Introducing... to Australia, Schemes and Mind Maps of Marketing

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Introducing...Introducing...

to Australiato Australia

1.1. Table Of ContentsTable Of Contents

• 1. Executive Summary……………………………………………………………………….
• 2. Introduction and Company Background……………………………………………....…..
• 3. Current Business Idea/Concept and Model……………………………………………......
• 4. Objectives of the Marketing Plan……………………………………………………...….
• 5. The Australian Environment……………………………………………....……………....
  • a. Economic…………………………………………………………………...……..
  • b. Cultural……………………………………………………………………………
  • c. Social……………………………………………………………………………...
  • d. Political…………………………………………………………………………....
  • e. Legal…………………………………………………………………………...….
• 6. Market Analysis and Consumer Behavior………………………………………………...
• 7. Industry Analysis and Competition…………………………………………………...…..
• 8. Mode of Entry……………………………………………………………………………..
• 9. Segmentation Targeting and Positioning……………………………………………….....
  • a. Segmentation…………………………………………………...………………....
  • b. Targeting…………………………………………………………………………..
  • c. Positioning………………………………………………………………………...
• 10. Marketing: Four P’s……………………………………………………………………….
  • a. Product…………………………………………………………………………….
  • b. Place………………………………………………………………………..…….
  • c. Price……………………………………………………………………………...
  • d. Promotion……………………………………………………………..………….
• 11. Financial Analysis………………………………………………………………………..
  • a. Sales Forecast…………………………………………….……………………....
  • b. Estimate of Cost……………………………………………………....………….
• 12. Implementation and Control……………………………………………………………..
  • a. Implementation…………………………………………………………………..
  • b. Control…………………………………………………………………………...
• 13. Conclusion…………………………………………………………………………....….
• 14. Timing……………………………………………………………………………....……
• 15. Bibliography……………………………………………………………………………..
• 16. Appendix………………………………………………………………....……………....

3. Introduction and Company Background3. Introduction and Company Background

Andrew Kortina and Iqram Magdon-Ismail founded Venmo in 2009, since then the application has revolutionized the way people send and receive money. Venmo was acquired by Braintree in 2012 for $26.2 million, and then PayPal bought Braintree for $800 million in 2013. Venmo has quickly become the most popular mobile, peer-to-peer payment platform among Millennials in the US. The app gives users the ability to pay each other and share the payment message, recipient and time with other users of the app (Khanna, 2015). All of this is organized in a timeline like that of Facebook. Kortina and Magdon-Ismail never thought Venmo would get as big as it is today. The partners came up with many ideas and startups before launching Venmo. It started as an idea for a music app, transformed into a text message service for sending money, and eventually became the app it is today. Once the app launched in 2009, it got a lot of recognition for being one of the best app ideas to date. People were amazed at how easy it was to send and receive money on Venmo. Paypal acquired the app because they knew Venmo would put them out of business. Paypal’s business model is outdated and Venmo is the future. Now, Venmo is basically a verb: “I’ll just Venmo you.”

4. Current Business Idea4. Current Business Idea

Venmo’s business concept has remained consistent since their launch in 2009 with efforts to capitalize on their growth and take over the electronic payment market. Venmo provides a mobile application that serves as a quick and easy way to transfer payments without having to face the inconveniences of cash, checks, ATM fees, or wire transfers. They recognize that the use of cash is becoming outdated and they have focused their attention on achieving their goal of promoting the use of peer-to-peer electronic payments.

Differentiation:Differentiation:

Venmo differentiates themselves from their competitors by having a free application that does not charge its users for sending or receiving money. This differentiation has allowed Venmo to take over the electronic payment market and has further allowed them to experience extreme growth. Additionally, the free digital wallet works off of a social platform, similar to Facebook, by allowing their users to connect with and follow people that they may know. This provides a social way for users to send electronic payments and see the payments of those they have connected with. In general, there has been a growing interest and popularity for social media applications and Venmo uses this platform to encourage the use of their application. In addition, Venmo has just introduced Venmo Touch and Venmo API , which gives them another

competitive advantage. This new addition to Venmo allows for a “secure way to authorize the credit card that a customer previously used with another Braintree partner on the network or with Venmo itself, enabling a seamless checkout across apps” (Ready, 2013).

Current Business Model:Current Business Model:

Venmo has experienced their exponential growth by successfully differentiating themselves in the electronic payment market. This has allowed them to become one of the most popular electronic payment applications , while still being profitable by collecting payments in other ways. Venmo’s business model consists of placing small charges (3%) on credit card transactions. They additionally charge a minimal fee of 25 cents for automatic transfers to the consumers bank accounts. Finally, they have recently implemented Venmo API and Venmo Touch, which allows Venmo users to pay for items, such as clothing from Lulu Lemon or Forever 21, through the application. Venmo then charges those businesses a 2.9% fee. Through this business model, the customer is not burdened with any fees, while the other business receives customers from Venmo for a small fee.

5. Objectives of the Marketing Plan5. Objectives of the Marketing Plan

Venmo projects to achieve a specific goal of reaching 10% of the Australian market within the time period of 5 years (2023) to ensure that Venmo remains profitable when it takes its company internationally. This amount would measure out to be about 2.5 million users in Australia by 2023. Currently in Australia, Paypal is the only electronic payment application offered and has experienced success by taking up approximately 30% of the market share in

2014. Paypal additionally owns Venmo and would promote this application over Paypal itself due to Venmo’s rising profitability. The advantage of having Paypal as a cultural expert on the Australian market makes Venmo’s goal of penetrating the Australian market attainable. Venmo will infiltrate the Australian market quickly and easily and eventually take over the rising market share that Paypal already has in Australia.

6. The Australian Environment6. The Australian Environment

Economic:Economic:

Australia is a great market for Venmo to penetrate for several reasons. The first reason being that Australia has continued to experience stable economic growth. In fact, they hold one of the highest growth rates in the developed world. In addition, their economy has experienced uninterrupted economic growth for the last 25 years (Santander, 2018). This is a strong reason to bring this application to Australia due to the fact that their exponential growth

Representatives. There are two main political parties: the Australian Labor party (social democrat, center-left) and the Liberal Party (conservative, center-right, neoliberal) (Reserve Bank of Australia, 2015). It is also important to take into account a country's current events as these play a huge factor into their political environment. Prime Minister Malcolm Turnbull is working towards further expanding the business industries. To begin, Turnbull has cut taxes and allowances by 1.1 billion dollars to provide room for innovation and entrepreneurship to cultivate (Santander, 2018). This is a great opportunity for the US to step in and take advantage of the broadening markets. Australia has also been seeking other channels of development since 2013 (Santander, 2018). The US can help provide this future prosperity by introducing products, employments and innovations to overall elevate and grow the Australian economy. Currently, with the Australian politics welcoming such innovations, it is the perfect time to introduce Venmo.

Legal:Legal:

Australia is considered a low context culture (Southeastern University, 2017). This implies that when individuals are speaking to one another, a more direct and explicit route is taken (Williams, Yolanda). They do not need to rely on contextual elements such as the speaker’s body language or tone of voice (Williams, Yolanda). This would make business agreements between the United States and Australia easier , because the US is also classified as a low context culture. Additionally, in response to the instruction from the Financial System Inquiry, three financial agencies were created in Australia. The agencies are: the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC), and lastly the Reserve Bank of Australia (RBA) (Reserve Bank of Australia, 2015). The Australian markets are monitored and regulated by the government to ensure that the consumers and businesses coexist in harmony. Venmo already regulates their company and will ensure to have the same standards when operating in Australia.

7. Market Analysis and Consumer Behavior7. Market Analysis and Consumer Behavior

Australia has a population of approximately 25 million people, and close to 90% of them live in urban areas (Australian Bureau of Statistics, 2017). Financial services is one of the fastest growing sectors in Australia. With Australians spending more and more every year, it is an opportune time to introduce Venmo. They are open to innovation and want an easier/quicker way to pay people. Australia has a high standard of living and substantial liquid assets. In June 2017, there were 7.7 million credit card holders in the country (Australian Bureau of Statistics, 2017). Consumers are carrying less cash, and more cards. Due to the growing health concern, they are also buying more healthy/organic foods that cost more. On top of that, the craft beer boom has yet to slow down. Australians are doing more online shopping and buying more expensive products. Venmo will allow for friends and family to share the rising costs of goods without hitting an ATM.

The people in Australia who could use venmo are high school students, college students, migrant workers and parents. High school and college students will send money to and from each other for various activities. Migrant workers can send money home from Australia. Parents will be able to easily send money to their children when needed. Since Australians spend more, and make more on average than people in the US, they need Venmo more too. The most popular social media in Australia is Facebook (Appendix E), and Venmo works through Facebook. Therefore, once someone in Australia downloads Venmo they will have no problem connecting with their friends and family. Australians like convenience and what’s more convenient than downloading an app and being able to immediately send/receive payments from everyone you know? People in Australia who don’t want the timeline feature and would rather make payments with discretion they can turn this feature off and enable privacy settings. Venmo allows users to be as social and nonsocial as they want.

8. Industry Analysis and Competition8. Industry Analysis and Competition

Venmo has a first-movers advantage in Australia as there is nothing like it there. Australia has Paypal, but since Paypal owns Venmo it is essentially as though Paypal is introducing a new feature. Venmo processed $6.8 billion in payments in quarter 1 of 2017. Although there is no definitive data online that is free to the public, the app is believed to hold the largest market share of any mobile peer-to-peer payment platform in the US. This is due to its high popularity among millennials. We think it will be just as popular with young adults in Australia. Direct competition includes money transfers through Facebook, Snapchat, Square Cash, Apple Pay and Google Wallet. Which are all relatively new technologies that haven’t quite took control of the electronic payment market in Australia. Apple Pay and Google Wallet seem to be the leaders in market share, but we couldn’t find any data on the P2P mobile payment industry in Australia because it is so new. Indirect competition includes wire transfers and MoneyGram. Sending money through social media applications like Facebook and Snapchat is not very popular in the US because we have Venmo. This is because Venmo’s sole purpose is money transfers, while money transfers are just a small addition to applications like Facebook and Snapchat. This additional feature in Facebook and Snapchat allows them to try and compete with Venmo, but has not been as successful. Although, since Venmo will be entering a market in Australia that already has Facebook and Snapchat, it may be more difficult to compete with these direct competitors. Apple pay doesn’t allow you to send money to someone with an Android. Venmo does. Square Cash can only be used with credit and debit cards, you can’t connect a bank account. With Venmo, you can. Venmo has the lowest credit card fee among other payment service apps (3%). Plus, it has the quickest withdrawal speed to your bank account (1 business day). Google Wallet is Venmo’s closest competition, but it doesn’t have the social aspect Venmo does. The indirect competitors such as wire transfers and MoneyGram will not be hard to compete with, as Venmo operates in a more consumer friendly fashion. You don’t have to go anywhere, you can make payments and receive payments in the mobile app on your phone.

Venmo is not limited to one specific age. Regions that recorded the “highest proportion of wage and salary earners aged from 15-34” were located in areas of Melbourne, Sydney, and Brisbane. The salaries of these young adults range from $21,855-$35,474 (Australian Bureau of Statistics). This target market is the model market driver for the Venmo application because the individuals are active in their lives and likely keep up with the current social norms. In addition, a significant portion of this group are students enrolled in high school or college. The Australian government pays a monthly “allowance” to students while they are in school full-time. This provides the students with some disposable income that can be spent on leisure activities or products (Australian Government-Department of Human Services). Since this target market has been known to spend part of their income on such leisure activities, they will be more inclined to use Venmo due to its convenience and fast-forward innovation.

Positioning:Positioning:

Since the creation and release of Venmo, it has increased in popularity with a 154% growth rate from the first quarter of 2016 (Rey, Jason Del). It is anticipated that due to the convenience and accessibility of Venmo, it will be successful to bring the application to Australia. We want to position this app in the consumer’s minds as a convenient social media peer-to-peer payment application that is easily accessible and fun to use. A major quality of Venmo is that the application offers free money transfers between individuals and banks with no add-on fees. Furthermore, the application is free to download and does not have any in-app costs. In today’s society, especially among our target market group, social media platforms are widely popular. Venmo acts on this desire of online social connections and provides an online community. For example, Venmo users are able to connect with their friends through Facebook, other’s transactions can be viewed on the main feed page, and when typing the memo for each payment emojis can be used to add style and creativity to the message. As a company we want our users’ needs to be satisfied and met with every convenience.

11. Marketing: Four P’s11. Marketing: Four P’s

Product:Product:

Our product is service. It has the potential to become a global product as it satisfies the wants and needs of many people around the world. Venmo is focused around convenience. The importance of convenience is a growing matter around the world, especially in Australia and in the payment industry. Venmo is a mobile application that allows users to easily transfer money to one another. Venmo rids of the everyday inconveniences of checks, ATM fees, and/or wire transfers. Venmo differentiates itself from competitors by providing consumers with a free service for payment transfers. The application works on a social platform to allow users to connect and interact with others. In addition, money conversion will be the largest change to the application. Venmo will decrease the credit card transaction fee to 2.5% (.5% lower than in the US) in hopes that the market penetration pricing strategy works in their favors to attract new users at the low cost.

In addition there will be a 25 cent automatic transaction fee. The transaction fee will the same in Australia as the US. This is especially good for Australians as they have a high credit card usage rate. Furthermore, Australia has a different currency than the US. As of February 14, 2018 one Australian dollar was worth 1.26 compared to one US dollar (XE, 2018). Therefore, it is essential that Venmo is programmed to Australian currency to make the transfer as convenient as possible for the consumers. It also be would be in Venmo’s best interest to advance Venmo Touch. Australians value convenience. This service, as mentioned before, allows for a convenient checkout among multiple applications with your Venmo balance. By allowing Venmo to easily make payments across other apps, along with being able to individually pay people gives Australians even more incentive to want to use Venmo.

Place:Place:

Venmo is looking to enter the Australian markets in the summer of 2019 when there is the most economic circulation. During the summer, Australians are always out and about; whether that be going out to eat with friends or catching a surf lesson. In fact, there has been a 20% increase in fast food meals as well as a 6% increase in restaurant meals in the last two years (Hogan, 2017). The environment of increased spending is perfect for Venmo as our application helps easily facilitate the reimbursements. In addition, Australians are using less cash and more electronic based payments. A “survey showed that Australian consumers are continuing to switch to electronic payment methods in preference to paper-based methods – cash and cheques – for their transactions” (Doyle, 2016). This makes Australia's market perfect for Venmo as they are the best electronic payment applications available.

Price:Price:

The cost for consumers to use our application is virtually free. Venmo does not charge a fee for receiving money, sending money with a debit card, or making payments to authorized businesses. It is also free to transfer one’s balance to their bank account. However, if the consumer chooses to send money via credit card versus debit card there is a standard 3% fee. In bringing Venmo to the Australian market, we have adopted a market penetration pricing strategy in order to quickly build a significant market share. The new fee for credit card transactions are 2.5%. As mentioned earlier, this is .5% lower than the fee charged in the US. In addition, if the consumer wants to instantly transfer their balance to their bank account there is a fee of 25 cents. This fee will remain the same in both locations. Overall, all of Venmo’s costs are relatively low for consumers.

Facebook is the most popular social media in Australia (Appendix E), it might be smart to launch an ad campaign on there. For the first quarter of business in Australia, Venmo should spend $50,000 on online advertising (Facebook/Instagram/Snapchat/Twitter). Venmo should also spend $50,000 on representatives to advertise at tables on college campuses, beaches, shopping centers and other locations. These representatives should have free venmo merchandise including stickers, t-shirts and water bottles. The cost of this merchandise will be approximately $20,000. That brings the grand total of advertising costs to $120,000 for the first quarter.

13. Implementation and Control13. Implementation and Control

Implementation:Implementation:

Venmo is committed to customer satisfaction by offering its users no transaction fees. This would carry over when implementing Venmo into the Australian market to create a positive brand image as well as establishing positive relationships with the Australian market. By offering its users free transactions, a social platform, as well as an ease when transferring costs, Venmo differentiates themselves from other electronic payments and positions themselves as a convenient and accessible application. Furthermore, Venmo has a first mover advantage in Australia, due to the lack of direct competition in this country and would allow Australians to experience such convenience for the first time.

Control:Control:

To certify that Venmo is reaching their goals, it is important to measure the profits that are incurred when first entering the market. Additionally, another critical factor to measure is the response of the Australian users to the application itself. This would be conducted by surveying the satisfaction of the users within the application. After the user’s first few Venmo payments, a message will appear while the individual is using the app asking them to rate the application on a one-five star basis. The purpose of this survey is to gage how satisfied the user is with the application, and to provide an opportunity for the users to offer any suggestions that would improve the application. This would ensure that Venmo can continue to maintain positive relationships with the Australian users , while also taking into consideration what changes Venmo could make to further improve these relationships with the users. With these forms of control, we hope to improve the Venmo application to better suit the Australian population and eventually gain a market share of 10% by 2023.

14. Conclusion14. Conclusion

The application Venmo has grown significantly in growth and popularity since its release date in 2009 with at least a million users. As previously mentioned, the Australian culture is one of relaxation, adventure, and enjoying life. Introducing Venmo to the Australian society would be beneficial to consumers because it focuses on the convenience and accessibility that perfectly complements this lifestyle. The parent company of Venmo, PayPal, is currently functioning in Australia and has shown successful results. Due to this information, it is anticipated that Venmo will be prosperous as well. Our goal is to gain 10% of Australia’s market by the year 2023.

15. Timing15. Timing

Venmo has decided to enter the market next summer (2019) as they have a goal of achieving 2.5 million users in Australia by 2023. Summer is the best time for Venmo to penetrate the Australian market for several key reasons. The main reason is due to the increase of economic circulation from individuals engaging in summer activities. Another reason is that our target market, college students (18-25 years old) are likely on school break and will have more free time to be with friends, go out to eat, and experiment with online technologies such as Venmo etc. (See Appendix B)

Ready, B. (2013, January 31). Introducing Venmo Touch: One Touch Payment Across Apps. Retrieved February 26, 2018. Rey, Jason Del. (2016, April 27). Venmo Is Growing Ridiculously Fast. Retrieved March 05,

Santander. (2018). Australia: Economic and political outline. Retrieved January 24, 2018. Sensis- Social Media Report 2017. (2017, June 22). Retrieved March 05, 2018. Shareholders Unite Small. (2017, May 04). PayPal - Mind The Gap. Retrieved March 05, 2018. Venmo. (n.d.). Retrieved March 05, 2018. Who can get Youth Allowance. (n.d.). Retrieved March 05, 2018.

17. Appendix17. Appendix

Appendix A: Appendix B:

Appendix E: Appendix F: