Business Plan - New Product Launch and VC Funding
- 1. PGCHRM 15 / MK1RH13-1 MARKETING1GROUP ASSIGNMENTSubmitted ToProf. Arpita SrivastavaIn partial fulfillment of the requirements of the coursework onMarketingBySl. Name SMS ID SID Centre1 Amit Soni 112384 RH13118 Delhi Green Park2 Deepa Guha Roy 112279 RH13080 Delhi Green Park3 Gunjan Dang 112381 RH13115 Delhi Green Park4 Neeraj Mehra 112104 RH13094 Delhi Cannaught Place5 Nisha Singh 112325 RH13031 Delhi Cannaught Place6 Nitin Verma 111987 RH13034 Delhi Cannaught Place7 Piyush Mishra 112407 RH13010 Bhubaneshwar8 Pranay Prakash 112309 RH13037 Delhi Green Park9 Priyanka Bhandari 112427 RH13018 Delhi Cannaught Place10 Rajiv Naithani 112047 RH13055 Delhi Cannaught Place11 Rasika Sarna 112167 RH13045 Delhi Cannaught Place12 Taranpreet Tiwari 111981 RH13040 Delhi Cannaught Place
- 2.PGCHRM 15 / MK1RH13-1 MARKETING2MARKETING PLAN FORGo Guide India Pvt. Ltd.
- 3.PGCHRM 15 / MK1RH13-1 MARKETING3TABLE OF CONTENTSExecutive Summary 41. Mission 72. Environmental Analysis 73. SWOT Analysis 84. The Product 95. The Market 93.1 Market Segmentation 93.2 Market Analysis 103.3 Target Market Segment Strategy 113.4 Market Needs 113.5 Service Business Analysis 113.6 Competition Analysis 126. Marketing Communication 124.1 Product Life Cycle and Communication Mix 137. Financial Plan 138. Monitoring: Evaluation and Control 169. Customer Relationship Management 1610. Exit Strategy / Opportunity 1711. References 17
- 4.PGCHRM 15 / MK1RH13-1 MARKETING4EXECUTIVE SUMMARYWorldwide as well as in India, the taxi services market is variedly unorganized. However, in therecent past, companies have started capitalizing this market and in no time several large as well assmall radio taxi operators expanded rapidly in the Indian radio taxi market. Since, 2009, the markethas witnessed a compounded annual growth rate (CAGR) of 41.90% in terms of market revenues.Increasing consumer disposable income along with poor public transport system in the country hasgiven rise to a new market of radio taxi services.According to “India Radio Taxi Services Market Forecast & Opportunities, 2017” the radio taxiservices market in India has huge untapped opportunities. There are very few players in theorganised radio taxi services market who have failed to address the market demand due tounavailability of required number of cabs. The National Capital Region, Delhi-NCR, has the highestpotential, where almost 30% calls are dropped by the companies due to unavailability of cabs / taxis.Companies such as Meru Cabs have resulted in 120% increase in Net profit after tax for its equityshareholders, which show the kind of return on investments this newly created market segment iswitnessing.The steep increase in the number of radio taxi operators in the recent past, as well as the radio taxisthemselves, shows that suddenly everyone is finding this to be a lucrative business, and there isenough space for all-India players. While Meru Cabs alone has plans to almost double its fleet size to2,500 cabs in Delhi / NCR by the year 2017, it is estimated that the Indian radio taxi services marketwill reach 30,000 taxis by 2017, with Delhi / NCR continuing to remain the leading geography withover 30% of the market i.e. over 9,000 Radio Taxis.While the prevailing government regulations (specially in Delhi /NCR) mandate each new licensee tohave a fleet size of 500 radio taxis within one year of obtaining the license, what will make the radiocab industry in the future will be the existence of three to four major national level players. At leastin the top ten cities in the country, there will be huge scope for radio cabs catering to the middle-class and upper middle-class strata. Industry experts estimate that in about 18 months from now,the industry will see consolidation happening, where marginal players will be taken over assustenance will be very crucial for existence.The industry is now getting stabilized and is through with the initial challenges of customerorientation and education. It took its own sweet time for the average Indian to realize that an air-conditioned, (semi)new car, with a trained chauffeur, is not beyond his / her affordability. Winningthe confidence of the masses, middle class and upwards, to avail this service did happen, albeitslowly. This is evident from the fact that the current 4,000+ Radio Taxis in Delhi / NCR alone ferry
- 5.PGCHRM 15 / MK1RH13-1 MARKETING5over 1 million passengers every month. Further, over 65% of the 20,000 daily trips made these RadioTaxis are either to the Airport or to the Railway Station, which signifies that there is an onwardjourney involved.The Opportunity AreaWhile the existing Radio Taxi operators are now looking at growth, there are newer players whohave recognized the immense potential this market has, which is evident from the spurt in numberof new licensees in the last one year or so. Companies are now not only looking at customerretention through various loyalty programs, they have also started exploring alternate sources ofrevenues in terms of external / internal branding. What is, however, still not being optimally utilizedis the 40-minute travel time that each passenger spends inside the Radio Taxi.This travel time of the passengers could be effectively utilized by providing them customizedinformation about their final destination (after the onward journey). Not only will this enhance thepassenger’s travel experience manifold, this will also present an opportunity to create a focussedand customized media property which may further translate into continuous revenue flows.The CompanyGo Guide India Pvt. Ltd. is incorporated as a Private Limited Company under the Companies Act,1956. Its registered office is in the National Capital of Region, which is not only a hub for majorcorporate houses and business avenues, but also the largest market in the Radio Taxi industry.The promoters are a group of seasoned professionals with varied experiences in leading senior rolesin Technological Product Development, Corporate Financing and Business Consulting.The Company intends to hire an 8-member core team, which will initially work on the productdevelopment and technological calibration, subsequently expanding its employee base to cater tothe growing business need.Product OverviewWith the help of information gathered from the passenger at the time of booking of a Radio Taxi, acustomized content will be delivered inside the Radio Taxi through an interactive electronic touch-screen, which may also be used by the passenger for entertainment as well as business updates,apart from other pre-defined content. This content will be delivered to the passenger in the RadioTaxi free of cost.
- 6.PGCHRM 15 / MK1RH13-1 MARKETING6This product will be unique in its own way as it will be designed to cater the personal requirementsof the individual. Not only passengers will be able to understand about important places on theirway but also can get details related to hotels, commercial outlets, hospitals, restaurant, monumentsetc of the city where they will be travelling. All these information will be pre-mapped as per inputscollected from the passenger while registering the booking request for cab. Besides, passenger willhave an option to take all relevant information either sent to him over sms, email or even on USBdrive.To understand the usage of radio taxi and relevance of the product to passengers, we carried out astudy as part of our market research and found that over 60% of the respondents confirmed thatthey travel in a Radio taxi at least once in a month, and that it is their preferred mode of publictransport. Currently none of these passengers receive any value added services while commuting inthese cabs. While designing our product, we identified this gap which does exist in the market andhave leveraged on the same to come up with this new offering.To leverage on our offering as a differentiator, we are also going ahead with obtaining a patent onthe same. While we are operating in a service space, we want to ensure our IP is protected and wehave patent advantage around it as well.The MarketThe Radio Taxi market in the National Capital Region is witnessing considerable growth, which is aresult of expansion activities of existing players as well as creating room for new players alongside.Go Guide wants to establish itself in the market by providing highly customized travel information tothe passengers of the Radio Taxi operators by delivering relevant infotainment content into theRadio Taxis and making them accessible to the passengers free of cost.In order to create awareness about the product and service we are offering, we intend to domultilayer campaigns starting from website, advertisements, social media platform, activities atcorporate for awareness, hoardings and certainly leveraging all radio taxis to not only deploy ourproduct but also advertise in their cabs so that they have a reason to partner with us.CompetitionSince this is a new niche product concept we are launching we are not subject to a competition atthis stage. This is biggest advantage we are operating as part of our business model.
- 7.PGCHRM 15 / MK1RH13-1 MARKETING7Financial ConsiderationsGo Guide expects to raise around $ 4.5 mn of initial funding in three tranches through investmentpartners over the first twenty-four months, after which it shall be capable of financing its furthergrowth avenues. The initial funding shall cover the pre-launch, launch and a part of the consolidation/ expansion phase.Go Guide expects cumulative revenues of about $ 4.5 mn by the end of first year, $ 8.3 mn at by theend of second year, $13.8 mn by the end of third year and $ 20.2 mn by the end of fourth year ofoperations, as it steadily increases its coverage in line with the corresponding increase in the numberof Radio Taxis. Profits for this period are expected to be around $160,000 in year 1, 41.4 mn at theend of year two, $ 3.1 mn at the end of year three and $ 6.6 mn at the end of year four.Financial Highlights1.1 MissionGo Guide aims to offer customized travel information to its customers by providing seamlessintegration between most updated information and best-in-class technologies1.2 Keys to Successi. Early mover advantage in the niche market segmentii. Innovative product providing highly customized travel informationiii. Regular updates on local travel informationiv. Services complementary for the end-user (passenger)v. Opportunity to expand to other modes of transport$0$50,00,000$1,00,00,000$1,50,00,000$2,00,00,000$2,50,00,000Year 1 Year 2 Year 3 Year 4RevenuesCapital EmployedNet profit
- 8.PGCHRM 15 / MK1RH13-1 MARKETING8vi. Inclusive Revenue model providing growth opportunities to customers as well aspartners2. Environmental AnalysisBeing a new venture offering a first-of-its kind product into the market, the following wouldbe the critical areas:i. Competitive Forces: Since there is no other similar product in the market, thecompetition will be more from the online / phone-based portals which provideinformation of generic nature. Since Go Guide will be a customized informationprovider, it may not have any immediate threat from competitionii. Economic Forces: Even though a number of big spenders have, off late, reduced theiroverall budgets, while at the same time, diverting the advertising budget topromotional activities. However, for Go Guide, even though the initial investment(CAPEX) would be very high, considering the revenue model, it would be able tobuild upon it economies of scale and break-even in 19 month’s time (11 months intooperations)iii. Political forces: There are no expected political factors which are likely to impact thelaunch and operations of Go Guide.iv. Legal and regulatory Forces: The Radio Taxi industry in Delhi / NCR is a regulated bythe local government and except for the usual registrations for new business etc, nospecific / additional clearances / licences are required for commencing operationsv. Technological Forces: Considering the nature of the service, a lot of technologicalintegrations across various platforms will be required before the launch of theservice. This will be required to ensure that the final product being made availableto the customer is in line with the philosophy of launching such a product.vi. Socio-cultural Factors: In today’s society, customers seem to be devoting more timetowards work than other activities. Go Guide intends to target the customers whenthey are away from their work desks as well as the household chores, adn theaverage travel time of 40 minutes is where most of the information sharing andawareness will happen.3. SWOT AnalysisStrengthsi. Early mover advantage due to lack of available competition
- 9.PGCHRM 15 / MK1RH13-1 MARKETING9ii. While the services for the end consumer (passenger) is going to be free of charge,the Radio Taxi operators would earn rentals by way of allowing such service in theircabsiii. Radio Taxis are Safe and Secure, GPS enabled, hence no additional effort inattracting customersiv. High degree of customized information being made available to the customer whileon the moveWeaknessesi. New product, hence user may be sceptical initiallyii. High dependence on technology, with no other alternateiii. Capital intensive, as interactive display screen etc will need to be procured,customized and fitted into the Radio TaxisOpportunitiesi. Untapped Market, with high growth potentialii. Opportunity to expand to other tools, modes of transport etcThreatsi. Introduction of newer modes of transport viz. The Quadcycle form Bajaj may eatinto the passenger shareii. Further technological advancements delivering similar content on mobile phonesdirectly (or though downloadable applications)iii. Improved Public Transport System4. The ProductGo Guide shall provide partner Radio taxi operators with interactive display screens, whichshall be fitted in the in the head rest of either of the front seats. This screen will be used toprovide
customized travel information with the passengers while they will be travelling inthe Radio taxi. Apart from this, passengers will also be able to view other content viz. Travel,Entertainment, Business, News Updates etc.Go Guide will take up the overall project with each Radio Taxi operator, right frominstallation of each interactive screen to provision / updation of content as well as anymaintenance requirements.While the interactive touch screens for Go Guide will be procured and installed in the RadioTaxis by our hardware partners, all customization w.r.t. GPRS connectivity, content
- 10.PGCHRM 15 / MK1RH13-1 MARKETING10synchronization etc shall be outsourced to specialist agencies while keeping a check on thequality of the final product.The MarketGo Guide’s focus is on providing customized travel information to the over 1 millionpassengers of Radio Taxis in the National Capital region. Over 90% of the respondentsconfirmed that they will find it useful if relevant information if provided to them while theyare travelling in the Radio Taxi.5.1 Market SegmentationGo Guide will cater to a Niche market segment of passengers, who use the radio taxi servicesas an intermediate mode of transport for a onward journey using other modes of transport.As part of a feasibility study commissioned for the purposes of this product, over 60% of therespondents confirmed that they use radio taxi services as an intermediate mode oftransport at least once a month, while the end travel is for business purposes. Of allpassengers using the radio taxi service, over 70% are from the business / corporate segment,who require such travel information local to their destination as their travel is more frequentand mostly to newer destinations.Go Guide will aspire to enhance the quality of its service offerings to an extent that itbecomes a mandatory part of any passengers travel, thereby ensuring that each radio Taxioperator looks at us as an integral part of its service offerings.An analysis of the traveller profile, along with the outcome of the survey commissioned forthe purpose, shows that most of the passengers would like to receive information pertainingto Local Travel, Entertainment and News Updates.What was also highlighted in the survey was the travellers were comfortable sharing thefollowing information in order to be able to receive relevant customized information:i. Destination (if travelling out of the city)ii. Genderiii. Reason for Traveliv. Age / Age GroupThe content for the interactive display screens could be customized basis the above interestareas and the travel destination.5.2 Market AnalysisDelhi / NCR currently has the following major radio taxis operating under the respectivebrand names:
- 11.PGCHRM 15 / MK1RH13-1 MARKETING11i. Meru Cabsii. Mega Cabsiii. Easy Cabsiv. Quick Cabsv. Wyn Cabsvi. Mango Cabsvii. Iris Cabsviii. Delhi Cabsix. OLA Cabsx. Super CabsAs of May, 2013, while Meru (1350), Mega (500) and Easy (800) Cabs are the leaders in theDelhi / NCR Radio Taxi industry, with a combined fleet size of over 2600 vehicles, the othersin the list are relatively newer entrants in this high potential market, sharing a total ofanother 1500 cabs amongst them. The total number of Radio Taxis in Delhi / NCR in May,2013, hence, stands at over 4000 vehicles.Passenger Volumes: Radio Taxis in Delhi / NCROn a daily average basis, each Radio Taxi does 5 trips per day, ferrying 1.8 passengers pertrip, thereby carrying approximately 270 passengers every month.The while the average number of trips for some of the market leaders goes up to 8 trips pertaxi per day, including seasonal variations, the average number of passengers does notideally exceed two per trip.The 4000-odd Radio Taxis plying on the roads of Delhi / NCR, hence, ferry over 1 millionpassengers every month across the city, particularly to / from the airport / railway station.The number of impressions (passengers) per month shall increase from 270,000 in themonth of March, 2014 to 594,000 by the end of Year two, 1.08 million by the end of yearthree, 1.7 million by the end of year four and 2.4 million by the end of year five.No. of Impressions in Go Guide Cabs-5,00,000.0010,00,000.0015,00,000.0020,00,000.0025,00,000.0030,00,000.00Year 1 Year 2 Year 3 Year 4 Year 5
- 12.PGCHRM 15 / MK1RH13-1 MARKETING125.3 Target Market Segment StrategyThe prominent target market for Go Guide is the regular business traveller, whichconstitutes of over 70% of all radio taxi users. High degree of customization and relevanceof content will be the key to maintaining and enhancing the market share, thereby acting asa catalyst in the expansion plans. Further, over 85% of all Radio Taxi users in Dlehi / NCR aremales.5.4 Market NeedsBecause Delhi / NCR is subject to constant rise in population, most of which comprises of themiddle as well as upper-middle class, coupled with the challenges faced by the PublicTransport system in the city, people are looking forward to the secure, safe, affordable andcomfortable Radio Taxis as a preferred mode of travel.Its on-call availability and transparent passenger tariffs are a key area of strength for theindustry.5.5 Service Business AnalysisThe alternative modes of transport are faced by multiple and varied challenges, which deterthe passengers from using them. While the regular taxi services are confined to the mass-transport hubs (Railway Stations, Airports etc), their on-call availability is negligible. Auto-rickshaws, another popular mode of transport, are not as safe and most of the customerexperiences for this mode of travel have been one of disappointment.Since the Radio Taxis are regulated by a number of government regulations, and providesafety as well as comfort to the traveller, they have a distinct advantage over other similarmodes of public transport.5.6 Competition AnalysisNone of the current Radio Taxi operators in the Delhi / NCR region offer a service remotelysimilar to the one being offered by Go Guide. One of the prominent Radio Taxi operators inthis geography had, in the past, partnered with a media agency to provide entertainmentcontent by using display screens in Radio Taxis, but the venture did not succeed asi. The partnership did not have enough financial support to fund this capital-intensivebusiness
- 13.PGCHRM 15 / MK1RH13-1 MARKETING13ii. The content being provided was not updated as frequently, and hence would becomeobsolete very frequentlyiii. It did not provide the passengers with any relevant / customized information which wasof immediate interest to the passengersiv. Display screens were not explored as a source of potential revenue, which could in-turnhave helped the partnership sustain the businessThe closest in terms of similarity of services offered is the phone-based service calledJustdial. However, the information shared by them has the following key limitations:i. Key-word based search engine, available either through phone call or internetii. Very low degree of customizationiii. Non-relevant information is also shared, hence the customer has to apply hit-and-trialmethod to zero-upon the most appropriate option6. Marketing CommunicationSince the product offering is for a very niche market, and also considering the uniqueness ofthe product, Go Guide shall adopt the “Pull” strategy in order to educate and acquirecustomers.While on one hand, the “Pull” strategy will help attract customers to the Radio Taxis byprojecting Go Guide as a value-added service, it will also help in reaching out to the variousRadio Taxi operators by providing them with a continuous and assured source of revenue,while at the same time, providing the end-customers with a unique and customized value-added service.While the services will be offered to the end consumer free of cost, the Radio Taxi operatorsas well as the content partners will look at Go Guide as a source of revenue.6.1 Product Life Cycle and Communication MixStages ofProduct LifeCycleIntroduction Growth Consolidation MaturityTimelines 0 – 12 months 13 – 24 months 25 – 48 months 49+ monthsPromotionalObjectiveAwareness Comprehension Conviction Remind / RecallResponseHierarchyAttention Interest Desire Action
- 14.PGCHRM 15 / MK1RH13-1 MARKETING14PromotionalActivityFor radio TaxiOperators Institutional / B2BSellingFor End-users Publicity inMagazines (travel /current affairs) Advertising – Print/ Electronic / Radio Bill-boards /hoarding, speciallyleading to / fromairports / railwaystationsFor radio TaxiOperators Institutional /B2B SellingFor End-users e-marketingusing existingcustomer’sdatabase celebrityendorsementsFor radio TaxiOperators Institutional/B2B SellingFor End-users Word-of-mouth Moments ofTruththrough printmediaMinimaladvertising,mostly stablebusiness7. Financial PlanThe biggest marketing challenge today is to Reach, and Engage with, an increasingly mobileaudience which is elusive to traditional media. This is where OOH media plays an importantrole. It serves as not just a reminder medium, but an informative medium as well forgenerating brand awareness and salience.The largest chunk of OOH budget and planning time goes into billboards as these areconsidered most effective.However, over the years, following reasons have been identified as why an advertiser shouldlook beyond Billboards:
- 15.PGCHRM 15 / MK1RH13-1 MARKETING15What we will offer to our advertisers is an opportunity to cut the clutter and an opportunityto have a personal communication with their target segment. This also gives credence to thefact that many purchases are contemplated when the customer is relaxed, and focused.Current Radio Taxi branding options available to an advertiser are:I. External branding: Taxi Top, Taxi Sides, Boot, Vehicle WrapII. Internal branding: Danglers, Product Catalogue, Brochures, Magazines, etcIII. Electroluminescent Stickers
- 16.PGCHRM 15 / MK1RH13-1 MARKETING16IV. Product Sampling, Bill Roll BrandingLarge numbers of companies cutting across industries are currently using the various RadioTaxi properties for advertising their products. However, the following are the USPs ofelectronic advertising within the Radio Taxis (on the Go Guide interactive screens):• Inside the car the passenger is captive hence more receptive to the message• Passenger would be in car for at least 40 minutes so interactive campaigns can beexecuted• Exclusive visibility within the cab away from the clutter• It’s possible to measure and track the reach and impact of your campaign• High reach and low cost per impressionAn internal branding, on the head-rest (dangler etc) would cost an advertiser an amount ofINR 5,000 per cab per month. This also is the source of income for the Radio Taxi operator,or his opportunity cost, if this space is taken up by Go Guide for placing its own interactivescreens.Since Go Guide will have the option of letting out this property to multiple advertisers, oursource of revenue will be much higher than the Radio Taxi operator’s opportunity cost forthis particular space.With an average of four advertisers @ INR 3,500 per cab per month, Go Guide’s revenuesfrom the source will grow by around 120% by the end of the first year itself.On the other hand, the Radio Taxi operator can be compensated at the rate of hisopportunity cost for this media property, with a clear benefit of assured revenues for alonger period of time from this particular source.
- 17.PGCHRM 15 / MK1RH13-1 MARKETING178. Monitoring: Evaluation and Controli. Comparison of financial expenditures against planned goalsii. Beak-down of the budget within the project to have better control on probabledeviationsiii. A project management concept will be used to evaluate the implementation of themarketing plan by establishing time requirements, human resource needs,and financial or budgetary expendituresiv. A perpetual comparison of actual and planned activities will be conducted on amonthly basis for the first year and on a quarterly basis after the initialimplementation phase. The business analysis team, including the marketing director,will report their comparison of actual and planned outcomes directly to thecompany president.v. Each project team is responsible for determining what changes must be madein procedures, product focus, or operations as a result of the studies conducted in itsarea9. Customer Relationship ManagementBeing a new product for the customers, gathering customer feedback and inputs forimprovements will be a very key area of focus for Go Guide.The entire span of the customer’s interaction with the product i.e. the aesthetics of theproduct, the ease of navigation, relevance of information provided, technological glitchesexperienced, if any, and the future expectations will be captured through feedback formsplaced inside the cab.For customers who have pre-booked and are aware of the services, a call back will bescheduled upon the culmination of their journey to ascertain if the desired information wasdelivered to them, and if they would like to call out any specific areas of improvement, or ifthey have any further expectations from the product.All data so gathered will be electronically stored, which will also be amalgamated with thecustomer data received from the Radio Taxi Company. In the mid-to-long run, this databasewill be able to provide plenty of demographic details in order to take the customerexperience to the next level.Not only such data management help us in knowing our customers better, it will also help usapproach prospective advertisers with more specific customer data, thereby adding value totheir business as well.
- 18.PGCHRM 15 / MK1RH13-1 MARKETING1810. Exit Plan for investorsThough looking at the revenue inflow, an investor would like to stay on for a longer period oftime, Go Guide has still charted out an Exit Plan wherein the investor will have anopportunity to withdraw his / her investments in the following manner, and in that order ofpriority (all options with a 5 – 7 yrs projections):i. Shareholder buyback: Sale of shares to the company’s principalsii. Initial Public Offering (IPO)iii. Selling the company to a strategic buyer11. Referencesi. Personal Interview with Interview with Mr. Gaurav Nagpal, Sales Manager, MeruCabsii. http://www.dare.co.in/opportunities/services/radio-cabs-challenges-en-route.htmiii. http://www.bplans.com/bakery_business_plan/strategy_and_implementation_summary_fc.php#.UaZz_UBgcUgiv. http://www.venturegiant.com/news-channel-344-what-is-your-proposed-exit-strategy-for-an-angel-investor.aspxv. http://www.merucabs.com/cabvertise/vi. http://www.delhi.gov.in/DoIT/DoIT_Transport/trrs31.pdf
Category: Business plan