Bright Light InnovationsArielle Bailey

Critical Issues

The top management team of Bright Light Innovations is excited about the Starlight Stove product they have developed and are preparing to review its place in the market. The team is a grouping of students and faculty from Colorado State University’s Colleges of Business and Engineering. Created with several purposes, including replacing the burning of solid biomass fuels for cooking and eating in the home, the stove will work to improve the quality of life for some of the world’s poorest people.

Although the team realizes the potential of this product, they also realize they will need a marketing plan to introduce this product to the market.

To set up a SWOT analysis for the case we would need to identify the strengths, weaknesses, opportunities and threats of the situation. The top three strengths of the Bright Light Innovations team are number one; their top team consists of both students and faculty. In today’s society, it can be very advantageous to build business teams with a diverse set of members.

The more diverse the group, the more perspectives the team can offer on any given project. Mannix of What differences make a difference? The promise and reality of diverse teams in organizations, states that, “A belief has developed among laypeople, management scholars, and social scientists alike that diversity in teams will lead to a direct increase in the variety of perspectives brought to a problem, to opportunities for synergistic knowledge and information sharing, and hence to greater creativity and quality of team performance (Mannix & Neale, 2005).

Get quality help now

RhizMan

Verified

Proficient in: Innovation

4.9 (247)

“ Rhizman is absolutely amazing at what he does . I highly recommend him if you need an assignment done ”

+84 relevant experts are online

Hire writer

” In this case, different members of the group could offer their take on the process of burning solid biomass and what different sectors of the Napal population would choose to utilize their electricity for.

The second strength of the team is that they successfully created the Starlight Stove to consume less biomass and convert the produced heat into electricity. At the moment, this is the only stove of its kind. More than one-third of the world’s population burns solid biomass fuel for cooking and heating in open pits or traditional cook stoves. These methods create indoor air pollution that contributes to respiratory disease, women’s health issues including miscarriage, and the deaths of one million children under the age of five each year (Perreault, McCarthy, & Cannon, 2014). This strength transitions into an opportunity for the team where the stove will offer several benefits to the population of Napal.

The third strength for the team are their connections with the government officials, and nongovernmental organizations that may be able to provide assistance with communicating to their own population consisting of language barriers and illiterate people. Madhubalan Viswanathan, the author of Decision Making and Coping of Functionally Illiterate Consumers and Some Implications for Marketing Management, suggests that the strong predilection for concrete reasoning and pictographic information of functionally illiterate consumers suggests that companies should reconsider how they highlight new products or the differentiating aspects of existing product offerings through advertising, in-store displays, and positioning (Viswanathan, Rosa, & Harris, 2005.) The current illiteracy crisis argues that marketers should update their thinking to consider how consumer literacy should influence message, and channel determinations (Harrison – Walker, 1995). In this case, management should consider creating slideshows of pictographic information to present to families as well as integrating demonstrations into the strategy. The combination of speaking with the literate children of a household and demonstrating the ease of use and product benefits will greatly enhance the chance of product adoption.

The first weakness for the team is that they will be introducing the Starlight Stove as the first of its kind and its technology will be new to the market. There are other competing enclosed cook stoves, but none produce electricity like the Starlight. Solar panels are a costly option coming in at around $360 each and micro-hydropower is only beneficial for homes close to a water source (Perreault, McCarthy, & Cannon, 2014). Although this technology seems to be an obvious choice for the population, the team is worried it may take awhile for the stove to be adopted into society.

The second weakness for the group is that they are still undecided about the pricing of the stove and of the financial aid that the residents will need to obtain before purchasing the stoves. Sabou Felicia of The Marketing Mix Optimization states that, “The most important decisions and activities related to price are: analysis of competitors prices, implementation of pricing policy, selecting the method of determining the price, determination of discounts for different types of customers, and establishing terms and conditions of sale (Felicia, 2014).” Price is a major part of the Marketing Mix and needs to be solidified before marketing the item can begin. Especially when the target audience is poor. The third weakness is that the university is a non-profit organization, which makes it harder to find funding to develop the product. Finally, the marketing strategy will need to be adjusted to fit the culture of the population due to the technology limitations.

There are several opportunities present in the case. The first opportunity taken by the top management team was the realization that burning solid biomass fuel indoors creates indoor pollution that can cause respiratory issues, health issues in women, and even death in children. The stove has developed into the obvious solution to these issues and surpasses the effectiveness of solar panels or micro-hydro power. Recognizing Nepal as the starting target market is the second opportunity. The climate is relatively cold and only eleven percent of homes have electricity. The heat and electricity production of the stove will be particularly beneficial to this area. Eighty Eight percent of the population uses firewood as their main source of energy (Perreault, McCarthy, & Cannon, 2014).

The threats the team could face include the fact that there are other competing, closed stoves on the market that operate in a similar fashion, minus the electricity function. This technology is well known while the Starlight Stove will be new on the market and may experience a longer adoption time. Another concern is that the pricing/financial strategy has not been finalized for the product. Currently, the team is working with estimates on pricing as well as financing options for consumers. At their estimated price of $80 per unit, they are still unsure of whether this price will provide adequate margins for distributors (Perreault, McCarthy, & Cannon, 2014).

Evaluation of Alternatives

The culture of the population is an important factor for management to consider before approaching this market. Introducing a new product on such a challenging market can come with uncertainties. The climate and the need recognition of the area are positive factors and can solidify Nepal as a strong market to start with. However, funding, price point and household income are major factors when it comes to making the sale. What’s worse is that management has not solidified these numbers as of yet. Perrault mentions that Bright Light Innovations plans to start as a for-profit business and in order for the stoves to be profitable, they would need to sell at $80 per unit. Making less than $3 per week, Nepalese people generally have a GNI of $400 per year, putting the $80 stove out of reach for most families (Perreault, McCarthy, & Cannon, 2014). Without a steady income, micro financing may not be an option as some families may find it hard to obtain a loan.

Although the downsides to the stove should not be ignored, there are several upsides to the idea as well. The stove will offer innovative technology that can truly make a difference in every household. Consumers will be able to cook safely while generating more hours of light for the home, decreasing indoor air pollution and allowing children to focus more on their education. As more wood burning stoves are replaced buy the Starlight, the rates of flooding and erosion will decrease over time. If management decides to produce the stoves in the local area it can create several job opportunities for families and increase the income per capital. The marketing plan for this product will have to be unique as literacy and technology are limited in the target area of Nepal.

Support of Recommendations

In order to fully understand how to market this new technology, it is imperative that management recognizes the challenges of the Nepalese market and their consumer behaviors. For a successful strategic plan, management should consider the marketing mix. Exhibit 5-1 of Basic Marketing depicts the marketing mix of the final consumer Perreault, McCarthy, & Cannon, 2014). The marketing mix includes the economic needs, psychological variables, social influences, and purchase situation of the consumer leading them to the consumer decision process and then their response determines whether or not they make the purchase (Felicia, 2014). For economic needs, the Nepalese people may consider the efficiency of the stove seeing as though a main concern for the population is cutting back on indoor pollution. Psychological variables may include lifestyle, and motivation while the social influences may include culture and family. Finally, the purchase situation could be based on the reason for purchase.

Seeing that Nepal has limited access to technology and functionally illiterate consumers make up most of the population, management will need to be more creative about their campaign delivery. Perhaps the marketing campaign begins in the schools where the children are literate and have literate adults as teachers. Bright Light Innovations could hold meetings and demonstrations in the schools, inviting the teachers to be spokespeople of the new product. Different segments of the population could come to the demonstrations to receive their information on the stove. Marketing collateral could include entertaining videos, with visuals and signs being placed in different locations around the village to target the separate areas. Management can connect with the local governments to introduce the product and the benefits it can bring to the surrounding communities.

Market segmentation has to be done in order to determine the households with electricity versus those without and offer those with solar panels an opportunity to save money. Management needs to find a financing opportunity that will work for the different income levels in the village and if the stoves can be produced locally, they could work on creating a discount for the families of the employees. This will increase the ability for locals to purchase the stove as well as support their own communities by giving back to their economy. In current times, marketing strategy is important as it has to be tailored directly to the target audience it serves (Felicia, 2014).”

References

1. Duflo, E., Greenstone, M., & Hanna, R. (n.d.). Cooking Stoves, Indoor Air Pollution, and Respiratory Health in India. Retrieved February 19, 2019, from
2. FELICIA, S. (2014). THE MARKETING MIX OPTIMIZATION. Annals of the „Constantin Br?ncu?i,(1), 253-257. Retrieved February 21, 2019.
3. Harrison?Walker, L. J. (1995). The import of illiteracy to marketing communication. Journal of Consumer Marketing,12(1), 50-62. doi:10.1108/07363769510080997
4. Mannix, E., & Neale, M. (2005). What Differences Make a Difference? The promise and reality of diverse teams in organizations. Psychological Science in the Public Interest,6(2), 31-55. Retrieved February 22, 2019.
5. Perreault, W. D., Jr., McCarthy, E. J., & Cannon, J. P. (2014). Basic Marketing: A Marketing Strategy Planning Approach(19th ed.). New York, NY: McGraw-Hill Irwin.
6. Viswanathan, M., Rosa, J. A., & Harris, J. E. (2005). Decision Making and Coping of Functionally Illiterate Consumers and Some Implications for Marketing Management. Journal of Marketing,69(1), 15-31. Retrieved February 21, 2019.