1. The Story of a Web Camera
- A Case Study on Product Development and Marketing
The Story of a Web Camera
Presented By: Anders T.K. Leung
2. Outline
• Company Background
• Product Idea
• Product Development
• Test Marketing
• Marketing
• Pricing
• Q & A
The Story of a Web Camera
3. Company Background
• A manufacturer and exporter
headquartered at HK
• ISO9001-certified factory at
Dongguan, China with 350
workers
• Products: modems and
graphics cards for PC
• Developing new product line
of digital cameras since 1999
The Story of a Web Camera
4. Company Background
• First model of digital camera
was launched in 2000 Q2
• More models were launched
in 2001
• All cameras are using the
new CMOS sensor
technology (vs CCD sensor)
• Mainly selling under OEM
channels
The Story of a Web Camera
5. Product Idea
• Market feedback - Demands
for a low cost web camera
(~USD8)
• Our cameras all have web
camera mode but price was
too high!
The Story of a Web Camera
6. Product Idea
• Technology driven - a new
generation of sensor chip
integrated with controller was just
launched -- bring cost down
• Technical know-how - experience
in digital camera and lens
• Management support
The Story of a Web Camera
GO!
7. Product Development
• Defining the core benefits:
• Stylish, cyber outlook
• Versatile - using on desktop PC,
notebook PC and LCD monitor
• Quality - use higher cost Korea-
made lens
• Ready-to-use - bundled with
application software (MS
NetMeeting)
• Value-for-money
The Story of a Web Camera
8. Product Development
• Fine tuning on the industrial
design
• Development schedule - aimed
to ship in 3 months
• Spec finalized, model named
-Internet Cam IC100
The Story of a Web Camera
9. Product Development
• Electronic design:
– Prototype
– Circuit board layout
• Mechanical design
– Housing design
– Mockup sample to test the base
– Start tooling/Review on 1st shoot
• Packaging design
– Color box
– Installation software
The Story of a Web Camera
10. Product Development
Pre-production stage:
• Engineering Sample (ES)
– Review ES with Marketing
– Submit ES to potential customers
• Group assembly with Production
– To find out/fix issues in production
– Review on testing/QC procedures
• Pilot Production
The Story of a Web Camera
11. Product Development
• Issues during product development:
– Product requirements /specifications
– Development schedule
– Product costing
– Suitable for mass production
The Story of a Web Camera
12. Test Marketing
• First version of Internet Cam IC100:
– in a classical beige color
– bundled with MS NetMeeting software
– packed in a small window box -
shipping costs concerned
• 1st shipment for test marketing in
Dec 2002
The Story of a Web Camera
13. Test Marketing
• Feedback of test marketing:
– Image quality is good
– Easy to install
– Packing is not attractive
• Emphasizing on NetMeeting
application - but it is not easy-to-use
• Sales was not ramped up very well
The Story of a Web Camera
14. Marketing
Opportunities:
• Microsoft was promoting video
function of their MSN IM - it is
easier to use then NetMeeting
• SARS outbreak in Q1 2003
discouraging travelling
The Story of a Web Camera
15. Marketing
Actions:
• Launching a 2nd version of color
box with a large window
• Emphasizing on it works with MS
MSN
• Put MSN screen on color box
The Story of a Web Camera
16. Marketing
Core benefits:
• The Korea-made lens and fine
tuning in S/W gives a good image
quality
• Auto white-balance feature
• Can be placed on both CRT and
LCD monitor
• Easy-to-install - by a in-house
developed installation software
The Story of a Web Camera
17. Marketing
Other tangible values:
• Stylish housing attracts end-users
• Product name “Internet Cam”
suggests it works on the Internet
• Works with MS MSN gives
confidence to end-users
• Packed in a eye-catching, large,
colorful window box
The Story of a Web Camera
18. Pricing
• Competition was keen -- always has
price pressure
• Other makers based on the same
chip entering the market, creating
price competition
The Story of a Web Camera
19. Pricing
Our responses:
• To bargain a lower chip price by
increasing the volume
• Emphasize on Korea-made lens
• Stylish housing and packaging helps
to add value
• Sell at a discounted price for highly
competitive markets -- India
• Early entering the market grab
repeating customer
The Story of a Web Camera
20. Pricing
Price trends:
The Story of a Web Camera
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
110.0%
Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05
High
Bottom
High
Bottom
21. Pricing
Price trends (moving average):
The Story of a Web Camera
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
110.0%
Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05
High
Bottom
Moving Avg.
(High)
Moving Avg.
(Bottom)
22. Pricing
Price trends:
The Story of a Web Camera
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
110.0%
Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05
High
Bottom
High
Bottom
Value added by product
design and marketing
23. Conclusions
• Quality product design added value
• Fast response to the market needs
• Sell a solution to meet user’s need,
not just a product (a MSN ready
video cam vs a web cam)
• Eye-catching packaging
• Use price differentiation to keep
market share
The Story of a Web Camera
