¶ … product is a software application that gathers information from consumers via credit and debit card purchases. This information is then used to predict future purchases. This application is basically an extension of the buyer predictive software that is used by many online retailers already, except that is uses a broader purchasing pattern, giving more data points when compared with current applications on the market. Where Amazon might use past Amazon purchases to predict future purchases, this software would use all debit and credit purchases, thereby improving its predictive power.
This application is useful for retail marketers. These marketers will benefit from the app's predictive power, as it will help them to better target customers. The software, therefore, increases the efficiency of advertising as measured by return on investment. This benefit is superior to existing similar applications on the market because there are more data points, from multiple vendors. This provides a clearer picture of the buying patterns of each individual, which allows for more accurate targeting.
The software works by gathering information from credit and debit card companies through their point of purchase software. The data is then aggregated across the different retail stores and online retailers. Furthermore, where possible the data is linked across multiple cards, by social security number, name/address or some other distinct variable. The results are then analyzed to find patterns, and these results are expected to have greater predictive powers than other similar apps because for each customer there will be more data points.
Company Description
Our company has a pre-existing business, but this venture is an intrapreneurial effort within that business. Thus, we are already equipped with an allotment of capital, some talent and established customer contacts. These are all things that will help us to be able to grow more quickly than if this was a start-up. In senior management can be convinced that this project has a high enough ROI, we will have access to considerable resources to make this project succeed.
Industry Overview
Marketing in the United States is the driver of entire industries. Advertising is worth $171 billion in the United States (eMarketer, 2013). The main customers in this industry are manufacturers and retails, who are seeking to reach the consumer market. With the large amount of money that is spent, it is important for these firms to maximize their efficiency. With an Olympics, World Cup and midterm elections, it is expected that 2014 will be a year of strong growth in the business. The industry will also benefit from modest improvement in the economy, which should spur an increase in consumer spending. The biggest growth segment in advertising is mobile, which is expected to nearly double in size by 2017 (eMarketer, 2013).
Firms that provide business intelligence to enhance advertiser outcomes typically enjoy tremendous success. The leader in this industry today is Google, but several other online firms have also been successful, including software providers. Online is the biggest market for this sort of business intelligence because of the ability for companies to gather vast amounts of data. This trend, known as Big Data, is where our company will make its mark, by bringing the most refined, useful Big Data to the market (Bradbury & Anderson, 2013).
Target Market
The application will provide our company with data that we will then send. Our target market will consist of advertisers. These are generally going to be medium or large retailers. This is because we are seeking to predict consumer retail buying patterns. The retailers will need to be large enough to get value from our data, and have the means to buy. We estimate that our target market contains many of the nation's largest advertisers. We are also going to target the competitors of these large advertisers, companies that feel that a technological edge is going to be critical to their success in the long-run.
The value of the target market is quite high. Our services will be priced based on the value we offer customers, but using Google as a reference point, the target market is worth tens of billions per year. The key selling point to attract this market will be our superior data. There is some price elasticity of demand. Our customers have substitution options and will compare our service against those options in order to determine where the best cost-benefit ratio lies. As long as we have the best cost-benefit ratio, we can expect low price elasticity of demand, but when our cost-benefit ratio is closer to that of the competition, price elasticity of demand is going to be high. This ratio is going to be...
Where our results are better than those of our competitors, we have the opportunity to price at a higher level than them, but overall we will need to price in line with the market. Value to the customer is critical, because our customers tend to operate on a 'return on investment' basis, and will seek an ROI from our service that is superior to the ROI other services are offering. Thus, our pricing strategy will require us to understand where key competitors are pricing, and to get a sense of how much incremental revenue our customers will gain from our service vis-a-vis the customers.
Distribution Strategy
Software and distribution is easy and can be done remotely over secure connections. The company will need to be able to do this in real time in order to meet customers' needs. Sourcing the data is the critical element, but the app is designed to work in concert with the point of sale machines that are used by retailers and online retail systems. Once the data has been transmitted back to the servers, it is processed, and the output data is communicated back to clients. This should happen on demand to offer genuinely value to the customers. The value is in the quality of the inputs, the quality of the data and finally in the speed at which this transaction can take place.
Communication Venue
Advertising is the best method of reaching the audience and should be utilized. This will come from trade advertising and personal contacts. There is a role for public relations as well, to attract advertisers. But we will be making contact with a number of major customer targets directly as well, to help sell our service. Alternative media are especially valuable since most of our business model is digital. We can have a strong marketing presence in digital media, which will help us to reach our target audience.
The critical deciding factor for us will be the reach of the advertising. We are constrained by capital initially, so it is important that we get the reach we need in order to pursue the best customers. It is recommended therefore that the best communications venues are online and offline at trade shows where we can meet a number of prospective clients at one time.
Message
The message will focus on our positioning as being able to deliver the most robust results in the industry. We will specifically compare our results against those of the industry leaders in order to support our positioning. The message should focus on our innovative idea, our patent protection on the program and our ability to deliver superior results consistently. Most of our target market wants to be the best in their industries, so if we can position ourselves as the firm that will get them closer, then that is going to help us grow our business. The communication venue -- especially when we talk directly to potential customers -- enhances the message because high level business is often done on a person-to-person basis.
Buyer Analysis
The buyer is the end user for our product. We are selling data, and therefore the people that use the data are the same companies that purchase it. They may subcontract to external advertising agencies, and we should be willing to accept that and work with those agencies to help our clients to succeed. By focusing on our clients' needs, we can carve out a niche with our superior data.
Recommendation
It is recommended that we focus on both personal selling and online advertising to get our message across. We are targeting fairly large buyers, so personal selling is important but we also want to create buzz about our data service. We are likely to have some controversy about privacy with this product, so it is important that we can spin that inevitable publicity into positive outcomes.
References
Bradbury, D. & Anderson, T. (2013). Big data and marketing: An inevitable partnership. The Guardian Retrieved November 25, 2013 from http://www.theguardian.com/technology/2013/oct/16/big-data-and-marketing-an-inevitable-partnership eMarketer. (2013). U.S. total media ad spending inches up, pushed by digital. eMarketer. Retrieved November 25, 2013 from http://www.emarketer.com/Article/U.S.-Total-Media-Ad-Spend-Inches-Up-Pushed-by-Digital/1010154
Pearson, S. (2009). Taking account of privacy when designing cloud computing services. Labs HP . Retrieved November 1, 2013 from http://www.gtsi.com/files/6713/6355/4960/HP_Lab.pdf
Read, M. & Arabee, Z. (2011). Increase product sales of electronic companies by using IT…
