Ridge Energy is a Canadian company that performs home energy audits. It is exploring expanding into the Australian and New Zealand markets. The document outlines Ridge's company overview, a SWOT analysis, market and industry analyses of Australia and New Zealand, a proposed regional marketing strategy including target markets, entry strategy through a joint venture, and a marketing plan with the 4 P's for Melbourne, Australia. It concludes with proposed budgets and an implementation section.
29. INDUSTRY ANALYSIS Energy Efficient Homes Package $1,600 towards ceiling insulation or a solar hot water system Green Loans Program Free home energy audit and an interest-free loan of up to $10,000 National Rainwater and Greywater Initiative Up to $500 for installing rainwater tanks or greywater systems Solar Credits Program Receive credits for installing a solar, hydro, or wind system which can be used for a discount on installation FEDERAL INCENTIVE PROGRAM
31. TARGET MARKET REQUIRED CHARACTERISTICS High income earners Home has poor energy consumption Owner-occupiers of target dwellings Our targetmarket
32. TARGET MARKET COUPLES WITH OLDER CHILDREN Home owners59% with a mortgage41% without a mortgage 40 to 60 years old Eldest child aged 15 and up Average number of people in home: 4 Average disposable income per week: $700 Average number of rooms in home: 3.6 Average number of employed persons: 2.5 Geo-Market: Melbourne, VictoriaEstimated Target Households: 182,000
33. TARGET MARKET OLDER COUPLES WITH NO CHILDREN Home owners66% with a mortgage34% without a mortgage 35 to55 years old Average disposable income per week: $880 Average number of people in home: 2 Average number of employed persons: 1.7 Average number of rooms in home: 3.2 Geo-Market: Melbourne, VictoriaEstimated Target Households: 67,000
35. TARGET MARKETS ATTITUDES AND MOTIVATIONS SURVEY: Australians’ Main Reason for Installing Insulation Source: Australian Bureau of Statistics. “4602.0.55.001 - Environmental Issues: Energy Use and Conservation.” March 2008.
39. ENTRY STRATEGY JOINT VENTURE Joint venture strategy Knowledge of Australian market One less competitor Control over operations Planned partner: Assesses homes for energy efficiency, thermal performance, and water usage to help customers achieve comfort, cost savings, and ‘benefits to all’
41. Importance of partnership could differ among the parties E.g. more important to the smaller partner than the large partner Objectives of partners could differ inside the venture E.g. differing financial/expansion objectives Potential control problems Ridge could lose control over some of their assets Contributions of partners to the venture Partner’s capability to contribute may diminish over time; could become a competitor in the future Cultural differences between the partners E.g. hiring practices and management styles NEGATIVES OF COLLABORATION
42. Two price/service levels: Standard and Premium Report language: English(but modified to suit the colloquial English of Australians) Report delivered in the form of a CD Contractors trained according to the Australian Board of Sustainability Assessors (ABSA) Uniforms and hybrid company vehicles Customer service Technology:FirstRate MELBOURNE MARKETING PLAN PRODUCT
43. Online Revamp Ridge website, banner ads Newspaper advertisement in the Herald Sun Radio ad on Vega 91.5 Trade shows & information booths Public relations Partner with local govt and community Supporting materials Brochures, pamphlets MELBOURNE MARKETING PLAN ADVERTISING & PROMOTIONS
44. MELBOURNE MARKETING PLAN ADVERTISING & PROMOTIONS Image Source: www.everblueenergy.com/homeownerinspections.html
45. Two price/service levels: Standard audit ($150) Premium audit ($400) Current prices between $150 to $175 in Canada Average Australian industry pricing: AU$125 to AU$150 Referral discount: refer neighbors 10% off MELBOURNE MARKETING PLAN PRICE
46. MELBOURNE MARKETING PLAN PLACE Company office and retail store in urban areas of Melbourne Transportation: company-owned hybrid vehicles Ridge’s catchment areas: urban and suburban Melbourne Retail store: “The Energy Store” - Located outside the downtown core
Independent Canadian company who performs energy audits for residential homes Assist their customers in learning the energy efficiency of their home and provide advice on how to efficiently reduce energy consumptionLooking for international opportunities to expand their businessAt this point, they are open to considering development in any country in the world as long as there is a strong business justificationFor the following presentation, we will be focusing on Ride Energy’s expansion into New Zealand/Australia
StrengthsExpertise in the area of energy efficiency in residential homes in Canada Experience with expanding into new markets (albeit domestic markets) Professionally liscened and trained agents (provide customer service) Franchise stores because no one else offers it (people can walk in to the store to ask questions and get advice, brochures) Expanded into different provinces (greater reach, experience for expansion) Good relationship with Canadian Government WeaknessesNo current marketing other than Ridge website, rely heavily on word of mouthUnderstanding what the government will give as rebates Quality control is hard to guarantee or monitor with independent contractors Ethics are hard to control and monitor with independent contractors Lack of knowledge/experience in Australia/NZ energy efficiency assessment industry, including gov't initiatives, building codes, software,competitors, etc. Especially in an industry like this one, where it's so small and specialized, whether you get work depends a lot on your reputation and who you know (or who knows you - referrals, etc.). In addition, they lose the competitive advantage of being able to train and certify assessors. No mission statement: gives the company and the contractors a guide Only provide assessments to buildings, thus do not offer assessments to larger buildings like some competitors do OpportunitiesAus/NZ are embracing the green economy, investing a lot of resources into such things as energy efficiency and alternative energy sources. This is a tremendous opportunity for Ridge to enter the market and quickly establish itself as a main player. In Australia, consumers are highly educated and perhaps have more of an appreciation for environmental issues, as well as the income to pay for energy assessments. Although the recession has curbed consumer spending, it has also brought down construction labour costs, making renovations more affordable in that sense It's speculated that the recession is causing people to "nest", i.e. perform fixer-uppers and other DIY projects to their homes in the hope that when the housing market eventually goes on the upswing, they will be able to sell their homes for more money. Government has many initiatives to show people how to do "do-it-yourself" maintenance and repairs Common language in Canada and Australia Government grants offered in Australia, as well as each state Chance to expand to a new market Highly educated potential workforce Potential alliances because there are so many competitors Expand into a store that sells energy efficient tech. (perhaps gov't affiliated/promoted) #9 Ease of doing business (3rd in starting a business) #3 in 2009 Index of Economic Freedom by hiring Australians we will be offering jobs during the recession ThreatsThe recession has reduced consumer confidence/spending. People may be less willing to invest in home renovations when their jobs, savings, the economy, is so unstable. In Australia, the regulatory system surrounding energy assessments could be complex for foreign industries to adapt to, and thus might provide some intialdiffculties for Ridge when they first enter. In Australia, entry into the energy assessment industry is easy and thus creates more competitors for Ridge upon entrance. (low entry barriers) In New Zealand, the population is aging and those earning the highest incomes will move into the retired portion of the population. Most would have savings for their retirements but due to the economic downturn, some might be more inclined to save their money. Australia is divided into many states, which brings many different codes, laws, competitors etc. #9 Ease of doing business (3rd in starting a business) --> more competitors any government change could result in changes in policies or grants many competitors STRENGTHS:ExpertiseExperience expanding domesticallyGeographic reach within CanadaProfessionally licensed & trained agentsFranchise storeGood relationship with CAN govtWEAKNESSES:Only marketing on Ridge websiteQuality control with independent agentsLack of knowledge/experience in AUS/NZNo mission statementDo not provide audit for larger buildingsOPPORTUNITIES:AUS/NZ embracing green economyHighly educated marketGovt offers many DIY initiativesDecreased construction labour costsCommon language (English)Govt offers grantsChance to expand to a new market#9 Ease of Doing Business#3 2009 Index of Economic FreedomTHREATS:Reduced spendingComplex regulatory systemLow entry barriersAging population saving retirement moneyAustralia divided into many statesMany competitorsChange in govt#9 Ease of Doing Business
Generally, Australian people are outgoing and friendly. Typically, low power distance and high individualism are accepted social normsRidge can expect fair treatment from the courts and protection of its intellectual propertyStrict laws around consumer protection and its employment standards differ significantly from those of CanadaIn the 2007 to 2008 year, it is estimated that 75% of Australians had access to a home computer and 67% had home access to the internet. Of those with internet access, 52% had broadband connections (Australian Bureau of Statistics, 2008 December 18).
Two price/service levels: Standard and Premium.Report format to be in English but modified to suit the colloquial English of AustraliansReport delivered in the form of a CD to customer homes by Ridge consultantsContractors will be trained according to the Australian Board of Sustainability Assessors (ABSA)Contractor to wear uniforms and drive hybrid company vehiclesHigh standards of customer serviceTechnology and equipment are consistent with that Canada, but conforming to Australian standardsContractors will use FirstRate, which is the required software in Victoria
Newspaper ad in the Herald SunLess expensive than other forms of advertising such as TV or magazine adsSells more than 550,000 copies each dayReaches 1.5 million readersReadership: 1,467,000 Monday – Friday, 1,404,000 SaturdaysThe reason we chose a radio is because:Again, a less expensive means of advertising80 per cent of working adults listen to commercial radio each week 74 % people who listen to radio at work discuss things they have heard with family or friends 69 % agree that commercials give them informationTrade shows such as the Sustainable Living Festival and the HIA Home Building and Renovation Expo are possible options for Ridge Energy to attend.
Candy to add
Investment required – defined by the initial start-up fixed costs = between $327,000 and $651,250 Incremental RevenueAssuming every audit cost $125Equipments and travel expenses are reimbursed by Ridge (fixed costs)Expected revenue to be $50-75
2nd year – at least 2000+ audits are needed to breakeven (assuming a $75 profit from each audit)1st and 2nd year combine – 6700+ audits to cover up both year’s expenses If 1st year expenses are divided between 5 years, then 3200 audits are needed each year to breakeven.
2 days to receive business license
Lots of opportunity for Ridge in Australia- the right target markets and motivations for purchasing the product are presentGovernment grant system and supporting factors ensures minimal changes of the product Main barrier to overcome is total expenses in the first two years of business- can the profits eventually make up for it?
