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Marketing Strategy Analysis for Student Nurture Network Concept

Marketing Strategy Analysis for Student Nurture Network Concept

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Student Nurture Network Student Nurture Network Document Transcript

  • STRATEGIC MARKETING ANALYSIS FOR:IMBA 2010/11BLOCK 1 STUDENT NURTURE NETWORK (HTTP://WWW.STUDENTSNURTURE.IN/) Submitted By, Uday Shankar A B 0
  • STUDENT CONNECT NETWORK: STRATEGIC MARKETING ANALYSISIntroduction & Understanding The Present:The education market in India is one of the most active, crowded and growing markets that has helped propelIndia to a global arena. The saving habits of middle class people and the governments plan to spend about fiveper cent of GDP on education in next five years is estimated to double Indias education market size to $50billion by 2015, according to projections made by Assocham.The higher education market, in particular the Bachelors Degree segment that includes courses like B.E, B.Sc,B.A, B.Tech, BBM, B.Com and B. Architecture, is one of the segments within that is more active and changing inthe recent times compared to other education segments. This market is dominated in urban areas of India andprimarily in cities like Bangalore, Delhi, Mumbai, Chennai, Calcutta, Pune, Trivandrum and few others, and hasless prominence & existence in rural areas due to the relatively higher population and availability of studentsin urban areas.Bangalores US$ 11.88 billion economy makes it one of the major economic centers in India, with the valueof citys exports totaling US$ 9.81 billion in 2004-05. With an economic growth of 10.3%, Bangalore is the fastestgrowing major metropolis in India and is also the countrys fourth largest fast moving consumer goods(FMCG) market. With a per capita income of US$ 1,695.89 in 2006-07, the city is the third largest hub forhigh net worth individuals.Bangalore, also called as the Silicon Valley of India, has the largest number of information technologycompanies located in the city which contributed 33% of Indias IT exports (of US$ 33 billion in 2006-07).Infosys (total sales of $4.6 Billion) and Wipro, Indias second and third largest software companies areheadquartered in Bangalore, as are many of the global SEI-CMM Level 5 Companies. The headquarters ofseveral other prestigious government/public sector undertakings such as BEL, HAL, NAL, BHEL, BEML, ISROand HMT are also located in Bangalore.Bangalore is one of the famous cities in Karnataka, India mainly because of the IT revolution that it broughtto the country. It is home to a large number of academic colleges and churn out outstanding students yearafter year who make a mark for themselves in a various fields of activity. However, there is a lot of scope forsports, cultural, soft skills and academic activities in these colleges. The graduates from Bangalore areabsorbed by many reputed industrial houses, multinationals and corporate sector and hence studentscome from far and near to the Bangalore colleges. Most of the Bangalore colleges have impressive campuses, somuch so that many films and ad films are shot here.Who: Understanding the market:However, the variety and opportunities due to the huge number of colleges is now seen as a major concern forthe students when choosing a college, primarily because the students are not able to consciously, with goodqualitative data, choose a particular bachelor’s college since there are many colleges with not much valuedifferentiation. It is also seen that, due to the enormous growth, most of the colleges have only been able to playthe number by increasing the number of seats and sadly not in the same spirit the quality of educationespecially in soft academic skills like written & spoken communication skills, interview skills, entrepreneurship,networking and others. 1
  • Hence a huge market opportunity exists in serving these customers, who include,  Primarily, the Students (by helping to choose Colleges before they get in to any bachelor degree, Platform for providing non-technical/soft skills and also at the end of graduation Help choosing/applying for Companies) &  Secondarily, o Colleges (Wanting to come out of the clutter, market themselves & get the best students by showcasing their value propositions) and o Companies (In need of right talents for their expanding workforce)The new start-up “Student Nurture Network @ http://www.studentsnurture.in/ (hypothetical site)” will explorethis market opportunity to serve the needs of all the 3 customers.Choosing a SegmentBased on this market opportunity, a business level strategy of Outside-In approach (as per the nomenclature in thebook “Strategy Synthesis” by Bob De Wit and Ron Meyer) is followed to build a customer value proposition. Theinitial scope/segmentation strategy will be a Niche Strategy approach (as per the nomenclature in the book“Marketing Strategy & Organization”) catering only to the Bachelors Degree Segment of Higher Education.What: Customer Value Proposition & The Present Business ModelThe Customer value proposition targeting the student community consists of 4 competitive advantages as in thebusiness model below, 2
  • • Inter-College Networking • Info of all Bachelor • Career Counseling • Books • Networking Events with Degree colleges with • Invitation for many • Tuition Fees etc Alumni’s history, departments, contests like Debate, • Certification Programmes • Invitation for various courses available, entry Creative Essay Writing, College requirements, noted Computer Programming, Cultural/Academic Events alumni’s & testimonials White Paper Contests • College Ranking (ranked and others. with inputs from current & past students, parents, companies & experts) • Seminars, Job Fairs etc. • Industry Workshops. • Newsletters communicating Tips, Testimonials, Interviewse etc. 3 Months 6 Months 1 Year(s) 2 Year(s) Replicate Success Performance Measurement / Target against Timeline: (Numbers in each box below represents the number of Student Base, Colleges (that students come from), Companies in Tie up with and On-Venue Events Hosted) Construction Growth Phase• 250 Students, Phase • 2000 Students,• 2 Colleges • 10 Colleges • 750 Students, • 5000 Students,• 1 Company • 5 Companies • Diversify/Replicate • 5 Colleges • 30 Colleges Success?• 2 Events • 8 Events • 3 Companies • 15 Companies • 5 Events • 15 Events Creation Reputation Expansion Phase Building Phase Phase? 3
  • Revenue Generation and Marketing Mechanisms: •Online Web Ads (Google Ad Sense • Students: at least for the first 1 year until we Award Credit Points for have a sizeable user count to start Sign up, Providing having our own advertisement Testimonial, Responding support) to a Discussion Forum •Banners at Events Query, Introducing a new student, Providing •Company/College Sponsorship of Information of an Events (Platinum, Silver & Gold) unreported academic •Sponsorer of the Month (Prominent event, Sharing Space in Site & all Information, Responding events/communications in that month) to a Surveys, •Charge for space in weekly Participating in communication emails Seminars, Online Events •Sponsorship for Promotional/Credit and Any other contests. Points Redeemable Awards such as • Companies and T-Shirts & Caps, Books, Mobile Air Time, Shoes, Pens and Other articles Colleges: that carry the corresponding Drive advertisement & sponsorer logo. sponsorship revenues •Participation to Different On-Venue from companies & Events is free for the first year and colleges by showcasing later charged by a minimal amount active student (logged in of 50 - 100 Indian Rs (1 Euro = 60 at least once the last 7 Rs) to ensure quality participation. days) base and page hits and Student Value.Business Environment:The targeted market segment is underserved and there aren’t any significant players in this arena. Some effortshave been displayed by few individuals/organizations but they have mostly been stale, intermittent and in-consistent lacking quality and focus particularly on this segment. Some of the online sites working on this area areinspirenignite.com, highereducationinindia.com and educationbangalore.com with vtunews.in being themost active one in relative sense. Though vtunews.in is working towards this, a simple analysis of it revealed it’smany issues like Badly designed website, Flooded Online Ads, Meager/No marketing efforts, Caters onlyto students already in VTU and only for VTU colleges, it’s more like a information aggregatordisplaying/connecting information in its website.With the phenomenal growth of the segment it may attract potential new entrants, who could replicate the model.Hence a strong focus on continuously increasing, improving & delivering the Customer Value Propositions withinnovations in the interaction mechanisms along with early mover advantage will help the company to establish astrategic leadership position and competitive advantage. 4
  • MABA Analysis in comparison with Medical/MBBS Higher and Pre-UniversityEducation: (Based on the data available from government websites mentioned in the bibliography &references) Market Attractiveness Business Advantage Govnt Regulations (-ve) Market Share Technology Availability Customer Loyalty Entry Barriers Technological Competence Competition Patent Suppliers Bargaining… Customers Bargaining… Flexibility Economic Trends Sensitivity Organization Size Image Acquistion Costs Location Market Growth 0 2 4 6 8 10 0 2 4 6 8 10 Pre-University MBBS/Medical Bachelors Pre-University MBBS/Medical BachelorsThe MABA analysis reveals that the Market Attractiveness is higher in terms of Growth & Size, with BusinessAdvantage higher in terms of location and market share advantage.Marketing Intelligence:The Market Intelligence data will be primarily obtained from the research firm juxtconsult.com that specializesin market research in the local Indian market. However the specific data pertaining to user/student behavior fromat the websites are tracked and collected using smart IT systems built in to the web site along with usageof Google Analytics.The site http://www.studentsnurture.in will itself also have a survey mechanism to collect data directly from theusers/students (encouraged by awarding credit points).Data related to number of students joining in to the Bachelor degree education system from differentlocations will be obtained from KCET (Karnataka Common Entrance Test) board which is made publiclyavailable based on the RTI (Right to Information) act of Indian Legal System.All the different market data will be used to target marketing efforts across specific student locations, studentsfrom the dissatisfied colleges, companies seeking huge number of campus recruits and for thedevelopment of organization website. These data will be used by a internal review committee responsible foranalyzing these different data and working out a appropriate strategy along with the respective departments. 5
  • Raison D’ètre & The Organization’s Mission:The reason for existence of this organization, which will be privately held among like minded investors, is notsolely to make money. The primary objective is to serve the interest of the student community. However, theorganization will make enough profits to cater to its going concern/continuity ensuring enough capital andresources required for wages, website maintenance & development and investment other required assets.The mission statement of the organization is “Connecting & Nurturing Student Community to Help themSucceed and Realize their Dreams”. The statement is chosen carefully enough to ensure that it does not limitthe growth ideas of the initiative by limiting solely to a single location or degree. Though a niche segmenttargeting is chosen now, it is only to ensure a clear focus and to take advantage of the current marketopportunities.Sustainability of the Competitive Advantage:The advantage of entering the market now provides us with an early mover advantage since no dominant playerexists in this market now. The low or near zero entry & exit costs also makes the entry in to this market a stronggo proposition. However, we should also be cautious of the rapid growth in the education segment that couldchange the way the education industry is run. Some of the risk factors, though relatively low, are formation of asimilar body by a group of colleges (Comed-K Group of Institutions could pose such a thread due to the alreadyexisting network of colleges) and replicating the offering, Change in laws & legislations by adding certainminimum basic requirements that need to be met for all the colleges, Threat by the Leaders of the Educationalinstitutions backed by political leaders and any other factors. Hence the sustainability of this organization requiresthat a strategic alliance/understanding along the local government and educational institutions beestablished.Organizational Sustainability also requires that we continuously respond to the new requirements of the corporateworld that are not met by the colleges, because corporations are the ones that ultimately take in these students.The improvements & innovations can be achieved by via introducing new type of events, virtualconferences/webinars, website enhancements and other things that are prevalent in the times.Vision of the Organization (3 Year Vision/By 2014): One of the most respected organization’s in Bangalore for its efforts in the area of Education Improvement. Nurture & Enhance the lives of 10,000 students with many stories to share. Tie up with more than 50% of the companies in Bangalore working in Information Technology Space. Students from more than 75% of all the Bachelor Degree colleges in Bangalore.Market Making, Hunting and Farming:The start of “Student Nurture” was by itself a classic example of a market making approach where in it created amarket which was not earlier targeted. In exploring further opportunities, in future, to serve the mass, theorganization could create similar markets for other educational streams like MBBS and Pre-University educationalong with entering in to rural areas after looking at high growth potentials. The organization could also grow tostart a separate arm that develops technology for innovational methods of teaching in education. It isestimated, by World Economic Council, that by 2010 approximately 75% of world’s population will live in cities!A possible Market Hunting approach could involve using the huge student base numbers to get players fromother industries for a win-win relationship, an example could be granting crowd-sourcing projects, 6
  • opportunities for part time sales workforce that would help students supplement their income and nurture actas an intermediary deriving a small percentage of this income which would go directly to the foundation fund.Mining existing customers for more opportunities is an example of Market Farming. It could involve havingcompanies sponsor some student’s education for a year or so, that would also help companies bolster their CSRimage. Sell any technologies & products produced/developed by the Student Organization to the customercompanies.The Future Business Model and The “BHAG”: •One of the most respected organization’s in India for its efforts in the area of Education Improvement. •Nurture & Enhance the lives of more than 150,000 students, with thousands of stories to share. •Setup the “Education for ALL” foundation for funding scholarships, and improvement of education in rural areas of Karnataka (Bangalore is the capital of Karnataka). •Run a top notch university under a separate arm, for higher education in Bangalore and One other college in Northern Karnataka that would revolutionize the way education is imparted. •Provide Venture Capital Support for Entrepreneurship oriented students. •Students from all the colleges in Bangalore along with students from different parts of KarnatakaCreating & Screening Strategic Options:“If you do what you always did, you will get what you always got”, is one of the famous quotes from Einstein thatis very much applicable to organizations that do not innovate. In a competitive market this would translate suchthat, an organization would always get less than what it earlier got. This is because there will always be manyentrants in the market who will try to replicate the successful business models and reap its benefits. Hence anyorganization will have to continuously work to create many new strategic options and screen & implementthem to say ahead of the race and have a competitive edge. In this case it is important for Student Nurture toinnovate its value proposition to students as it grows ahead in future. It could be in terms of usage oftechnology, introducing innovative pricing models and any other activities to ensure it’s leadership/earlymover advantage position. It should constantly spot the trend in education and student behavior,understand and analyze its weakness areas by value auditing, work towards continuous value innovation,leveraging what could be done, and finding the feasibility & balance. 7
  • Seeing, Starting and Sustaining:Once the BHAG (Big Hairy Audacious Goal) is created, the organization needs to start working towards it in thenear future. This is the further growth phase in which the organization shift involves moving from Thinking toImplementation. The want to change need to be communicated in the organization and buy-in from all thestakeholders need to be obtained. This will ensure success of the overall plan and reduces the risk of anyonederailing the BHAG mid-way or even before it is started. In this case the BHAG is in line with mission of helpingstudents and hence it shouldn’t be difficult to work towards it when the time comes.The Seeing Phase is about starting the process towards realizing the opportunities that exist over and beyondspecific the attributes like Bangalore and Bachelor Degree Higher Education Segment. It is about moving furtherand expand the success for a larger reach and serving.The Starting Phase is about communicating the BHAG to all the employees after seeing the existing or creatingnew opportunities to investors, students, Alumnus and others to help them understand and thus in return help theorganization to embrace this BHAG. It is imperative for organization to do this in a way that it also helps itevaluate the strategic plan towards BHAG by the all the people who will touched by it.The Sustaining Phase is when the seeing and the subsequent starting phase is achieved successfully and theorganization moves towards sustaining it. It is great to start new initiatives and implementing new programmesbut if that cannot be sustained it is of no use. It requires constant focus and analysis of the market trends, as inthe previous phase, to ensure all the initiatives are sustained and taken forward for the next cycle of growth.Growth is inevitable for any organization that wants to prosper itself and its customers and to expand doing itevery time.The above phases could be achieved by making coalitions with any other players, small or big and requires a senseof urgency within the organization. It requires a concerted effort to knock-off the barriers that exist in the timesto successfully achieve the higher vision or the BHAG.Balanced Marketing Scorecard:Balanced Marketing Scorecard is an excellent example of systematized common sense in business life. It translatesbusiness vision in to daily practice by linking actions to measurable objectives, which is a balanced distribution offinance processes, internal business processes, learning processes, growth and customer response. The primaryunderlying principle of the balanced scorecard is to measure the objectives to help track the performance andevaluate its offerings. The different metrics corresponding to the values given in the balanced marketing scorecard can/will be expanded to contain detailed metrics like number of student’s who were offered a job in first attempt, who were helped to achieve their entrepreunerial or higher study dreams, companies whose human resources target were met to 100% satisfaction and many other factors.Conclusion: It is apparent that the huge untapped & unserved market segment can be catered by provindingthe much required value services. Later, after the organization grows it could expand its offerings to othersegments and locations and achieve it’s BHAG. 8
  • Bibliography & References:  Higher education, http://en.wikipedia.org/wiki/Higher_education  Bachelors degree, http://en.wikipedia.org/wiki/Bachelors_degree  Indias education market projected at $50 billion by 2015: Assocham, http://www.mynews.in/News/Indias_education_market_projected_at_$50_bln_by_2015_Assocham_N 57175.html  Infosys Revenues, http://www.infosys.com/investors/reports-filings/quarterly-results/2008- 2009/Q4/Documents/IFRS-press-release.pdf  Strategy Synthesis, by Bob De Wit and Ron Meyer.  Marketing Strategy & Organization, by Rudy Moenaert & Henry Robben with Peter Gouw.  Market data from www.juxtconsult.com, http://cet.kar.nic.in/, http://kea.kar.nic.in/, http://www.karnataka.com/education/cet  http://www.asianforumcsr.com/ 9