Which Markets AIBO Can Look for as Alternatives to US and Japan Markets - Essay Example

Answer Analysis and Re-Design The new features and benefits in AIBO needed for US markets can be determined by some of the industry observations and practices. The Sony CEO’s initial reaction “What can AIBO do?” on AIBO, as noted by Prof. Youngme Moon (2001) in his case study, very aptly indicates that “utility” of this product is of prime importance to customers. While at the same time, it also needs to provide the differentiating values of entertainment and delight. In addition to these factors, AIBO enthusiast’s site www.aibosite.com also lists AIBO FAQs which point out some of the features which typical AIBO users have been asking for. Consolidating information from all the above sources, following are the features of AIBO which can be built in addition to the present features – 1. AIBO Facial Recognition – it would be very useful if AIBO is able to recognize its owner’s face. As of the date of the case, AIBO did not have facial recognition features. Users would find it more delightful if AIBO would recognize its owners face and express delight just as the actual dogs or puppies do. 2. AIBO Voice Recognition – similar to face recognition, AIBO owners would also find it very delightful if their robopet would recognize their voice and respond accordingly. This would really delight the users. 3. AIBO Self Battery Recharge – there have been questions raised by AIBO owners (AIBO FAQs www.aibosite.com) if AIBO can detect by itself if its battery needs recharge and would go and plug itself in order to recharge itself. This would remove the last bit of dependency of AIBO on its owner. Possibly this can be done by having the battery recharge through its legs which could connect to a docking station and connect itself for recharge. 4. AIBO Newspaper Collection – AIBO can try to make its habits as close to the actual pet dogs as possible. Many US dog owners have a habit of their pets fetching the morning newspapers. As an added “utility” expected by US consumers, this can be a very relevant functionality. There can be specially designed AIBO newspaper port where the newspapers would be dropped by the newspaper vendor. This can trigger an automatic detection by AIBO who can go to the port and fetch the newspaper for its owner. 5. AIBO Object Transportation – similar to AIBO newspaper collection, an additional utility can be added for AIBO where AIBO can pick small objects and drop it at the place in the house as suggested by the owner. 6. AIBO Intrusion Detection – as an actual dog many times serves as a watch dog at night and alerts the owners by barking, AIBO should be programmed as an intrusion detection system and if there is a housebreak, then it can detect movement and sound off a siren as well as give the burglar an electric shock or so, thereby preventing theft. 7. AIBO Bluetooth Usage – AIBO can have Bluetooth enabled memory where owners can use it to transfer data from one device to another. As compared to LEGO, AIBO definitely stands at an advantage as the look and feel of LEGO is like that of an inanimate object, whereas AIBO really provides the feel, delight and satisfaction of a live object similar to a dog pet which many people are used to. Similarly, with PLEO, a dinosaur robot is not as realistic as AIBO which resembles a dog which people are used to. A dinosaur may not be something that all people can relate to. Hence, as compared to both LEGO and PLEO, AIBO definitely stands at an advantage. The above features suggested definitely justify a feasibility study for the following reasons – A. The features suggested above have been definitely used in some or the other electronic / robotic mechanisms. Hence, these features seem possible to be designed. But, it just needs to be researched more on how to integrate these features into AIBO. B. Market for AIBO and demand for AIBO does exist. AIBO and similar products have an enormous popularity which provides the justification for market demand and assures sale of AIBO and its accessories. AIBO historical sales also provide justification of the market C. A lot of data on market / user needs for AIBO features are available through various AIBO enthusiast groups, existing AIBO studies and possible future studies on AIBO. Thus, a lot of feasibility studies will be analysis of existing information and extrapolation of these results to arrive at conclusions needed for feasibility studies. Answer 2 – Constraints and Risks Following are the risks to AIBO re-launch with added features in the US markets – Biggest risk is market risk in terms of actual sales happening in the US market. There are already two generations of AIBO products in existing target market in the US. Assuming that they may have a life span of roughly 10 years, bringing in new AIBO model may or may not find a market in the US due to the already existing AIBO consumer base. This needs to be carefully analyzed through market surveys during the feasibility studies. Budget Overrun – the research and development budgets needed for these additional features can be huge, with possibilities of budget overruns above the originally planned budgets. Pricing risk – it is already known that at existing AIBO pricing and sales, the AIBO project may have just broken even. With the high R&D costs for additional AIBO features, it may become inevitable to price it at a higher price range, but this would in turn give rise to risk of not achieving the desired sales and revenues. Time to Market Risk – the additional features will need time for research and development which may not be possible to be crunched beyond a certain limit. Due to this, if in case there is a significant gap between the feasibility study and the time to introduce the new AIBO in market, the user preferences may have changed in this while leading to lesser than targeted sales. Constraints to the new features can be as follows – 1. Design constraints – the suggested features, although have been tried in other electronic gadgets, fitting them within the AIBO shape and size may be a challenge and may need some compromise in excluding some of the features 2. Budget Constraints – the research and development for all these features may need high budgets. This may not be available considering overall business constraints, consequently needing some prioritization of which features to develop first within the budget constraints. 3. Time to market constraints – as stated above, it is important to time the product introduction in the market. The research needed for this may be driven by the time to market of the AIBO product. Again, some prioritization of features may be needed to meet this constraint. 4. Resource constraints – research and development of innovative products is often dependent upon the resources available in terms of people skills, electronic equipment, physical material, etc. which can assist in developing these additional new features from a product design perspective. Thus, the design and features may depend on these factors and in case not feasible, some of the features may have to be abandoned in some cases. Answer 3 – Market Opportunity and Recommendations The Sony AIBO sales in Japan were at a peak with almost 90-95% of sales coming from the Japan market. As stated in the case study by Prof. Youngme Moon (2001), the earlier positioning made for AIBO was – ‘... the joys of having an intelligent, alert companion at your home without the toil guilt and fretting that usually go along with emotional and physical maintenance …’. This positioning really hit the right chord with Japanese consumers, mainly because many Japanese lived in small apartments where real pets are not allowed. Out of Japanese market, significant share was from the elderly people and senior citizens who bought AIBO as companions. The huge popularity of AIBO in Japan was also reflective of Japan’s general infatuation with virtual toys. Some part of this popularity was also attributable to Japanese lifestyle which contained famous cartoons where robots were portrayed as heroes. This made owning AIBO more desirable for Japanese while the same factor did not play a major factor in US where robots were often portrayed as future enemies of human race. With so much of sales coming only from the Japan market, it was a huge risk of focusing on only one market. Firstly, the market may have reached a saturation point and reached the maximum number of target AIBO customers. Also, in any unforeseen circumstances, if Japan market is lost, it would result in near total loss of AIBO market. Due to this, it was inevitable for Sony to look for markets beyond Japan to take its AIBO product. America was a suitable market because it was receptive to new / high technology products such as AIBO. Hence, user interest and user awareness already exist in case of US markets. Secondly, American business environment was also inviting for Japanese and other enterprising businesses as well as such innovative high class products and services. Due to all these reasons, US region was the best suited next market region to look for AIBO. In order to understand which markets AIBO can look for as alternatives to US and Japan markets, it is important to understand the target consumer profile and then choose the market regions which qualify to be in the target customer segments. Markets other than US as an alternative would have to be developed countries who are used to high technology products and can see value from a entertainment product with a slightly premium pricing. Regions which could qualify for such markets are UK and European countries such as Germany, France, etc. These markets would provide good demand for AIBO. As mentioned in “The AIBO Story” (2004), the criteria used for choosing AIBO target consumers was people who were seeking an entertainment companion as well as people interested in information technology. Interestingly, while the above described technophile has been the AIBO consumer profile, as reported by PR Newswire (2004), ‘… since the arrival of the third generation AIBO, the ERS-7, with its enhanced functionality and real connectivity features, the customer profile of AIBO has become more mainstream. This second wave of buyers includes women as well as men with socially integrated lifestyles looking for companionship at home and new ways of wireless entertainment.’ As suggested in the case study by Prof. Youngme Moon (2001), out of the 135000 AIBOs made available on internet, 132000 were sold in Japan, 2000 in US and 1000 in Europe. In fact, it is also evident that Sony did go to these markets after introducing AIBO in US markets. The existing AIBO UK/Europe official websites indicate that AIBO was indeed taken to these markets with reasonable amount of success. The AIBO product websites are also present in other than English language such as German and Dutch which may possibly indicate AIBO functionalities to be also language customized as per the region. In fact as stated by an article by Joanne Pransky (2001), a slightly modified version of AIBO was released on internet for the regions Japan, US and Europe, of which Europe included following countries - Austria, Greece, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Portugal, Spain, Switzerland, the UK, Belgium, Netherlands, Sweden and Norway. References PROF. YOUNGME MOON, 2001. SONY AIBO – The World’s First Entertainment Robot: Harvard Business School. AIBO Features and User Guides. 2006. URL: http://support.sony-europe.com/aibo/ [accessed 2 June, 2009] John Borland, 2006. “Sony puts Aibo to sleep” URL: http://news.cnet.com/Sony-puts-Aibo-to-sleep/2100-1041_3-6031649.html [accessed 2 June, 2009] AIBO FAQs. URL: http://www.aibosite.com/sp/gen/index-2.html [accessed 2 June, 2009] Overview of LEGO Mindstorms URL: http://mindstorms.lego.com/Overview/ [accessed 2 June, 2009] Pleo - Advice, comparisons, news, reviews and prices. 2007. www.robotadvice.com URL: http://www.robotadvice.com/ugobe-pleo_robot.html [accessed 2 June, 2009] Joanne Pransky. AIBO – the no 1 selling service robot (2001). URL: http://www.robot.md/publications/aibo.pdf [accessed 2 June, 2009] The AIBO Story (2004). URL: http://www.sonyaibo.net/aibostory.htm [accessed 2 June, 2009] AIBO Celebrates Five Years of Innovation and Intelligence, BERLIN, May 6 /PRNewswire (2004). URL: http://www.prnewswire.co.uk/cgi/news/release?id=122331 [accessed 2 June, 2009] Read More