Value Propositions

Recently, our instructor went in to more detail about what a value proposition is. A Value Proposition should tell employees, potential business partners, and customer who and what your company is. I decided to raid my pantry to see if I could find any good examples of value propositions:

Telula Green Zing Beverage: Green Zing is a healthy blend of juiced leafy greens and citrus with just a hint of ginger. It's packed with health nutrients, antioxidants, and a crisp, bold taste designed to fill you up with healthy fruits and veggies from the farm. 

What we can capture from this is that 1) they use fresh vegetables 2) it is designed to be healthy and delicious and 3) it can supplement a meal.

Progresso Soup: For over 100 years, our kitchens have crafted honest, soul-satisfying recipes with real ingredients you're proud to serve.

This establishes a history of the company, tells that it is honest (both in ingredients and business), and and says that you the consumer would be proud of the soup. 

Mom Brands (Malt O Meal): Great cereal doesn't have to be expensive. Since 2007, American families have saved over a billion dollars on breakfast cereal by choosing our brands over the more expensive varieties. And they haven't sacrificed taste or nutrition. Maybe that's how MOM Brands has become the fastest growing cereal company in America.

This one is probably the best example. It establishes that their cereal is less expensive but is good and nutritional. The company is family owned and growing quickly. It is a message to consumers and potential partners. 

Obviously, if you are not in the food industry, your value proposition should not sound as appetizing. However, what we can learn from these examples is what kind of message you should try to send. If you company is a clean option like Telula, promote that "value". If you have a history of good service like Progresso, use it. If you are the "less expensive" option, let it be known.

Market Surveys: Speaking to Consumers

In order to fain an understand of what people want or how they feel about certain product and ideas, companies use market surveys to gather data. This data can then be used on advertisements strategies, product development, or establishing a market. While market surveys are helpful, it is unlikely that your small business will be able to afford on of the big marketing firms. For this reason, I have gathered and thought of some ways to do your own market survey:

Email: Probably the easiest and most convenient for both parties, emails can be the "fire and forget" method. Asking customers to leave their email in exchange for small discounts can be a great way to 1) build up your database of potential survey-takers and 2) build customer loyalty. I recommend the email method most. Think about it: how many companies currently have your email?

Telephone: phone numbers are easy to get but more labor intensive. Instead of sending a mass email, business will have to call each number on their list, which takes time. Also, many people forward numbers they do not recognize. Numbers can be effective to gather market information, but it is a longer, more difficult process.

Mail: Probably the slowest method, mail can be used to conduct the same surveys. However, companies must rely on customer to their mail the surveys back or bring them to a physical location. For this method, it is highly recommended to give customers an incentive to do so. Mail can be easy to manage and it relatively easy to send off. The return is largely uncertain.

In-store Survey: a great way to gauge how your customers feel is to simply ask them. Having paper surveys in your store can be a quick and easy way for your customers to give feedback. Unfortunately, the delivery of this is fairly limited. You can only reach the people in the store.

Most important for collecting this data is be openly grateful for what consumers give you. If offering incentives is possible, do it. Keep in mind, only the willing will be giving you information. Sometimes purchasing data or doing independent research will be necessary.

Customer Service

We have all heard about it, experienced it, and may have been a part of it. It seems its now just a business buzz word. So, what is "Customer Service"?

To me, customer service is anything a company does to make a customer feel more welcome and comfortable doing business with that company. It can be anything from complementary robes at hotels to fixing a wrong order at a restaurant. Panera Bread is a fascinating example. One thing they pride themselves in is "Panera Warmth". Panera Warmth is having the right atmosphere, helpful associates, and a devotion to fixing mistakes. For example, if a customer orders a sandwich and it was made improperly, the customer can keep that one and the production team will make an entirely new one for them. Is it giving away food? Kind of, yes. However, the cost of a sandwich is worth preserving that relationship with the customer. Essentially, $1.25 in ingredients can ensure future investments of far more than that. That is smart customer service.

The unfortunate thing is most people do not realize when they are being "served". People may remember good customer service, but they will definitely remember bad customer service. As a college student who looks for deals on books and supplies, I run into companies like Pearson who have terrible customer service. It is a chore to contact them and a struggle to get the issues resolved. To this day, I have several problems I have not been able to remedy because their customer service is just...bad.

Companies should invest heavily into having open forms of communication for their customers. What tends to happen is by failing to correct customer service problems, companies lose even more business for the future. It is not just a buzz word. Having awesome customer service can make or break your company.

Market Differentiation

Discussion

Market Differentiation is anytime a company focus on one or more specific things about their product and tries to use that as their "edge". For example, products use "Organic" or "All Natural" to highlight themselves as the "healthy choice". Game consoles market their ability to play games at higher resolutions or on faster networks than their competitors. You can look at most products and see what they use as their selling point. Sometimes it is as simple as being cheaper, but there are more complex options like a guarantee of great customer service. 

Ideas

For the company that I am developing, I have researched what other companies have done in my field. So far, there are no competitors in the market, at least for the audience I want to capture. So, I have to spend much of my time imagining what their selling point will be. For my product, I can boast that it will be domestically produced, offer a service with the product, and offer incentives to medical professionals. From my reading, I can tell that the other companies doing the research similar to mine are not focused on these 3 areas. 

To differentiate your product, it is important to understand how you are similar and different from your competitors. If you own a small store, advertise your more "personal experience" for customers or spectacular customer service. Basically, be aware of what people do not like about your competitor. 

Observations

Amazon has the infrastructure to offer "free two-day shipping" for their premium members.

Walmart is a large store that offers "convenience" and low prices. Target is a store that offers convenience (same) and quality (different). 

Location Research: Huntsville, Alabama

Industry
Huntsville, Alabama is a city that is rapidly becoming an industry-leader in technology and science. The city is host to many different industries but the three large ones are: Aerospace/Defense, Advanced Manufacturing, and Bio-science. Red Stone Arsenal is host to many companies and agencies like NASA, ATF, US Army Command, and the FBI. There is also 12 research industrial parks like Cummings Research Park.

There are over 200 different manufacturing companies that create parts for the auto and aerospace industry leader. Many "local manufacturing operations are located in one of the area's publicly owned industrial parks with sites and infrastructure currently in place for immediate and future growth."

The city also features "a wide range of  manufacturing [for] telecommunications hardware, circuit board and communications sub-component assembly and design, sensors and radars for advanced missile systems and detection, and software engineering."

All of these industry and manufacturing opportunities could be beneficial for a product highly dependent on manufacturing and information technology.

Taxes
Huntsville offers tax incentives for companies. Most categories of taxes have abatable terms which companies must meet and get approved. These abatable taxes essentially mean that companies, assuming they meet the right requirements (depending on factors like industry, location, etc), could stand to pay less in taxes and earn more profit.

Building Options
There are 85 industrial buildings for lease in the Huntsville area that are around the size I am looking for. Further individual research will have to be done, but there are plenty of options for a business to grow and develop in.

Transportation
Huntsville has access to several railroad lines, I-65, and a National Airport. Many of the industrial buildings are in close proximity to other companies, lodging, amenities, and high traffic areas. Having routes to receive and ship are a definite must, but it looks like Huntsville has that covered.

Video Games: A Hobby and a Business Venture

If you are like me, the prospect of a new console or release of upcoming video game gets you mighty excited and impatient. For a long time, I viewed my simple hobby as child's play. There are people out there making video games just for fun. It's true that many game developers love to make and create games, but things are a little more complicated these days. Now, "gamers" see a consistent trend of publisher imposed deadlines and the installation of "microtransactions." I will break this down for industry outsiders.

So assuming you like to play the popular games like Call of Duty, Battlefield, or Assassins Creed (there are many more unmentioned titles), that means you like games that are at the peak of the industry. There are game developers and game publishers. That is an oversimplification of a complex industry, but that is the jest of it. More recently, games have started marketing paid downloadable content (DLC), premium memberships, and the aforementioned microtransactions. So now we have a base game selling for $60. Then usually there are 4 DLC releases over a year that are about $15 dollars each or people can opt into the "premium" membership and save about $10 by paying $50 upfront. Alternatively, there are microtransactions which are small purchases of $1 (give or take) to make the game easier or more enjoyable. The fact is, video games are always asking for more money. It isn't cheap to make a video game, but there is definitely a growing trend in finding alternative routes for videos games to keep making money 1 or 2 years into their cycle. Time for some stats:

"Total revenues for the industry in the U.S. hit $23.5 billion last year—a 5% jump over 2014, according to the Entertainment Software Association, the industry lobbying body, which also hosts the E3 trade show in June."

"The recent open beta for DICE’s upcoming Battlefield 1 has broken EA records.

The studio has revealed that the game was played by 13.2m people" in a week of free access.

"Sony has sold 40 million units of the PlayStation 4 globally the company announced today."

Trend: The numbers (active users and sales) in the video game industry just keep getting bigger.