto is designed to fill the void of interrupting your entertainment in order to get a drink, or missing out on your party because of hosting responsibilities. The multi-functionality of the product separates it from the competitors because the inside acts as a cooler, which is lined with removable ice packs, keeping your refreshments ice cold.
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PHOTO OF PROTOTYPE
: ibutes r t t A Key nient Conve Stylish nctional fu Multi- Efficient y Energ Fun!
New Product Design Concept Structure: Plywood, Brad nails, Wood Glue,
chill otto Looking into chill-otto
Materials: Ice Pack Compartments
Interior Tray Flipped
Hot Glue, Styrene, Acrylic, and Gauze. Cushion: Rubber, Microfiber and Foam Fabrics: Leather and Microfiber
Insulation Lid
The materials that are used for building the structure of chill-otto are ½-inch thick plywood for the base, 1 ½-inch brad nails, staple pins and wood glue. The exterior of the chillotto consists of either microfiber or leather, over padding, with a gauze underside, and wooden feet. The interior is constructed with acrylic for the tray that will be assembled on the inside of the removable top. The built in cooling system materials consist of white styrene assembled with hot glue and reusable ice sheets.
Sizes:
Medium, (15x15x15) 9 quarts -- holds 12 cans
Unique Design Features:
-Built in cooler -Removable ice pack liners easily placed into the freezer -Bottle and wine opener included -Table tray lid
Line Extensions: -Large, (39x19x18) 25 quarts -- holds 36 cans -Licensed product for the NFL -Licensed product for the NCAA -Summer patio collection
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Stylish High-end refrigerators
Nothing- This is the gap our product will fill chill otto
Not Convenient
Convenient Basic refrigerators
-Cooler -Ice Bucket
Not Stylish Our competitors in the convenience market are coolers, ice-buckets, and multi-functional ottomans. The graph above illustrates the gap in the market for a convenient, cold, and visually appealing product. The product we are proposing will fill the void in the industry for binge watchers, home TV viewing entertainers, and sports home viewing enthusiasts. While our competition fits the needs of either convenient, stylish, or cold, none of the competition encompasses all qualities in one product; giving consumers the multi-functionality they want.
Competitors
Cooler: $20.00 average retail price
Ice Bucket: $30.00 average retail price
Ottoman: $89.00 average retail price
• The traditional ice cooler is not suitable for • Nostalgic and good for small chilling needs • Multi-functionality is limited to storage indoor entertaining • Not the most widely adopted way to chill drinks, • Has not changed in design or product attributes • Ice condensation and refill process are inconvenient not common in average consumer household • Has aesthetic appeal and good for indoors and messy • Requires too much upkeep with ice changing and • Does not chill • While it keeps items cool, like the chill-otto, it is not clean up of melted ice and condensation • Not insulated as clean, stylish, and multi-functional.
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Distribution Plan Distribution Justification Statement Chill-otto is being sold at 660 Target stores nationwide. Unit distribution was based on store sales per capita and square footage. The stores are broken down by tiers, highest sales to lowest with the highest being Tier A and lowest Tier D. Tier A and B will have a high base inventory and the quantities on hand will be larger due to projected sales and a higher percentage sell through. With Target’s weekly auto-replenishment system chill-otto will be replenished accordingly. Tier C and D stores have a lower inventory base, sell through, and overall impact on sales. Distribution in all markets is important and a key reason Target is chill-otto’s retailer partner.
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Marketing Plan
• Seasonal promotions surrounding key usage/periods • Encourage gift giving • Leverage positive word of mouth & social sharing • Utilize a multi-channel marketing mix via • social media • merchandising • sports marketing • in-store experiences • publicity • events • product placements • strategic partnerships
Promotional Calendar
Sports -- Olympics, Basketball, Baseball, Hockey, & Football Awards -- Golden Globes, Grammys, Academy Awards, MTV Movie Awards, American Music Awards, & Emmy Awards Holidays -- New Years, Valentine’s Day, Easter, Mother’s Day, Father’s Day, Back to School, Halloween, Black Friday, and Holidays Weddings -- June 10.8%, August 10.2%, September 9.6% and October 9.4% TV Series -- Scandal, Game of Thrones, Grey’s Anatomy, The Bachelor, and The Voice
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Packaging
The chill-otto base will have a wrap on both the front and back. The top will have its own wrap so consumers can open it and look inside. Plastic wrap under the lid reduces damage and inventory loss.
Point of Purchase
Chill-otto will be placed on the middle shelf adjacent other ottomans being sold at Target. Fortunately, the chill-otto will stand out due to its eye catching branding and multi-functional attributes. Target’s in-store merchandising team will be able to re-stock daily after each purchase. The product will also be featured directly on Target’s website.
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MARKETING 11
Olympics & Product Placement
Chill-otto will be an exclusive partner of the Rio 2016 Olympics. After competing, Olympians will get a refreshment from the chill-otto while waiting for their scores. The NBC network will also conduct interviews for their coverage of the games with a chill-otto by their side.
LAUNCH chill-otto zone
The chill-otto zone will provide an area for people to relax and “chill out� with their friends while enjoying ice cold beverages kept cool in chill-ottos. These zones are to enhance the atmosphere of the event by providing an intimate and unplugged zone from its surroundings with air conditioning and live music. Chill-otto zone will be present at Target stores as well as hosted at major events such as Lollapalooza, Coachella, Spring Awakening, etc. Chill-otto will also have chill-otto zones on school/college campuses at key events. Zones will resemble small living spaces decorated for a home-feel relaxation area perfect for hosting big groups of event goers. Visitors will also be encouraged to share their experience on Social Media by using the hashtags #chillottozone and #jointhechillebration.
MARKETING
IN STORE SIGNS AND PROMOTIONS
End Caps
Every Second Counts
don’t miss the one that wins the game
Check out below at what makes the chill-otto so amazing Join the Chillebration!
Target will have merchandised end caps that highlight chill-otto. The theme of the end cap will change depending on current events such as the Super Bowl, Oscars, and New Year’s Eve etc. Chill-otto will also partner with Netflix and release specially designed end caps for their upcoming original content premieres. The copy invites the consumer to look at the mounted chill-otto and see its unique features. The lid will be attached by a cable and the inside will be lined with plastic wrap to protect against damage.
33 .42 Million Subscribers 36.6 Million Viewers
114.5 Million Viewers
Strategic Partnerships Wedding Registry
When registering your wedding through Target, if a chill-otto is selected then the customer will receive an exclusive 15% discount on the product. Also, chill-otto will be featured as a top registry pick on Target’s online wedding registry.
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MARKETING
Guest Appearances
Chill-otto will be featured on top rated television talk shows such as The Ellen Degeneres show, Live! with Kelly and Michael, and The Rachael Ray Show. On these shows, chill-otto will be placed on set with the talk show hosts. During the show, the host will either grab an ice cold beverage from what appeared to be a regular ottoman and wow the crowd or give the audience a complementary chill-otto for their home.
Chill-otto will be featured on all social media platforms including Facebook, Instagram, and Twitter. User generated content will promote the functionality and convenience of chill-otto by having fans submit pictures or videos creatively displaying their love of using chill-otto. Customers will be able to use our tagline to better explain their submissions and the most voted or liked submission will win a chill-otto.
#jointhechillebration
Ratings:
The Ellen DeGeneres Show | NBC Live! With Kelly & Michael | ABC The Rachael Ray Show | CBS 13
Social
FINANCIAL ANALYSIS
PRICING STRATEGY
chill-otto Cost Analysis
Our product fits in with the mindset of a Target consumer because it offers both value and quality while serving a dual-purpose. Our pricing strategy is competitive with multi-functional ottomans with an average price of $89. Consumers won’t have to purchase multiple products for their needs making chill-otto the most valuable option.
Profit Margin
Baseline material and production cost is $34.28. Target has a wholesale opportunity at $58.00 while maintaining a 41% margin. Bringing chill-otto to retail at an MSRP of $95.00 provides a healthy mark-up of 64%.
Budget
Selling an average of 6 units / month per store for each of the 660 stores, retail sales in the first year are projected at $4,269,585. Based on the first year sales projection, a budget of 10% of sales is allocated to marketing, advertising, and PR for chill-otto. The budget includes all aspects of product development to in-store delivery and sales promotion.
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CONCLUSION
chill otto
Chill-otto will fulfill a need. Hosting parties is not fun. Dealing with ice messes, etc. is time consuming and frustrating. We want to be “at the party� -- watching the season finale, the big game, celebrating the award winners, enjoying the video game with our family and friends. Not dealing with ice trays, coolers, slow ice dispensers, etc. Chill-otto is a stylish, multi-functional solution to your in home entertaining worries. Bring on the Chillebration, with chill-otto. Target is the perfect strategic partner to bring chill-otto to the masses. The successful mass market retailer is a go-to resource for lifestyle products such as the chill-otto. Projected net sales of chill-otto are $3.7 million dollars. This is a profitable new venture, with a 39% projected profit margin. As chill-otto matures, we recommend extensions such the NFL, NCAA, MLB, etc. teams to reach additional rabid viewing fans. Also, we could consider partnerships with high viewership cable partners such as HBO, Lifetime, and more. We can also look to possible video game console partners such as Xbox, Sony, or Nintendo. We can also see the product working on a business to business stage partnering with the hospitality industry to enhance their consumers’ experiences. Chill-otto is the right product for binge watchers, home entertainers, and sports home viewing enthusiasts. Chill-otto is not just a product, it is a solution to a contemporary lifestyle issue/opportunity. This product allows people to join the party spending time with their loved ones and friends. Chill-otto creates shared experiences for their friends, marrying convenience with enjoyment. For everyone, including party hosts. Join the chillebration!
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