Half-Way Through: Reflection

1) What did you learn during this month?

I enjoyed learning about the different resources that are available for research such as IBISWorld and Hoovers. The ease of which you can generate a report on any business type with real data that won’t embarrass you is amazing. I had not used those resources before and I will use them in the future. In fact I have already used that for other needs and projects.

2) What do you like about this course?

I like the fast pace of the assignments. I like the self-grading; I like the short format of the videos which makes it easy to knock out a few assignments and feel as if you are making progress. I also think I’m learning quite a bit about what makes a viable business as the feedback from my class mates is invaluable. The blog is a great tool for class collaboration.

3) What don't you like about this course?

Sixty assignments is a tremendous amount to accomplish in eight weeks. If I were to change anything I would reduce the number of interviews.

4) Do you think it was a fair assumption that this course requires 8-10 hours of work per week? What has been your experience so far and why?

I think it’s a fair assessment that assignments could take that long in some cases; but it’s great that they require various amounts of time. I have found that some are simple and quick and others require research or collaboration which definitely prolongs the amount of time.  

5) If it were up to you what would you change about the course to make it better?

Actually this is a excellent course. I can't recommend a change just because it's something that I find challenging, because without challenge there is no growth. As I mentioned the interviews were not my favorite, but they are a necessity in getting to know your customers. Since I like to work fast, I would make the entire course available on the first day including the lists for student comments.  

INDUSTRY: Rewrite

The three main points I want to revise are placing more emphasis on the online publishing element of my NAICS code, shifting my focus from magazine readers to advertisers as my primary target and providing a free online directory for local minority businesses.

My current NAICS code 51112 is for printing and online publishing; however the online version must also include a print version. There is a code for Internet publishing only, 519130 – but that does not fit my plan. My code is correct, I just need to do more to flesh out my plan for the Internet section as it has the chance to be effective as indicated by my interviews and class feedback.

My original plan was to target the magazine readers, but now I plan to target the potential advertisers as they are the source of all funding. However, I cannot ignore the readers, I have to be able to deliver readers – or there will be no advertisers.

I am considering adding a free business directory to the magazine’s website. Based on my interview results, there appears to be a need for a local business directory for minorities.

REWRITE:

INDUSTRY: NAICS Code and Definition – this section does not require a rewrite, it is correct as is; I just need to revise my thought process.

INDUSTRY: Value Chain Diagram – this section does not require a rewrite, it is correct as is; I just to revise my thought process.

General Thinking about the business idea – the addition of a free business directory on my magazine’s website will need to be adjusted in the features and benefits in the company section. 

MARKET:Customer Interview No.3

1) Provide (embed) the video or audio recording of your interview with the customer. As an alternative, you can provide the transcript of your interview but it will take you a lot of time. Thus, I would strongly recommend to go with the video or audio recording. Posts without evidence of the conducted interview won't be accepted. 

Embedded is my conversation with Stacey an African American female who could be a potential reader of my magazine. Small Business Interview No. 3

2) Describe the most interesting and useful insights about your customers that you learned through this interview. 

This interview was interesting in that the reader expected (knew) that there would be an issue locating information, but she didn’t have an immediate recollection of having done a search. This reader, a highly educated professional, as a medical doctor, gives me pause in my theory. Type A, highly motivated individuals are going to reach their life goals despite everything. My magazine will be helpful to them – but they probably won’t seek me out and they will probably be circumspect.

3) Describe if there is anything you learned about interviewing process. How did you feel during the interview? Was it easy or not? Do you feel like you need to adjust any of your questions or your overall approach?

These questions were not really helpful in this conversation. I found that I did more talking than the customer – as I tried to explain the questions. After the first customer interview, where I dropped one question; I reviewed the questions again before this customer interview. As I started this second customer interview process I was fairly confident in the questions. At the completion of the interview – I had very little confidence in them as a means to gain insight. But on reviewing the material, I found this interview extremely helpful, because the answers were so unexpected. 

MARKET: Customer Interview No. 2

1) Provide (embed) the video or audio recording of your interview with the customer. As an alternative, you can provide the transcript of your interview but it will take you a lot of time. Thus, I would strongly recommend to go with the video or audio recording. Posts without evidence of the conducted interview won't be accepted. 

Embedded is my conversation with Ivi an African American female who could be a potential reader of my magazine. Small Business Interview No. 2

2) Describe the most interesting and useful insights about your customers that you learned through this interview. 

I was surprised that Ivi immediately described a struggle that was an issue for her in receiving professional care. That’s an avenue that I had not considered before this conversation. It’s also something for me to keep in mind regarding the magazine content. The comfort level is very important when dealing with personal issues.  

3) Describe if there is anything you learned about interviewing process. How did you feel during the interview? Was it easy or not? Do you feel like you need to adjust any of your questions or your overall approach?

Again I had to revamp the questions to follow the course of the conversation. I also had to omit a question. I think that’s okay because I did gain useful information.

MARKET: Customer Interview #1

1) Provide (embed) the video or audio recording of your interview with the customer. As an alternative, you can provide the transcript of your interview but it will take you a lot of time. Thus, I would strongly recommend to go with the video or audio recording. Posts without evidence of the conducted interview won't be accepted. 

Embedded is my conversation with Dana an experienced media buyer.  Small Business Interview No. 1

2) Describe the most interesting and useful insights about your customers that you learned through this interview. 

I learned to place more emphasis on digital and electronic media; they are currently popular because they are getting a tangible result which makes the life of the media buyer easier. I was aware of this before and I have included it as a part of my plan, but to hear her say it adds greater weight.

3) Describe if there is anything you learned about interviewing process. How did you feel during the interview? Was it easy or not? Do you feel like you need to adjust any of your questions or your overall approach?

I learned that interviewing requires really good questions. My questions were okay – but they felt awkward.  I found myself making up the questions are the interview processed, because the line of questioning that I had written down didn’t make as much sense with her responses.

MARKET: Customer Interview Strategy

Potential Interviewees Advertisers:

1.       Marketing Executive with media buying experience - Dana

2.       Community Relations Executive with media buying experience – Rose

3.       City Marketing and Communications Manager – Bob

4.       Co-founder local publishing company – Scott

5.       UF MSE Graduate Student and former magazine employee

6.       Local satellite company media buyer

7.       Local cable company media buyer

Potential Interviewees Magazine Readers:

1.       African American female age 25 with college degree

2.       African American female age 45 with college degree

Advertiser Questions:

1.       What is the hardest part about getting your services in the faces of the affluent minorities in North Central Florida?

2.       Can you tell me about the last time that happened?

3.       Why was it hard, was it the process or the results?

4.       Have you done anything to solve that problem – if so what?

5.       What don’t you love about your solution?

6.       How often do you have this problem?

7.       Note; emotions –

8.       3 – peat; tell me again three times

9.       5 why; ask why five times

Reader Questions:

1.       What is the hardest part about getting good information for minorities in North Central Florida seeking improve their lifestyle? 

2.       Can you tell me about the last time you have this issue?

3.       Why was it hard, was it the process or the results?

4.       Have you done anything to solve that problem – if so what?

5.       What don’t you love about your solution?

6.       How often do you have this problem?

7.       Note; emotions –

8.       3 – peat; tell me again three times

9.       5 whys; ask why five times

I also used the Customer Interview Script writer found on the customer development labs website to generate this interview script that I think is great. I will use it.

https://docs.google.com/document/d/1BjvDe7vIzVTLz5UT6D4dtx66S3BA5LCKVQ2vWeRwbdQ/edit?usp=sharing

Market: Definition and Size

My market definition for advertisers includes governmental enterprises with an advertising budget of more than $200,000 each year, within the service industry, employing more than 100 people. The business should be located in the North Central Florida area. This is my primary market.

 My market definition for customers receiving the magazine is African American females within a five mile radius of the Alachua County Area who are college educated and aged from 25 – 65 with an income of more than $50,000. 

Market size                                                                           Unit Price $9.99                   Usage Rate – 4 times

Florida Residents 20,271,272  

X 51% Female  

X 20.2% African American Alachua County  

X 40.8%  Bachelor’s Degree Alachua County

X Median Household Income $42,212  

Market size for governmental enterprises in Alachua County I was not success in my search for this information. American Fact Finder indicated there are 21 governments in Alachua County, bit I'm not certain that is the number that I;'m looking for. 

SUMMARY: Rewrite

Based on the feedback that I received; I will address these three points in my Summary Rewrite: the definition of local, the size of my target market and who my primary target audience is and why.

Summary REWRITE: Customer Problems and my Solutions

Minority area residents are seeking an alternative source for hot topics with a local flavor.  They feel as if they are being overlooked by the main media outlets, or when they are included outlets are not really covering their topics of interest.  African Americans, Hispanic and Asians make up about 50 percent of the local population. So, if they need a publication that caters to them – their segment is large enough to support it.

The geographic scope of our market will be regional covering the north central Florida area with a focus on the 800 plus square miles of Alachua County. Regarding my target audience, I estimate that my primary target audience may be about 20,000. Of this 20,000, a little more than half are female; although females are not my only target – they may have more of a propensity to actually pick up the FREE magazine. The median household income of the Gainesville area is about $46,000, we set our target income at $50,000 although it would not be considered affluent in most markets - this is a good level of income for minorities in the area.

There is an opportunity for an upscale magazine, covering minorities, in the North Central Florida area. Gainesville has an unmet need for a publication covering the topics of politics, technology, medicine, entertainment and money matters with a local flavor. There is also an unmet need from the business perspective; businesses want to reach affluent members of the African American community in a manner that demonstrates they are in partnership with them. The simple act of spending money in a publication targeted to blacks and owned by blacks speaks volumes in the African American community.  I will be selling advertising space in a magazine and then giving the magazine away to members of the community. In some cases we may have a few subscription sales for home delivery.   

Company: Reflection

I found the features and benefits exercise of this section to be the most thought provoking.  I’m well aware of the features of my product/service, but in considering how those translate into benefits for my customers – I really had to give it some thought. The product and service mix along with the mission were straight forward easy sections.

The Essence section was interesting as I have yet to think about my venture in those terms. The dream and product section were also easy, however the unfair advantage was a thoughtful section because I don’t really see where I have one. 

COMPANY: Unfair Advantage

The Radar is an upscale quarterly magazine targeting minorities. The primary target is African American, but the magazine will also feature Hispanic and Asian cover stories. The Radar will follow the lead of all magazines of its class by offering to solve a problem for the reader, such as losing weight, saving money or becoming more successful. 

This service offering is filling a gap in the market, the idea is not new, nor is the target market new – however this concept has not been adequately addressed in our area. This type of service does not allow for the creation of barriers to discourage duplication, it’s a relevantly simple business model that others can duplicate. There are only two real points of differentiation; the quality of our customer service and the high quality of our product offering. Those are reasons that create customer loyalty.

Rewrite
The Radar is an upscale quarterly magazine targeting minorities. The primary target is African American, but the magazine will also feature Hispanic and Asian cover stories. The Radar will follow the lead of all magazines of its class by offering to solve a problem for the reader, such as losing weight, saving money or becoming more successful. 

This service offering is filling a gap in the market, the idea is not new, nor is the target market new – however this concept has not been adequately addressed in our area. This type of service does not allow for the creation of barriers to discourage duplication, it’s a relevantly simple business model that others can duplicate. There are only two real points of differentiation; the quality of our customer service and the high quality of our product offering. Those are reasons that create customer loyalty, but we will also make available an online directory on The Radar’s website which includes local businesses that are targeting minorities. This service will be free to businesses and will work as a resource center for locals seeking a specific service or need.   

COMPANY: Dream Section

There is an opportunity for an upscale magazine, targeting minorities, in the North Central Florida area. The African American community is 20 percent of the Alachua County population of more than 250,000, which has an unmet need for a publication covering the topics of politics, technology, medicine, entertainment, and money matters with a local flavor. The magazine, The Radar, in addition to filling a gap for readers; it will also fill a gap for advertisers seeking to reach affluent African American customers in a manner that informs them the advertisers care about the sustainability of minority businesses.

Regarding future develop. The venture could consider developing an entire suite of media outlets targeting minorities, such as radio venture with a suite of local stations with various types of music or even talk shows. The team could also research the idea of developing a local television show covering topics of interest with the same value proposition as the magazine. Not everyone likes to receive information via print. Some customers like to get their news and information by listening to the radio or watching a program on television.

  

Since the magazine will start as a quarterly publication, there is also some opportunity with the prospect of moving The Radar to a bimonthly publication or even a monthly, considering the reception of the market with the quarterly. 

The magazine is being established as a lifestyle business. There are no plans for rapid expansion. The initial circulation is for 10,000 to expand to 20,000 within five years is a workable goal. The North Central Florida area is large enough to accommodate that expansion.

Rewrite: 

There is an opportunity for an upscale magazine, targeting minorities, in the North Central Florida area. The African American community is 20 percent of the Alachua County population of more than 250,000, which has an unmet need for a publication covering the topics of politics, technology, medicine, entertainment, and money matters with a local flavor. The magazine, The Radar, in addition to filling a gap for readers; it will also fill a gap for advertisers seeking to reach affluent African American customers in a manner that informs them the advertisers care about the sustainability of minority businesses.

Regarding future develop. The venture could consider developing an entire suite of media outlets targeting minorities, such as radio venture with a suite of local stations with various types of music or even talk shows. There is also a need for an online directory for local businesses who wish to target minorities; this will be a service that will be offered free to businesses on The Radar’s website.  The team could also research the idea of developing a local television show covering topics of interest with the same value proposition as the magazine. Not everyone likes to receive information via print. Some customers like to get their news and information by listening to the radio or watching a program on television. 

  

Since the magazine will start as a quarterly publication, there is also some opportunity with the prospect of moving The Radar to a bimonthly publication or even a monthly, considering the reception of the market with the quarterly. 

The magazine is being established as a lifestyle business. There are no plans for rapid expansion. The initial circulation is for 10,000 to expand to 20,000 within five years is a workable goal. The North Central Florida area is large enough to accommodate that expansion.

COMPANY: My Company and Product

The Company and the Concept – My Company will take of form of an LLC because of its flexibility. It’s a private limited company which means I’ll have the pass-through taxing of a partnership with the limited liability of a corporation.

I discovered the concept for The Radar magazine because I noticed a gap in the market while making media buys for the local area. I was also receiving some political push back because we were not placing enough buys in publications target to minorities. In my efforts to correct this situation – I search for a high quality publication targeting affluent members of the minority community; I could not find a publication that meets my needs. Even though I have to great idea the company is still in the idea and research stage. Working towards my MSE degree is forcing me to make progress with my venture.

The Radar’s mission is to provide an upscale general interest magazine for minorities with a local flavor in the North Central Florida area. Our main objective is to give a choice to advertisers for readers who are seeking the American dream.

The unique value proposition is that The Radar is the only upscale print magazine in the area that offers a local flavor and is targeted to minorities. The position offers value to the customer as well the businesses who are seeking to place their ads in such a publication. In additional to the printed publication, The Radar will also offer a website and a mobile app. 

Our product is a quarterly upscale, standard sized, high-gloss magazine with 110 – 125 pages; the magazine will target minorities in the North Central Florida area. 

The Radar is a non-paid circulation, meaning there is no cover price and it is free. This model is based on a relationship with advertisers. There will be a few paid subscriptions for home delivery at $9.99 a year; ad space will cover costs. The high circulation rate and long shelf life is the bread and butter of the magazines’ sustainably. The purpose of the magazine is to get ads to customers. The secondary focus is content. Without ads there is no content. The appearance of the magazine plays a major role in this service. If the magazine is not upscale it will not reach the affluent members of the black community. The circulation has to be wide spread otherwise the advertisers will not participate. The ad revenues pay the costs of the entire concern. The business location plays a major role, since this area does not have a publication of this sort; but other cities already have this type of publication.

The primary target audience for the magazine is female minorities within a five mile radius of the Alachua County area including African Americans, Asians and Hispanics, who are college educated and aged 25 to 65 with an income of more than $50,000.  The Radar Magazine will create value for readers by providing information and ideas on ways to solve problems. The quarterly magazine will offer value to businesses by providing them with a venue to get their ads before an upscale African American/minority audience.   

This is a diagram of the depth and breadth of The Radar’s product/service mix and the expected revenue. 

In considering possible drawbacks, we know that various markets grow at different rates over a period of time; we are not sure of the rate of growth for this local magazine market, which means that we are not certain how long the window of opportunity will be open because others could be working to bring a similar publication to market as we speak. It can take a great  deal of time to really determine if a new venture will be a success or failure and this venture is a little more complicated because it’s a quarterly publication; so the length of time to complete and repeat the process is much more than for a daily publication. 

COMPANY: Essence

The Radar magazine provides solutions to problems through education and motivation. We are your guide to the American Dream 


Rewrite: The Radar Magazine provides solutions to problems through education and motivation. We are your guide to reaching your goals.

COMPANY: Features vs. Benefits

COMPANY: Product/ service mix

The main sources of revenue from The Radar magazine are the ad sales. The structure of the ad pricing is such that we will charge a lower price for ads positioned on the internal pages and a premium price for ads on the external pages and adjacent. Additional revenue will also come in via magazine subscriptions; we are projecting about 1,000 sales of subscriptions.  

The breadth of the products/service that we are offering for advertisers is narrow, however since we have a varying number of ad size the depth is slightly deep.

The breadth of the products/service that we are offering for readers is narrow and the depth is shallow as there is only one item type in each of the three areas. 

INDUSTRY: Reflection

On reflecting on the magazine publishing industry research; the most surprising insight that I discovered was that printing is an $83 billion industry shared by only 47 businesses. Although surprised may not be the appropriate word, enlightened – may be a better word. When I think about all the printed material that I see every day – It’s not really a surprise. I can now say that I have been enlightened to the revenue stream of printing.

The industry exercises were relatively easy.  The coding and defining were very easy as were the information sources, the overview was not difficult – but it required quite a bit of time.  The five forces model was fun, but the value chain diagram was the most difficult for me. IBISWorld provided most of the elements, but I had to research to find the others. This element of the industry exercises was the most taxing for me as it took me a while to totally grasp the concept and complete the diagram.

I like my final results, but I think the value chain diagram can be improved in its appearance. I think I could include more detail on my analysis for the five forces model as the model is the result of very rough notes and inserting data on the fly; someone following my process may not be able to discern all of my steps. Other than that, I enjoyed this segment. I was not aware of these reach avenues and I’m delighted to add them to my tool box. 

INDUSTRY: Value Chain Diagram

Magazine Publishing Industry Value Chain Diagram 

INDUSTRY: 5 Forces Model

Porter's Five Forces Diagram for the Magazine Publishing Industry

The competition for the magazine publishing industry is high and increasing. Magazine periodical publishers compete among themselves for readers and advertisers and well as with other mediums. In reviewing the market share the results are rather mixed as it is fragmented and concentrated. It’s concentrated as there are four industry leaders, but it’s fragmented in that the industry leaders only control 22 percent of the market, the other 80 percent is split among well over 20,000 other enterprises.

Barriers for new entrants are medium and steady, but not prohibitive. Sixty new magazines started in 2015, but the majority of new magazines were published by existing companies. It’s much more cost effective for an existing publisher to start a new publication than at startup; even though startup costs are fairly low.

The threat of substitutes is high as readers and advertisers have so many choices in print and digital platforms.  There is also great variation in the costs, this give readers and advertisers the opportunity to mix and match various mediums and outlets depending on their needs and wants. Of course the largest threat to print is digital and in many cases the content is free to the end-user.

The power of some suppliers is high at this time. The cost of paper is increasing even though developed countries are using less as they move towards digital formats. However emerging markets in underdeveloped countries are increasing the paper demand and consumption. Print publishers are also concerned when the price of postage increases as they have to pass these cost on their buyers.

The power of buyers is high as they have so many different choices to meet their needs. With the various new technologies available – end users are no longer held hostage with print media. Digital platforms including social media are becoming, if not reliable, viable sources for content on any subject. At the buyer level switching costs are low and the threat of backward integration is high as any reader can set up their own blog on any day.

The state of these five factors of the Porter’s Forces Framework are the reason that the magazine publishing industry is in a current state of decline with reduced profit margins; with so many factors at the high state leading to lower revenue.

In conclusion, even though the industry is in a state of decline, there are low barriers to entry and there is always opportunity within niche markets. Because of the various taste, preferences, hobbies, loves, hates, needs and wants of the 190 millions smartphone user in the United States alone; there is always room for one more specialty magazine in print or digital format.

INDUSTRY: Overview

The Magazine Publishing Industry

The magazine publishing industry is a $41.2 billion industry annually with a growth rate that is in slight decline at about -0.8 percent for 2015 and a projected decline for 2016. It’s interesting to note that industry employment is expected to take a slight dip over the next couple of years and then rise before going flat over the next three years; while revenues will take a slight dip and then rise over four or more years. My guess is that improved efficiencies will drive the increased revenues with fewer employees. Print advertising expenditures will also take a slight dip before rising and flattening for the foreseeable future.

As the annual growth indicates, the magazine publishing industry is currently in the decline stage of its life cycle. According to IBISWorld the key factors indicating an industry is on the decline are:

• Revenue grows slower than economy

• Falling company numbers; large firms dominate 
• Little technology and process change

• Declining per capita consumption of goods
• Stable and clearly segmented products and brands

The decline is mainly a result of declining print advertising expenditures which happened over the past ten years; having a major effect on the entire industry as 50 percent of the industry revenues are from advertising.

The growth of multimedia companies is one the most popular trends in the industry as companies increase their portfolios to offer more than one type of print publication along with a host of other outlets under the same umbrella. This offers a larger selection of demographic groups for their customers. Another trend is the removal of the middle man in the distribution process. Publishers now work directly with retailers to get their publications in stores. And lastly another trend for publishers is to move towards digital versions of their publications. They are providing downloadable data files with special software that offers easy navigation for readers.

As for trends in industry costs those are increasing as the price of paper increases. Although printing cost in the USA and other developed countries are going down, the international market for emerging economies is pushing the paper price up. The largest trend of the entire industry is the digital age. Everyone is trying is establish a digital presence with their niche market. Since customers have so many different ways that they can view content publishers are trying to make sure their content has a responsive design to increase ease of use for all customers. On the digital front that content is trending towards a younger audience as they are more technology savvy.

Research indicates that as far as sales are concerned a digital platform coupled with a print platform offers the best sales results.  But publishers did have to decrease their costs for print ads in order to survive the on slot of digital and it appears to there is no going back.

There aren’t really any new requirements, but the industry is subject to changes in tax rates, postage and copyright regulations. Publishers also sell or rent their contact list and that can fall into the area of consumer privacy in dealing with telemarketing and email marketing. Of course the industry is in opposition to any new laws that increase these costs. The level of regulation is light and the trend is steady.

The key success factors to the magazine publishing industry are:

• Access to niche markets – this is important when online offerings are a revenue driver
•  Access to a highly skilled workforce – this is the backbone of any good company
• Control of distribution arrangements – allows companies to maintain favorable arrangements
• Effective cost control – drives price competitiveness and profits
• Establishment of brand names – this is important because it can influence buyers’ perceptions and help drive sales

Companies demonstrating success in the magazine publishing industry are able to predict the trends of the future and get a head start on new product and service offerings. This is demonstrated by the industry leader Advance Publications, who is able to show growth while others are declining because of the early restructuring and reformatting of their major publications along with “timely investments in the digital market.”

In reviewing the standard financial ratios for the industry over the past ten years – there is a steady downward trend. The forecast for the next five years continues that downward trend. Of the key ratios such as revenue, revenue per employee and share of the economy – they are all on a downward slop with share of the economy dropping in half from 2006 to 2020 (from 0.12 to 0.06)