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Marketing Analysis of Frugl - Case Study Example

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The "Marketing Analysis of Frugl" paper analyses the opportunities and challenges of Frugl in the market with the help of SWOT analysis, PESTEL analysis, GAP analysis, Porter’s five forces analysis, Ansoft Matrix analysis, Branding, Marketing mix, etc.  …
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Marketing analysis of Frugl Introduction Cellphone and internet related technologies are growing rapidly at present because of the huge acceptance these technologies among people all over the world. Business, marketing, education, politics and culture are some areas in which these technologies have larger impact at present. The rapid growth of computer, internet and mobile phone related technologies has helped the development of application software very much. Developers and computer experts are developing simple applications for computers and mobile phones, in order to help even ordinary people accomplish certain tasks. E-commerce companies such as Amazon, Ebay and Flipkart have their own application software for helping people to purchase products from their webstore. Apple and Google are some of the major operating system developers as far as mobile phones are concerned. Apple’s IOS and Google’s Android OS are extremely popular at present. Both Apple and Google have their own web stores (iStore and Play Store) which are filled with thousands of application software. These application software help people in many ways. Majority of these application software are available to all free of cost. One of the reasons for providing free applications to mobile users is the ability of these application software to place ads in front of the users and generate revenue for the developers. In fact application developers are currently competing each other to develop potentially useful application software for the users. As a result of that, new ideas and concepts develop in application software development. Frugl is one such application software developed recently by Suzanne Nobel, a New York native with 20 years’ experience as an entertainment publicist (Swift, 2014). ‘Ever feel overwhelmed searching the What’s On lists for London? Now there’s an app that does the work for you.  Be frugal, use Frugl, a one-stop portal for ‘Free’ or ‘Cheap’ events in the city, showcasing the latest live music, sample sales, comedy shows, art installations and even the best budget club nights’ (Swift 2014). Launched in February 2013, Frugl is an events discovery app for those of us on a budget or who like a bargain. Frugl is free, for the moment. It helps people to choose events randomly from the database of Frugl. Latest live music, comedy and club nights, walks and talks, sales and installations are some of the events that can be chosen from Frugl’s database. It is possible to know the price as well as the date of these events while using Frugl. The events in London are updated daily, in Frugl’s database (Frugl, 2014). It provides information about events as well as the details available from other sites like Eventbrite and Facebook. Moreover, it helps to book tickets online and also in locating places with the help of Google maps, Apple Maps and Citymapper. ‘A shortlist button in Frugl allows users to drop the events onto their phone’s calendar. A fun function called FruglIt helps users to shake their phone in order to get a random event of the day’ (Maya, 2014). At present Frugl is available only on iPhones. It can be downloaded in iPhones from iTunes App store. This paper analyses the opportunities and challenges of Frugl in the market with the help of SWOT analysis, PESTEL analysis, GAP analysis, Porter’s five forces analysis, Ansoft Matrix analysis, Branding, Marketing mix, etc. PESTEL analysis Political A lot of political, cultural, social and entertainment events are taking place in London every day. The entry to majority of these events are free of cost. In fact, entry to all political events are free of cost. However, even those who are interested in politics are struggling to get the exact date and time of the occurrence of political events that are taking place in London. Frugl can definitely help London people who are interested in political events. Since Frugl updates its database every day, it is possible for people to know the time and location of political events taking place in a particular day or night in London. In short, political event managers can use Frugl effectively to communicate with people who are interested in politics. Economic At present, Frugl is a free application. The developers of Frugl is not using any advertisements for generating revenue. However, it is quite possible that this application can generate revenue in future, after establishing in the market. It should be noted that people like to know the exact date and locations of various events. They would definitely pay some money for applications like this. In future, Frugl can definitely think about charging some prices for the services it provided to the customers. It is impossible for the company to progress further without placing ads in its website or collecting money from the customers. Social The services offered by Frugl can be considered as social services since the company is charging anything from its customers. The company provides a lot of useful information and services to the society. As a result of that the present image of the company is acceptable to the public. In other words, Frugl can be considered as socially responsible company at present. Technological Technology is extremely important in the case of Frugl since it is working on digital technology platforms. It is necessary for the company to develop more applications to suit the needs of all types of mobile phone users. The company should develop technologies to make Frugl compatible with all available mobile phone platforms as well as computer Oss. Environmental The company is not doing anything directly to cause harm to the environment. However, one can argue that the company is causing damages to the environment indirectly. It should be noted that Frugl application works on mobile phones and these phones have the ability to cause many damages to the environment after they become useless. Moreover, Frugl application works on mobile phones which are working on electric power. The batteries used in the mobile phones are capable of causing problems to the environment. In short, Frugl has the ability to cause some damages to the environment indirectly. Legal As of now, Frugl is not facing any legal problems in Britain since all the activities performed by the company are in accordance with the rules and regulations of the UK. Since the services offered by the company is unique in nature, the chances of legal battle with other companies is less. The idea behind the concept of Frugl is purely the creation of its founder and hence the question about intellectual property violation is also irrelavent. SWOT analysis Strength The major strength of Frugl is the absence of competition. No other application software are available at present for the people in London to know about the various events taking place in their neighbourhood. Therefore, Frugl can definitely claim a monopoly in this segment. The idea behind Frugl is that you can find stuff to do in London thats free or low cost. Not only does the app tell you what is going on, you can book or buy tickets direct from within the app. If you are not a big fan of travelling much for your entertainment, or if you happen to be in a location with time on your hands and want to find out whats going on nearby, Frugl will find whats near to you. And if you are in an unfamiliar location, of course Frugl can help you with directions to the venue youve selected (Swift 2014). It should be noted that a lot of foreigners visit London every day. Majority of them are unaware of the important locations of London. Moreover, they may not have proper ideas about how to book a train or bus ticket to visit various locations in London. Moreover, they may not have proper ideas about the actual geographical locations of the important landmarks in London. All these problems can be addressed with the help of Frugl. In other words, Frugl provides services not only to the London residents but also to the visiting foreigners. No other application software are currently providing the same facilities as offered by Frugl. Weakness The major weakness of Frugl is its operations in a limited space. At present, Frugl gives information about the major events taking place in London only. UK is one of the biggest countries in the world and it has many other major cities, apart from London. However, Frugl is currently operating only in London and hence people in other parts of UK are not getting its services. ‘Theres a good mix of different types of events listed in Frugl, and it is a really easy app to get to grips with. Its a pity it is iPhone only at the moment – roll on the Android version. And of course, roll on versions for other cities!’ (Swift 2014). It should be noted that Google’s Android OS is much more popular than Apple’s IOS. However, Frugl does not have an Android compatible version at the moment. It is possible that majority of the London residents may have iPhones. However, it is not necessary that all the visiting people in London may have iPhones. This is true especially in the case of London visitors from Asian countries since Android is the popular OS in Asia. In short, absence of an Android compatible version is definitely a weakness of Frugl. Lack of funding or financial resources is another weakness of Frugl. Moreover, Frugla is currently struggling with employee resources also. The company does not have enough funds to hire more people at the moment. It should be noted that the services of Frugl are free and hence the company is not getting any revenue at the moment from this service. The founder of Frugl, undertakes the functions such as marketing and PR (Where it is @ London, 2014). She is not getting enough time to concentrate on other aspects of her business because of the absence of employee resources. Opportunities Frugl has a lot of opportunities not only in Britain, but also in other parts of the world. Since events re taking place on a regular basis in most of the cities in this world, an application software like Frugl would definitely get more popularity if the company decides to expand its operations. Europe and America can be considered as the major locations by Frugl for immediate expansion. Thereafter, the company can consider establishing its business operations in Asia. India and China are two of the most rapidly emerging economies in the world at present. Most of the business people in the world are currently targeting these two countries. As a result of that, a lot of business events are taking place in these countries. An application software like Frugl could definitely help business people in these countries to get more information about the business events. According to the founder of Frugl, the company is ‘looking to work with event promoters and brands who want to showcase what they are doing on Frugl and offer value for the users. Anyone can submit an event or an offer on the app for free via frugl.com and Frugl encourage them to do so!’ (Where it is @ London. 2014). It should be noted that the above offer is definitely an attractive one for event managers. It is possible to list the events free of cost in Frugl’s data base and thereby event managers can reduce their advertising costs considerably. The above offer would definitely increase the business potential of Frugl as more and more event managers use Frugl for advertising and the brand value of the company increases. Threat Even though competition is less at present, it is quite possible that developers may develop similar applications to compete with Frugl in future. In fact, developers are waiting for new concepts. Once they get a new concept, they are able to incorporate new ideas and develop new application software with more features. In other words, the success of Frugl would encourage application developers to develop new application software to compete with Frugl. Branding “Brand can be defined as “A name, symbol, logo, signature or a combination thereof that defines a manufacturers products or services through differentiating them from competitors products or services and offers perceptions such as quality, value, prestige to the consumers”(Pars & Gulsert, 2011, p.228). Some customers give more importance to the brand rather the product. Such customers give more importance to brand names rather than product quality while taking purchasing decisions. Such customers may have immense confidence in the abilities of the brands and they will purchase any product from such brands without a second thought. For example, Apple Inc. is a well-recognized brand all over the world. Americans and many other consumers all over the world buy products from Apple brand without a second thought. Therefore, branding is one area in which Frugl has to concentrate more at present. Since Frugl is a new brand it is difficult for them to establish themselves in the market. The company has to undertake aggressive sales, marketing and advertising campaigns to improve the brand value. According to Kathiravana, et al., (2010, p.21) “Brand attributes consist of ‘bits’ of information that are linked to a brand name in consumer memory and that, when combined with the brand name, make up a brand’s image”. At present, Frugl does not have a logo. Frugl should think about the development of a logo which is capable of revealing the services offered by the company. According to Mishra & Datta (2011, p.109), ‘Brand Name (BN) was seen to have a strong impact on Customer Based Brand Equity (CBBE)’. ‘Brand Equity is the value and strength of the Brand that decides its worth. It can also be defined as the differential impact of brand knowledge on consumer’s response to the Brand Marketing’ (Brand Equity - Meaning and Measuring Brand Equity, 2013). Brand equity is the value that a consumer gives to a particular brand. For example, iPhone 5, Nokia Lumia and Samsung Galaxy S3 need no introduction in the markets all over the world since these products have immense brand value and CBBE. However, Frugl is not a familiar name even for the British at present. It is necessary for the company to promote its brand with the help of suitable brand building activities. At present Frugl is doing something to build its brand value. For example, ‘Frugl’s new app and website are prime examples of a rebranding done well’ (Ashley, 2014). However, more efforts are necessary to promote Frugl not only as a local brand but also as an international brand. The company should think seriously about implementing similar applications in all parts of the world so that the name Frugl would be familiar to more people. Marketing mix Product Frugl is a service in the online world. It can contribute heavily to the promotion of ecommerce or online business. It should be noted that the primary aim of social networks like Facebook and Twitter was to help people in the process of socializing. Even the founders of these companies did not have any business interests at that time. However, it has been revealed that social networks have huge business potentials. Currently a new term called social commerce has been evolved out in the business world. Same way, Frugl can also unveil its business potential in many ways. For example, it is possible for Frugl to charge some fees for listing the events from the event managers. Moreover, the company can make this application as a paid one later, instead of providing it as a free service. If found useful, customers would not mind much to pay something for this application. The company should incorporate new features in this service to get more acceptance among the people. Price At present, frugal is a free service. The company is not charging anything from its customers. However, it is difficult for the company to maintain its free services in future. As the company grows, it is necessary to employ more people and expand the business operations. It would be difficult for the company to find enough financial resources for such things, without collecting a fee from the users. Strategic pricing strategies such as price skimming is incompatible to Frugl. ‘Price skimming involves charging a relatively high price for a short time where a new, innovative, or much-improved product is launched onto a market’ (Riley, 2012b). Price skimming strategy can be used effectively at the time of introduction of a product or service in the market. The company has already introduced its service and it would be difficult for them to charge higher prices now since the customers had already rated its worth. At the same time, the company should think about tactical pricing strategies such as demand-based pricing. In other words, Frugl can think about increasing this prices of its services when the demand increases. Until the demand increases, the company should charge only nominal prices for its service, in order to attract more customers. Place As mentioned many times earlier in this paper, Frugl services are currently available only to the London residents, and that also to the iPhone owners only. It is difficult for the company to service only the London customer and become a prominent company in Britain. The company should expand its operations not only to all major cities in England but also to all major cities in the world as well. It should be noted that emerging countries such as India and China offer a lot of scope for application software like Frugl. After establishing themselves in Britain Frugl should think seriously about the expansion possibilities in overseas countries such as India and China. A lot of business events are currently taking place in these countries because of the rapid growth of international business. It is necessary for international companies to inform the people about the business events sponsored by them in these countries. An application software like Frugl would definitely help such companies in this regard. Promotion Advertising is the major promotion activity that can be undertaken by Frugl. The promotional activity such as packaging is insignificant in the case of Frugl since it is a service without physical presence rather than a product. Personal selling, PR and sales promotion campaigns can also be considered by Frugl as part of its business development. Internet and websites can also be used for the promotion of Frugl. Social networks can be used effectively for the promotion of Frugl. It is believed that viral marketing is the most effective marketing campaign at present. Word of Mouth or WOM is the core of viral marketing. In other words, modern customers are more interested in trusting the words of the users rather than that of the marketers. Electronic WOM or eWOM can be executed with the help of social networks. Frugl should think about employing some people to manage the eWOM through social networks. According to Cheung et al. (2011) ‘when people use social media platform to discuss the details of a product and service they received, they may indirectly help the promotion of that product or service’. They pointed out that electronic word of mouth (eWOM) publicity is the most effective marketing activity available at present. According to Nath et al. (2010), customers’ or the end user’s word-of-mouth communication can give much more weightage to the people than the company’s advertising campaigns, marketing techniques and public relations. Porters five forces According to Michael Porter, there are five competitive forces that can affect an organization’s competitive power. They are; Threat of substitute products, Threat of new entrants, Intense rivalry among existing players, Bargaining power of suppliers and Bargaining power of Buyers (Porter’s Five Forces Model, 2009). The figure given below explains Porter’s five forces theory. (Porter’s Five Forces Model, 2009) Industrial rivalry is not much applicable in the case of Frugl since the company is not facing much competition at present. In fact Frugl is the only free service which help London people to know more about the events that are taking place around them. At the same time, it is quite possible that similar applications may be developed by the developers in future. Supplier power in the case of Frugl is weak. It should be noted that the suppliers in the case of Frugl are the companies that notify their events in Frugl’s database. Since the services provided by Frugl is free, suppliers cannot bargain too much. Buyers in the case of Frugl is the end users of Frugl service. Again, they cannot bargain too much with the company since they are getting this service absolutely free of cost. Moreover, there are no other similar services available to them at present. Therefore, they cannot bargain too much with Frugl at the moment. Threat of new products and threat of substitute products are definitely applicable in the case of Frugl. It is quite possible that new similar applications may be developed by the developers after watching the success of Frugl. Moreover, many of the services offered by Frugl is currently available to the people through different channels. For example, locations services are provided by google maps and many people in the world are currently using it. In other words, there are substitute products which can offer the same services offered by Frugl. At the same time, all such substitute products do not have the ability to provide different types of services at the moment. For example, Google maps cannot provide details about the events that are taking place in London Moreover, it cannot assist people in booking tickets. It can provide only the location services. However, Frugl is providing a package of services and that is why its popularity is growing. Gap analysis Gap Analysis helps business people to identify the gap between their current situation and the future state that they want to reach, along with the tasks that they need to complete to close this gap. Analysis of the present situation, identification of future state, and the identification of the ways to bridge the gap are the three major elements of Gap analysis (Mind Tools, 2014). At present, Frugl has limited its activities only in London. Moreover, it is servicing only the iPhone users. It is impossible for Frugl to develop more using this strategy. It is necessary for the company to service more customers and more places in future. Frugl has a lot of business potential not only in UK, but also in other parts of the world. A substantial portion of the cell phone users in this world are using Android phones. However, Frugl is not servicing Android users at the moment. It would be difficult for Frugl to grow further without servicing the android users. It is necessary to develop the Android version of Frugl in order to close the huge gap left in the Android phone user segment. Ansoft matrix The Ansoff Growth matrix is another marketing planning tool commonly used by marketers while implement a new product or service in the market. ‘Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets. The output from the Ansoff product/market matrix is a series of suggested growth strategies which that are illustrated below’ (Riley, 2012a) (Riley, 2012a) Market penetration refers to the selling of existing products into existing market. At present, Frugl exists only in London market. It is not necessary that all people in London are aware of this software. It is necessary to give adequate advertising to Frugl in order to make the name familiar to all people staying in London. In other words, Frugl should conduct an aggressive advertising and marketing campaign, in order to penetrate deep into the London market. Market development refers to the selling of existing products to new markets. At present, Frugl is available or useful only to the London people. It is necessary to incorporate new features and facilities so that it can be developed in other markets as well. Frugl should include the details about the other events that are taking place in all major cities in the UK so that more people get awareness about this service. Product development refers to the introduction of new products into new markets. At present, Frugl is available only to the London residents. If it is introduced in other major cities in the UK, people will accept it as a new product. It is quite possible that new application software may enter the London or British market to compete with Frugl. New products or the competing products may have better features than Frugl. Therefore, it is necessary for Frugl to improve its features and services to stay competitive in the market all the time. Innovation, Research and development are necessary for Frugl to keep its leadership in the market all the time. Customer needs are changing day by day. It is necessary for Frugl to keep an eye on such changing trends in customer behaviours and to make necessary changes in its marketing strategies. Diversification is the market growth strategy in which a company markets new products in new markets. It is necessary for Frugl to enter new markets with the help of new products. The company should think seriously about the development of new similar products in order to diversify the business. It should be noted that even Microsoft and Apple Inc. are currently looking for diversification of business even though these companies have monopoly in their respective business areas. Under such circumstances, Frugl should think seriously about the development of new products and services to improve its competitive power further. Conclusions Frugl has a lot of opportunities in the market. With the help of suitable marketing strategies Frugl can conquer British market. At present, Frugl is not facing much competition. However, the chances of competition increases day by day. Frugl should think about expanding its business not only to all cities in Britain but also to other major international locations. The company should think about implementing a nominal charge for its services so that revenue earned in this way can be utilized for further expansion of business. References Ashley, 2014. ‘Frugl: Rebranded’. [Online] Available at: http://www.moo.com/blog/2014/03/23/frugl-rebranded/[Accessed 28 March 2013] ‘Brand Equity - Meaning and Measuring Brand Equity’. 2013. [Online] Available at: http://www.managementstudyguide.com/brand-equity.htm [Accessed 28 March 2013] Cheung, C., Lee, M. and Jin, X. 2011. Customer Engagement in an Online Social Platform:Conceptual Model and Scale Development. Thirty Second International Conference on Information Systems. (ICIS). Shanghai, December 6, 2011 2011, Online Communities and Digital Collaborations, pp. 8. Frugl. 2014. ‘Do more and spend less with Frugl, the London events app for those on a budget’ [Online] Available at: http://www.frugl.com [Accessed 09 August 2014] Kathiravana, C., Panchanathama, N. and Anushan, S. 2010. ‘The competitive implications of consumer Evaluation of brand image, product attributes, and Perceived quality in competitive two-wheeler Markets of India’. Serbian Journal of Management 5 (1), pp. 21 - 38 Mishra, P & Datta, B. 2011. ‘Brand Name: The Impact Factor’. Research Journal of Business Management. 5 (3), pp.109-116 Maya, T.P. 2014. ‘Interview with the Founder of Frugl’. [Online] Available at: http://madeinshoreditch.co.uk/2014/03/20/interview-with-the-founder-of-frugl/[Accessed 09 August 2014] Mind Tools, 2014. ‘Gap Analysis’. [Online] Available at: http://www.mindtools.com/pages/article/gap-analysis.htm [Accessed 09 August 2014] Nath, A., Singh, R., Iyer, L., and Ganesh, J., 2010. Web 2.0: Capabilities, Business Value and Strategic Practice. Journal of Information Science & Technology, 7(1), pp. 22-39. Pars, S.R. & Gulsert, C. 2011. ‘The Effects of Brand Image on Consumers’ Choice’. International Journal of Business and Social Science. 2 (20). ‘Porter’s Five Forces Model’. 2009, [Online], Available at: http://notesdesk.com/notes/strategy/porters-five-forces-model-porters-model/ [Accessed 09 August 2014] Riley, J. 2012a. ‘Ansoff Matrix’. [Online] Available at: http://tutor2u.net/business/strategy/ansoff_matrix.htm [Accessed 09 August 2014] Riley, J. 2012b. ‘Pricing Strategies – Skimming’. [Online] Available at: http://www.tutor2u.net/business/marketing/pricing_strategy_skimming.asp [Accessed 09 August 2014] Swift, S. 2014. ‘Be Frugl with the new London events app’. [Online] Available at: http://businessofeminin.com/en/frugl-free-london-events-app/[Accessed 09 August 2014] Vogel, S. 2014. ‘Mobile app of the day: Frugl’. [Online] Available at: http://www.itproportal.com/2014/05/27/mobile-app-of-the-day-frugl/[Accessed 09 August 2014] Where it is @ London. 2014. ‘FRUGL: An amazing new app’. [Online] Available at: http://www.whereitsatlondon.com/Frugl.aspx[Accessed 09 August 2014] Read More

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