These slides use ideas from my (Jeff Funk) class to develop a business model for Freebee. Freebee is a new form of consumer research service that combines mobile coupons with trial free gifts and marketing using mobile phones. Registered users can receive free products by providing feedback on the product through a mobile survey. This service is particularly useful for the fast moving consumer goods market where firms need to obtain very fast feedback from the market. Freebee captures value from these clients and hopes to prevent entry through network effects associated with users, clients, and retail outlets.

1. - Creating better products
MT4002 – Technology Management Strategy
Henrik Nilsson
Adam Lewenhaupt
Yuwei Zhang

2. Agenda
1. Introduction
2. Competitive landscape
3. Under the hood
4. Analysis and the future

3. The FMCG Industry
What is Fast-Moving Consumer Goods (FMCG)?
“Frequently purchased goods such as milk,
soft drinks, chocolate bars, shampoo, etc.”
Problems faced by FMCG companies
Increase consumer awareness
Develop attractive products
• Advertisement
• Loyalty programs
• Trial marketing
• Follow best practices
• Product development
• Market research
+30 000
SGD

4. freebee – the FMCG market’s missing link
Solves FMCG companies two major problems twice as fast,
cheaper and with better accuracy than any of its competitors
Mobile coupons
=
Campaign initialization
Workflow
Trial Marketing
+
Data collection
Market research
+
Analysis report

5. freebee’s value proposition
Consumers (app users)
Get access to free and discounted offers
Clients (companies)
Product awareness
•
•
•
Shelf driving
Word of mouth marketing
Facilitates further sales
Consumer insights
•
•
•
Campaign analysis and surveys
Facilitates R&D
Facilitates brand positioning
Cheaper and faster than current solutions
Retail stores
Opportunity to Increase their number of
customers

6. Scenario – freebee at its best
Problem: Coca Cola wants to test launch and create
awareness about their new “Coke Pink”, which is
targeted to women aged 15-30 living in urban areas
freebee’s solution:
•
•
•
•
•
•
Coca Cola chooses which question types they want
to ask and to whom
freebee pushes out the chosen segment using metadata
Consumers receives push and decides to make a stop
at 7 /11 on her way home to redeem a free Coke Pink
Having consumed the Coke Pink she completes the survey while taking the
elevator up to her apartment
The result is sent to freebee who checks if the survey is done correctly
The campaign is analyzed and a Power Point with actionable results is sent
back to Coca Cola

7. What paradigm shifts made freebee possible?
FMCG companies have been increasingly interested in
• Who their consumers are and what characterize them
• Data analysis as opposed to focus groups
Technologies and methods
• Smartphone penetration
• Secure mobile coupon system
• Convenience stores cashier systems opened to 3rd party coupons
Environment and Culture
• Social networking and viralability
• Generation Y comes of age
• Mobile apps have become parts of our everyday life

8. freebee’s market
freebee bridges two markets and can therefore gain market shares from
both
Trial marketing
Market research

9. Two types of competitors
Trial marketing
• Mobile coupons
• Printed coupons
• Sampling
Market research
• Internet and mobile surveys
• Traditional market research
• Focus groups
• Interviews
• Observations

10. Scenario – freebee at its best
Remember this one?
• Clients to freebee
Which questions and to whom?
• freebee to consumers
Effective distribution
• Consumers to freebee
Convenient offer collection and survey
completion
• freebee to clients
Fast actionable results

11. Client’s perspective – Trial marketing industry
Effective segmentation
Inexpensive
Viral
Shelf driving
Create awareness
How is the learn where your
Whatspecifically can that target your consumers
Spread the cost of the about your product product
Consumers awareness service product exists
Let consumers know youthey can find your through self-replicating processes
freebee
Mobile Coupons
Printed Coupons
Sampling
Create
awareness
Shelf driving
Viral
Inexpensive
Effective
Fast results
Respone
segmentation
accuracy and
quality
Consumer
insight

12. Client’s perspective – Market research industry
Inexpensive
Effective segmentation
Fast results
Response insight
Consumer accuracy and quality
What is gain thecan you target
How specifically of insights time when products
Can youthe the the the service of youryou need
Learnreliable is consumers thinkyour consumers them
How what cost insights in
freebee
Internet/Mobile Surveys
Market Research
Create
awareness
Shelf driving
Viral
Inexpensive
Effective
segmentation
Fast results
Respone
accuracy and
quality
Consumer
insight

13. Consumer’s perspective
Convenience
Availability
Low time
Reward consumption
Number of offers
At how myoffers from to Ime choose from
Amountmanyitplaces cancollect the offer offer
How easy isgain take the collect the offer
Whatlong doesforavailableoffer collect the
is of
it me for to to
freebee
Sampling
Printed Coupons
Market Research
Number of offers
Reward
Low time
consumption
Availability
Convenience

14. Testimonials
Number of downloads
(in thousands)
120
100
80
60
40
20
0

15. Scope of activities
Expand consumer base
Support
Activities
Research and development
App and client-web maintenance
Identify and connect new retail stores
Campaign Campaign
design distribution
Analyze &
present
results
Primary Activities
Marketing
& Sales

16. Value network – flow chart
Retail stores
Clients
Kuponginlösen
freebee
Consumers

17. Customer selection – Clients
• freebee’s services is best suited for FMCG companies
• Targeting the major FMCG companies
•
•
•
Most products to offer
More money to spend on freebee’s services
Facilitates international expansion

18. Customer selection – Consumers and retail stores
Consumers
•
•
•
freebee is available to all smartphone owners connected to
Android Market or App Store
Early focus on generation Y
Gained diversification through high app rankings
25%
19%
44%
Men
18%
13%
Women
56%
9%
8%
2%
0-19
20-29
30-39
3%
40-49
1% 1%
50-
Retail stores
•
freebee works with the major convenience store chains in Sweden

19. Method of value capture
Fee-for-Service and cross subsidization
•
•
Clients are charged depending on the services they use
Partnership – discounts on campaigns and analysis
Free
Initial fee
0 SGD
4000 SGD
Push notification
Campaign addons
Discount
2000 SGD
2000 SGD
Segmentation
2000 SGD
2000 SGD
facebook marketing 2000 SGD 2000 SGD
Campaign analysis
Analysis
0 SGD
0 SGD
Segment analysis
2000 SGD
2000 SGD
Product analysis
Customized
analysis
8000 SGD
-
8000 SGD
-

20. Market characteristics and strategic control
Weak appropriability regime
•
•
•
Hard to protect intellectual property
Easy to imitate
Small initial investment needed for new entrants
Moment 22
•
Critical mass of stakeholders
Strong network effects
•
More clients and retail stores attract and is attracted by more consumers
Dependent on an effective standard for coupon redemption
•
Everyone has to adopt this standard in order to compete successfully

21. Strengths and weaknesses
Strengths
•
Large and steadily growing number of
connected retail stores and consumers
•
•
•
•
•
•
2 000+ connected retail stores
100 000+ downloaded apps
Fast and high response rates
High data quality
Efficient segmentation possibilities
Great customizability of campaign services
Weaknesses
•
•
•
•
•
Highly dependent on external party
for coupon redemptions
Low barriers to entry
Low brand recognition
Highly imitable
No international experience

22. Opportunities and threats
Opportunities
•
Strengthen first-mover advantages
•
•
•
•
New Methods of value capture
•
•
•
Network effects
Brand recognition
Expand to international markets
View advertisement before offer collection
Share the offer on social networks before collection
Create and control a new and superior standard for coupon redemption
•
Create barriers to entry and possibility for receiving licensing/transaction fees
Threats
•
•
New entrants enter freebee’s market niche
Strong existing market research and trial marketing
firms enter the smartphone market

23. The future
Retail stores
Clients
Kuponginlösen
freebee
Consumers

24. Thank you for listening
Any Questions?