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A TOTAL of three—that was the number of enrollees R. A. Gapuz Review Center (RAGRC) had back in 1994 when they opened, offering review classes for those taking government board exams. But this did not deter founder Ray Gapuz from persevering in his then newly established business. Nowadays, their number of enrollees are in the thousands, so much so, that review and coaching sessions have to be scheduled in hotel ballrooms, mall cinemas and even big events places such as the Philippine International Convention Center and Araneta Coliseum. And get this—review classes are also beamed via satellite to other venues in the country. Of course, online review courses are also offered. Today RAGRC is the market leader among nursing review centers, getting the lion's share of 40 percent of the market among 55 documented review centers, according to its website. Just how did RAGRC succeed? Josiah Go, marketing guru and chairman of Mansmith and Fielders, Inc., points to market-driving strategies applied by the company. “Market-driving strategies define how a firm will embrace innovative changes in the industry logic and business system to grow its profit and industry’s demand from marginal and non-customers,” says Go. To do this, innovations may be implemented in the value proposition (what the company may offer customers), the business system, or both. Here are steps RAGRC took to succeed: 1. Give a new value proposition by: - Offering an intensive 10-day review course at 8 hours a day aside from the traditional 6-month review course at 3 times a week. The shorter review course allows nursing graduates to find work while providing RAGRC faster turnaround. - Holding review classes in hotels and malls instead of cramped classrooms. - Presenting the curriculum according to diseases regardless of age to remove any duplication encountered when doing it by specialization. This is well appreciated by the reviewees. 2. Innovate the business system by: - Going high tech and livening up review classes by holding it game show style and offering stimulating card games as reinforcement. This prevents boredom from setting in. Market-driving strategies are all about changing the rules of the game in order to attract new demand. They may just be what your company needs to be profitable and stay profitable. Josiah Go is conducting a seminar dubbed "Market-Driving Strategies: Executive Workout" on June 25-26 in Makati City and on July 14-15 in Cebu City. E-mail info@mansmith.net for details.

BY this time, most of my friends have already made their pick among the Selecta Gold flavors: Berry Strawberry, Chocolate Truffles, or Hazelnut Brownie. Which one is the best? We each had our own favorites. The three flavors are concocted by renowned Filipino chefs: J Gamboa of Cirkulo for Berry Strawberry, Rolando Laudico of Bistro Filipino for Chocolate Truffles and Sau del Rosario of Chelsea for Hazelnut Brownie. To find out which one is best, my brother-in-law bought all three. I bought a couple of pints too, when I’m not really a regular ice cream buyer (and if I do buy, it’s not Selecta). The thought, though, of having gourmet ice cream done by chefs was irresistible. Red Ribbon did the same thing, but with fashion designers. Rajo Laurel and Frederick Peralta designed beautiful tiered wedding cakes for brides-to-be to choose. Imagine saying, “My cake designer is Rajo Laurel.” Cool. HP also came out with a Vivienne Tam HP mini notebook that looks like a sleek designer clutch bag (in chic red!). Bring this to Starbucks and check your e-mail and you’ll be the envy of many. Tapping well-known designers and experts (like chefs) to collaborate on making your product may be more effective than getting a celebrity endorser. The expert, by working with you, gives the message that your brand is worth having an alliance with. You get to see how the expert can play with your product and improve it. And the customer gets the feeling that this is a limited edition of your product and so he has to get it. Result: product image gets a boost and sales may increase. Nice move.

Many tabloids in the country have been operating for a long time on a formula of scandalous attention-grabbing headlines and photos of sexy girls on the front page. One tabloid, Inquirer Libre, decided to take a different route. Using market-driving strategies, Inquirer Libre presented its product differently while targeting a new market. As explained by marketing guru Josiah Go of Mansmith and Fielders, Inc., market-driving strategies, the latest buzzword in market orientation, call for a breaking of the rules and changing the value proposition or business system or both to grow profit and demand from new and marginal customers. (See previous post here.) Inquirer Libre is a morning tabloid featuring short news and feature articles that can be read in 15 minutes. However, Go points out that unlike the other tabloids, it is given for free at MRT stations. There are no photos of naked women; the total package is wholesome. The target market consists of office people in their 20s and 30s on their way to work. “Instead of tapping the traditional newspaper dealers, Libre’s new channel is in the various train stations. This means no dealer trade margin and no sales returns,” says Go. Inquirer Libre also has a classified ads page that runs every Thursday, a new reason for the target market to read it. As a result of the market-driving strategies (give it out for free, go wholesome, go direct to the market at train stations, offer classifieds), Inquirer Libre is the leading free tabloid in Metro Manila and hit its ROI fast. Are you looking for a way to survive the cut-throat competition? Market-driving strategies may be the answer.

IT USED to be that company executives adopted a sales-driven market orientation--focus was on bringing in more sales so the factory had to churn out enough units to meet market demand. Then came the market-driven market orientation in the 80s. The customer is key in a market-driven orientation. The marketing objective is to retain customers and be better. This was followed by the customer-driven market orientation wherein customization is the key to reach niche markets. And now there is the market-driving market orientation, which Dr. Philip Kotler, the father of modern marketing, identifies as the fourth major market orientation. It focuses on playing a different game, of breaking the rules, rather than just being better. It was first brought up by Prof. Greg Carpenter of Kellogg Graduate School of Business in the ‘90s. “Market-driving strategies define how a firm will embrace innovative changes in the industry logic and business system to grow its profit and industry’s demand from marginal and non-customers,” explains Josiah L. Go, chairman and chief marketing strategist of Mansmith and Fielders, Inc., in his seminar called “Market-Driving Strategies: Executive Workout 1.0” held earlier this month at the Renaissance Hotel in Makati. Simply put, market-driving strategies are “game-changing innovation to create and conquer new market space while reinventing the business system.” Go adds that Blue Ocean strategy is a subset of market-driving strategies. Go further says that whereas market-driven strategies go for customer retention and loyalty, market-driving strategies pursue customer acquisition. Whereas the former’s performance is gauged on market shares gained, the latter’s performance is gauged on market penetration and acceptance. The target market of a market-driven market orientation is the customer or served market, while that of the market-driving market orientation are the non-customers and marginal customers—the unserved market. According to Go, market-driving strategies have three levels: first, those that involve changing the value proposition (the reason consumers buy your product or service); second, those that involve changing the business system; and third, those that involve changing both the value proposition and the business system. You first gauge where you are now, assess where you want to be, and plot how to get there using marketing analytical tools such as those developed by Mansmith and Fielders. One of the interesting case studies presented by Go to illustrate market-driving strategies is the case of Belle de Jour Power Planner. The idea of making a planner for women came to then 24-year-old Darlyn Ty who could not find a nice planner geared toward fashion-conscious women who also need to organize their schedules. Belle de Jour changed its value proposition by offering more than just a ho-hum planner: discount coupons, special women’s pages, time management tools and helpful tips in a visually appealing planner that does not look boring at all. It was also treated as a book instead of a magazine, thus giving higher trade margins to retailers. Because of this market-driving strategy, Belle de Jour planners have always been sold out since 2006 and total volume went up from 1,500 copies in 2006 to 50,000 copies in 2008. What is the impact of market-driving strategies on industries and economies? Go cites four: 1. Lots of efforts will be created in satisfying needs not yet satisfied 2. Better profits for companies instead of cutthroat competition 3. Better opportunities for employees to grow 4. All simplistic branding strategies will be red-flagged “Market-driving strategies can be applied to all businesses except when you are in a business where you have nothing to supply anymore—for instance, if a manufacturing facility is full or there is a lack of raw materials,” says Go. He also says these can be applied to small businesses but not to sari-sari stores in terms of the discipline in using analytical tools—in that case, one just has to look around and see what it needs to offer. "Market-driving strategies address the challenges of tomorrow's business," says Go.

AT a marketing seminar I attended last week, participants shared how their companies are affected by the global financial crisis. Two companies dealing with imaging equipment with head offices in Japan said their sales were a bit down this first quarter. A restaurateur in Greenbelt said sales weren’t as high too as before, but since Filipinos love to eat out, they’re still OK. Housewares exporter Cecilia Josef Gift Collection’s sales were likewise affected this first quarter, says Cecilia Ordonez, one of the partners. “We may have to be content with less and see up to what point we can fill in demand,” she says. Their case is interesting because not only are they coping with the global financial crisis; they are also part of the declining handicrafts and housewares industry in the country. To cope, Ordonez says, “We did some maneuvers.” (See this link to read about what they did.) “To survive in the business, you have to be aware of what is happening, be able to utilize current technology, and give the market what they want at their price,” adds Ordonez. In short, don't sit at a corner and lament declining sales--be creative in finding ways to clinch that sale.

CECILIA M. Ordoñez grew up seeing her parents meet American buyers, procure materials for orders, and package gift baskets and other products for shipping abroad. Amo Philippines Inc. was established in 1973 by Cecilia’s parents as a typical cottage industry doing gift baskets. The business grew and the company would join trade exhibits here and abroad. Cecilia and her siblings helped out in the company in finance, production and sales. While working for the company, though, Cecilia observed that management could have been stricter in running the company. The high level of inventory could have been controlled more. Controls could have been put in place to prevent pilferage. To make cash management more effective, cash advances to employees could have been given less freely. And so when Cecilia, a marketing graduate of De La Salle University and MBA graduate of the University of Asia and the Pacific, had the opportunity to put up her own business, she made sure she adopted measures to lower costs and allow for flexibility by not being tied up with fixed costs. She put up Cecilia Josef Gift Collection (CJGC) in Mandaluyong City with business partner Joseph G. Aguiting two years ago to fill in the market demand in the housewares industry. CJGC exports midrib peacock buri chairs, nursery chairs, baskets, and premium gift packaging items. It also caters to the local market by supplying the gift packaging needs of companies. Ninety-nine percent of its clientele are based abroad—U.S., Italy and Spain, among others. Learning from her experience at her parents’ company, Cecilia implemented the following measures to protect the bottom line: 1. Do away with middle staffing. CJGC has a lean organization. The partners are hands on in the business, with Cecilia overseeing operations and sales, and Joseph overseeing finance, staffing and management. 2. Have no warehouse. Without a warehouse, fixed costs are kept to a minimum. Products are made as orders come in. 3. Send people to the origin of materials or merchandise. Since the products used for their items are indigenous, production is made where the materials are procured, and in many cases this is done in the provinces. Trucks are sent to these “centers” to pick up finished goods. Prototyping is done in the Mandaluyong office, though. 4. Hire subcontractors at the place of production. In this way, the organization is kept lean while providing jobs in the countryside. 5. Be strict with quality control. Rejected output are accounted for and charged against the worker. “We developed our own business model,” says Cecilia. While the measures may seem radical to the pioneers, they may just be the things needed to survive and stay ahead in this highly competitive industry.

THERE COMES a time in every home-based business’ life when the entrepreneur is faced with a dilemma: To open a store or not? To have a real office outside the home or not? To grow big or stay small? Such is the dilemma currently faced by partners Analyn Arce and Joan Runes of The Peach Box, a home-based specialty food shop. Since the partners started the business in February 2006, majority of their clients would phone them and order party food trays like baked macaroni, fettucine carbonara, and chicken pastel and kesong puti spread. Starting with only P60,000 in capital, The Peach Box steadily gained clients, which only started among family and friends and bazaar/tiangge regulars. Now, people they don’t know who have sampled their food at parties or have heard of them through word of mouth call them for orders. To make it easier for people to get the food items, The Peach Box opened take out kiosks in tandem with the family-owned Arce Dairy (which sells ice cream and milk at the same kiosks) at Greenhills Theater Mall in 2006 and at Landmark Trinoma in 2008. Now The Peach Box has been offered a big space in a major mall which could be the perfect place to launch The Peach Box, the restaurant. While other entrepreneurs may be quick to jump at the offer, the partners are studying the matter carefully. According to Arce, here are the considerations they are weighing on whether to open in the mall as a restaurant: 1. Rent. Some malls charge a percentage of sales as rent, while others charge a flat rate per month. Mall rent can be very expensive. 2. Overhead. “With a bigger space comes bigger overhead,” says Arce. 3. Location. Not all restaurants do well in the mall. Is the location being offered good? Will the right traffic go there? 4. Size. Is the leasable space the right size for the business? While the prospect of having a full-scale restaurant may be exciting, maybe a cozy small café would be better? 5. Concept. Does the business concept fit the mall’s particular location and target market? On the other hand, the reason why Arce is entertaining getting mall space with seating for dine-in customers is so that more people will get the chance to try The Peach Box’s specialties. Should The Peach Box go big or stay small for the meantime? Entrepreneurs faced with the same dilemma must study all angles before signing on the dotted line in the mall rental contract.

SCHOOL will be out soon and that means lots of free time for students. This is peak season for those in the summer workshop business, be it in the field of academics (tutorial and review centers), athletics (sports centers), or arts (cooking, art, dance, and creative writing classes, among others). Among those companies offering summer workshops is Zero Gravity, which offers basic and intermediate streetdance theater workshops for preteens, teens, and adults. Located along busy Katipunan Avenue in Loyola Heights, Quezon City, Zero Gravity is right smack in student territory with schools like UP, Ateneo, Miriam, Kostka, and Multiple Intelligence International School, among others, just a stone’s throw away. This is good for the company since its target market is the student population. There are a lot of dance workshops being offered especially during summer, but what sets them apart, according to Rebie P. Ramoso, one of the owners, is “the element of theater. Other dance studios focus on developing dance skills. We put together dance, theater and multimedia arts.” As their tagline says it, “We don’t just dance. We tell a story.” This year’s summer workshops, for instance, will be composed of 16 dance sessions and 8 theater sessions. There are five dance teachers on board and one acting coach, Missy Maramara, a theater actor/director. For the culminating activity, they will be staging West Side Story. Rebie teaches dance in Miriam Grade School and noted that there was a need for a venue for students’ dance expression. School performances and competitions were not enough for them. That’s when Rebie, Kristine S. Calleja, and Karen Carlos decided to put up Zero Gravity. They started offering a summer dance workshop in 2007 and quickly saw very shy kids coming out of their shell once they go through the classes. “The fulfillment for us is not in mounting huge productions. It’s in seeing students improve,” says Rebie. Marketing efforts According to Kristine who handles marketing and events, to draw their target market in, Zero Gravity employs direct mail to exclusive villages. They also go direct to schools by putting up posters and giving away flyers. High traffic sites like churches are also visited so they can give out more flyers. Some time ago, they also placed an ad in the newspaper “but that was the worst [marketing effort,]” says Kristine. There was a lot of competition and they only got two respondents from that ad. The best way for them to draw their target market is through viral marketing—the use of the Internet, specifically their Multiply site. About 50 percent of their enrollees found out about them or got in touch with them through their Multiply site. This just goes to show that the youth are very much online and get their information more from the Internet than through traditional media like newspapers. Surviving the lean months But since workshops of this kind are very popular only in the summer, how do they survive the lean months? In 2008, Zero Gravity decided to offer regular classes throughout the year. They have also identified another income stream: offering their studio for rent—which could be a venue for rehearsals, seminars, workshops, and even parties. To maintain their competitive edge, Rebie says, “We keep ourselves updated with the trends abroad. We want to continue striving to be better in dance and in other kinds of art. We’d like to push the boundaries in art and keep growth organic.”

NEW downloadable applications are available at the iTunes store every day, but February 14, 2009 was extra special for Filipino techies. It was the day that a Filipino-developed application for the iPhone was made available for free to anyone interested around the world: the Council on Foreign Relations (CFR), a free news application developed by Vinta Solutions Inc. for the global organization CFR. To date, more than 4,000 downloads have been recorded in just two weeks' time so much so that the CFR application made it to top 12 downloads list on the iTunes AppStore. Majority of the downloads were made in the United States, with others made in Europe and Asia. Leonides De Ocampo, chairman and CEO of Vinta LLC (the US arm of Vinta Solutions, Inc.), says Vinta is just a small three-year-old family business that's into consulting and outsourcing. He is a mechanical engineer, while his brother, Leon Francis De Ocampo, is an industrial engineer. Both of them are graduates of the University of the Philippines. Leon heads Vinta Solutions, Inc. Leonides also pursued higher studies and finished MS in Mechanical Engineering at Duke University in the US. How Vinta bagged the CFR project is quite interesting. Since Leonides is very much interested in foreign relations and policy and would read the CFR website regularly, he thought of contacting the CFR offices in September 2008 (just when the global financial crisis unraveled and Lehman Brothers collapsed) to offer Vinta's services. Leonides noticed that a lot of news organizations are coming on board the iPhone and thought that CFR would be interested to do the same. "I just contacted them and they were very pleased," he says. "We provide very competitive rates." CFR is an independent foreign policy think tank. Its goal is to help people better understand the world and foreign policies. Even CNN, Leonides says, taps foreign experts from CFR to comment on foreign policy. Membership is stringent as applicants have to possess certain credentials. Among its members are former US presidents Bill Clinton and Jimmy Carter, former US secretary of state Condoleeza Rice, journalists Tom Brokaw and Diane Sawyer, and actress Angelina Jolie. In the CFR application for iPhone, people can read daily briefs about foreign news, and read expert opinions, interviews and analysis. "CFR sends us a huge chunk of data called a feed. We cut that data into pieces relevant to how the phone displays it," says Leonides. The application can also cache items (create local copies of data on the phone) so readers can go back to previously viewed items easily while connected to the Internet. Leonides says two Filipino developers worked on the CFR application--Luther Estares, a graduate of computer science in Mindanao, and Marni Reyes, a UP Los Banos computer science graduate. "The talent here is everywhere. The intellectual capital we have is very rich," says Leonides. Vinta is also pursuing similar mobile application and data processing projects globally, but the bulk of their work is in doing outsourced AutoCAD services. For mobile applications, current clients are based in the US and Germany. For AutoCAD, Vinta has clients in Canada and the Middle East. The company is also set to launch another free iPhone application in the next few weeks called SabiNila, a news aggregator for the Filipino community. Leonides admits it may be difficult to tap the foreign market at this time because of the global financial crisis. However, with "strong relationships with clients or a strong interest in their business, and the right timing to capture their interest," Filipino companies may be able to get new accounts abroad. He offers two tips for those wanting to tap the foreign market: 1. Go with what you're interested in. You'll then have insight in that market or area. 2. Immerse yourself in the latest trends. In Leonides' case, he noticed how people use phones much and merged this with his interest in foreign news. This gave him material for a proposal to present to CFR. Don't let geography limit you. With the right product, you can pitch that proposal to business prospects worldwide.

WITH THE expected slowdown in the Philippine economy this year as confirmed by the International Monetary Fund, entrepreneurs are finding ways to deal with the global financial crisis. “When the economy is down, nobody spends,” says Karat World top man Felix Gorriceta III. The times thus call for streamlining of inventory. “Stock up on what sells. We don’t experiment much on new merchandise, which we had the luxury of doing so before,” he says. At publishing company Adarna House, Emelina Almario, president, shares these strategies: 1. Streamline business processes. “We are auditing current business processes and looking at ways to improve them in terms of cutting costs.” 2. Manage risks. “Our various sales channels present different levels and types of risks and we are also looking into these.” 3. Practice prudence with resources. This goes for “electricity, paper and gas (even the small things count!).” Her daughter, Ani Rosa Almario, who co-owns The Raya School with partners, reveals they are holding off on tuition fee hikes “so as not to add to [the parents’] financial woes.” But there’s always opportunity in tough times. Gorriceta cites Henry Sy, who built his very first SM mall when the economy was hard up in the ‘80s. “Spaces are being offered now and it’s a good idea to grab them. But don’t just open [a store] anywhere. Choose places where you think you will profit, where business will prosper,” he advises. Indeed, during tough times, the tough gets going.