Smart Advertising
I-GO Presentation
Boston Consulting Group Case Competition
May 2011
Vincent Yu, Geoffrey Zheng & Mike Zhang
YU I ZHENG I ZHANG | 1
What are your “pain points” as a carsharing
service?
Differentiating specific appeals for specific
market segments
Leveraging network of current carsharers to spread word-of-mouth
Balancing cost with new
improvements to service
YU I ZHENG I ZHANG | 2
Smart
Advertising
• Target advertising based on
preferences
• Cost
• Car-Sharing Affinity
• Mixture of Both
• Create tiers based on
preferences: Franklin,
Clinton & Gore Sector
• Develop Market strategy
based on tiers
YU I ZHENG I ZHANG | 3
Franklin Sector
• Low Income: $7,00022,000 per annum
household income
• Only 13% of current carsharing market
• Overcome car culture
• Lower half of sector spends
42% of income on ownership
• Focus on cost savings
• Correlation between income and
number of vehicle miles driven
YU I ZHENG I ZHANG | 4
Franklin Sector
Humboldt Park
• Low Income: $7,00022,000 per annum
household income
• Only 13% of current carsharing market
• Overcome car culture
• Lower half of sector spends
42% of income on ownership
• Focus on cost savings
• Correlation between income and
number of vehicle miles driven
YU I ZHENG I ZHANG | 5
Gore Sector
• Extremely Young: 25-54%
of residences from 20-35
• 49% more likely to support
green business
• 60% of market under 35
years old
• 70% willing to pay cost
premiums for causes
YU I ZHENG I ZHANG | 6
Gore Sector
• Extremely Young: 25-54%
of residences from 20-35
• Highly-Educated: 35% and
above with higher education
• 66% of carsharing market
has higher education
YU I ZHENG I ZHANG | 7
Gore Sector
• Extremely Young: 25-54%
of residences from 20-35
• Highly-Educated: 35%
above with higher education
• High Income: $52,00069,000 per annum
household income
• Green-Focused
• Green edge over Zipcar
• Local Business
YU I ZHENG I ZHANG | 8
Gore Sector
Lake View
• Extremely Young: 25-54%
of residences from 20-35
• Highly-Educated: 35%
above with higher education
• High Income: $52,00069,000 per annum
household income
• Green-Focused
• Green edge over Zipcar
• Local Business
YU I ZHENG I ZHANG | 9
Clinton Sector
• Highly-Educated: 35%
above with higher education
• Middle Income: $39,00052,000 per annum
household income
• Model Consumer
• Cost advantage
• Environment commitment
• Better customer service
YU I ZHENG I ZHANG | 10
Clinton Sector
Near West Side
• Highly-Educated: 35%
above with higher education
• Middle Income: $39,00052,000 per annum
household income
• Model Consumer
• Cost advantage
• Environment commitment
• Better customer service
YU I ZHENG I ZHANG | 11
Marketing Segments
Strategies
Franklin Sector:
Capture the low-income market
Gore Sector:
Challenge for environmental activists;
product differentiation
Clinton Sector:
Challenge for model customers; product
differentiation and cost leadership
•
•
•
Cost-Savings Focus
$5,000 average savings on car
“Best parts of driving, for less”
•
•
•
Environmental Focus
Low emission vehicles
More green, more local than Zipcar
•
•
•
Hybrid Focus
Cost edge over Zipcar
Environmental Edge over Zipcar
YU I ZHENG I ZHANG | 12
Leveraging Networking: Word of Mouth
Systems
• Compensation-Based Referral Systems
• Reward Users for referring new IGO users
• 25-35% word-of-mouth consumers
• Create exposure in neighborhoods
• Overcome Car Culture
• 70% prefer customer views over critics/professional reviews
• 82% prefer customer views over all else
• Average 15-30% Increase in Sales/Revenue
• 40% of WOM customers have brand loyalty
YU I ZHENG I ZHANG | 13
Leveraging Networking: Social Networks
• Facebook groups for each neighborhood and each college
• Pareto Principle: 80/20 rule
• Use Sectors to focus information
• 43% of 20-39 year olds use Facebook 10+ hours weekly
• 81% of marketers indicated significant exposure
• 29% Increase in Sales from Online Advertising
• Same Effects as Traditional Word of Mouth Systems
YU I ZHENG I ZHANG | 14
Leveraging Networking: Model
• 40% Growth over
10 Weeks
• Committed brand
loyalty
YU I ZHENG I ZHANG | 15
New Technology Implementations:
Smartphone App
• Low cost improvement to service
• Estimated $1000 cost to implement
• Increase Exposure of I-GO
• Estimated to benefit 60% of members
• Mobile reservations
• GPS locations of parking lots
YU I ZHENG I ZHANG | 16
Conclusion: First Steps
• Target Advertisements Based on Sectors
• Leverage Social Networking
• Create Facebook group for each neighborhood/college campus
• Create referral-based system
YU I ZHENG I ZHANG | 17
YU I ZHENG I ZHANG
YU I ZHENG I ZHANG | 18