WEEK 9: MARKET IDENTIFICATION AND SIZING
In this blog, we evaluate our market size and share, develop the TAM, SAM, and SOM, generate hypotheses, and interview ten individuals. I learnt how to complete the TAM in this exercise since it is my responsibility to do the TAM. Before calculating the amount of our TAM, I conduct research on the Total Available Market. I also noticed that the Philippines has a population of 112,508,994 people in 2022, according to the Philippines Population Density Map. I learned also that in the year 2020, there will be 1.77 million OFWs and 1.71 million OCWs, according to a statistical overview. We estimate that 0.045 percent of the population is in need of these services, resulting in 4.57 million persons in need of these services. The Philippines is not a large country like Russia, Canada, or China, but we all know that we have a hundred million people living here, not to mention a lot of tourists and visitors from other countries, and if everyone purchased, we could make a hundred million dollars in net revenue.
HERE’S WHAT WE THOUGHT
Ride Hailing Cab/ Transportation Network Company revenue amounts to Millions of dollars and courier service business is as big that houses multi-million revenue. Deploying Applications on platforms are costs money. COVID-19 restrictions will hinder some of the operations.
SO HERE’S WHAT WE DID
Did a thorough research and went back to knowing the Customer Segment (Mass Market) did an interview of 10 people and consolidated the responses Narrowed down the potential target Market and analyzed COVID-19 hindrances. Adjusts services based on what level is the area of coverage.
SO HERE’S WHAT WE FOUND
TRANSPORTATION NETWORK COMPANY BUSINESS / RIDE HAILING CAB BUSINESS it was predicted by Statistic Research Department on 2021 that revenue of the public transportation in the Philippines is amounted to $855 MILLION (Php 44,782,335,000.00) which forecasted by the year 2025. Annual Grab Report Year 2021 Released: January 2022
SO HERE’S WHAT WE FOUND
Competitors like Grab Holdings amounts $675 Million (Php 35,354,475,000.00) estimation of net revenue from 2020 to 2021. Though 2020, Grab took a loss of 26% of its earnings but slowly going racking up sales.
COMPETITORS: GRAB, MAXIM AND PADYAK
GROWTH POTENTIAL 16% — Android developers over $5,000 a month 25%- IOS developers over $ 5,000 a month As of April 20, 2022 — $ 5,000- Php 261,885.00
SO HERE’S WHAT WE’RE TRYING TO DO
FORMATIVE YEARS FORECASTED 1–5 YEARS OF SERVICE AND BUSINESS
TRACKING COURIER AND CUSTOMERS DOWNLOADS BY ADVERTISEMENTS
FREEMIUM MODEL
Instead of charging users for a fee from the start, freemium apps allow users access to basic features. However, to access premium features, users are required to pay a fee. This is renewed on a yearly basis. Bagahe Padala App and Services will have Premium Services where every transaction has a reward points. Accumulated reward points can be redeemed for free ride and or other reward options.
WHAT WE’RE GOING TO DO
DON’T BURN THE BUSINESS IN THE FORMATIVE YEARS.
PHASE 1: 1–3 YEARS THE APP WILL SOLELY FOCUS ON TARGET MARKET (OFW’S/BALIKBAYANS, SARISARI STORE OWNERS, AND TRAVELLERS/VACATIONERS).
Condition for proceeding: WHEN LOSS, DEBTS ARE FULLY PAID AND FULLY RECOVERED.
PHASE 2: FOLLOWING YEARS we will expand to courier service, allowing small items delivery and two-wheeled couriers partake on the business.
Market Type Hypothesis
NEW PRODUCT TO EXISTING MARKET AND TRYING TO RE-SEGMENT THE MARKET.
HYPOTHESIS
· There is a strong interest in Bagahe Padala App and services on potential customers, as they believed it will lessen their wasting a lot of time waiting for vehicles and do heavy lifting of their baggage because they have scheduled transportation ahead of their arrivals through the app.
· The potential market customers are willing to pay for the Bagahe Padala App and Services at the expense of convenient and hassle free ride.
TEST
· INTERVIEWS ON POTENTIAL MARKET CUSTOMERS (OFW/BALIKABAYAN, VACATIONERS/TRAVELE RS and SARI-SARI STORE OWNERS)
· INTERVIEWS ON POTENTIAL MARKET CUSTOMERS (OFW/BALIKABAYAN, VACATIONERS/TRAVELE RS and SARI-SARI STORE OWNERS)
RESULT
· Age bracket of 19–50 were interviewed. The results are as follows: 80% of them said they are interested in the application and are willing to pay for it. Some positive response are the following: “Yes I am interested. There is really a hassle in bringing a lot of purchased good especially that I am bringing my kids with me.” “Yes, I am willing to pay. As long as I won’t experience hassle with my baggage.” “Yes because it will be convenient and less hassle for our part as travellers.” “As an OFW it will be a solution to my years of pain bringing my heavy pasalubong and blaikbayan boxes.” 20% of them said they don’t need this application as they have their own vehicles to whenever.
· 50% of the interviewees responded they would want an affordable fare of less than Php 100.And, other 50% would be willing to pay for more than Php 100 per transaction. 90% of the respondents are ANDROID users. Hence, the team would take serious considerations on the android application development, as the large portion of the potential customers are using android. The team would also like to focus on ANDROID app development in the first year of service and will go venture on IOS on the following year.