Movvo: Marketing Location – Based Big Data

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- Airports

This segment, based on a “niche” application, is characterized by being a perfect fit between Movvo’s solution and airports’ “pain points”. Airports are interested in crowd managing instruments and solutions that would help them monetize their passenger population, specifically understanding shopping behaviours in terminals. In addition, this is a segment with low price sensitivity, being beneficial for Movvo to potentially achieve higher profits given the interest on the product. Specifically targeting airports with a high flux of passengers (more than 5 million yearly) with a 75% penetration rate but also with a high initial investment value per airport and uncertain returns (due to the long buying process), one can state that unless an airport has good prospects of payback, the success in this segment is compromised.

- Of the segments described in the case which would you target initially? Why?

Having in mind the characteristics of the different segments as well as Movvo’s value proposition regarding each one of them, I would personally recommend Malls and Retailers for Movvo to initially target.

One should then analyse the characteristics of these two segments’ approach in comparison with the others (Appendix 1).

At first sight, one can detach the Airports segment to be the most attractive due to the low price sensitivity, interest on the product by prospective customers and higher penetration rate comparatively to the other segments considered. However, the risk and uncertainty related to this segment might not allow Movvo to achieve its objectives in terms of sales and profit. Specifically, “unless an airport has good prospects of payback (less than 2.5 years), it is unlikely that Movvo would succeed selling this solution”.

The Transport and Mobility market is also identified as being a potential success if chosen, as the prospective customers are receptive to the service provided and would definitely benefit from the innovative automatic payment service as well as monitor passengers’ use of the transports. However, the success of the service would directly depend on the number of passengers that actually download Movvo’s application as well as the intention of the transportation companies’ owners to install such a technology (they are receptive and find it useful but the penetration rate is not extremely high). In what concerns to the Portuguese market (supposing that Movvo, as a portuguese company that targets European markets, would see Portugal as an initial market to invest in), there are two barriers that can be enumerated. The first one is related to the automatic payment system: there is a device already well established in the market called MB Way, developed by SIBS Forward Payment Solutions, that actually gives travellers (consumers in general) the opportunity to pay for tickets with their mobile phones, just needing to have the MB Way app installed and allowing the payment, what is considered an advantage as people in general do not feel safe being charged automatically, that is what Movvo would offer. This mechanism of accepting the payment would then be much more attractive to consumers as they will confirm their buying intentions. The transportation company would then just need to have incorporated the app also, once it needs to give payment orders. The second one would be the fact that in terms of transportation companies, most of the ones operating in Portugal are state-owned, not having a willingness to pay as high as expected when compared to private companies that are constantly searching for innovation.

My advice in terms of target segmentation would be a combination of the two first segments, intervening in malls first and then moving to retailers. The conjugation of these two segments would turn out to be much more profitable, as Movvo would benefit, in the first place, from the huge market opportunity – it represents a big market (high number of malls with a large global leasing area as well as stores inside each mall) that is actually interested in the technology Movvo has to offer and is willing to invest on it. Several malls have been doing this kind of analysis manually and Movvo would be a more efficient alternative, providing a high precision with minor error service.

The high competition within this segment and urgency to detach from direct competitors by presenting the best price-quality proposal to prospective customers is the biggest challenge Movvo would need to face, as the sales effectiveness associated to the malls’ segment is actually low and needs to be compensated by an increase in the conversion rate (efforts of the sales’ team on increasing the number of closing deals).

The introduction of retailers inside the selected malls in Movvo’s strategy would then leverage the business and potentially expand it to other stores from the same retailers, in a way that, if Movvo’s service benefits are perceived by the retailers, they would like to install it in a higher number of stores (not only inside but also outside malls).

Movvo will then profit from selling information regarding the same infrastructure to different customers and with different purposes, but benefiting from the fact that they will just incur once in the installation cost. The only thing that differs in this process is how data would be manipulated and presented, according to the client’s expectations.

- What would be the most effective way to position Movvo in your chosen market?

In order to position itself in the market, Movvo’s value proposition should be clear in a way that its service should be distinguished from the direct competitors. As already mentioned in 2., the initial approach should be the malls’ segment, turning out to be a solution that would directly help mall’s managers in order to monitor crowds inside the malls or measure impact of marketing campaigns and events attractiveness, for example. The second step would then be to approach retailers with stores inside the malls with the aim to improve, simultaneously, the overall performance of the store as well as the shopper experience itself (analyse customers’ common paths, maximize cashier efficiency, analyse promotional displays, …). A third stage of this market penetration would be a replication of the service provided to retailers inside the malls in other stores they could have outside them.

There are a couple of main features that clearly distinguish Movvo’s service from the competition, that should be easily perceived by customers:

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