You know Gimme what I some want money! Business Plan 2012
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The Environment There is strong indication that online shopping is growing fast in New Zealand. This is driven by growth in the amount of online stores in addition to the traditional ‘bricks and mortar’ retailers that are improving their offering by adopting online shopping technology. In 2011, 1.6 million New Zealanders aged over 18 made online shopping purchases, up 8% on the previous year That’s an additional 122,000 people, equating to nearly half of New Zealand’s adult population shopping online
There appears to be a move from straight price offers to price offers linked to brands. That is, the offer is becoming more about value and less about cheap. – NZ Retailers Association
In 2013, 81% of online shoppers in New Zealand are predicted to maintain or increase their online shopping.
The Problem With so many products available and ever-increasing places to shop online, it can be difficult and time-consuming to navigate these places and find the right product for yourself and for others.
The Solution Provide an easy to use web tool that acts as a virtual shop assistant, guiding customers to the product that’s right for their needs, enhancing a retailer’s online shopping experience.
$5,370,000,000 New Zealand online shopping expenditure is predicted to be worth $5.37 billion by 2016.
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Value Proposition CUPS is an engaging and flexible decision guiding system. It enables retailers to effectively deliver personalized customer experiences and enhance their digital services. It helps consumers become confident in their purchases by using new ways to inspire and personalize their product choices.
CUPS stands for Customer User Positioning System and is based on a framework which aids the user in complex decision making with a variety of scenarios and environments. The core objective is for the user to be more confident about their next purchasing decision. Matching up personal user values with reviews with recommendations from a crowd-sourced ‘panel of experts’ allows CUPS to be substantial, clear-cut and relevant to the consumer. Customers are becoming more at ease with the digital medium. But buying things online does rely heavily on consumer comfort and trust. Most customer engagement practiced in New Zealand delivers clunky conversations, driven by a mishmash of customer likes, comments and basic information. Advancements in web technology such as Augmented reality, video content, wall-to-wall social media posting, chat, tag clouds, detailed descriptions and real-time analytics enable feedback loops that pick up every morsel of customer information. All of that information can be turned into accurate, actionable insights that enhance a businesses’ ability to create a highly personal response. The goal is to create more value from customer conversations with the retailer and establish relationships. Instead of telling well-rehearsed positioning lines, it’s about being quiet and letting the customer run the conversation. It delivers more, better-qualified and more responsive customers, buying more.
Features & Benefits Primary Features
Uses abstract value, percentage comparison and smart semantic technology. Takes best of both professional review and free comparison sites. Engaging & simple, fast, easy to use with high accessability 24/7
Benefits to the end user
Inspiration and confidence Chance to get a good deal Authentic pre-purchase research
Benefits to the retailer
Sway undecided buyers Provide personalised service Improved online sales arsenal
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How It Works
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Profile For a quick start, the user can just input their name. Alternatively, users can login with existing Facebook/ Google/Twitter account.
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Product What type of device is wanted? Phone / Tablet / Laptop / Desktop Unsure (will look at all 4 product types)
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Person Learning about the person the product is for, in relation to the current user. - Self / Someone Else.
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How It Works
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Particulars Basic details about the User/ Consumer: Name, Gender & Age.
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Prior Experience Finding out the general experience the consumer has with the chosen product type. Locating appropriate user-friendly features based on level of experience.
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Purpose Inputting multiple activities that the product will be used for to gauge the type of products that reflects the usability.
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How It Works
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Portability Finding out places/environment where the product will mainly be used to match with devices that hold certain portability attributes.
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Price The budget of the buyer/consumer. Narrowing down the current products in the market that aligns with the given price range.
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Processing CUPS calculates all the values from the ‘semantic spectrum’ (under the hood algorithm) based on the particulars given by the user.
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How It Works
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Picks CUPS spits out the top 3 recommendations.
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Properties Specifications of the chosen product that best match the user’s given particulars.
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Purchase CUPS connects directly to retailer’s website with available product and allows user to add chosen product into collection for future reference.
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Under The Hood
CUPS calculates all the values from the ‘semantic spectrum’ (under the hood algorithm) based on the particulars given by the user.
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Under The Hood Smart Semantic Technology (SST) In comparison to other decision tools, our system incorporates semantics to compare a user’s needs with a product. We recognized that there is an inadequate relationship when comparing features solely against price. This relationship is especially weak when the user only has a limited understanding of what those features can do for them. The semantic system utilises the relative comparison of keywords to help find a ‘best match’. CUPS would consist of large and ever evolving database of keywords, that are compared to each product with relative percentage identifiers. For example a smartphone might have ‘business’ (.5), ‘taking photos’ (.8) and ‘email’ (.6) rate quite highly, while a smaller non-smartphone, would rank much lower when comparing these terms, since these features are either not available or the phone is just not as ideal to use for these purposes. The keywords themselves would initially be constructed by a dedicated panel of experts and the percentage identifiers crowd-sourced to ensure integrity through diversity. On an ongoing basis, the system itself could self-evolve by using successful ‘purchases’ by consumers as a way of validating the database and ensuring it stays relevant.
Context Relevance Discovery Behaviour
Help!
Value Interests Meaning Multi-lingual
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Target Market Technology Retailers...
If you’re a retailer you could be missing out by not having multiple channels to market to your customers. CUPS acts as a go-between, matching customer needs to retail products and matching customer insights and data to long-term business needs. CUPS works to not only grow customer base but improve customer retention through better service.
Specialist Retailers ...and their customers
‘Big Box’ Retailers
Online Retailers
New Zealanders have been trained to only buy things on promotion, at 60%, New Zealand has the highest percentage of products on sale at any on time. Retailers need to consider that a strategy based only on price will not work if the consumers are looking to be guided to a personalized product. Driven by sales pressure, too many customer relationships are all about getting a bargain, rather than providing a solution to a need. There are a number of factors that are causing growth in online purchases in New Zealand including the continued strength of the New Zealand and Australian dollar coupled with greater variety of products and services. Consumers are also seeking greater value in their purchases and the use of social media by both consumers and retailers that drive feedback loops about brand and product awareness.
Market Opportunity Case Study: ShoeDazzle.com ShoeDazzle is an online fashion network that provides inspiration to discover personal fashion style. Profiles are matched with a celebrity fashion style and special updates and discounts are offered to the user monthly.
Improve customer service to multiple channels: Web, Mobile, Apps, Phone, In-Store
60% of products are on sale in New Zealand at any one time, the highest percentage worldwide. Sales driven by price
Sales driven by value
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Go-to-Market Strategy How will you reach your target market?
Early partnerships with retailers to introduce the tool to its consumers will allow us to start networking and advertising towards our intended market.
How will potential customers find out about your product or service?
Social Networking provides multiple opportunities to market the CUPS tool and its retail partners. They are interlinked with words and pictures circulating large groups of people fast and repeatedly.
What will motivate potential customers to buy your product or service?
The fresh take that CUPS has on pre-purchase and postpurchase research/decision making. As well as the smart semantic technology behind the scenes topped with userfriendly, accessible and eye-candy features.
What channels will you go through and what customer relationships do you need?
Paid Advertising (Online, Broadcast, Print) Affiliate/Joint Venture partnership with retailers, giving a percentage of the revenue made when users use the service based on retailer recommendation and/or referral traffic. As an alternative to buying advertising space on the website like PriceSpy, when CUPS users post what they have bough or are thinking of buying – retailers are effectively acquiring real estate on a person’s profile. Organic Search (SEO) showing intent for our product which flows into the site consistently and grows exponentially over time. High Price & High Margin specifically ‘Cost-Per-Click’ type advertising such as Google AdWords and Facebook Advertisements to drive users to the service.
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Channels to Market CUPS Website
CUPS In-Store App
Some businesses are already responding by creating dedicated apps or mobile-friendly websites through which customers can process payments. Others take the further smart step of having their own devices handy to allow for online purchasing and payment processing.
Retail and service-based businesses are also blending their web services with their in-store experience or their face-to-face sales experience. CUPS works in conjunction with technology retailers to create opportunities around customer service experiences.
Near Field Communication (NFC) Near Field Communication technology is being trialled by ANZ and MasterCard to provide contactless payment technology in New Zealand for the first time. PayPass will enable users to pay electronically via a sticker attached to any phone type by tapping the device in front of any MasterCard PayPass terminal. It works in the same way as the Snapper technology used in Wellington public transport system and has been adapted into the Touch2Pay system from 2Degrees phone network. Touch2Pay allows you to use a Touch2Pay Smartphone to pay for goods and services wherever Snapper cards are accepted, without the need for cash or an EFTPOS card.
Consumer expectations are rapidly rising in regard to what they will be able to do on their tablet or smartphone.
Applied to the CUPS web
Mobile customers are no longer just service, customers could early adopters: They represent a use their mobile phone broad range of consumer segments and have become part of the to pay for goods and mainstream population. Applied to the services in an easier way. CUPS service, customers could use their mobile phone to pay for goods and services in an easier way. If NFC technology is becoming increasingly integrated into communication technology, then adapting to make purchasing even easier will enhance the ease of the CUPS shopping experience.
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Who are our main competitors?
Pricespy .co.nz
Consumer .org.nz
Offers free up-to-date price comparisons amongst retailers and search filters that allow individual features to be searched, but requires knowledge of what to search for first
Provides online & offline written reviews and comparisons on many products, but charges a premium in order to view them – NZ$67 for 6 months
Purchase decisions driven primarily by price
Reviews and information are frustrating and time- consuming to understand
Makes money through advertising space for retailers on the site
Non-profit organisation with a trusted 52 year history behind the brand
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Competitive Positioning In-depth analysis
Consumer.org.nz
Consumerbuild Powerswitch What’s my number
$0 Cheap
$1
$100 Expensive
Telme Yahoo! Priceme Pricespy Shopbot Shallow analysis
Point of Difference
Market forces such as the economic recession, rise in GST and consumer demand for greater transparency in corporations and government has contributed to the rise in the number of price-watching websites. Consumer Institute charges a premium for in-depth ‘Target-style’ analyses of products and services while multiple ‘me too’ free services provide a basic alternative for consumers. With the market moving towards a cheap/in-depth model, the CUPS service is positioned to provide a freemium service; charging the user only for when they need greater in-depth analysis – fusing the best of both sectors.
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Revenue Streams Free to use to entice customers First few questions free to use – get a broader list of product results e.g 10. Hover over recommended product results to see expandable list of retailers + prices Retailers pay a royalty fee to CUPS for usage*
Micro charge the user, for a more personalised result $1.99+/- For each use – the usual price of an app of a song download from iTunes store NZ$1.79-2.39 More questions, more focussed & specific to user – get a more specific result e.g 1 product recommendation + details + link to buy online
Retaining Intellectual Property rights, operational & development costs are covered by licencing the CUPS system to retailers as Passive Income Royalties are set at a level that will reimburse the intellectual property owner for its costs (e.g. R&D and patenting costs) over the life of the licence – AJ Park Intellectual Property, Welllington
Upgrade options for retailers
Pointing CUPS user to purchase, commission for ‘Sealing the Deal’ When customer hovers over results to see expandable list of retailers + prices, click to go to retailers website/online store, we receive a % commission for the sale if it goes ahead
Like Trademe – Retailers can pay to have ‘enhanced features’ in the results e.g logo, bold text, free shipping etc
Customer Data & Analytics Subscription
Subscribe to data for retailers, once CUPS system database reaches critical mass with Real time access & analytics able to track demographic data Track buying habits of First Purchase Consumers, someone who has never bought anything in that particular field before, by tracking what keywords are trending with people using CUPS – track customer attitudes & mindsets.
Customers would need to acknowledge Terms & Conditions that by registering to use the CUPS system, we are remembering their settings and that the data is being utilized to help CUPS better personalize the product selection from retailers.
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Pricing Strategy We have identified that there are two main revenue systems that we could utilize to make money out of CUPS. They are split into two main phases, a short and long term strategy. We have considered that our initial focus will be on establishing a client base and spreading awareness of the product and as a result we initially want to push a freemium model as an incentive to get people to try it. This would still allow people to get a feel for the product, but where a more in depth and narrowed result follows a short one-time fee such as a gold coin. Once this client base has been established in the long term and returning visitors peak, we expect that the data being generated by the application will carry significant weight for a whole range of businesses in the technology sector. This data would be made accessible in real time to these businesses, through an ongoing subscription. It would be unique in that it is not just matching what people are buying, but tracking and identifying the range of personal considerations they are making for this technology, when they are in pursuit of it.
$
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Pricing Strategy
Short Term Strategy Entice Customers with deals from retailers, start with specific market e.g Mobile Phones
% Commission from sale
$
$
%
$
%
%
Purchase from retailer’s online store
Retailer Product recommendations and expanded lists reveal where to purchase
Retailer
Retailer
Retailer
$
$
Retailer
Retailer
Retailer
$ Retailer
For a small fee, a customer is able to narrow down retailers, also incentivize to lock in sale
Customer uses CUPS questionaire system, their input data is collected
Retailer
Customer Data
Customer
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Long Term Strategy Subscriptions to Customer Data Analytics once C.U.P.S reaches critical mass, expand into diverse markets e.g clothing, restaurants, educational facilities, politics etc
% Commission from sale
$
%
Purchase from retailer’s online store
Retailer Retailers are able to subscribe for real-time analytics about CUPS customer buying habits
Retailer Data
Retailer Subscription Fee $
Product recommendations and expanded lists reveal where to purchase
Customer Data
Customer uses CUPS questionaire system, their input data is collected
Customer Data
Customer Data
Customer Data
Customer
Customer
Customer
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Activities Planning
Update marketing plan for business - Business Canvas Intellectual Property and Patent licensing in New Zealand Revisit market research - Market Validation / conduct a focus group. Refine your target audience and niche. Expand your product and service offerings. Assemble ‘Panel of Experts’ to investigate products & categories
Production
Refine wireframe and step-by-step process of service. Refine design and develop tool. Do iterative prototype testing and retrieve user feedback. Test on different users and device platforms.
Face-to-Face Networking
Introduce and show service to other retailers and potential users. Partner and affiliate with compatible and complementary companies.
Advertising
Advertise on Social Media - Facebook, Twitter, etc. Advertise on the radio. Advertise in the Yellow Pages website Take out an ad in newspaper. Advertise on TV. Advertise on LinkedIn. Buy ad space on relevant and high traffic websites.
Social Media Marketing
Create Facebook and Twitter profiles & pages. Start a business blog. Write blog posts on a regular basis to update audience.
Internet Marketing
Start a Google Adwords pay-per-click campaign. Upload a video demo to YouTube/Vimeo featured on site. Exposure to blogs and tech news websites Set up Google Analytics on your website and blog. Review and measure Google Analytics statistics. Track online reputation.
Email Marketing
Create an email opt-in on website or blog. Send very brief, regular emails to list. Use analytics to measure the effectiveness of email campaigns.
Other Incentives
Develop temporary promos and holiday features. Create a “frequent user” loyalty/rewards program.
Relationship Building
Send out a customer satisfaction survey. Ask for referrals and make a referral. Cross-promote products and services with other local businesses.
Marketing with Content Team Construction
Write a press release and develop a media kit. Submit press release to various distribution channels. Hire a marketing consultant & search engine marketing firm Hire programmer and developers, sales coach or salesperson Consult with public relations & professional copywriter.
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Financial Forecast Task
Quote
Register Patent with the Intellectual Property Office of New Zealand (IPONZ)
$287.50 incl. GST Complete Specification
Applications with complete specification take 15 Working days to approve
Intellectual Property advice
$107.00 incl. GST PCT* – NZ National Fee
$1,768.00 incl. GST PCT* – International Fee
*Patent Cooperation Treaty simplifies the procedure for seeking patent protection for the invention in many countries outside New Zealand
$3-5,000 + GST International Patent Search
Further develop web technology, database and back-end mechanics
$7-9,000 + GST Provisional Patent Specification $80,000 to $120,000 Bespoke web solution
User testing to further verify method of producing personalised product recommendations
Implementation Timeline
Missing Pieces
Christmas retail opportunities
Development & Technology
In the first 20 days of December 2011, Kiwis spent nearly $3 billion on gifts, $133 million up from the same period in 2010. We estimate that it would take up to a year to further refine the business canvas and develop the CUPS tool to launch for Christmas holiday retail season in 2013.
Financial & Accounting advice Networking with retailers User testing Legal advice
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Team & Resources Joy Roxas User Experience Design Graphic Design Social Media Marketing & Networking Strategies
Currently playing with interactive technologies and front-end development. Enjoys keeping track of 12 (mostly “educational”) television shows and counting, with no loss of enthusiasm. Secretly wants to be a journalist.
Kieran Stowers Project Management User Interface Design Marketing Communications Branding & Strategy Editorial Design Copywriting
Additional experience includes current position as Undergraduate Teaching Assistant at College of Creative Arts. Married to a Colombian and a pretty convincing Argentinian, he can also hold a decent conversation in spanish.
Chris Nicholls Interactive Design User Interface Design Front End Development Design Strategist
A cookie cutter pom, Chris is a true mr.fixit with all things digital. When he’s not busy diving into a sea of code, he’s probably concocting yet another cheesy pun.
Vincent Lee Graphic Design User Interface Design Illustration Social Media Strategy
Ben Wright Motion Graphics Graphic Design Typography Editorial Design
He is currently working on a project that explores how living publicly on YouTube affects the way he lives, works and plays. Self-diagnosed insomniac, Vincent is a kiwi-bred designer and dreamer. He is forever perfecting the art of intricacy in his illustrations and subtle shadows and reflections in his UI design.
Specialises with a rare mix of graphic design and motion graphics. He has a 23.4% chance of getting a 3 pointer from the half court, he can also cook a mean pork belly.