Marketing Analysis of Dexit Inc

Marketing Analysis of Dexit IncCase Analysis Report DexitIntroduction to Dexit Inc.In 2001 a privately held ho make intention ofhold known as Dexit Inc. (the debit entry Express play along) was formed by Renah Persofsky, a former member of the Bank of Montreals e-commerce subsidiary had left to pursue opportunities to a greater extent aggressively. The companys terminal was to provide customers with a new convenient and easy to use electronic requital system that would provide an alternative option to cash for low- look upon minutes. Dexit Inc. had expected that this electronic payment service to be used for a weensy transaction averaging a cost of approximately of $4, however in addition there was a belief that this service could possibly be used for purchases potentially as large as $25. The design of Dexits service would allow customers to pay for goods and operate by waving an electronic tag near a specialized reader that would be placed at a retail counter that would c onvey in a secure manner with Dexits central payment clearing system. This process would on average be completed in slight than three seconds which would generate fast no- hassle payments that could besides be tracked enabling users to monitor their low-value purchases. This system which has been extensively tested and deemed to be highly bona fide would be establish on Radio Frequency Identification (RFID) technology. With this technology a secure personal identification number in the customers tag would be read wirelessly by the merchandisers terminal.Problem IdentificationFlashing forward to today, Renah Persofsky (CEO) is facing critical decisions regarding the launch of Dexit Inc.s electronic payment system. Currently Dexit has attracted two of Canadas largest banks as early stage investors and as well Telus Mobility, the wireless subsidiary of the countrys second largest telecommunications firm. in all three entities cod expressed significant enthusiasm for Dexits wirele ss payment service however each wanted to see a firm marketing programme before commitment of further resources to Dexit. The key decisions that CEO Renah Persofsky faced in order to push ahead with the project had includeddeciding which merchants and consumers Dexits service would tar cash in ones chips which wouldshape the separate aspects of the marketing device.Determining whether any additions or changes needed to be made to the proceeds itself.Establishing the pricing dodging that Dexit would implement which would take into tarradiddle the value of the service to merchants and consumers and their ordainingness to pay.Create a promotional plan to reach each target audience and decide amid a Toronto-only launch, regional launch, or national launch in major(ip) Canadian cities.SWOT AnalysisStrengthsDexit has major companies like two of Canadas largest banks and Telus Mobility keep them which gives them huge area to look for. The new system is much much effective than t he previous ones launched in the market because it provides an efficient way to counterbalance retail minutes. The transactions are very secure and takes just three seconds for transactions to work due to Radio Frequency Identification (RDIF) technology.The company is targeting retail businesses characterized by high-frequency and low-value transactions by providing them with system which provides ease, speed and security. They are as well as targeting consumers who make lots of low transactions. They are providing customers with username and password so they can access their own account and keep track of their transactions. As for merchants they go forth be able to register for an account by providing basic information round financial institution to settle payments which will be executed on a daily basis by transferring funds electronically to the merchants bank. And for retailers they offered faster payment than cash, credits or debit. failingThe history of the product outsi de the firm has been unsuccessful due to merchants finding the payment process costly and inconvenient since they had to operate two separate terminals a traditional swipe reader for customer who used debit transaction and second to read the cards computer chip for stored value transactions. Also, with major company backing the company it is crucial for Dexit to provide them with positive result.OpportunitiesDexit has opportunity to establish itself in the largest market for digital transactions. It also has a chance to explore the global market as their long term plan which will help them to expand their market and develop sustained competitive advantages. It will also help Dexit to bring in new judgements, expand their horizons and strengthen their market value.ThreatsSince it is not easy to replicate the domestic market success globally it competency not father to same positive results. Other companies can also easily attain the technology which could increase the risk of los ing customers to the rivals. There are numerous opposite companies that allow customers to make electronic payments. Those companies give cards instead of key tags which means that customers will most likely stick to utilize cards since they are used to it. Also Dexit has just entered the market so it will take a while for the company to get customers. The company will have a hard term dealing with its competitors.Segmentation, Targeting and PositioningDexit Inc. are providing consumers an easier and faster methods of making their day-by-day transactions. The target for Dexit Inc. can be divided into the consumers and the merchants. Merchants can proceed a lot of time servicing a customer at a busy store and consumers could extradite a great amount of time avoiding line-up on their way to something important. Places like gas stations and fast food restaurants usually with a heavy customer traffic are potential merchant groups. Key tags will not only reduce the time it takes to processed with a transaction but will also reduce the amount of thieving from the cash register since everything would be done by electronic money. This will enable them to take more customer by avoiding walkaship canal. Merchants such as Esso, Tim Hortons, Mcdonalds are possible businesses that would benefit having Dexit receives at their locations. Dexits consumer market can be segmented by their work and lifestyle and attitudes. A consumers perception towards a fast food restaurants is to attain a quick service, even when it comes to making the payment for their purchase. Customers that usually rush to Tim Hortons are eager to each get to work or to an educational institute. The target market would vary from young adult to early 50s would are any employed or enrolled at an educational institute. According to Employment and Social Development Canada somewhat 81.6 percent canadian from ages 25 to 44 are employed and about 71.3 percent canadians from ages 45 to 65 are employe d. These employed canadian are always in a hurry to get to work on time and rushing back home base to avoid traffic. OCUL on their website states about 458,251 student across Ontario alone on their updated statistics August 2014. Dixits main focus should be towards targeting Canadian student and employed customers who use electronic payment methods to make their public purchases smoother and quicker. Imagine not requiring to take out your wallet and being able to make a payment through a key holder that is connected to you car keys, or being able to tell how much of you money was spend on everyday small expenses such as gas, coffee or morning breakfast. In Canada, the market size has been estimated to be about 536 billion dollars in the payment industry, with about 4.1 billion transactions made through debit and credit cards. These cards often get lost or stolen without consumers attention and are also misused by frauds that can cost consumes a great amount of money. Key tags on the other hand are quite secure since their have less chances of getting lost and consumers can easily notice if key tag is lost. Consumers would be feel more safe and secured to make smaller everyday transaction.Product StrategyThe core benefit in using Dexits payment system is to make is easier for consumers and merchant to make small amount purchases more efficiently. Small Purchases ranging from a dollar to about 25 dollars. This for everyday consumer would speed-up their ordering time and for merchants would speed-up the selling process. The product would also help consumer keep track of their small purchases with security. Key chain fob with the RFID technology is a very good payment system. Consumers would find it easier and more convenient to use keychain to make their small purchases. Consumers and merchants save time and also the risk of losing money. Consumer will no longer need to worry about giving exact change or worry about losing pocket change on their way to a nearb y store.Place StrategySince Dexits key tag is a brand new idea in the market, it would be better if the product is first tested out in a smaller market. Having Dexit Inc. promote their product nationally would be costly and very risk. If product not successful it could cost Dexit a huge amount on loses. To ensure the product is successful it would be beneficial is the company decided to introduce the product only in Ontario first. Dexit should focus on attracting market share in Ontario, since it already has a bigger population than other provinces. In 2001, the amount of interac direct payments equaled to about 755 million traction only in Ontario. There are about 6,551,298 interac direct users with about 116,241 merchants that also use interac. Currently in ontario the unemployment rate is about 6.9 percent, which is quite low. Student in Ontario have a quite large population.Price StrategyDexit Inc. makes to strategize the price they would hinge upon the consumers and their mer chants. Effectively balancing payments between consumers and merchants will lead to adoption by both and prevent them from seeking alternatives. To do this it is important to not charge either side in a way that they will perceive as detrimental.Consumers will not be charged upfront for registering or to acquire the RFID tag. This avoids creating an initial investment barrier between consumers and their service. Consumers wont need to invest to try out Dexit. or else they will be charged a small fee for each transaction. They will be attracted to use Dexit because of its convenience and time-saving capabilities. They wont mind paying the small transaction based fee. Instead they will focus on the opportunity to use a new, innovative, time saving technology.Merchants wont be charged a transaction based fee. This will encourage them to promote Dexit to customers using payment methods that do charge a transaction fee like debit or credit. This is one of the ways Dexit will use a push strategy. Instead they will be charged an upfront cost to have the reader installed in their store. Merchants are more likely to be ok with an upfront cost, seeing it as an investment to attract customers that use Dexit and a competitive advantage in terms of convenience. Customers who value their time and prefer convenience will choose locations that have Dexit readers installed. This is one of the ways Dexit will employ a pull Strategy.By balancing the be between merchants and consumers Dexit can encourage adoption among both groups. By receiving fiddling term payments from merchants and long term payments from consumers Dexit can smooth out their revenue, allowing them to better plan for future expansions and investments.Promotion StrategyThe main goal of Persofskys promotional strategy was to reach her chosen target markets. This could be determined by either a Pull or Push strategy. With a Push strategy, merchants are given incentives to promote the Dexit service. With a Pull strategy, a buzz is wee-weed around the product and helps increase the demand from consumers. A Pull strategy would work well for Dexit, based on the fact it is a product of major convenience, one that could contain on in the marketplace when promoted properly. When buzz is created around a product that can offer consumers something quick and tangible, it has a habit of catching on and allowing other consumers to see the benefits for themselves.With minimal cash flow, Dexit is forced to get creative with the promotional aspect of the product and company. Traditional advertising can be considered, along with gross revenue promotions and direct marketing. Traditional advertising is effective because it can be used on so many different channels, such as radio, newspapers, magazines and television. By using traditional advertising, Dexit can reach a large number of consumers through the wide variety of channels.Final recommendationWith Dexit being a new product, and this slip of tec hnology being new to consumers, it will be important to generate a high volume of sales in the early stages. This will require Dexit to penetrate the marketplace with low initial prices to gain as much traction as possible. The most plausible revenue model it to charge consumers a small percentage to use Dexit services. The consumers will most likely use Dexit due to its convenience and time-saving capabilities. Consumers will sacrifice the small percentage they will be paying for each transaction to save time at the checkout.In addition merchants can be charged when they purchase the Dexit POS terminals, this will create extra revenue for the company. Merchants will be likely to purchase the terminals because they want to attract consumers who are using Dexit, in hopes of having them enter their store instead of red ink to a competitors location. It will be important to try and sell the terminals to chain stores, who will place the Dexit terminal in all of their stores, and also r eceive a discounted price for bulk orders.Consumers should be able to receive the RFID tags for free, this will give the consumer a sense of nostalgia with the product and be more likely to keep it and attach it to a key-chain or store it in their wallet. If the consumers have to pay for the tag and then pay a charge each time they use it, they whitethorn feel like they are being taken advantage of and decide to use traditional forms of paying. Many consumers are very price sensitive and the spare tag charge whitethorn be ll it takes for them to stay away from Dexit.ContingenciesWith any type of business plan it is important to plan for unexpected events or choppy changes in the marketplace. These contingencies can stem from any part of the company or product that is being launched into the market and how they will change the original marketing plan that was developed before the launch.In the case of Dexit, there are many different contingencies that should be thought out and plan ned before launch.Firstly, a misadventure should be developed in the case that the equipment or software that is used in the Dexit tag is faulty or has some issues. This is a common type of puzzle with any product that involves technology as there is no way to guarantee with 100% certainty that the product will not falter.Secondly, a contingency should be developed in case the consumers do not catch on to the Dexit product and sales are lagging form initial estimates. This may include switching up the promotional strategy or targeting a different consumer group than originally thought. It will only take a short time period to see whether or not consumers are beginning to use Dexit or not and at that point a decision will be made to stay the course or switch up the marketing plan.