Part B. A Short Case Study: Gizmo

Orange Company, based out of Southern California, was doing remarkably well considering that only 10 years earlier the company had been merely a hobby for Sam Wilkerson. Sam was fascinated by taking apart computers, adding memory, and then putting them back together. He never expected that his weekend hobby would turn into one of the highest earning computer companies in the world. The companys relaxed atmosphere encouraged creativity and product innovation. The developers were never afraid to try something new. In fact, it was one of these highly experimental projects that led to their newest product: a smart phone that can do it all- simultaneously surf the Internet, text message, perform voice recognition note taking, play music and movies, while still maintaining superior functioning for making telephone calls. With the use of touch screen technology, and therefore no buttons to get in the way, it was unlike anything seen on the market.

While management at Orange felt that their new smart phone-Gizmo-would be well-received by consumers as innovative and cutting edge, they had concerns. They were not sure about their target market, the marketing strategy, and the resulting supply chain implications. These decisions were directly tied to their pricing strategy and therefore had capacity and delivery implications. Who would be their target market and how would they price the product given its abundant features? Should the product be targeted to business professionals, students, or the public in general? If Gizmo did significantly better than expected, could their supply chain handle the added demand?

Orange was considering the possibility of partnering with the largest mobile service provider in the industry, Random Wireless, for exclusive distribution. This would mean that they could utilize an already established distribution channel for their first smart phone release. Orange believed that this would have significant impacts on distribution savings and the ability to reach a wider market. They would also be able to provide service support at many locations. However, there were also disadvantages to selling their product through one exclusive distributor.

Orange knew that they had a wonderful product, but the key to success would be good marketing, an excellent distribution network, and a reliable supply chain. They had some decisions to make.

Case Study Questions:

Q3. Identify at least two different possible target markets for the Gizmo. How would the marketing strategy differ for each target market? (12 Points)

[Insert your solution here]

Q4. Discuss the advantages and disadvantages of going with one exclusive distributor. (4 Points)

[Insert your solution here]