Ideas don't always equal Money

One new idea introduced to me through this past weeks reading that really resonated over and over again was the emphasis of SOCIAL MEDIA. The four P's was introduced in the 1960's, 50 years ago. In my opinion it is not wise to base our basis for marketing on a half-century old technique. With all the advancements in technology and how society works and people connect, a new system of reaching out MUST be utilized. The ease at which one person with an internet connection can communicate and influence any realm is astonishing. With that power and connectivity it seems the place/promotion of the product is/should be constantly accessible (as much of the internet is).

The challenge I see here is how to successfully use these tools to not spam users about your product but attract people. If someone feels they "stumbled upon" something amazing, often they feel obliged to spread the knowledge to others, like a product evangelist. This can be a pretty exciting time for people to experiment utilizing these platforms and possibly strike gold. I however seem to be peering up at a mountain of which I am not sure where to get a footing. The articles had excellent examples of how ESTABLISHED BRANDS like Toyota used social media to repair damaged relationships and product reputation. For a BEGINNING BRAND or someone establishing a hold in the market place I feel short of ways to successfully use all this free connectivity to reach customers who have this need that I can satisfy.

If I approach social media as a way to spread word of my cause / business, I could easily come across as another spammer just using new tools on the internet to fill their inboxes etc. But do you really think I can get customers to love my product by offering a free service slightly related to my venture like Daily Musical Instrument Maintenance Tips or provide contact information for musical repair shops? As an entering brand what do you think the appropriate course of action is in utilizing social media? Creating evangelists? Drawing in more sales? Improving your industry in general? Delivering a socially responsible message? Simply spreading the word about your product? Or all of the above?

I guess if all of the above is the true answer, then developing successful social media has the potential to be a potent weapon if developed properly.

Marketing Pittsburgh Historic/Green Apartments

Talking in our group session last week was useful in that it made me realize that I can't achieve all that I would want, from a standpoint of social impact, with my venture idea. The simple fact is that I'm not trying to offer affordable housing, although green affordable housing would be a really, really good venture in its own right and something I might be interested in looking at in the future.

Now that I can safely say that I am positioning my venture to capture the average apartment renter in the city, I think I have a good foundation for marketing my product according to the elements of a marketing plan discussed in the book chapter. In other words, I have a better understanding of how I am going to market toward my target consumers.

Product: My product is, as I've discussed before, pretty unique and stands out in terms of its environmental friendliness and the value this adds to consumers through energy savings, historic preservation, access to nice housing in an up-and-coming neighborhood, etc. Marketing the benefits of owning one of my apartments, as opposed to the competitors' apartments (most of which use standard construction and maintenance methods) will be essential.

Place: There is not much unique that applies to my venture's point of sale except to the degree that I am offering apartments in a neighborhood that is seing an influx of new residents (South Side of Pittsburgh).

Price: With regard to price, I will have the ability to charge renters at a competitive rate because of the use of historic preservation financial incentives. I am looking at the $1,000/month + or - $200 as a sort of range. This is comparable to new apartment rent rates for South Side and for the rest of the city, but lower by some margin than the average for specifically historic buildings. When I looked at the chapter's discussion on pricing flexibility and product uniqueness, it occured to me that I do have a very unique product with only a few competitors. The problem my competitors are having, however, is vacancy because of a down housing market. Allowing for a little more price flexibility may help me tap into some of the market that would go to other buildings if I didn't charge a lower rent.

Promotion: This is where I can take advantage of both the social media tactics that the other articles talk about and the standard real estate promotion practices. As I have said before, I am seeking to capture so-called "early adopters" of green technology. One of the things about this particular market segment is that they are highly technologically savvy. Now, I don't think having a Facebook page or Twitter account will help my business very much, but a website would certainly help and I've benchmarked some ideas from some competitors' websites to help guide this. Another thing I think would be tremendously beneficial from a promotion standpoint is to have direct communication with Pittsburgh's universities and the science/research communities we have here. Being able to tap into this and the "creative class" in general will be a huge plus because they will make a more desirable community overall.

Building your brand

For all our social ventures, I believe building a brand is important especially as pioneers. And branding is very critical in order to be successful in this very competitive market place today So that we can have an easily recognizable brand. This helps obtain loyal customers too. The use of social media to build your brand play a very important role, especially in these times when everybody tweets, face book and the use of the internet has grown, everybody uses a smart phone. Location based advertising is very high. The googleabilty of your organization has be be constantly improving. As a social venture, or any organization, you just have to ride on the wave of this new technologies and media sources to help build your brand. I mean when I shop, like many other people, I usually go for brands I mainly remember.
I found an interesting articles on brand building
http://ezinearticles.com/?Importance-of-Brand-Building&id=1252035

And just a final word, I am a die hard att customer just because of their slogan..Rethink Possible. It is such a mind blowing slogan to me.

Marketing Plan & Pricing - Good Timing

As has been the trend during this semester, this week's readings coincided with some interesting and important discoveries.

One of the marketing strategies I've had all along is to partner with the local neighborhood business/community organizations in the areas I'm targeting to help ease adoption of local businesses to onlyinpgh. The reasoning behind this was simple--they're interested in promoting their local area, I'm interested in promoting their local area, so our interests should be aligned, right? Not necessarily, I found out.

I met with a large organization last week and through our discussions I realized that they actually see onlyinpgh as a competitor. The reason is that they get a large portion of their funding from memberships from local businesses, and part of the benefits they provide as part of that membership is promotion of their events on the organization's website and in their materials. Even though onlyinpgh and the organization are on the same "team," per say, we're competing for the same marketing dollars from local businesses.

This greatly impacts the "promotion" portion of the marketing mix and has the potential to throw some wrenches into my plan. This is doubly true since the social mission of onlyinpgh is to create more vibrant neighborhoods, and it's difficult to imagine succeeding in that if our actions put further financial pressure on already cash-strapped community organizations.

To address this, the first thing I need to do is get a better understanding of how the different community organizations I'm looking to partner with are organized and where they get their funding. I've previously met with several smaller organizations and no such issue has come up, so not every organization will see me as a competitor.

The other thing I'd like to do is position myself not as a competitor but as a benefit to local community organizations. For example, if I further involve them in the sales process by incentivizing their active participation rather than just ask them to open up their networks, it could benefit both of us. For example, if 10% of the monthly fee a business pays to have their activities on onlyinpgh go back to their local community organization, then we become a funding source rather than a threat.

Pricing, obviously, comes into play with this train of thought, and that's been something I've been struggling with. How does one get accurate feedback on a customer's willingness to pay? Does anyone have any personal experiences or suggestions for this?

Some more marketing

Very useful articles overall. I liked one of the articles criticizing the 50-year-old 4P's approach - we clearly need an updated one! But the article fails to provide one. Oh well, I guess there will be some more research on 4P's in the future.

If I should stick to what we currently have:

Product (in my case service): Promotion of energy efficiency measures amongst residential users. EEme helps users to save on their energy bills; utilities to avoid facing harsh monetary penalties imposed by their states (when utilities fail to meet state-mandated energy conservation targets); and product/service providers to increase their business volumes.

Price: Utilities spend millions of dollars on their Demand-side Management (DSM) programs. To put this into context, Duquesne Light spends about $20million/year on their DSM program a quarter of which can be attributed to administrative costs. We will take their current spending into account for price optimization. The first article emphasizes unique product offerings for high pricing. It argues that people have more difficulty in valuing unique products. Clearly, higher prices can yield higher profits. I will think about unique product features in the next weeks.

Place: EEme will be rooted on Facebook for enhanced consumer participation and interaction.

Promotion: Although EEme will use social networks for marketing, I think about using contests and Groupon type of mass purchasing to promote EEme further.

All articles underscore the importance of simple, crisp and clear-cut value communication and building a personal connection with the customer for engagement. Although those points all sound like common sense I have yet to find ways to accomplish such tasks. How can you reach out to the customer and connect with them and help them understand your value the way you understand it? This is challenging...

Picking a competitive strategy closer to home

Our group meetings on Wednesday provided a new level of insight into what it would take to market my concept in another country, particularly in growing Asian markets. While I’m comfortable with my venture concept from a technical standpoint – I’m a hobbyist who understands the technical and financial nuances of the domestic used car market and restoration process – I’m much less adept at understanding the cultural intricacies of many developing countries simply because I haven’t experienced them. I had hoped to piggyback a lot of my marketing strategy based on how micro-finance companies go about their business. However, some of my international classmates suggested that there would be cultural forces acting against certain aspects of my plans.

For example, there is still a significant amount of discrimination which may inhibit business owners from using my service because of their gender or socioeconomic class. While it’s possible for microfinance companies to offer loans to underrepresented or oppressed facets of the population, the connotations of using private transportation to aggressively grow a business may still be subject to harsher discrimination. In many large cities in India there are also already cab companies which offer transportation services to business people, offering another strong force of indirect competition.

As an alternative, I had already done a significant amount of research on this concept for an American market early on in my decision making. There are many companies which offer tax deductable donation services to people with junk cars in the US. A person can donate their old car and receive a decrease to their taxable income. These cars typically enter the for-profit salvage market by specialized companies who purchase the car from the charity and hand them a small amount of cash. However, I haven’t been able to find a service which targets training mechanics by using the parts directly, or marketing the repaired cars to needy organizations.

Interestingly, there’s a very successful non-profit in Pittsburgh called Free Ride, which does exactly what I was planning to do – but with bicycles. Free Ride repairs donated bicycles and gives them to various organizations, homeless shelters, etc. They also work education into their model, as customers can contribute by repairing bikes as well. I plan to contact Free Ride when they’re open this week, and attend their next event on March 7^th if I can. They might be a valuable well of information.

This week’s reading on marketing strategy further emphasized how I can use existing channels to develop my venture and that’s currently my mode of thinking. 1.) I know how to rebuild and deal with used cars. 2.) Vocational schools and independent education facilities already exist and have a high demand for their graduates. 3.) People in the US are already used to ‘donating’ their cars to charity, so there will be little to no switching cost to do business with my venture. 4.) Supplying not just financial resources but educational opportunities and the assurance that the rebuilt car(s) will be used to supply community focused organizations with transportation is a competitive advantage. It’s much more appealing than the ‘junk your car and give the money to charity’ model. 5.) I hope to leverage the local connection to Free Ride to gain advice and knowledge about the process of receiving donations and rebuilding machines into something useful. They may also help me identify organizations that would be in need of the highly discounted rebuilt vehicles (churches, shelters, local Pittsburgh philanthropies).

http://freeridepgh.org/

Review of Marketing Strategies

This week I try to fit my company’s marketing strategy as per the readings for this week.

To start off, I tried to address the Marketing Mix (The 4 Ps of Marketing) for my business. Here’s how it fared.

Product (Service) / Place:

I differentiate my product (rather service) from others by the unique distribution and marketing plan. The goal is to make my product accessible to the ones who are most remote from centers of human population –> The villages. The Idea is to have vans and trucks loaded with my product, head out to a town center. The town center is like the nerve of activity for rural people. Once a week (Generally Friday), all small scale businessman set up temporary stalls to market their goods. It is at this time that the people from surrounding villages congregate here to buy/sell their goods. I want to use these places to market my lamps. This way, the lamp would be just like any other product, available just as easily as the rest. The first step in the marketing plan would be to target the small scale businessmen. Convince them about the advantages this lamp offers in terms of increasing business time, and then distribute the lamps through their well established chains.

Also getting in touch with NGO is an option I am exploring. NGOs generally have a good feel of villages and are well respected by the rural folk. By tying up with NGOs working towards improvement of health, literacy,etc. in villages, I could use their resources to market my lamp.

Price:

This is where I have some problem. I haven’t firmly decided on the price. There is some competition in my field but not as bad as consumer goods. This gives me some space, but not a lot. As of now, I have decided to set the price to $20. But I am flexible on this price. I would test the market initially and then based on the feedback, be flexible enough to change this to a more optimum price.

Promotion:

I will not use adverts to target my customers. As I said earlier, I will use the pre-existing marketing chains to reach out to the customers. The small scale businessmen themselves are the ambassadors of my product.

 

Using Social Media to Leverage my business

          I was wondering how I might leverage my business by using social media since my customers have no access to electricity and therefore no access to computers or the internet. This is when I realized that I could set up a mission. Something like Light a life campaign. In this campaign (via Facebook and twitter) I could engage the public and educate them about the “good” work my organization is doing. They can see interviews with people whose lives have changed (Youtube), they can view photographs and journals (blogs) and connect to the rural people through our business (facebook and twitter). I could also post updates about events, where we could have mass Solar Lamp distributions to the poor. All this is excellent brand building ideas. The website/blog can also have a donate button and people could donate a lamp to one family. On doing so, they could actually get to see pictures of the lamps being delivered to one family. This builds trust in my organization. An option called participate could also be set up in the web-site, where anybody could volunteer their time (and money?) to take part in mass lamp distribution. These programs not only build my image, but also bolster sales. The funding for these events can be arranges, either from the Govt. and/or private entities.

The path I want to take in “Image building” for my firm is one where my firm appears to be an NGO from the outside. Serving the underprivileged. Social Service. Etc. This is how I would brand my venture. But what it really is, is a Social Enterprise. Its not that I want to hide this fact from people. But the working culture and the positioning of my firm would be like that of an NGO. I think that is very very important to get hard working, committed and inspired people on my team. People, I believe, connect better when they know they are working towards a “good cause” rather than mere profit. This needs to be engendered within the fabric of my organization. That, I believe, will not only go a long way in establishing an enthusiastic working team, but also make work more fun.

Marketing and Sales within Foreign Markets

As indicated by this week’s reading, the ability of a company to successfully market and sale its product, at the right price and through the right avenues, is a key component of its success. The marketing component of a business can be handled through new social media tools or through more traditional means. Likewise, in today’s highly technological age, there is an increasing variety of ways to sale products to customers, through traditional stores, through the internet, even via text, to name a few.

All of these traditional and up and coming techniques can be used by both domestic and foreign businesses. Since my venture focuses on the international space, my blog contribution for this week examines how marketing and sales are different within foreign markets and how one can successfully launch a foreign venture.

My research resulted in the following articles:

· http://findarticles.com/p/articles/mi_hb3081/is_n2_v34/ai_n28614428/?tag=content;col1

o Outdated (1992) but very informational article on the challenges of setting prices in foreign markets

· http://www.gcx-online.com/bxj/article.asp?magarticle_id=1652

o Article containing information to break into foreign markets

· http://www.helium.com/items/1774414-how-to-conduct-a-pest-analysis and http://www.helium.com/items/1936919-pest-analysis

o Two similar articles containing information on how to conduct a PEST (political, economic, social, and technological) analysis of foreign markets.

From my group’s discussion during our group discussion period last week, I think that the last two articles will prove the most useful. Does anyone have any similar research to share? If so, please comment.

Marketing and Sales

Any business boils down to selling its products (and making profit). Therefore a good plan for marketing and selling is necessary.
I read several related articles on this topic (those in the list of readings for this week). The one that I found most relevant was the “Creating a Marketing Plan: An Overview.” Below is my Marketing Plan. I had to search for more resources in the internet to get more insight on the subject [3][4].

Creating a Marketing Plan
Most of the time, before selling, there is marketing. The marketing plan aims to transform a product or service concept into a successful offering that meets the needs of target customers and fulfills the company’s expectations.
Following the content structure provided in the article, my marketing plan for the Senior Force venture summarize as:

Executive Summary
Senior Force provides online senior citizen job marketplace, a service for facilitating the connection of senior job seekers and job offerer. This marketing plan identifies the market segment and illustrates the strategies that will be used to attract our clients and retain their loyalty. The focused service towards the senior citizen together with social networking and usability feature will provide higher values to the user that the competitor. There are two different income sources: the senior citizens that will seek jobs, and the organizations that will post the job offerings. Two different approaches will be taken for those two targets.

Current Situation

The SWOT Analysis

• Strength: Focused on senior citizen: better accessibility options, better search criteria for experienced senior job seekers. Social networking capability features, and integration with other social platforms such as Facebook and LinkedIn.
• Weaknesses: Late player in the domain. Although we will provide unique service in term of features, there are already business that provide alternative service. Another weakness is lack of expertise in the domain of senior citizen. Most of our data will be from internet and census bureau.
• Opportunities: Offline service, direct approach, is an opportunity. This is true as still many senior people may not be fluent using computer and internet.
• Threats: The internet is a low barrier market. Almost anyone can jump in to the business.

Market Opportunity
According to the U.S. Census Bureau, the population over 60 has been growing at an average rate of 4.8%, much greater than any other age range.
One of the client types is the senior citizens. As mentioned above, the senior citizen population is growing. Nowadays, there are about 76 million baby boomers in the United States in his/her 60’s.
The other type of the client is the organizations that offer jobs. News articles shows that the interest for business related to senior people is increasing [1]. Large enterprises such as Boston Consulting Group [2] are acknowledging that experienced senior workers are assets to the company.
My venture will approach those two type of clients.

Financial and Marketing Goals
The initial marketing phase will take 6 months. In this phase, we will focus on the launching of the system and attracting clients until minimal critical mass is achieved. The second phase will take 12 months. This phase is where we will start making alliances with other organizations. The site the traffic will continuously increase. We expect to have profit in this phase.

Marketing Strategy
For the job seekers, there will be two level of membership: basic level and premium level. The basic level will be free of charge and the user will be able to browse posted jobs. The premium level will be charged with a nominal membership fee of $10/annual. In this level, the user is allowed to post his/her resume in the system which will be accessible by the job provider. Also when a new job is posted in the area of his/her interest, it will be notified through via email/mobile.
Likewise, the organization will be charged for publishing a job opportunity for premium format (unlimited text, image, and highlight). A simple job posting will be free of charge (plain text up to 300 characters).

Takeaways from other readings
• Take advantage of new communication medium: the social networking.
• Add another “P” (People) to the four P’s in the marketing Mix. Creating loyalty among the customer is very important.
• Be creative when marketing, go beyond.
• When assigning price, break away from the cost-plus model.

References
[1] http://www.nytimes.com/2011/02/06/business/06aging.html?_r=1&src=busln
[2] http://features.blogs.fortune.cnn.com/2011/01/27/why-companies-need-to-start-hiring-older-workers/

[3] http://en.wikipedia.org/wiki/SWOT_analysis
[4] http://en.wikipedia.org/wiki/Marketing_plan

- Young-Suk

Marketing and Inspiring !

After reading the article The dragon fly effect I was amazed at what creative marketing could do and read about determination and will power. The story of Alex Scott and her lemonade stand truly touched me. It just proves that with the right mix of determination (goal), attention, engagement and taking action can make any product excel. Reading these amazing stories, I could relate this to my work with Madura Microfinance (MMF) in India.

MMF works with poor women in rural parts of South India. These women are so poor that making a profit of a mere 20$ / month (Rs.800/-) is a big deal for them. The focus of MMF was women, because the company believed that only women can change a society. They lend loans of ranging from 20 to 100$ to women. Women, who have a particular skill or an idea for a business are only given loans. These women are then put into groups called self-help groups , to help them repay their monthly installments. So the challenge was to work on a marketing campaign to spread awareness of their loan products and organisation. We worked with print and television media catering to the villages. Spreading awareness by pointing to the success stories of women entrepreneurs. Taking the media to these villages and exposing them to life in the villages and the determination of these women to succeed created a huge impact on the media !

One women who was uneducated but able to start and run a successful business of rearing cows. Her husband did not work and soon seeing her succeed at what she did started to help her soon. She was happy that with the money she earned her children were able to go to school and be better educated ! I can say this organization enforced all four wings of the dragonfly effect.

Design thinking is one concept, which I hearing lately in many discussions, group presentations and in articles. This article also had a brief mention of design thinking. In one of my other classes we had a detailed study on P&G's effort to restructure the organisation based on design thinking and its principles. Design thinking focuses on the needs of the customer to design a product rather than creating a product and then targeting it to a specific audience. So, I was wondering would design thinking help in the formation of a product for a social enterprise ? What would be its advantages/ disadvantages?

The People's Station: Enhancing the Playbook

Social media is tool that could both make or break a brand. Reading the article "The One Thing You Must Get Right When Building A Brand" has helped me devise an approach to enhance the playbook of The People's Sation into "The People's Choice"

• Incorporate social media as a means to gauge the needs and wants of "the people"
• The People's Station would collect feedback from "the people" on topics in the community they would like to hear about, music they woud like to listen to, industries of interest for job opportunities, as well as other relevant topics of interest
• Communicate through the social media channel the clear customer promise of The People's Station to maintain it as "the people's choice" in order to continuously build up the trust of the public
• Continuously gain support of leaders, businesses, and organizations of the local community in order to keep the promise set forth by The People's Station
• "Build the buzz" of The People's Station by word of mouth networks and other means of marketing

Now going forward, how can I continuosly improve the playbook of The People's Station?

Marketing Plan-the Four P’s

This week we will discuss back to the four of Porter’s Five P to make a successful market plan. The article Creating a Marketing Plan discusses the main components that make a promising market plan, and then uses many paragraphs to discuss the marketing mix to a target market. Simplify speaking, a good Product delivered in a customer-friendly way at a competitive Price through a variety of Places or channels and effective Promotion to the target market.

These four P’s provide a very useful framework for my venture’s market plan. It is a good time to think about them in a comprehensive way.

Product
Physical distinctions

My offer is health insurance for the uninsured. It is an intangible product compared to tangible products such as McDonald’s burgers and Dell’s computers. What defines it is its feature and quality of policies that people can benefit from.

The design of the product requires deep understanding of customers that fall in the market selection. Given the diverse characteristics of my customers and their situation, a customized approach may need to be adopted. However, it means high cost. I need to think about whether I hire medical professionals to do this job, or rely on insurance companies’ services to do this.

Features-types of illness and medical services covered, any constraints on pre-existing conditions, number of household members covered, percentage of claims insured, plan type (HMO, fee per visit, etc.), limitations on hospitals and physicians visited, etc. My envisioned situation would be that people not only get free insurance, but also get the most appropriate plan that fits their situation. The more fit the plan, the less cost it is for them and for other stakeholders.

Performance Quality-the quality of the product depends on whether the features of the plan fit customers.

Conformance Quality and Reliability-I haven’t decided how many partnering insurance companies to work with, or to see how many companies are willing to lower their profit margin and offer plans for poor people. Once the list of partners has been decided, the next thing I need to ensure is that there will not be discrepancies among the plans offered. They should be of similar quality and reliability.

Durability-some of my customers are full-time insured, and some are part-time uninsured during a given year. My product needs to cover their specific needs and I also need to decide a method to ensure that their plans are renewed or discontinued given their situation.
Repairability-the customers’ needs should be reviewed at least annually so that the insurance plans are still a good fit. If circumstance changes, new plans should be offered or discontinued.

Service distinctions
Ordering Ease-the physical distinctions mentioned above and this service all require instant communication with customers. It can be done on the website, the same that the public view and donate money. Given that my customers may not have access to internet, orders can also be made over phone or via mail. In addition, I need to partner with free clinics, safety net, hospitals and all other free medical services that my customers may go to and have an order system available in these places.

Delivery-The customers should be able to track the process of their case on the insurance companies’ website. If not available, such information should be available on my venture’s website through a secured account for each customer.

Customer Training and Consulting-Customers can call to inquire how to use my venture to benefit them, and how to take advantage of the insurance plans.

Place
This is not the place where customers will see the product of insurance plans, but to see what my venture offers. Thus it is the same as the promotion channels for my venture. Place should be where customers go to use free medical services. I followed the Many Paths to the Customer graph to draw mine place.



Price
In my case, price is not set for my customers, i.e. the uninsured. Rather, it is the pricing for insurance companies. I should ask myself these questions.

• What price level I can get to ensure more people covered by my venture?
• How much a percentage should I get from these companies in return to cover my venture’s operations?
• For donors, shall I set different level of donations ($5, $10, $50, etc.)? Will this drive them away or will it increase donations?
• Out of each donation, how much shall I draw to cover the operation?

This depends on a detailed analysis of a budget for my venture month by month and for a fiscal year. It also depends on how fast the donations come in and the number of people covered.

Promotion
As a social enterprise, my venture fits more into the not-for-profit type rather than a for-profit type. Thus all promotion methods and fundraising efforts used by not-for-profit are applicable to my venture. First of all, I need to understand clearly what are the most effective promotion methods for organizations, fundraising return ratio for each method, and determine which can be used for my venture. Next, I need to use the Place channels that I identified above and design specific activities to promote my venture.

What are unique promotion methods application for social enterprise? What new technologies can I take advantage? The following articles mention “Think locally”, which is usefuly for my venture.

Here are some very interesting discussions on marketing for social enterprise http://www.socialedge.org/discussions/marketing-communication/marketing-for-community-based-social-enterprise-february-2005/?searchterm=None

Six emerging marekting technologies for social enterprise: (maybe group buying for health insurance?)
http://www.networkworld.com/community/blog/six-emerging-marketing-technologies-enterpris

Framing My Product Relative to the Competition

My meeting with an attorney at the Pittsburgh History and Landmarks Foundation was extremely useful in that it has helped me clarify exactly what my ambitions for my venture should be and to find what I believe will be the right business model and market positioning scheme to succeed.

Before now, I had a real problem and I was starting to doubt the potential of my venture idea for two main reasons: market potential and positioning. With regard to market potential, I was actually pretty taken back by Dr. Myers' comments last week. Granted, she admitted to having something of a personal background of fighting the kind of work I want to do. But I began to think to myself, here is a city resident who has lived here a long time, much longer than I have, and she probably speaks for a lot of people who are wary of the idea of historic preservation, green construction, or both. I realized that it might be hard to convince a critical mass of people that my building would be better to live in than their own homes. But I realized after my conversation with Anne at the PHLF that, if I just framed my development project a little differently, I may be able to secure a market share.

Granted, there are people who would be willing to pay higher rent to live in green buildings, but it's a small market and it's not exactly the kind of social value that I'm most interested in building. Coming into the semester I had talked about making green buildings available to lower income neighborhoods, and my goal is to avoid the critique that my venture is basically serving rich people who can afford my product. One thing Anne helped me understand is, the potential financial benefit of historic preservation tax credits and easements is huge, enough to offset a large portion of construction costs and historic preservation costs, if they can be kept in check (cost overruns in the historic preservation of a building can often be drastic and sink a project, because there are strict federal guidelines that must be adhered to). She pointed to the example of the Heinz Lofts in the North Side as an example of this where the developer garnered millions of dollars worth of tax credits and easements. It occured to us that, rather than spreading this money around to other interests, it could best be used to help reduce what my venture would charge for rent, making my buildings more affordable. This would help me accomplish my central goal, as I outlined it at the beginning of the semester, of providing better community access to green buildings.

I think, if I frame my venture this way, there is room for a lot less incredulity like that expressed by Dr. Myers. What I would be providing is high quality housing at an affordable price, or at least this is the way it can be framed for the average consumer. But I would still be providing a product for that specific smaller market that wants historic preservation, green living or both. It's a win/win from a positioning standpoint.

Markets and Positioning

The third article was not too relevant to my venture idea as I am primarily targeting residential users in the US (and potentially other industrialized nations). The reason for this is the high aggregate and per capita energy consumptions in industrialized nations.

EEme connects residential users with utilities, product/service providers, municipalities and provides them with relevant EE rebates and loan terms. Given the multifaceted nature of this service I face different customers and propose different values to each group of customers:

1. Residential users will save on their energy bills.

2. Utilities will avoid facing harsh monetary penalties that are posed by their states when they fail to meet their energy conservation targets as set by their states. Further, EEme will help utilities monitor their Demand-side Management (DSM) programs and reduce their DSM administrative costs.

3. Product and service providers will enjoy increased business volume.

4. Municipalities and other social investors which provide financing for the residential users to deploy EE measures, will enjoy a return on their investment.

Although there are a few newly established startups (e.g. Energysavvy, Energy Efficiency 2.0, etc.) which provide users with an online tool to capture their EE potential, such services are fairly unknown to most users. Hence, a new demand area is being created. EEme's competitive advantages compared to the other companies are:

1. Utilization of social media for user awareness and participation.

2. Enhanced rebates via partnering with product and service providers.

3. Loans via partnering with municipalities and other social funds.

4. Utilization of aerial and street-view thermal imaging to refine target market and thus not require the users to take an online energy audit (unlike e.g. Energysavvy)

5. Clear value communication to users via avoiding detailed energy jargon. Easy-to-understand bang for the buck type of approach will help user tap into relevant and cost-effective measures.

Market Segmentation, Target Market and Positioning

This weeks reading focused on Marketing Strategy. The authors broadly classify Marketing Strategy into three distinct phases:

1. Market Segmentation

2. Target Market Selection

3. Positioning.

I tried to implement these ‘mantras’ into  my venture and the following are my thoughts on that.

Market Segmentation

From the outset I was very clear that I want to target a very specific group of people in India’s society. My segmentation is based on affordability. I target the rural people of India who have an income of (Rs.2000 to Rs.5000) p.m. This represents a section of society who are in a position of moving into the ‘comfortable living’ bracket of the rural society, if provided with amenities like infrastructure and in the case of my firm – Clean Energy. Now corroborating this with what the article states, I guess my venture falls into the Segmentation based on observable characteristics of customers.

I also tried to answer the three questions posed at the end of the section.

Understand the benefits the customers seek.

The customers seek access to low cost lighting, with no effects on their health (as opposed to kerosene lamps). This is the benefit my firm provides to the customers.

Segment the market and develop prototypical customer profiles based on the customer benefits.

I have segmented the market based on the affordability of the customers and specifically target the customers in the income range of Rs.2000 to Rs.5000 p.m. As of now, I have no basis for selecting this range apart from my ‘gut feeling’ of having worked with the rural people in India. But I am open to change this range depending on actual conditions and locations within India.

Find observable variables most likely to discriminate among the benefit segments to identify membership in specific segments.

One common thread that runs through the customers I want to target is that these people are primarily into agriculture and cottage industry (like weaving, dying, etc.). So in my marketing strategy I need to focus on those facts that these people can relate to. Thing like improving income generation, improving kids education and improving health are what these customers would be most concerned about.

Target Market Selection

The authors state the in order to understand Target Market selection, it is important that one understands Differentiation.

The authors suggest that one draws up a competitor capability matrix.

	Light my Home (My Firm)	D-Light	Duron Energy	TERI (Government of India)
Ability to conceive and design	?	X	X
Ability to produce	?	X	X
Ability to Market	YES			X
Ability to Finance	?			X
Ability to manage/execute	YES	X	X

This is my matrix. The ‘X’ indicates ‘Good capability. And the immediate thing that hits me is the advantage the competitors have over me in the first two rows. This worried me. All these firms have the advantage of starting early, optimizing their design and product. If I were to start the design process for my product, I would literally have to start at the drawing board. What do I do? I have the technical know-how of how to build a solar lamp, but is it worth investing time, effort and money into product development. I must seriously consider this. Shall I just focus on the distribution of these products rather than manufacture? The reason I say this is because, row 3 and row 5 are the strengths of my firm, thanks to my previous experience of working with the rural Indians. My contacts and distribution chain is already set up in a gross form. I need to only optimize this. I could really do with some suggestion.

Any help on this?

Positioning

In order to arrange a product to occupy a clear, distinctive and attractive position in the market, one needs to position their product appropriately. I decided to work on this for my product, as per the article.

• Who are my customers? 

I have already identified my customers. So this part is OK.

• What is the set of needs this product fulfills?

Again, I have answered this, so I am fine.

• Why is the product the best option to satisfy those needs?

So this is my USP. Distribution. The problem with ‘high-tech’ in India is availability to the common man in the rural areas. I ask myself this question, ‘If a cake of soap can be made available in the remotest location, why not a solar lamp’? I am not being utopian in any way by asserting this question. It is a reality. Coke and Pepsi have done this. You can find Coke and Pepsi in virtually every small shop-around-the-corner in remote Indian areas. This is something which can be made feasible with by setting up low-cost distribution chains.

So I got thinking, ‘What is my Positioning Statement’?

Light my home provides the cheapest and the most widely available clean energy solar lamps among all low cost lighting solutions because you can buy it at your corner store.

Or

Light my home is the best option for your clean and low cost lighting needs because you can buy it in the end-of-the-road shop.

My thoughts: Somehow, this does not convince me enough. It sounds like a weak statement to convince someone. Is it a convincing argument that just because something is available close to you, then it the best choice? Well in retrospect, that is true. Don’t we base our decision on availability and distance. We all like ‘close to home’ shops. In fact when I moved to Pittsburgh, one of the criteria in selecting a place to stay was ‘It must be close to Giant Eagle’. So distance does matter.

In summary, I need to decide if I must produce and design the lamps myself. I could start off distributing products from other manufacturers and then once I have a foothold into the business, possibly explore the fact that I could design the product myself. That remains to be seen. Meanwhile, as we move on in the semester, I find myself thinking on dimensions that I would never have thought on before, on things I had taken for granted. Like Prof. Tim Zak’s example on the engineer who thinks, ‘My product is good so people must buy it’. After all, at the end of the day, I am an engineer. And it is good to look outside that box for a moment or two.

Market Segmentation, Target Market Selection and Positioning

MARKET SEGMENTATION

TARGET MARKET SELECTION

POSITIONING

Differentiation

these are necessry steps to acheieve a successful marketing strategy, because it provides focus for the organization

Market Segmentation- involves dividing the marketing into different segments based distinct characteristics, behavior and needs The goal here is to group similar customers together, so that they can be served more effiently and effectively as opposed to a segment with different customer types. in order to achieve these goal, understanding the customer is very important, this would help ensure that you distinctly segment the customers so that different segments can be easily distinguishable. For my Social venture, I am differentiate my customers based on their wealth my target market is the over 71% of the Nigerian Population that is leaving below the poverty mark.

Target Market selection- This is the next step after Market segementation. the goal here is to determine what segment is financially most attractive, thus maximising the profit of the organization. Understanding differetiation is very important in this step. Marketers have to be able to identify how differenttheir organization is fro other competitors and what areas their organization is best in, and work on its advantages. For my social venture, I am hoping to increase my revenues based on an increased quantity of customers and not price, so the main variable driving my revenues is the quantity, and as such, my initially health care facilities are going to be in the areas that are both very impoverished and densely populated.

Positioning-The marketers effort to identify a unique selling proposition foe the product. A good positioning statement should answer who are the customers, what needs are being fulfiled by the product and why is the product the best option to satisfy the need.

Differentiation- Organizations shold clearly differentiaste their products from that of their competitors. There are vertical and Horizontal differentiation. Vertical differentiation, is when all buyers agree that Product A is better than Product B, and if they are both sold at the same price nobody would buy product B. Vertical differentiation.Vertical differentiations takes into considereation that even though consumers are different they take advantage of the customers willinglness to pay. Horizontal differentiation if product A and Product be are diferent in such a way that costumers consider indifeerent. So if Product A and Product B are sold at the same price some people with buy Product A and others B. Horizontal differentiation is something like differentiation based on colour.

Understanding Opponents--where to start?

Competition is something that has been at the forefront of my mind since starting to work on onlyinpgh. Not only is it something that is repeated many times in business classes or articles, but analyzing competition, even if subconsciously, is usually how many venture ideas are started. The light bulb going off in someone's head one night when they think, "You know what would be great? If there was something that could do x." is basically a very cursory competitive analysis. After all, if you knew of someone doing exactly what you're talking about, then you wouldn't see it as a need, would you?

However, as the Competitor Analysis and Market Segmentation articles discuss, when it comes to competitive analysis, the devil is in the details of how you define competition and how you define your customers. No matter what need the product is addressing, it is being satisfied by someone at some level currently, and it's up to us to figure out how and how to do it better.

There are a TON of competitors for onlyinpgh, some of them established businesses and some of them more informal. People are currently finding things to do in a multitude of ways, and onlyinpgh is basically just trying to make it easier. The people looking for things to do can also be segmented in a multitude of ways, including undergrad college students, graduate-level college students, high school students, parents with families, long-time residents, out-of-town pleasure visitors, out-of-town business visitors...the list can go on and on. Each of these groups has different priorities and looks for things in very different ways.

My question is: where to start? In terms of competition, should it always be the most popular current provider of event information, or should it be the one that is the most similar to what I'm trying to do? In terms of individual users, should it be the one's I'm most familiar with (college students), or should it be the one's with the most disposable income (definitely NOT college students) or some other group?

Market for the Senior Job Seeker

Now we are in the phase of analyzing the market to position the product. The article “Market Segmentation, Target market Selection, and Positioning” provides basic notion on the subject.

The reading help me further refine my venture concept.

Market segmentation

For my venture, the market is segmented based on both benefit sought by customer and common characteristics. In my venture, this is possible as it is clear the benefits the customers are seeking and at the same time, it is specifically for people of age over 65.

• Benefit the customers seek. Our customers are expecting to find the most appropriate job for him/her considering his age.
• Segment the market, develop prototypical customer profiles. Our customer base at one side will be mostly retired people over 65 with regular or sporadic access to internet. These people have had previously job, and now are highly experienced in all kinds of domains. At the other side of our customer base will be organizations that requires labor. The organization can be private companies as well as government or non-profit organization.
• Find the observable variables most likely to discriminate among the benefit segments. People of age over 65 (baby boomers). Also high profile or large organizations, such as multinationals, government offices, etc.

Target Market Selection

Given the characteristics of the service, target market, I believe, is straight forward. An important factor would be the narrowing of the market selection to a specific area. For the purpose I have conducted a research of baby boomers concentration by state. It turns out that Maine and other states in northern east part of the country satisfy this criterion.

Positioning

The article game me a good starting strategy for the positioning: define the positioning statement.

Our Senior Force site is the most effective job connecting site for senior citizens among all job seeking sites because it focuses on senior citizens unique characteristics and takes advantage of social networking.

Answering the three key questions

• Who are the customers?
  The main customers are the senior citizens over 65.
• What is the set of needs the product fulfills?
  The service will facilitate retired people to find appropriate jobs.
• Why is the product the best option to satisfy those needs?
  Our site provides job indexing, categorizing and querying focused for people with more than 35 years of experience. It also provides user clustering and networking for enhanced experience. Furthermore usability features for senior people making it easier for them to use

To identify the differentiator, I identified the possible competitors. There are two types of competitors: the generic job market site as monster.com, and the senior job market site such as www.seniorjobbank.org. The former is too generic and the information classification is not suited for senior job seekers. The latter is focused on senior, but the functionalities are primitive.

Our service, as previously mentioned will have enhanced functionalities for job seeker/poster. Some of the functionalities are automatic job clustering by criteria, active notification, and networking among users. It will also provide better usability for senior people.

- Young-Suk

Starting a Business in African Emerging Markets

This week’s readings focused on advice for how we can identify the key market for our social venture and ourselves for success amongst our competitors. Especially interesting to me was the article “Strategies that Fit Emerging Markets” because of the tips it gave for researching, choosing, and succeeding within developing markets. Although I was pleased with the advice offered in the article, I was disappointed that it only focused on the BRIC countries (Brazil, Russia, India, and China).

Given that the focus of my venture is Nigeria (with eventual hopes of spreading into other African countries), I did some research into how to succeed within African markets. The following link to relevant information I found:

· http://www.businessweek.com/smallbiz/content/sep2009/sb20090918_418026.htm

· http://www.businesswings.co.uk/articles/Doing-business-in-Africa

· http://one.org/blog/2010/11/12/doing-business-in-africa-where-does-the-continent-rank-in-business-regulations/

Although all of the information I found was valuable, it was amongst slim pickings; most of the information I found was either from non-reputable sites or in blog format. Does anyone happen to know of articles, websites, etc. in which I can gain more information on this topic? If so, please comment.

Competition: A growing 'new car' industry in the developing world

One of the primary challenges to my venture concept is that there is an increasingly large presence of new and used car dealers throughout Asia and other areas in the developing world. Large auto manufacturers are also building cheaper, smaller cars that are specifically targeted for these markets. Horizontal strategies which once targeted only the economic elite with offerings similar to those available in Europe and North America have transitioned to vertical strategies which extend to models positioned below those in American markets. An Indian carmaker Tata has developed a cheap car called the Nano which has been a sales success. According to the Indian based used car marketing site I found, a five year old Tata passenger car can be purchased for as little as $5k in equivalent US dollars.

Interestingly, Tata’s business model has become such an enormous success that it recently took ownership of Jaguar and Land Rover, a group of luxury British car brands. Although the association is only financial at this time, it’s clear that makers of small cars targeted towards the developing world are morphing into serious businesses. Similarly, the Chinese government is requiring foreign automakers to partner with Chinese auto companies if they wish to have an engineering and sales presence in China. This has created a number of partnerships which may leverage historic engineering knowledge with China’s enormous manufacturing capabilities. They are also beginning to produce commercial vehicles.

My original cost estimates would allow a wrecked compact American market car to be rebuilt for $2.5k or less. While this model is still very competitive the economics may become more sensitive over time. As a possible alternative, I want to begin researching how the model of rebuilding damaged cars might benefit from focusing on locally produced vehicles. As the number of cars on the developing world’s roads increases, presumably accidents and secondary parts markets will follow suit.

One advantage in targeting small businesses is that they require more space and a larger payload not offered by cars such as the Nano. The educational aspect is also a key element which I need to further develop. Although it may be possible to get government support for training mechanics, these governments are increasingly funded by the burgeoning local auto makers. At this time my venture concept would only be indirect competition, however the discussion of developing a competitive business model and market strategy in this week’s readings made me consider some of the potential risks and considerations that significantly alter the course of my venture concept.

http://www.cardekho.com/usedCars

http://www.tatamotors.com/buy_tata/