What is this question about?
This product marketing interview question tests your knowledge of what a marketing plan is, the quality of your insights, and the originality of your ideas. A marketing plan should revolve around the product positioning, customers, and competition. A marketing goal, strategy and marketing activities to achieve that goal should be stated.
What is the interviewer looking for?
The interviewer is evaluating you on the following:
- Can you answer the question in a structured and organized way, or do you shoot from the hip and answer without taking a moment to think about the question?
- Do you start with a marketing goal and then list activities? Or do you start listing activities without knowing what the goal is?
- Do you have original ideas for marketing activities?
- Are you articulate or do you tend to ramble?
How to structure your answer?
State the marketing goal. Ask what the marketing goal is. If the interviewer asks you to think of one, proceed with the analysis below, and use it to state a marketing goal afterwards.
Analyze company, competition, customers, and market to understand the current state.
- Company — What are the goals of the company? What are the company’s strengths and weaknesses?
- Competition — Who are they? How do they position their products? What are their strengths and weaknesses?
- Customers — Who are they? What do they want to use the product for? How do they pay for the product (e.g., subscription, pay to buy)?
- Market landscape — What are the trends? What are the legal and regional issues?
State or restate (if it has been provided) the marketing goal.
List marketing activities. Think about your previous analysis and list activities that will address issues to achieve the marketing goal.
- Product — Are there any feature changes the product must have?
- Distribution — How are users going to buy the product?
- Promotion — How are you going to promote the product (e.g., inbound/outbound marketing)?
- Partnerships — Will there be any co-branding, co-sales, or mutually beneficial partnerships?
- Retention strategy — How will you keep users actively using the product?
- Pricing — What will be your pricing strategy (offensive or defensive)? Offensive could be price leadership, penetration pricing, price/performance pricing, or promotional discounts. Defensive could be value-based, maintaining the highest price, price skimming, or bait-and-switch pricing.
- What is the marketing goal?
- Summarize the activities and their effect on the marketing goal.
- How will these activities differentiate you from the competition?
INTERVIEWEE: Are we targeting the US market first?
INTERVIEWEE: Okay. I want to first discuss the current situation with the company, users, competition, and market to evaluate what the marketing goal should be. Then I will talk about a marketing plan to achieve this goal.
INTERVIEWER: Sounds good.
INTERVIEWEE: The Google Watch is a two-sided platform with developers on one side and users on the other, so it is important to keep both their needs in mind. As a development platform, the Google Watch will help grow two core businesses: Google Ads and Google Cloud. So, Google Watch is strategic to the business growth.
Users and Market
Current users of smartwatches are segmented in the market by the type of smartwatches they buy, which can be summarized into four categories: Ultra-Premium, Premium, Standard and Fitness & Wellness. Customers choose smartwatches based on three attributes: features, style and price. The Ultra-premium users care mostly about style, and price is not an issue. Apple’s Hermes smartwatch and Edition smartwatch, which sell for $1000+, are in this category. Premium users care about style and features, but have a limit to what they are willing to spend; usually between $200 and $400. And Standard users’ prioritize price, favoring watches below $100. Fitness enthusiasts care about price too, but for them features for fitness activities is a precondition. Besides these types of users, I think there are additional user types that have not been targeted, such as patients and doctors in the health market. A smartwatch could provide valuable information and notifications to doctors about the health condition of patients.
Contrary to expectations, the smartwatch market took a dive in 2016 and market analysts expect it now to decline from 65% to 25% in 2017; an estimate from e-Market. The main reason for this decline is that users have not found smartwatches useful. The majority of smartwatches need to use a smartphone as a hotspot in order to provide basic features like notifications, emails, and messages. And since a smartphone provides these same features, users are left thinking: “Why do I need a smartwatch apart from the very rare occasion I want to measure my heart rate?” Thus, smartwatch makers are having a hard time convincing users of their products’ value proposition. Users don’t think the smartwatch does something useful for them that justifies the price tag.
Now, let’s talk about the competition. Apple dominates the Ultra-premium market. And, the Premium market is highly fragmented with players such as Samsung, LG, Huawei, Alcatel, Pebble, Motorola and others. Premium is the market with the largest number of buyers, but there is no real winner. The competitors in this market have not been able to differentiate themselves. They compete on a number of features such as GPS, storage, sensors, and style, but they don’t differentiate themselves in what people care about most: How is the watch going to be useful to me? They have yet to explain what their utility is.
Therefore, I think there is an opportunity for Google to enter this market with a smartwatch that differentiates itself from the pack by its utility and with a competitive price. With this strategy, Google can gain market share rapidly while growing a market that is still underpenetrated. Google has a world class AI technology and research team that is advancing faster than competitors. Google AI technology should be used to support use cases that will prove how it simplifies the lives of its users by providing them with more free time to enjoy their lives. The target user should be professionals or people with very busy lives, who will derive great benefit from having an AI assistant.
With this strategy in mind, I would like to brainstorm some marketing activities to help achieve the goal of rapid market share gain.
Let’s talk about the Product first. I think one feature the product has to have is a cellular radio, so the watch can be used independently from the smartphone. Otherwise, users would still see the smartwatch competing with their smartphone.
The Google smartwatch should come pre-loaded with AI technology that will support use cases, where the AI assistant will provide almost 100% correct answers. I think this is crucial. If on the first try users get a wrong, inaccurate or no answer, they are likely to never use the AI features again. The Google Assistant today, can provide answers to some questions that involve search or looking up data from one of the Google Apps, such as Gmail or Calendar. But, it needs to be improved to anticipate all the types of questions users may have. For example, currently the Google Assistant cannot tell me the name of the person I have an appointment with next. Chatbots that are created using the Google Actions API, should pass rigorous tests before they are allowed to be deployed on the Google smartwatch. There are already chatbots available in messaging apps, but many aren’t useful because they cannot provide accurate answers. Chatbots that are likely to be used frequently by busy people, like hailing a ride, making a dinner or hotel reservation, should be fully tested against all possible questions.
As I mentioned before, attracting developers is key to adding value to the smartwatch. I would recommend a campaign that gives developers free watches to implement on and provide development tools to make it easier for developers to develop chatbots. The Google Actions API as well as partnering with third party AI technology, like what Google is doing with API.ai, is a very good start. In addition, providing end-to-end application examples, through documentation and access to Google engineers through email or chat would assure developers that Google will do everything to help them succeed.
Now, let’s talk about distribution. I would start by limiting the number of watches available through all our distribution channels, so we can create a sense of need or urgency in getting the watch.
To generate curiosity, we could borrow a page from Snap and have vending machines or pop-up shops in different locations where people can buy the watches. To emphasize the AI differentiating point of the watches, the interface to buy a watch should be through the Google Assistant and/or chatbot on the vending machine display. Alternatively, users could interact with a web app on their smartphone that connects to the vending machine’s chatbot to buy a smartwatch. The Google Assistant voice interface and chatbot should be rigorously tested to handle any type of question the customer may have.
The Google Play store should also showcase the watches and offer a pre-order program to create excitement.
Accessory devices like watches are things that people prefer to touch and feel. Opening Google Play pop-up stores to reach customers directly would also increase product interest.
To promote the watch, I would synchronize some outbound and inbound marketing activities. I would develop a video campaign to showcase how useful the Google smartwatch is. The video would star famous entrepreneurs, people that are known to be super busy, in scenarios where the smartwatch is so smart that it even corrects the user in certain decisions. For example, a CEO decides to order a sandwich for dinner, but the assistant proposes a different option that will keep his calories per day at his desired target level. The videos should be on display in the Google Play store, across all major social networks, and publications such as newspapers and tech websites that busy professionals visit. Some taglines for the campaign that come to mind are: “working behind the scenes,” “your assistant 24×7,” or “close to you.”
Google could establish a partnership with cellular networks to sell more watches. The cellular network could offer a combined smartwatch and smartphone data package at an attractive price.
Google could also partner with large enterprises so they will buy Google smartwatches at a discount for their employees, and in exchange Google provides attractive ad deals to those companies.
And to retain users, Google could offer free services with each watch, such as access to audio books for free.
I would recommend an offensive pricing strategy. Set the price at cost, which will be lower than competitors’ prices in order to penetrate the market quickly. This strategy will increase Google market share while growing the market because buyers on the fence will be more likely to convert when they compare the value and price with competitors’ offerings. Later on Google can introduce a line of higher priced smartwatches that have additional features to compensate for the profit loss on the introductory watch.
In summary, I think Google can enter and win the smartwatch market if they differentiate the smartwatch using its AI technology to support use cases that will make their user’s lives simpler. There are only a few companies, namely Microsoft, Apple, and Amazon that have the technological power and resources to compete in the AI space, and I believe Google is ahead of them. Google can be the first in entering the smartwatch market with an AI supported watch, and maintain high differentiation by patenting every new AI-based innovation that comes along. To gain market share quickly while growing the market, I recommended an offensive pricing strategy by setting the price for the smartwatch at cost. And finally, I suggested various marketing activities to promote, distribute and establish partnerships to reach busy professionals.