Introduction
Coworking space service is a business concept where a company offers a work environment to people from different backgrounds working independently or together (Schuermann, 2014). The business model targets self-employed people, freelancers, small businesses, start-ups, consultants, and people working from home. In addition, a typical coworking office space provides the necessary equipment to their customers, such as internet, printing services, boardroom, and even kitchen services. The idea is to help small businesses access the best office working environment that would have been costly or difficult for them. In this business model, the customers pay a subscription for regular use or a set amount per time of office use.
Comfort Space is a new company that seeks to establish co-sharing office space in town xx and capitalize on the existing market opportunities. The business model is more of a business-to-business targeting other small businesses, remote workers, and start-ups. This marketing plan describes what the company aims to offer, the value proposition, the customer target, the need for the service, and the marketing mix. The marketing plan is categorized into several parts, including situational analysis, market segmentation, target, positioning, and the marketing 5Ps.
Situational Analysis
Situational analysis helps understand a business environment to create a viable business plan. A company can plan and make attainable goals with situational analysis after examining all the necessary environmental factors. The marketing plan covers the situational analysis for Comfort Space based on the PESTEL analysis. The PESTEL analysis provides insight on the competition level as per economic factors, how factors like technology, social, and environment create opportunities for customers and collaboration and impact the company, especially political factors (Berry, 2017).
Political factors include government policies and regulations that may impact the business (Berry, 2017). Further, these policies cover issues such as employment laws, tax policies, and other environmental laws such as safety and occupational regulations. Political factors have minimal impact on the company’s business model. Like any other company, taxes must be paid, and the company does not fair negatively. Likewise, the company must implement all the necessary laws, specifically environmental, labor and safety regulations. The most important regulations are safety and occupational; since the company offers office space to many types of businesses with different workers, security and occupational compliance are a must. Likewise, other health policies also impact the industry. For example, governments directed working from home and quarantine at the peak of the Covid-19 pandemic (Pak et al., 2020), which would have negatively affected this business model.
Economic factors impact business financial performance from the company and customers’ perspectives. For instance, higher interest rates will affect borrowing costs adversely, leading to higher start-up costs. A good economy will also increase customers’ purchasing power leading to increased subscriptions for the business and potentially high revenue growth. For example, during the covid-19 pandemic, there was economic turmoil, and most companies closed (Bartik et al., 2020). Hypothetically, if Comfort Space existed, there would have been reduced revenue because of the economic downtown.
Social factors include demographics, age, perception, and people’s attitudes. Small businesses and entrepreneurs often tend to explore and create new relationships in the hope of generating leads and more business opportunities. Therefore, working online or from home limits such possibilities, and the company’s business model offers collaboration and interactive opportunities. Likewise, a small business with no huge capital needs modern and professional offices to present a good image.
Technological factors create barriers to business start-ups or enhance business processes. With modern technologies such as high-speed internet, virtual private network, and remote working, the company enables small businesses, start-ups, and entrepreneurs to access these technologies and expensive hardware at a relatively fair price. Additionally, new collaboration tools allow people to work remotely, and the business aims to offer space for remote workers.
Environmental factors are those that have an impact on the natural environment. Going green is a current business trend where businesses aim to reduce their carbon footprint regarding climate change (United Nations, 2020). The company is promoting this move by offering multiple spaces to businesses, leading to reduced energy waste. In addition, the office environment is paperless and encourages the use of digital records, minimizing the use of paper to contribute to the preservation of trees. Lastly, the business office space is created with enough natural lighting that reduces the amount of electricity usage, and the printers use green printing inks that are environmentally friendly. Lastly, legal factors are the contractual factors that may affect the company, such as sub-letting and risk arising from space lending or the liability.
Segmentation
Market segmentation is the categorization of customers into groups that is approachable. The market is not made of similar characteristics but distinct features with different needs and wants. Market segmentation is based on many approaches like firmographic, product use, income level, occupation, purchasing behavior, and nationality (Dolnicar, Grün, and Leisch, 2018). Comfort Space segments customers primarily using firmographic.
Firmographic categorizes target companies based on the company’s features (Bly, 2015). In this category, comfort space categorizes firms into three classes; start-ups, small businesses, and large businesses with workers working remotely. Start-ups are relatively young companies and enterprises created by entrepreneurs to design and develop new products and services. Based on their characteristics, these businesses usually lack enough capital and often minimize start-up costs such as building office space. This creates an opportunity for Comfort space to offer well-equipped co-sharing office space at a lower price.
Secondly, small businesses can take any form of ownership, such as sole proprietorship, limited companies, and partnerships, and are characterized by very few employees and small revenue. For example, a partnership can comprise two individuals working on several consultancy works; therefore, they do not need to have physical space in huge offices, which is where Comfort space comes in and help them.
Lastly, with the increased rate of remote working uptake, some companies may require their remote employees to have a working space with minimal interactions. In this case, Comfort space seeks to approach these workers living near the office and form a business partnership with employers to offer working space at a prescribed rate.
Targeting
Comfort Space will select and target all the market segments identified above; therefore, the company will use a differentiated marketing strategy. With differentiated marketing strategies, the company will implement different marketing strategies for each of the above segments (Bly, 2015). For example, when making offers to start-ups, their package may be different as they may need more resources compared to remote workers who only need the workspace. Thus, their request may include extra items such as a boardroom and regular office space. On the other hand, remote workers may not need everyday spaces, especially those with a hybrid working structure. Similarly, a small business may need periodic space based on their needs and contracts. Lastly, the company will meet customers’ needs using a differentiated marketing strategy.
Positioning
Market position is how customers view and perceive a brand and its associated products. Therefore, this affects how Comfort Space will position itself and remain competitive by providing excellent service. In this case, the value proposition of Comfort space will differentiate itself from other competitors. With this in mind, the company has a positioning statement:
“Comfort Space offers complete, spacious, and well-equipped co-sharing office space to small businesses, start-ups, and remote workers who need an excellent office environment because their comfort, productivity, and efficiency matter.”
Marketing mix
The marketing mix consists of 5Ps (Product, Price, Promotion, Place, and People). The product is a package of benefits that fulfill customers’ needs and wants. There are two views surrounding the product: the firm’s view, which is the service offered, and the customer’s perspective, which is the solution being offered. Comfort Space offers co-sharing office space to business customers who seek a professional work environment at a lower cost.
The price is the fees charged on the service rendered to customers. In this case, the price is the subscription fees of office space charges. The service price is determined using the cost-plus methodology to cover all the input costs and generate profit from the margin. As for the pricing strategy, Comfort Space will use the market penetration strategy and offer lower prices than the competition to stimulate service uptake and disadvantage the competition.
Promotion is the activity of communicating about the service to potential customers. Comfort Space will use the necessary marketing tools to promote the service. For instance, the company will leverage the power of social media to create awareness at a lower cost. In addition, the company will also use digital advertisement to reach more customers, such as through Facebook Ads and Google Ads. These technology tools track users’ internet usage and browsing behavior to pinpoint potential customers, thus creating a higher return on investment than traditional advertising (Balça and Casais, 2021).
Place covers the aspect of service delivery and the location. Comfort space will start by leasing substantial empty spaces in the building and equipping it; ideally, the services will primarily be offered at these offices. People are the employees of the company that will be helping customers. Comfort Space will hire enough staff responsible for various business functions. For example, the sales and marketing associates will be tasked with the operation of sales. Customers service associates will deal with customers and help where necessary, facilities officers will oversee the office facilities, and the finance associates will ensure that customers’ accounts and financial records are up to date and accurate. Lastly, a CEO will manage the business to provide excellent customer service and proper business direction.
Conclusion
Comfort Space will offer coworking and sharing space targeting small businesses, start-ups, and remoter workers. The situational analysis informed by the PESTEL analysis indicates a reasonably competitive environment due to economic, political, social, and technological factors. The market segmentation is based on firmographic factors and categorized as start-ups, small businesses, and large businesses with remote workers. Comfort Space will use a differentiated marketing strategy for market targeting and focus on all segments identified. The company’s value proposition is clearly outlined in its market positioning statement. The marketing 5Ps covers the aspect of Product, Price, Promotion, Place, and People and how the company addresses each element.
Reference List
Balça, J. and Casais, B. (2021) “Return on investment of display advertising: Google Ads vs. Facebook Ads,” in Handbook of Research on New Media Applications in Public Relations and Advertising. Hershey, PA: IGI Global, pp. 1–13.
Bartik, A. W. et al. (2020) “The impact of COVID-19 on small business outcomes and expectations,” Proceedings of the National Academy of Sciences of the United States of America, 117(30), pp. 17656–17666. doi: 10.1073/pnas.2006991117.
Berry, E. (2017) Pestle analysis: Prepare the best strategies in advance. North Charleston, SC: Createspace Independent Publishing Platform.
Bly, R. W. (2015) The marketing plan handbook: Develop big-picture marketing plans for pennies on the dollar. Entrepreneur Press. Available at: https://books.google.at/books?id=GUZjCwAAQBAJ.
Dolnicar, S., Grün, B. and Leisch, F. (2018) Market segmentation analysis: Understanding it, doing it, and making it useful. 1st ed. Singapore, Singapore: Springer. Available at: https://books.google.at/books?id=b-1lDwAAQBAJ.
Pak, A. et al. (2020) “Economic consequences of the COVID-19 outbreak: The need for epidemic preparedness,” Frontiers in public health, 8, p. 241. doi: 10.3389/fpubh.2020.00241.
Schuermann, M. (2014) Coworking space: A potent business model for plug ’N play and indie workers. Berlin, Germany: epubli.
United Nations (2020) “Climate Change and COVID-19: UN urges nations to ‘recover better’ | United Nations.” Available at: https://www.un.org/en/un-coronavirus-communications-team/un-urges-countries-%E2%80%98build-back-better%E2%80%99 (Accessed: June 29, 2022).
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