BASIC MARKETING 18th Edition by Jerome McCarthy William Perreault, Joseph Cannon

تمرين 41

Bright Light Innovations: The Starlight Stove*
*This case is based on a business plan written by Ajay Jha, Sachin Joshi, Katie Lucchesi, Dan Mastbergen, Ryan Palmer, and Chaun Sims.
The top management team of Bright Light Innovations is preparing to meet and review their market situation. The team is a combination of students and faculty from Colorado State University's (CSU) Colleges of Business and Engineering: Dr. Bryan Wilson, Paul Hudnut, Ajay Jha, Sachin Joshi, Katie Lucchesi, Dan Mastbergen, Ryan Palmer, and Chaun Sims. They are excited about the Starlight Stove product they have developed-and passionate about the opportunity that it provides to improve the quality of life for some of the world's poorest people. They know they have a great technology, but they need a marketing plan to bring this product to market.
Every day, over 2.4 billion people-more than one-third of the world's population-burn solid biomass fuel (wood, charcoal, dung, and coal) for cooking and heating. These fuels are usually burned indoors in open pits or traditional cook stoves. About two-thirds of the people using this fuel also have no electricity, so the open fires often burn into the night to provide light. These fires create indoor air pollution that is a leading contributor to respiratory diseases in these countries. U.N. Secretary General Kofi Annan has called for greater energy efficiency and noted that "indoor air pollution has become one of the top 10 causes of mortality and premature death." It is estimated that this source of pollution contributes each year to the deaths of 1 million children under the age of 5, and it is a leading cause of miscarriage and women's health problems.
Hoping to address these consumers' needs for safe cooking and electricity, CSU's Engines and Energy Conversion Laboratory developed the Starlight Stove. The Starlight Stove's improved technology requires 50 to 70 percent less biomass fuel than traditional stoves. It also has a thermoelectric generator that converts heat from the stove into electricity that can power a small lightbulb or be stored in a rechargeable battery for later use. The technology has been refined, and the team believes it is ready to go to market.
There are other competing enclosed cookstoves, but none produce electricity. Solar panels can provide electricity, but they are expensive-costing $360 each. Micro-hydropower allows households to convert the power from streams and rivers into electricity, but homes must be close to a river and water flow in many areas of the country is seasonal. These technologies-solar panels and hydropower-are understood by many consumers and are already in use in some areas. The Starlight Stove, on the other hand, offers a new technology, and that may slow its adoption.
The management team decided on Nepal as the initial target market for the Starlight Stove. Several factors made this market particularly attractive. The climate is relatively cold and only 11 percent of the households have access to electricity, so the heat and electricity production of the stove are particularly beneficial. Eighty-eight percent of the population uses firewood as their main source of energy. In addition, deforestation creates environmental problems in Nepal because it contributes to erosion and flooding. So the social benefits of the Starlight Stove will be particularly appealing to the Nepalese government and aid organizations.
There are approximately 9.2 million households in Nepal, but the gross national income per capita is only about $400, with most adults making between $1 and $3 per day. Nepal is largely rural, with only 17 percent of the population living in urban areas. The country is divided into 75 districts. Each district is further divided into about 60 village development committees (a sort of local government) consisting of about 450 households. The similar characteristics of northern India-immediately south of Nepal-make it a logical follow-up market.
The Starlight Stove offers several benefits to this population. For example, the longer hours with light-thanks to the electricity-and less time required to collect wood or other fuel could allow families to earn money by weaving, farming, or producing other crafts. Family productivity could increase 20 percent or more per day. Or the added hours with light might allow children to gain an education. If the product were manufactured locally, it could provide jobs for the population and help them learn the benefits of technology.
With obvious benefits for such a large number of people, the Bright Light Innovations team could look to donations to subsidize the Starlight Stove for the Nepalese people. But the team has concerns about this traditional form of aid. Financing in the form of grants, government relief, or donations is unreliable. If it is not renewed, projects wallow or die. Further, grants often fail to teach disadvantaged people skills and responsibility. So the team wants to create a sustainable venture that provides benefits for all-and has set up Bright Light Innovations as a for-profit business.
The management team has to make a number of marketing decisions. For example, it has to decide how to price the Starlight Stove. It estimates that the stove will cost about $60 to manufacture after setting up a plant in Nepal and expects that microfinancing organizations will provide loans for families. If units are sold for $80, the loan can be financed at 20 percent interest for three years with payments of $0.68 per week (microfinancing institutions typically collect on a weekly, or sometimes daily, basis). The team thinks that it will be easy to find a microfinancing institution to provide these loans. But the team is still unsure about whether this price will provide adequate margins for distributors.
The team also has to decide how to promote the stove to a population where less than half the adults can read. However, the team does have contacts with some business leaders, government officials, and nongovernmental organizations that may be able to provide advice and help.
What should be the marketing strategy of the Bright Light Innovations team for the Starlight Stove? Why?