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Startup on a budget: Winning new customers without breaking the bank.

Bertels, H.M.J. 2019 "Startup on a budget: Winning new customers without breaking the bank." The CASE Journal, accepted for publication.

Abstract

Lammily is a startup company in its second year of existence which produces toys that embody realism: a fashion doll with proportions based on the average 19-year old American woman, a sticker set of common body markings such as booboos and cellulite to make dolls look realistic and doll outfits. After the company's initial success in 2014, fueled by positive publicity from online media eager to share information about the average doll project, sales were flat. Nickolay Lamm, the founder of Lammily, started to feel the heat to acquire new customers in ways that didn't rely solely on digital word-of-mouth. Lammily commissioned a direct response TV commercial in the summer of 2015, but it failed to lead to significant new customer growth.

This case describes how Nickolay struggles to move beyond the launch phase of his entrepreneurial venture and turn his startup into a business with a sustainable customer base. Facing stagnating growth and established competitors with deep pockets, Nickolay needs to figure out why the TV commercial didn't work for Lammily and what his new plan to acquire new customers quickly will be.

The case ties together a number of marketing concepts and theories which might be addressed in a(n) (entrepreneurial) marketing course or an entrepreneurship course. The case focuses on niche, digital, and social media marketing and utilizes fundamental marketing concepts such as target market, value proposition, brand positioning, the marketing communications mix, and the adopter categories of the diffusion of innovations theory.

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