1.
Vodafone Smart
Home Project
OutOfTheBox Team
Dossena Erica 1733229
Fratti Annalisa 1504331
Girardi Giulia 1731769
Korkusuz Egemen 1708032
Matteoda Michelangelo
1729227
Scala Francesco 1731082

2.
ü Executive Summary
ü Vodafone Company
ü Methodology Used
ü Opportunity Identification
ü Concept Generation
ü Concept Testing
ü New Product Launch
ü Market Sizing
Agenda

3.
The purpose of this project was to develop a B2B2C business model for “Vodafone Smart Home”
concept.
In order to reach our aim we firstly analyzed the current Italian market, and we noticed a contradiction:
while the Italians’ patterns of consumption, habits and the overall system are still significantly
backwards, there is a considerable interest in everything that involves technology development and
environmental sustainability that results in the corresponding trends.
We therefore combined this starting point with the results of our quantitative and qualitative research
and with our managerial intuition. The result was the creation of a concept that would parallel these
market trends with an additional added value: an innovative platform to manage home utilities aimed
at making consumers’ life more comfortable.
Executive
Summary

4.
Vodafone Italia aims at being the country’s most admired
telecommunication brand, confirming its leadership in the
mobile market and strengthening its position of reference as
alternative operator for the home services.
Vodafone
Company
The Mission

5.
Since 2001, Vodafone is part of the Vodafone Group, that with its 391 millions
customers is one of the world’s biggest mobile communication groups.
Thanks to a constant growth throughout the past 15 years, Vodafone is today the
leader in the Italian mobile market with over 31,7 millions customers, counting
for around 19% of the overall profit of the Vodafone group.
The contribution of the company, direct and indirect, for family,firms and public
administration accounts 6,6 billions of euro, contributing to the Country GDP for 3
billions. Vodafone is the first operator in the mobile phone market in term of
market share, however in the landline sector it ranks fifth with 2,5 millions of
customers.
Some
Results
Vodafone
Company

6.
Innovation has been the driver of Vodafone strategic choices
throughout its whole history, and it was the element that led to
its success. As consumer-centered company, since their first
promotional campaign “Vi diamo ascolto”, this element has
been the distinctive trait of this company.
Vodafone investments on inovation
It has spent around 900 million euro in technology, in fact it is the first mobile operator offering the 4G even on
Smartphone (January 2013).
In April 2013 the company launched its service of Optic fibre in Milan with the objective to cover 25% of the entire
city by 2015.
On the Smart Technology Vodafone is investing to test and create new solutions focusing on the personalization
of the smartphone’s apps and web based services. Moreover Vodafone has tried to sustain the development of
the multimedia service without leaving the core business.
Vodafone
Company
Vodafone has invested a lot in the radio electric line through the
AMR (Automatic Metric Reading) to monitor its electric consumption.
Through these data Vodafone in fact can check and limit carefully
the 48% of its energy’s expense and if they are in line with the data
provided by the suppliers. The aim is to extend the line up to 700
appliances.
Core Values

7.
Identify and develop a product/service within the
concept of smart home by adopting the perspective of
private and public services:
Vodafone2Enterprise
The Brief

8.
Methodologies
Used

9.
Methodologies
Not Used
Human Factor Research
It was not possible for us to use the Gap analysis
methodology (neither the AR nor OS one) because of
the impossibility to find direct competitors in the market
for our product. It was therefore impossible to ask people
to rate its attributes and to compare brands.
Furthermore, even if we asked questions about the
similar existing products (e.g. the smart plugs, those
without the app with the different functions or the
inclusion of the internet ADSL and fixed telephone), only
few respondents (the current innovators and early
adopters) could have answered, since the are not mass
market products yet.
Even if the interface is not always
convenient and simple, we didn’t apply
the human factor research because
our user segments’ profile are not poorly
understood and there was no particular
need to find which types of people and
in which settings interact with our
offering.
Gap Analysis

10.
Of course we would have had more results if we
had applied Compositive and Decompositive
tools in order to test our concept, but taking into
consideration the aim of this project and the
limited time resources we opted at this stage to
focus more on the results of two other concept
testing methods: focus group and questionnaire.
Moreover, since our concept opens up new value
trajectories we preferred to focus on the
opportunity identification stage.
Compositive &
Decompositive Tools
ATAR model was not used for
market sizing because our product
doesn’t exist in the market yet.
Therefore the four variables could
not be calculated. Bass and
Rogers was used instead.
Market testing
No methodology from the
market testing phase was
applied because of the
impossibility of producing the
actual product in question
and the related app.
ATAR

11.
OPPORTUNITY INDENTIFICATION
AND SELECTION

12.
Focus
Technological Dimension: Technology strengths include Vodafone’s high level of
connectivity, innovative products, application and services.
Market Dimension: Vodafone focuses on developing innovative products and
services to be part of people’s everyday life by making life easier.
Goals
Developing innovative products and services gives Vodafone the ability to achieve
its goal of global reach, while continuing to grow its business at the same time, by
developing commercially viable, scalable services that support sustainable growth.
Guidelines : Vodafone aims to be a selective innovator in the services with cost
efficient solutions.
Product Innovation Charter
In order to keep focused
and asses in the best
way which was the
idea to pursue, we
found the need to draw
a PIC.

13.
SMART
PARKING
VODAFONE
HUB
SMART
CLOSET
GAMING
STATION
We Started out by considering several
Ideas…

14.
Even if it concerned a “smart life”, did not belong to the Smart Home
framework.
It would have been difficult to implement due to several factors involved
(people wear many different brands which is hard to optimize for an app,
it would have implied mass-suggestions, etc.)
We thought about this idea starting from the consideration that in general
consumers have a high willingness to pay for entertainment products and
this would have potentially granted us a double digit growth. The reason
why we abandoned it was that each game producer already has an
agreement with game console companies, furthermore this project would
have need a huge amount of R&D investments despite the fact that the
games market is already saturated and has its established players.
… and eliminated the ones we didn’t believe were
appropriate for the following reasons:

15.
After evaluating different possibilities, and always having
in mind the aim of reaching a double digit growth, we
opted to pursue an idea that would help the utilities
company to track better their clients’ consumption and
obtain more data about their services’ usage.
On the other side we wanted to simplify life of consumers,
and at the same time to be eco friendly.
The key word at this step of the project was WASTE,
specifically for what concerned the following spheres:
- Electricity and gas
- Water
- Food
- Internet ADSL and home phone
Our initial idea was therefore an app inside the Vodafone
station, through which consumers could see the
consumption and take the bookkeeping of all the before
mentioned elements.
Managerial Intuition
We then decided to carry on
with the idea of the
Vodafone Hub, because it
had several financial and
strategic strength points.

16.
MICROENVIRONMENT
ANALYSIS
Home automation
Landline and ADSL
Electricity and gas
The food issue
Secondary Data
.
We therefore started making an online
research of secondary data in order to
verify that this is actually a significant
problem in the actual Italian market and
the results were the following:
1
2
MACROENVIRONMENTAL
ANALYSIS
PEST

17.
MACROENVIRONMENTAL
ANALYSIS
POLITICAL FRAMEWORK
• Complete liberalization of the gas & electricity
market in the last years. Before it was a
national monopoly controlled by Enel.
• Implementation of measures aimed at
reducing energy consumption of the Italian
buildings through the “Certificazione
energetica degli edifici”.
• 55% tax detraction in case of energetic
requalification of the existing building was
implemented in 2007
SOCIAL
• Paramount imortance of the house for
the average italian as vital core of the
family
TECHNOLOGICAL
• The number of families that owns a personal computer has
grown (+ 1,2 %) as well as the ones that have internet
access (+ 2,1 %) and broadband connection (+ 2,4 %) ;
still 4/10 italians do not benefit from digital technologies,
even if it would make them save money in numerous fields.
• The market for smart home systems and services in the
Italy is set to become a major market opportunity for
technology and service providers over the next five years.
• 2% of homes in Italy can now be classified as "SMART",
and revenues from related hardware, services and
installation fees will grow at a 27% CAGR 2017.
ECONOMICAL
• High level of income taxes leads italian people
to seek for ways to cut their expenses and
regenerate their consumption habits.
• Italian unemployment rate is running at 12 per
cent and expected to increase to even higher
levels in 2014
• Policies to reduce wastes :10% energy savings
target for 2016 through the National Energy
Efficiency Action Plan in order to save up to
126.3 TWh in buildings, transport and small
industries.
1PEST

18.
The HOME AUTOMATION
The home automation market in Europe
is living a great phase of development,
with yearly growth trends(CAGR) of
5,1%.
Italy currently is ranking 3rd after Great
Britain and France in the European
home automation market.
Even if automation systems are still perceived as
expensive products, prices are decreasing at a
global level due to the competition coming from
various operators of the sector, a better
communication on the advantages of the systems
and the high penetration of tablet PCs in the Italian
houses.
0% 20% 40% 60% 80%
Tren-no Alto Adige
Valle d'Aosta
Veneto
Lombardia
Piemonte
78%
63%
61%
60%
55%
-20% -10% 0% 10% 20%
15%
-7%
-11% Sicilia
Basilicata
Sardegna
Top and worst performers in the
construction of buildings provided
with automation systems
Source: elabora-ons on a study Immobiliare.it
2MICROENVIRONMENTAL ANLYSIS

19.
Landline & ADSL
For what concerns the landline &ADSL market the
undisputed ruler is Telecom Italia, the major
telecommunication company of the country, with 70%
market share. Fastweb and Infostrada only retained
respectively 9% and 8% of the market.
In a global landscape where the
telecommunication companies have seen
their revenues and volumes increase
substantially, the Italian operators have
had a decrease in revenues of 4,3% in
this sector.
This was mainly due to the lower
purchasing power of consumers and the
increased competitive dynamics among
the main actors triggering price wars.
While the landline access sector had a
4,2% decrease, the broadband access
registered a 1% increase from the
previous year. The broadband penetration
in the Country is still low compared to the
EU5 average due to a structural
backwardness.In conclusion, the commercial strategies carried out by
the various operators didn’t result in an increase of the
market but in a continual change among operators by
the consumers.
2MICROENVIRONMENTAL ANLYSIS

20.
MICROENVIRONMENTAL ANALYSIS
ELECTRICITY & GAS
The Electricity market is dominated by Enel with
more than 27 % market share, followed by Eni and
Edison.
Eni
Enel
Edison
Gdf Suez
Iren
E.On
Hera
Royal Dutch Shell
Plc
A2A
In the Gas market Eni is the
leader with 28 % market share, but
even in this case Enel and Edison
follow after.
Source: Federazione Italiana per l’uso razionale dell’energia
In spite of the liberalization of the
sector, only 1 consumer out of 3 has
switched his operator for the
electricity and for what concerns the
gas, this happened only in the 23%
of the cases.
2
Source: Autorità per l’energia elettrica il gas e il sistema
idrico
Market Share in the Italian
market

21.
Final prices of Electricity for domestic use
Final prices of Gas for domes1c
use
In Italy the price for electricity
has steadily increased while
for what concerns gas, a
reduction in most of the
European Countries has been
observed.
c
c
2MICROENVIRONMENTAL
ANALYSIS
Electricity & gas
Source: Autorità per l’energia elettrica il gas e il sistema idrico

22.
Electricity consumption in TWh
Source: Elaborations of Autorità per energia elettrica e gas based on data
GRTN/TERNA
On the consumption
side, the yearly trend
shows a constant but
flat slowdown due in
part to the economical
downturn and in part to
the policies of energy
savings adopted by the
Italian Government.
2MICROENVIRONMENTAL
ANALYSIS
ELECTRICITY & GAS

23.
The FOOD ISSUE
Separate collection on a regional basis
Notwithstanding a significant
difference between the North
and the South, in all Italian
regions a continual increase
has been observed in the
separate collection in the last
years, reducing year after year
the amount of
Per capita food losses and waste, at consumption
and pre-consumptions stages, in different regions
According to the Food and
Agricultural Organization every year
1,3 billion tons of food are wasted,
equal to 1/3 of the total production
destined to consumption.
In Italy 149 kg of food are wasted
annually per capita but the
Economical crisis has caused a
57% reduction.
Source: Global food losses and food waste by FAO
Source: NoiItalia 2014 by Istat
2MICROENVIRONMENTAL ANALYSIS

24.
Target: Italians, 18-60 y.o.
At the initial stage we thought that our target could
have an age range from 18 to 60 years old. The
reason of our decision is that we believed the
needs and perceptions about waste characterized
this whole range.
However, from the next step on, we decided to
separate this wide range into 2 groups: one made
of people from 18 to 30 and the other of people
from 30 to 60.
The logic behind this choice is that, even if needs
for saving money and not wasting energy are the
same, their life style and habits for what concerns
this topics are really different.
In order not to loose focus and to be effective we
therefore carried on 2 separate focus groups.
We furthermore needed more
specific quantitative data directly
from the side of the consumers
and therefore we launched an
online survey.
Online Survey

25.
They believe that on
average:
19,71%
of their electricity
bill
13,71% of their
gas bill
Is DUE TO
WASTES
THEIR WASTE PERCEPTION
% of respondents that strongly
believe (top 3 boxes) that the
following issues are
important:
Electricity waste: 58%
Water waste: 72,8%
Food waste: 77,8%
Gas waste: 54,3%
FIDELIZATION
% of respondents that never changed their
supplier:
- Electricity: 60,5 %
- Gas: 60,5 %
- ADSL: 33,3%
% of the respondents that switches ADSL
supplier every 2-3 years is 40%
24,7% don’t own a landline telephone

26.
HOME EXPENDITURES MANAGEMENT SYSTEM
% of our respondents behaviors about monitoring utility
expenditures
-Don’t monitor : 35,8%
-Monitoring irregularly : 51,8%
-Monitoring monthly : 12,3%
- Average level of satisfaction with current system : 6,12/10
- 42% believe they need a personal adviser to manage home
expenses
For 53% of our respondents, managing
the bookkeeping of the house is a
significantly annoying task. (top 4)
70,4% would like to spend little time on
the management of the house (top 4)
73,5% would like to spend the least
amount possible on bureaucracy
69% pays a lot of attention to always
save as much as possible

27.
The most significant results
are:
Keeping all the bills to check for expenses, occupies unnecessarry space in
home.
It is hard to find the bills of the previous months, because consumers need
to look for in their archives.
The necessity of swithcing all the lights off is an annoying task, specially when
consumers want to relax at home and are in comfortable situations, as for
example before going to sleep.
Please find in the appendix the videos of the most relevant and
significant moments of our empathic design
Emphatic Design
The reason why we applied the technique of
the empathic design is that our customer
population is defined and the usage is
embedded in the environment but the usage/
experience of managing home expenditures is
very complex and therefore difficult to articulate
in all it aspects. Thanks to the fact that we
were able to observe consumers in their native
surroundings, we were capable of more deeply
analyzing the problems of the potential user
population.
Tracking the expenses for people
is very time consuming and a big
problem.

28.
The first insights were about the amazing product experience of the consumers. “The
comfort of leaving the house with the lights on is something unbelievable” Giorgio (45).
Besides the high level of technology of the products and difficulty to understand their usage
in the very beginning, once the customers were able to set the application in a proper way
they were able to exploit all the benefits of the service.
Most of them declared to be very satisfied about their purchase’s decision.
Customer Case Research
The reason why we used this
technique is that we wanted to clarify
the full process of energy consumption
in consumers’ homes. In addtition, it
was useful to us in order to see hidden
decision makers, unintended uses and
unseen obstacles to purchase or
consumption of the product/service.
We decided to start from the stores and the channel
through which products similar to our potential
concept are bought. Through the retailer we
managed to obtain contacts of some customers
willing to take part in our research. We choose Belkin
as a proxy firm for our service, as producer of general
purpose elettrical devices and connectivity solutions.
The biggest obstacles emerged at the level of the purchase decision.
The service and the product was able to rouse a lot of interest
among different types of consumers, but all of them though carefully
about their final decision of purchase. Only after a careful research
and comparison about the prices and benefits they decided to buy
Belkin.

29.
Moreover they were extremely worried about the settlement of a smart
plug cause they considered the lights as a “very sensible part” of their
house.
Only one of them was expressing its problem, and he needed to call the
company’s technicians to fix the plug due to certain problems with the
energy supplying line of his home.
Customer Case Research
The awareness of the company in the
high tech sector was really important to
them as they stated that just the name
and the reputation were able to influence
them in their choice.

30.
Date: 06/05/2014 – From 7 to 9 p.m
Location: Röentgen Building Room SR01
Technical support: videocamera and audiorecorder
Target population: 18-30 y.o.
Projective techniques and methods applied:
ü Interpretation and completion task
ü Metaphorical elicitation
Focus Group
Complementary to our survey, a focus group was
carried out in order to have a direct contact with
consumers first of all to gain insights and opinions
about their way of consumption in house and their
approach with the waste. The final aim was to
observe and to test the perception about smart home
and our innovative service. This technique was
specifically selected because of its appropriateness
when it comes of gathering ideas for the introduction
of new product and services.

31.
.
CRITICAL FINDINGS
The first things consumers think about when someone talks
about smart home are concerning environment,
sustainability, energy and electricity consumption.
“When I think about smart home I think about a
house which cares about the enviroment”
Smart home was also connected to kitchen, such as
smart fridge, oven. The aspect of monitoring the
house, the smart light and the control were also
mentioned several times, where smartphone was
imagined as a possible device to manage the
house.
Please find in the appendix all the collages produced by our respondents
Focus Group
We found the need to explore and study what
smart home means to current consumers. We
believed that it was paramount to understand
what consumers believe a smart home is, what
they think about it and moreover what are their
expectations from it
TAT

32.
We asked to our respondents ‘’what do you think these people are thinking or saying?’
Through these images we wanted to understand how do people feel about managing the
expenses and effects of it to their lifes.
Please find in the appendix all the images used.
“I guess they have got wrong the bill”
She is probably checking the counter because she
thinks that the estimation the electric or gas provider
has done are not right.
They are probably wife and husband discussing the bill
and comparing each other with the previous expenses
of the last month.
Thanks to this methodology we were first of all
able to probe attitudes and feeling of individuals
deeply and systematically in relation to our
subjects. We specifically chose this methodology
because of the fact that it is used in situations in
which breakthrough or unconventional offerings
are desired, as in our situation.
Focus Group
Metaphorical Elicitation

33.
Through this image we
wanted to understand the
feelings of respondents about
waiting in a line
for payments.
“Such a mess. There is the number 20 and I
am like one hundred..Is it possible that there
is not an easier way to do that..”
She is probably a girl annoyed by the huge queue of the
post office.
Focus Group
Metaphorical Elicitation

34.
Focus Group
In general, they are aware, planned, organized and careful about their expenses, but for
most of the respondents the care for the house is perceived as a disturb and a waste
of time. Moreover for the bills there is an approximate check and the control was done
in comparison with the last month, but without spending large amount of time doing it.
The reason behind it is to save money on expenses for both economical and
environmental reasons. For the same reasons, they check the lights and energy
consumption expense because it is an easy task.
For the food they care about offer and promotions of the retailers and
they tend to save money leveraging on the quantity purchase.
Moreover, they were more careful about the food’s waste (just 5-10€
out of total expenses of the month). They have never purchased food
with e-commerce due to lack of trust.
All our participants live apart from their families; alone or with flatmates they have to deal
with the management of the house and above all its expenses.
Utilities
Food

35.
In the last part of the focus group, we explained our idea.
Some of them were sceptical about its value, for several reasons:
• In a smart home everything should be controlled but too many variables involved could lead to many
threats and management problems. We assessed that our idea was too complex,
since it involved many different factors (electricity, gas, water, food), and difficult to deliver and
communicate. It was difficult to express it in a focused way and it was difficult for them to understand and
most of all remember all the features of our concept.
• Their willingness to spend was in general really low, partly
because of their lack of financial resources (they mostly get funded by their parents), partly because The
concept and its following benefits were difficult to deliver and communicate, therefore most of the
consumers do not perceive its value and finally because it was strictly dependent on how much they will
be able to return from their investments
“Nice, but I would
rather offer this to
families”
This was a turning point on our concept generation
phase. We decided that this age range could not be our
target.
Focus Group
• Some were not interested in having objectives for their expenditures because
they are already used to avoid wastes. They preferred suggestions on how to
save money.
• This target usually moves in/out houses very frequently, therefore the isn’t willing
to sign up middle-long term contracts for the house.
Clarissa, 22

36.
OUR NEW TARGET
Families and in particular parents for instance, want to have the control on their expenses
and moreover they want to control the devices which their kids use. Simply they want a
control over the whole devices at home. Moreover the families who own middle-big houses
can be more willing pay since they have a lot of devices in house they need to control.
According to our insights, we deduced that the young families moving into the new house
are more willing to try new offer; in addition to this the generation Y is much more sensible
towards the environmental issues and they are more willing to reduce the wastes.
We also think that part of Generation X is interested in buying our
service due to their higher willingness to pay but on the contrary a
barrier for this target can be the usage of the smart devices, since they
have lower penetration of the digitalization regarding smartphone and
application in general, but our app is thought to be extremely easy and
simple.
After deciding on our actual targets, we decide to test our idea with a
second focus group,to see if our project can really work or no.
We therefore decided to test this intuition with further analysis.

37.
DECISIONS TAKEN
We also decided to eliminate the food aspect of our initial idea, in order to
have a more focused and effective offer. This is the reason why it will not
appear in the next focus group.
SMART PLUG/
SWITCH
+ APP

38.
We therefore refined our concept, also through the use of the Product
Templates.
More specifically, we opted for task unification:
Taking into consideration an already existing product, smart plug and
smart switches, we decided to add the additional task of
bookkeeping: no other product present in the market has the
possibility, apart from the monitoring of the kW consumption, to see the bills
related.*
Furthermore, through our idea not only we unified the task of bookkeeping in
such a device, but we also include the expenses for the internet ADSL
and home telephone.
*This feature will be described in detail later
Product templates
TASK UNIFICATION

39.
See appendix for detailed exchange of information
We contacted a total of 2 lead user through specialized forums and discussions with the topic
“Smart Home, yes or not?” such as:
- http://www.finanzaonline.com/forum/arredamento-edilizia-impianti
- http://www.arredamento.it/forum/
Moreover, we contacted a journalist that wrote several articles about smart home and smart home
devices on the website http://www.ideegreen.it/
We decided to use lead user analysis because
of the importance of this methodology when it
comes to high technology product. It was important
for us to understand the trends in the markets, and
get information on the reasons why they adopted a
smart home technology, together with the obstacles
they currently face. Still, after unlocking this sticking
information we needed to asses if their opinion was
applicable to typical users, reason why we carried
on questionnaires and focus groups.
SPECIFICATION OF LEAD USERS INDICATORS
IDENTIFICATION OF SAMPLE OF LEAD
USERS
We appointed lead users as Italian consumers that are significantly interested in high
technology products, to a point that they actively engage in this field (for example through
forums, newspaper articles, etc.). Furthermore, since the Italian smart home market is still not
well developed, we also decided to consider lead users those consumers that currently own
an automated home system.
Lead User
Analysis

40.
CONDUCT CONCEPT GENERATION WORKSHOP
(i)
See appendix for detailed exchange of information
The communication was carried out by email and by telephone.
The main results from the exchange of information were:
Benefits that lead people to install a Smart Home system, and more in
particular a smart plug/switch one are:
• The possibility to take control over your house, from wherever
you are. In this way you can avoid damages or waste (e.g. the fridge that switches off
while you are on holiday, lights left on, ect.) and manage it as you find it more
appropriate.
• A series of small but important comforts when you are
inside such as possibility of turning off with one click all the lights before going to
sleep or waking up with the light getting into the room because the shutter opens
automatically
Obstacles that prevent people from installing such a
system are:
• Costs: consumers don’t trust the economical returns they can
get from such a system, therefore are not motivated to invest on
them.
• Level of digitalization of Italian consumers:
not everybody in Italy is able to deal with applications and
advanced technology systems.

41.
CONDUCT CONCEPT GENERATION WORKSHOP
(ii)
See appendix for detailed exchange of information
In general, they confirmed the results we got from previous researches: the Italian market
is still little but has great potential, because there is interest.
They really appreciated our idea and underlined the needs for a marketing
campaign to educate consumers.
Two of them even suggested us the inclusion of the possibility to recognize when the kW
consumption goes over the limit set by Enel after which the cost per kW would increase
and there is a risk that the electric system shuts down. In these cases the system
automatically switches off devices according to priorities set by consumers on the app.
TEST CONCEPT WITH ORDINARY
USERS
Carried out throughout concept testing online survey and focus
group (see next slides).

42.
While before we were planning to focus our concept on the savings consumers
could derive from such a system, we understood at this stage that it would be
more effective to focus on the control and comfort benefits of it.
These aspects are in fact significantly valued by current consumers, whereas at
this market stage (such systems are not yet in the mass market) it wouldn’t be
effective to stress on savings of both financial resources and
environmental waste because consumers are still sceptical.
CONSEQUENT DECISIONS
TAKEN
In fact, all our our primary data researches (focus
group, online survey, etc.) confirmed this.
But most of all, under a strategic marketing point
of view, focusing on control and comfort instead of
savings would allow a higher price in the
market.

43.
CONCEPT GENERATION

44.
An innovative platform to assist
the management of household
utilities and control of its devices.
APPLICATION
SMART PACKAGE
+

45.
Most of the services and product concerning the light are extremely descriptive, but
we need something original and innovative to attract our customers.
We want an evocative name which stimulate curiosity. That is, a kind of scientific
name which can remind the high tech sector and the electric one.
Ergon reminds both sectors for “er” and “on” inside which recall the energy sector.
Why ?
The prefix “Erg”due to its ancient remind to a lot of scientific
terminology. The same word energy comes from the
combination of “en”= inside and “ergon”= action, work.
Through our service we want to give order to the actions and
tasks people do inside their house.
Moreover ergo is a term currently used in the formal italian
vocabulary and it will be easy to remember.

46.
OUR
CLIENT
1°In the extremely liberalized Italian Market
2°In Europe by market capitalization
4°Italian group in terms of turnover
31 Million customers in Italy
40 countries globallyOperating in
ENEL is an Italian electric utility company. It is now partially privatised with the Italian government
control: the largest shareholders are the Italian Ministry of Economy & Finance
ENEL is always adapting itself in term of sustainability and battle against the climatic change.

47.
WHAT ARE THE SMART PLUGS
ABOUT?The smart plug allows you to measure the power consumption of
the connected device and can be used for energy saving purposes.
The plug holds a microprocessor which enables it to identify
connected equipment, track the energy consumption and to be
controlled by an application.
The smart switch is a device replaced with old fashioned light
switches and it is basically new generation of light controlling
system of your house. With a microprocessor it enables you to
control your lights either touching or remote with your application.
WHAT ARE THE SMART SWITCHES
ABOUT?
THE SMART PACKAGE

48.
WHAT IS THE APP
ABOUT?
BOOKKEEPING
SWITCH ON/OFF
MONITOR
From this “all in one” platform, you can accomplish in a clear and user-friendly way
the following tasks:

49.
MONITOR
The app shows the energy consumption for each and
every device and plug present in the house. In this way
it is possible to know which device consumes more in
order to be able to use resources in the most efficient
way.
It furthermore recognizes when the
kW consumption goes over the limit
set by Enel after which the cost per
kW would increase and there is a
risk that the electric system shuts
down. In these cases the system
automatically switches off devices
according to priorities set by
consumers on the app.

50.
BOOKKEEPIN
G
In one section of the app it will be possible to see black-
on-white all the expenses concerning electricity, gas,
internet ADSL and house telephone. This offers great
benefits to consumers, such as:
• Compare bills without
wasting time to look for them in the
different paper versions
• Set objectives of expenses
and get notifications that gives you
personalized advice to reach
them (thanks to the information
collected through the smart switches
and plugs)
• Manage expenses “all in one”,
a feature very much appreciated by
our respondents

51.
SWITCH ON/OFF
Consumers will be able to switch on and off devices and
light from everywhere:
• when they are away from home (ex: light forgotten
on)
• when they are on holidays in order to avoid unnecessary
annoyances (ex: fridge that accidentally goes off, as
several our respondents mentioned)
• when they are comfortably relaxing in their
houses (ex: switch off all lights at once before going to
sleep)
They will also be able to regulate the
temperature and plan it according to
when they will be home.
But not only consumers will be able to
benefit from this added comfort to their
life, they will also eliminate unnecessary
energy consumption and save money,
behaving at the same time in a eco-
friendly way.

52.
REVENUE MODEL
Vodafone makes a company
manufacture the smart plugs and smart
switches and develops an app that
works with it.
Then sells them the smart plugs and
smart switches to ENEL, at the price
necessary to cover their costs: 8€*
ENEL will provide the app for free
to consumers and sell them a
package of 15 between switches
and plugs at a price of 15€ per
month.
In exchange, in order to benefit from the
service and the app they will have to sign a
minimum 2 years contract with both Enel
and Vodafone.
*See slide on price for the details.
8€*15 switches/plugs= 120€
120€/24 months of the contract (see next
step)=5€
Of the 15€ paid by consumers:
- 5€ go to Enel to recover costs
- 5€ go to Enel as profit
- 5€ go to Vodafone as profit for the app
1
2
3 4
5

53.
A NEW VALUE
TRAJECTORY
SEASONAL CONVERSION ME-TOO LINE EXTENSION
NEW TO THE
FIRM
NEW TO
THE WORLD
0%
10%
20%
OPENING UP NEW VALUE
TRAJECTORIES
GOVERNING EXISTING VALUE
TRAJECTORIES
First of all, our concept is new-to-the-firm for both for Vodafone and for Enel because none of them offer
yet this product.
Although the set of smart plug and smart switch with the respective app is already
present in the market, we believe that our concept is a product that opens up new
value trajectory and it is new to the world for the following reasons:
- They don’t exist if considered together with the possibility of managing the
accountability side of it and together with the Internet ADSL and house telephone.
- It is an innovation on the current market: no other utility company offer such a
service and direct competitors are not to be found.
- There is no current product that satisfies all these needs together, even if the
single needs are present in the mind of the customer as well their solutions are
inside the market

54.
• It is in line with Vodafone strategy: sustainability, innovative and highly technological
products, being customer-centred by making consumers’ life easier.
• Vodafone will reinforce its presence in the home of its customers becoming a fundamental
element
o Vodafone becomes synonym of home
o Vodafone gains/improves ‘’technology and
innovation’’ brand associations.
BENEFITS FOR
VODAFONE
• Revenues’ double digit growth
• Expansion of its consumer base
leveraging on Enel’s ones
… AND UNDER A STRATEGIC POINT OF VIEW:
IN TERMS OF IMAGE
AND BRAND:
• This project can be a good starting point for Vodafone to enter the
smart home market, a market that is forecasted to grow exponentially.
• This idea opens up new opportunities for Vodafone because it can
allow the company to launch line extensions for later periods.
• Vodafone will become a strategic hub
• Customer “lock-in” through the 2 years contract
• Fixed monthly revenues granted
• Opportunity to create a loyal customer base

55.
BENEFITS FOR
ENEL
• ENEL will be able to collect huge amount of information about their
customers: they can track all the consumption habits and even monitor which
devices they use most, at what time, in which days
• Opportunity to set personalized offers to consumers according to the new
information
• No competitor currently offers this system and no competitor has
already this kind of information: strong competitive
advantage
• Increase in consumer base through the new offer
• As for Vodafone, this project can be a good starting point for Enel
to enter a smart home market, a market that is forecasted
to grow.

56.
A new app to enhance brand awareness and image in a sector
with low trust
Enel will have associations as:
• A smart and technologically advanced company
• User friendly
• An eco-friendly firm, caring about waste reduction
Therefore it will be perceived not just as an electric provider
but more.
AND ABOUT ITS IMAGE...

57.
After browsing through the on-going projects of the firm, we assessed that this concept
is perfectly in line with Enel strategy.
In 2012 the firm launched its own application ‘’ComeConsumo’’ for their consumers to
check their consumption. Moreover we find out that “In order to help increase
energy efficiency and meet European medium and long-term targets
(2030-2050) for reducing CO2, Enel is developing innovative technologies to be made
available to customers in order to optimize and rationalize energy
consumption, so that the end user can play an active role through the use of digital
devices that increase the
THE MEET OF INTERESTS
transparency of consumption, encourage participation in the
energy market, and promote a more rational use of energy.”
As a result we can say that we are on the same direction of Enel and
thanks to the existing knowledge of Vodafone about technology and
R&D , an agreement for our project would be very suitable for both
sides. Because we are suppliying Enel what they are looking for,
lowering their R&D cost Enel will be the first in the market with such an
offer among energy companies.

58.
CONCEPT
TESTING

59.
Date: 13/05/2014 – From 7 to 9 p.m
Location: Röentgen Building Room SR01
Technical support: videocamera and audiorecorder
Target population: 30-60 y.o.
Projective techniques and methods applied:
ü Interpretation and completion task
ü Stimuli design: Stripped concept testing; Pictures
Focus Group
Apart from the second-round online survey
especially dedicated to concept testing, we
believed we have the necessity to assess our
concept also benefitting from a focus group,
because in this way we would have the
opportunity to better explain our concept and
therefore gain direct and qualitative valuable
feedback.

60.
We decided to explain our idea
through a stripped concept
description, due to the fact that this
type of technology is really new and
complex and we wanted to be as
clear as possible with our
respondents.
Furthermore, we agreed on the fact
that the use of pictures was
necessary because of the newness
of the product and the awareness
barrier we find out in the first focus
group.
In order not to influence our
consumers and not to have a bias
derived from the participant judging
the layout of the image and not the
concept per se, we provided
different images.
Stimuli Design Stripped concept description and pictures

61.
Insights
For what concerns the families, first there is less division of the task and only
one or two people in general is in charge of tracking all the bills.
For the individuals instead, the way to understand the expenses is not through
checking how many kw they consumed, but simply by comparing the
prices in different bills. Kw means nothing for them, to understand level
of consumption they have to see actual price.
The electricity was the type of consumption they care most about because it
was the one where they are mostly wasting.
Moreover people were also extremely careful in choosing the
electric operators, and they tend to be more loyal to them.
High loyalty was also meaning low elasticity to switch, and
changing was often associate with problems and risks for
consumers.
Most of them use to pay their bills automatically through
their bank account, even if some risk was included.
“I have changed operator, but then I went back to Enel because
somehow the name gave me security.” (Edy 45)

62.
Insights (i)
• Overall we assessed that our idea has a space in the
market and that there is interest for it, we therefore decided
to carry on with it.
• We confirmed our strategy to leverage on the control of
the bills and the comfort of the remote control, instead of on
saving possibilities and the easy payment.
FINAL RESULTS AND DECISIONS
• They monitor more or less precisely their utilities expenditures, and they were
aware of the presence in the market of applications to do so.
• Firstly they were interested in the economy of the operators included in our service.
• They are willing to pay for having stability in costs but were moderately willing to
change internet providers for having our service. Overall speaking, people are more
flexible to change internet service than electricity service.
• They consider it as an innovative product but they are unfamiliar with its
usage.
• They will be really interested in having them with a loan for use system.

63.
After the focus group results
we wanted to find out if our
results could have been
generalized.
Concept Testing
Online Survey
We developed a short and effective survey to test our
concept with our potential target 30-60. We assume that especially
from the age of 30, people are used to set up family unit together; on the other side we did not want to
overpass the 60 years old consumers because of their average technology abilities.
In the survey we introduced our concept through an embellished explanation and visual
images to help them to visualize it.
We tested above all: ü Interest
ü Overall Liking
ü Uniqueness
ü Purchase
intentionsWe furthermore included questions about personal data with the aim to divide our
target according to income and personal traits.
Moreover, we tested their perceived innovativeness, the amount they will be willing to pay, which
operators they have and their attitude toward the switch of operators.

64.
Results
The willingness to pay for the service decreases to the average
of 6,6/10 with more dispersion in the data.
In a scale from 1 to 9 the interest for the product is similar to the overall liking with a
mean and median around 7. The standard deviation is around 2 points with a more
dispersion for what concern the likeness.
The concept testing survey confirmed what arised from the focus group. Enel is well
established in the market and the consumer tend to trust it. Due to the fact that the
consumers are more sensible for what concerns energy and electricity, they are also
less likely to switch operators in comparison with the internet providers.
The amount of money people are willing to pay
concentrate on the average value of 300€.
(For further data see the appendix)
However the dispersion of data is much higher for
the other answers.
However, only 21 people out of 101 are willing to pay 360€ or
more, our set price for the package (that is, in 2 years: 15*24)

65.
Bass and Rogers Model
We decide to use Bass and Roger to
segment the market because it was a new
to the world product. This model is able to
forecast very precisely as far as concerns
the opening up of new value trajectories.
Assumptions
• We forecast the sales of our product focusing on the number of consumers first
according to the results of our qualitative and quantitative analysis.
• In fact since it was not feasible to develop a cluster analysis with the results of our
concept testing survey due to reduced number of variables inserted* we decided to
segment the
• We use our concept testing survey to derivate the different
features of our target and their approach to the product.
However we are aware that in the long term the reliability of
our concept testing survey made at the time t can vary and
we try to adjust especially in the last periods
market using the Roger and Bass model which identify 5
targets according to the percentage of customers acquired
and the period of launch of the product.

66.
0
100000
200000
300000
400000
500000
600000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Numberofcustomersperyear
Years
Roger and Bass model forecast

67.
FIVE TARGETS
(I)
Consumers which already have both a Vodafone and an Enel
contract.
Why? They will have no switching costs if they want to buy Ergon
and a pre-existing relationship with both companies. To sum up
they have very low barriers to adoption.
Did we consider all of the innovators? No, in fact we just selected
a fraction of those by analyzing our questionnaire and taking into
consideration only those with an higher propensity to buy a certain
commercial innovation, that is the ones who according to our
questionnaire show more enthusiasm towards our service
(likeness, interest and willingness to buy all over 7). They are the
ones who buy our product for the comfort it offers.
First phase: year 1
INNOVATORS
37.400

68.
FIVE TARGETS
(II)
In the second period the innovation will spread significantly.
Through Enel’s marketing investments and tested usage of
innovators who will influence the others (q), the customers start
perceiving the value of our offer. In this segment we estimate the
presence of consumers who might have subscribed a telephone
contract with another company different than Vodafone and would
be willing to switch to Vodafone thanks to their high propensity to
innovate.
According to our questionnaire data, the customers of both Enel
and Vodafone’s competitors willing to switch to Vodafone for a better
offer it’s equal to 40%. So, we assumed that 40% of Ergon buyers
are not yet a Vodafone client and those will be our new subscriber.
They are the ones who will buy our product for both the control and
comfort opportunities.
Second phase: years
2-4
EARLY
ADOPTERS
251.630

69.
FIVE TARGETS (III)
They are a considerable amount of consumers but have a lower willingness to pay and
less interest and likeability than the previous groups but still quite high (more than
6).
According to our estimate, part of them are still both Enel and Vodafone consumers
(20%), the majority are Enel’s clients switching internet provider (68%) and the rest
are the ones who change both electric and internet provider.
Among these there will be consumers who will buy our product also to save money. In the
third phase we assume that the features of our product will be well established.
These are the consumers who change especially because of the opportunities
of saving. In fact they have lower income than the others, less interest
and likeness but still an average willingness to purchase (more than 5).
We deduce that the percentage of the people willing to switch both electric and
internet will increase significantly in this phase (around 30%).
Third phase: years 5-9
EARLY MAJORITY
309.897
Fourth phase: years 10-14
LATE MAJORITY
400.317

70.
The laggards of our model are similar to the late majority and
they will purchase for the same reason.
However, among them there could be wealthy people, with
house management problems. These can have understood the
big opportunity of control for our service.
However according to the increased interest towards the smart
home more and more consumers from different targets will be
convinced to purchase our service as a first “smart home”
product.
FIVE TARGETS (IV)
Fifth phase: years
15-17
LAGGARDS
122.05
5

71.
2015 2016 2017 2018 2019
ERGON USERS 37400 203889 425666 714696 1080409
of whom new Vodafone subscribers 0 81555,6 170266,4 285878,4 432163,6
ANNUAL REVENUES PER ERGON USER 60 60 60 60 60
ERGON REVENUES 2244000 12233340 25539960 42881760 64824540
ANNUAL REVENUES PER
SUBSCRIPTION
420 420 420 420 420
REVENUES FROM NEW
SUBSCRIPTIONS
0 34253352 71511888 120068928 181508712
TOTAL NEW REVENUES 2244000 46486692 97051848 162950688 246333252
TOTAL FIXED LINE REVENUES 676600000 723086692 820138540 983089228 1229422480
% increasing revenues 0,30% 7% 13% 20% 25%
According to our forecasts, Ergon users will raise from 37.400 in 2015 up to 1,08 mln in 2019. By
assuming that only 40% of them will be also new customers of Vodafone ADSL, the revenue stream
can be divided in 2 part :
1. Some initial revenues will come from Ergon service itself , since its users will pay to
Vodafone an annual subscription of 60 euro for using the Ergon app.
2. The others will come from new Vodafone ADSL ‘s customers which will subscribe in order
to be able to us Ergon.
As a result, our estimations show how the launch of Ergon will have a strong impact on fixed line
revenues; in fact they will increase by 0,3% , 7% , 13% , 20% and 25% in the respective
years of our budget.
FORCASTED
REVENUES

72.
YEAR 2015 2016 2017 2018 2019
FIXED LINE OPERATIVE COSTS 2013 402500000 402500000 402500000 402500000 402500000
for new employees 0 1382714,568 2886740,23 4846855,743 7327012,558
supplying costs 0 22123433,08 46187843,7 77549691,89 117232200,9
administrative costs 0 4148143,703 8660220,7 14540567,23 21981037,67
TOTAL COSTS FOR NEW SUBSCRIPTIONS 0 27654291,35 57734804,6 96937114,87 146540251,2
TOTAL OPERATIVE COSTS 402500000 430154291,4 487889096 584826210,9 731366462
In the computation of operative costs, we have divided them in 2 categories : the ones due to
the new subscriptions and the ones due to the launch and the management of Ergon service.
To compute the first, we assumed they will increase proportionally with revenues, so we have applied the
same growth rate of revenues to the operative costs of fixed line we derived by “Vodafone income statement
2013”. A second assumption regards how these costs are splitted : we came out with 3 categories
(employees costs, supplying costs and administrative costs) with weight respectively the 5% , the 80% and
the 15% of total operative costs.
OPERATIVE COSTS ERGON 775000 1000000 1550000 2000000 2450000
forn new employees 675000 900000 1350000 1800000 2250000
for manager 100000 100000 200000 200000 200000
As said before, also Ergon entails operative costs due mainly to hiring new employees which will manage
the promotion activities, post-sale assistance etc. This team (of 50 people in 2019) will be supervised by 2
new managerial figures.

73.
MARKETING EXPENSES 44355000 44325000 44325000 44325000 44325000
ADVERTISINIG 44325000 44325000 44325000 44325000 44325000
produzione spot 1000000 1000000 1000000 1000000 1000000
via tradi>onal media 38325000 38325000 38325000 38325000 38325000
via social media 5000000 5000000 5000000 5000000 5000000
APP DEVELOPMENT 30000 0 0 0 0
As stated in our B2B relationship , Vodafone will also participate in
the promotional investments sustained by Enel . These
are mainly composed of advertising expenses which will permit
Ergon to be communicated to via traditional and new media.
In fact we aim to promote this new service through a TV-based
promotion with some daily commercials to be launched in the prime
time slot.
Furthermore, we want to manage also a social media campaign in
order to reach the most “innovation inclined” customers and the
younger target.

74.
YEAR 2015 2016 2017 2018 2019
ERGON USERS 37400 203889 425666 714696 1080409
of whom new Vodafone subscribers 0 81555,6 170266,4 285878,4 432163,6
ANNUAL REVENUES PER ERGON USER 60 60 60 60 60
ERGON REVENUES 2244000 12233340 25539960 42881760 64824540
ANNUAL REVENUES PER SUBSCRIPTION 420 420 420 420 420
REVENUES FROM NEW SUBSCRIPTIONS 0 34253352 71511888 120068928 181508712
TOTAL NEW REVENUES 2244000 46486692 97051848 162950688 246333252
TOTAL FIXED LINE REVENUES 676600000 723086692 820138540 983089228 1229422480
% increasing revenuese 0,30% 7% 13% 20% 25%
FIXED LINE OPERATIVE COSTS 2013 402500000 402500000 402500000 402500000 402500000
for new employees 0 1382714,568 2886740,23 4846855,743 7327012,558
supplying costs 0 22123433,08 46187843,7 77549691,89 117232200,9
administra>ve costs 0 4148143,703 8660220,7 14540567,23 21981037,67
TOTAL COSTS FOR NEW SUBSCRIPTIONS 0 27654291,35 57734804,6 96937114,87 146540251,2
OPERATIVE COSTS ERGON 775000 1000000 1550000 2000000 2450000
forn new employees 675000 900000 1350000 1800000 2250000
for manager 100000 100000 200000 200000 200000
TOTAL OPERATIVE COSTS 402500000 430154291,4 487889096 584826210,9 731366462
FIXED LINE EBITDA 273325000 291932400,6 330699444 396263017,1 495606018
FIXED LINE EBITDA (%) 40% 40% 40% 40% 40%
MARKETING EXPENSES 44355000 44325000 44325000 44325000 44325000
ADVERTISINIG 44325000 44325000 44325000 44325000 44325000
produzione spot 1000000 1000000 1000000 1000000 1000000
via tradi>onal media 38325000 38325000 38325000 38325000 38325000
via social media 5000000 5000000 5000000 5000000 5000000
APP DEVELOPMENT 30000 0 0 0 0
NMC -42886000 -26492599,4 -6557956,64 19688573,13 53018000,85

75.
STRENGHT
S
OPPORTUNITIES THREATS
WEAKNESS
ES
- Consumers’ possible feeling of “lock-
in”
- Not all Italian people are able to use
high technology systems
- Not trust on the benefits that this
system could lead to
- Highly imitable concept
- Reaction of competitors
- Double digit growth for
- Vodafone
- Positive image conveyed
- Environmental friendly trend
- Italian economic situation leads to
needs for savings
- Only a starting point of a possible process
of managing all house expenses (included
water and food) through an app
- In line with technological modernization of
the country trend (ex: from analogical to
digital counters, etc.)
- Strong brand equity and image
- Vodafone Italian market is one of the most
profitable at a global level.
- Possession of big data, financial and
technological resources and know-how.
- Vodafone internet ADSL is not a leader
in the Italian market
- The competitors moved first to the fiber
technology and emphasized that with their
communication.
- From our research emerged a bad
perception of Vodafone internet
ADSL
SW
OT

76.
ü Increase REVENUES by a double-digit
especially from the fixed line sector, up to
+21% in 2017 and +80% in 2019.
ü Focus on families and professionals (house-
owners and not) with a sensibility for
technology
ü Increase the AWARENESS toward smart
devices
ü Become the market LEADER
MARKETING GOALS AND OBJECTIVES

77.
PRODUCT
Our offer represents a BRAND EXTENTION for Vodafone.
The product offered to the consumers will be branded ENEL,
as well as the app, but the sentence “powered by Vodafone”, together
with the Vodafone logo must be included every time the product is presented.
BASIC PRODUCT: the App by Vodafone, the smart plugs and smart swithces produced by a
third party on behalf of Vodafone.
EXPECTED PRODUCT: Characteristics of current smart switches and plugs on the market,
that is: the possibility to monitor kW of consumptions and to switch on/off lights and devices
remotely
AUGMENTED PRODUCT: bookkeeping in general and inclusion of Internet ADSL and home
telephone in the bookkeeping
POTENTIAL PRODUCT: possible future inclusion of all the home expenses, as initially
thought with our “Vodafone Hub” (but then left because too complex to communicate to
consumers considered the early stage in the market of our current product category)

78.
PROMOTION
B2B promotion strategy: it will consist in public relations between the two firms
through sales manager force, agreements for the future co-development of the
platform and post-sale assistance.
B2C promotion strategy: Enel will be in charge for the main advertisement of
the platform within its main communication channels (tv spots, radio, billboards and
magazines). However, Vodafone will assist the promotion with displays inside
the website, flyers in the Vodafone stores and promotional SMS to its clientele.
The total costs of the campaign will be split between the two companies.
Contingency Planning: in case the level of
expected awareness coming form the customers it
is not satisfactory withing 4-6 months we suggest to
establish Enel corners inside the Vodafone
stores and the main shopping centers so to allow
customers to try the platform and enjoy its
benefits.

79.
Since it is a B2B business the placement for Vodafone will have a
relatively low importance
The distribution channel used by Vodafone will make use of couriers
companies for the distribution of the products to Enel wharehouses.
PLACEMENT
For what concerns the B2C strategy, Enel will
sell the packages through its vendors.
The App instead will be available on the Apple
Store and Google Play.

80.
*For details about the price calculations please see appendix
Vodafone is a worldwide known and respected brand which has a huge bargaining
power. Moreover prices in the Europe are very high for our products, as competitors like
Belkin are selling one smart plug+app in İtalian market for 49,99€.
With our agreement, we are giving Enel opportunity to acquire a very low cost product
and service (considering smart plugs,smart swithces and app), which is actually sold for
very high prices.
Vodafone has an existing technology and strong R&D in terms of applications/
smartphone services. Thereforeo with this purchase they are not only buying the smart
plugs/swtiches but also a Vodafone supported App. To sum up, they are not only buying a
physical product but also experience and knowledge of Vodafone in terms of technology.
According to our revenue model, we are not charging Enel any extra cost from the smart plugs and
switches, we are simply recovering the cost of purchase and transportation to the warehouse.
Cost of a smart plug or a smart switch is the same = 7.30€ (cost of production in China)*
Shipping cost for 20 foot container from Genova to Milan= 2000$= 1.459,80 €
Transportation cost from Genova to Milan approximately = 250€
Also we can inlude variable costs like warehousing cost, labor cost and other expenses.
In total we can say that, we will deliver the price 8€ per smart plug or smart switch
PRICE
Considering this PRICE, Why would ENEL buy from us instead of a direct
purchase ?

81.
WORK CONCLUSIONS
We believe that our idea could seriously have space in the actual Italian market both
because it satisfies actual and felt needs that consumers currently have and because
they are not yet met in the market by any competitor.
We are at the same time aware that it
presents challenges not to be under evaluated
and to be dealt with, including the backward
patterns of Italian consumption and the lack of
awareness of the benefits that these smart
systems could lead to, with the consequent
low willingness to pay for them.
However, we believe that thanks to the strong and positive
image of both Vodafone and Enel, and their financial and
know-how capability to implement cooperative and effective
marketing efforts, consumers can be educated on the matter
in order to overcome these obstacles.

82.
Our concept is implemented relying on the results of our qualitative and
quantitative techniques. We are aware that the data deduction might not be
statically reliable because results are based on a limited sample, that might not
be sufficient to estimate the entire population’s behaviour.
LIMITATIONS I
We have estimated that a smart home concept will
spread in the Italian market in the short-medium term (6
months- 1 year). As a matter of fact, we might consider
that the digital sector in house is still very backward.
For instance the digital devices in house are still very. In
fact a big part of the electrical counters are still not
digitalized due to recent Italians regulations (see
secondary data).

83.
The financial success of our concept is in biggest part due to high
margins, rather than a significant increase consmer base.
Moreover, we are aware that the financial results are not significantly
impressing, but we had as priority the feasibility of the product, and still
we forecasted a double digit growth.
No market testing technique was applied, due to the scope of this project.
During the process of opportunity identification a switch of target and a change of
concept as occured. This has led us to a best idea, but it may also have complicated
the understanding of its development from the point of view of readers.
We are aware that the cost of developing an application could be costly investment
for Vodafone but we are really convinced that the firm has the know how and the
capabilities sufficient to implent that. In addition it must take into account that it is an
existing the technology that it should be only adapted for the specific features
mentioned above.
LIMITATIONS II

84.
But most importantly, thanks to the information acquired
about the consumption habits of the Italian consumers
Vodafone will have the possibility to create smart devices for
the house in the future and became symbol of the smart
home in Italy.
The Beginning of a new Path
In our vision Enel Ergon is the just first step forward towards a series of new
strategic opportunities for Vodafone.
Vodafone could first of all develop this concept until becoming a real home
hub, by simply adding other expenditures to this existing system.

85.
“Innovation is taking two things
that already exist and putting
them together in a new way”
Tom Freston

86.
Thanks for the Attention
Team