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Showing posts with label Business Models. Show all posts
Showing posts with label Business Models. Show all posts

Saturday, May 1, 2021

How a Small Colombian Language Training Institute is Reshaping its Marketing Strategy by Esteban Ochoa * [32]

Established in 1978, A.V.C is a premium language institute in Medellin, Colombia. The firm utilizes a customer intimacy strategy. The Institute developed strong relationships with  students by having an open-door policy about personal/life issues, granting scholarships based on program excellence, regular communication with family members, and an end-of-year award ceremony.

A.V.C. offers programs in English, French, German, and Italian to a Spanish-speaking market. Although the Institute has been in business for more than 40 years, only 600 students achieved full proficiency in their chosen languages and graduated. Given the difficulty of the program, nearly half of the students were unable to complete the coursework. The Institute has always focused on offering small classes, custom-tailored learning programs, and tutoring sessions with an emphasis on building lifelong customer relationships. Graduates still visit the school and often send their own children there.

Although A.V.C reached a high level of customer intimacy with students and alumni, due to lack of technological preparation, the Institute had to close at the beginning of the COVID-19 pandemic and lay off 85% of its employees. Service firms have had to look for ways to operate remotely to survive. VOC Digital was retained to re-imagine A.V.C.’s business model. The project started with identifying the right target market. Additionally, new sources of income were required to fund the virtualization of the different courses and re-hire of teachers.

Instead of looking to compete in the crowded city, VOC targeted rural residents, ages 15 through 45 in the outskirts of Medellin, Colombia. Using a geodemographic segmentation approach, there were two reasons that rural Colombian towns were selected as the target market: 

1) Service availability: Typically, formal foreign language lessons in Colombia are limited to middle and upper-class families in the city and those studying in citadel universities. Rural residents generally leave their towns for opportunities that only the big cities can offer, education being one of them. The service itself is almost non-existent in rural communities. VOC Digital and A.V.C. recognize this untapped market opportunity.

2) Number of rural towns in Antioquia and throughout Colombia: In the west region of Antioquia alone (Antioquia is the equivalent of a state in the United States), there are approximately 23 rural towns with an average population of more than 25,000 residents. In all of rural Antioquia, which is only one state in Colombia, there are over 8.5 million inhabitants. Furthermore, Colombia has 32 departments or states (User, S. n.d.).

The solution for the an alternative income generation source will be supplied by renting out a large portion (75%) of the school (a land asset) as office spaces. The two-story building is located in a prime central location in the heart of downtown Medellin which adds value and demand due to heavy foot traffic. Creating a new revenue stream combined with the proposed segmentation strategy and digital technology (adding virtual courses) will reinvigorate the educational services offered.

VOC Digital is currently creating all of the online programs that combine small (in student count) recorded virtual classes, custom-tailored learning programs, and online tutoring all under one centralized portal designed for cell phones which is funded by the rental spaces. All of the guides, course materials, and tests given will be compatible and optimized as well for mobile devices. Such a seamless integration is not only to make the program more user-friendly and accessible to its future student body but to be able to do it at a cost low enough to establish an ongoing relationship with consumers in rural Colombia. 

The hiring process for teachers begins in June 2021 and will be finalized by November 2021. A pilot course is set to launch at the end of the second quarter of 2022 to collect real time user data and will be offered free of charge to 15 individuals. During the remainder of 2022, three more free courses will be opened to further improve user experience and build customer intimacy with the first set of students taking language classes via the new approach. The launch of all the courses is planned for the start of 2023. Data will be collected monthly to continue to improve user experience. A.V.C is excited about the new strategy and creating long-term value for its clients.

Reference

User, S. (n.d.). 3.2.1-Proyecciones de población según ÁREA GEOGRÁFICA en Los municipios DE antioquia. Años 2015 - 2017. Retrieved March 21, 2021, from http://www.antioquiadatos.gov.co/index.php/3-2-1-proyecciones-de-poblacion-segun-area-geografica-en-los-municipios-de-antioquia-anos-2015-2016

* Esteban Ochoa is the owner of VOC Digital, a marketing agency. He may be reached at: vocdigitalco@gmail.com  

 

 

 

 

 

 

 

 

 

  

 


Friday, September 13, 2019

Winning Business Models for the Now Economy [3]



[It ain’t that hard to be different.  Tom Peters] A successful business model describes how an organization designs and delivers value by providing stakeholders with a shared understanding of how the business operates. A strong business model offers a competitive edge by demonstrating that the firm does something different, more innovative, and better than its rivals. Realize that different isn’t always better, but better is always different. Sirius XM Satellite Radio is always on whether you are at home, at work, in your car, or at the beach. Many customers listen to SiriusXM eight to twelve hours a day! Apple’s iTunes is a great example of the changing music industry. In the past, record companies, distributors, and retailers controlled channels and profits, now the artist and platform (iTunes) has the market power. Newspapers have struggled to become information providers as their readers aged and defected to new media. Sound business models answer the following 3 questions: 1) where should we compete?; 2) how should we compete?; and 3) how can we monetize products, services, experiences, and ideas. According to Accenture, 80% of companies hope to grow by developing new business models by 2019.Consider these 20 business models as you evaluate or develop your business strategy.

Digital Business Models

1. Access: Customer usage not ownership (Spotify, Zipcar) 2. Bricks-and-clicks: Retail and e-tail (Best Buy, Target) 3. Bundling: Sell 2 or more products for a discount (Comcast, Microsoft Office) 4. Community of users: Users generate knowledge, solve problems (eBay, Wikipedia) 5. Crowdsourcing: Outsource to non-employees for solutions (My Starbucks Idea, Doritos Super Bowl Contest) 6. Experience: App-based service plans (ClassPass, Zeel Massage) 7. Free: No cost products/services, revenues generated elsewhere (Skype, YouTube) 8. Freemium: Basic service at no charge, enhanced services have fees (LinkedIn, MailChimp) 9. Long tail: Millions of products offered, most sell very few (Amazon, Netflix) 10. Marketspace: Digital marketplace of buyers and sellers (Alibaba, eBay) 11. Multi-sided markets: Serve multiple segments – e.g., readers and advertisers (USA Today, Visa) 12. On-demand: Services as needed (TaskRabbit, Uber) 13. Open business model: Companies share low cost options [way below branded] Linux, Qualcomm) 14. Pay for value: Customers opt to pay what they wish (Neighborhood café, Radiohead CDs) 15. Platform participant: Enhance platforms by creating user applications (Foursquare, Zynga) 16. Pure-play: Online presence (Blue Nile, Overstock.com) 17. Shaper: Open up new marketspace (Apple, Facebook) 18. Software as a service (SaaS): Deliver applications over the internet (Salesforce.com, ADP) 19. Subscription: Recurring fees for services purchased on a regular basis (Dollar Shave Club, SiriusXM) 20. Unbundling: Sell a single product from a set of related products (AT & T DSL, Windows Live Essentials) Think about the 7 questions below as your management team assesses your business model and market performance. 1.  Can you clearly explain your business model? 2.  What is unique about your strategy? 3.   How does it compare with your direct and indirect competitors? 4.   Have you broken any industry rules lately? 5.   Can you develop a more innovative and interesting business model? 6.   Will your business model win in the market? 7.  Does your organization truly deliver superior value for customers in the Now Economy? __________________________________________________________________________________________ This blog post is the 3rd in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com, www.artweinstein.com/, 954-309-0901 .




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