Casper Sleep WAC - Analysis of case PDF

Preview

Summary

Analysis of case...

Description

Casper Sleep Inc.

WAC

1. How big a threat are the 'direct to consumer' mattress firms to the traditional 'Big Mattress?' The ‘direct to consumers’ mattress firms do not cause a big threat compared to the traditional and significant firms in the US mattress industry such as Serta, Tempur Pedic, Sealy and Simmons with a total market share of 95%. Casper sleep being a startup is threatening because direct to consumer channels have similar offerings and want to beat the company which currently holds 0.7% in market share. Casper however see it’s direct to consumers as a motivational force to improve themselves. The competitors in these categories are: .

Saatva:  Takeaways old mattresses for $39 (service not offered by Casper)  Positioned as “America’s best-priced luxury mattress.”  Charges delivery for $99 – does not deliver in a box  Queen size: $999 plus $99 of delivery

.

Tuft and Needle:  Came to the market two years before Casper Sleep Inc.  “Quality Mattress at a fair price.”  100-day trial like Casper  Similar delivery to Casper  Priced at $600

.

Leesa:  Only one mattress model  Free shipping and trial policy same as Casper  Price at $890 for queen with same six months 0% financing as Casper

Casper Sleep Inc.

WAC

2. How was Casper able to differentiate itself from other 'direct to consumer' firms? Why was it able to pass by direct to consumer pioneer Tuft and Needle? Casper Sleep Inc. point of differentiation from the rest of its consumers is its shipping method. They are the only ones that use a UPS shipping mechanism where their mattress can be compressed in a 20 x 21 x 41-in height box. Many other qualities of the Casper mattress are matched by competitors such as prices, 100-day trial, and quality and level of foam. Their idea was so smart and basic that they raised $1.85 million in first round of funding. Another differentiation was due to their great Customer Experience team. This team would offer customers advice about bed, have conversation about their sleep or even read a bedtime story for them. Tuft And Needle were already in the direct-to-consumer business before Casper. The use of social media, podcast, radio, online channels, subway, taxi and billboards helped Casper a lot in its marketing. The custom referral codes that were provided by endorsers would allow Casper to have an understanding with the help of statistics about the type of customers they are having. Tuft and Needle started to claim about its offerings and used paid Google search when Casper became popular about it being the first one to offer a mattress in a box. To have a similar attractive trial period, Tuft and Needle also went with the same offering as that of Casper as compared to their initial 30-day trial period. Casper figured out that their fast and free shipping and trial of their product at home was important for their success. By selling directly to the customers through Ecommerce store, they were able to cut their prices significantly. Their price points were also affordable.

Casper Sleep Inc.

WAC

Another differentiating factor was their communication strategy. They communicated through social media, radio, podcast, press media, and outdoor advertising (subways, taxi). These strategies allowed Casper Sleep to reach to masses in less cost as compared to TVCs. 3. Evaluate Casper's promotional strategy from launch to September 2015. Did the initial focus on 'earned,' rather than paid media make sense? Why or why not? Casper sleep used various promotional strategies for launching their business. They advertised through social media, radio, podcast, press media, and outdoor advertising (subways, taxi). They also focused on word of mouth promotions. They hired famous celebrities like Leonardo DiCaprio and Maroon 5 lead singer Adam Levine to form their brand image. Kaplan continuously paid more attention towards press in the initial months to gain market reputation and brand awareness. Casper sleep definitely got high coverage and positive recognition as a realistic competitor to the major four players. Bloomberg and other magazines featured about Casper. These features and articles were possibly the main drivers that made customers check their website. Positive customer reviews, word of mouth and referrals do have significant impact as compared to traditional marketing mediums. The initial efforts of earned media did make sense. Casper earned great media coverage and they got successful. Apart from this, Casper reinvented the user buying experience. Instead of visiting the store and giving so much time on choosing mattress features etc, people can simply order a mattress from their home and get it delivered for free. This reinvention ran through their marketing, beginning top-of-funnel with their Google search ads.

Casper Sleep Inc.

WAC

4. What is the appropriate mission for Casper communications? To Chief Creative Officer, Luke Sherman, 'it’s all about brand love.' To CEO Philip Krim, its 'sales performance in the short term.' In my point of view, Luke Sherman’s statement “It’s all about brand love” is more appropriate for Casper sleep. They were able to create a brand that all consumers could love and trust. With media and high end celebrities, they could create credibility among the users. Customers tend to buy from a brand that they could trust for the high quality and durability. This usually happens with brand that have low value commodity and people tend to buy occasionally. With mattress, it’s a onetime investment for 7-8 years so being a mattress startup, it’s even more difficult for any customer to trust a new brand for high quality product. Maximizing sales and revenues are the important goals for a brand and Casper did it differently. They allowed the customers to decide themselves if Casper sleep did have a quality product as compared to other mattress brands. 5. With ambitions to establish itself as the 'Nike of sleep,' what messages and media mix would you recommend to Casper for the next phase? In particular, should Casper begin to use television as a medium or not? I would recommend Casper sleep to expand into new markets apart from just being in NYC. They should also offer more variations in mattresses with different price ranges. By opening new stores at various residential and commercial areas and the facility of faster home delivery, Casper sleep would be able to get into next phase. I wouldn’t recommend a TVC at this stage since it’s expensive and would increase the per unit cost that would be eventually covered by increasing the cost of mattress. Talking in realistic terms, its difficult for Casper to reach the level of being “Nike of Sleep” at this stage because mattresses are not something that people change on regular basis. Nike is what it is because they sell shoes that customers can easily store and

Casper Sleep Inc.

WAC

change on a regular basis. However, all consumers can only buy a single mattress and they won’t remember it that much. Nike is more of a status symbol. In general the mattress industry won’t be able to reach the level of a status symbol as mattress is for personal use and cannot be shown in public for reputation....