Case Study of the Week: Mattress Company Adds to the Product Mix

Mar 7, 2022

Entrepreneurship

You are the owner of Cloud Mattress, a company that began selling mattresses online in 2014. Cloud Mattress was the first online-only company to sell mattresses with free delivery and a 100-day return policy. The mattresses roll up and fit into a box for delivery and then regain normal shape once opened. The company offers four types of foam, memory foam and polyurethane support foam mattresses.

Before your product launch, you raised $2 million in the first round of funding. Venture capitalists were excited about the new product and its unique branding. Since a majority of the U.S. population sleeps on a bed with a mattress, the market included everyone.

In the first 28 days after launch, Cloud Mattress sold $1 million worth of product. Another round of funding soon after gave the company an additional $13 million. Those funds were used to expand delivery to include Canada. Additional funding received throughout the last few years has been used to open additional manufacturing facilities.

The success of Cloud Mattress has resulted in two competitors. Both competitors offer similar mattresses that are rolled up and shipped in a box, at no fee, directly to consumers. The copycat companies offer similar pricing and have used the same advertising methods as Cloud Mattress: magazine ads, television commercials and sponsored ads on social media.

To stand out from its competitors, Cloud Mattress opened 200 physical store locations in the last year. The store locations offer customers the chance to lay down on a Cloud Mattress, try the four different types of foam mattresses, and easily return the product if not satisfied.

While the physical store locations have been successful, the copycat companies have begun opening stores locations or partnering with retailers to showcase their mattresses. Cloud Mattress needs to stay ahead of the competition.

A venture capitalist wants you to consider adding other products to the brand. While not everyone is currently in the market for a mattress, everyone sleeps; therefore, expanding the product line would expand the market.

You will present new product line additions to the venture capitalist, with an explanation on how the new product line will build the brand. The capitalist may be accompanied by additional business partners.

Questions?

Randi Bibiano
Competitive Events Specialist
randi@deca.org

Randi Bibiano is DECA's competitive events specialist. In this role, she conceptualizes and authors role-play scenarios for the collegiate and high school division’s competitive events programs. She also manages DECA's online competitive events and serves as a liaison to volunteer efforts at DECA's educational conferences.

Discussion Questions

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Classroom Connection

Career CLuster:

Entrepreneurship

Instructional Area(s):

Product/Service Management

Performance Indicators:

Explain the concept of product mix
Plan product mix
Build product/service brand
Explain the concept of competition