A case report of
Bright Light Innovations: The Starlight Stove
Dr. Yasemin Atinc
Student ID: 50217298
College of Business
MS in Management Program
University of Texas A&M – Commerce
Mar 23, 2018
Bright Light Innovations has a top management team made up of students and faculty from Colorado State University’s Colleges of Business and Engineering. The management team has developed a product known as the Starlight Stove. This stove was developed in hopes to improve the overall quality of life for less fortunate people. The management team wishes to address the everyday consumer needs for safe cooking and electricity. The Starlight Stove requires less biomass fuel and also has the ability to convert heat from the stove into electricity. This new feature gives everyday people the opportunity to enjoy safe cooking and electricity at an affordable price. The management team knows that they have great technology; they just need a marketing plan in order to get their product out on the market.
Bright light Innovations must have a good strategic plan .The company should understand why global businesses fail even after strategic planning occurs and what tactical adjustments can be made to correct malfunctions. Bright Light Innovations has to implement a strategic planning of launching a new product in a foreign country. This means that the for profit company needs to establish a partnership with the local government. Bright light Innovations needs to work closely with the Nepal Government to get the permission to launch the new product. Bright light Innovations will also……
For Triston Knaus it has been a hard task growing his business due to lack of marketing strategy even though he had some definite ideas about what travelers wanted. Triston Knaus is the owner of Peaceful Rest Motor Lodge who is seeking to uplift the losing money and to increase the percentage of occupancy rate. Knaus is in a critical situation where he needs to make a crucial decision between minor changes that he needs to make in his own lodge or join a motel chains such as Holidays Inn and Days Inn.
Bright Light Innovations is a business that is dealing with a unique product. The Starlight Stove is the new product being introduced in the market. SWOT analysis identifies the objectives and the factors that might or might not favor the firm in achieving its set objectives.
• Advertisement and Sales Promotion: Knaus did not use sufficient funds and time to advertise and even didn’t launch any sales promotions. Instead he relies on people finding his motel on their own which results low occupancy rate.
• Lack of recreational facilities: The motel does not have any recreational facilities such as swimming pool and other non-revenue producing facilities. Knaus found the result given by regional Tourist Bureau that 78% of the visitors prefer recreational facilities in their choice of accommodations.
• E-commerce: There is no online/ e-commerce site for the customer to find the motel’s information as well as to book rooms online this results in loss of sales in a competitive environment. In today’s world travelers like to check how convenient the motel is and what are its amenities. E-commerce sites allows travelers to give an idea about the site/ place to be familiar with the place before deciding to book there.
• Promotion Tactic: Business is all about attracting customers and making money. In today’s world internet plays a vital role in finding the desire thing that you search with all the details. Many people use internet to find hotels and other services that they desired to look at. Knaus must be able to create a strong strategy that helps him to reach the highest number of consumers. Different methods of advertising such as billboards, television, social media, radio advertisements are the best way to get customers. He should be able to take the benefits from internet to take over the marketing world. It is very important to know why the content is being created to whom you are targeting and how will it be beneficial to the target group is the most. Organizations typically use content marketing to build an audience and to achieve at least one of these profitable results: increased revenue, lower costs, or better customers.
• Social Influencers:
According to Sprout Social, “74% of shoppers make buying decisions based on social media”. There are some sites such as Yelp ; TripAdvisor which play a vital role in a providing a relevant information to the customer which is directly linked with a business’s success or failure. These sites make it easy for the tourists to know what kind of experience they will get if they decide to go with the hotel. By knowing review for the customer helps a business owner to know where the business is going and what are the improvements needed to make the customer more satisfied. These types of reviews is crucial for Knaus to make a better use of the sites and to know what are the customer likes and dislikes. The survey done by PwC total retail survey 2016, “45% of global respondents said that reading reviews, comments, and feedback influences their shopping behavior”.
Conducting SWOT Analysis, helps in addressing some strengths and opportunities and helps in confines some weakness and threats.
The company has a stable management team with its members being university students. Diverse sources of knowledge and ideas are readily present. This puts the management at a good position of making concrete sound mind decisions.
• Location – The Company is situated in a highly populated area where market size is significantly large. Moreover, internationally there are higher demands of energy saving stoves for lighting and heating.
• Uniqueness of the product – Starlight Stove is a new product in the market. No particular company has ever produced and marketed a product similar to Starlight Stoves.
• Price – Starlight Stoves is sold at affordable prices. The company also has microfinance strategy that will offer loan services to the families, hence, increasing potential buyers. Additionally, Starlight Stoves are costing less compared to competitive products like solar panels.
• User friendly – Starlight Stoves are friendly to both the users and environment. Traditional stoves consume bulk amount of biomass fuel as compared to Starlight Stoves causing more deforestation, and consequently environmental population.
• Competitive advantage – Starlight Stove offers long durations of lighting, thus, enabling the product to compete with its competitors’ products like Hydra-Electricity.
• Lodge most significant strength is its product/service differentiation.
• Knanus has more focused on cost-effective tourists in order to slowly penetrate in the competitive market where location plays a vital role as it is located next to the highway with excellent visibility and easy to get to attract many customers.
• As Peaceful Rest Motor Lodge independent business not being affiliated with any chain, has gotten freedom to make changes according to the managerial process.
• Peaceful Rest Motor Lodge is only 10 miles far from the tourist area and is located next to the highway with excellent visibility and easy to get with huge parking spot is a prime location for the tourist to make a favorite vacation spot.
• Targeting low cost of purchase with modern room helps to meet large number of customer.
In spite of all the above listed strengths of the company, various weaknesses in the provision of goods to the customers occur. Among the major weakness includes:
• Product awareness – Starlight Stove is a new product in the market. Target market has no idea on how to use the stove, its benefits over the traditional stoves, and the accrued economic benefits of using the stove.
• Pricing – Bright Light Innovations Company faces a major problem in deciding on the price of the stove. Pricing strategy should ensure that the firm is making profit and internationally the set price of the product is affordable.
• Location of the business – the business is located in Nepal where most of the residents are living below the poverty line. Therefore, majority of residents are willing to buy the stove but they cannot afford to have one.
• There are no signs for the Peace Rest Motor Lodge instead manager was relying on people finding his motel by the customer.
• The lodge has limited amenities or no recreational facilities as Knaus ( the owner) thought those nonrevenue- producing facilities such as swimming pool were not necessary to offer to the clients.
• Lack of online site the customer are not getting the information about the about the lodge.
• The manager did not pay much attention to marketing strategy, sales promotion rather he depends up on word- of-mouth to advertise.
• Advertising budgeting should be considered while doing business which Knanus lacked.
• Starting a business without having concrete idea and destination that went something wrong is a result of poor business plan. Falling occupancy rate to 55% which is below the average rate has shown the business was not setup correctly.
The market has many opportunities for the company that is still struggling to come up. Some of the opportunities the firm has are:
• Collaboration and state funding – Bright Light Innovations Company is dealing with a product that is environmental friendly. Globally, use of biomass fuel is causing more danger of deforestation. Governments are campaigning for use of other forms of fuel in order to conserve environments. Therefore, the firm can collaborate with the government to educate the public about the merits of using Starlight Stoves. Through the initiative, the government might finance the project.
• Online marketing – Bright Light Innovations Company can increase its strategy through developing an online marketing mechanism. This approach enables the firm to have an international target market, hence, an increase in sales.
• Educated and experienced staff – Bright Light Innovations Company comprises of experts in the energy sector with both skills and knowledge. Through this, the firm enjoys quality product production and marketing that ensure customer satisfaction and increased sales.
• Located 10 miles away from tourist area increases the chance of gaining costumer looking for cheap hotel in an emergency.
• Great opportunity to join a national motel chain such as Holidays Inn or Days Inn that likely to increase overall bookings by 40%.
• Taking the advantage of prime location and increasing the customer helps to gain popularity which ultimately results business success.
• Increasing use of social media, billboard, radio, newspaper rather than depending upon only word-of-mouth attracts more customer.
• Changing the facilities according to the customer’s needs might create a loyal customer.
Current rate of growth in the market may lead to market saturation, through stiff competition. Competition that is posing threats to the business comes from various sources.
• Price and promotion – new firms are supposed to offer free samples to the customers to create awareness of the existence of a new product in the market.
• Stiff Competition – internationally there are different forms energy that is used as fuel for heating and lighting. Bright Light Innovations offer a product that has several other substitute products from potential competitors.
• Location of the business – the population in Nepal and the entire world, who are the target market, has a high illiteracy level. Due to this, it is hard for it to adapt to new changes, thus, preferring traditional stoves as opposed to Starlight Stoves.
• Competition is increasing day by day due to the competitive world so Knanus should always be alert with the changing needs, wants and preference of the customers. Continuous keeping an eye on competitors and product and services positioning is the key to stay in business.
• Huge investment is needed in advertisement part which may be less beneficial for recent business.
• Risk of coming of larger chains hotels to the area where Peaceful Rest Motor Lodge has established its business which is a financial threat or switching threats. In future if the area continues to grow then there is the chance of increase in tax rate that will create financial burden than now.
• It is very challenging to compete with large chains that are financially strong which has already gain loyal customer.
Evaluation of Alternatives:
Knaus has some alternatives to increase the occupancy rate and revenue by making several changes in existing business or by entering into the national chain (join Days In or join the Holiday Inn)
Knaus could make some minor operation changes such as creating creative billboards, building CRM (Customer Relationship Management), maintaining and designing a better outlook of motel to attract target customer, creating user-friendly online website that provide a overview of the motel, conducting survey in a niche market to identify customer’s preference. Also separating budget for marketing for publicity. An independent business would have more power of freedom to promote its uniqueness.
Joining a franchise:
Knaus could join a motel chain to be in a competitive market but branding a hotel is time consuming as well as expensive process. His options are Days Inn or Holiday Inn. However joining either one helps Knaus to be franchise with national chains but he would loose the independence of owing the business. As Days Inn uses few television advertising and less print advertising than Holiday Inn. Days Inn focuses on sales promotions and beneficial membership program. Days Inn doesn’t require a major capital investment to join as it is looking for lower price motel. Also, Peaceful Rest Motor Lodge and Days Inn both have the same motive i.e. targeting cost-effective customers. Though marketing strategies such as sales promotion, membership accounts help to earn loyal customer. Whereas joining Holiday Inn as a franchise requires more capital investment along with uplifting some amenities. Peaceful Rest Motor Lodge must have capital between $300,000 and $500,000 depending upon how sophisticated business you want. Joining franchise helps to develop quickly which offers lots of advantages that provides national recognition. Holiday Inn could increase the room rate at Peaceful Rest Motor Lodge from $45 per day to $75 per day, only if amenities are added. Holiday Inn has also greater membership deals that make the consumer loyal.
Support of Recommendations
Hence from the above-mentioned factors, Tristan Knaus should join Days Inn, a national chain, which would be the best scenario in current case situation. Joining Days Inn does not require huge capital investment also they have the same business purpose i.e targeting cost-effective customers which draw large number of customers. Despite lack of recreational facilities, the lodge can increase the rate of the occupancy rate from 55% to higher by brand name of Days Inn and its strong promotions. Collaborating with the Days Inn will helps Knaus to manage the Lodge more effectively due to his management experiences with large firms which can lead the best outcomes.
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