Clean Water as a Fundamental Need the Whole World - Essay Example

E-commerce Contents Contents 2 Introduction 3 Organizational Design 3 Start-up Requirements 4 Proposed Business 6 Internet based Marketing 6 BusinessApp 9 Market Segmentation and Value Proposition 9 Revenue Stream 10 Communicating value 11 Feasibility 12 Conclusion 12 Reference List 14 Introduction Clean water is a necessity for survival of life on Earth. Protecting water for the purpose of drinking contributes positively towards health of individuals and this in turn contributes to overall development of the economy. If water is once contaminated, then it is very expensive to clean it or find an effective alternative. Nigeria is one of the largest countries in Africa; yet, it is characterized by low levels of access to clean drinking water. The responsibility of supplying clean drinking water is divided between three tiers of the government. Water Resources management is under prerogative of the federal government. Supply of water in the urban areas is overseen by state governments; whereas, that in rural areas is looked after by the local governments (Standards Organisation of Nigeria, 2007). Owing to the low levels of purified water supply, this paper wishes to launch a solar water purifier business in Kano State of Nigeria. The product is highly innovative and has been proved sustainable in the long run. The business will clearly focus on providing easy access to clean and safe drinking water to a variety of customers. The business is expected to be profitable because of the huge demand of clean drinking water in the state. This water purifier business will be mainly promoted through electronic media due to rise in popularity of this medium. The various aspects of promoting the business through an electronic medium have been discussed in the paper. The other requirements for starting up the business like, start-up requirements, revenue models, segmentation of the customers and marketing of the product, has also been thoroughly discussed. Organizational Design Organizational design refers to allocation of tasks, their coordination and supervision, which helps an organization to achieve its objectives. There are various aspects of organizational design, namely strategy, structure, reward process, business process and human resource management (Ziegler, 1996). The vision of the organization is to provide the masses with safe drinking water in the most cost effective manner. This is expected to create a positive difference in lives of the inhabitants of Kano State. The basic competitive advantage of the company is the technology that is used to purify water. It is based on renewable solar energy and emits no harmful radiations. The clean technology and low cost of production are core competencies of the organization. The organization will be highly centralized and the strategic decision making will be mostly conducted by the Managing Director. Mr. Thomas Linden has been appointed as the MD, who already has 14 years experience in the related field. The functional division will comprise the production department, human resource department, finance department, accounting department, marketing department and R&D department. The day-to-day work of the organization will be performed by these departments; each of these will specialize in the concerned task. The financial reward of the top management will be based on achievement of overall business development and the middle and lower level management will receive rewards based on achievement of the sales target. The rationale behind this reward structure is to ensure that employees are motivated in a positive way (Griffin and Moorhead, 2013). The human resource department must make sure that talented and sincere individuals are recruited as staff. Start-up Requirements The following two tables summarize start-up requirements of the organization. The figures that are shown in the table have been estimated by management of the company. The possible heads of expenditure like, legal requirements, rents and research and development, has been estimated and the values are shown in the table. The present assets and cash flow requirements are also detailed in the table. Figure 1: Summary of Start up costs Start-up Requirements Start-up Expenses   Legal $6,000 Stationery etc. $850 Brochures $3,500 Consultants $3,000 Rent $1,000 Research and Development $5,000 Total Start-up Expenses $19,350 Start-up Assets   Cash Required $124,223 Start-up Inventory $5,000 Other Current Assets $30,000 Long-term Assets $220,000     Total Assets $379,223 Total Requirements $398,573 (Source: Authors Creation) In Nigeria, the Nigerian Standard for Drinking Water Quality was established to secure protection of consumers regarding safe drinking water. As water is an essential commodity that contributes to the health of public, standards that are required to be met in this regard are considerably higher (The Economist Intelligence Unit, 1999). As the company expects to promote marketing through internet, establishing a website about the company is of critical importance. This is the main interface through which the company can interact with its clients. The products that are offered by the company should be clearly highlighted through the website. In order to make content of the website worthwhile, efficient content writers from famous magazines or newspapers can be hired who can prepare the content in a congruent and attractive manner. If the content is weak, then people are not likely to be attracted or buy the product. Therefore, recruitment of proper human resource for developing the website is extremely essential to ensure success of the company. Proposed Business The aim is to establish a solar water purifier system in Kano State, Nigeria, which is mainly to be promoted through internet based marketing. Nigeria is one of the countries in Africa, which is heavily plagued by the problem regarding absence of clean and safe drinking water for inhabitants. As of 2008, only 75% of the urban based population and only 42% of the rural population had access to safe drinking water in Nigeria (GEMS, 2013). This makes business proposal of the solar based water purifiers quite a lucrative one in Nigeria. The product that is being offered involves two variants that the organization wishes to launch. The first one is the NG Solar Carocell 500 and the other is the NG Solar Carocell 1500. The basic features of the products are the same. The difference lies in capacity of the models to handle volumes of water. One product is particularly suitable for the use of individual households and the other is useful for commercial establishments like, offices and schools. As the business will be mainly based on e-commerce model, online retail stores are to be used for placing the product. Sales through physical retailers are not considered presently. The price of the water purifiers are set well within the budget of middle and lower-middle class of the population as the target is to build a large number of customer base within the first year of operation. The management has decided upon competitive pricing for the product. Promotional activities are mainly to be promoted through traditional as well as internet based medium. The rationale is to increase visibility of the product to maximum in order to ensure highest sales. Internet based Marketing Internet based marketing is mainly chosen for the associated inexpensiveness of this marketing technique. The primary difference with traditional marketing is that internet marketing is done over the web. The reason for choosing internet based marketing for this business is that it is relatively inexpensive to administer as compared to other alternatives of mass media like, radio and television. Internet based marketing allows users to buy products from the comfort of their homes and transactions occurs very quickly. In Nigeria, it has been found that the number of internet users has risen to 48,366,179, which is equivalent to 28.4% of the population. Internet is being used by most of the urban households and in all offices and workplaces. The number of Facebook users in the country is approximately 6,630,200 and this value is rising constantly (Internet World Stats, 2014). These figures indicate that the base of internet using customers is increasing in Nigeria, which will be particularly beneficial to the internet based marketing theme of the business. The following graph shows the number of internet users in Nigeria from 2004-2012. Figure 2: Rise in the number of Internet Users (Source: Trading Economis, 2014) This graph clearly shows a consistent rise in the number of internet users. Another reason to choose internet based marketing is that results from the process are easier to measure. The rise in sales of the product based on internet campaigns is easy to measure. Social media marketing is one of the most widely discussed topics in marketing literature in the present scenario. As the content of social media has to be created by regular people using highly scalable and accessible technologies like, blogs, social networks, message boards and micro blogs, proper recruitment of a creative team is extremely important for success of the water purifier business. E-business model can help the firm in both e-procurement and e-commerce. E-procurement refers to purchasing of raw materials, customs, warehousing, documentation and quality validation. This can be used by the business to acquire raw materials like, fibres, for the production. E-commerce is used in selling the finished products (Columbus, 2000). This can help in purchasing the products from various locations without visiting the shops. The consumers can research on products directly with the help of leading sites on internet and place their orders easily (Johnson and Whang, 2002). For instance, Kaymu, Jumia and Lagos are some of the popular online retailers based in Nigeria (Okoli, 2013). The following table compares costs and benefits of using social media marketing that can be faced by the organization while conducting the business (Mergel and Greeves, 2012). Table 1: Cost and Benefit of Using social media (Source: Mergel and Greeves, 2012) The basic tool that is used to measure success of sales based on internet media is called the “online buzz”. There are various ways in which online buzz can be measured, namely people browser, social mention, brands eye, heartbeat and alterian. These tools can be employed by the organization to measure impact on sales through use of internet media (Mitchell, et al., 2012). Finally, in order to comprehend success of the business using social media, proper monitoring of the social media is of high importance. This activity is chargeable and is based on the commitment of monitoring (Napier, Rivers and Wagner, 2005). Business App In contemporary times, almost everyone is armed with smart phones and tablets, which has made it much easier for the business organizations to interact with their customers. This has improved the potential of sales for the businesses. Therefore, the company can improve the sales of the water purifier through the application of a business app in its e business. The best way to this will be through the use of “Square Register”. This is one of the best business apps developed for smart phone users which allows the business to accept payments through any major credit cards. This application was developed in 2010 by James McKelvey and Jack Dorsey and uses free credit card reader and free point of tools to accept payments (Chowdhury, 2013). This will allow the company to get instant payments for its purchases and the customer can use them directly through their smart phones. This will enhance the ease of doing business. Market Segmentation and Value Proposition In Kano State, population of the urban area was around 12 millions in 2010. About 50% of the population reside in the urban areas and another 50% reside in low-income areas. Six government agencies are responsible for supply of water in the urban areas and water supply in the low-income areas are dominated by informal techniques like, motorized boreholes, hand pumps and rain water harvesting (Iliyas, n.d.). As of 2006, there were more than 5500 government and public schools in Kano State and most of them lacked access to safe drinking water (Kano State Ministry of Education, 2008). As Kano is a major financial and business centre of North Nigeria, it houses a large number of offices in both public and private sector (GEMS, 2013). Market segmentation is one of the most important aspects of marketing, which helps to enhance the opportunity of sales (Zimmerman and Blythe, 2013). Market segmentation allows the organization to diversify its strategies, which are aimed at particular customer groups. This specific targeting of customer groups is more effective than mass targeting. In this case, there are four main customer segments that the business wants to address (Zimmerman and Blythe, 2013). The first group is the households; the second group comprises private and government offices; the third group is that of housing estates and housing companies; and the fourth group constitutes schools. All of these figures indicate that size of market for the water purifier in Kano State is quite large and the target market that has been selected is quite relevant for developing opportunities of the business. The current data from various sources point out a prominent lack of safe drinking water in Kano State (PATH, 2010). This indicates ample opportunity for the business, given that the market size is quite big. There are two important value propositions for the company. The first one relates to clean technology that is to be employed in the water purifier. This does not involve use of any harmful chemicals and emits no greenhouse gases. The second value proposition for customers is the excellent customer service that is to be provided to them, once the product is purchased. Revenue Stream In this section of the paper, possible revenues that can be generated from sales of the product of the company are estimated. Based on customer segmentation of the company, the following revenue stream has been approximated. Figure 3: Expected Revenue Generation (Source: Author’s Creation) This graph shows that majority of the revenue is to come from commercial establishments, which are closely followed by housing communities. The schools contribute to the least amount of revenue. Communicating value Marketing has often been used to describe a process that creates, extracts and delivers customer value by using an appropriate time frame (Vitale, 2011). This is because sustainability of a business in the long run critically depends on timely communication of the value to customers. Communicating with customers is basically a part of the promotional mix strategies that are followed by the company. The methods that are widely employed by organizations to communicate with their customers include personal selling, advertising and sales promotion (Anderson, et al., 2012). The first aspect that the company needs to focus on is to establish a personal website that can effectively demonstrate all unique features of the product along with benefits that customers can enjoy on purchasing the product. The personal website of the company can be used to directly communicate with customers and obtain their views and reviews of the product (Brown, 2006). Building the website efficiently is the key to success of the organization as this is a direct interface whereby benefits from the product can be effortlessly communicated to the customers. Once the customer starts visiting the website, they will be easily able to learn about the unique features of the product. The clean technology used in the process of purifying water and low cost should be primarily highlighted. Benefits to the large number of school children and households can be properly advertised through the website. Automation of the website and database will allow the company to effectively communicate with customers and explain the importance of buying the product to them. Automated e-mails can be sent once the customer starts visiting the website and this can contribute in sales through referrals. As social media and internet is used for the purpose of communicating with customers, the organization can build a wide base of customers through the extensive network of internet users. As these types of websites can be used by customers to express their views, the organization can benefit by gaining knowledge about the areas and product aspects that require improvement. The research and development team of the company can work on these areas to improve quality of the products. The “positive” and “negative views” about the products will definitely help the company to improve business (Johnson and Whang, 2002). Feasibility Feasibility of the business plan is extremely important for sustainability and profitability of a business. In terms of micro market analysis, it has been observed that there is an ample market gap for the product as access to safe drinking water is one of the major problems in Kano State of Nigeria. This brings along opportunity for the business, when it commences operation. Analysis of the solar water purifier in Nigeria has revealed that there are a few direct competitors to the business like, Fiwa Industrial Global Control Venture, Jmm Mega Spring Limited and Solar World LAfric Limited. However, these companies are not based in Kano State and additionally, internet based marketing and promotional method is likely to provide a competitive advantage to the product. The biggest USP of the product is the clean and natural technology that is used in the production technique. This is expected to reduce operational costs of the business significantly; this will help to price the product at a cost lower than that of the competitors. This is expected to create a wide base of customers for the company and enhance sales. The internet based marketing is also supposed to reduce operational cost of the business and add to profitability. Finally, owing to the fact that Kano is one of the most commercially and financially significant areas in Nigeria, this makes the market size formidable and ensures profitability. Conclusion This project has discussed in details about the launch of a new solar water purifier in the Kano State of Nigeria. Initially, research on the State had revealed that there is a dearth of clean drinking water, which is a major concern. As water is one of the basic commodities of life, provision of clean drinking water is of utmost importance. This paper has studied the group of customers at whom the product should be targeted and has found four major groups that can provide marketing opportunities. The size of the market is growing and demand for clean water will also rise in future. This makes the product relevant for the market. The business is expected to operate through internet. This has been decided so as to reduce cost of operation of the business. Internet based business can provide opportunities of both e-procurement and e-commerce for the business. E-procurement can help the company to acquire raw materials of production at an effective price, which will directly reduce the cost of business operation. E-commerce, on the other hand, will help the company to sell finished products. For this purpose, website of the company can be used by customers to learn about the product features and purchase accordingly. 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