Executive Summary
This report has investigated Salpha Energy L.T.D (Salpha) , An independent solar products distributor, located in Lagos, Nigeria. The report provides brief information about Salpha and how they are positioned . In this report I will discuss the different segmentation groups as well as Salphas targeting strategy. I considered the use of the marketing mix to develop a recommendation fo alpha energy to improve their Marketing strategy. Furthermore, we will use the PESTLE analysis to evaluate Salpha Energy efficiency pithing the different factors. All the analytic tool mentioned above were used to come up with the recommendations for Salpha to reach their objectives which as the Lagos branch manager stated “ A strategic concept in the solar market of Nigeria to make to make the company a leading retailer “.
The current problem Salpha Energy is facing is the fact that they want to expand further in the country and globally, that is of course id they have supportable growth.
The report has been conducted an STP analysis on the company, which will be able to provide Salpha Energy with a variety of options with potential customer bases. It also identified where Salpha Energy ranks in the market, and then concluding that Salpha is Well positioned in a Niche market
Overview
Salpha Energy is a Solar distributor and consist of an installation unit that sells solar products such as; Solar power radios, solar lamps, solar panels which range from 500w to 5kw. Their head office is located in Ikea Lagos Nigeria, which is a popular business district in the country. Which makes it a very popular spot for tech gurus to purchase. There are also major problems in that area to do with electricity in that are despite it is the major technology hub in Lagos. Salpha has taken advantage of this fact and sold over 5,000 solar lamps and 200 solar panels which had helped the area to become really solar sufficient and this gave Salpha energy its presence in the market.
The branch is open six days a week : Monday to Saturday. The opening is from 10 am to 5pm.
Salpha has a wide variety of solar product which are rare to find in the state, especially as they import from China and France.
Market Segmentation
Market segmentation is the act of sub-dividing larger groups into smaller ones, who share similarities, to classify them to their characteristics (Dubb and Simkin,2008; Smith 1956) This is what the report I have conducted hopes to do for Salpha; to help them understand their current and potential customers, allowing them expanding their niche market(Cahill,1997,Chaston 2004).
1.) Geographic Segmentation: Salpha is placed very strategically: however it still maintains a central position in the middle of a busy industrious city. Its location it very ideal as it gives alpha the advantage as consumers see their products on the way to the Ikeja mall. The store is also uniquely designed with solar panel on the roof and the building is painted bright yellow and black on the ceiling to embody the brands logo. There are also solar panels on display outside the shop as well as a special show room inside the building display and test the solar products. Geographic Segmentation is real important for Salpha Energy since currently it is not a very large company. By realizing that their customer base is mainly homeowners and small businesses that are trying to be energy sufficient and also on a budget. This is how Salpha Energy catered to their geographical Segment:
a.) Climate: with Lagos’s hot weather condition, Salpha offers a range of Solar products, which will entice the customers that are interested in saving on energy bills. The sun is Very vibrant in the city and will be able to allow the devices charge efficiently with no obstruction of rain.
b.) Location: As aforementioned, Ikeja,Obafemi Awolowo Way, is a residential area, with new homeowners developing interest in making their home energy efficient, which will save them a lot on alternative options like; Generators. Thus Salpha benefits from being situated in a developing residential area. However to utmostly provide an incentive for people to come into their shop.
c.) Culture: The culture in Lagos is not energy efficient state and this is a setback for Salpha as many of the customers are reliant on fossil energy.
2.)Demographic:
Age group What Salpha can do to entice them
Teenagers & young adults The can create leaflets informing the of the benefits of renewable resources e.g. Solar energy . Offer discounts to students
Older Generation Providing them with delivery options for their solar panels to be delivered. Introduce payment plans for solar installations
Age: Salpha could easily start targeting their customers by enticing them through things that would seem exciting or interesting to their age group:
Psychographic: This would look at the social class, lifestyle and personality of the customers of Salpha Energy.
There are several Lifestyle segmentation models, but fo the case of Salpha energy it seemed suitable to use the Young & Republican’s Cross-cultural consumer Characterizations (examstutor.com, 2015):
Behavioral Segmentation:
Occasional : Currently Salpha are not offering this, but they do seek to provide flexibility in delivery, payment and installation providing they are given a notice in advance.
Usage rate:
On the go Customers If they are heavy usage customers, Salpha operates a referral reward system.
Specialty customers Come to alpha because they believe they are selling a product that other competitors do not. For example, they offer five solar kits that are tailored to their customer base. Right now they focus on The Bass solar kit as it is ideal for home lighting reading, cooking. However they could also look into factories that want larger electricity supplies.
Local customers Resident who live around Ikeja and come once in a while to buy solar panels for their homes or to upgrade their homes with another solar panel. They are most likely have a referral reward.
Bulk buying customer/ Online shopping Salpha does not have online shopping as an option. This I because of the business model of the company, which uses expert to determine what the customers may need for their home. However the option will soon be available as they look to further expand and customers can buy their solar kist and panels online.
Now that we have segmented the market and the consumers in detail, it is essential to identify what customers they are hoping to target. As explained in the table above, one targeting strategy will no fulfil the needs of all customer groups. However, if Salpha implements each of the recommendations made above, it would be highly costly, which could be detrimental fo the cashflow of Salpha energy ( smart insights, 2013). Therefore Salpha needs to select their final target customers. When I interviewed the Manager of Salpha Miss Sandra Chukwudozie she emphasized that the target audience at Ikea is residential and bulk buying suppliers, however she is open to expansion. Now Salpha needs to show priority to their potential customer segments depending on in what direction they plan on expanding the business, and according to that , what kind of customers are likely to be the most profitable.
Positioning is the Last stage of market segmentation: now that the current and potential customers have been identified and targeted, it is important to determine Salphas competitive advantage in the market and then work on marketing Salpha Energy to fit the perception they want to create for themselves inter customers minds (Dibb and Simkin, 1996; Garberson, 2015). Company positioning is beneficial, since not only will Salpha learn more about where their company stands compared to their competitors , but so will the customers.