Jasmine Sprayberry Week 5 Product Final (1)

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1 Product Development and Pricing Jasmina Sprayberry Colorado Christian University MKT-460A- Product, Development and Pricing James Douglas August 23, 2020

2 Product Development and Pricing Before any product is developed it starts off as a concept or idea. There are different stages that are incorporated in product development. We must identify the need in the market, present and design the product, develop a minimum viable product release the product and integrate user’s feedback. Smart speakers are extremely common with millions of people owning them. On November 16 th , 2016 Google Home smart speaker was released. This is a device that enables users to speak voice commands, it is a virtual assistant. Google Home is a device that is voice activated and it’s connected to the internet. This a device that is always listening but not recording, It needs commands such as “Hey Google” or “Ok Google” to properly function. “Google Home is Google's entry into the smart home hub field. It is a small speaker tower that is activated via voice commands. Google Home can search the web and perform other functions added by third-party Actions.” (Vigliarolo, 2016). As much as Google Home seems to be a consumer product it is actually very much so useful in business settings as well. While most consumers will utilize a Google Home device for information and entertainment. It's usable by anyone wishing to explore the growing smart home and office markets. Google Home is designed as a hub for internet of things and media devices, giving Google a lot of leverage since it can choose its partners. Businesses can use the different features to automate smart offices and extend their market reach. Every year there are many new products introduced to the market. Product innovation by definition is solving a problem consumers have. There might not be any products on the market that address issues or there are these types of products but address issues in different ways. When creating a new product we must always ask ourselves, is it relevant, better than the competition, and is the innovation of the product obvious? Product innovation is very important it helps create

3 new spaces in the crowded market. “By identifying the gaps and imposing yourself into a new space, you can find an audience and satisfy consumer needs in a way that is new and refreshing.”(Ghelber, 2020.) Product innovation doesn’t always involve a totally new product. For example, Amazon Alexa was launched a few years before Google Home. Alexa is also another smart speaker just through Amazon. When Google Home was innovated it was definitely not the first on the market. Innovation also happens when we look an existing product and add better, and more features. When we talk about innovation and “Blue Ocean” we are saying that competition is irrelevant. (Kim & Mauborgne, 2015) define blue oceans as unexplored market spaces associated with high potential profits. Since the launched of the original Google Home, the company has improved the design, coming out with a Google Home mini and the Google Home Nest. Some of the major capabilities of all of the Google Home products are that they are all hands free, you can have multi users, get direct answers from Google. You can link music accounts, or use Google music suggestions, manage everyday tasks, control your home, such as lights. Google Home smart speakers are compatible with Chromecast. The most current Google smart system or speaker that has launched is the Nest Hub Max. This was designed with smart display, it is perfect for making video calls, leaving video messages, controlling connected home devices. At 7 inches tall and 10 inches wide, Nest Hub Max is a great addition to any countertop, shelf, or shared space. The Nest Hub Max comes with two microphones, 10-inch HD touchscreen display, speaks are crisp to hear though the household. It is available in two different colors, comes with built in camera. This device was designed to look like a mix between the original Google Home and a tablet. Utilizing this device within a business can be beneficial too. Some of the ways companies are video call for meetings, product demos, training. There are many work places that could benefit from hands-free control like this, ranging from a doctor's

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4 office to a commercial kitchen. The Nest Hub Max can be used for daily employee tasks. The privacy is secured via face recognition. Every company that designs a product must have a pricing strategy in place. Pricing a product is a top revenue management challenge. You don’t want to price the product too high it could be viewed as cost-prohibitive, or if the product is too low the price value maybe be diminished. Googles marketing mix involves different pricing strategies. Google has very many different products in order to price these products correctly they must be able to utilize the different strategies. The most notable pricing strategies Google uses are freemium pricing, market-oriented, penetration pricing, value-based pricing. When Google launches the smart speaker in 2016, it was sold for a retail price of $129. This was a product that was directly in completion with Amazon Echo. When Google launched the smart speaker it was priced 28% less than Amazon Echo. (Punwasee, 2020). The strategy behind included cost-plus pricing and penetration pricing. Cost-plus pricing is an antiquated method of setting prices whereby you calculate all the costs associated with producing and delivering your product or service and add a defined profit margin. (Punwasee, 2020). This strategy is without all contemplations identified with client worth and limits the potential evaluating upside. Likewise, it is reliant on your expense to deliver, which may not be showcase based and neglects to think about the opposition. The pricing of Google the Nest Hub Max is at a set price of $229. There is freemium strategy in place to begin with certain applications such as YouTube music. There is a free trial for 30 days, once the 30 days are up there are different subscriptions you can sign up for. The security futures on the Nest require a monthly subscription of $5. Innovation pricing is complicated but it isn’t something that can be overlooked or not done well, it gives the business future profit potential. When we look at Google Home’s price positioning, it is clear to see that dollars were left on the

5 table, and as a consequence, market value will be destroyed. When designing a new product the product creation and development considerations must be made. Google home saw an opportunity to release a smart home speaker and the demand for it. Product considerations are the product characteristics that marketing team must consider when designing a new product or even managing a new product. When it comes to the Google Nest hub max, they grew the product with more advanced setting, more features, they considered what was missing at making the smart speaker smarter. It’s very often that market research is done prior to designing products. Google took the design of the original Google Home and re- positioned it with the Google Nest Hub Max. Google generates revenue from their products. As result in that Google is constantly working on everything in their power to capitalize on the potential growth areas. Googles vision to dominate the smart home market and own the entire stack of hardware devices ties in closely with the digital assistant. Their decision to bring The Google Nest under Googles hardware division signals Googles interest in integrating all of their products with a simple assistant. In the long run providing the company with more channels to advertise and provide more information to consumers. Google is constantly growing and striving to build sustainability in everything they do. Their business now is including hardware, and according to their website the commitments are going to remain the same. Googles ambition is that every product they build will leave their customers, people, the planet and the communities the same. When it comes to sustainability of a product, it must provide environmental, social and economic benefit while protecting the health of the public. Google Nest Hub is a product and services for circulatory and reuse materials at their highest

6 environmental and social value. According to Google, their products are and will be recyclable with a drive to maximize recycled content wherever possible. Their goals are to be good neighbors in the communities. The Google Nest Hub is made by Googles hardware to and from Google’s direct customers that are carbon neutral. Google requires high ethical standards when it comes to product development and design. The goal is to create the type of technology that puts people first ad expand the need, and gain benefits from the technology. Google Home Hub and the Nest Hub are designed to be fully recyclable. “Google Home Hub is designed to be small. Minimizing the size and weight of the Google Home Hub allows materials to be used more efficiently, thereby reducing the energy consumed during production and shipping as well as minimizing the amount of packaging.” Googles company culture is known worldwide. It is one of the most influential companies in the world. Not only do they offer a great environment to work at they provide a lot of perks. Their culture is flexible, they encourage employees to be creative and be actively involved. Building a sense of community is one of the first steps to creating a more positive company culture Google encourages their employees to gain trust and loyalty of their customers. Technology innovation is huge, sustainable long term growth and profitability are key to Googles success. They have a great way of caring and supporting the communities. After all their company motto is “don’t be evil”.” Be kind to one another, tenderhearted, forgiving one another, as God in Christ forgave you.” (Ephesians 4:32, NIV). All great products take a lot work, the products are innovative, they have a good pricing strategy, and framework. Product creation and development are all taken into consideration.

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7 References The Holy Bible, new international version. (1984). Grand Rapids: Zondervan Publishing House. Vigliarolo. B (October, 2016). TechRepublic. Google Home. Retrieved from https://www.techrepublic.com/article/google-home-the-smart-persons-guide/ Ghelber. A (December, 2020). Revuze. What Is Product Innovation and why is it so important for brands. Retrieved from https://www.revuze.it/blog/what-is-product-innovation/ Blue ocean strategy: How to create uncontested market space and make the competition irrelevant . Punwasee. A (2020). Revenue. New product pricing: A strategic approach. Retrieved from https://revenueml.com/new-product-pricing-a-strategic-approach/

Jasmine Sprayberry Week 5 Product Final (1)

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