Developing marketing plan for b2b startup

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Федеральное государственное автономное образовательное учреждение высшего образования

"Национальный исследовательский университет

"Высшая школа экономики""

Факультет бизнеса и менеджмента

"Разработка маркетинг плана для стартапа в сфере B2B"

Выпускная квалификационная работа

по направлению подготовки 38.03.02 "Менеджмент"

образовательная программа бакалавриата "Менеджмент"

"Developing marketing plan for b2b startup"

Литвинова Ирина Вадимовна

Руководитель Кандидат экономических

наук Рожков А.Г

Москва

2017



Table of contents

Chapter 1. Introduction

1.1 Background of the research

1.2 Company description

1.3 Problem analysis

1.4 Main research question

1.5 Methodology

1.6 Organization of the report

Chapter 2. Theoretical framework

2.1 Introduction of the theory

2.2 Theoretical perspective on the topic

2.3 Selection and justification of the theory

Chapter 3. Marketing plan for Pass24

3.1 Executive summary

3.2 Market analysis

3.3 Porter's five forces

3.4 Competitor benchmarking

3.5 Key success factors

3.6 SWOT

3.7 Target market

3.8 Mission statement

3.9 Marketing objectives

3.10 Marketing strategy

3.11 Metrics

Conclusion

References

Appendices



Chapter 1. Introduction

1.1 Background of the research

In today's era, corporations emphasise on creating a "digital relationship" with customers. This is well driven due to the rise of digital technologies and devices such as smartphones, smart products, the Internet of Things (IoT), SaaS products, Artificial Intelligence in day to day life of customer. So, there is a crucial need to understand the role of digital technology in developing and reshaping the process and strategy of marketing. According to the American Marketing Association, digital marketing may be seen as activities, institutions, and processes facilitated by digital technologies for creating, communicating and delivering value for customers and other stake-holders. P.K. Kannan and Hongshuang adopt a more inclusive perspective and define digital marketing as "an adaptive, technology-enabled process by which firms collaborate with customers and partners to jointly create, communicate, deliver, and sustain value for all stakeholders" (Kannan, Hongshuang, 2016).

The present paper describes a proposed marketing plan for Pass24, a SaaS startup that operates in a b2b market. SaaS is abbreviation for "Software as a service". It is ultimately a software model in which software is hosted on servers and provides services to the customers online. SaaS applications are provided over the web, which enables it to be accessed from any computer and doesn't require any software installation. Moreover, these applications are designed to run through a standard web browser and whenever the updates for a SaaS application is needed, it is easily installed on the server which ensures that all the users running the application are using the latest version. As Pass24 is considered as a digital product, a digital marketing strategy will be suggested to solve the problem situation Pass24 faces.

Thus, this study will contain the online marketing strategy for Pass24, a mobile application for managing access to gated communities. The learning goals pertaining to the Management study program are the execution of an analysis of a real business problem with the formulation of SMART research questions to solve the business problem and the use of relevant theories that will justify the finalized research questions. The selection and development of applicable research methodologies will eventually lead to the execution of the research. The digital marketing strategy will define the best mix of online marketing tools to gain new customers through targeting them and reaching them via online customer journeys. This study will also examine the effects that the implemented marketing initiatives have. In the next section, the company will be described in further detail.

1.2 Company description

It is important to discuss the history and the reasoning behind the company, in order to understand the particular business model that Pass24 has applied for developing its brand.

Pass24 is a mobile application that is powered by the iOS and Android software platforms for smartphones and tablets. It is designed for managing access to gated communities. The easy-to use interface presents the status of all visitors due to arrive, that have arrived or are overdue to exit. The user is able to preregister visitors via mobile application, the system quickly and efficiently processes visitor access requests, thereby promoting the operational effectiveness of security personnel. It is able to interface with existing access control system which is very convenient.

1.3 Problem analysis

Pass24 made its first online appearance in March 2017 during the launch of the mobile application, however the company decided to focus on direct sales because of the market's peculiarity. The actual market place combines two major segments of customers: those who are on the Access control systems market and all the potential customers that do not have ACS but are interested in cloud based visitors' management service. The point is that this b2b market is not used to digital channel strategies. However, the author assumes that as Pass24 is a SaaS product, it should use a digital marketing strategy to promote its service.

1 Current situation

The aim of Pass24 is to acquire an online marketing strategy which will enable the company to get new customers as a result of smart and efficient online marketing initiatives. The company has been unable to respond to this opportunity as the company did not make use of Facebook advertising together with E-mail marketing, SEO and paid media until April 2017. The company has tried out different campaigns but did not solely focus on the opportunity of the usage of online marketing tools.

2 Future desired situation

The digital marketing strategy will enable Pass24 to target current and potential customers through online marketing instruments consisting of e-mail marketing, Facebook postings and advertising, SEO, lead management. As a result, an increase in customer acquisition will take place.

The future desired situation for Pass24 will be an online conversion rate at 2,33% by 31 May 2018. The conversion rate is based on a calculation of the amount of contracts made divided by the amount of unique users who visited the landing page within a certain time frame. The average conversion is between 1% and 5%.

3 Objective of the research

The aim of this research is thus to provide the company concise and useful marketing plan which will give a clear structure of the different digital marketing initiatives the company should implement in order to achieve a desired online conversion rate by 31 May 2018.



1.4 Main research question

This research aims to provide understanding of the complexity of online marketing with the following main research question:

"What digital marketing strategy should Pass24 adopt in order to provide 3000 unique visitors to a website and conversion rate at 2,33% on 31 May 2018?"

The importance of this question is that it will provide Pass24 with the essential instruments for a successful online marketing strategy which will help them to acquire more customers and increase brand awareness. Once this research question has been answered correctly, it will be able to implement the proposed online marketing strategy.

1.5 Methodology

The methods described in the following section are the rationale for the application of several research techniques in order to identify, select and analyze information applied to the understanding of the research problem. Primary research methods refer to the collection of data obtained first-hand by the researcher on the variables of interest for the specific purpose of the study. Secondary research methods refer to the collection of data gathered from sources that already exist, also by the researcher on the variables of interest for the specific purpose of the study.

The systematic, comparative, logical analysis and synthesis of the scientific literature will be used to fulfil the aims of this study.

1.6 Organization of the report

Chapter 1 includes the description of the research, description of the company and the analysis of the identified problem. It will also justify the use of primary (qualitative & quantitative) and secondary research methods, the alignment between the research question, theory and methods, the validity and reliability of the research methods, the transparency of the research data and the approach of research ethics.

Chapter 2 includes the introduction of the theory, theoretical perspectives on the theory, selection and justification of the theory to be applied. In Chapter 3 author will provide a necessary analysis of the current situation in the market, Pass24 position and propose a relevant marketing plan to answer the main research question.



Chapter 2. Theoretical framework

2.1 Introduction of the theory

Theory is crucial to business research. Theory guides research and helps create ideas. Consequently, theory will provide evidence and support with arguments for the designated research. The chosen theory in this chapter will give a clear view on the topic of the thesis and will direct the research to the creation of the secondary questions. The secondary questions of the report will provide the required data and a structured answer to the main question.

The following chapter will firstly introduce and explain the different selected theories. Subsequently, different theoretical perspectives will be given on the topic. Afterwards the selection and justification of the theory to be applied will be presented, together with the limitations of the selected theory.

2.2 Theoretical perspective on the topic

1 Internet marketing theory

According to Dave Chaffey, Fiona Ellis-Chadwick, Kevin Johnston and Richard Mayer in their book: "Internet Marketing: Strategy, Implementation and Practice", the internet and digital media have transformed marketing and business. Customers have a much wider choice of products, services and prices from different suppliers and the means to select and purchase items more readily (Chaffey,2010). For organizations, digital media and new technology platforms give the opportunity to expand into to new markets, offer new services, apply new online communications techniques. The authors stress in their book that in order to develop a sound internet strategy today it involves understanding a more competitive buying environment than ever before, with customer journeys involving many different forms of online presence. To help develop a strategy to reach and influence current and potential customers online it is commonplace to refer to three main types of media channels that marketers consider today: paid media, earned media, owned media.

This theory covers the internal- and external influences in the development of an internet marketing strategy. The internal influences are the firm's objectives and strategies. These are internal influences since they directly influence the internet marketing. External influences are market structure and demand, emerging opportunities and threats and competitor strategies, which are evident to this particular research.

The advantages of internet marketing can be subdivided into 5 key pints: identification, anticipation, satisfaction, market penetration and market development. The internet can be used for the identification of market research to find out customer's needs and wants. The internet also provides an additional channel by which customers can access information and make purchases, evaluating the demand is key to governing resource allocation to internet marketing. A key success factor in internet marketing is achieving customer satisfaction through the electronic channel, which raises issues such as: is the site easy to use, does it perform adequately, what is the standard of associated customer service and how are physical products dispatched.

The internet can be used to sell more existing products into existing markets, also named as market penetration and demand market development supports the usage of internet for the sale of products into new geographical markets, taking advantage of the low cost of advertising internationally without the necessity for a supporting sales infrastructure in the customers' countries. The disadvantages of internet marketing are that you might end up using outdated information, updating information in the correct time frames is a critical issue, any web visitors and customers demand something for free and there is a lot of competition in the market, so it is mandatory to be updated on the current activities of the competitors.

2 The psychology of online persuasion theory.

The book Webs of Influence: the psychology of online persuasion is written by Nathalie Nahai. In her book she emphases that it is important to connect with customers, nurture customer relationships and understand customer's psychology behind what makes them click or make the purchase. Ms. Nahai, web psychologist, expertly showcases the developments, techniques and insights which will lead to online success from a psychology, neuroscience and behavioral economics perspective. The book delivers the tools which will lead to a compelling, influential and profitable online marketing strategy.

The theory clearly explains the steps which should be taken in order to create a successful online marketing strategy. The first step highlights the identification of the target group, which emphasizes the decision making process, whether the target group is online or offline and the reason why. This step is particularly important for the creation of the questionnaire for this research, as this questionnaire will assess the needs and wants of the customers. Cultural characteristics and individual differences are included as well. The second step includes the basic principles to persuasive communication, focusing on the communication via the website, the usage of colors, images and videos and social media. The third step explains the principles of selling integrity through online influence, building reputational capital, how to increase sales, pricing strategies and value, the behavior chain: taking risk trust and privacy into account.

The advantages of the theory is that is a more personal approach, which allows Pass24 to penetrate through the minds of potential online customers which enables them to understand the psychology behind the conversion. This will particularly be useful when analyzing the steps which the potential customers take before completing a conversion. The steps that the customers take can give a clear indication of what makes the customers bounce (not complete conversion). Moreover, this will aid Pass24 in optimizing the stages of the online platforms. A clear disadvantage of this theory does not provide a structured plan on how the competitors are utilizing psychology to persuade online customers, as Pass24 is operating in a competitive market it is of great importance that it is aware of the online persuasion strategies of the competitors.

3 The Diffusion of Innovation model.

The Diffusion of Innovation Theory, proposed by Everett Rogers explains how a product gains momentum and spreads, or diffuses, throughout a group. The theory posits that there are five categories of buyers that adopt new products:

1) Innovators - Consumers who eagerly purchase an innovative product because it's new. They are quick to embrace, promote and create new ideas and this then prompts the rest of the population to look at the world in a different light.

2) Early Adopters - A product should have a value.

3) Early Majority - This group of consumers is relatively slow to adopt new technologies, products or ideas. Will agree to try the product, but will not be the first in line.

4) Late Majority-Such consumers are very practical in how they approach new products They will rarely try anything new until it has been tried and tested by many others.

5) Laggards- These individuals are the absolute last to try a new product or service.

The DOI theory is fairly relevant and used today by many companies when launching a new product or service. In fact, this theory is the groundwork of the "High-Tech Marketing Model", which suggests that the way to develop a high-tech market is to work the curve from left to right. Geoffrey A. Moore in his book "Crossing the Chasm. Marketing and Selling High-Tech Products to Mainstream Customers", explains that when using this approach, attention would first be given to growing the market among the innovators, then moving on to doing the same for the early adopters, followed by the early majority, then the late majority, and lastly the laggards.

Companies use each group as a reference base for going on to market to the next group. It should be noted that marketing campaign needs to be geared primarily towards innovators, particularly when launching a product.

According to Maloney's 16% rule, once the company has reached 16% adoption of any innovation, it must change the messaging and media strategy in order to accelerate through the chasm to the tipping point (Figure 1 ).

Figure 1. The DOI model

Clearly then, rendering to this approach it is important to maintain momentum in order to create a cause effect that makes it natural for the next group to want to buy the product.

The DOI theory can provide insights into the types of digital marketing strategies needed to ensure success. Therefore, Pass24 should use this model to speed adoption and diffusion of its product. Furthermore, following strategies will be considered while creating marketing plan:

1. Pass 24 should understand how personality of consumers affects adoption of innovation. For instance, innovators and early adopters tend to be: young, extroverts, risk-takers, well educated, affluent, better connected.

2. It is crucial to note innovation characteristics and how it affects adoption. Product factors that affect adoption are:

o Advantage --The more advantage a product has over existing products, the easier adoption will be.

o Compatibility --Consumers resist change so the less they have to adjust their consumer habits to use your product, the easier adoption will be.

o Complexity --Making a product intuitive greatly speeds adoption.

o Trialability --Giving potential buyers an opportunity to test the product speeds adoption. This is why so many innovations offer a trial period (Pass24 does) or use a freemium model that allows users to experience a limited version of the product before upgrading to a paid version.

o Observability --Products used in private spread much slower than those used in public, obviously because others can see the product being used.

3. Innovative product should have a strong USP and clear message to speed adoption. Communication with the customers should correspond with the stage of adoption. After launching an innovation, the most essential goal is to build a clear understanding of the product among consumers. So, instead of promoting the brand, there is a need to focus on explaining what the product does, how it solves the problem, why it is better. Consumer should realize the problem is being solved. At this stage Pass24 can use short videos, guest posts and courting press with non-promotional education pieces.

4. Pass24 need to consider the process consumers go through in adoption as different kinds of communication should be provided on each stage. Consumers typically go through the following stages:

o Awareness

o Interest

o Evaluation

o Trial

o Adoption

4 RACE framework.

A study conducted by McKinsey states that for longer period there is no traditional "path to purchase". A customer does not show any sign of leniency in the market and his purchasing decision has widened due to multiple channel available out there. Not only this, in the research McKinsey found that as consumer evaluate product options, mainly two-third of touch points and interactions are consumer driven which include reviews which they read on internet, friends & relative's recommendations, family member choice, as well his own personal experiences with the product and the brand (McKinsey, 2009). Apart from this, the other third of the touch points are driven by marketing organizations. The thing which mainly matters a lot for the marketers is that they should learn how their organizations can influence real world consumers across different tough points.

Dr. Dave Chaffey proposed the RACE framework: Reach, Act, Convert, Engage. This system is widely used to (1) guide digital marketing activity, (2) to manage and optimize communication strategy across the many online and offline customer touchpoints that are involved in the "path to purchase" (Chaffey,2010).

Hence, in this thesis RACE framework will be used in establishing the major digital marketing goals, organizing KPI dashboard and curating proposed strategies.

To attract prospects and convert them into clients we need to contemplate the five areas of RACE planning:

o Plan - The digital marketing strategy starts with setting up goals, defining essential metrics, choosing the right channel.

o Reach - On this stage company should focus on growing brand awareness through increasing the online visibility of web sites.

o Act -Creating engaged leads by engaging interaction of prospects with company's posted content.

o Convert - this stage requires converting leads into paying clients.

o Engage - Encouraging customers to buy again and to become advocates who recommend the brand and share its content. ?

5 Social Media Framework.

Many business organisations are delving into the world of Social media and looking to use this as an efficient and profitable platform for their business operations and marketing strategies. However, with the increasing popularity of the world of social media come many different challenges and opportunities. In order to understand the right way to utilise the applications of social media, one must have a proper understanding of what is social media and what groups of applications precisely falls under the social media umbrella (Kaplan, 2010).

According to Kaplan and Haenlein, Social media is defined as "A group of internet-based applications that builds on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content" and can be categorized into six main branches:

o Collaborative projects- enable the creation of content by many online end-users. Examples include Wikipedia and Delicious.

o Blogs- considered the earliest form of social networking websites where posts are stamped and viewed in reverse chronological order and is usually maintained by a single admin.

o Social networking sites- enable users to create individual profiles where pictures, videos, files and personal information can be shared and also allows connecting with each other and sending instant messages and e-mails.

o Content communities- enable sharing of one specific type of media content between its users. Examples include, Flickr, where images are shared; YouTube- for video contents only.

o Virtual game worlds- a 3D environment, where users interact with each other with a personalised online avatar in a real-life like scenario.

o Virtual social worlds- similar to virtual game worlds, this platform allow all possible behavioural interactions with each other without any restrictions.

Social Medias can be classified into specific groups by factors such as:

o Media richness and the degree of social presence allowed

o the degree of self-disclosure required and the type of self-presentation allowed

Understanding these factors makes it easier to comprehend and thus grade the position of specific applications. For example, since collaborative projects such as blogs are mostly text based offers less exposure in terms of the richness of the medium compared to social networking sites like Instagram, Twitter, Google+ and Facebook which also allow the sharing of other medias like pictures, videos, GIFs and files. Kaplan and Haenlein came up with some useful advices to point the business organisations in the right direction when using different platforms of social media for more profitable operations (Kaplan, 2012)

With the advent of high-speed internet and the user-friendly advantages of Web 2.0, there seems to be an overwhelming number of social media websites available. It is impossible for business organisations to be present in all of them. The first step to sort this dilemma is to carefully study the target market and the platforms and websites the platform is present. Once that is achieved, the business may choose their most active sites. In special cases, business organisation may opt to create its own social media website if no other platforms meet its specific requirements. Companies like Japan's Fujifilm has launched its own social media network for incorporating a community of photography lovers, best suited to its own business.

The next order of business is to carefully align activities through the integration of a carefully organised media plan across the selected operational websites. The objective is to avoid any confusion and alienation on the target customer's end and to maximise the uplift of sales.

In addition to that, business organisations need to come up with a special team whose sole task is to handle the social media aspects of the operation (such as maintaining discussion threads and comments, etc.) by giving them administrative rights while granting the other staff limited access rights. This strategy works better than blocking staff members from such applications since it not only allows everyone in the corporation to stay up to date without delaying their own tasks, but only enables the completion of core responsibilities of each sector on time.

The authors of the article also advocate organisations to be creative, humble and active to attract the said target audience. Since it's an online platform, it is important to be honest since if you lie about something, it will be easily noticeable which may lead to organisations losing its credibility and will put a negative impact on them.

Due to the exceeding popularity of social media websites, it is considered to be a significant part of every average human's life. Kaplan encourages "unprofessional" interactions when in social media. Even though the end-users are customers, they are still real-life people who appreciate a down to earth, relatable post.

Since social media is significantly different from other traditional media forms due to its overly dynamic, democratic and interactive aspects, they require a controlled managerial approach to its analysis and measurement. Kaplan's framework highlights the key points of intersection of this difference and also helps to direct organisations and researchers in developing an appropriate social media metrics for their marketing dashboard.

Within any form of social media, all of the four elements i.e., motives, content, network structure, and social roles & interactions continually interact with one another, being altered and reinforced due to a feedback and learning mechanism. In accordance to network and social theory, the engaging individuals are heterogeneous, and dynamics are inherent in all elements. Due to the egalitarian network structure of the social medium, users of websites like the Facebook and Twitter cannot be studied in isolation, since the process is highly non-linear. This effect is described as marketing "pinball". The framework also defines social media on the basis of social interactivity as distinguishing features. Therefore, any reaction to marketing input will bring about an immediate, multi-way, and contingent response.

Hence, Pass24 must identify the proper metrics and come up with a dashboard that sufficiently captures all the four elements of Kaplan's suggested framework, before these metrics can provide relevant information regarding the deployment and success of their marketing efforts and subsequently be related to marketing input and outcomes.

2.3 Selection and justification of the theory

After the evaluation of the designated theories, it became evident that the combination of the internet marketing theory by Dave Chaffey, Fiona Ellis-Chadwick, Kevin Johnston and Richard Mayer and the psychology of online persuasion theory by Nathalie Nahai and Social Media Metrics Framework by Andreas Kaplan and Michael Haenlein will create the fundamental theoretical framework for analyzing digital media channels. To understand target audience better, the Diffusion of Innovations model by Geoffrey Moore is chosen. It became obvious that for developing marketing plan we need to optimize digital strategies to establish the conditions for the best sales conversation. Thus, the RACE framework is the most relevant instrument for this process.

The above- mentioned theories are complimentary as they combine the key aspects of this particular research: internet marketing, innovation product and online persuasion.

The internet marketing theory by Dave Chaffey argues that the presence of online marketing is replacing offline marketing. The book stresses the importance of business to consumer online marketing in relation to the customers' buyer behavior and online multi- channel experiences. The internet marketing theory will ensure that the internal- and external influences in the development of an internet marketing strategy are covered and that a clear picture of the consumer behavior and online decision- making process are explained. Moreover, the RACE framework allows to clearly follow this process and provides important insights into digital marketing strategy implementation.

The psychology of online persuasion theory by Nathalie Nah argues that the fundamental key aspects of online success are targeting the right group of customers, persuasive communications and sales with integrity. These key principles form a whole which ensure customer's persuasion towards online conversion.

The Diffusion of Innovation model by Geoffrey Moore argues that it is essential to follow customer throughout his "path to purchase" and adapt the communication strategies depending on adoption type. It emphasizes that product should contain factors that speed adoption as it may lead to a huge success or failure as an outcome of launching an innovative product.

The Social Media Metrics by Andreas Kaplan and Michael Haenlein points out the importance of social media websites in increasing brand awareness. Thus, it encourages "unprofessional" interactions and stresses that any reaction to marketing input will bring an immediate response.



Chapter 3. Marketing plan for Pass24

3.1 Executive summary

The methods and instruments described in the following section are the rationale for the application of several research techniques in order to identify, select and analyse information applied to the understanding of the research problem. Primary research methods refer to the collection of data obtained first-hand by the researcher on the variables of interest for the specific purpose of the study. Secondary research methods refer to the collection of data gathered from sources that already exist, also by the researcher on the variables of interest for the specific purpose of the study.

The main question of this research is: What digital marketing strategy should Pass24 adopt in order to provide 3000 unique visitors to a website and conversion rate at 2,33% on 31 May 2018?

To answer this question, the author will provide a marketing plan that comprises external and internal analysis of the business environment, set of marketing objectives, strategies and key metrics. The main peculiarities of the market will be outlined, using Michel Porter's Five Dimensions model. In the internal analysis, the strengths and weaknesses will be identified and in the external analysis the opportunities and threats will be identified. A digital SWOT analysis will be created in order to draw a complete picture of Pass24 position in the market.

The needs and wants of the target group will be analysed through the acquisition of primary quantitative data. Marketing objectives of Pass24 will be set through the RACE Digital Marketing Planning Framework (see appendix ). The KPI model will be created by using the systems of Google Analytics and Facebook ads. Thus, the systems provide a clear overview that showcases which version of online marketing or post did better and why.



3.2 Market analysis

To date, the Russian market of security systems is under constant growth. The market volume totals more than 1 billion dollars; at the same time, experts note the positive dynamics of growth, even despite the hostile economic situation.

There are five important features that are specific for this market:

1. Low information transparency; ignorance of the end user

2. Seasonal demand

3. High percentage of imported equipment

4. Relative conservatism and market closeness

5. High fragmentation of the market, the absence of obvious leaders

The market of security systems can be divided into the following main segments: security television, ACS systems, perimeter security systems, theft protection and fire protection systems, and security alarm systems (Figure 2).

Figure 2. Russian market of security systems

Pass24 operates in the ACS segment, since visitor management and database maintenance are the main means in access control systems. ACS is a set of software and hardware, organizational and methodological tools, using which the tasks of enterprise premises control and management are solved. The volume of this segment is growing annually by more than 25%, demonstrating the highest growth rates. The segment of mobile access control should demonstrate a growth rate of 200% in 2017 ($ 13.5 million of revenue compared to $ 4.5 million in 2016). Therefore, it can be argued that this market is attractive for the company's activities.

3.3 Porter's five forces

Michael Porter's theory of the competitive advantage is showcased in his book "Competitive Strategy: Techniques for Analysing Industries and Competitors". Mr. Porter argues that a competitive advantage is a function of either providing comparable buyer value more efficiently than competitors, or performing activities at comparable cost but in unique ways that create more buyer value than competitors and, hence, command a premium price (Porter, 1980)

One may argue that a theory which is created in the 1980's might be outdated for the current marketing landscape as it has changed in less than ten years. In the book "The power of real- time social media marketing", Beverly Macy and Teri Thompson argue that even though the book "Competitive Strategy: Techniques for Analysing Industries and Competitors" was written back in the 1980's before the PC, the internet or social media, the theory is still applicable in today's business environment (Macy, 2010). The theory is still applicable as it showcases competitive influences that shape every single industry and market. It sets a benchmark for how the companies that constitute those industries should view the competitive landscape. The 5 forces help marketers to analyse everything from the intensity of competition to the profitability and attractiveness of an industry. strategy media customer search

It also helps to understand how value is shared among actors and provides insight into redistribution of profits, the theory gives a broader view on competition than only a company's existing competitors and Porter's theory emphasizes an outside analysis of the organization's environment over an internal focus. This will especially help to create an online marketing strategy as it is important to be aware of the rivalry of competitors, such as threat of new entrants, threat of substitute products, bargaining power of buyers and of suppliers. This will give insight on the activities of competitors and how Pass24 could create strategies to counteract their online marketing activities (Table 1).

Conversely, the disadvantages of the theory are that it is based on the assumption that firms strive only for a competitive advantage over their rivals and exclude other motivations. Buyers, suppliers and competitors are assumed unrelated and do not operate in networks outside of the industry under observation and many industry lines are blurred (Provenmodels, 2017).

Table 1.

Porter's Five Forces analysis for ACS market

Force	Market characteristics
Threat of substitution	Low-technology ACS are losing their relevance. However, the invention of new technologies has a number of limitations, including time, investments, demand.
Competitive Rivalry	Increased presence of Russian companies in low-tech segments. International companies are leaders of the industry in automation, technologies.
Threat of new entry	There is a significant technological and investment barrier to entering the market for domestic companies, international companies already present on the market.
Buyer Power	A lot of clients are scattered. The level of awareness of ACS new technologies is low. The growth of welfare and culture provides a rise of using security systems which leads to an increase in requirements and expectations about the technological level of the product.
Supplier Power	Highly competitive market of manufacturers and suppliers.

The following conclusions can be made:

· It is worth sticking to the generic strategy of focus. Thus, closed gated communities is the niche where Pass24 operates.

· Much effort is needed to educate the consumer, increase brand awareness and emphasise USP.

· It is necessary to monitor competitors' offers and track the emergence of new players.

· It is recommended to diversify the client portfolio.

· The mobile application's ability improvement should be continued.

3.4 Competitor benchmarking

One of the most common mistake that startups make is considering that there is no competition in the market and the product is absolutely unique. That is why competitors' analysis and benchmarking should be made (Table 2).

Table 2

Competitor benchmarking

Company	Intellect Park	Allgatekeeper	Simple gate
Description	Provides barriers for commercial properties, gated communities and multi apartment buildings. It also offers a cloud and a mobile application to support/build ACS.	Provides a process simplification for regular or temporarily access to restricted parking in which most of us use in everyday life in both home and work. It includes a cloud, mobile application, controller.	Provides a mobile application for opening barriers.
On the web
Product
Strengths & Weaknesses	Strengths Provides a full ACS with a barrier, cloud support, mobile application, video control system, call center Is a recognized, trusted brand in the industry Well structured and differentiated price offers Weaknesses Isn't able to provide mobile application/cloud without barrier thus it is considered as an additional service User still needs to call for entrance allowance	Strengths Skolkovo resident company Offers "your own project" possibility (upgrade existing ACS, add features as a cloud support etc.) Provides a lot of updates and technological innovations (smart parking) Weaknesses Doesn't provide security (replaces guards) Highly dependent on internet and the use of smartphone Can work only with its own device	Strengths Simple interface, clear system of verification process Is tracking user's location, so he can't open the gate from everywhere Several locations are able in the menu (home, work) Weaknesses Can work only with its own device Doesn't have a website Is only able to open gate
Market breakdown

Pass24 is a cloud-based visitor management system with a mobile application. The practice of professional security agencies, has shown that one of the main disadvantages of ACS in gated communities is the impossibility of quickly restoring the chronology of information on vehicles entering the territory and their owners in the event of emergencies. That is where the idea of creating this service came. Unlike all other ways to organize checkpoints in an enterprise or in closed residential complexes, Pass24 helps to avoid any misunderstandings related to the human factor. The system is easily integrated with any installed equipment and software, as well as with the existing ACS system.

It has no restrictions on the number of users and serviced checkpoints. The protected cloud contains history and templates of requests; there is an option for storing personal data, as well as the ability to monitor the status of a request for guest visit from anywhere in the world.

The application was specially developed for closed gated communities. It is free for all the residents; after downloading it, they need to register, confirm the phone number, make a request for a guest visit, and that is it - now any authorised user can safely wait for the guest.

Each pass is visible and monitored on the screen at the time of creation. There is no need for an operator to register passes, and the security can be engaged in maintaining order in the territory without any distraction (Figure 3).

Thus, the basic solution of Pass24 includes:

1. Mobile application for users (high usability, fast application submission)

2. Clear role division in the ACS (a guard is no longer responsible for calls)

3. Transparent system of applications control (templates, history of visits -everything is stored in the cloud; minimum risk of data loss)

4. Effective integration with already installed equipment (internet and computer at the checkpoint are required)

Figure 3. Pass24 mobile application

3.5 Key success factors

Given the activity of competing companies and general market analysis, the following key success factors for the industry can be singled out:

1. Technical updates and modifications of the product

2. High quality of production

3. High flexibility of production

4. Strong partner network

5. Strong brand image and reputation

6. Patent protection

3.6 SWOT

The company performs its activities in a developing market, the growth of which is conditioned by the need for continual improvement of the product, enhancement of its efficiency and quality, the need for recording the changes in the influential factors of the internal and external environment.

The company's external environment, namely the actions of the market's leading competitors and the market development trends, dictate certain requirements.

In the first turn, it is the need for creating and launching new contemporary products, developing a network of partners, for increasing the company's publicity in the external environment, and for provision of high brand awareness by the target audience.

In order to meet the consumers' expectations, to ensure the company's dynamic development and to receive profit over the long term, to increase the company's value, it is necessary to set strategic goals and tasks and to develop a list of measures for their accomplishment.

Digital SWOT matrix is made to define startup's current situation more precisely and to choose the right strategy (Table 3).



Table 3

Digital SWOT for Pass24

Digital marketing SWOT matrix for Pass24	Strengths: Price point for users lower than competitors Email list for users interested that were not part of beta version Landing page mobile friendly, available app	Weaknesses: SEO- single landing page, new site is developing, low visibility for key terms Budget for Event Marketing (key industry events too expensive and resource dependent) Resources for marketing activity limited Content marketing limited
Opportunities: Event marketing -Industry specific events and conferences Advertising on mobile platforms Companies in the industry don't consider social networks as an effective marketing channel	SO Strategies Email Marketing campaigns Personal Branding of founders through social media (own channels and external) Apply continuous Conversion Rate Optimisation (CRO) on all marketing channels, website and app; PPC Create workshops to promote service and build content opportunities/Special webinars for partners Push notifications to drive use Create a referral scheme for users	WO Strategies Secure free or partnership based speaking opportunities for key industry events Partnership with key influencers on topic of ACS, new trends in technologies to promote Pass24 Make interesting content and use social media to promote an app, targeting residents of gated communities
Threats: Competitors rank for key terms and improve SEO Competitors have pre existing inbound marketing approach and onboarding programs PPC - some key terms high cost campaigns Other startups launching with lower price point or freemium model	ST Strategies Defend marketing position by developing brand and personal brand of founders Educate market with key topics linked to personas Apply agile marketing strategies to drive awareness and leads	WT Strategies Continuous SEO program PPC to drive awareness and leads Increase sharing of content and brand awareness



3.7 Target market

As the startup operates in the b2b market, its primary target audience can be divided on:

· HOA's and Property managers (visitor management system in the gated communities)

· System integrators

· Security Service providers.

Hence, Pass24 offers a comprehensive approach to managing visitors which allows clients to make a long and complicated process optimized, increase the residents' loyalty level and upgrade current ACS.

In order to develop a convenient and intuitive interface, to understand what functions there must be in the menu and how to make the service even more efficient, it is also necessary to clearly define the pain points of the end users. These are residents of gated communities with following characteristics:

· Bachelor and higher University degree

· Aged 30-50

· Families with children.

· Active lifestyle: travelling, sport, social life

· Active use of smartphone

· The efficiency of any process becomes the key indicator for them.

For a more detailed study of the consumer behavior, including the process of the user's interaction with mobile applications, social networks, and other electronic resources, a questionnaire was developed, and a survey was conducted among representatives of this target audience. It allowed Pass24 to get clearer vision of the TA's desires and motivations, and will help to modify the product / the methods of promotion. Hence, all the data collected allowed to create a target audience Persona Profile (Figure 4).

Figure 4. Target Audience Persona Profile

3.8 Mission statement

Pass24 wants to to grow its presence, utilizing its technological simplicity, to become the leading systems integrator in Russia. The company mission is to

provide the best service to manage guest access proactively, exceeding customer's expectations while operating with the highest levels of honesty, integrity, responsibility, and professionalism.

3.9 Marketing objectives

Marketing objectives are set according to RACE model which helps brands engage their customers throughout the customer lifecycle (Table 4). The strategies to achieve defined objectives will be provided further as well as the KPI model to measure results (Appendix 1).



Table 4

Pass24 Marketing Objectives

Objectives	Substantiation	Strategies to achieve goals	Key performance indicators
REACH Increase brand awareness and visits to company landing page, apps and social network sites, total number of visits min 23,300 over 12 months (KPI model)	Paid search will be needed due to competitive space and key competitors ranking for terms Founders speak and guest blog / interview for key influential sites	Proactive SEO and Inbound Marketing approach Social media marketing, partnerships with complementary sites Paid search across AdWords and Facebook	Increase volume% of Natural search visits - monthly increments Paid search visits - monthly increments Brand mentions via social media
ACT Generation of leads, Drive 120 free trial sign ups over 3 months	CRO on all channels and landing pages to improve conversion rate from traffic- especially paid traffic	Branded content campaigns Remarketing based on content, event interactions and sign up (free trial) Email program -activation for free sign ups to convert to paid customers Free trial 1 month to encourage adoption of use	Conversion Rate (sign up for free trial)
CONVERT Increase conversion rates from leads to sales and sales volumes achieved online or offline. Free trials to convert minimum 35 paying customers each month	CRO on all landing pages and email programs to improve traffic and conversion rates from free trial to paid. Branded content and education of tool to activate users - needs more than just a sign up, Beta testing identified number of profiles and visits to tool that created loyal paying user.	Email program- improve churn rate with key client events, education focus of tool and account management ...

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