Developing a New Smartphone Application: UrbanBaby
(5 pages of text)
UrbanBaby is a newly developed smartphone application (app) that allows users to address the difficult task of finding activities, restaurants and other forms of entertainment for newborns to young teens. A number of issues must be addressed if it is going to be profitable. First, the app’s creators, Alex and Pavel, are unsure how to characterize the large potential target market, parents, or if there are other target markets that might be interested. This is critical, as the success of the app depends on the cultivation of a strong online community that will contribute content. Second, they have to find a reliable source of data to populate the app. Third, they must decide whether to focus on Apple's operating system, which is popular in North America, or put more of their energy into competing operating systems that are much more popular in the rest of the world. Finally, they have a number of strategic marketing choices to make and to prioritize, including whether to keep the UrbanBaby brand name and risk the ire of similarly named competitors, how to price the app, how to position and promote the app and how to time the rollout. How these initial choices will affect subsequent strategic and tactical decisions is also a matter of concern.
This case is designed to work in a consumer insights, consumer behaviour, marketing strategy or similar elective for both experienced undergraduate and MBA programs. In general, this case can be used as an example of how interconnected multiple decision points concerning strategy and tactics can be. Students should be able to examine these decision points, decide which are most important (i.e., which need to be addressed first) and then understand how these initial decisions affect subsequent strategic and tactical choices. The case includes a number of basic marketing principles that can be the focus of classroom discussion, i.e., defining market segments, the 4 P's and branding issues. As the case focuses on an extremely fast-moving product category (both in terms of underlying technology and changes in the marketplace), students should understand that the tactical decisions needed are made under extreme time pressure and uncertainty. Finally, the case lays out a number of strategic choices concerning pricing, but analysis suggests that none of these options will lead to profitability over any reasonable time horizon. This could lead to a fruitful discussion concerning alternative ways to achieve profitability, whether or not these sorts of endeavours should be started in the first place and what other strategic choices could be made to ensure success.
Canada, Small, 2012
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