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Meshtech
Feasibility Report
AUGUST 1, 2016AUT University
TA: Helen ParkStream 54
Kiran Sahota 1084736Mark Price 0824887
ContentsBusiness Mission:....................................................................................................................................................................5
Company overview, goals, and objectives:..................................................................................................................5
Business Philosophy............................................................................................................................................................5
Industry Description............................................................................................................................................................5
Products and Services..............................................................................................................................................................7
Target market.........................................................................................................................................................................10
Primary Research – Quantitative Survey...............................................................................................................................10
Research Problem..............................................................................................................................................................10
Research Objectives..........................................................................................................................................................10
Method...............................................................................................................................................................................10
Key Findings......................................................................................................................................................................10
Demographics................................................................................................................................................................10
Customer Perceptions....................................................................................................................................................11
Motivations....................................................................................................................................................................13
Brand Identity................................................................................................................................................................13
Secondary Data: Background Research + 3 Studies.............................................................................................................16
Earnings Vs Age Group.................................................................................................................................................16
Generation Vs Social/Technological Issues: Attitudes, Cognitive, Behaviours............................................................16
Weight – Overweight Vs Under/Healthy Weight..........................................................................................................20
Life-Cycle Compared to Income...................................................................................................................................21
Life-Cycle Spending Habits..........................................................................................................................................22
Geographic Region – Life-Cycle Relationship.............................................................................................................23
Geographic Region – Personal Values Relationship.....................................................................................................23
Pet-Care and Pet Ownership..........................................................................................................................................24
Expenditure by Industry................................................................................................................................................27
Market share..........................................................................................................................................................................27
Consumer Adoption: Future Trends for Technology............................................................................................................28
[Study] Accenture: The Internet of Things (IoT) – The Future of Consumer Adoption...................................................28
Product Categories.........................................................................................................................................................28
Gender Adoption - Overall............................................................................................................................................28
Gender Adoption – Automotive....................................................................................................................................28
[Study] 2015 State of the Smart Home Report..................................................................................................................29
Age as a Role for Excitement........................................................................................................................................29
Motivation to Upgrade...................................................................................................................................................31
Examining the Shopping Journey – Consumers Under 45............................................................................................31
Final Lessons from the Study........................................................................................................................................32
Mobile and Internet Subscription/Usage Rates.................................................................................................................33
Fibre Connections..........................................................................................................................................................33
Uncapped Data Plans.....................................................................................................................................................33
Consumer Profile...................................................................................................................................................................34
Preliminary Profile............................................................................................................................................................34
Internal Environment.............................................................................................................................................................36
SWOT Analysis.................................................................................................................................................................36
Strengths........................................................................................................................................................................36
Weaknesses....................................................................................................................................................................37
Opportunities.................................................................................................................................................................38
Threats...........................................................................................................................................................................38
PESTLE Analysis..............................................................................................................................................................38
External Environment - Competitor Analysis.......................................................................................................................38
Noel Leeming....................................................................................................................................................................38
Noel Leeming’s price and product range for smart devices:.........................................................................................39
SWOT analysis for Noel Leeming, New Zealand.........................................................................................................40
PriceSpy.............................................................................................................................................................................41
SWOT analysis for PriceSpy New Zealand:.................................................................................................................41
JB Hi-Fi.............................................................................................................................................................................43
JB Hi-Fi’s price and product range for smart devices:..................................................................................................43
SWOT analysis for JB Hi-Fi, New Zealand:.................................................................................................................44
PB Tech.............................................................................................................................................................................45
PB Tech’s price and product range for smart devices:..................................................................................................46
SWOT analysis for PB Tech, New Zealand:.................................................................................................................46
Advertising Plan....................................................................................................................................................................48
Plan....................................................................................................................................................................................48
Media.................................................................................................................................................................................48
Creative..............................................................................................................................................................................49
Emotional Appeal..........................................................................................................................................................49
Memorability and Familiarity........................................................................................................................................50
Premium Image and Premium Price..............................................................................................................................51
Opinion Leaders................................................................................................................................................................51
First Opinion Leader: Josef Rackich.............................................................................................................................51
Second Opinion Leader: Shannon Harris......................................................................................................................52
Third Opinion Leader: Paul Henry................................................................................................................................52
Supply Chain Analysis & Flexibility.....................................................................................................................................53
Meaning:............................................................................................................................................................................53
Components of Flexibility for Supply Chain....................................................................................................................53
Quality...........................................................................................................................................................................54
Product from Suppliers..................................................................................................................................................54
Production......................................................................................................................................................................55
Distribution....................................................................................................................................................................55
Brand.....................................................................................................................................................................................56
Brand Summation..............................................................................................................................................................56
Brand Name...................................................................................................................................................................56
Brand Logo Design........................................................................................................................................................56
Brand Personality..............................................................................................................................................................57
Slogan “Getting Smart Kiwis Connected”....................................................................................................................58
References.............................................................................................................................................................................60
Appendix...............................................................................................................................................................................70
Primary Research – Quantitative Survey...........................................................................................................................70
Secondary Research...........................................................................................................................................................84
Earnings Vs Age Group.................................................................................................................................................84
Generation Vs Social/Technological Issues: Attitudes, Cognitive, Behaviours............................................................84
Weight – Overweight Vs Under/Healthy Weight..........................................................................................................85
Life-Cycle compared to Income....................................................................................................................................86
Life-Cycle Spending Habits..........................................................................................................................................86
Geographic Region – Life-Cycle Relationship.............................................................................................................87
Geographic Region – Personal Values Relationship.....................................................................................................87
[Study] Accenture: The Internet of Things (IoT) – The Future of Consumer Adoption...............................................88
Expenditure by Industry................................................................................................................................................89
Pet-Care and Pet Ownership..............................................................................................................................................90
Business Mission: Our business mission is to offer and deliver our consumers a range of smart devices which solve real, everyday
problems through a diverse, simple, and effortless experience using our price and product comparison website.
As the New Zealand technology sector continues to grow, consumer demand for smart technology has grown as
well. MeshTech was created for the purpose that consumers have one location where they can compare and
contrast smart devices according to their wants and needs. We aim for MeshTech to become the one-stop smart-
shop for smart devices compatible with iOS, Android, and other software. Consumers will have the option to
have our certified and qualified technician setup and install smart devices purchased through our website, at an
additional fee, in their home, office, or vehicle. Our tech-support team will also be available through live chat
on the website to assist and solve consumer enquiries, reducing the burden of doubt.
Company overview, goals, and objectives:
MeshTech aims to develop a diverse, simple, and effortless experience for our consumers from the initial
exposure to our website, through the decision-making process, to post-purchase feelings. With our technicians
available to be called out to setup and install smart devices purchased from our website, we want our website to
be synonyms with the one-stop smart-shop who put delivering consumer value at the forefront.
Business Philosophy
Diversity. Simple. Effortless. There are the 3 word which created MeshTech. It is important to us to create a
diverse, simple, and effortless experience for consumers using our website.
Industry Description
According to research conducted by NZTech (2016), New Zealand’s tech sector contributes a large portion to
the economy (NZTech, 2016). The tech sector is defined as “a combination of ICT and high-tech
manufacturing, is a dynamic and growing part of the New Zealand economy, featuring high levels of
innovation, connectedness and expenditure on R&D” (NZTech, 2016, p. 23). The tech sector accounted for an
estimated 8% of GDP in 2015, contributing $16.2billion to the economy and almost 100,00 (NZTech, 2016).
MeshTech will contribute to New Zealand’s tech sector through our website by utilising the growth of online
sales; consumers will have the ability to view a range of smart devices, via categories, manufactured from
various brands and compare them according to price and specifications.
Auckland, Wellington, and Christchurch are the largest contributors to New Zealand tech sector (NZTech,
2016). Statistics New Zealand 2016 March quarter recorded a 1.8% ($136 million) increase in retail trade sales
in Auckland (Statistics New Zealand, 2016). Over the last eight years, there has been a sustained growth trend
for the sales volume of electrical and electronic goods. MeshTech will initially setup the website for the
Auckland region because of the growing rate of sales, as well as growing consumer awareness for smart
devices. Once the website has been established, we will move into the Wellington and Christchurch regions,
and continue to expand from there.
NZTech’s research states that those employed in and by the tech sector are the “highest paid and highest
qualified of all sectors” (NZTech, 2016, p. 16). MeshTech will utilise these qualified employees by offering a
setup and installation service for consumers purchasing through our website. At an additional cost, consumers
will have the option to call out a MeshTech technicians to setup and install the purchased device/s within the
home, office, or vehicle, as well as how to use the device to get the most out of it.
Products and ServicesA smart device is an electronic gadget which can interact, connect, and share information with its user and other
smart devices (Technopedia, 2016) via different networks, such as bluetooth and Wi-Fi. Some common smart
devices are smartphones, tablets, refrigerators, wearable devices, and other electronic devices. Smart devices
can send alerts to the user, which the user can then alter through the various networks. Some smart devices may
operate through their own apps creating customer loyalty, such as Morepork home security through the Spark
network.
With smart devices becoming progressively available, consumers are purchasing these devices to help
develop routines, satisfy curiosity, and create future benefits to their everyday lives (Lazar, Koehler,
Tanenbaum, & Nguyen, 2015). As the demand for smart devices increases, innovation and development has
increased as well. Dunn (2015) stated the area with the most potential for innovation and development is the
home, and these are the devices MeshTech will offer to our consumers, as well as other items (Dunn, 2015).
Thompson (2015) also said that smart devices offer “unbounded potential to improve our lives and enhance
sustainability” (Thomsom, 2010). In areas such as the home, occupants have the potential and capacity to
control and programme an assortment of devices connected to the home, which can be controlled through a
smartphone or tablet. Some of these devices also have the function to be connected together to create an
efficient network, improving our consumer’s everyday lives.
Environmental and activity information is sent to data storage centres through these sensors, where the
information is analysed and processed to provide feedback to the consumer and the manufacturer. Devices are
being transformed into smart devices via connections with the internet, allowing them to interact with each
other on a global scale. These interconnected systems can improve efficiency, reliability, and sustainability
(Mukhopadhyay & Suryadevara, 2014) adapting to the environment and the user.
MeshTech is an online retail website specialising in comparing products and prices of a range of smart devices.
Our aim is to be the one-stop smart-shop for the on-the-go consumer, who is looking to purchase smart devices
to solve real, everyday problems. The range of smart devices will cater to as many of the consumers’ needs and
wants as possible to enhance the consumer’s lifestyle.
With 5.5 million new devices, on average, being connected to the internet each other (O'Brien, 2016),
smart devices are a part of everyday life, and New Zealand consumers are realising there is a want and need for
them to solve everyday problems. O’Brien (2016) reports that the 5 key areas most likely to be affected by the
Internet of Things is: 1) wearables (e.g., smart watches), 2) connected cars, 3) connected homes, 4) connected
cities, and 5) industrial internet (transportation, oil and gas, and healthcare (O'Brien, 2016).
The smart devices MeshTech will offer:
● Wireless monitoring: baby monitors.● Home security and office: smart lights, smart locks.● Home entertainment: wireless speakers.● Vehicle systems: audio, security systems.● Wearables: activity trackers for health and fitness.● Pets: smart collars equipped with GPS tracker, smart pet feeders controlled via apps, pet toys controlled via apps,
smart pet tags which can notify owners of the pet’s health and wellbeing through an app.MeshTech will not be selling or offering smartphones, laptops, tablets, smart TVs, smart watches, gaming
consoles, cameras, or heat pumps because of market saturation and competitive pricing already within the New
Zealand market.
MeshTech will not only sell to individual consumers, but to commercial retailers as well. The retailers
who currently sell smart devices within the New Zealand market, such as Noel Leeming, JB Hi-Fi, and PB
Tech, sell only specific, popular brands. These retailers have the opportunity to expand their product range if
they purchase bulk devices through MeshTech at a discounted price. At an additional cost for the retailer and if
the retailer wishes, MeshTech will advertise on our website the stores which have newly purchased devices
from us, as well as provide a link straight to the retailer’s website for an easy transition for the consumer. As
more retailers purchase through MeshTech and are advertised on the website, consumers will start to believe
that our website is trustworthy.
There are some categories of smart devices which can be introduced to retailers as well. For example, Animates
pet store does not stock nor supply smart devices for pets. MeshTech can supply these smart devices for pets,
such as smart collars equipped with GPS tracker, smart pet feeders controlled via apps, pet toys controlled via
apps, smart pet tags which can notify owners of the pet’s health and wellbeing through an app, to Animates
diversifying their product range and drawing in new consumers.
Our team of certified technicians will be available to all of our consumers through live chat on the website. If
consumers have any enquiries, they can simply type out a message through the live chat window on the website
and a technician will answer them as soon as possible- within standard business working hours. Enquires can
range from any issues the consumer is having with a smart device they current use, or which smart device is
best suited to their wants and needs.
When a consumer purchases a smart device/s through our website, they will have the option to call out
one of our technicians to have the device/s setup and installed in their home, office, or car, for an additional
cost. Our technicians will also educate our consumer on how to use the device/s, as well as how to get the most
out if. This service adds value to our business, as well as demonstrates to the consumer we will go above and
beyond to ensure they are satisfied with their product and our brand. With employment in New Zealand’s tech
sector being the highest paid and qualified of all sectors (NZTech, 2016), our consumers are guaranteed the best
possible service from our technicians.
A price and product comparison website is the best option for our business because we want to offer our
consumers a wide range of smart devices to help them with everyday problems. For a consumer to effectively
ascertain which product they want and need, comparing those products with others of a similar design and
function will allow them to choose the one which is best suited for them. Coupled with a user-rating from
previous buyers, consumers will have access to as much information as possible on the smart device they wish
to purchase. A price and product comparison website enables consumers to simultaneously check the prices of
similar products in one place (Ronayne, 2015). According to Jung, Cho, and Lee (2014) price and product
comparison websites reduce and simplify the consumer’s cost of searching for products, and helps their
decision-making process and purchasing decisions (Jung, Cho, & Lee, 2014); MeshTech aim to make this
process as easy as possible for our consumers.
Target market
Primary Research – Quantitative Survey
Research Problem
Does the New Zealand market have a large enough appetite for Smart Technology in order for our project to be
sustainable and/or lucrative?
Research Objectives
The purpose of this research is to identify the likely adoption rates of our target market. We wish to understand
products which are most exciting for our consumer, and what hindering feelings that they may have to prevent
them from adopting or engaging in Smart Technology. We will ask a series of questions to current
feelings/opinions/understanding of Smart Technology (or lack thereof), to gather insight into the immediate
readiness of the New Zealand market as a whole.
Method
The main method of our quantitative primary data collection is a survey. The sample size consists of 40
respondents, over the age of 18, living within the Auckland Region. The questions will focus on Demographic
segmentation, Mobile Technology usage, Social Media utility, Smart Technology perceptions in relation to
word association, understanding initial consumer inhibitions against Smart-Technology, and gathering feelings
towards possible logo concepts. Our sampling method will consist of a Simple Sampling technique, in that, we
open the survey freely for people on the NZ Herald comments sections, and randomly select 1 in 7 responses.
We initially conducted this survey on the 12th of August 2016, and allowed responses until 24th August 2016.
This was to ensure we have adequate responses in order to remove biases such as regional, self-selection, and
we required users to sign into the survey using a Google account, in order to remove dual inputs.
Key Findings
Demographics
From our data, we accept we had an over-coverage bias in relation to 18 to 25 year olds (65%), and (our target)
26 to 33 year olds, but can be due to the fact this age group views NZ Herald online more than other age
groups. Of the respondents, we found that more
than half (56.4%) used mobile data between 2 to 4
hours a day, indicating that to target these users, we
need to be selective in our Advertising Plan as to
when we advertise through this communication
channel.
Of the respondents, the most commonly attained
social media account platform was Facebook (95%), followed by Snapchat, Instagram, Twitter, and Linked-In
(77.5%, 72.5%, 50%, and 37.5%, respectively). When asked which social media account respondents use most,
the resounding platform was Facebook (80%), followed by Instagram (12.5%), and lesser used Snapchat (5%),
and Twitter (2.5%) – no respondent mentioned Wechat, Linked-In, Yikyak, Tumblr, Pinterest, or Weibo, as
their most preferred. Half of our respondents owned an Apple iPhone, 7.5% of respondents didn’t own any
smartphone, and the remaining 42.5% used Android.
We had a balanced array of ethnicity representation, and were fortunate to avoid overrepresentation of
Caucasians, leaving us with 62.5%. Most of our respondents had a University Undergraduate Degree (35.9%)
or a University Certificate/Entrance (25.6%). 5.1% had a Trade Qualification – and they were over 40 years of
age. We had an equal representation of sexes – both 50% for male, and female. The majority of our respondents
were either Full Time working (42.5%), or studying (32.5%), which may offer a dichotomy of responses – due
to University Students being inept and informed with technology, compared to the middle-class citizen.
Because of the overrepresentation of students, we had 35% of respondents who was earning under $249.00 a
week (35%). 65% of respondents earnt more than $250, of which, 40% earnt more than $750 per week.
Customer Perceptions
When asked what types of Smart Technology respondents most excited for, Wearable Technology was
predictably at the top of the list (47.5%), followed closely by Home Automation (42.5%), and close contending
was Vehicle Connectivity. The interest in automotive was exciting, as there is not a large range available
currently in New Zealand, and could prove to be lucrative. About a third of respondents wished for Home
Security (27.5%).
We asked our respondents to describe in three words what came to their mind initially when thinking of the
term “Smart Technology”
We found the positive associated words were:
1. Easy 2. Interactive
3. Fast 4. Social
5. Secured 6. Convenient
7. Future 8. New
9. Fun 10. Cloud
11. Helpful 12. Useful
We found the negative associated words were:
1. Unreliable 2. Expensive
3. Not-upgradable 4. Pretentious
5. Naïve 6. Obsolescence
7. Controlling 8. Lazy
9. Lag 10. Support
We will use these words in future development for our advertising campaigns, with special consideration to
how we specific demographics feel about adopting smart technology. We may use antonyms to the negative
words to persuade this group to change its perceptions. More study and testing will be done further into the
report.
Most of the respondents (given
more than one option) preferred
to purchase from a Physical
Retailer (70%), which is
concerning because the project
focuses on getting people online
on a website, whilst 42.5% preferred to shop online, and avoid the inconvenience of having to travel to a store.
This may be because a utilitarian shopper knows what they want, and are more willing to browse online to find
information, or interact with sales people. The respondents who preferred to shop physically in store, may
prefer a supported sales experience, or may be impulsive or fulfilling gratification. It may also be because a
good percentage of shoppers are recreational, in that they prefer the socialising, bargain hunting, inspiration, or
sensory stimulation that a retail store offers (Wagner & Rudolph, 2010).
We decided to dig deeper into the initial expectations of our consumers to measure vaguely the price elasticity
of demand that people were willing to spend on particular items, and test the waters for some not so saturated
markets. When asked “How much would you expect to pay for” a smart lock, just under half (42.5%) of those
surveyed would expect to pay less than $199 for this device. The market value for a smart lock is between
$400-800 depending on the features. This gives us an insight that either (1) our consumers have not researched
this product, (2) they do not have an appetite yet for this, (3) they have unrealistic expectations, or (4) they are
more price conscientious. This can be a benefit to us, as imports from our prospective suppliers (China) can
provide this device at a cheaper price which will match expectations. The
majority of respondents (of which were older) had a more realistic
expectation – over 57.5% felt a lock would be between $200-599. This
tells us that we have an opportunity to offer a premium line products for
those who want higher quality and are willing and able to pay for such a
device – and yet offer a budget/economical option for consumers who are
less liberal with their disposable income. For a Smartwatch, which has
been advertised by competitors already, and reasonably saturated in the
market – we had a much more diverse range of perspectives - 65% felt the
smartwatch deserved to be under $399, and yet, 35% were expecting to
pay over $400. This tells us that the average consumer understands that
there are a broad range of options available – not simply an elite Apple
watch – but also cheaper Android options. The integrated ‘hub’ was much
more diverse than the Smartwatch in expectations. The youngest
respondents tended to opt for the lower end of prices (47.5% chose under
$399) but the older respondents who were full time working, tended to choose higher price-points, between
$400 to over $800, which could suggest that they may be willing to pay for functionality (as Generation Y’s
purchase decision tends to revolve around).
Motivations
We asked our respondents how likely they were to purchase various types of smart technology, within 5 years,
to observe if expectations met purchase motivation. Aligned with secondary data, we found that Wearable
technology was at the forefront of our consumers’ minds (over 55% chose 4 or 5 out of a possible 5). Investing
in Home Security served mixed opinions – equally negative and positive, with a fifth sitting at the neutral
position. We found that respondents who were male, and over 33, were the most likely to purchase home
security. This could be a generation issue, or it could be that these respondents were at a different life stage. It
may not be lucrative to offer or focus on home security options on our website for this reason. Also backed by
our secondary data, we found that Entertainment Systems were of a high purchase motivation (70% chose 4 or
5 out of 5 – with 42.5% choosing 5 out of 5). This signifies that this range of products are in the highest
demand – potentially because consumers are able to see real value and tangibility in the products they purchase.
Respondents under 58 were most likely to desire entertainment as 5 out of 5, which tells us that family
gathering may still be important to them. Similarly, 18 to 25 year olds also rated this as a top priority – which
tells us that there may be many gamers and/or online movie/TV-show streaming enthusiasts. We can capitalise
on these two consumer types by marketing these products with direct messages which cater to this
demographic. Younger respondents were less interested in Kitchen related smart technology, but older
generations showed interest. Unsurprisingly, the younger 18 to 25 year olds, and in particular – the men – were
less likely to purchase smart technology which was for animals. Women on the other hand (especially those
between 26 and 49) were most likely to be interested in these technologies. This could be because they are
animal owners – whether by companionship, or for family means, or both. Only respondents older than 40 had
significant interest in garden technologies – which tells us that they are most likely home owners – but in
general, the millennial generation and Generation Z were not interested in garden related technology.
Brand Identity
In this portion of the survey, we were testing to comprehend what our name “MeshTech” meant to consumers,
and if the core messages we were trying to deliver were being absorbed as intended. We got our respondents to
provide a word that comes to mind when presented with the word “Mesh” and we found a range of answers –
which we hope will help us to generate interesting experiential advertisements in the future.
Words presented were:
Integration Clothes Mixing Variety
Keeping out Everything Wifi Material
Combinatio
n
Dual-purposed Fences Internet
Fabric Linking Together Connectivity
This sets a cornerstone for the types of peripheral messages we can deliver to solidify our brand logo design. It
seems the consumer was able to (on average) interpret what the name meant, and resonated with the products
we hope to offer. This can aid us to generate adverts which resonate with our target audience’s most familiar
setting. For instance: Not having to get off the couch (“effortless”), and getting children to choose a movie from
a tablet, then streaming it onto the television – family time in front of the television; “together” which builds an
emotive appeal.
We felt it was important to dive into our consumers’ mindset in response to concern with smart technology – as
our secondary research suggests to us that security is at the forefront of the consumer mind. The three least
cautious/concerned issues for consumers were:
1) the product not being easy to use (36.8%)
2) security issues – access to home network (23.7%)
3) lack of perceived value (23.7%)
This tells us that consumers are expecting devices to “just work” when they purchase them, and they would be
invested in the purchase process, to be informed when purchasing an electronic good.
When asked what respondents were most concerned/cautious with, the most chosen options were:
1) value not meeting needs post purchase (47.5%)
2) security issues – access to home network (30%)
3) concerns with price (10%)
Despite news coverage of potential hacking, it seems consumers are not as concerned with access to home networks,
generally, but possibly feeling pressure from the question due to recent news events highlighting hacking and IoT
vulnerabilities (Osbourne, 2016). When we asked which security worried our respondents the
most (personal information, access to camera feeds, front door access, access to home
network) about two fifths (35.9%) were mostly worried about personal information
getting leaked, one fifth (20.5%) were worried people would gain access to their front
doors, and equally the same amount didn’t feel that any of the significant issues worried
them.
We found that almost two fifths preferred free benefits (“set it up for me for free if I
become a member”), and almost a third felt they would be able to sort out the
connection process themselves. We also found that about a quarter expected the
company to set it up for them and they would pay more for that service. This could be
due to possibly two types of customers: “I don’t want to deal with it – you deal with it”
types, and “I would rather have an expert touch this so I can learn from them” types.
Overall, two thirds of respondents
preferred/expected more than a simple
Online Shop & Deliver service, which
since other competitors are not offering (PriceSpy), this could be
a niche area for our business to penetrate.
We wanted to contemplate which of our 3 logo designs our
consumers would resonate most with. Of the three options available to them (infant stages in our logo designs),
the most preferred was “Complex House” with the logo on the left – which respondents felt gave them
confidence and was eye catching. The “Kiwi” design on the other hand was regarded as the most ‘New
Zealand’ feeling logo, was simple, and expressed confidence, was eye-catching, but did not feel effortless.
Secondary Data: Background Research + 3 Studies
Earnings Vs Age Group
According to our data, we have found that, in general, the highest frequency for earnings is $30,000 or more.
This is particularly more common with people over the age of 25, and most prevalent in the 35 to 49-year-old
groups. Generally, the graph shows that younger people (under 25), are the most likely to have the least amount
of money – or less likely to have over $30,000. The younger generation (Generation Z and/or Millennials) have
the lowest disposable income, potentially (Roy Morgan, 2011).
Generation Vs Social/Technological Issues: Attitudes, Cognitive, Behaviours
(Roy Morgan New Zealand, 2011)
Figure 1 ROY MORGAN SINGLE SOURCE NZ: AUGUST 2013 - JULY 2014 LIFE-CYCLE OF RESPONDENT vs DISCRETIONARY INCOME
Different generations exist in New Zealand, which have faced unique experiences both socially and financially.
The fundamental differences between these groups is they have influence over their perceptions to new
products, and their spending habits.
The term “Baby-Boomers” can be used to describe those individuals born between 1943 and 1964, and are the
second eldest generation in New Zealand (Lyon, Legg, & Toulson, 2015). They were raised in an era of
explosive national wealth, often receiving houses by inheritance and expansion, and are fiercely competitive. In
their youth, they were moving through the Women’s Civil Movement, and therefore were amongst many social
movements. They have a tendency to be self-immersed and self-satisfaction rates top on their list. They tend to
be more emotional than intuitive (Manchester University, 2015). They tend to be strong-willed, and have a high
aptitude to work ethics, which tend to blend work and personal life readily- ‘live to work.’ Baby-Boomers tend
to excel at interpersonal skills including mentorship relationships, democratic processes, teamwork, and focus
on effects of change (Lyon, Legg, & Toulson, 2015).
Looking at the data, we can acetate that the Baby-Boomer generation tends to be weary of price gauging
(bargain hunting does not appeal), strongly appeal to quality over price (more than other generations), and feel
that have more time on their hands than other generations. They are more privacy contentious, have little use
for technology in everyday life, and have fairly persuasive attitude towards their health.
The term “Generation X” refers to people born between 1965 and 1981. They grew up in a dualistic ‘latch-key’
family life-style – where both parents were heavily involved in consumerism (Lyon, Legg, & Toulson, 2015).
Following their parent’s skyrocketing incomes, and high divorce rates, Xer’s resentment carried through to a
perspective of “work to live” mindset, polar to previous generations – with heavier reasoning burden being
placed on balancing work life with family and social life (Rashbrooke, 2015). They are more liberal than
previous generations, and have placed more importance on diversity of gender, ethnicity, opportunity, and
technology. Having not lived through the era of the boom, they expected to be able to maintain security at the
workplace, whilst believing in enhancing their individual marketability (Lyon, Legg, & Toulson, 2015). They
seek organisations who value their “competencies, reward productivity rather than longevity, and create a sense
of community” (Lyon, Legg, & Toulson, 2015). They tend to be selfish, ambitious, determined to succeed
financially, and refuting traditional management styles. They tend to be into labels and brand names,
individualistic, sceptical, self-reliant, and suspicious of organisations (Novak, 2000-2016).
Looking at the data, we can see they follow the previous generation, in that quality is more important than
price. They are also the most likely to buy a product based on label alone, are constantly looking for new
experiences, use technology to gain control over a busy day, are security conscious, and care greatly about
physical health.
The term “Generation Y” (also known as ‘Nexters,’ ‘Internet Gen,’ or ‘Millennials’) refers to people born
between 1982 and 1995. This generation grew up through the most important current technological
breakthroughs – namely: Bluetooth, Infrared, Trans-Radio Frequencies, LCD/LED display panels, ADSL2,
Smartphones and mobile technologies, and are comfortable with computing (Eaqub & Eaqub, 2015). Their
education was mostly traditional, and thus, their language levels tend to diversify beyond Xers (Lyon, Legg, &
Toulson, 2015). They tend to be closer to their parents than Xers, tend to be more central-liberal politically, are
generally more relaxed, and optimism is higher in this generation (Cran, 2010). They had higher constraints
from overzealous parenting styles, and thus from employers, thrive in more structured workplaces (Lyon, Legg,
& Toulson, 2015). They are highly educated, tend to be tech-savvy, and are likely to change occupations within
5 years. They see work as a learning experience, have a keen sense of fairness and equity, expect consistency
with authority, and value integrity of a corporation more than other generations (Tulgan & Martin, 2001).
Looking at the data, Millennials tend to be the most economical in purchase decisions, are less enticed by
branding, have less interest in quality verses price (compared to their parents), require technology most to keep
up with daily life, and tend to be the most work-life obsessed group. They tend to be less interested in physical
activity at the workplace, but are moderately concerned about personal health, and value new experiences most.
The term “Generation Z” refers to people born since 1995. They are more emotionally charged, and have a
tendency to be more ‘left’ politically (Reilly, Sirgy, & Gorman, 2012). They are more concerned with
democratic social movements, are well organised and schedule often, are less promiscuous than past
generations, and prefer to work in teams (Novak, 2000-2016). They have grown up where internet is a core
utility, and thus thrive in environments with a digital presence. Because of this, they tend to gain access to
information quickly, and have strong views on many different subjects. They also tend to have shorter attention
spans than prior generations, have strong demand and expectations on speed of technology, and are the most
entitled generation (Novak, 2000-2016).
Looking at the data, we can see that much like Millennials, Generation Z’s are much more conscious about
spending money and will often search online for cheaper alternatives. Since mass importation of goods
following New Zealand’s Free Trade Agreement with China, Z’s are less concerned for quality over price. They
are the most comfortable with technology (having been born into it), and are less optimistic about the future.
They are less physically motivated, less inclined to do exercise, and much less security conscious than all prior
generations. Despite their lack of motivation, Z’s tend to feel like their lives are too busy and fall back on
technology to balance their lifestyle choices.
Weight – Overweight Vs Under/Healthy Weight
According to
Statistics NZ, women
tend to be obese more
often than men, and
this trend is
especially
pronounced amongst
18 to 24 year olds.
Comparing the
OECD averages for
obesity, with the average being 18.8%, New Zealand has the 3rd worst obesity (Statistics New Zealand, 2014).
The earlier generations tend to have the greatest trouble with obesity however (Generations X and Baby
Boomers).
The possible trend for the 18 to 24 year olds could be due
to childcare and teenage pregnancy, which may skew the
statistics (Parker, 2012). It could also be due to numerous
mental health issues such as depression or anxiety (Scott,
2007).
Maori and Pacific Islanders continue to hold the largest
segment of obesity amongst the ethnic groups,
disproportionately compared to their population size.
Asian ethnicities tend to have the lowest obesity per capita
(Rasanathan, Ameratunga, & Tse, 2006), which may be attributed to cultural stigma and customs – as in
Southern Asian continents, physical health is seen as largely important for happiness (Rush, Chandu, & Plank,
2007).
Life-Cycle Compared to Income
From what we can observe from the data having children disproportionately makes the person/couple poorer.
The data is indicative that the greatest population proportion of wealthy individuals falls to the age of 34 years
and over. It seems judging from the ages that the generations X/Y are the ‘powerhouse’ couple types, which are
most likely to be less inclined to have children, and are self-sufficient working professional groups. Of the
younger groups, having children and/or being single, were the two common denominators in lower wealth
equity. This justifies the fact that relationships have financial benefits. For this reason, we may wish to target
couples who are working professionals, without children, and have the most disposable income, comparably.
Figure ROY MORGAN SINGLE SOURCE NEW ZEALAND: AUGUST 2013 -
Life-Cycle Spending Habits
The income disparity between singles, and people who are married, has a marked difference on their spending
habits. From the data above, we can see that the lowest spenders tend to be those who are younger and have
children. People who are married, and are 35 and over, and (regardless of children) tend to be the largest big-
spending consumers – possibly because of professional demands, or is characteristic of the consumer who is
eagerly trying to fill a void through materialistic goods (see generation vs Social issues). For this reason, it
would be worth investigating into technology that benefits or targets children. Individuals who are single, have
no children, and are over 35, tend to be heavily price conscientious, and are more interested in goods which
partner to smartphones (McIntyre, Tully, & Atwal, 2014). According to Raaji, consumers in this demography
have become more cautious on purchasing decisions in relation to price, since the 2010 financial crisis, and
have less aptitude to budgeting and are therefore more in favour of hire-purchase and other credit options
(Raaij, 2016).
Geographic Region – Life-Cycle Relationship
According to our data, in all regions, the largest segment of the population is over 35, married, and without
children. This demographic tends to be in rural areas compared to larger urban metropolitan cities. This is also
true for respondents who are single, over 35, and without children. This may be due to New Zealand’s aging
population – which are concentrated in urban areas particularly in the South Island (Statistics New Zealand,
2006). There are significantly less of the younger generation despite immigration taken into account.
Geographic Region – Personal Values Relationship
We wished to gain a fundamental outlook over
the general attitudes that dominate each region.
The “Visible Achievement” attitude refers to the
consumer buying behaviour of egoistic motives
(Broad, 1950) – i.e. consumers purchasing to
express their internal satisfaction and self-
identity; a manifestation to maximise individual
outcomes; individualism. Simply put – the
consumer purchases to fulfil their own subjective
interpretation of success; what success looks like to them – polar to “Look at Me” which relates to purchasing
so others perceive them as successful. This attitude is most prominent in Millennial generations, as well as
Generation Y (Onkvisit & Shaw, 1987). Despite this individualised consumerism, these generations put great
importance on ethical issues, corporate responsibility (especially with conservational practices), and are most
willing to engage in cause-related purchasing in various degrees (Bucic, Harris, & Arli, 2012). The influence of
perceived service quality in a store and the seemingly fascist higher acknowledgement of ‘self’ from the retailer
to the consumer, increases loyalty to the brand, and results in an overall positive perception from these groups
of their shopping experiences (Wu & Chan, 2011). The overwhelming results seem to suggest that the vast
majority of consumers are seeking to purchase items which provide implicit value rather over explicit.
The “Look at Me” purchase motivation tends to identify consumers who purchase products explicitly to
improve their personal appearance – how others perceive them from appearance alone. This category typically
falls into the Generation Z group, who in 2016, will be still battling the ‘identity vs role confusion’ life stage
(Carducci, 2009).
The “Something Better” motivation tends to
represent values such as efficiency,
common sense, functionality, and reliability
(Kostelijk, 2016). Consumers who fall into
this category tend to favour direct central
messages, which revolve around the core
instrumentality of the good, as opposed to
the intrinsic (pleasure) value, and perceive
peripheral messages as pithy (Kostelijk, 2016). This motivation seems to be the lowest amongst respondents,
and importantly, lowest in Marlborough which is a region of agriculture and vineyards.
We can also see that inter-island, Auckland consumers (and North Island, in general) spend much more in retail
and general industry than the rest of the South Island. This is because over half of the population live in the
upper north, of the North Island (Statistics NZ, 2013).
Pet-Care and Pet Ownership
Despite our primary-research results showing a lack of interest in pets – pet owners generally are more altruistic and
emotionally attached to pets, and are more willing to spend excesses of money for their pet’s wellbeing as they regard a
pet as ‘part of the family’ (Neilsen, 2015). For this reason, and additionally since most of the pet shop market leaders do
not supply Smart Technology for their customers (Little, 2015), we thought it would be best to jump into the pet industry
– which would also suit the group of products that our site will provide, and offer more diversity. There are not many
devices available even on TradeMe which cater for pets, so there is a niche that can be tapped into.
SEQ Appendix \* ARABIC 1 Sales by Region in Current Prices
Table 2 NZ Market Volume of Pet Care by Category
Table 1 Canadian Intelligence: Exported from Market Data Analytics Database - 10/08/2016
Amongst the various varieties, toys for cats and dogs have been preferential amongst kiwi consumers. This may
be because Millennial generations are choosing to have less children (for financial/personal reasons) and
instead, adopting to have a domestic animal (Little, 2015). Birds and Fish have minimal (if any) growth, and
therefore we will avoid targeting these animals. Eventually, we may want to expand into the Australian Market
(Mid-Long term goal) for pet supplies.
Expenditure by Industry
2Industry Sectors; Statistics NZ
We collected data from the Statistics NZ Industry Report 2015, to understand in which areas Kiwi consumers
were spending the most. This was important for MeshTech, as consumers are dispersing in variety – from those
who are on a low budget, to those who spend large – we wanted to understand the 7 industries which ‘mattered’
most to them. What we discovered is that non-store related purchasing (online) was the lowest form of
shopping – amongst our predisposed target market. Motor vehicles and parts were a growing industry, and held
an ongoing lucrative position. This justifies our premise in that automotive products are likely to (in general)
appease the desires of consumers from a wider range. Interestingly, electronic goods were only on a steady
incline since 2010, which may be due to lack of viability from current electronics, since the explosion of
broadband in the early 2000’s. Hardware and gardening supplies are growing rapidly, despite our preliminary
research showing minimal interest from our consumers, it may be that consumers are unaware of residential
garden irrigation systems, and new builds and retirement homes may be a niche market more suited for the
commercial splice of this project.
Market shareHow will the concept be valuable in the marketplace?
Consumer Adoption: Future Trends for Technology
[Study] Accenture: The Internet of Things (IoT) – The Future of Consumer Adoption
Product Categories
According to our research on Consumer Adoption, consumers are more likely to see value in Health & Fitness
Wearable technology (Accenture, 2014).
From the study, we found that impulsive (most likely adopt within 12 months) of consumers were most excited
for wearable devices, thermostats, and security. More moderate spending consumers (likely to purchase within
5 years) were anticipating saving for a thermostat, security system, smart watch, and wearables. The product
categories which consumers were least likely to adopt (more than 5 years), were clothing, wearable HUD’s,
smart refrigerators, and self-driving vacuum (Accenture, 2014).
Lack of awareness is not the only
barrier to purchasing Smart-
Technology. Almost two fifths of
consumers feel there is a lack of
‘perceived value’ (36%), and
privacy still remains a critical
issue (23%). Cross comparing
these study results with the “Generation vs Attitude” results, we can see this data may be skewed by older
respondents, as Millennial and Generation Z are not as privacy conscious. Understandably, about a 5th of
consumers assume smart technology is expensive (Accenture, 2014).
Overall, 45% of mass consumers surveyed planned to purchase an in-home connected device within the next
two years – of these, 92% planned to purchase one by 2019 (Accenture, 2014). 75% would purchase an in-
home “IoT” device within 5 years. Across demographics such as Age and Life-Cycle, the study found that
overall it is parents (compared to non-parents) who are more likely to purchase an in-home connected
entertainment device – and wearables.
Gender Adoption - Overall
Men are more than twice as likely as women to have heard of “Internet of Things” and were also more likely to
consider themselves “Early-Adopters.” Men are more likely than women to already own/plan to purchase a
smart device in the next year (16% vs 10%). Both genders are similarly concerned with Wearables (7% vs 6%).
Gender Adoption – Automotive
Women seem to be more likely than men to share data from their connected car in exchange for location-based
coupons or discounts (54% vs 47%), and yet men are more likely to release their personal location data if they
are informed of potentially interesting locations
along their route (33% vs 22%). Both genders
answered similarly with these questions with
regards to wearables (Accenture, 2014).
[Study] 2015 State of the Smart Home
Report
Top themes of the study
This study’s sample size consists of 1,600
respondents (1,000 USA:600 Canadian). The
report shows that Simplicity and Ease-of-Use
(“Effortless Experience”) beats technological
innovation, which matches the idea behind our
slogan.
The most popular devices in the study was found to be home
monitoring cameras, and connected door locks – this may be
because a burglary takes place in the US every 14.1 seconds
(iControl, 2015). The study found that 90% of consumers feel that
personal and family safety remains one of the top reasons to
purchase a smart home system. 70% are excited about cost savings
derived from energy control and monitoring, 48% say they are
excited about the potential convenience in programming home
settings and maintenance, and 47% say they are excited about the
potential to help the environment with greater energy efficiency
(iControl, 2015).
Age as a Role for Excitement
Compared to consumers overall, consumers aged over 55 expressed
a higher level of excitement around the potential cost savings benefit
of a smart home (78%).
Those consumers who were aged between 25-34 expressed a higher
level of excitement with regards to: greater productivity and ability
to manage work-life balance (40% vs. 23% of consumers overall).
They perceived that smart technology would assist to making it
easier to enjoy music, movies and web surfing anywhere in the
“Consumers want devices which solve real, everyday
problems” CITATION iCo15 \l 5129 (iControl,
2015)
house: 26% (vs. 18% of consumers overall). Additionally, it was a priority that smart technology was to help
anticipate needs [shopping lists, minor repairs]: 24% (vs. 18% of consumers overall). This age group also
desired more interactive features that help them connect with people in their lives (21% vs. 13% of consumers
overall).
Consumers generally were most likely to
purchase:
Consumers 25-34 were most likely to purchase:
Home cameras
Connected thermostat
Connected lighting
Connected door lock
Smart home hub
Smart home services
Connected kitchen appliance
37%
37%
34%
34%
32%
31%
25%
Home cameras
Connected thermostat
Connected lighting
Connected door lock
Smart home hub
Smart home services
Connected kitchen appliance
56%
54%
54%
53%
52%
50%
50%
Motivation to Upgrade
According to the study, almost half
of both US and Canadian
consumers were likely to upgrade
their homes to ‘smart homes’ when
they were making
renovations/upgrades to the home
– indicating that those polled in this question were of an older generation, and were home owners. For both, a
quarter were likely to upgrade, when moving to a new home – and about a third, when buying a new home.
Less than 5% were likely to upgrade upon the purchase of a second home, and lesser too for a child. Having
pets was the lowest motivation at less than 1% (iControl, 2015).
Examining the Shopping Journey – Consumers Under 45
The study found that, in general, younger
consumers perceived smart technology to
be of a higher price, and didn’t require as
much support – they preferred Do-It-
Yourself technology with minimal
interaction with the company. They
preferred to purchase smart technology at a
retailer who specialised in security or
general technology store.
In contrast, older consumers preferred that
their devices were installed for them, to feel
‘looked after,’ and have a personal touch applied to service. Compared to younger generations, they were
unwilling to spend a considerable amount on smart technology – perhaps due to limited knowledge on the
subject of the benefits of smart technology, and preferred to purchase from trusted companies – such as their
supplier of telecommunications.
Across both segments, about 60%, wished that the devices worked by themselves; interpreting “smart” to mean
“do not need active monitoring;” devices which worked autonomously. From this, the study acetated that
consumers want lighting to ‘read’ their minds, aka: work differently throughout the day, such as dimming when
they wake up in the middle of the night. Internet-connected coffee pots were a consumer favourite (10% chose
this device as their first choice), and wanted a coffee pot which brewed upon their schedules. The washer/dryer
was the third option listed as first choice by 9% of consumers.
The top 3 ways in which consumers currently kept track of their parents/grandparents were:
1) Check-ins over the phone (55%)
2) In-person checking (37%
3) Email (23%)
This is indicative that landlines are used predominantly for the exclusive use of calling grandparents – and with
landline subscriptions reducing in New Zealand, it is likely to be a lesser trend here. The two greatest methods
were interpersonal and proactive,
which means that to sell the
benefits of smart technology, we
will need to advocate services and
products which specifically cater to this utilitarian consumer.
Final Lessons from the Study
The study summarises to impose that a company:
1) Does not overlook the importance of security
▪ With each study, security is measured as the top reason to buying a smart-home system
▪ Even as consumer awareness of these systems increase – security remains in the foresight sitting
as the core of a smart home experience
➢ “Security is what makes a smart-home, a smart-home”
2) Makes the complex simple
▪ The study reminds us that ensuring the numerous everyday devices are all connected to the home
network is a complex process
▪ Despite the complexity of the technology inside the smart-home HUB, the user experience
simply must be simple, intuitive, and easy
▪ By simplifying the process throughout the entire purchase process and ownership, including
installation, configuration, operation, and management of smart-home solutions – we can make
the technology accessible and attainable for all consumers
➢ Keep it simple
3) Must engage along the journey
▪ People experience a smart-home in action and are more likely to be excited for its possibilities
and purchase within the year
▪ Currently there are a lack of retailers displaying the technology with interactive demonstration,
and take advantage of opportunities to show-off the power of smart home technology – and give
consumers a change to try it first hand
➢ Give consumers an experiential exposure to the products
Mobile and Internet Subscription/Usage Rates
According to the World Development Indicators (2016) Report, fixed-landline subscriptions have continuously
dropped since 1990, broadband subscriptions have seen a steady incline, and mobile subscriptions have soared
since the 2000’s (The World Bank, 2016). This surge of mobile subscriptions is due to the introduction of new
competition, Vodafone NZ, which added a new player to the previously monopolised market (Geradin & Kerf,
2003). One third of all broadband (ADSL1, ADSL2+, VDSL, and Fibre) connections with a zero-cap had
quadrupled since 2014. The number of fire connections in use increased 5% to 105,000 – and 86% of New
Zealanders have mobiles which connect to the internet (3.9 million) (MacPherson, 2015).
Fibre Connections
Currently, this means of connection is the fastest growing connection type in
NZ. Fibre connections have “more than doubled to over 100,000 in 2015,
from 46,000 in 2014” (MacPherson, 2015). DSL connections still grow, but
are slower (increasing only about 1% annually) at about 1.33 million. Fibre
makes up 5% of all broadband connections.
Uncapped Data Plans
Broadband connections with no data cap (maximum size
restriction on bandwidth), has more than quadrupled to
“628,000 in 2015, from 155,000 in 2014” (MacPherson, 2015).
About one third of all connections were uncapped, compared
with 8% in 2014. Above this, people nationwide are using
more data – an increase from 2014 of 143% (OECD, 2015).
Consumer Profile
Preliminary Profile
With various different personalities, needs, experiences, and values of the consumer – coupled with the vast
number of products that MeshTech will have on offer – it may be difficult to specify which consumers we will
target.
Preliminary results from our primary and secondary data show us that our most likely residential consumer is a
European male, living in urban Northland/Auckland/Wellington between 29 and 49 years of age, slightly
overweight unlike his partner, who he lives with. He is a working professional, who earns approximately
$45,000 to $65,000 and is reasonably savvy with technology, and may be more inclined to seek smart
technology which fills his purpose-specific motivation. He will wake up at 07:00 to the sound of his iPhone on
the bedside charger, and starts his morning, eating a healthy breakfast with his partner. After showering, he
boils the kettle, manually, and prepares an instant coffee at 7:30 for his morning routine. He is checking his
email and reading the Herald on his iPhone, until his alarm alerts him that it is time to leave for work. He gets
into his 2012 Toyota, and plugs his phone into the cigarette charger, and listens to Spotify on the way to work.
He will forget that he has forgotten to lock his front door, as he pulls out of his driveway, so he messages his
partner to ensure the house is locked, as he continues on his busy traffic packed commute. As he parks his car at
the company parking space, he checks his Facebook, and swipes his ID card through the front security desks.
He gets to his desk, logs into the computer, and checks his Linked-In. His partner sends him a video of their
Jack Russel Terrier doing something silly on Snapchat. The couple decided to purchase a dog, rather than have
a child, for both economical and personal reasons. She reminds him that they need to get more dog biscuits and
how he is due for a new present. He has time before his shift starts, and so goes on Instagram to see what his
friends are doing, and likes a few pages. Enticed by a gaming post, he goes on YouTube to watch a trailer, finds
that it is about $20 above his budget, and so promptly goes on TradeMe to see if he can purchase this new game
cheaper. He tends to be a moderate spender who is willing to invest more money into products if they a) fit his
lifestyle, and b) is good value for the money. He recalls the extra $3,900 he splashed out for himself after 2
months of savings, on that 47” LED television, and is thinking about getting a better couch to suit his gaming
lifestyle. It’s 5pm, and he is signing out of work, and off towards home. He gets a Snapchat message from his
cousin, inviting him over for dinner, so he swings by his place and picks up his partner. Before leaving, they do
a ‘big sweep’ of the house, ensuring all the gates and doors are locked, and that the lights and stove is turned
off, just in case.
Internal Environment
SWOT Analysis
Strengths
MeshTech is an online website, specialising in selling a range of smart devices. There is no one place for New
Zealand consumers to purchase a range of smart devices currently in the market. Retailers such as Noel
Leeming, JB Hi-Fi, and PB Tech stock and sell only a specific range of smart devices, which can cost the
consumer hundreds of dollars. MeshTech will offer a range of smart devices that are currently not available in
New Zealand at a discounted price as we will be using trusted wholesalers.
The New Zealand tech sector is growing, according to NZTech, and it contributes a large percentage to the
country’s economy (Kubiak, Stephenson, & Parr, 2016). Entering the tech sector will benefit and strengthen
MeshTech’s brand as the demand for smart devices is increasing amongst our target market. The tech sector
also contributes approximately 100,000 jobs and is one of the highest qualified and paid sectors in the
economy. MeshTech will employ qualified and skilled technicians from the tech sector to setup and install
smart devices purchased through our website for our consumers, at an additional optional fee. This service adds
value to our brand and ensures that the purchased smart device is installed correctly.
MeshTech will also sell directly to retailers, not just individual consumers. Electronic retailers such as Noel
Leeming and JB Hi-Fi only offer a select range of smart devices. MeshTech can feature these products on our
website, increasing Noel Leeming, JB Hi-Fi, and PB Tech’s consumer reach, as well as strengthening
MeshTech’s reputation as a trusted brand.
Some retailers which currently do not sell smart devices could benefit from partnering with
MeshTech, as well. Animates pet store, for example, do not sell smart devices for pets, although there are
devices in the market which cater to this niche market. Smart collars with a GPS tracker and smart pet feeders
controlled through an app are just some of the smart devices pet owners can use which Animates is not offering.
Through a partnership with MeshTech, we can supply them with the smart devices to sell within Animates
stores across New Zealand.
We chose to create a website because it provides our consumers with a more convenient and engaging platform,
instead of visiting a physical retail store. Consumers will be able to browse, research, and purchase smart
devices according to their wants and needs directly through our website. Our target market, Generation X and
Generation Y, are characterised as early adopters of technology, and they have grown up with the internet at
their fingertips. Online shopping gives our consumers access to information about the product through
product/key (Lissitsaa & Kolb, 2015).
Gen X and Y consumers read reviews and research products before they purchase them; MeshTech will supply
comprehensive information about each of our smart devices, reducing the time Gen X and Y consumers would
use researching the product through various sources. Gen Y consumers tend to make purchasing decisions
quicker than Gen X, therefore, the information supplied for the product will be short and easy to understand.
As a price and product comparison website, our consumers have the advantage of comparing several smart
device according to their wants and needs. Price and product comparison websites reduce the time and effort for
consumers who are online shopping, and simplifies their decision-making process. MeshTech aims to make this
process as simple as possible for our consumers, so we will add in a user-rating systems for consumers who
have already purchased that smart device. This will help the consumer choose and decide if the smart device is
the best choice for them.
Weaknesses
As with any retail business, MeshTech do run the risk of our suppliers running out of stock of smart devices.
We will avoid this situation as best we can by keeping open lines of communication with our suppliers, ensure
automatic updates (where possible) of the databased driving the website as soon as possible to alert consumers
if a product is out of stock, and give an estimated time we expect to have more stock. This situation will be
problematic especially during peak times, such as Christmas. During these peak times, MeshTech will ensure
that smart devices showing particularly strong interests of purchase are well stocked. We also run a risk that we
may not be able to source the best possible products, in particular, products which may not meet the minimum
certification standards, or regulatory requirements enforced by Customs NZ may incur an unexpected fine
and/or storage fee (such as refrigerator products) - ensuring we are readily managing and controlling our supply
chain (Customs NZ, 2015). There are also multiple contributors who produce Hub products which compete
with Apple’s HomeKit such as: Google’s Next, Samsung’s SmartThings, Wink, etc. (Chase, 2016), which can
detract sales away from our Apple HomeKit targeted products. We can overcome this weakness by resorting
back to our company personality, and exercise the ‘more-is-better’ principle, by removing specialisation in
HomeKit products, and allowing consumers the ability to segment our product listings by compatibility. Much
like the competition, one weakness we may encounter is a less than satisfactory consumer inquiry response
time, particularly with phone services. One of the major flaws with new start-ups, is possessing low reachability
with new potential customers, and lacking an effortless flow of communication between the consumer and the
business. We endeavour to overcome this by installing a “Live Chat” feature on our website, which will feature
across any and all pages that the consumer is browsing on, which falls back and reinforces our brand
personality “effortless experience.” Installing this live chat feature enables a customer to quickly and easily
posit questions to our team, and the use of Instant Messaging, means the representative responding will be more
efficient, and can handle multiple consumer inquiries at a time (Spark NZ, 2016). Above this, we will also have
a template for our complaints process, in which case the consumer can fill in a fixed form, and send it through
to us via email, which will reduce the time taken up dealing with the complaint by our Sales channel on the
Live Chat feature, and lead the way to set the correct expectations to the complainant regarding expected
response times. Shipping and handling fees have become the number one factor for consumers to change their
decisions about purchasing with an online retailer (Macdonald & Jarvi, 2013).
Opportunities
From our survey results we saw that the trends in smart devices most of our respondents are excited for are:
wearable technology (47.5%), followed by home automation (42.5%), with vehicle connectivity coming in
third. These smart devices may be in high demand potentially because there is real value for these devices, as
well as fulfilling a need of the consumer. With these products already in high demand with our target market
MeshTech will use these preliminary results as initial stock purchases, because they are most likely to attract
our target market and help us enter the New Zealand market.
Threats
The biggest competition to MeshTech are the stores Noel Leeming, JB HI-Fi, and PB Tech, as they stock and
sell specific ranges of smart devices.
Noel Leeming is New Zealand’s leading retailer in electronics and appliances. They are an
established brand which New Zealand consumer trust. Although they sell specific brands of smart devices,
consumers are well-aware of the quality of their products and will happily pay for them. Noel Leeming also
give their consumers the option to have their devices setup and installed in their homes, comparable to
MeshTech’s service.
JB Hi-Fi is New Zealand’s largest home entertainment specialist. They are well-known for their
discounted products, including their smart devices. This is a threat to MeshTech as the smart devices we offer
will need to be of equal or lesser price than what JB Hi-Fi is offering to attract consumers.
PB Tech is New Zealand’s largest IT and computing retailer. They are known for their
discounted products as they have strong relationships with domestic suppliers to keep prices down. Within each
PB Tech store across New Zealand, their trained staff are on hand to help consumers with any issues they may
have with their product.
PriceSpy is our biggest online competition as they are an established price and product comparison website as
well. They are the leading price and product comparison service in New Zealand and have 1208 stores listed.
MeshTech will need to effectively advertise our brand to compete with PriceSpy and stress that consumers are
purchasing from our suppliers, not another retailer.
PESTLE Analysis
(Incomplete): Mika Juco (https://drive.google.com/open?id=0B2JfISIsA61dSVZDSTAtbDRJalU)
External Environment - Competitor Analysis
Noel Leeming
Noel Leeming is New Zealand’s leading consumer electronics and appliance retailer (Noel Leeming, 2010).
They offer the widest possible range of branded technology and appliances, as well as a high standard of
service in terms of setup and installation of devices purchased by the consumer. In April 2015, Noel Leeming
won the Roy Morgan Customer Satisfaction Award in the furniture/electrical store of the year category (The
Warehouse Group, 2015). One of the biggest highlights in 2015 was the exclusive launch of the Apple Watch in
Noel Leeming stores in Auckland and Wellington (The Warehouse Group, 2015). This demonstrates that Noel
Leeming is a strong leader in the market, one MeshTech will have to strive to compete with.
Noel Leeming is MeshTech’s biggest threat as they are an established retailer specialising in
electronics and appliances. New Zealand consumers are comfortable with the knowledge that Noel Leeming is
the place to go for all and any electronics and appliance needs. As well as having the advantage of 77 physical
retail stores located across New Zealand, Noel Leeming also offers to set-up and install of their devices for their
consumer, taking the burden off them; MeshTech will be offering the same service, as it adds value to the
product and the brand.
Noel Leeming offer a wide range of smart devices for the home, including smart lights, security system,
wireless baby monitors, GPS trackers, wireless speakers, and wearables, such as smart watches. MeshTech will
also offer these products, but will we offer a range of brands, so our consumers have the opportunity to choose
the brand best suited to their wants and needs.
Noel Leeming play an active role within the community through the Mobile Learning Centre for students and
teachers across New Zealand (The Warehouse Group, 2015). It is a not-for-profit initiative targeted and
designed for students to learn, touch, and play with technology. It provides education on integrating technology
through an interactive learning environment.
In terms of social media, Noel Leeming uses Facebook, Instagram, YouTube, and Twitter; their Facebook
account is updated more regularly than their other accounts. The Facebook page showcases events, special
deals in store and online, competitions, and new stock. With an average of over 2 million Kiwis using Facebook
per day (Pelea Z. , 2015), Noel Leeming are utilising a strong social media platform.
In 2012, The Warehouse Group acquired Noel Leeming as purchasing trends showed a substantial growth in
the consumer electronics and home appliance sector over the past 5 years, and with consumers becoming
increasingly connected with the world, the sector will continue to grow (NZX Limitied, 2012). According to
The Warehouse Group’s interim report 2016, Noel Leeming’s market share continues to increase with a
recorded 15% growth in sales.
Noel Leeming’s price and product range for smart devices:
Noel Leeming’s pricing strategy is competitive within the New Zealand; consumers know for the price they pay; they are
receiving a good quality product. Noel Leeming will also match any competitor’s prices, provided that the competition
product is currently in stock within New Zealand and has a physical retail store presence- this excludes online stores,
clearance stores, parallel importing or a warehouse outlet.
Product Price (NZ$)
WeMo switch $80.00 - $110.00
Netgear security system (including camera) $290.00 - $1170.00
Light bulbs compatible with smart home apps/ home automation systems $20.00 - $200.00
Wireless HD camera $200.00
Baby monitor (with camera) $70.00 - $300.00
Tracking device $200.00
Activity trackers/ wearables $50.00 - $500.00
Wireless speaker $230.00 - $330.00
SWOT analysis for Noel Leeming, New Zealand
Strengths Weaknesses
Over 70 established physical retail store locations across New Zealand
Noel Leeming offers Connected Solutions, which aims to provide
consumers with discovering the latest technologies (Noel
Leeming, 2016). It compares plans and devices for consumers,
employees make recommendations best suited to what the
consumer want and need, and connect their consumer across
mobile and broadband networks
Consumers are offered a free half hour training session with a
specialist, who shows them how to get the most out of their
devices (Noel Leeming, 2016)
Their services also offer application of screen protectors,
transferring content from a consumer’s old phone to their new
one on all major mobile operating systems (Noel Leeming, 2016).
Strong social media presence:● Over 58,500 Facebook followers.● Over 1,000 Instagram followers.● Over 1,700 Twitter followers.● Over 300 YouTube subscribers.
Strong community presence through the Mobile Learning Centre
for students and teachers across New Zealand.
Steady growth in sales and market share within New Zealand.
Noel Leeming offers specific ranges of smart devices
Belkin WeMo, Netgear, Uniden, Panasonic, Smanos,
Samsung, Apple, LG, Fitbit
There are many other ranges and brands consumers
are not offered; this is an opportunity for MeshTech
to reach a wider consumer market.
Threats Opportunities
Noel Leeming offer a Set-up and Installation service, which is a
threat to MeshTech as we will offer the same type of service for
our consumers
The tech problems Noel Leeming help with are slow internet
connections, router problems, devices that will not connect to
each other, or problems streaming content (Noel Leeming, 2016).
They also offer the service of delivering and connecting the new
device for the consumer, demonstrate how to use the device, and
take any unnecessary packaging.
There is an opportunity for Noel Leeming to feature
their specific ranges through MeshTech’s website.
This way, they will reach a wider target market, as
well as receive benefits from MeshTech, such as
exclusive smart devices they can sell in their stores,
or discounts when Noel Leeming purchase from
smart devices through us.
Price range for this service:Computer setup service $149-$248
Television/home theatre service $149-$449
Whiteware service $ 89-$169
(Noel Leeming, 2016).
PriceSpy
PriceSpy is the leading price and product comparison service in New Zealand (PriceSpy, About the site and
company, 2016); they strive to deliver the most comprehensive price listings and product information on the
market. The information they provide on pricing and products is completely independent and impartial.
With 1208 stores listed on PriceSpy, they are listed and sorted according to the same criteria, information
regarding price is updated regularly, new products are added as quickly as possible, shipping costs are
displayed when available, stores cannot pay to have negative reviews or store rating removed, and any store
ratings proven to be false violates PriceSpy’s rules and will be removed. PriceSpy do not charge companies to
list their products on the website. A retailer has the option of becoming a ‘feature store’ (PriceSpy, Our
independence, 2016), which offers the service of displaying the store’s logo whenever its name is present and a
clickable link leading the consumer directly to the retailer’s website; the retailer also has access to a statistical
analysis to keep an eye on their competitors and to optimise their product range.
PriceSpy use Facebook and Twitter to update consumers on special deals and new products. With over 28,000
Facebook likes and 135 Twitter followers, PriceSpy have targeted a wide range of consumers. Consumers have
a level of trust and confidence with this price and product comparison website, because of positive past
experiences and an overall established reputation.
The main point of difference between MeshTech and PriceSpy is that consumers do not purchase products from
the PriceSpy website, they are instead directed to the retailer’s website where the purchase can be made.
Consumers purchasing smart devices from MeshTech will be purchasing from our trusted suppliers, unless the
consumer wishes to purchase a featured device from a retailer, they will then be directed to that retailer’s
website to make the purchase.
SWOT analysis for PriceSpy New Zealand:
Strengths Weaknesses
PriceSpy are the leading website for price and product comparison in New Zealand.
PriceSpy do not charge companies to list their products on the website.
The PriceSpy website can be confusing for consumers new to
the concept because of the abundance of products available.
● The categories are simple to understand: phones & GPS, computer components, computer accessories, audio & video, photo & video, computers, home & garden, games & consoles, and sports & outdoors.
Retailers can become a ‘featured store’ on the website, which offers the opportunity for the retailer to have their logo displayed whenever their name is present and a clickable link leading the consumer directly to the retailer’s website.
PriceSpy have developed an app for iOS and Android, so consumers are able to find the best price for the product they want wherever they are.
● Consumers can create a wish list, and filter their searches to make them more narrow to help the consumer find the product they specifically want.
● Consumers can also setup alerts for when a product has reached the price they are able to afford, which they can then purchase through the app.
Offer a wide range of products, not just electronic goods,
catering to as many consumers as possible.
A strong level of trust and confidence from customers
because PriceSpy are an established product comparison
website.
Each category has subcategories.The products are listed according to price, user rating from consumers who have already purchased the product, product ranking within the current market, and other specific information depending on the category.
● This can be overwhelming for new consumers, especially those who are not confident with using product-comparison websites.
The MeshTech’s website will be easy and simple to use for all consumers, and with our live chat option, consumers can ask us about any issues they may face when selecting products.
PriceSpy is not a retail website; consumers do not purchase
products from the PriceSpy website, but they are directed to
the retailer’s website where the purchase can be made
● This is a point of difference MeshTech will stress as consumer wishing to purchase a smart device from us, will purchase from our suppliers, unless they select a product from a feature store we are advertising.
Threats Opportunities
PriceSpy has already established a reputation as being the
website consumers go to when they wish to compare and
contrast products; this is a threat to MeshTech as we will
also be a price comparison website, but solely for smart
devices.
As of 2015, PriceSpy launched new categories for smart home devices.Categories:
● Surveillance cameras● Transmitters and receivers● Sensors and sirens● Controllers
These new categories can appeal to existing consumers, as well as attract new consumers.
MeshTech and PriceSpy can collaborate and feature the same
smart device/s on their websites, increasing the online
retailer’s exposure of the product.
● The retailer will have the benefit of 2 price comparison websites showcasing
JB Hi-Fi
JB Hi-Fi is Australia’s and New Zealand’s largest home entertainment specialists with a range of home
entertainment, whitegoods and small appliances at discounted prices (JB Hi-Fi, 2015). With the headquarters
based in Melbourne, JB Hi-Fi entered the New Zealand market in 2010 through the acquisition and liquidation
of Hill & Stewart (Slade, 2010). With 15 stores currently operating across New Zealand, JB Hi-Fi pride
themselves on having some of the cheapest prices for their products. In the first year of the 2015 financial year,
JB Hi-Fi’s sales decline 4.3% to $113 million; this decline was primarily due to a digital switchover (McBeth,
2015).
Launched in May 2012 in New Zealand, the Helping Hands program involves over 217
employees who make weekly contributions to 3 chosen charity partners through regular payroll deductions (JB
Hi-Fi, 2016). The charities are Youthline, Shelterbox, and Kenzie. The Youthline charity work with young
people to ensure they know where to get help and access to support when they need it. Shelterbox provides
emergency shelter for families around the world who are affected by disasters. Kenzie is commitment to the
improvement of the emotional and mental wellbeing of children, young people and their families who are
affected by a serious illness, a cancer diagnosis, or are mourning the passing of a family member. As recorded
in the 2015 annual report, approximately $55,000 was raised. To further help raise money for these charities, JB
Hi-Fi placed Change for Change boxes in all stores; by placing these boxes at the point of sale, it encourages
customers to donate any spare or loose change they may be carrying. Since the boxes were introduced,
approximately $20,000 has been collected (JB Hi-Fi, 2015).
JB Hi-Fi uses Facebook, Twitter, and YouTube to interact with their consumers. Their Facebook pages has
55,393 likes and is kept up to date with in-store promotions and sales, competitions, and store openings. With
an average of over 2 million Kiwis using Facebook every day, with a majority of those users between the ages
of 25 and 34 (Pelea Z. , 2015), JB Hi-Fi have a strong platform to promote their stores and products.
Their Twitter account has 2,443 followers and is not kept updated as frequently as the Facebook page. Twitter
is not as popular as Facebook with New Zealand social media users; with an estimated 330,000 users, it is
mainly used by 18-29 year olds (Jones, 2013). This age demographic of young adults would have either
finished high school and transitioned into full-time work, or have chosen to continue with their studies at
university; they are starting to make their way through the world and an established discounted electronic store
is the first place they will visit when motivated to purchase a smart device.
JB Hi-Fi’s YouTube account has 2,949 subscribers. YouTube reaches 3 in 10 New Zealand each day (Colmar
Brunton, 2014). JB Hi-Fi’s channel showcases featured products and their functions, trailers to movies now out
of DVD and Blu Ray, and trailers and reviews for upcoming and newly released games. Exposing consumers to
products this way can help persuade a consumer to purchase a product by showcasing the special features.
JB Hi-Fi’s price and product range for smart devices:
JB Hi-Fi has positioned itself as the retailer who sells the same products as the competition, but as the “lower-
price alternative” (Thomson, 2010). From the table below, JB Hi-Fi’s price range for smart devices is broad,
especially with home audio, activity trackers/wearables, and wireless audio devices. Home entertainment is JB
Hi-Fi’s central marketing position, therefore, targeting prices for devices which fall into that category, such as
home audio, and making sure the consumer gets the best deal is crucial for this competitor. The broad range of
prices allows consumers flexibility when considering the price of the smart device they wish to purchase,
because price is one of the defining factors for consumer purchasing decisions; the prices of the devices
MeshTech will offer will be as low as possible without impacting our financial margins.
Product Price (NZ$)
Home audio system with bluetooth $390.00-$700.00
Wireless audio $70.00-$2900.00
Activity trackers/ wearables $50.00-$500.00
Robotic vacuum cleaner $490.00-$1380.00
SWOT analysis for JB Hi-Fi, New Zealand:
Strengths Weaknesses
Being regarded as a new electronic store in New
Zealand gives JB Hi-Fi opportunities to grow in the
marketplace, especially with an increasing trend in
the retail sector.
JB Hi-Fi products are well-known to be discounted,
therefore, consumers may choose to shop with them
first, before deciding to shop with a competitor
retailer.
Their Helping Hands program and Change for
Change boxes placed in all stores shows consumers
that JB Hi-Fi care for more than just profits.
● The Helping Hands programs allows employees to make weekly contributions to 3 chosen charities: Youthline, Shelterbox, and Kenzie. JB Hi-Fi’s 2015 annual report records that approximately 32% New Zealand JB Hi-Fi employees make this weekly contribution.
● The Change for Change boxes encourages donations from consumers and since the launch in 2012, New Zealand JB Hi-Fi stores have raised approximately $20,000 (JB Hi-Fi, 2015)
JB Hi-Fi is still a relatively new discount electrical store in the
New Zealand, and it will take time for them to build a stronger
presence in market.
There have been recorded declines in sales and earnings for the
first half of the 2015 financial year, primarily because of the
digital switchover.
The website does not offer sufficient information about the
product. Consumers either have to search for the product
specifications through another website before deciding whether or
not to purchase the product from JB Hi-Fi, or they must travel to
the closest physical store location and speak to an employee; this
costs the consumer time and be a deterrent to purchasing the
product.
● MeshTech’s aim is to make the searching and purchasing process as easy as possible for our consumers. With our live chat service, consumers will be able to ask one of our technicians about a product they are considering to purchase.
JB Hi-Fi offer a limited range of smart devices for their
consumers- excluding computers, tablets, TVs, mobile phones,
and gaming consoles. The devices they do offer are mainly for
home entertainment purposes.
Threats Opportunities
JB Hi-Fi have a strong competitive pricing strategy.
The smart devices MeshTech will offer will need to
be discounted enough that our consumers know they
are receiving the best possible price, without the,
often associated, illusion of purchasing a cheap
quality product.
MeshTech can feature JB Hi-Fi’s smart device product on the
website. This way, they will reach a wider target market, as well
as receive benefits from MeshTech.
PB Tech
PB Tech is New Zealand’s largest IT and computing retailer with 10 superstores and service centres across the
country, with their head office located in Manukau, Auckland. PB Tech have worked towards becoming a
trusted retailer and supplier to consumers, businesses, and the public sector; they also operate the country’s
largest IT service centre, with authorisation to sell and service leading brands such as HP, LG, Samsung, and
other brands (PB Tech, 2014).
PB Tech are known to frequently offer low or discounted prices on their products because they have a strong
relationship with their suppliers, as well as strong purchasing power within the local market. Through their
global sourcing agreements and local distributions agreements, PB Tech’s products are on hand and ready to
export.
Each of the 10 PB Tech retail stores across New Zealand employee electronics technicians and support staff to
help consumers with any issues they may have with their product. These issues can include if the consumer
needs help setting up or operating the product, or if the product does not work (PB Tech, 2014).
PB Tech offer many finance options for their consumers. For personal finance, they accept Q Card and Finance
Now (personal finance). For businesses, they accept Finance Now (business finance), IBM Global Financing,
and Equico. Offering multiple finance options allows consumers to purchase their product however they are
most comfortable.
PB Tech’s Facebook page currently has 69,817 likes. Their page is regularly updated with the newest product
information, competitions, new software updates for Android and iOS, upcoming in store sales, and technology
reviews. As a strong social media platform for over 2 million Kiwi’s, PB Tech’s presence and regular updates is
an advantage with the 25 to 34-year-old consumers (Pelea Z. , 2015), who are the ones generally purchasing
technology.
PB Tech’s Twitter account has 926 followers and is not updated as regularly as their Facebook
page. Their last tweet was in December 2015 about the new BlackBerry phone. With Twitter mainly popular
with the 18 to 29 age range (Jones, 2013), their presence on this social media platform is not as important than
Facebook.
Their YouTube account has 1,372 subscribers and shows videos with the latest news in the technology world
and reviews for upcoming technology. With YouTube reaching 3 in 10 New Zealanders each day (Colmar
Brunton, 2014), PB Tech’s reviews are a good way for consumers to research a product before they decide to
purchase.
PB Tech’s price and product range for smart devices:
PB Tech’s pricing strategy is to give consumers the cheapest price possible through their local purchasing
power and strong supplier relationships. This strategy is effective, as PB Tech have established themselves as a
discount, cost-cutting retailer which consumers can trust. Their broad range of pricing for smart devices allows
consumers the option to purchase a cheaper device with similar functions to the more expensive items; combine
with financing options, PB Tech have done their best to cater to their consumers’ purchasing power.
Product Price
Activity trackers/ wearables $15.00-$1,350.00
Dash camera $85.00-$310.00
Car audio $95.00-$130.00
Wireless backseat camera for car $270.00
Bluetooth alarm clock $55.00-$180.00
Security system: Elgato Eve Door & Window $70.00-$140.00
SWOT analysis for PB Tech, New Zealand:
Strengths Weaknesses
New Zealand’s largest IT and computing retailer with an established reputation, with a large local purchasing power and strong supplier relationships.
PB Tech’s service centres routinely help and are dedicated to fixing any issues consumers may have with a product.
● Each retail store in New Zealand offers this service, therefore, MeshTech will need to effectively advertise we also provide this service.
Multiple finance options for consumers.
PB Tech’s range of smart devices is not very extensive. Comparable to MeshTech’s other competitors, PB Tech also stock a select range of smart devices, as their main focus is IT and computing related products.
● This is a weaknesses because PB Tech have the potential to be the leaders in smart device technology if they recognised the growing demand for them.
Threats Opportunities
PB Tech’s service centres are located in store, so if consumers have any issues, they can easily
MeshTech can feature PB Tech’s smart device product on the website. This way, they will reach a wider
sort it out in store without having to wait for a technician to come to their home or office.
target market, as well as receive benefits from MeshTech.
Advertising Plan
Plan
Our initial plan like all start-up businesses will be to build brand awareness and to position ourselves in the
market to show that we not only know who our customers are but why they would choose our business. As
there are already a lot of well-known brands in the market for tech products such as JB HIFI/Noel Leeming etc.
We want the positioning of our brand to be shown not only as a company that is new and innovative but also as
a business that is here to supply to the consumer on a specific level. This means our company in the forefront
will be focusing on undercutting the competition and bringing a fair few amount of deals and promotions out
that cater to our consumer, this means our campaign will need to fall in line with this thinking. As we offer a
wide variety of products that fit into the life styles of many, it is hard to pin point one general consumer for our
target market. This means when it comes to our advertising campaign we need to focus on plans that stretch out
to cover and reach a variety. Because of this we plan to connect our brand with different well known opinion
leaders of NZ, primarily that have a large social following as shown from our primary and secondary data
research a main consumer for Mesh Tech is generation Y, a generation born from the 1980s-1995, which is a
generation that is familiar with technology and not uncomfortable with change and new devices, which helps us
as we are a company that can be seen to be built on both – new technology, new business, change etc.
Media
Our plan is to build a campaign that focuses on social media sensory; this means social media that is engaging
the audience. Track Maven (2016) states that in terms of business to consumer sales of retail tech that
Instagram and Facebook not only have the largest audience, but the largest types of audiences that engage with
the business on a regular basis as well. We can structure regular vines, or ‘live-broadcasts’ (web series is
planned for long term goal, when our website has a wider reach) which prospective consumers can potentially
tune into, leaving comments and reactions to the video in real-time, while we use the videos to either educate
consumers on new products,
or teach consumers how to
get the advantages of their
existing product categories
(DeMers, 2016). We will
enable customers to build a
stronger connection to our
brand, and encourage
consumers to remain loyal,
as we hope by providing a greater level of support post-purchase through (essentially) inexpensive videos, we
can dominate in customer retention (Eid, 2013) This is why we have decided to focus on three main opinion
leaders in New Zealand that either have a wide follower basis online such as Instagram, Facebook and
YouTube or are known as a house hold name, that the consumers of New Zealand have become familiar with.
With over 400 million users, Instagram is “one of the world’s largest mobile ads platform” (Instagram, 2016).
Instagram is used primarily by our youngest market of 18 to 25-year old’s (Kafka, 2015). Only 36% of
marketers use Instagram, and User-Engagement is higher (3.1% compared to Facebook’s 0.7%) (Faigle, 2015).
With the younger demographic being more visually affluent, we can utilise Instagram's photo and video tools to
communicate a consistent message, to penetrate the attention of early adopters (Fill, Hughes, & Francesco,
2012).
Our main focus in the beginning will be to engage the audience, this means our opinion leaders will encourage
the consumer to subscribe/follow/add us on all our platforms of social media, which will be Facebook,
Instagram, email and snap chat. “Communication has been variously defined as the passing of information, the
exchange of ideas, or the process of establishing a commonness or oneness of thought between a sender and a
receiver” (Belch, 2012). It also needs to be noted that a big incentive the consumer will have to follow us on
these different platforms will be the fact we will only offer certain deals through these channels.
With the power of social media being one that is always changing and upgrading, we will need to make sure
our plans adapt to that as well. With social media sites like snapchat and Instagram they have the option of a
24hour run, this means that if we were to create an advert on these two channels it would only run for 24 hours
and then be gone. So our media plan needs to adapt to this fast pace action and know a head of time what are
our main targets/ideas to send out to the consumer for that 24 hour run. This is to ensure that in such a small
space of time the consumer is still completely informed on our brand and what we are doing. This will work
well with quick fire promotions that we necessarily don’t want around for a lengthy amount of time or
promotions that invite the consumer down to an event that we will hold.
Creative
Our creative plans are to engage the customer and showcase us as a brand in general, this means with social
media posts we want to highlight the fact that we are new but we are a better or rather more convenient choice
from our competition. Communication occurs when the customer networks or meets the brand, stated as ‘touch
points’ (Shah, 2014). Our main focus is to show the consumer the importance of how our products are still of a
high quality for a lesser price. For example, our business is focusing on finding products specific to our
consumers’ needs, meaning when it comes to our creative design for advertising we want this to be a focal
point, so to when our opinion leaders talk about our products we want a huge part of this to be centred around
there experience using our site – “It was easy to use”, “super-efficient”, “would definitely purchase through
them again”. But to have this happen we will need to make sure our business is doing exactly that.
Our creative process will also describe all our response mechanisms such as our reply coupons, our websites
address or the discount codes that are specific to our opinion leaders. This is so our team can make
arrangements on how to handle and use each one.
Emotional Appeal
A strong positioning of our brand and our values from the beginning will act as our short cut into the tech
market; This along with our opinion leaders creating hype about our brand will create a connection with the
consumer. The marketplace for technology resellers has reached a saturation-point, therefore, this makes
completing a ‘Unique Selling Point’ problematic, as groupings are fetching smaller segments. We can defeat
this current trend by means of Emotional Selling Proposition (ESP), or the Unique Emotional Proposition
(UEP) models (Kazmi & Satish, 2009).
A well-known name promoting our brand from the beginning creates a sense of connection with the customer,
if the consumer trusts the opinions/voice of someone promoting a product they are more likely to follow the
views of this person and in turn want to visit the site or even purchase from the business also. With the
interconnectedness of Facebook/Instagram, we can use the "Trending" instrument which will empower us to
monitor how regular our product is tagged directly, or indirectly cited in conversations (Russell, 2014). We can
capture this language to gather a sense of interaction-acquisition and emotional response initially completed
after posts made by the company – short-term and long term responses (Holt, 1995). We also need to make sure
that our point of difference is expressed both by the opinion leaders and our campaign, this means showing that
our main focus is all about making
sure we go that bit extra with the
consumer. We are able to use the
tools of Instagram, to 15-second-
long videos or photos using 13
artistic filters (Lim &
Yazdanifard). A video uploaded to
Instagram, can fortunately include
a website link, which
inadvertently can serve the
purpose of directing the consumer
to the MeshTech Website. We can
also utilize Instagram to deliver specific messages which we can conceptualise and furnish to the self-construal
nature of our target market (Lavoie, 2015). We aim to form an online community, so that our consumers have a
steady line of communication with us, and we can actively engage in immediate concerns that a consumer may
have. This also enables us to behave proactively in our response to the unintentional encoding of our consumers
which may arise in any IMC communication (Belch, 2012).
Memorability and Familiarity
As said previously our main action to create familiarity within the consumer is by using familiar tools and
house hold names that appeal to them. For example, Josef Rackish a New Zealand fitness guru has over 3
million followers across his social media platforms, by him promoting to his followers regularly about our site
and why he would use our site (Fitness tech wear) creates a bond with the consumer and entices them to
purchase with us as well.
Along with our opinion leaders, campaigns on snap chat and Instagram that last 24 hours means that we can
continuously put new eye catching videos/posts out that attract the consumers’ attention repetitively but are
new each time so that the consumer does not get bored with what is being advertised to them. We can capitalize
on his image to encourage our customers to engage with us over our social platforms, getting in touch with
them, and creating user generated content as social media platforms thrive (Fulgoni, 2015)
Premium Image and Premium Price
Our main point of difference compared to other tech websites on the market is that we will be undercutting the
prices they offer, this means the consumer is more likely to shop with us as we are offering them a better price-
point – this strategy is better known as the “Pierce Price” strategy (Özer & Phillips, 2012), and serves
distinctive purpose as to gain a large market share (establishing explosive reachability) whilst running at
marginal profit (Smith, 2011). A long with this we will also be making sure we have regular promotions and
deals, such as free shipping or free at home set ups.
Our image will also correspond with this and what we are selling/our main values and beliefs, meaning we will
set out our image as being new age and improved from the other companies on the market.
Opinion Leaders
Our biggest driving force behind our campaign is using well-known names in New Zealand to promote our
business in the beginning stages. By well known, we mean social personalities that either have a wide following
or are a common house hold name amongst New Zealanders and specifically our target market of Generation Y
consumers.
We want our opinion leaders to also have an involvement with tech wear/smart devices; this is so they can truly
advertise to their followers why they should purchase from our site. Our main goal with using opinion leaders
to advertise our brand is not to focus on the technology specifically but the customer journey as a whole, so
how easy it was to use our site and why they would choose to purchase with us again.
We will have them promote our brand and name by giving them discount codes that apply to them, or so they
can encourage the consumer to follow us on social media. This way not only do we build brand awareness but
also our following as a whole, meaning our reach for advertising will grow also.
A big decision with using opinion leaders for a startup company like ours is that in terms of an advertising
budget the only cost would be the cost of the products that we decide to send out to them to review. This gives
us more leeway in terms of a budget for our actual campaign that follows the reviews.
First Opinion Leader: Josef Rackich
Josef Rakich is a fitness guru who has a combined following of over 3 million across all his social media
platforms (Facebook, Instagram and YouTube). His main follower basis comes from males ranging from all
ages but that are specifically wanting to improve their fitness/health and well-being. Josef Rakich continuously
engages with his audience on products that not only benefit him but can benefit the fitness community as a
whole. This is where MeshTech would want to involve him, as part of our line and the tech wear that we offer
will be focused on fitness wear, such as – Fitbit, calorie tracking, sleep tracking devices.
In terms of how we want him to promote our brand will be through his Facebook and Instagram site, is this is
where we see there is the biggest engagement with customers. His promotion will be inclusive of him wearing
the fitness apparel and using it in his daily workout videos and then proceeding to talk about where he ordered
it from. This in turn, may provide an additional persuasion pathway – where our consumer’s attitude is moved
or united by other signals somewhat than the message itself (Bencit, 1987).
Second Opinion Leader: Shannon Harris
Shannon Harris is a New Zealand Beauty and Lifestyle vlogger/blogger, who uses tech such as fitness, health
and life style and smart devices as a whole regularly. She has a combined following of over 3.5million on her
social media platforms and has daily posts on snap chat/Facebook/Instagram as well as uploads three videos per
week on her YouTube account. The main consumer market of her followers being females of all ages who are
interested in beauty and lifestyle products as well. We are using her to gain momentum over Aspirational
Persuasive Groups as younger female groups regard Shannon as an expert, and will actively shape theirs (and
aspire to shape other’s perceptions of their self-image to increase the likelihood on being accepted as a
hierarchy member of a peer group, which is lead on the drive of becoming further gifted; monetary and
authority (Blythe, 2009).
Shannon Harris has been seen to promote brands and their websites on her videos, where she unboxes items and
discusses the price point, how long shipping took and if the company was easy to deal with. This is where we
will capitalize on her followers and her “review videos” by sending her products that cater to her and her life
style. For example, we send Shannon a fit bit to which she un boxes on video and talks about our company as a
whole and the benefits of purchasing with us over other brands (i.e. free shipping, fast shipping time, easy to
manage and deal with). We will also supply her with a unique code that applies only to her and her followers
that work on specific products on our site this will be to encourage them to first and foremost visit our site but
also to spend on our site.
Third Opinion Leader: Paul Henry
Paul Henry is a well-known New Zealand television host who is seen through the New Zealand television
screens daily, he appeals to all generations as he has become a house hold name amongst New Zealanders. Why
we would use him is that he holds a platform that reaches out to both male and females across the board,
meaning there is no limitations on age concerning our target market. With Paul henry our main focal point will
be to simply having him wear tech from our company on his show and to mention where he purchased the item
from.
Supply Chain Analysis & Flexibility
Our business needs to adapt a form of flexibility in manufacturing.
Meaning:- New Product Flexibility
- Rate of Volume Flexibility
- Production line flexibility
As a business we need to be able to restructure our supply chain for new products quickly, as we want to have a
fast turnaround for product purchases and distribution. As technology is evolving rapidly, this means smart
devices and technology is also growing at a high speed. Because of this we need to be able to increase our
production line overall to adhere to the demands for new products from our consumers. Our business as a whole
must be prepared for a landslide in the market an upscale or anything between that could adversely affect us.
Components of Flexibility for Supply Chain
Component Description
Manufacturing
- We need to have the ability to reproduce several different parts without general retooling be able
to when it comes to
- A quick turn around on how the company produces and old line of products to then a new
production line that produces new products.
- Capability to change a production line/schedule when a product needs to be modified or to
handle multiple modifications.
Operational
- We want to be flexible with our operational system as we want to ensure we
have the capability to proficiently produce product that are unique and highly
customized.
- A flexible operational system will also be how easy it is to alternate the
operational line in order to cater to a specific product.
Customer
- Flexible on delivery, for example last minute changes in addresses, new products added new
customers on the data base.
- Growth in demand for a particular product for our consumer means overall speed in the
department also needs to upgrade
Strategic
- Our strategic flexibility comes down to what we offer our customer in terms of
variety of products for the customer and a variety of ways of getting that product
to the customer as fast as possible.
Capacity
- Being able to increase or decrease production levels to cater to the needs of the
consumer and trends on the market.
- Shifting capacity of one product to another product when needed
Quality
As our business is new to the market quality needs to be an important selling point of ours, this means that not
only are the products that we are supplying are of a high grade/value. But also the services that we use to
develop and deliver our products are as well. Its important every part of the supply chain is of high quality as,
as a whole the employees of mesh tech or any delivery/manufacturing company that we may use will always
reflect back on us as well. Good quality is important to our consumer because they will already have a
perceived greater risk when purchasing from us as we are a new business and when selling unproven products
from an unknown brand lacks a sense of familiarity in purchasing from our business by the consumer.
Product from Suppliers
Outsourcing is now being seen as a common practice among different businesses in New Zealand, this is
because outsourcing and off shoring offers more solutions for product manufacturing than that of a national
level due to locational differences (Hikmet, 2015), this meaning that in terms of location there is a far better
reach for supplies and manufacturers. With technological advances on the rise, our business can capitalize on
locational advantage by on sourcing our resources which vary considerably in terms of cost to make, quality,
regular availability and availability on locations in order to not only maximize our profits with our consumer
but also take on a competitive advantage with our competitors. Due to high levels of competition already
between tech sale companies, outsourcing of our products will be considered one of our key strategic options to
help maintain our competitiveness as well as meet the expectations of our consumer for products still of a high
quality but at a lower price.
When it comes to importing goods from other countries, our research showed that countries such as China and
India both offered the best deals in terms of websites which offered tech wear and devices at a lower price and
at wholesale value. This included sites such as China’s Focal-Price, Alibaba, Taobao, and India’s Tech-Store.
The advantages of importing our products from other countries means we are getting our product for much less,
which in turn means we can cut down our prices for the consumer and match out competitors.
This is in comparison to New Zealand supplier companies like N3 that whilst offering businesses a discount
when purchasing from certain technology stores, such as 15% from PB Tech (CCCA, 2016), they do not offer
wholesale buying or cheaper prices than that of overseas businesses.
Production
Offshoring part of our production means we will relocate part of our day to day production to a more low-cost
country. Countries like china offer us a gate way into maximizing our production line but with a lower cost
reduction (Statistics NZ, 2010). This as well as the significant savings in labor costs due to the difference
between wages in each country. Average wages in New Zealand workers are anywhere from $15.25 per hour
and up compared to in china where the average wage per hour is $1.44-$1.73 (Hikmet, 2015).
With cheaper labor costs it gives us the chance to hire more employees, in turn a faster turn around with our
production line and goods supplied in general.
The availability of specialized workers and manufacturers that present themselves on the Chinese market in
comparison to New Zealand is much higher as well, meaning New Zealand buyers have a broader range of
diverse quality products and options to choose from when we offshore source in china.
Distribution
Our distribution would start from our factory production line over seas and be shipped to our NZ warehouse
where we will store our products. According to Hikme (n.d.) shipping goods from China to New Zealand is still
at least half the time it takes for products to get produced in New Zealand.
Once our products are in the warehouse when a customer orders a product it will immediately be shipped out to
them, companies like “Pack and Send New Zealand” are a great company to work with in terms of New
Zealand product distribution as they are a one stop shop for all our packaging needs. Firstly, with warehousing,
our company will have access to logistics expertise without the costly investment of a fixed infrastructure, pack
and send provide warehousing and distribution services that cater specifically to the business. These services
include, loading and unloading of containers, warehousing and inventory management, order fulfillment, and
delivery (Nimmo, 1999). This a long with specific packaging services to meet any customers needs, which
include assembling of the product and plastic wrapping or specialized wrapping if the customer needs. All
items that are sent out through pack and send are also track able online, meaning the customer can follow the
journey of their item from warehouse send out to when it arrives at their door.
Pack and send differs from companies such as Fastway couriers at it specifically caters to business deliveries
and storage and on what they can do to best fit your business.
Brand
Brand Summation
As a Technology company, we wish to
convey a persona which is professional,
authentic, simple, together, expert (to
reaffirm trust in our consumer) – and
above all – provide an effortless experience. We wish to convey to our potential customers that we can provide
an intuitive experience on our website and require a low involvement from the consumer post-purchase – by
having a steady level of automated communication.
Brand Name
The name “MeshTech” derived from a collection of words that were synonyms of smart, interconnected, and
technology. We decided that Mesh was unique, not taken by another company in New Zealand within a similar
industry, was simplistic, and easy to say within a sentence (linguistics). Tech was decided as a form of direct
message – to portray exactly what we do,
and what we are about, to set an idea or
expectation in the mind of the consumer
before they interact with us. Bound
together, the words we feel, signify the
collectivist idea that we are about
technology that is intertwined or
‘webbed’ together.
Brand Logo Design
Generally, technology companies tend to use blue as their main colour palette for their logo, which typically
marinates in the subconscious mind as to provide a person a sense of intellectualism, trust, efficiency, and logic
(Wright, 2008). We felt a bright blue was reminiscent to the core message we wish to portray, although yellow
may also reverberate our desired position to be perceived as optimistic, confident, creative, and friendly
(Wright, 2008). When we first thought of “interconnected” and “computing” – the first image which came to
mind for us was a logic board (as seen on the image, right). The circles, lines, and symmetry were familiar
immediately to us, and we felt it accurately reflected the “connected” image, core to our project.
Brand Personality
To formulate an effective brand communication strategy, we endeavour to connect human characteristics,
which resonates wholesomely with our specific target market. We had to carefully construct a consistent and
repetitive delivery of characteristics, which is steady throughout the entire company. Chronic attribution is
activated in memory, and guides a person’s behaviours even after a long period of time where the memory
hasn’t been activated. It is therefore vastly vital that in order to get our audience to remember the most basic of
who we are, that all communications, activities, processes, and actions – regardless of how rudimentary they
may appear – are unswervingly constant (McConnell, Shoda, & Skulborstad, 2012). Taking into consideration
the fact that we have a multitude of products, each of our markets varies in needs and desires, and have an
assortment of skills and experiences with technology – we felt it to be imperative that in each of our
advertisements, we pull our audience’s attention in by associating excitement back to our company, which in
turn may help consumers to view us as daring, spirited, imaginative, and up-to-date (Aaker, 1997). This is
because New Zealand historically has had a low adoption rate of smart technology, but with the release of
Apple’s iOS 10’s “HomeKit” and its excitement that will stimulate from the much anticipated release of the
iPhone 7 coming on September 7th 2016 (Price, 2016), we may see customers actively seeking smart
technology. New Zealander’s highest Web Search for the terms Home Automation, Big Data, and Internet of
Things, especially peaks around September, and again in August – which is the release of Samsung and Apple
products, typically. The most populous regions for these searches tends to be in the main centres, and the
eastern Canterbury region. We decided that “excitement” was the most appropriate personality to adopt as the
slow uptake of smart technology, and yet the anticipation that new technology releases brings, will have
consumers perceive our brand as optimistic and positive. We want to deliver the perceived benefit that by using
our products, our target market (Generation X, primarily) is able to reach their internalised ‘visible
achievement’ goals, and further their expected self-image congruence (Goldsmith & Goldsmith, 2011). We
wish to carry this perspective to drive engagement and further shareability of our messages by spreading joy
(Stenlund, 2014), and to show our consumers that we are fun, exciting, and surprising – show our audience
what is unexpected. The Home Automation sector of New Zealand is still in its infancy, and we feel there is an
inadequacy of drive from competitors, so we are going to start off being more provocative and challenge the
predisposed assumptions and reservations that our target market may have. We will combine surprise,
excitement, and awe-inspired content (for the older group) and humorous (for the younger) to increase our
content’s virility (Jones, 2012). Our older customers (referring to Primary and Secondary Data Results) need a
much more nurtured approach for their decision making processes, and therefore reaffirming our themes to
create optimism, we will cast out a steady flow of ‘story-telling’ adverts, which we hope, will inadvertently
provide these types of consumers with a sense of experience, prior to purchase (Seiter, 2014).
Slogan “Getting Smart Kiwis Connected”
In order for our audience to interpret the fundamental elements of our service, it is imperative that we have a
slogan which accurately, and somewhat simply, defines our core values and what we have to offer. Essentially a
slogan becomes a company’s logo, its “identification mark” (Zyubina, 2011). A truly effective and catchy
slogan grasps a desired action, which becomes the foundation of the campaigns which follow. We chose our
particular slogan as it alliterated the “K” phonic sound, had direct interpretation, and a pun on the word “Smart”
which can be interpreted as intelligent (reflecting back on the principal values and context of our industry),
higher-ability (adding prestige worthiness to the company and to the consumer investing into us), and smart
(relating to the technology we sell). The sentence also has a cheeky peripheral undertone as a call-to-action;
states that we are the company which ‘you’ should use to get ‘sorted’ which is exactly the type of message we
wish to deliver. With this slogan, we aim to create a visual image of getting someone plugged-up and moving
with technology; a double meaning (Baratta, 2010). The slogan delivers an epitomising tone which is useful in
a political environment – it appeals to a particular appetite, need, and has an assertive short-cut expression
(Sherif, 1967). The slogan is best suited as it accurately represents the types of communications we will publish
to our audience, keeping the overall context consistent, which is important for brand communications. The
slogan suits our target market as it is simple, precise, isn’t too vague. We do wish to further test this slogan
however, as we may change it to follow the SUCCE (Simplicity, Unexpectedness, Concreteness, Credibility,
Emotions, Stories) principles – to perhaps gain a slogan that is as equally as sticky (Sgroi, 2014).
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Appendix
Primary Research – Quantitative Survey
Google Form Survey Link: https://goo.gl/forms/Ej3RJgmWOCzfgHXN2
Secondary Research
Earnings Vs Age Group
Generation Vs Social/Technological Issues: Attitudes, Cognitive, Behaviours
Weight – Overweight Vs Under/Healthy Weight
Life-Cycle compared to Income
Life-Cycle Spending Habits
Geographic Region – Life-Cycle Relationship
Geographic Region – Personal Values Relationship
3Sales by Region in current prices (Annual-March)
[Study] Accenture: The Internet of Things (IoT) – The Future of Consumer Adoption
Expenditure by Industry
(Statistics NZ, 2015)
Pet-Care and Pet Ownership
Table NZ Market Volume of Pet Care by Category
Table Market Value by Country
