The Industry Analysis Project is the focus of the Marketing 1 course. This project is worth a total of 40% of your overall mark. The project has 3 Phases:

• Phase 1 (Group Industry Environmental Scan) worth 10%,
• Phase 2 (Individual Company Analysis) worth 15%, and
• Phase 3 (Group Presentation) worth 15%.

Please read the rubrics for all phases of the project in SLATE. This will give you an excellent idea of expectations and requirements.

Situation

Here is an example of a situation that you should consider when approaching this project:

• Imagine that you have just graduated from the marketing diploma program at Sheridan, and you have been hired as a marketing support person with the Nestlé company. You are working with brands such as Perrier and Pure Life in the marketing department.
• Your manager wants you to familiarize yourself with the bottled water market. He/she wants you to become familiar with trends in this market and the marketing activities of the various companies.  Your manager wants you to report your findings in the form of a presentation.
• Your analysis should focus on the Canadian/North American market.

Research

• You will want to search CREDIBLE sources on the internet as well as use online academic databases provided through Sheridan Library. Use the Marketing 1 Research Guide (http://sheridancollege.libguides.com/Marketing1) to get started with your research. You can also visit the Library for assistance with research including searching online, using academic databases, locating industry and company information, and for help with APA format.
• This project requires students to create a SWOT analysis. Students must research internal facts and external trends and put this information into the appropriate categories. You may NOT use a pre-made SWOT or analysis that someone else published on the internet. These sources include, but are not limited to the Sheridan Library databases, SlideShare, MBA Skool, PESTLE analysis, scribd, freeswotanalysis.com, Study Moose, and Marketing 91.

References

You are expected to use APA formatting for references.

• Detailed secondary research that is properly cited; in-depth analysis and professional documentation/presentation are essential. Use the APA Citation Guide (http://sheridancollege.libguides.com/citation_guide) to properly cite those sources.
• You must include an in-text citation after each point that you are listing in your report. This citation should include the author of the publication, the date of publication and the page number where the information you have included can be found. An example is (Smith, 2005, p. 57).
• You must also include a complete reference list (on a separate page) at the end of your report which includes a list of all of the articles you have used in your report in alphabetical order. Here are two examples of what a reference list entry should look like:

From Marketing magazine website:

Jones, F. (2004, October 14). Trends in Advertising. Marketing Magazine. Retrieved from www.marketingmag.ca

From academic database:

Warren, M. (2007). Do celebrity endorsements still work? Campaign, p.13. Retrieved from http://search.proquest.com/docview/227461444?accountid=3455

Instructions

• Form a group of 4 students.
• Choose any industry from the list attached in Appendix A (the bottled water market situation discussed earlier is just an example).
• Complete the Group Contract provided in SLATE and submit no later than Week 3 at the beginning of class. You must indicate your first 3 priority choices.  Topics will be allocated on a first come, first serve basis.
• Topics will be confirmed by your instructor.
• Please read the rubrics for all phases of the project in SLATE. This will give you an excellent idea of expectations and requirements.

PHASE 1 – GROUP INDUSTRY ENVIRONMENTAL SCAN (10%)

A scan of the Marketing Environment is an essential step in developing any marketing strategy or plan. You need to understand the customers, trends, the competition and the external factors that may impact decisions.

Reference Chapter 2 in the text for an overview of each environmental force that you will research for your report.

Research

In order to complete your Industry Environmental Scan, you will want to conduct a significant amount of secondary research using the internet and the Sheridan databases. Use the Marketing 1 Research Guide.

• Although this is a group project, each group member is expected to find at least 6 references for this report. Each group member will submit their 6 references with the assignment.
• You are expected to have at least 4 trends in each category.
• Only include references that are current within the last 3 years.
• Students must research external trends and put this information into the appropriate categories. You may NOT use a pre-made SWOT or analysis that someone else published on the internet. These sources include, but are not limited to the Sheridan Library databases, SlideShare, MBA Skool, PESTLE analysis, scribd, freeswotanalysis.com, Study Moose, and Marketing 91.

Instructions

• Your report should cover Demographic, Socio-cultural, Economic, Technological, Competitive/Industry and Regulatory forces affecting your selected industry. These are forces that are external to any specific company.
• For each fact that you uncover, you will need to determine whether it is an opportunity or a threat. Opportunities are facts that can have a positive influence on the industry. Threats are facts that can have a negative influence on the industry.
• Place an ‘O’ beside facts that are Opportunities and a ‘T’ beside facts that are Threats.
• Once you have categorized your Opportunities and Threats, you should explain why it is an Opportunity or Threat. What is the potential impact on the industry?
• Place the name of the group member beside each of the points that they have contributed to the report (see sample). Each group member will submit their 6 references with the assignment.
• This analysis should be submitted in a Microsoft Word document. Use Arial/Times New Roman 11 point font. Include a title page.
• Provide one electronic copy in SLATE per group.
• Each group member will submit their 6 references with the assignment.
• All must be submitted on time to avoid a late penalty.
• The grading rubric is provided in the Assignment folder. Review this prior to report submission.
• An example of the format you can use based upon the eReader industry will be provided by your instructor.

PHASE 2 – INDIVIDUAL COMPANY ANALYSIS (15%)

Each group member will conduct a thorough analysis of one of the companies that competes in the industry selected. You should select a PUBLIC company for your project as there will be more information available to you. Your group is required to confirm which company will be assigned to each group member by Week 3.

Format

You are expected to include the following information in your report:

Instructions

• This analysis should be submitted in a Microsoft Word document. Use Arial/Times New Roman 11 point font. The size of the report will be in the area of five to ten pages. Include a title page.
• Use in-text citations and include a reference list at the end of the document.
• You may NOT use a pre-made SWOT or analysis that someone else published on the internet. These sources include, but are not limited to the Sheridan Library databases, SlideShare, MBA Skool, PESTLE analysis, scribd, freeswotanalysis.com, Study Moose, and Marketing 91.
• Please provide one electronic copy in SLATE per person.
• All must be submitted on time to avoid a late penalty.
• The grading rubric is provided in the Assignment folder. Please view this prior to report submission.
• An example of a Company Analysis for Kobo will be provided by your instructor.

phASE 3 – Group Presentation (15%)

Presentation dates to be assigned by professor

With your team, prepare a PowerPoint presentation of your Industry and Company Analyses.

Your presentation should be a minimum of 10 minutes – maximum of 15 minutes long, no more and no less. This will be followed by questions from your professor. Presentation timing should be evenly split amongst group members. At the 10 minute mark, if group members have not yet presented, your professor will stop the presentation and use the remaining 5 minutes to hear the students who have not presented. A student who does not present will receive a zero.

Format

Instructions

• You should include a wide variety of changing graphics to make your presentation informative and persuasive.
• The presentation should use APA format for citing information (see example of format posted in SLATE).
• ALL team members MUST present. IF A TEAM MEMBER IS NOT PRESENT, THEY WILL RECEIVE A ZERO ON THE PRESENTATION PORTION OF THE ASSIGNMENT.
• Presentations should be developed in PowerPoint.
• A presentation schedule will be developed once the class teams are finalized.
• The dress code is business, semi-casual for the presentation.
• Please provide one paper copy of the complete presentation in class, and one electronic copy in SLATE. Both must be submitted on time to avoid a late penalty.
• The grading rubric is provided in the Assignment folder. Please review for specific expectations.
• An example of a Presentation will be provided by your instructor.

COMPANY ANALYSIS: KOBO
Prepared for: Professor Bureau
Prepared by: John Sweeney
June 15, 2013

A. COMPANY BACKGROUND

History

Kobo was founded in 2009 and 58% owned by Indigo Books and Music. The first Kobo eReader was
sold in 2010 (Euromonitor, 2012, p 1). The company was sold in 2012 to Rakuten Inc, the largest e-commerce company in Japan. Kobo’s headquarters are in Toronto, ON (Euromonitor, 2012, p 1). Kobo not only manufacturers their own brand of eReaders, but has also developed tablets and applications for the ipad and android platforms (Euromonitor, 2012, p 1). Kobo was named by using an anagram for the word ‘book’ (Creative Keys, 2013).

Size and Growth

Kobo currently has 14.5 million registered users (“Kobo bucks softening”, 2013, para 2). While most of these users are based in Canada, it is estimated that 15% are based in the United States (kobocafe, 2013, “Kobo’s bet to double down”). Kobo estimates that it has 45% share of the Canadian eReader market (Kozlowski, 2013, para 1) and 20% of the global eReader market (Hoffelder, 2013, para 2), (kobocafe, 2013, “Kobo brings the joy of ereading”). It is estimated that Kobo is responsible for close to 50% of digital ebook sales in Canada and close to 20% in other markets (kobocafe, 2013, “Kobo’s bet to double down”). The eReader market is estimated to be worth $250 billion globally (kobocafe, 2013, “Kobo’s bet to double down”). Kobo sales have been estimated at $93 million in 2011 (PrivCo, 2013). Kobo sales have been growing rapidly in the past year. Kobo reports that their Q1 2013 sales are up 145% vs. the same time period in 2012 (kobocafe, 2013, “Kobo’s bet to double down”).

B. SEGMENTATION CHART

The following chart outlines two customer segments for the Kobo eReader:

The primary segment for Kobo is the Passionate Reader. This group is interested in ‘reading’ functionality and applications and less concerned about other cutting edge technology. They want a wide range of reading material available that is easily accessible and easy to read. They want to be connected to other readers as part of their social life. Reading is a serious hobby for them and they spend a lot of time doing it (World Newsmedia Network, 2012, p 85). The Parental Educators may be likely to lean towards a tablet, which offers greater functionality that may be more child-friendly and provide more interesting learning applications.

C. 4 P’S
Product (Kobo, 2013)
• Kobo offers a range of eReaders of different size, functionality and prices (Purewal, 2013, para 1). See the chart below for a brief description of each device (“E-Book Readers”, 2013), (Kobo, 2013, “Technical Specs”):

• Kobo sells two models of tablet – Kobo Arc and Kobo Vox. See the chart below for a brief
description of each (Kobo, 2013, Technical Specs) :

• Free Apps: To ensure that customers can purchase and read Kobo ebook offerings, Kobo offers free applications for Apple products, android, Blackberry and PC/Mac devices to enable the reading of Kobo ebooks (Kobo, 2013, Free Apps)
• Huge Selection of Books: Over 3 million Ebooks are available for Kobo (Kobocafe, 2013, “Kobo brings the joy of reading”)
• Accessories: Kobo sells accessories for the Kobo device such as skins, kobo covers and sleeves, and a variety of power sources (Kobo, 2013, Accessories)
• Warranty: Kobo provides a 1-year Standard Limited Warranty on all of its devices (Kobo, 2013, Help)
• To help customers understand the benefits of eReaders, Kobo’s website provides information and a video (Kobo, 2013, What is eReading?)
• Recycling: Kobo provides an eRecycling program for the safe disposal old Kobo eReaders and tablets (Kobo, 2013, eRecycling Program)
• Printing: E Ink print on paper reading environment simulates the experience of reading a paper copy of text (kobo, 2013, Kobo Touch overview)
• Storage: EReaders can carry over 1000 books on one device (Kobo, 2013, EReaders)

Price
• Kobo offers a range of devices at varying price points reflecting their functionality (Best Buy, 2013)
• Kobo generally offers good value for the dollar vs. the competition (Euromonitor, 2012, p 2)
• Kobo provides a manufacturer’s suggested retail price (the price that Kobo recommends that retailers sell for), but retailers can set their own prices and discounts (Kobo, 2013, eReaders)
• Kobo ebook prices range from free to $19.99 (Kobo, 2013, eBooks)
• Prices range from $39.99 for the more limited functionality of the Mini to $299 for the Arc tablet.

See the table below for the prices of the Kobo, Kindle and Sony eReaders:

Place

• Kobo is distributed in over 17,600 retail outlets worldwide (kobocafe, 2013, “Kobo’s bet to double down”).
• North American retail outlets include Best Buy, Indigo-Chapters, Toys R Us, Target, Walmart, Future Shop, Staples and The Source (kobocafe, 2013, “Kobo Announces Family of Ereaders”)
• Kobo has a partnership with the American Booksellers Association and its membership sellers Kobo products (kobocafe, 2013, “Kobo Announces Family of Ereaders”)
• Kobo’s rapid global growth has been a result of its retail partnerships worldwide (kobocafe, 2013, “Kobo’s bet to double down”)
• Kobo distributes its eReaders online from the kobo.com website, selling to Canada and the United States (kobocafe, 2013, “Kobo Announces Family of Ereaders”)
• Ebooks are sold in over 190 countries (kobocafe, 2013, “Kobo’s bet to double down”)
• eReaders are sold in Canada, France, Austria, Belgium, Italy, Germany, Spain, Portugal, UK, Netherlands, New Zealand, Australia, Japan , Brazil and South Africa (kobo, 2013, Where to buy)

Promotion

• Kobo Pulse is a social eReader application that encourages interaction between kobo readers (kobo, 2013, “A New World”)
• Kobo Reading Life tracks what you have read, how long it has taken you to read it and assigns award points for reading achievements (kobo, 2013, “A New World”)
• Television commercials launched in May 2013 focused on two target groups: mothers reading to their children at bedtime and those who are passionate readers.
• Kobo tripled their advertising spend to produce and air these new advertisements (Krashinisky, 2013, para 2)
• Kobo Writing Life scholarship awarding tuition for three aspiring writers to writing courses (kobocafe, 2013, “Kobo and Curtis Brown Creative”)
• Kobo website provides excellent overview of all devices and ebooks as well an e-commerce functionality (kobo, 2013)
• Kobocafé is an updated website offered by Kobo to provide people with an easy way to access industry news and company information (kobocafe, 2013)
• Kobo’s Affiliate program pays 5% commission on ebooks sold and 10% commission on devices and accessories sold (kobo, 2013, Affiliates)
• Kobo offers marketing programs for retailers through American Booksellers Association, including in-store displays, promotional material, contests (American Booksellers Association, 2013).
o An example of the American Booksellers Association promotional program is a Mother’s Day promotion offering a free ebook with the purchase of any Kobo device (American Booksellers Association, 2013)
• Kobo has a YouTube channel which highlights the brand’s commercials, interviews with authors, Kobo tutorials for their devices and detailed product information (The Kobo Channel, 2013)
• Kobo is Facebook’s exclusive reading partner, providing readers with a forum to communicate and share (Kobo, 2013, Affiliates )
• Kobo uses Twitter to regularly update new book additions and customer reviews (kobo, 2013, Twitter)

D. COMPETITIVE ADVANTAGE

When Kobo initially launched in 2010, it was launched at a very low price point when compared to the competition (Grant, 2011, para 2). Kobo has focused on providing a range of eReaders, ebooks and applications that will allow customers to read anytime, anywhere and anything that they are interested in.  Kobo is not the innovator in the market. While their eReaders provide comparable functionality, they
often incorporate the functionality after the competition but at a good price point.  Kobo’s competitive advantage is being able to offer excellent value to a broad range of readers by  providing good functionality at a reasonable price point. They also strive to connect passionate readers  through social media networks to heighten the reading experience.

E. SWOT ANALYSIS

Strengths

• Kobo Pulse integration with social media (Velazco, 2011)
• Named the best eReader by the Wall Street Journal (kobocafe, 2013, “Kobo’s bet to double down”)
• Over 3.5 million ebooks available (Kobo, 2013, About Us)
• Broad range of content across age ranges kobocafe, 2013, “Kobo’s bet to double down”)
• Partnership with Chapters in Canada and other major retailers worldwide (Koslowski, 2013, para 1)
• Ebooks are available in 190 countries across 68 languages kobocafe, 2013, “Kobo’s bet to double down”)
• Kobo Writing Life platform for independent authors to self-publish their work (kobocafe, 2013, “Introducing the Kobo Writing Life”)
• Strong independent bookseller network (Freeman, 2012, para 1)
• Attractive pricing with comparable functionality (Euromonitor, 2012, p 2)
• Aquafadas acquisition to provide more rich multimedia content including academic, kid’s books, magazines and comic books (“Kobo Inc.”, 2012).
• Acquisition by Rakuten provides greater financial resources (Euromonitor, 2012, p 1)

Weaknesses

• Limited functionality versus tablets

• Rated lower than competitive eReaders by Consumer Reports (Consumer Reports, 2012, p 2)
• Low single digit market share in the U.S. market (Greenfield, 2013, p 1)
• 20% share of the global ebook market (Hoffelder, 2013, para 2)
• EReaders are only available in a dozen countries (Greenfield, 2013, p 3)
Strong Canadian sales (Euromonitor, 2012, p 1)

Opportunities

• Growth in self-published books (Campbell, 2013, para 2)
• Baby boomers/seniors have more leisure time (Statistics Canada, 2009, para. 20)
• Large global market for ebooks (Bensinger, 2013, para. 3)
• Aging population (Statistics Canada, 2012)
• Advertising space is being sold on competitive eReaders (Warc, 2011, para 1)

Threats

• 53% of consumers intend to buy a Kindle (Ipsos, 2012, para 9)
• People are spending more time on the internet (CBC News, 2012, para. 2)
• Tablet computers use colour, graphics, apps and touch technology (Bensinger, 2013, para .10)
• Pirating of ebooks (Pogue, 2013, para. 17)
• Significant competitive pressure from Apple, Amazon and Sony (Euromonitor, 2012, p 2)

• Competitors spend large amounts on media (Del Rey, 2013, para 5)

F. POTENTIAL ACTIONS

1. BUILD ON A STRENGTH
• Further develop and exploit the social aspect of the Kobo eReader.
o One of the strengths of the kobo is its integration with social platforms and the ability of kobo readers to interact. Kobo should further develop the social aspect of the kobo by providing more opportunities for readers to interact and share opinions and knowledge.
2. CORRECT/MINIMIZE A WEAKNESS
• Ensure functionality meets the varying needs of the serious reader, such as ease of outdoor reading and font sizing.
o One of Kobo’s weaknesses is that it only offers comparable functionality. Kobo should understand the needs of its ‘serious readers’ and quickly match important components of functionality with the competition.
3. EXPLOIT AN OPPORTUNTITY
• Create eReader packs for traveling baby boomers/seniors focused on different interests i.e. best-sellers, classics, gardening, politics, etc.
oBaby boomers and seniors have more leisure time and Kobo could create and bundle books along different interest areas providing added value to their customers.
4. EXPLOIT AN OPPORTUNITY
• Develop a distribution network outside of North America
o There is a large global market available for eReaders. While Kobo has a strong share of the Canadian market, they have had significant difficulty penetrating the US market. Kobo should set up partnerships with retailers in the large markets outside of North America to grow sales.
5. MANAGE A THREAT
• Research the importance of advancing technology with key customer groups

o Tablets are a significant threat to the eReader business. The functionality, colour, applications and touch technology available with tablets could sway consumers to choose a tablet instead of an eReader device.
6. MANAGE A THREAT
• Aggressively promote that Kobo content is compatible with smartphone, tablet and android systems
oA significant number of people do not own an eReader device. Providing compatible content for other devices and operating systems will grow Kobo’s share of the digital ebook business.