Q.1. (a) Develop a comprehensive segmentation scheme for smart thermostats. Segmentation must focus on consumer and commercial residential applications. You must have at least three different sub-segments under each category, consumer and commercial residential segments. See Figure 1

Figure 1: Market Segment for a Computer Manufacturer

Computer Manufacturer

Business Buyer Consumers Government

Financial Institutions Students Federal

Healthcare Families State

Professional Services Working Professionals Local

(Hint: A very important way to breakdown the consumer segment for smart thermostats is by the type of dwelling unit. Similarly, the starting point for commercial residential applications can also be the type of dwelling or commercial organization. Review variables used to segment consumer and business markets, e.g., demographics, psychographics, etc., to gain additional insights into segmentation.)

(b) Select any 3 criteria listed in Figure 2 (see below) to evaluate the attractiveness of each of the consumer and commercial sub-segments identified in part (a). Provide a brief rationale on why you chose the specific criteria.

Figure 2: Segment Evaluation Criteria

Evaluating Segments:

~Identifiable

~Reachable

~Responsive

~Growth Prospects

~Size

~Fit with Company Objectives

~Competitive Position

Q.2. Identify and briefly explain the targeting strategy(ies) generally being used by smart thermostat manufacturers. Use research to support your answer.

Q.3. (a) Identify and explain the current product life cycle stage for smart thermostats. The answer must encompass 4Ps as well as customer adoption and competitive intensity.

(b) Identify and briefly explain 3 factors (see Figure 3) that are limiting/hindering the overall adoption of smart thermostats.

Figure 3: Factors Affecting New Product Adoption

Factors Affecting Diffusion of Innovation

Relative Advantage

Compatibility

Complexity

Observability

Trialability

(c) Is it possible to accelerate/expand smart thermostat adoption among various residential segments (consumer and commercial)? If yes, how? If no, why not?