Project Everest

Customer Segment

[Customer segments] ERS Collection

There are a number of key customer segments that have been identified for ERS collection.

Hotels

Intention: To establish a clear distinction between the various hotel sizes in Timor Leste. This is based on the assumption that different sized hotels would have varying priorities and perceptions of waste management in Timor-Leste.

Process: Through our data collection we found that there are 61 Hotels in Dili and surrounding areas.

We noted their price, number of rooms, web presence and also the extras they offer. In doing so, we found that the most consistent and accurate data that we were able to collect was the minimum price one could pay for one room. We found that the price range for a basic room for one night in Dii is from US$11-150. 

Result:We decided to differentiate between hotel sizes based on the metric of minimum price of a room for one night. With $70 being the cut-off point between the market segments which we described as either ‘Expensive’ Hotels (market segment (a)) or ‘Cheaper’ hotels (market segment (b)). ‘Expensive’ are a market of 23 and ‘cheaper’ is a market of 38.

Explanation: We settled on this metric after attempting to gather information on hotels such as their number of rooms, web presence, and which extras they offered. Those metrics were time intensive to gather often inaccurate, and for many were either difficult or impossible to acquire. Relative to those metrics accurate room cost can be located quickly and consistently across almost all hotels. This divisionis from our initial market differentiation, with the assumption that these segments’ problem spaces around waste have the potential to differ. It is important to note that as we gather more information through offer testing, there may be cases where despite price, hotels will fall into the alternate market based on their problem space and UVP. 

c) Schools 

Market size: 131

Intention: To establish a clear definition of a category of previously untapped Timorese businesses that produce significant cardboard and paper waste.

Process: Given that we made the decision to cease collecting glass waste, and instead focus on cardboard and paper waste it was clear that we would need to find, and then better understand market segments that produced significant amounts of it. Moreover, that ideally these would be new segments given our desire to scale the ERS collections business.

Result:We settled on the easily delineated market segment of schools. The assumption being that schools produce large quantities of paper and cardboard waste that is not soiled and is recyclable. 

Explanation: Schools closely fit our aim while also being clearly separated from other segments. Across this segment we assume there is a significant amount of cardboard and paper waste production, thus making it perfect for our market analysis experiment. Additionally Schools in Timor Leste are a mostly previously untapped market for ERS.

d) Organisations with subsidiaries

Market size: 42

Intention: To establish a clear definition of Timorese businesses that do not directly deal in hospitality which Everest Recycling Solutions (ERS) should include its market size analysis.

Process: Upon initial market size research, it became apparent that our initial definition of this segment (Organisations with subsidiaries) was not necessarily reflective of the realities of the business environment in Timor Leste. As a result, we were arbitrarily reducing our theoretical accessible market. By iterating and expanding our definition, we are now able to include more organisations within this segment, that are still reflective of our original intent. 

Result: Market segment 1d) now refers to significant organisations operating in Timor Leste. Which is defined as follows: An organisation working in Timor Leste that possesses any of the following qualities: Having global operations, employing ten or greater employees, not being a sole trader. 

Explanation: We wanted to provide a clear definition which would allow us to delineate between small business while still allowing us to include organisations such as the Embassies. To achieve this, we settled on an inclusive list of qualities which qualifies businesses for this list. 

e) Restaurants

market Size: 182

Intention: To differentiate restaurants as a market segment in our analysis.

Process: Originally restaurants were included in the same market segment as medium-sized hotels; however it quickly became clear that restaurants operated differently and thus had needs which we could better understand within their context. 

Result: We established Restaurants as a market segment defined for our purposes as being as food serving hospitality venues that are not a part of a larger hotel. 

Methodology for finding markets

Hotels and restaurants

The first place we looked to validate the market size for hotels and restaurants was through our previous contacts from the last 2 years of project. This was done through assessing the spreadsheet “180630 Every Business ERS Has Ever Contacted” and noting down all of the relevant businesses. We then used the internet to fill in any gaps and this was primarily achieved through browsing Booking.com and Tripadvisor. At this point, most of the hotels were added to the list. In order to find more restauarants, we utilised Facebook to find the remainder of these, as Facebook is used as a huge advertising platform for businesses in Timor with 78.71% of Timorese people actively using Facebook (http://gs.statcounter.com/social-media-stats/all/timor-leste). It is also important to note, that we used Google Maps and also our observations to find any others that might slip through. We do feel as though this is an accurate representation of the size of the market as we compiled this through multiple platforms. 

Schools

ERS has previously explored schools but not in a large amount of depth. We initially utilised meeting minutes and schools ERS has previously been in contact with. Following this, we conducted online research, including putting in the Portuguese word for school (escolar) into Google maps we found 131 schools. 

Organisations with subsidiaries:

In researching organisations with subsidiaries (now defined as significant organisations), we employed varied methodologies in our research. 

Initially we utilised information within current contact records from meeting minutes, hubspot and documents within the workhub google drive. Google maps was then utilised to map out businesses in the area. These were then cross-checked online through google as well as embassy pages in order to determine which were compatible with our market size definition

edited on 28th January 2019, 23:01 by Rose Gooding

Rose Gooding 9 months ago

It wouldn't let me tag on the original post so:

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Harry Telford 9 months ago

Status label added: Customer Segment

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James Balzer 9 months ago

Hello there :)

Thank you for the post. It's good to see ERS hard at work and making progress.

There are just some points of clarification that I would like to hear answers for in regards to some of the suggestions and statements in the above post. These are as follows.

1) Perhaps I can be corrected, but I'm struggling to see how this Black Label post demonstrates a properly validated Customer Segment. It's one thing to be able to understand 'Market Potential', but that doesn't mean that all of the above types of customers can be classified as part of your Customer Segment. I feel that validating a Customer Segment is about truly understanding whether or not your assumed customers genuinely have a problem for which they're willing to pay for your specific service in order to solve.

Perhaps I have knowledge gaps, that I'm willing to be corrected on, but it appears to be that you are assuming that they are part of your Customer Segment based off unsubstantiated hypotheses and assumptions. These are hypotheses and assumptions regarding the potential problem that you think customers might be experiencing, and the assumption that they're willing to pay for your specific solution in order to solve this hypothesised pain point of theirs. It's the reason that the 'Problem' and 'Customer Segment' boxes in the Lean Canvas are both labelled as '1', as the validation of these boxes need to be done in direct conjunction with each other in order to be adequate validations.

2) In the post, you stated that your desire to establish distinctions between the various hotel sizes is "based on the assumption that different sized hotels would have varying priorities and perceptions of waste management in Timor-Leste." Feel free to provide clarification on what I'm about to say, but personally at least, I struggle to correlate how hotel size is an influencing factor in differentiating between how hotels perceive waste management differently. Perhaps there is more context that I need or knowledge gaps that I have, so feel free to talk about any further reasoning that you may have had that I'm not aware of.

3) This feeds into my last point, but I am finding it difficult to perceive how the pricing of the rooms can act as a primary indication of hotel size. As an analogy, I could go to The Quay restaurant and pay $80 for 1 scoop of some fancy French/Italian ice cream, or I could go to Hog's Breath Cafe and pay $20 for 'all you can eat' and consume 20 plates of chicken nuggets, 10 double choc sundaes and 5 cheese stuffed supreme pizzas in 1 night. While what The Quay offers is notably more expensive for what one gets, Hog's Breath Cafe is a larger business overall, which is a result of a plethora of other factors outside of price points.

Don't get me wrong, I have no doubt that you have considered all of this reasoning, and the analogy is primarily there for the purpose of humour. I would be interested to see what clarification you could have on what I've said here, as perhaps there is 'on-the-ground' knowledge that would fill potential knowledge gaps that I have.

4) Regarding the 'Schools' segment, I would perhaps consider properly testing the amount of paper and cardboard that they produce, and their willingness to pay for a collection service for it. However, in my opinion, that's a really cool customer segment that is definitely worth looking into.

Awesome stuff Rose, Matt and team! Venture On and Lead Always!!

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Rose Gooding 9 months ago

Hi Jimmy, appreciate your feedback and input.

1. Seeing as ERS has been running for two years these segments represent customers with which we have effectively served and this step is about actually separating them and assessing their problem perceptions and ultimately potentially deliver different things based on these. I can see that these look like assumptions, however I am using 2 years of information and data before the crowdicity and experiments era, so I’m sure you can appreciate bridging that gap is quite difficult.
2. What I meant by the statement ‘based on the assumption that different sized hotels would have varying priorities and perceptions of waste management in Timor-Leste’ is that how they view the problem and what their solution is has the potential to be quite different (this is also based on experience) e.g. a smaller hotel, owned by a local that is not educated on the idea of recycling potentially views the problem as having waste and smells on the streets which should be a sense of national pride and the solution is just to get rid of it. Conversely, a larger hotel such as Hotel Timor that is expatriate owned by someone who is aware of the concept of recycling and knows their is a potential solution to the waste-riddled beaches that effect tourism, is more likely to see the solution as having the opportunity to recycle.
3. Price was an initial distinction in different hotels as it ultimately effects business margins and disposable income, as well as volume of customers. This is not how I see the distinction ending at, but this just allowed us to start an initial market break down. In my opinion it wouldn’t make sense to put a Hotel Timor and then a small hostel where the owners live on the premises and its more Bed in Breakfast style into the same market. The team is looking at fine tuning this distinction. (Might I proudly add, the goal is to conduct 24 offer tests in collaboration with the repurpose team tomorrow)
4. Schools were always something that were overlooked on the basis we couldn’t collect the waste they were producing. I would agree, however, some hard data on paper waste production is crucial. A key value prop we are finding here are education programs (something they see extreme value in paying for) in conjunction with collections as a means to enhance that education is something we are finding.

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Georgia van der Stap 8 months ago

Hey guys, we have just completed the competitor analysis. Feel free to check it out, here is the link- https://docs.google.com/spreadsheets/d/1xNUMv...Z5Z4/edit#gid=0

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