Thursday, October 17, 2019

MBA in a Nutshell #9 - Marketing : Marketing Mix - Product - Differentiation

We're heading into the marketing mix taught to most MBAs which is the 4Ps of  Product, Price, Place and Promotion. Interestingly the author claims that in HK and Singapore, "people selling" and "physical evidence" would extend the marketing model into the 6Ps.

We will only be taking a short while to talk about product differentiation.

A great example of product differentiation in the book is Haagen-Daaz  that added more butterfat and pumped less air to build a new category called premium ice-cream. I was shocked to discover that Haagen Daaz actually came from New York, hardly the kind of place conjured by it's classy Swiss-like brand name.

Unfortunately for me, I entered an industry that isn't exactly a Blue Ocean zone. It is not difficult to find videos on various value investing or get rick quick courses on the Internet. Complicating matters are the really well-run Telegram groups that I am already part of that can provide real-time advice on reaching financial independence or REITs investing.

So this is what I did to differentiate my product from the rest in the industry :

  • My course is driven by a life objective rather than an investing style. A retail investor is learning a framework on how to retire early and not a specific form of investing. So unlike other trainers, this gives me the freedom to pivot based on changes in the financial markets. Strategies do fall out of favor every now and then, so I am not locked down to any investing approach.
  • I adopted a quantamental approach and then made it feasible for a retail investor to execute the investment strategy without too much analysis which tends to paralyze them under a different course provider. I know because I was the last batch of NUS Applied Finance masters, I spent years being paralyzed by the Equity Analysis framework taught by the CFA program.  This combination is unique and based on a blend of different academic papers published in journals. 
  • My course covers leverage in greater detail and provides an option to boost returns if you are willing to take on a non-zero chance of margin call. Only a minority of students go on to apply leverage but many students are intellectually curious enough to want to learn more of how that works.
  • Beyond the course, I built a walled-garden on FB consisting only of alumni of the program. This way we have a safe space for serious investors who are sick of getting "PM me pls" messages in the more open forums. This group also provides lifetime updates and support on the portfolios built by the latest batch of students.
  • I am also building a coalition of partners who are willing to offer special rates for students of the program in exchange to getting access to them. So far students are pleased with the software tools and salary based FAs I can introduce to them. Naturally, I have a network of lawyers to help them with stickier issues they may face as part of their lives.
  • Lastly, I am part of the product too. Not only have I gone through the process of attaining financial independence, I have over a decade of public speaking experience was spent one semester being bashed-up by seniors in the SMU International Moots Program. Most of the best investors I know are mainly introverts, may be socially awkward, and may not like being interrogated by a paying member of the class. This is a space I can play in. 
Beyond what the students get, my course is the only one where I actively take a leveraged bet on my student's investment choices using a significant part of my trainer fees. This ensures that I will work hard to improve my material over time because I face investment losses if my students make bad bets on the market. This is probably the hardest component to replicate because it almost means that any trainer willing to do this will have to forego a salary for a year after each course.

In summary, product differentiation is a marathon. 

Over time, I fully expect competitors to come into this space and I am ready to meet them in this field of battle-  so much so that I am willing to publish my play-book on this blog for them to review.

But rest assured, I am already working to develop my next innovation in the financial education space.

Next week I will talk about IP protection.

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