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Smart Advertising

Smart Advertising. I-GO Presentation Boston Consulting Group Case Competition May 2011. Vincent Yu, Geoffrey Zheng & Mike Zhang. What are your “pain points” as a carsharing service?. Differentiating specific appeals for specific market segments.

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Smart Advertising

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  1. Smart Advertising I-GO Presentation Boston Consulting Group Case Competition May 2011 Vincent Yu, Geoffrey Zheng & Mike Zhang

  2. What are your “pain points” as a carsharing service? Differentiating specific appeals for specific market segments Leveraging network of current car-sharers to spread word-of-mouth Balancing cost with new improvements to service

  3. Smart Advertising • Target advertising based on preferences • Cost • Car-Sharing Affinity • Mixture of Both • Create tiers based on preferences: Franklin, Clinton & Gore Sector • Develop Market strategy based on tiers

  4. Franklin Sector • Low Income: $7,000-22,000 per annum household income • Only 13% of current car-sharing market • Overcome car culture • Lower half of sector spends 42% of income on ownership • Focus on cost savings • Correlation between income and number of vehicle miles driven

  5. Franklin Sector • Low Income: $7,000-22,000 per annum household income • Only 13% of current car-sharing market • Overcome car culture • Lower half of sector spends 42% of income on ownership • Focus on cost savings • Correlation between income and number of vehicle miles driven Humboldt Park

  6. Gore Sector • Extremely Young: 25-54% of residences from 20-35 • 49% more likely to support green business • 60% of market under 35 years old • 70% willing to pay cost premiums for causes

  7. Gore Sector • Extremely Young: 25-54% of residences from 20-35 • Highly-Educated: 35% and above with higher education • 66% of carsharing market has higher education

  8. Gore Sector • Extremely Young: 25-54% of residences from 20-35 • Highly-Educated: 35% above with higher education • High Income: $52,000-69,000 per annum household income • Green-Focused • Green edge over Zipcar • Local Business

  9. Gore Sector • Extremely Young: 25-54% of residences from 20-35 • Highly-Educated: 35% above with higher education • High Income: $52,000-69,000 per annum household income • Green-Focused • Green edge over Zipcar • Local Business Lake View

  10. Clinton Sector • Highly-Educated: 35% above with higher education • Middle Income: $39,000-52,000 per annum household income • Model Consumer • Cost advantage • Environment commitment • Better customer service

  11. Clinton Sector • Highly-Educated: 35% above with higher education • Middle Income: $39,000-52,000 per annum household income • Model Consumer • Cost advantage • Environment commitment • Better customer service Near West Side

  12. Marketing Segments • Low Third-Tier-Yield-to-Cost ratio • Second-Tier Untapped Growth Potential • Unrecognized coverage potential Strategies Franklin Sector: Capture the low-income market • Cost-Savings Focus • $5,000 average savings on car • “Best parts of driving, for less” Gore Sector: Challenge for environmental activists; product differentiation • Environmental Focus • Low emission vehicles • More green, more local than Zipcar Clinton Sector: Challenge for model customers; product differentiation and cost leadership • Hybrid Focus • Cost edge over Zipcar • Environmental Edge over Zipcar

  13. Leveraging Networking: Word of Mouth Systems • Compensation-Based Referral Systems • Reward Users for referring new IGO users • 25-35% word-of-mouth consumers • Create exposure in neighborhoods • Overcome Car Culture • 70% prefer customer views over critics/professional reviews • 82% prefer customer views over all else • Average 15-30% Increase in Sales/Revenue • 40% of WOM customers have brand loyalty

  14. Leveraging Networking: Social Networks • Facebook groups for each neighborhood and each college • Pareto Principle: 80/20 rule • Use Sectors to focus information • 43% of 20-39 year olds use Facebook 10+ hours weekly • 81% of marketers indicated significant exposure • 29% Increase in Sales from Online Advertising • Same Effects as Traditional Word of Mouth Systems

  15. Leveraging Networking: Model • 40% Growth over 10 Weeks • Committed brand loyalty

  16. New Technology Implementations: Smartphone App • Low cost improvement to service • Estimated $1000 cost to implement • Increase Exposure of I-GO • Estimated to benefit 60% of members • Mobile reservations • GPS locations of parking lots

  17. Conclusion: First Steps • Target Advertisements Based on Sectors • Leverage Social Networking • Create Facebook group for each neighborhood/college campus • Create referral-based system

  18. YU I ZHENG I ZHANG

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