Marketing and Product Development

The question in the case is whether Kim should spend the flip (2nd round) VC financing in Marketing and scale up the assembly line or should focus the resources on ok tuning the animate result. Our pass is that the political party should allocate well-nigh 70% of $4mn in commercializeplaceing spend and 30% in ingathering maturement and fine tuning the existing one.This recommendation is primarily establish on the fact that the comp any(prenominal) should maximize the premier mover favor and develop barriers to doorway by reducing the comprise of goods sold with the stand by of economies of scale and ventually reducing the sales price so as to be competitive and not let others to enter the space. This is principally because the line of credit model is very easily replicable and thus create the essay of world thrown out of business in the long run.Moreover, the product development and fine tuning is largely replicable irrespective of the number of guests and sever ally node could be segmented based on the 4 bins Kim and Nolan came up with. With name to the spend, the company should focus on Email marketing, Sophisticated tender media, maturation sophisticated search echanics, promoting the deals websites advertising and withal advertising with blogs. moreover, it is worthy a mention that though emails and network affiliates program involves broad spends, they be directly proportional to the amount of business the firm does or the node learnedness. The company may run the risk of 1. Exposing the activities and products in asset to the business model by scaling up the marketing spends and bringing unexampled levels of transparency to customers along with the firms competitors and potential competitors 2. Exponentially increase the customer property and acquisition be by developing ultiple layers of acquisition costs 3.May negatively yarn-dye the performance and write up of the firm if the customers have complaints astir(predic ate) the product However the firm may mitigate these risks by 1. getting maximum amount of market share and create growth in the market size. Thus, creating barrier to entry as a result of scurvy selling price and course of product match. This is mainly because the idea is intimately un hip-hopped and the product is concurrently acceptable. The firm must target to tap as much market as possible before any new or existing player takes it over.Marketing and Product cultivationThe question in the case is whether Kim should spend the fresh (2nd round) VC financing in Marketing and scale up the business or should focus the resources on fine tuning the existing product. Our recommendation is that the company should allocate around 70% of $4mn in marketing spend and 30% in product development and fine tuning the existing one. This recommendation is primarily based on the fact that the company should maximize the first mover advantage and develop barriers to entry by reducing the cost of goods sold with the help of economies of scale and eventually reducing the sales price so as to be competitive and not let others to enter the space.This is mainly because the business model is very easily replicable and thus create the risk of being thrown out of business in the long run. Moreover, the product development and fine tuning is largely replicable irrespective of the number of customers and each customer could be segmented based on the 4 bins Kim and Nolan came up with. With reference to the spend, the company should focus on Email marketing, Sophisticated social media, developing sophisticated search mechanics, promoting the deals websites advertising and also advertising through blogs.However, it is worthwhile a mention that though emails and network affiliates program involves huge spends, they are directly proportional to the amount of business the firm does or the customer acquisition. The company may run the risk of1.Exposing the activities and products in add ition to the business model by scaling up the marketing spends and bringing unprecedented levels of transparency to customers along with the firms competitors and potential competitors2.Exponentially increase the customer retention and acquisition costs by developing multiple layers of acquisition costs3.May negatively affect the performance and reputation of the firm if the customers have complaints about the product However the firm may mitigate these risks by1.Acquiring maximum amount of market share and create growth in the market size. Thus, creating barrier to entry as a result of low selling price and variety of product match. This is mainly because the idea is substantially untapped and the product is simultaneously acceptable. The firm must target to tap as much market as possible before any new or existing player takes it over.2.The increasing customer retention and acquisition costs could alsobe countered by lowing the COGS as a result of economies of scale and effecting the retention by further lowering the selling price without affecting the margins much.3.Negative reputation due to customer complaints could be countered with the help of product development and fine tuning the existing products and ideas based on customer needs and respect system. This could be done by implementing the CRM with the help of 30% of the additional silver raised in the 2nd round.