STRATEGIC SERVICE ANALYSIS OF GANESHA PUBLIC SPEAKING SCHOOL

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1 THE INDONESIAN JOURNAL OF BUSINESS ADMINISTRATION Vol. 2, No. 6, 2013: STRATEGIC SERVICE ANALYSIS OF GANESHA PUBLIC SPEAKING SCHOOL Damar Sandi Wicaksana and Satya Aditya Wibowo School of Business and Management Institut Teknologi Bandung, Indonesia Abstract GPSS suffered from its low occupancy rate, which is equal to 12%. This figure is still far from the company s target which is 70%. Using Company, Industry and Targeted Customer Analysis, the business solutions will be proposed by considering the lowest possible cost, yet provides the bigest possible results. The data used are primary data which consist of company s internal data and questionnaires. Based on those analyses, there are three issues that need consideration the most are: the marketing issue, office issue and trainer issue. The proposed business solution will require 19 million for year Keywords: Service, Occupancy rate, Public Speaking Training, Segmenting, Clustering, Awareness. 1. Introduction This journal is based on author s final project required to finish his study in Master of Business Administration Graduate Program, Institut Teknologi Bandung. The author chose Ganesha Public Speaking School as his object of research. Ganesha Public Speaking School (GPSS) was founded in 9 October 2009 answering a huge market potential and bringing a mission to help Indonesia people improving their public speaking abilities. Since its establishment, GPSS has trained thousands of participants either through seminars on campuses, regular public training and in-house trainings. As a business that has been running for over 3 years, GPSS faced with the fact that the occupancy rate of their training is still low. Occupancy rate is the ratio between the number of participants compared to the capacity of participants that can be accommodated. By the end of 2011, the GPSS occupany ratio still stands at 7% per month. Although it is increased to 12% by the end of July 2012, the figure is still far from the desired target, which is about 70%. Figure 1.1 Average Yearly Occupancy rate With a lower level of competition and population less than Jakarta, GPSS faces a different competitive landscape in Bandung. It required an appropriate marketing strategy to achieve the target level of at 638

2 least 70% occupancy rate by the end of As a note, the target occupancy rate mentioned is not to be achieved by giving a free training. 2. Business Issue Exploration A. Conceptual Framework Three areas that will be analyzed to find out the root cause are: industry, company, and targeted customers. Figure 2.1 Conceptual Framework Diagram The industry analysis used to understand the business environment particularly in public speaking training business in Bandung. Different from Jakarta, Bandung has less population, and fewer offices. The competition itself will also have different landscape. There are only Tantowi Yahya Public Speaking School, DJ Arie Broadcasting School and Dale Carnegie Training. All of them will be analyzed in the next chapter. The company analysis used to understand the current condition of GPSS. As a small company, GPSS has less experinces and resources. Fortunately, GPSS does not has any direct strong competitor in its target market. The targeted customer analysis used to understand GPSS main target which are the Bandung middle classes. This analysis will discover mostly to understand Bandung middle classes preference toward a good public speaking training. The last stage, is the formulation of an appropriate business solutions for the targeted customer. The business solutions will be implemented using the most efficient and the most effective way as possible. B. Method of Data Collection and Analysis The industry area will be analyzed using two tools, namely Porter's Five Forces to analyze the situation of the industry itself, and 7P marketing mix to analyze competitors. Data used for both tools came from field observation, company visit and competitors websites. Porter s Five Forces analysis consists of 5 factors: threat of new entrants, threat of subtitutes product, bargaining power of buyers, bargaining power of suppliers, and rivalry among the existing players. The threat of new entrants is considered low. There is only a few public speaking training in Bandung. This lack of interest in opening a public speaking training business probably due to the fewer number of offices in the city than Jakarta. In addition, big cities such Jakarta and Surabaya have more potential as a place for starting businesses, including a public speaking training business. The threat of substitutes is considered high, because as a training serves to increase confidence and ability to speak in public, GPSS will has substitutes like: books, videos, and articles about public speaking. Or even by self-practice. In the questionnaire that has been distributed to the respondents, the most selected 639

3 answer is self experience option. This may relate to the fact that the level of public awareness of the city on public speaking training was still low. GPSS has two kinds of buyers, namely personal and company. Table 2.1 describes the bargaining power of buyers. Table 2.1. Bargaining Powers of Buyers Buyers are Powerful if: Person Compa al ny Buyers are concentrated No No Buyers purchase a significant proportion of output No Yes Buyers possess a credible backward integration threat No No Producers threaten forward integration No No Significant buyer switching costs Yes No Buyers are fragmented (many, different) Yes Yes Producers supply critical portions of buyers' input Yes Yes GPSS has two major suppliers, namely outsourced trainers and companies that rent training room. Table 2.2 describes the bargaining power of suppliers. Table 2.4 Bargaining Powers of Suppliers. Suppliers are Powerful if: Credible forward integration by suppliers No No Suppliers concentrated No No Customers Powerful No No Significant cost to switch suppliers Suppliers are Weak if: Outsour ced Trainers Yes Outsour ced Trainin g Rooms No Trainin g Trainers Rooms Many competitive suppliers No Yes Concentrated purchasers No No Customers Weak Yes Yes Purchase commodity products No Yes Credible backward integration by purchasers Yes No All competitors target different segment compare to Ganesha Public Speaking School. In term of cost, TYPSS and Dale Carnegie Training charge a very high training free to its customer. So both are targeting higher economic classes. DJ Arie School targeting the same market as GPSS in terms of cost, but it is not focused on offering general-purpose public speaking training. Therefore, it can be concluded that the competition level in the industry is relatively low. 640

4 The competitor analysis use 7P marketing mix. Table 2.3 concludes 7P marketing mix of GPSS s competitors. Table P Marketing Mix Comparation Factor GPSS TYPSS DJ Arie Produc t Price (Basic) Place Promot ion People Gener al Purpos e Busine ss Area Mainly Intern et Nonpublic figure General and Professi onal Busines s Office Building All media Public Figure Process Equal Equal Physica l Eviden ces Logo, Websit e Logo, Building. Professi onal Mall All media Public Figure + Field trip to radio stations Logo, Building Dale Carnegie General Purpose Hotel All media Non- Public Figure Equal Logo, Building In addition, figure 2.2 describes all company process diagram. Figure 2.2 Process Diagram of Public Speaking Training. The second step is to analyze the current condition of GPSS, starting from the STP (Segmentation, Targeting and Positioning), 7P marketing mix and SWOT (Strength, Weakness, Opportunity and Threat). GPSS segments its customer by Region, Age, Gender, Economic Level, User, Self Confidence and Desired Benefits. Below is the Segmentation and Targeting table of GPSS. Table 2.4. Segmentation and Targeting Table Factor Segmentation Targeting GEOGRAPHIC Regions All big cities in Indonesia Bandung DEMOGRAPHIC Age < 20, 20 30, > Gender Male, Female Male, Female Economic Low, Middle, High Low Class, 641

5 Level Class Middle Class Individual, Individual, User Company Company PSYCHOGRAPHIC Self Low, Middle, Low, Middle, High Confidence High BEHAVIORAL Desired Benefits Output, Service, Cost Effective, Experience, Friend Cost Effective Public speaking has always been associated with something intimidating or uncomfortable for the people who will perform it. Using the tagline as: Public Speaking is FUN and EASY to learn GPSS position itself as a public speaking training that delivered in a friendly atmosphere and easy to master methods even for those who are first time to learn public speaking. To analyze GPSS 7P Marketing Mix and SWOT, the company s internal data will be used. Table 2.5 concludes GPSS s 7P Marketing Mix. Table 2.5. GPSS s 7P Marketing Mix No Factor GPSS (Training) 1 Product Basic (weekdays + weekends) and Advanced Class, In-house Training, Seminar, DVD, Professional MC service, 2 Price (training) (Basic Weekdays) (in-house training) 3 Place Grand Surapati Core, Jl. PHH Mustofa. 4 Promotion Mainly via Internet and social media, discount rate, bonuses, etc 5 People Non-public figure with 6 6 Process 7 Physical Evidences employees. Equal to competitors + final presentation Logo, Website, Building According to several analyses on questionnaire and company s internal data, these are GPSS Strengths, Weaknesses, Opportunities and Threats. 642

6 Table 2.6. SWOT Analysis No STRENGTH SWOT ANALYSIS Competitive Price. In addition to competitive price, GPSS also provide 100% money back guaranteed and a maximum 3x installment payment. New Public Speaking Training Methods Using NLP. This is one of the leading method used by GPSS trainers to reprogram the negative beliefs that exist in the minds of the participants about public speaking. Its implementation is similar to hypnosis, but done with the participant remains in a state of conscious. Very Good Internet Marketing Strategy. The most dominant marketing activities conducted on the GPSS are internet marketing strategy which use Search Engine Optimization applied on the website. Located in a Business Area Surapati Core. Although not close to the center of the city, GPSS the building is fairly representative as a place of training and also easy to reach, as it is close to major highways. Very Good Pricing Strategy. Only GPSS who applying some pricing strategy in accordance with the desire of its target market as described in sub-chapter on price. Very Good Sales Team. Salesman at GPSS are also serves as a trainer. This is deliberately done in addition to saving the costs, also to make customers trust the salesman because as a trainer, the salesman is guaranteed proficient in public speaking. Final Presentations Although easy to imitate, but currently, only GPSS who provides an opportunity for participants to make a presentation in front of an audience than other participants. Since there is no other way to prevent any company can do the same thing, GPSS should immediately branding the advantages. 643

7 WEAKNESS OPPORTUNITIES THREAT Low brand awareness. Weak Management. As a small company, GPSS do not have a legal entity yet. This indicates the weakness GPSS management than its competitors. Although regular participants would not be too concerned about this, but with a growing brand, GPSS should immediately form a legal entity. Low Marketing Budget. Less Strategic Location. Although a strategic location is crucial to a training institution, but in terms of public speaking training, a strategic location is not too important, because public speaking training providers are very few in Bandung. Thus potential participants would not be too concerned about the distance of the location. Does not have any permanent office yet. Does not have any public figure. Usually, big company like Tantowi Yahya Public Speaking School, DJ Arie, Talk Inc has public figure to leverage the companies image. While majority of the respondents from targeted customer does not really care about the public figure. However, they need a professional trainer that also active in any public speaking field such MC, radio announcer, or TV presenter. Low competition on public speaking training service in Bandung. Very few competition in low price public speaking training. Very high demand on public speaking training in Bandung. Younger participant. There are opportunities to work on the younger market where there are no major brand on it. Company segment. Profit gained from in-house training is greater than regular training. GPSS should also pay more attention to this market. Other big cities such Semarang, Jogjakarta, Medan, Surabaya, etc Competition from other public speaking training. Although there is currently no competitors which compete head-to-head with GPSS in terms of targeted market (Bandung middle classes), the company must be prepared for it. Low public speaking training awareness. The third stage is to analyze the targeted customer. Data used in this analysis is derived from questionnaire. According to the World Bank, the middle class is the population that has expenditures of USD 2 - USD 20 per day. For these reasons, this Final Project will propose a business solution suitable for middle class customers only. 644

8 The sample taken is not randomly selected where the sample are close friends or friends of friends of the researcher and academic community of MBA ITB. The method used is convenience sampling. The subjects are selected just because they are easiest to recruit for the study. The sample size used in this research is Slovin Formula (Slovin, 2002: 141 cited by Arresty, 2012: 53). n = sample size N = population size e 2 = error term. Based on Slovin Formula, sample sizing with population size (N) which are Bandung middle classes = and error term (e 2 ) = 10% n = / 1+ ( x ) 100 people. The questionnaire consisted of two parts. The first part is profiling, which is part of where respondents fill out personal data (gender, age, occupation, etc.). While the second part is the part where the respondents were asked to answer questions about their preferences for public speaking training that they want. Between the first and the second part, there are 3 filtering questions, namely: 1. Do you live in Bandung? 2. How much money do you spend in a month? 3. Are you interested in public speaking training? By answering the three questions with: (1) Yes (2) 600, ,000 (3) Interested / Very Interested / Absolutely Interested. Then eventually, the remaining respondents were Bandung middle classes who interested to join public speaking training in Bandung. They are allowed to continue to the second part. Of the 160 respondent, there are 120 Bandung middle classes. Of those 120 people, there are 97 people eligible to proceed to the second part. In the second part, the questions arranged according to the SERVQUAL attributes, which are: tangible, reliability, responsiveness, assurance and empathy. Then those dimensions will be further elaborated into several sub-dimensions. Lastly, those sub-dimensions will be divided into research attributes that represent qualities of desired public speaking training business. Table 2.7. Respondents Profile No. Variable All Bandu ng Middle Class Quali fied 1 Gende Male r Female TOTAL y.o y.o Age y.o y.o > 50 y.o TOTAL College / Student Occu 9 Employee pation 10 Entrepreneur House wife

9 12 Job Seeker Others TOTAL < Expens e per month > TOTAL City Bandung Other City TOTAL Clustering method used in the final project is K-Means method. Questions were addressed using judgment-sampling technique. This means that the question were only addressed to Bandung middle classes who interested / really interested / absolutely interested in public speaking training in Bandung which amounted to 97 people. Thus, subjectively, the final project will be set into three segments. Based on the crosstab analysis for Gender, Age and Profession, the number of respondent in cxuster 2 is larger than the other two clusters in all three-profile attributes. However, with a more detailed observation, there are too many similarities between the properties of cluster 2 and 3. That can cause false targets. Therefore, although less than the other two clusters, cluster 1 will be selected as the target market. Table 2.8. Final Cluster Centers Final Cluster Centers Attributes Cluster Complete Facilities Strategic Location Complete equipment Friendly atmosphere Guidance per individual Proven Alumni Famous companies Certified company % Money back guaranteed Affordable Cost Trainer looks Trainer is also practitioner Friendly Trainer Famous Trainer Certified Trainer The company easily contacted High Empathy Very responsive to suggestions 18 6 and critics

10 C. Analysis of Business Situation This section contains analysis and identification of business situation or factors that cause the issue. Table 2.9. Root Cause Table No Root Cause Lowpublic speaking training awareness in Bandung. Bandung is not a densely populated city compared to Jakarta. There are fewer offices also. Therefore, public speaking training in Bandung is less well known, although there are quite a lot of potential applicants. Of course, the lower the public speaking awareness training, the lower awareness of GPSS and its Occupancy Rate. Low GPSS brand awareness. It also deals with the lack of public awareness on public speaking training in Bandung. Compared to TYPSS and DJ Arie Broadcasting School, GPSS is a new player. GPSS low brand awareness also leads to low Occupancy Rate of GPSS. Low GPSS brand image. In addition to brand awareness, brand image is also likely important. Because, although later recognized by the public, if the GPSS image is not positive, it is also difficult for its Occupancy Rate to increase. Less strategic location. Judging from targeted customer desires in the Questionnaire, indeed the training location must be in a strategic location. The less strategic the location, the lower the probability of Occupany Rate to Increase. Some competition. Although the competition is not so tight in the targeted market, it must remain a concern for the future. There is also competition from small players and possibility of new entrants. This may also reduce the Occupancy Rate at some point. But not the main root cause, since GPSS target a differenet market from big competitors. 647 Basis of Analysis Targeted Customer Analysis (TCA), SWOT Customer Analysis (CA), TCA CA, TCA SWOT, TCA Industry Analysis, SWOT

11 6 7 8 No well-known Trainer. According to targeted customer desires, trainers should also a public figure. So, it is logical that when the trainers is known, the awareness and trust will be higher, thus increase the probability of higher occupancy rate. Trainers should also be practitioners in any public speaking field. So far no GPSS trainer who is also a professional in the field of public speaking. When the credibility of GPSS has increase, so the Occupancy Rate. Weak Management. To be able to give better training, GPSS should concern more to enhance its management system. Good management will result in professional services that will enhance the probability of the increase of Occupancy Rate. Although this is important, but it is not a high priority. TCA TCA SWOT The next step, all the root causes will be weighted to the resources and the impacts generated in the form of Resource - Impact Matrix. The objective is to determine which are the higher priority root causes that need to be dealt immediately. And which are the low priority root causes that can be delayed, or ignored because not feasible at this time. Figure 2.3. Resource Impact Matrix. In the picture above, the y-axis is the axis of the Impact, while the x axis is the axis of the Resource. The Final Cluster Center in Targeted Customer Analysis was used to determine the magnitude of Impact. Using the criteria: a root cause with an attribute valued 1 3 is a lower impact root cause, and a root cause with an attribute valued 4 6 is a higher impact root cause, therefore all root causes that derived from Targeted Customer Analysis will automatically be Higher Impact Root Causes. 648

12 The greater the Impact of a root cause, the higher the priority. Figure 2.4 explains the root cause diagram. Low GPSS brand Awareness Low public speaking training Awareness Less Strategic Location Trainers should also Practitioners No Well Known Trainers Marketing Issue (Hi Impact - Low Resource) Office Issue (High Im pact - High Resource) Trainer Issue (High Impact- High Resource) Low Occupany Rate Som e Competition Weak Management Low Im pact Figure 2.4. Root Cause Diagram 3. Business Solution In this chapter, the business solutions will be determined to overcome all five high impact root causes in the previous chapter. There are four business solutions that proposed in this research. Below is the budgeting table that describes it. Activities Table 3.1. Budgeting Monthly Budget Annual Budget 1. Advertising - Website Design GPSS Video Profile Sign Box Publicity - Radio Article Collaboration with Social Institution Joint Promo Co-branding with Tutoring Institution Office - Profit Sharing Licensing Trainer - Guess Speaker Total Budget

13 Promotion can be used both to improve public speaking training and GPSS brand awareness. In addition to promotion, publicity can also help to increase awareness. The six attributes that derived from questionnaire will be emphasized in all aspects of marketing communications such: website, brochure, video profile, and sign box. Publicity is a solution that adheres to the Low Budget High Impact principal. For instance, by using media such radio, newspapers, and online forums. Another ways is to cooperate with reputable business or social organizations. In addition to increasing awareness of public speaking training itself, GPSS brand image should also be improved. Some possible ways are by registering GPSS to Bandung Department of Education as an accredited training institution, as training that eligible to give professional title to its alumni, and by twitter promotion. GPSS should consider seeking training place closer to the city center in order to be easily recognized by more and more people and easily accessible by the participants. A strategic place will also helped improve the image of the company. A fastest way is by rent / buy a training room in the center of the city. But it surely would cost very high. The solution is to work with universities located in the center of Bandung. GPSS and the university will open a public speaking training inside university building with profit sharing or licensing agreement. From Targeted Customer Analysis, it was known that the desired trainer better be a well known figure. Or at least, have a job in any field of public speaking. The fastest way is by hiring those professionals to be trainers in GPSS. However, it would cost high, and would effect to the increase of training cost. Therefore the right business solution is to invite a local speaker and public speaking practitioners who are competent in their field, to share their knowledge and experience in public speaking in one or two sessions only. 4. Implementation Plan And Conclusion D. Implementation Plan Implementation plan is based on the ability of GPSS in terms of human and capital resources. Website design and brochure design will instantly begin in January, because the work can be done by another company. The same thing applies to the video profile and sign box. But both were be done after the web design and brochure. Acreditation and Professional Title programs will begin in mid-year due to a lower priority than others. While Twitter Promotion can be done since the beginning of the month because it cost lower than other promotion program and can be performed by another company. To reach the number of followers as many 10,000 followers, it is estimated to take about 6 months - 1 year. Publicity program via radio and article can be started from the beginning of the year and consistently throughout the year, in order to keep public awareness always high. While the collaboration program with tutoring institutions and video profile to begin in April. Meanwhile, the collaboration with Social Institution to begin in mid-year due to a lower priority, and requires a longer preparation time. Profit Sharing Program or Licensing for office, should be started early in the year, but could be delayed until March. It require considerable expense to invite popular Guess Speakers. Meanwhile, the impact is yet to be known. For that reason, it is advisable for GPSS to try the program on Advanced Public Speaking Class first, which is held every two months. These solutions are dedicated to increase the Attention step of AIDA (Attention, Interest, Desire and Action). Along the way, GPSS has conducted a marketing communication that fulfill the participant Interest, Desire and Action, but has lack program to increase the Attention step, which is the most important factor before doing the other three. E. Conclusion Although the demand for public speaking training is quite high, there is no public speaking training that suit the need of most people in Bandung: the middle classes. This is an opportunity that should be utilized by Ganesha Public Speaking School if they want to be the number one public speaking training 650

14 in Bandung. Based on the sales report from 2009 to July 2012, it is known that the business issue faced by GPSS is the low occupancy rate that is mainly caused by the low level of awareness towards public speaking training in the city. In addition, there are also several issues in marketing, office and trainers issue. It is believed that if the business solution in this Final Project be implemented, GPSS would overcome those issues. References Arresty, A., Service Quality Improvement at CV. Citra Tiara (City Trans) Bandung. MBA ITB: Final Project Rangkuti. F, Dongkrak Penjualan Melalui MARKETING STRATEGY & COMPETITIVE POSITIONING Mengukur Segmentasi, Targeting dan Positioning Menggunakan SPSS. PT Gramedia Pustaka Utama. Jakarta Kotler, P., Marketing Management. Prentice Hall. Singapore Mursalim, Pelatihan Validitas dan Reliabilitas. Unpublished Materials, Malang 651