B2: CUSTOMER

(External marketplace)

Understanding your market and addressable audience

Listen and Learn: Intro to B2:

Customer (External Marketplace)

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For a multimedia introduction to this session, please click on the “play” button on the left or on the audio file above.

INTRODUCTION: B2 Customer (External marketplace)

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How to WIN: Grant Thornton reports a 5% uptick in numbers of women CEOs worldwide in 2020

Grant Thornton produces an annual report on women in business. They believe that increasing the proportion of women in senior leadership has proven benefits for every business, in every sector, but to get them there, clear, sustained action needs to be taken. In 2019, they outlined the practical steps organisations can take to create an environment in which women can succeed. I the 2020 report they look at the Blueprint Plan in action, and evaluate the measures being put into practice to shift the balance of diversity. This year, our Women in Business report reveals what is happening, and where. You can read the report here.

INTRODUCTION: B2 Customer (External marketplace)

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Africa has the highest proportion of senior women in management in the world!

What is covered in this lesson?

SECTION 1:

• Getting to know your external (macro) marketplace
• Where to find appropriate research

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STOP & THINK: What is unique to your own marketplace?

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SECTION 2:

• Market research for planning
• Porter’s Five Forces model
• Research models for macro environment
• A hypothetical example of research: PESTEL

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SECTION 3: Tech, Infrastructure and consumer

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STOP AND THINK: Sources of market information and market specificities for individual countries and for the group to share

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TIME FOR REFLECTION: A PESTEL analysis of your business

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INTRODUCTION: B2 Customer (External marketplace)

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Reminder: Focus on the customer

1. Focusing on the customer will automatically make you a better business
2. Audience-centricity should be at the centre of your strategy
3. Your customers are your readers, your subscribers, your marketplace, and your advertising clients.
4. Do you know enough about your customers?
5. Have you asked them what they need?
6. Good customer data is an investment worth making: it helps to make sound business decisions, and not react without facts
7. Data helps facilitate transitions and big changes

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INTRODUCTION: B2 Customer (External marketplace)

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Section 1: Getting to know your market

Getting to know your own marketplace

• In this session, we will cover the first of the 5 pillars of Deloitte’s Digital Maturity Model - Customer - with a focus on “external” customers - this refers to the marketplace in which you are operating.
• You need to fully understand the parameters of your market and audience before you can forge forward with a legitimate strategy.
• There are many reasons for this:�
• Product development will depend on environmental factors like infrastructure and internet speed
• A decision on business models and revenue models like paid content for example, will depend on customer spending habits in the market in which you operate
• An understanding of and an ability to fulfil customer needs
• Editorial content choices may be influenced by the politics of the marketplace
• Investment in future-proofing your business will have to take into account the demographics and the economic situation in your marketplace - this will impact on the choices you make for capital expenditure
• The competitor landscape: who and what is your competition?

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SECTION1: B2 Getting to know your market

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Understanding your market: research

Where can you find this information? Try some of these routes:

• Search on Google - simple but effective. You will be using search parameters like “digital penetration in Kenya” (returning country specific data such as that on digital4africa.com/data or “data costs in Zambia” for country-specific stats (see numbeo.com for cost of living stats)
• There is a lot of free info available on sites like statista.com, internetworldstats.com, datareportal, CIA World Factbook and the Reuters Institute that now also does country-specific reports
• When searching on Google, remember to also click on “images” for graphics rather than text - there is often great, clear information available in graphical form that may then in turn click through to a research paper or article - good for board presentations
• Don’t forget about tapping your in-house research and marketing teams: they will have a lot of information - and very likely sales packs and presentations - that cover the regional market in which you are operating.
• Do customer research yourself - surveys are invaluable! You can use your websites to run customer surveys for a low price

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SECTION1: B2 Getting to know your market

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Above is an example of the information available on Datareportal for Uganda. �The full report is 60 slides long - with a hugely comprehensive selection of research information.

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SECTION1: B2 Getting to know your market

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Map your customer touchpoints

• You have multiple touchpoints with your customers, and external audiences which are potential customers
• There is no shortage of customer (or potential customer) touchpoints as user, reader, listener or viewer connections
• They may be familiar with your content - in print, on digital websites, through apps, via social media, podcasts, radio or TV stations.
• Through your customer care teams - customers calling in and you calling them. You may have a marketing team, or an audience feedback mechanism. You may even have a user research team

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SECTION1: B2 Getting to know your market

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Bringing in external customers as ‘known users’

• If you are not yet running a paywall, you are likely to have a large number of anonymous readers on your website or websites
• Take the lead from companies like Apple, Google and Netflix which are built around customer needs - and are very focused on “unmasking” or getting to know their customers
• These companies were the first to focus on gathering logged-in users - data is much richer if a user is logged-in to your site
• Make the most of these by asking for registration details (ask from a sample if this makes you nervous!), or sending customer surveys to groups of customers
• Use the results to build better experiences and inform product builds

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SECTION1: B2 Getting to know your market

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Stop & Think

Let’s stop and think for a moment:

• What can you identify as being specific to your market place in terms of internet or device usage, data costs etc?
• Where do you get your market research?

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SECTION1: B2 Getting to know your market

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Section 2: Market research and planning

What do you need to know about your market?

To form a coherent strategy, there are certain data areas that need to be fully mapped and understood. ��In this section we introduce 2 tools to help with analysing your marketplace: Porter’s Five Forces, and the PESTEL tool. For a comparison of the two, click here.

Market penetration rate - percentage of your customers that have bought your products in a period of time. More here.

Target market and addressable market - The specific / total market for your brand - usually helps to make the case for investment if calculated correctly.

Literacy rates - is literacy in your area growing, or stagnant? This will affect growth for news products

Digital penetration and internet usage - How extensively does your market use the internet? Is there a viable market for digital products?

Data costs, connectivity and cost of living - the price of data in a region can have a huge effect on what & how tech products are developed. More on Slide 28.

Consumer behaviour - shopping online, prefer carrier billing over credit cards, lack of credit facilities.

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SECTION 2: B2 Market research and planning

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Using Porter’s Five Forces model to understand your market

Porter's Five Forces is a model that identifies and analyses five competitive forces that shape every industry and helps determine an industry's weaknesses and strengths.

Porter's model can be applied to any segment of the economy to understand the level of competition within the industry and enhance a company's long-term profitability.

The Five Forces model is named after Harvard Business School professor, Michael E. Porter

Analysing the competitive environment:�

The number and power of a company's competitive rivals, potential new market entrants, suppliers, customers, and substitute products influence a company's profitability. Five Forces analysis can be used to guide business strategy to increase competitive advantage.

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Porter's five forces are:

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1. Industry competition: A higher degree of competition means the power of competing companies decreases. When competition is low, companies can do whatever they need to in order to increase their profits.�
2. New players in the industry: New (and more) entrants into the market mean a company's power also decreases. Most companies prefer to operate in a market or industry where there are fewer players.�
3. Supplier (seller) power: This factor examines how suppliers can use their power to increase the price of goods and services. The fewer suppliers there are in the market means they have more power.�
4. Buyer (customer) power: When consumers have more bargaining power, they may be able to affect the price of goods and services, driving them down.�
5. The threat of substitutes: Products and services by a rival that can easily be substituted are also a threat to a business's profitability.

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For more, including a video on the subject, please see this article.

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SECTION 2: B2 Market research and planning

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Porter’s Five Forces case study: Starbucks

In this example of Porter’s Five Forces on the right, you can see the application of the analysis for Starbucks - considering the intense rivalry in a crowded coffee market, this model can help to identify threats, competition and help to plan a strategy to offset the challenges. �For more on this case study, see here

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SECTION 2: B2 Market research and planning

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Listen and Learn: Using the PESTEL framework

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For a multimedia walkthrough of this section, please click on the “play” button on the left or on the audio file above.

SECTION 2: B2 Market research and planning

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“Research is formalised curiosity. It is poking and prying with a purpose. ” �

ZORA NEALE HURSTON

Author and Anthropologist

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SECTION 2: B2 Market research and planning

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A great tool for conducting research before launching a new product or into a new market, is the PESTEL analysis. PESTEL is used specifically to analyse the macro environment. See a video explanation of this tool here.

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SECTION 2: B2 Market research and planning

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Video Walkthrough: PESTEL Analysis

In this episode of Business To You, Lars talks about the PESTEL Analysis (formerly known as Pest factors) and how to use it properly. PESTEL is a framework that helps analyse the macro environment of organisations and is often used when starting a new business or when entering a foreign market. PESTEL stands for Political, Economic, Social, Technological, Environmental and Legal factors. Together these factors form a great representation of the general external environment of a business.

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SECTION 2: B2 Market research and planning

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Deep dive into market viability: a (hypothetical) example

Imagine you are about to launch a newspaper or website in Zimbabwe, and you’ve decided to launch in a vernacular language, Shona.

To understand the market, you would need to know at least the following:

• Your addressable audience: What is the Shona-speaking population of Zimbabwe in millions?
• What are the competitor newspaper products and how many copies do they sell every month? Is circulation declining, increasing or static?
• How many users are there monthly on the competitor websites?
• What market is your competitor aiming at demographically?

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The exercise on the left is illustrating what steps to take to launch a Shona language competitor to Kwayedza in Zimbabwe

SECTION 2: B2 Market research and planning

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Product launch research exercise (continued).

• What demographic group are you aiming at: how many potential readers fall into this group, now that you have narrowed down the native speakers?
• What devices do this group prefer - newspaper or digital?
• What editorial content are you planning: will you compete with the same or a different offering to your competitor?
• What do readers need and want: have you done any customer research?
• Have you identified a gap in the market that your competitors are not fulfilling?
• Can you compete on price? What is your planned frequency?
• What is the long-term outlook for your product?

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SECTION 2: B2 Market research and planning

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Stop & Think

Let’s stop and chat for a moment:

• What challenges would you face immediately when launching a digital title into your own market?
• Which items on the PESTEL framework have the most relevance - discuss with your colleagues.

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SECTION 2: B2 Market research and planning

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Section 3: Technology, infrastructure and consumers

Technology, infrastructure and consumer behaviour

Technology, infrastructure and the behaviour of consumers are major factors when considering strategic plans, because these macro-environmental factors are likely to have a significant impact on your business at all levels. Any strategic changes or plans should be seen in light of these issues.

Technology: While North America and Europe still plan for users on tablets and desktop, Africa has enormously high mobile use. Are you ready?

Infrastructure: Connectivity is a critical factor in developing new digital products or changing strategy. The availability of wifi, the spectrum availability (3g, 4g, 5g?), and data costs per gig (See next slide) are primary considerations for any media owner.

Consumer behaviour: Are your customers mainly retail, or have you cultivated subscription buyers? Look at financial inclusion factors: Are people comfortable with online payments, or carrier billing (pay-as-you-go), and how many own credit cards? Is debt defaulting a problem? Literacy levels?

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SECTION 3: B2 Technology, infrastructure and consumers

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Technology: African publishers have mobile readers

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Mobile penetration in Africa!

SECTION 3: B2 Technology, infrastructure and consumers

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Infrastructure: The price of mobile internet 2019 - Africa

In Africa, which is the poorest continent by GDP per capita, countries in the southernmost part of the continent pay the most for 1GB of data. �Zimbabwe pays the highest price both on the continent and in the world ($75.20), followed by Equatorial Guinea ($65.83), Saint Helena ($55.47) and Djibouti ($37.92). The reason for this is overburdened infrastructure (spectrum). For more information, see this article.

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SECTION 3: B2 Technology, infrastructure and consumers

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Consumers: pay attention to consumer behaviour

Your business plan and strategy should always take consumer behaviour into account.

Many African publishers have a larger number of retail or point of sale customers than subscribers, for example. So their ability to “know their customer” is constrained.

Some countries are more familiar with mobile banking than others. This should be taken into account when launching products - how do your audience pay for products?

For example: Kenyans have been using M-Pesa since 2007 and 17-million accounts exist in Kenya, but it is also used in other countries now, like Tanzania which has 7-million accounts. When planning for paid products, remember to look at financial inclusion factors - like credit card use and online payment behaviour - before launching new projects to consumers.

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SECTION 3: B2 Technology, infrastructure and consumers

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Quiz Assignment

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• Please complete the short online quiz to test what you have learnt.

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• You must score at least 80% in order to progress to the next module.

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SECTION 3: B2 Technology, infrastructure and consumers

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End of Lesson Two