During the first term, our Marketing Management professor gave us a project – to set up a business with an initial investment of not more than INR 1250 and to run it successfully using the marketing concepts taught in class. The class was divided into groups of 5 members each.
The first step of starting any business is to identify the needs existing in the target market and conduct an initial market research to validate your hypothesis on the scale of need and potential revenue that can be generated.
The groups came up with ideas like selling presentation templates, late night hot soups, sports-wear (dry t-shirts), door delivery of grocery etc. Being in a tier two city with challenging facilities meant that providing for even the elementary desires like fast food proved to be a profitable venture.
My group decided to set up a venture that could have been viewed as a ‘going concern’. We wanted to experience the actual challenges faced by a start-up, by sustaining the business for a longer period of time - not merely viewing it as a project which is limited to the first term of MBA. Hence the need to be addressed had to be constant and recurring.
We then came up with the idea of providing ironing services. There was a certain need for ironing clothes as in our campus we had facilities for washing clothes but students had to iron their clothes themselves. Life at any IIM is known for its rigour and deadlines. In the midst of things, students do not find time for chores like ironing. Hence we capitalized on this and went ahead testing our hypothesis by carrying out a market research in our campus. The results from the research confirmed our assumption and we saw a huge untapped opportunity.
We then started to look for potential vendors for ironing. We had to put into use our negotiation skills in setting up the operating terms and conditions with the vendors and finally the most important negotiation of contracting the price. Next step was to give the venture an identity. We named our startup – ‘Radiance’, with the tagline – “Dress to Impress”.
After vendor selection and naming the venture, it was now time to market our service offering at the campus. We took the traditional approach of mass marketing by installing posters in the hostel campus at strategic locations and also the modern digital approach by promoting the brand on WhatsApp groups. We knew that we were addressing a vital need which had great demand, hence the pricing was decided based on profit maximization model.
But then another group had launched both laundry and ironing services together and their ironing price was lower than ours. Hence we had to tackle competition. Our brand positioning had always been as that of a premium one and so we decided against cutting down on price. We provided our customers with professional services which would differentiate us from the competition and justify the premium we charge. We had to differentiate on quality of service and intense marketing efforts to occupy the mindshare of the target market.
The whole task for two months gave us great exposure as to how proper marketing efforts can help in generating sales. As we now approach the second term, my group is extremely satisfied on achieving the targets set two months back – Radiance has become a “household” name and our brand became a synonym of quality, trust, and premium-ness. All these culminated in generating profits for us. The whole task taught us so many things, right from market research to negotiations, pricing, customer acquisitions, marketing, the importance of maintaining data, generating financial statements and presentation skills.
The aspiring product manager in me couldn’t have asked for a better start than this in gaining a hands-on experience of managing an enterprise and tackling various challenges to sustain brand equity. This project will definitely help each one of us to better understand the various subjects coming our way in the next five terms.
- Mohammed Sameer (PGP 2018-20)