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AppendixPresentation: Company Customers• Idea • Tiered Membership • Customer• Problem: Why? Structure Segmentation• Problem: Workaround • Amazon’s Affiliates • User Acquisition• Solution Program • Customer Validation• Revenue • Other Affiliates • Survey Results• Customer Validation Programs • The ‘IKEA’ Effect • Market ExpansionIndustries Grid• E-Book Industry • Risks & Mitigations• Digital Music Industry • Timeline• Digital Game Industry • Decision Matrix
Customer Segmentation Geographic• Current Focus: US• Future: International Demographic• Current Focus: Female, 15-30 Years Old• Future: Expand to all buyers of digital goodsPsychographic• Digital content buyer• Craft/Paper Arts/Origami Enthusiast Behavior• Occasions: any holiday, gifts giving day
User Acquisition Driving Traffic Targeted Ads• SEO/SEM • Newsletter:• Blog mailchimp• Online Contest • Facebook• Youtube/Vimeo • Twitter• Social Media • Pinterest Engagement
E-Book Industry • Growing market size • Thriving demand • New technology, nicely complement the demand • Fast growth and the market is increasingly saturated
Digital Music Industry• Revenue: $5.2bn• Growth in 2012: 17.8%• Revenue: $7.8bn• While physical sales decrease 12.1%• In US. Spending on digital music increase to $3.4 bn
The ‘IKEA’ Effect Labor leads to love: There’s a link between labor to increase of valuation From the experiment: Participants who assemble the products, value them more highly than identical pre- assembled products The builders willingness to pay over something that they make by themselves is relatively higher than those who didn’t build the product Conclusion: increase in liking that occurs due to effort Increase of willingness to pay due to positive feelings that accompany the successful completion of task Goal: maximize customer satisfaction Risk/Challenge: Convince customers to engage in the labor that will lead them to value products more highly Task should not be too difficult as to lead to an inability to complete the task (reverse effect) Create motivational benefits of assigning employees to tasks they feel capable of completing
Tiered Membership Structure Access to 20 paperPremium •$9.99/year art video tutorials. 3 Free pre-made models. Access to 10 paper Plus •$4.99/year art video tutorials. Free Pre-made models on birthday Access to 3 basic Free •Open to all paper art video tutorials
Amazon’s Affiliates Program Product Category Fixed Advertising Fee RatesStandard Plan: Electronic Products 4.00%Volume-Based Amazon MP3 Products 5.00%Advertising Fee Amazon Instant Video 10.00% Game Downloads Products 10.00%Products Volume Advertising MyHabit.com Products 8.00%Shipped/Downloaded Fee Ratesin a Given Month** Gift Cards Redeemable on the 6.00%1-6 4.00% Amazon Site7-30 6.00% Gift Cards Not Redeemable on31-110 6.50% 4.00% the Amazon Site111-320 7.00% Magazines 25.00%321-630 7.50% Grocery 4.00%631-1570 8.00% Industrial Products and all1571-3130 8.25% products on Amazon 8.00%3131+ 8.50% Supply.com
Other Affiliates Programs Provider CommissioniTunes Affiliates Program 5% commission on all qualifying revenue generated by links to iTunes on your website and in email.Microsoft Store Affiliates 10% commission on the sellingProgram price of eligible products. Participate in special product promotions.
Market Expansion Grid Existing Product New ProductExisting Video tutorials availableMarket for all; focus on the crafts/origami enthusiasts; female 15+New Tiered Membership Pre-made origami model areMarket structure available for purchase
Risks & Mitigations Secure affiliations with onlineImitability:Business model is easy to retailers. Tiered membershipbe duplicated structure to secure content.Quality control: Easy step-by-step video tutorialpaper art is a and online community supportcomplicated process Customers retention: Incentivize customer retention via customers might lack gamification (different levels formotivation to engage in the paper arts). Shares on Social paper art creation MediaDurability: Customers are able topaper arts are fragile purchase boxes to keep their paper arts safe
Timeline Evaluate Secure Secure Build strong Current Target New partnership withpartnership with community and Strategy & Market (Pre- other e-gift Amazon brand Customer made model) retailers Satisfaction Q1 Year 1 Q2 Year 1 Q3 Year 1 Q4 Year 1 Year 2 + Market analysis Build video Secure for expansion Introduce tieredtutorial library & partnership with and new membershipgenerate users’ box/craft supply product structure interest wholesalers introduction
Customer Validation “Cute” “Doesn’t have “Creative Ideas” time to fold” “Better than gift cards”Suggestions:- Have space to write- Modern origami shape
Survey Results• N: 38• ~23% of gifts are digital• A person give about 2 digital gifts/year• On average, they spend $30/gift• Survey takers care about convenience and personalization.• However ~50% of survey takers are not satisfied with current method of delivery• 78% survey takers are willing to spend ~10 mins to personalize their digital gifts