The Nest Digital Thermostat Nest, which was acquired by Google in 2014 for $3.2

Question

The Nest Digital Thermostat Nest, which was acquired by Google in 2014 for $3.2 billion, is an influential player in the smart home industry. The company pioneered the digital thermostat and smoke detector. The Nest thermostat creates value by digitizing the entire home-temperature-control process-from fuel purchase to temperature setting to powering the heating, ventilation, and air-conditioning system-and connecting it to Nest's cloud data services."The thermostat aggregates data on real-time energy usage and shares that vital information with utilities, which use it to improve energy consumption forecasts and achieve greater efficiency. The retail price of a Nest thermostat is double or triple that of conventional thermostats Through its "Work with Nest program, the company is opening up its digital cloud program to devices from other providers. So far, partners include Whirlpool and Mercedes Benz. The connection with Mercedes allows drivers to adjust the Nest thermostat to insure a comfortable temperature upon arrival home. The Whirlpool integration provides the means to schedule wash and dry cycles during nonpeak hours. Using its digital cloud platform, Nest can enter other sectors by opening up its digital cloud platform to devices and services from other providers. Recent reports are that Nest is partnering with ADT, the world's largest home security firm.2 The two companies could connect Nest's Internet-connected thermostat with ADT's Pulse system that allows its customers to control their security system through a mobile app. Iansiti and Lakhani, "Digital Ubiquity," p. 95. 2 Google's Nest Close to Partnering with World's Largest Home Securit Company, A Forbes, December 22, 2014 th 2015 accessed p w tor es com on anuar o Propose a segmentation plan that Nest might use to target the small- and medium-sized business market.

Explanation / Answer

Today, Segmentation, Targeting & Positioning is a familiar strategic approach in Modern Market. The Nest Smart thermostat market can be segmented on the basis of i) Component ii) Network technology iii) Application. The Product development & enhancing the techonoly is a never ending process in marketing strategy.

Segmentation Bases:

Segmentation bases can be used to define which market segments Nest is targetiing as apart of its marketing strategy. Based on the Target market identified in the section above, those segmentation bases can be speciifed as,

1.Demographic: The Nest should be identifiy its demographic market share & Target the consumers accordingly.

2.Income : It has to target middle & Upper class individuals with their ads. Generally Nest user lives in a multi bedroom home with home security technology. The company shuold identify the customers expectations in Home security through cloud technology. Income is a significant factor in a consumer's buying Power. The company should analyse the market pricing of similar products and revise its pricing srtategy accordingly.

3. Age: Age is one of the most important variables used in the marketing startegies. The company should target Homeowners & Parents in the 30-50's age range. The Nest should attratct the targeted age group witn their features & technology.

4.Technology: Technology has a significant role in any companies sucess. Nest company should capitalize its technological advantages in the market. Its colloboration with major industry players like Whirlpool & Mercedes Benz should clear indicating its stenght towards its technical advancement. Nest should utilise its technogy in targeting markets.

5.Lifestyle:  Energy consciousness is considered a lifestyle.Lifestyle segmabtation is based on the way in which consumer lives and spends their Time & Money. Nest should research the consumer lifestyle and target the consumers accordingly

6. Small Business Market : The Nest company should always ensures its product availability in the small business markets. The price & Target audience should be identified and draft the marketing strategies accordingly.

7. Medium Business Market: Genarlly in the medium size markets Quality of the product plays an important role in the market strategy. The company can be continuoesly able to provide the After Sales Services to its customers

8. Customer Relationship Management

9. Analysis of competator Strenths & Moves

10. Advertisemening the product.

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