Ludicon – The market approach [602480]

Ludicon – The market approach
Laurent ,iu-Marian Neagu
Faculty of Automatic Control and Computer Science
University POLITEHNICA of Bucharest
Splaiul Independent ,ei 313, Bucharest, Romania, 060042
[anonimizat]
June 3, 2017
Abstract
In order for a business to exists, it must address the developed product or solution
to a market. Because, if no one is using and buying what you are creating, the
bussiness cannot be sustained. The dynamics in the marketing world nowadays is
hallucinating, as the attention of individuals is changing very fast. What yesterday
was generating you a return on investment from a billboard or a TV commercial,
today there is no point on using that. In the technology world, the dynamics are
even higher. People get bored very easy of a software application and to grab
their attention and put it into your product is even harder. The current paper is
tackling the marketing strategy of a mobile application, Ludicon, which is targeting
the Health and Fitness eld, in the context of a more and more sedentary lifestyle
among our generation.
1 Introduction
A marketing strategy is a process or model which allow a company or organization to
focus limited resources on the best opportunities to increase sales and thereby achieve a
sustainable competitive advantage [1].
In other words, it helps nding the best customers, understand their preferences and
take all the actions needed in order to generate sales. For the tech world, this is very
important in terms of the competition: there are lots of applications who have mostly the
same purpose and functionality and the main idea is to attract more customers than the
competition.
Product quality, product image, advertising and promotion are the key factors that can
be used in the development on a marketing strategy. The product needs to full the
market needs and preference, therefore the product and service quality needs to be on
high performance.
A good image that attracts customers is also an important attribute. Customers will not
use or buy a product that doesn't have a good image. Advertising, whether it is online or
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Figure 1: Factors that in
uence the marketing strategy
oine, is the key to make a product known on the market place. In the tech world, getting
the customers to use your application is a real challenge because the product lifecycle is
short: customers tend to use the application for a while and then drop it after they get
used to it and it is no longer interesting.
A proper marketing strategy places the product in the center of the customers interest all
the time. In general terms, marketing places the customer as the main entity that guides
all the marketing decisions. As it can be seen in the Figure 1, there are four factors that
in
uence the marketing strategy: customers, competition, special capabilities, external
environment [2].
As key factor of the marketing strategy, the customers play a very important role. All the
marketing decisions have to be done accordingly to the customer needs, preferences and
evolution of them. Therefore, market research is done by companies in order to nd out
what are the gaps in customers needs in order to make a general idea on what the product
or the service must do. During the product lifecycle, research and development should
be done in order to keep the product or the service competitive. Also, if the competition
makes a certain marketing strategy, the current strategy has to be adapted in response.
Every company has unique capabilities, its employees. Dedicated marketing person or
department is needed in order to perform the specic actions. The external environment
plays also an important role. Events outside the company can aect the company prod-
ucts and markets. Changes in customers preference, habits or technological development
are external events that rms must react to, anticipate or prevent. As for IT applications,
the technological progress is one of the biggest external factors that in
uence the applica-
tions features: new operating systems, devices, programming languages or libraries – are
released and all the time the Research and Development department needs to adapt.
The current research aims to explain the marketing strategy for a mobile application,
Ludicon. As being an application developed by a startup (which didn't raised yet any
investment), the budget for marketing is limited. Despite all of this, the product needs
to be known between clients and also to attract sport venues. As the product is B-B-C,
the marketing plan needs to be done accordingly.
In the following lines, I will analyze the importance of marketing for the product, the
market segmentation, targeting and positioning, the marketing and product mix and I
will also compare the application with similar ones in terms of marketing. As the main
subject is Ludicon from product to market, marketing plays a major role in the company's
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development. The customers and the sport venues are the key actors on the application
success, therefore the marketing plan aims to set out when and how the communication
between them is made.
2 The importance of marketing
As Michael Morris states in his book [3], marketing plays a central role in a business. If
a company doesn't understand its customers needs, it cannot full them and if it doesn't
understand their evolution, it will lose the contact with the market and no customers
means no sales, no sales means no prot, therefore the company will collapse. Each
company should have a dedicated marketing department.
Marketing and communication are in a close connection. Customer relations is one of the
most basic assignment of the marketing department. Marketing studies people individ-
ually to determine how they think in general and how they react. Many individuals are
also studied when forming groups. These may indicate dierent opportunities or threats
for the company. As a result of this research, groups with special needs that are not
satised at the moment can be discovered and they represent an opportunity. These are
called "segments".
In the technology world, the innovation has to line up with a critical customer problem
that no one has solved. For example, let's take the Amazon story and how it got into
the cloud computing business. An employee noticed that Amazon's retail customers that
use the eCommerce platform didn't take advantage of the computer storage in the cloud.
Therefore, he came with the idea of creating a new business to help retailers reduce their
IT costs using cloud computing oered by Amazon. Nowadays, Amazon is the lead of
cloud computing services [4] .
A marketing plan describes the activities that need to be performed in a timeframe in
terms of marketing. This plan is aligned with the company plan that also includes the
nance, human resources and Reaserch and Development. It usually has 3 outlooks: short
term (up until 1 year) – practical implementation: sales analysis, cost control, information
gathering; midterm (1-3 years) – establishing the practical implementation of the project;
long-term (5-10 years) – identifying market needs and how to satisfy them in order to
make prot [3].
In order to develop a proper marketing plan, the rst step is to gather information about
the customer needs. Market research is of two types: quantitative research and qualitative
research. The quantitative research is a measurement process, assigning numerical values
to the characteristics and variables analyzed. It is done through questionnaires and inter-
views and measures how many individuals have done or will do an action. By assembling
this information, the researcher will be able to create an image of the market components.
This research must be repeated periodically to discover the evolution and the changes that
occur. The qualitative research is interested about the feelings people have about their
own needs as well as about the products or services. There are not assigned numerical
values. The method provides information from the points of view of the individuals. It
is done through the group discussion method, they are debating a problem. The group
must be consisted of people related to the company products or services. Generally, the
companies use all of the marketing researches [3].
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The purpose of advertising is to propagate a predetermined message in a controlled man-
ner, within a particular audience. The main ways to advertise are: advertising by post,
radio, television, the press, the internet. The Internet plays an important role in the
advertising domain nowadays. In order to promote an application in the tech world, the
Internet is the key environment to make your app known to the public.
Online advertisments [5] are of 3 types and they can be bought as:
Cost per Mile (CPM) or known as Cost per Thousand impressions or views. This
type of advertisment involves the company to pay everytime their message is shown
to people.
Cost per Click (CPC) This type of advertisment involves the company to pay each
time a user clicks on their ads.
Cost per Action (CPA) This type of advertisment involves the company to pay only
when a purchase or another specic action is performed.
Internet advertisements are the following: online banners, search engine results pages, so-
cial media advertisements, email marketing, pop-ups and spyware. Online or web banners
are graphical advertisements displayed within a web page. The companies pay in order
to display their content that can consist of pictures, animations, audio-video or other
interactive elements using Flash or Java applets.
Search engine marketing aims to increase the website or application visibility in search
engine results. In other words, when a user searches for "sports application", the company
that oers a collaborative method to play sports, like Ludicon, can occur in the rst
results. Keywords are used and associated with websites of interest. This can be done
using Search Engine Optimization (known also as SEO), which main purpose is to make
the website content relevant to search terms. Search engines like Google have powerful
algorithms that show to the user only what is relevant to their search, therefore in online,
the website should be adapted to match them. Sponsored links are those seen in the
sponsored bar in search results. This search advertisements are usually sold via auctions,
companies bid on keywords that include time, language, location and the search engines
display the results to users based on the highest bid, keyword applicability and website
quality.
Social media advertisements are managed using social media websites such as: Facebook,
Instagram, Linkedin, Twitter. Email marketing contains an entire email or a portion
of an email message.This includes also the newsletters the user can subscribe to. Pop-
up advertisements are displayed in a web browser window that opens above or under a
website visitor's initial browser window. This are a way of getting people's attention about
the company products when they navigate on websites of their interest. Social media
advertisement is very used for promoting a software product, like Ludicon application.
For Ludicon, advertisment is very important. Users are found mostly on social media
websites because they are mostly young.
The company has a Facebook and Twitter page and the posts are related to the application
functionality and purpose. The pages are presented in Figures 2 and 3. The Linkedin
page is mostly used to attract investors, sponsors or people who may join the team. The
marketing strategy involves also the construction of an Instagram page that will contain
information about the application and its benets for users. Using Twitter in order to
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Figure 2: Facebook page
Figure 3: Twitter page
advertise the company is on a long term plan because in Romania this social media website
is not on top usage. When the company will extend globally, Twitter will be used more
to raise awareness of it.
As part of the marketing strategy, Ludicon oers also the possibility to users and people
interested in the application to subscribe to a newsletter in order to be the rst informed
about the new features. Business partners need to be informed, as well as customers,
about the service or product, so marketing should also include commercial relationships.
In this case, sponsors must be considered, like companies that own sports grounds. The
marketing plan that is developed for Ludicon must also include them. Therefore, there
is a dedicated person in the PR department that has the responsibility of getting and
maintaining the relations with the business partners.
Public relations covers multiple activities, all aimed at two results: improving perceptions
about the company and its products among relevant groups and limiting the size of
unfavorable images at the time of criticism [3]. As also for Ludicon, the aspect of creating
a positive image among users was important since the product development. Ludicon
team works intensively to maintain a positive image, as the purpose of the application is
also very clear: to promote playing sports among friends.
In the context of a company, in general terms, marketing is the interface between the
public and its own resources. Everything depends on the employees of the marketing
department, because without the market, the company cannot survive.
3 Market segmentation, targeting and positioning
There is a three step strategic marketing process containing segmentation, targeting, and
positioning, which help on the development of the marketing strategy. [6]
Segmentation is the process of dividing a market into potential customers, based on
common characteristics such as: geographic location (country, districts), demographic
(age, education, occupation, genre, income), psychological (VALS that stands for Values,
Attitudes and Lifestyles) and behavioral (desired benets, delity, usage rate).
In general terms, there are two methods of market segmentation in the technology world:
market-driven and innovation-driven [6]. The rst approach is based on understanding
what the customers are awaiting and needing. The second approach is based on the
innovating ideas of the creator and involves the technically revolutionary software or
hardware.
Ludicon is based on the rst approach (market-driven): it aims to full a customer need
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– help people interested in playing sports nd new partners and engage in creating new
sport communities. Beta testing is a form of testing, made by the audience, that tries
the product for a xed period of time. Ludicon did beta testing in august 2016, during a
summer camp, which included many sport activities, such as football, basketball, tennis,
and people interested in the application tested it and shared their feedback. The results
received from beta-testing were integrated in the solution.
Targeting is the process of evaluating the attractiveness of each segment and selecting
targeted segments. Within the selected segments, the most signicant customers are
needed to be chosen and targeted rst. There are two general ways of doing this targeting:
concentrated marketing (it is based on niches) and dierentiated marketing (it performs
marketing methods adapted to each segment). [6]
At Ludicon,the market consists of people who are interested in sports and also the compa-
nies which oer hosting for doing it (gyms, tennis, basketball, football courts, etc.). The
strategy used for targeting is the dierentiated marketing , because we apply campaigns
for promoting our product in dierent ways for certain segments. We plan to go and oer
prizes (such as phones or tablets) at the jogging or cycling events that are organized in
Bucharest for people that will install and use the application during the event. For the
football, tennis, squash, volley and basketball market we plan to go to the sport venues
and oer discounts (25 percentage less after two hours played through the application,
one hour free on Saturdays if you are a premium Ludicon member, etc.) for all the users
who are downloading our product from the mobile stores.
On the sport venues side, being a B-B-C product, we need to nd a way to target the
paying customers too, which is a very important part of our marketing plan. And so for
this the way Ludicon is doing is by hiring salesmen who will run a door-to-door campaign
for the beginning and negotiate with each sport venue in particular. The partnership
proposal with the business is yearly subscription with us, in exchange of which we will
oer them visibility in our application (when searching for sport locations, users will see
their company in top) and also important statistics about their customers (age, gender,
return rate, other sports they are interested in, etc.).
Positioning makes the dierence between the competitors. The marketing strategy must
involve the \positioning" of the product. The product needs to be identied and used
by the customers from the targeted segments [6]. Positioning is a dicult process in the
tech world. Customers are having diculties distinguishing between products. Therefore,
collecting feedback and interviewing customers from targeted segments is very important.
Also, beta testing and collecting the reactions of the prototype is very important in order
to build the company's positioning.
Once the positioning strategy is chosen, it will be implemented. Positioning creates the
image of the product in the mind of the important actors, clients and sponsors. It can be
done using the positioning statement and the slogan.
A positioning statement should be simple to understand, relevant, credible and fresh. The
most important attribute is to be relevant to the customers need, to show how can the
customer benet by using the application. Ludicon posititioning statement is: "Ludicon is
the social network for the oine games". This statement means that Ludicon's purpose
is to create a social network of sport lovers and so to be easy to identify which is the
footbal ammateur community in Brasov, or the tennis community in Cluj, or the squash
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Figure 4: Marketing mix
community in Bucharest. Therefore it promotes a healthy liftstyle among friends. And
creates last-long relationships through direct connection, and not through virtual online
chat. People meet and play and have fun while practicing their favourite hobbies.
A slogan is simple and it has to catch the customers attention. The slogan chosen by
Ludicon is \Let's go and play". It involves action, gathering friends or people around
together to play sport activities and it's the best one-liner which describes the application
functionality.
4 Marketing mix
Pricing is a marketing problem, which refers to what the customer wants and how much
he is willing to pay in return. Marketing people know how to maximize protability by
changing positioning and mix marketing.
Positioning refers to the relationship between the product oered by the company and the
competitors. Marketing sta should aim to get the maximum total prot. The marketing
mix takes into account all attributes of the product and related services.
Marketing mix is a term invented by Neil Borden and it describes the factors that combine
in order to sell a product. E. Jerome McCarthy reduced the marketing mix to 4 elements
called "The Four Ps". The 4Ps are the key variables the organization can take to achieve
the maximum impact on the market and the consumer, and re
ect the way in which
dierent components of the resources available to the organization achieve the expected
eects.
The 4 Ps are described in more details in Figure 4.
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Product represents the goods or services that a company oers for the market. A product
has a lifecycle: introduction, growth, maturity, decline. In the technlogy world, the
product lifecycle is short. The software applications and hardware are developed and
replaced at high rate. Researchers always aim to improve the products and sometimes
even replace the existing technologies [6].
Price is the amount of money people spend for the product. In the technology world, most
of the software applications are either free, either paid with a free trial in the beginning,
either free with in app purchases.
Promotion involves the activities did by the company to make the product known to the
targeted market. In the technology world, promotion often includes online advertising.
Place includes the activities that the company does in order to make the product available
to the market. In the technology world, the place to nd the software applications is on
specialized websites, as well as AppStore (for iOS), Google Play (for Android), dedicated
website (for web applications).
This 4 Ps are often related to the 4 Cs, as stated by Robert T. Lauterborn [7] in the table
bellow:
4Ps 4Cs
Product Consumer wants and needs
Price Cost to satisfy
Place Convenience to buy
Promotion Communication
Table 1: 4Ps versus 4Cs
The product should be developed according to the customer needs. The price should be
established according to the price the customer is willing to pay for the product. In order
to buy the product, the customers needs to have access to it – the convenience to buy is
also important. Online shops, catalogues, phone orders, etc. are places of convenience to
put the product available to the market. As for the promotion, the marketer should think
about communication – any advertising should be interactive with the customers.
To describe the marketing mix, the best way it is to put Ludicon in comparison with sim-
ilar applications in the Health and Lifestyle eld and explain the 4P's with the dierences
between.
One of them it is MyFitnessPal. Their product it is designed for helping people lose weight
by counting the calories of the food peple eat.The product manipulates a huge database
and includes training for users in order to keep them healthy. The product is one of
the most succesful in the area of Health and Lifestyle, with over 10 million downloads.
From the pricing point of view, the application is free, but it contains in-app purches
for dierent special training exercises.The place where it can be found is the same as for
Ludicon, which is in the mobile stores: AppStore for iOS and Google Play for Android,
and so it is very convenient. For the promotion point of view, MyFitnessPal brought
a sucessful solution that can be used as a model for each company, including Ludicon.
They state that the customers are channel-less, so even though it is a mobile application,
customers needs to be engaged everywhere, across every channel.
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The company human resources department sends email to people based on behavior of
the users in the mobile application, so it is building ongoing relationships with their users.
Through this model, they attracted an astonishing number of 9.5 million readers on their
blog.
Other product that is "running" in the same eld as Ludicon does is Runtastic, the
European startup that is the most popular at this moment. From the product point of
view, Runtastic has the most similar characteristics with our project from the applications
that are currently on the market. The application is tracking the progress of multiple
sports and it is integrating with multiple services and applications.The product is oering
statistics of the user progress and can connect to the social media platforms, just like
Ludicon. Our plus related to the product is that we support the concept of creating
communities of sport amateurs in geographical areas. The price model is the same as for
MyFitnessPal, which is free for download and basic functions and with in-app purchases
for premium functionalities. Ludicon is free for users and we ask money from the sport
venues.From the place point of view, the application is convenient to be found, on the
mobile stores. On the promotion side, Runtastic uses a people-rst marketing strategy.
In present, Runtastic has 180 milion downloads, 90 million registered users and more than
18 applications.
5 Product mix
What the product can do, how it does and how it looks are issues of great importance for
marketing. Conceiving the product must be based on the following factors [3]:
1.unmet consumer needs
2.what the competition oers
3.what is feasible from a technical and nancial point of view
4.the company's global strategies
An important attribute of the Ludicon application is the ease of use and simplicity. Al-
though it contains important technical features, the application is easy to use by non-
technical people. Also, the application is small in terms of disk usage. This is important
for a software when it is installed.
Reliability is a big issue for technological products and services. The application should
be available all the time or at least oer support in case of need. In the eld of information
technology, once the application is released and used, bugs and enhancements needs to
be solved or done. For example, users can suggest enhancements and the Research and
Development analyzes them in terms of feasibility and costs and they might or might not
implement them. Also, users can track and report bugs, and the Research and Develop-
ment has the responsibility to solve them. All of this actions contribute to the product
mix, as they contain the product features.
The same cycle is available for Ludicon. The dedicated Research and Development team is
working on the application to have it available on dierent platforms: Android application,
iOS application, a web application for viewing general data about the project and a web
platform for managing the back-end data and generate statistics for the sport venues.
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There is also bug tracking and reviews from users. Users can drop a line regarding the
application functionalities and enhancements.
Building a complete application that fulls the customer needs is the main purpose. All
the time, it is needed to be ahead of the competition. As the competition improves
the product characteristics, the company must do the same in order not to lose the
customers. Although much can be done when it comes to development, when enhancing
the application functionalities, budget and feasibility must be taken into consideration.
It is very important not to exceed the budget for research and development. Also, when
deciding on the application's improvement, all aspects of the human resources, technology
and feasibility of the activity itself must be thoroughly analyzed. There is a risk in all
development activities, but a risk prevention and response plan must always be conceived.
6 Conclusion and Further Work
In the current paper, it was presented the market approach for a mobile application that
targets the eld of Health and Lifestyle. On developing a product, the market cannot
be decoupled from the product, as they rely on each other. Continuously integrating the
customers feedback in the product is essential for the bussiness success.
Marketing and communication are in a close connection. Nowadays, a "put people rst"
approach is important and also the public relations department needs to build last-long
relationships with every customer in particular. The advertisment means to propagate a
message in a controler manner, for a particular audience, which represent your current
targeted market. For the technology world, the online advertisement is the most common
tool used. For Ludicon, the SEO containing words like "sport" or "football" or "social"
needs to be ranked as high as possible, so that application be more visibile for its tar-
geted audience. Also the social media advertisements are useful through channels such as
Facebook or Instagram, because the customers are mostly young.
The online image of Ludicon is built through a Facebook and Twitter page, and the
intention is in the near future to create also a Instagram page where to post content
about sport events and health. Users can also subscribe to an e-mail newsletter from our
website and they will be the rst informed about the features and news related to our
product.
For the marketing segmentation, Ludicon is using the market-driven approach, where the
company aims to full the customer need of nding sport partners around and engag-
ing in creating new amateur sport communities. For targeting we use the dierentiated
marketing, using dierent methods on certain segments, such as oering prizes (phones
or tablets) for some events or oering vouchers at sport venues. Also, for the paying
customers, we plan to use a door-to-door strategy using salesmen to negotiate with each
sport venue in particular.
At this moment, the product is still in the developing phase, so the marketing plan that
was created will be applyied after the product development is ended and this is scheduled
to happen on October this year. So ngers crossed!
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References
[1] Michael Baker. The strategic marketing plan audit. 2008. pag 3.
[2] Steven P. Schaars. Marketing strategy. 1998. pag 14.
[3] Michael Morris. The rst time manager. 2001. pag 149-177.
[4] Dave Power. Customer needs should drive innovation.
[5] Techopedia. Online advertising.
[6] Eric Viardot. Successful marketing strategy for high-tech rms 3nd edition. 2004.
[7] Sica Stanciu. Mixul de marketing { principal instrument al tacticii de marketing.
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