Which segment would you recommend targeting first and why? Given your recommended target segment, what do you recommend for:FLUX (software)

7.Specific product attributes andkeep in mind the likely must-haves versus nice-to-haves for the recommended segment. In addition, consider incorporating concepts related to diffusion of innovations for that segment.

8. Make sure to support your recommendation with analysis and logic, such as superior benefits relative to competing products. Make sure to think broadly of competing products from the customer segments perspective.

Students (Learning People ) The final segment of paper people that Wanberg considered was college and university students. There we re about 20.5 million undergraduate and 3 million graduate students in the U.S. in 2016 (with similar numbers in Europe), so clearly this was the largest of the three groups. 24 (See Exhibit 10 for a breakdown by institute type.) These were m illennials (defined as those born between 1982 and 2002) who grew up in the high-tech and social media age; one could envisage two different reactions to digital paper devices. On the one hand, computers, laptops, tablets, and smartphones had become such a common fixture of millennials everyday life that the need for the tactile sense of paper and the desire to take handwritten notes might no longer be an issue for them, suggesting a tepid response. On the other hand, it might be possible to design a digital paper experience that would enhance students study flow and integrate it with their other digital experiences, thus producing a keen reaction. Wanberg explained, Grades are the foundation of a students school life. We believe that better notes make better grades, and thats where the value lies.

Launch and Go-to-Market Decisions The market research had given Wanberg many concrete ideas about the type of features a final product could include, but as of fall 2015 , all he had was a crude prototype (see Exhibit 11) that demonstrated a solution to the slow-ink problem. To make progress , he knew he needed more help and resources. He thus set up meetings with various potential investors and industry experts. He also felt it was the right time to take E Ink up on its original offer of coming back when he had solved the latency challenge and see how it might want to get involved with his venture.

Communication While there weren t many large firms that employed creative professionals , presenting a fragmented market challenge, management believed there was a strong sense of community among them. Many designers and architects learned about new ideas and tools through word of mouth (WOM), and in each profession, there appeared to be highly respectedopinion leaders that most looked up to. reMarkable might be able to reach and influence a large portion of the creative segment by convincing these market mavens to use and positively review the product as a new tool that could vastly simplify and improve the sketching process. However, there were two issues that could hinder this seeding and outreach plan. The first was that the different occupations within the creative segment had different influencers who further varied by country. The other potential obstacle was that these opinion leaders tended to be protective about their reputation and hence expected a highly polished experience before they espoused and advocated anything new. It would be beneficial to solicit their input on how to finalize the product and begin the WOM process before the launch, but the current prototype was crude and imperfect. Hence, they might dismiss the idea and be unwilling to provide a perspective, let alone promote the device. Waiting for their support could result in delayed impact. If the creative segment were targeted, reMarkable would have to find a way to escape this catch-22. The nature of communication efforts with the working professionals segment depended on whether reMarkable decided to target them in a Business to Businesses (B2B) or Business to Consumer (B2C) manner. In the former, reMarkable would primarily approach business line managers in an attempt to convince them to purchase the product for their employees. reMarkable would have to create a sales force experienced in dealing with business executives in consulting or engineering firms. Yet even if discussions with these managers went well, they would then have to help convince the IT department to support the device and, ultimately, get senior management at these firms to sign off on the purchase. Thus, by going B2B, reMarkable would have to go through many decision-making layers and bureaucracy. Wanberg estimated that it could take up to 18 months from initial contact until a company signed on the dotted line. However, when a deal closed, it would result in tens if not hundreds of units sold; hence, a B2B approach, if well executed, would allow reMarkable to amplify sales volumes. Early discussions with investors suggested they preferred that reMarkable take a B2B approach, having seen numerous electronic device failures in the past with companies that tried a B2C strategy.

Pricing Wanberg and his team spent time thinking about the devices end price, which again seemed to heavily depend on the target segment and, to some extent, on the channel decision. He estimated that initially each unit would cost $250 to produce, and this cost could come down to $200 when production reached a high enough level (of about 100,000 units). Based on its market research, and considering the price of other electronic devices, reMarkable felt it should aim for an end price that fell in a range between $349 and $599. For working professionals, the e-writer would presumably play a significant productivity-enhancing role, as documents and note taking were central to their workflow. Therefore, they should have a high willingness to pay, and this might be all the more true if the device was sold to organizations (B2B) rather than to individuals (B2C). A similar argument could be made for the creative segment, where sketching was at the heart of their modus operandi. For these two groups, the company considered a retail price of $499 or above. Students, on the other hand, were typically more budget constrained, and it could take more time for them to perceive the device as a must have that could improve their academic performance. Consequently, they might have lower willingness to pay, and reMarkable would be wise to shoot for the lower limit of $349. If launched for all three segments simultaneously, a price between $349 and $499 might make sense. Some in the company believed there were other factors that could impact willingness to pa y. For example, less printing meant saving on paper costs and printer maintenance and could also have an environmental appeal. Wanberg tended to discount these matters : While a company could try to estimate how much paper and printer expenses would be saved by equipping workers with digital paper devices over a two - to three -year time frame, and while students could consider the savings across four years from not buying notebooks and pens, the numbers may not add up to justify the purchase. At best, these would be secondary or tertiary factors in the decision-making process. Another key factor in deciding the pricing strategy for the device was whether reMarkable would sell it solely online or through brickand-mortar retailers as well. The margins/fees imposed in each of these channels would affect the final price, as well as reMarkables unit margin. On top of that, each unit would bear a return probability (handling a return would at a minimum be the production cost), and a shipping and freight expense of $5. Selling directly through an e-commerce channel would result in a 4% credit card fee. All of these would eat into reMarkables gross margins. The company also expected SG&A (selling, general, and administrative) expenses of about 15%20% of sales.

CompItition Wanberg considered three main sources of competition to reMarkable: other e-writers, tablets, and the default of traditional pen and paper. As of late 2015, few digital writing products ha d been released. Sonys Digital Paper was launched without much fanfare or heavy promotion in 2014 and used E Inks digital paper technology. Functioning both as an e-reader and a digital notebook, it was geared primarily toward business professionals. It allowed users to download and annotate documents in PDF format only, as well as share files and notes with coworkers. Sonys device, though, still suffered greatly from the latency issue. Initially priced at about $1,100 a unit, the e-writer now cost $799 a unit.27 Another e-writer, the Boogie Board, was developed by Kent Displays. The Boogie Board was intended primarily for sketching, as it did not display documents and, hence, apparently was not suitable for working professionals. Lastly, Wanberg couldnt escape his apprehension that when people would debate whether to buy reMarkable, no matter how many bells and whistles he included in it, they would ask themselves whether to shell out hundreds of dollars when they could just keep using pen and paper or, at least for some people, tablets such as the iPad or the Microsoft Surface. While pen and paper offered the most familiar, comfortable, and cost-efficient writing medium, most workflows increasingly relied on computers. The ability to integrat e traditional paper and computers was cumbersome and time consuming, if not impossible in some instances. Existing t ablets, on the other hand, d idnt give consumers the paper experience they desired . Aside from the iPad, which cost roughly $499 and had limited writing options, another popular tablet-like device was the Microsoft Surface Pro 4, priced at $899, which boasted the full power of a laptop. Introduced in late 2015, the Surface Pro 4 was thinner and lighter and its LCD display had greater resolution than its predecessor, the Surface Pro 3. Its most notable improvement was the updated Surface Pen that featured quadruple the number of pressure- sensitivity levels and claimed to feel as natural as pen on paper. The pen also came with interchangeable tips for different writing styles and drawing and was magnetized for easy storage. 29 Samsungs Galaxy Note series was also geared toward a pen -computing experience and included a stylus (the Note 7 was to be released in the summer of 2016 at an estimated price of $899).

Looking fORWAR As his plane approached Oslo, Wanberg rubbed his tired eyes, folded his laptop, and scrambled to organize the notes he had scribbled down during the flight. Collecting his thoughts as the plane made its final descent, foremost on his mind was the target market decision. As a former student, consultant, and now designer of an electronic device , he knew that reMarkable was capable of transforming the day-to-day lives of people in each of these segments. The difficult part, though, was figuring out which group would be most willing to depart from traditional paper and how best to cater to them. With a launch time frame in mind for the fall of 2016 and only a crude prototype created, funding for further development and future marketing was a growing concern . Furthermore, Wanbergs potential manufacturing partners indicated a minimum batch order size of 5 ,000 units that had to be paid for up front before a single unit would be produced. While he would keep reaching out to friends, family, and early-stage venture funds to raise the working capital his company needed, Wanberg wondered if a crowdfunding campaign, such as through Kickstarter , could be a viable means of securing more funds pre-launch. However, reMarkable would have to hire another employee to manage such a campaign and success was by no means guaranteed, as r oughly 80% of technology Kickstarter campaigns failed to meet their goals. (See Exhibit 12 for information on Kickstarter .) He was beginning to wonder whether he had made the right decision by not pursuing a route where E Ink licensed or bought his technology. The next day, back in his office , Wanberg pulled out his laptop and the notes he jotted on paper. One by one he went through them and input the content into electronic documents. He smiled and thought to himself that, soon enough, there would come a day when doing so would be a relic of the past.