answer the question in this case study

CHAPTER 11 UNIQUE MARKETING ISSUES 363 WHAT WENT WRONG? How Failing to Establish a Clear Position in the Marketplace Forced an Adorable Robotic Dinosaur to Fall Silent If you've never met Plea, log onto YouTube, type pleo" nutshell, what Moore sald Is that there is a chasm into the search box, and then click on one of the video between the early adopters of a technologically sophisti- Iclips that are posted. Pho is a small robotic baby cated product and mainstream consumers. Early dinosaur-a Camarasaurus to be exact-that was the adopters are enthusiasts -- they are the visionaries who creation of Ugobe. Plea has many lifelike characteristics, seek out new products and try them before anyone else and can interact with people through its 38 sensors. Pleo A company doesn't have to have a coherent marketing can coo, shake, bark, cry, play tug-of-war and even act sad strategy to find early adopters-the early adopters find if you quit playing with it. The baby dinosaur was first them. That's who the 100,000 people who bought Pleo in revealed to the world at the DEMO Conference in 2006. It 2007 likely were, early adopters. According to Moore, a got ample press attention and rave reviews. In 2007, Pleo "chasm" needs to be crossed before a product grows was offered for sale--at a somewhat hefty price of beyand early adopters and mainstream consumers join $350 - and sold 100,000 units before the end of the year. in. If a firm can create a bandwagon effect among its Then its sales stalled in 2008, Ugobe's board removed its early adopters, and a product becomes a de facto stan- CEO and brought in new leadership. Ugobe went to the dard, the chasm can be crossed. This never happened in capital markets later that year to raise additional funding, to Pleo's case, a reality Ugobe realized too late. By thinking keep the company solvent, but no investor would pony up. that Pleo had broad market appeal, the company In April 2009. Ugobe filed bankruptcy and Pleo foll silent focused on growth rather than its basic marketing prob- What went wrong? lem. Eventually, Pleo's early adopters moved on to the Several things contributed to Ugobe's demiso. First, next technological marvel and sales died. Absent accel- although Pleo didn't look that complicated, getting a robot erating sales, Ugobe was not financially sustainable. to do the things Pleo could do was a major undertaking. Interestingly, Ugobe's failure wasn't the end of Pleo. John Sosoka, Ugobe's chief technical officer (CTO), in a At the bankruptcy sale, Innvo Labs, a subsidiary of Jetta presentation about Pleo to a class at Stanford University, Company Ltd., acquired all the intellectual property said Ugobe spent about $7 million building Pleo before it related to Pleo and has relaunched the robotic baby shipped the first unit. When sales slowed in 2008. Ugobe dinosaur under the Innvo Labs corporate name. wes in trouble financially, and couldn't raise additional funds. But according to Sosoka, even if Ugobe had risen additional Questions for Critical Thinking funding. It ultimately would have failed anyway. According to Sosoka and others, Ugobe's real problem wasn't financial. It 1. Who do you think should have been identified initially was a marketing problem that Ugobe never solved. as the target customer for a small robotic baby The core marketing problem had two parts. First, dinosaur? Should children wanting to play with a despite all of Pleo's positive attributes, Ugobe never unique toy have been the target market? If not, what really figured out what Pleo was and to whom it should about adults with a strong interest in technology be sold. Was Plec a pet? Was it a high-end toy? Was it a 2. What steps could Ugobe have taken to better companion robot for adults? Was it a really cool product? understand the meaning of its initial sales? Was it a platform for research? (Sophisticated users 3. Why do you think Ugobe was unsuccessful in its could write software add-ons that would enable Pleo to efforts to secure additional funding in 2008? What "red show more emotion) Pleo was at the same time all of flags" did these investors sen when they evaluated the these things and none of these things. In reality, it was in possibility of financially supporting Pleo and the a category that didn't really have a name or a market. company producing the product? Because Ugobe remained as puzzled about what Pleo 4. What do you think the odds are that Innvo Labs! was and to whom it should be sold as its potential relaunching of Ploo will be successful? To increase buyers, it never figured out Pleo's positioning strategy or the likelihood of success, what stops would you developed a coherent marketing message. recommend that innvo Labs take? The second part of Ugobe's marketing problem is that the firm may have mistakenly interpreted the meaning of Sources: Sosoka. "The Rise and Fall of Pleo, a Farewel Lecture Pleo's early sales. Ugobe clearly believed that the initial by John Sosoka, Former CTO of Ugobe," Robotshop.com blog www.robotshop.com/gorobotics/the-news/latest nens/the-rise- interest in Pleo-the 100,000 units that sold in 2007-was and-all-of-pleo--farwell-lecture-by-on-sosoica-former-oto-of- validation that pleo had broad market appeal. It didn't ugabe accessed February 28, 2011. anginally posted on In his insightful book, Crossing the Chasm, Geoffrey A May 29, 2009). "Turning Out the Lights: Ugabe, Makur of Aobotic Moore explains the nature of this phenomenon. In a Dinosaur Wall Street Journal, Aoni 28, 2009, 21