Case Studies on Best Practice in External Marketing Communication

Case on

[COMPANY 1]

BELIYA

[COMPANY 3]

[COMPANY 4]

Written in May, 2015 by the GERMAN/KASSEL team: Angela Schultheis & Beata Schwaiger

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BELIYA

1 Introduction of BELIYA

“Be good be beautiful” – this is the motto of BELIYA, an entrepreneurial company

from Hamburg, Germany. BELIYA is a label for handbags and accessories, which

supports the education of children in Africa. Each product sold by BELIYA helps

one child by funding one school year. The products are made of upcycling

materials from leather sofa returns and designer cloth remains.

Since September 2012 German customers can buy those handbags and

accessories, which were the idea of the founders Andrea Noelle and Annika

Busse. Now, about three years later, they are a team of six employees and their

products attain more and more attention: Not only in Hamburg, but media all

over the country report about BELIYA in magazines and on television and even

some celebrities wear the “good couture” handbags and accessories of BELIYA.

For a better systematisation and understanding of the business model of BELIYA,

it is explained with the help of CANVAS tool1, which consists of nine building

blocks and helps to describe and analyse business models. In this context the

value proposition, as the most important building block, will be presented

separately, followed by a section about key activities, key partners and key

resources as well as the customer segments, the customer relationships and the

channels. Afterwards the cost structure and the revenue streams will be

outlined.

1.1 BELIYA’s value proposition

BELIYA offers sustainable charity handbags and accessories and each sold

product funds the education of a child in a developing country in Africa for one

year. The donations are divided into six categories. In order to that, customers

support on average with 50 percent of the selling price a child with funding

- the school fees, as in many developing countries parents do not have enough

money to be able to pay for their children’s education. For example by

buying the GRACE handbag (€ 299) the customer funds the school fees for

one child for one year.

- the school books, which will be paid for one child for one year for example

by buying the JOY shopper bag (€ 109).

1 Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation: A Handbook

for Visionaries, Game Changers, and Challengers. Hoboken, New Jersey: John Wiley & Sons Inc.; p. 16 ff.

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- the school meal for one child for one year, which is funded for example by

buying the GRACE SMALL handbag (€ 249).

- the school uniform for one child for one year, which is funded by buying a

LOVE clutch (€ 89).

- the school bus, which is needed, because in rural areas the schools are often

many kilometers away from home. For example the TRUST phone pocket (€

29) funds the costs for the school bus – for one child for one year.

- other school projects. For example the FUTURE key ring (€ 34) supports the

construction of a well or a new school building or it funds a child in a

wheelchair.

Each product has a little tag, which shows the mentioned category of donation

with the help of the following symbols (figure 1):

On the back of the tag or on an attached card the customer can also find the name

of the specific child, who is supported with this particular handbag or accessory.

On the website of BELIYA (www.beliya.de/schulkinder) customers can also find

a picture of the supported child. Furthermore they are able to get some insights

about the profile of the child, for example the age, the country, and the projects in

which the child is involved. Therefore the aid is very personal and customers get

to know the supported child.

The handbags and accessories are made of valuable upcycling materials with a

high quality: Returns from the leather sofa production and cloth remains from

designer, haute couture, and Prêt-à-porter collections. That means that for

instance every material had a former life, for example it was used for a sofa or it

was destined for a PRADA bag. For instance when a leather of a sofa has a small

crack, the sofa cannot be delivered to the customer. This unneeded leather can

be used for the production of BELIYA bags and accessories.

These valuable materials were processed in small production plants in the

European Union (EU), which offer a great know-how and therefore a high

quality. The production plants are selected with the help of a catalogue of criteria

that guarantees fair conditions and wages to the employees within the plants.

Figure 1: Categories of donation on BELIYA products (www.beliya.de)

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1.2 Key activities, key partners and key resources

One of the key activities of the BELIYA team is the development of the products:

All the BELIYA bags and accessories are designed by the founders Andrea Noelle

and Annika Busse and they are perfected with each prototype. All bag

components are tested extensively, so that each bag meets the high quality

standards. Besides both founders need to have a great knowledge concerning

fashion trends, materials and handbags as desired by customers.

For guaranteeing the high quality standards, BELIYA has a lot of effort with the

coordination and the selection of both the suppliers of upcycling materials and

the production plants. Suppliers of returns from leather sofas and of cloth

remains from designer fashion are key partners for BELIYA and they are offering

a key resource for their products. They need to offer high quality materials to be

able to produce high quality products as well.

The production plants in the EU are classified as key partners, too, as they need

to have a great knowledge of producing with such materials and this knowledge

can be also seen as a key resource. Furthermore they need to meet the catalogue

of criteria, which requires fair conditions and wages.

Moreover BELIYA needs to coordinate with the charity organisations as another

important key partner. They are collaborating with three German organisations,

which are based in Namibia, Tanzania and Burundi: Two charitable associations

and one charitable foundation. They choose their donation partners very

carefully: Charity organisations need to have many years of experiences, the

school projects must have already been established for a few years and the

organisations have to demonstrate that the donations reach the children.

Therefore charity partners are usually smaller organisations with low

administrative costs which ensure that the support reaches the children with

little losses.

Last but not least a key activity of the BELIYA team is to develop and take care of

their marketing channels and marketing actions in order to stay in touch with

their customers. As the warehouse is located in the office location in Hamburg as

well, they need to take care of the online shop and handle purchase orders and

the individualism of their products with name tags of the children.

1.3 Customer segments, customer relationships and channels

The customers BELIYA wants to address are fashionable women from Germany,

who like designer fashion and value a high quality. At the same time those

women have an environmental awareness and are interested in social issues.

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Therefore they value sustainability and want to give something back by

supporting disadvantaged people who need help.

Most of the customers (about 95 percent) only buy the products in the BELIYA

online shop, which means that there is no personal contact to the BELIYA team.

Nevertheless the products are individualised and very personal because of a tag

with the name of the supported child, which can be seen on the website of BELIYA.

However, there are a few customers who are very close to BELIYA and buy the

products at the office location. Some products can be bought in stores in Hamburg,

Berlin, Munich, Oldenburg and Melsungen and there are even some shops in France,

Switzerland and in Austria. Even if there are some more requests from foreign

countries, BELIYA decided to focus on the German market for the beginning, but

they do not exclude the option to grow internationally in the future.

As already mentioned the major part of BELIYAs turnovers is made online and for

that reason the company is primarily active in online marketing and social media.

Their customers are informed regularly about the world of BELIYA. In this

connection BELIYA reports for example about the supported children and about

how a bag is produced.

1.4 Cost structure and revenue streams

BELIYA’s business model is value-based as they focus on a high quality of the offered

products. Comparatively the costs of production are very high, because as

mentioned above only hand-picked production plants are engaged. The costs for the

materials can be estimated as moderate costs: Only returns of the sofa production

and cloth remains are used and therefore money can be saved, but as they are from

designer collections they have a certain price as well. A high percentage of the

revenues – on average 50 percent of each product – is used for the support of the

education of African children. Finally there are some administrative costs, for

example the wages for the employees in Hamburg, the rent for the office and costs

for the online shop and other marketing activities.

BELIYA earns revenues with different fixed prices for different products (e.g.

accessories, small hand bags, bigger hand bags, shopper, etc.). The prices range

between € 29 for a phone pocket and € 349 for the most expensive handbag.

Furthermore BELIYA participates in crowdfunding actions for funding several

bigger projects in African schools. During their founding phase BELIYA was also

supported by the SOCIAL IMPACT LAB, an organisation, which helps social

companies to emerge. In this context BELIYA could benefit from a rent-free period of

eight months for their office location and they were also provided with helpful

knowledge and networks.

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1.5 In a nutshell: Business model of BELIYA based on CANVAS figure

Key partners - German charity

organisations - Production plants

in the European Union (EU)

- Suppliers of returns from leather sofas

- Suppliers of cloth remains from designer fashion

Key Activities - Draft of handbag and

accessories designs - Coordination and

selection of charity organisations, suppliers and production plants

- Servicing and planning marketing channels and actions

- Purchase order and warehouse management

Value Proposition - Social company which offers designer

handbags and accessories with good cause Each product funds the education of one

child for one year in developing countries in Africa

Support is divided in six categories of donation: school fees, school books, school meals, school uniform, school bus and other school projects

- Personal connection of the customer to the supported child, because every product has a tag which show the category of donation and the name of the supported child Picture and more information of the

children is available on the website - Products are made of upcycling materials

Returns from leather sofas Cloth remains from designer fashion

- Products are only made in production plants of the European Union (EU) with a great know-how and fair conditions

Customer Relationships

- Online shop without personal contact, but products are individualised with the name of the supported children

- Customers are informed regularly about the world of BELIYA (e.g. Blog, Facebook, etc.)

Customer Segments

- Fashionable women from Germany, who like designer fashion and value a high quality

- At the same time these women value sustainability and want to give something back in supporting disadvantaged people that need help

Key Resources - Valuable upcycling

returns and remains of leather sofas and designer fashion

- Know-how of European production pants

- Know-how concerning fashion trends, materials and handbags as desired by customers

Channels - Online shop on the

BELIYA website (95 % of the sales)

- A few customers that buy at the office location

- Also present in some stores

Cost Structure - Value-based business model with focus on high quality of the products - High costs of production: only hand-picked production plants are engaged - Moderate costs for materials, because only returns and remains are used - High percentage of revenues is used for support of African children (on

average 50 percent of each product)

Revenue Streams - Different fixed prices for different products (e.g. accessories, small

hand bags, bigger hand bags, shopper, etc.) - In Parts other supports during the founding phase (e.g. rent-free

period of eight months with the help of the SOCIAL IMPACT LAB) - Participation in crowdfunding actions

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2 What makes BELIYA an entrepreneurial company? How innovative are

they?

Following Shane and Venkatarama2, entrepreneurs need to have entrepreneurial

opportunities. That means that there have to be “situations, in which new goods,

services, raw materials, and organizing methods can be introduced and sold at

greater than their cost of production” (p. 220). Furthermore these “opportunities

must not be obvious to everyone all of the time” (p. 221) and successful

entrepreneurs have not only to see these opportunities “in situations in which

other people tend to see risks” (p. 222), but there must also “decide to exploit the

opportunity” (p. 222).

According to this definition BELIYA is an example for an entrepreneurial

company, because they developed a really innovative business model, which was

very new and has never existed before in that way. They took the opportunity of

selling a set of upcycling products that pursue a good cause which is visible and

transparent for the customers. Therefore innovativeness behind the idea of the

founders of BELIYA manifests itself in many different ways. This is demonstrated

in:

- their focus on responsibility and sustainability when producing their

products, both concerning resources and production plants.

- a value-based orientation which offers a high quality to their customers.

- the good cause which supports children’s education in developing countries.

- offering the customers the possibility to get in touch with the supported

child by giving the information who and how he or she is supported.

First, BELIYA takes responsibility from the beginning of the value chain until its

end. That means that they take responsibility, when the materials come into play.

They focus on sustainability and in order to that they only use valuable materials

from designer leather sofa returns and remains from designer, haute couture and

Prêt-à-porter cloth that otherwise would be disposed. Therefore the materials

are very valueable for the money even though they have a high quality. Besides

by using only these very valuable materials from designer collections, BELIYA

ensures that the products meet high quality requirements and their customer’s

desire for designer quality.

Furthermore BELIYA also takes responsibility while selecting their production

plants: With the help of a catalogue of criteria they only collaborate with

production plants in the European Union (EU), which guarantee fair conditions

for their employees with fair wages. For example the prototypes for BELIYA

2 Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a

field of research. Academy of Management Review (Vol. 25, No. 1), pp. 217-226.

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accessories were developed with the help of a social institution with unemployed

migrant women. In addition to that the production plants are very small family

businesses managed by their owners, which can offer a great know-how

regarding a high quality production. Finally, only collaborating with production

plants in the European Union is protecting the environment, because of very

short shipping distances andCO2-neutral shipping.

Last but not least, when selling the products, BELIYA especially shows their

entrepreneurial spirit: During the doctorial theses of the two founders, which

dealt with mini-credits, they have seen in different projects what people can

achieve. They recognised that good education is crucial and that educated

children were able to develop whole families and villages. Hence they decided to

found a company which can support those children and use a huge percentage of

the earnings to help other people. BELIYA hands out the responsibility to the

consumer who makes a donation by buying the products to fund the education of

a child in Africa for one year. Therefore BELIYA developed the six categories of

support and it is especially innovative that the aid is very personal: Because of

the little tags on the products the customer can get to know the supported child

via the BELIYA website.

3 What makes BELIYA an example of best practice with regards to

external marketing communication? – How are these practices

implemented?

BELIYA is a best practice example in external marketing communications

because the company maintains the communication to its stakeholders. BELIYA

spreads news via Facebook and a newsletter to let customers and ambassadors

be part of its world and is already present in the media.

In cooperation with the foundation Steps for Children they support projects

which help children in Africa regarding education. Such projects are promoted

via the BELIYA Youtube Channel, Facebook and their own website.

They were already mentioned several times on television, in the newspapers and

in magazines. In 2014 BELIYA won the Hamburg Marketing Award (Hamburger

Marketingpreis – HAMMA). In this regard the company had its “Good Couture”

campaign with posters at all bus stations in Hamburg. With this campaign

BELIYA could promote their products in the whole city and get a lot of attention.

BELIYA gets also attention in the media because several German celebrities have

bought bags and accessories from BELIYA and show them at public events which

are great advertising as well and shows that these products are on a high-class

level and worth buying especially as they are for a good cause.

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Another communication tool BELIYA uses is a newsletter to create an added

value by reporting about the world of their products, the children and projects

they support and also insights about the production of bags and accessories.

BELIYA wants all customers, non-customers and ambassadors to be part of the

very special BELIYA world.

Using the newsletter BELIYA also gives information about promotions and

special offers to their customers. Besides several sales promotions BELIYA has

also special offers for Mother’s Day where a selection of bags and accessories can

be purchased for a discounted price within a limited time period. Regarding sales

promotions, BELIYA furthermore offers a discount to friends of customers who

buy a GRACE handbag for € 299. A friend can then use a voucher to get a

discount of € 50 for a large GRACE handbag for € 299 or a discount of € 30 when

buying a small GRACE handbag for € 249. Such promotions can increase the sales

on the one hand and the popularity of BELIYA on the other hand, since the

customer’s friends also get to know the brand and its products by using the

vouchers.

4 How is BELIYA utilizing the new communications features?

BELIYA is mainly active in online marketing and social media. They make 95

percent of their sales via the online channel which means that this is the most

frequented channel. For that reason BELIYA uses almost the whole range of the

new digital media. They have an own blog where they post their updates and

where the readers have the possibility to spread the news via Twitter, Facebook

and Pinterest directly.

They also have an own Facebook fan page with more than 5,000 likes. They

update their posts frequently and upload news, pictures and several features to

inform their fans and customers about news regarding the company and their

products.

BELIYA has an own Youtube channel with several self-made videos but also

extracts from television reports about their company and special events like the

Hamburg Marketing Award.

Of course, they have a website where they promote their products and give

detailed information about the children in Africa who are supported by

purchasing bags and accessories.

Besides the website which contains their web shop BELIYA also has an

additional site called goodcouture.de where the customers can also become

ambassadors for their products. Each ambassador has the possibility to give a

statement about the mixture of fashion and charity, the business model or simply

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about the possibility to help other people while buying products for themselves.

Among the ambassadors there can be found TV stars, celebrities and fashion

bloggers.

5 International issues (if relevant)

Even though BELIYA engages socially, especially by supporting and funding the

education of children in Africa by selling their products, other international

activities are missing.

The products currently are primarily sold in Germany. BELIYA gets requests

from France to establish stores there and in fact, they already have two stores

there. They also sell their products in Switzerland and Austria because they also

got requests from these countries.

Regarding the international aspect the production sites are not placed in

Germany but in Italy and Hungary. The communication between the office in

Germany and both other countries is constant and the founders often go there to

visit the production sites.

As one of the founders told in an exclusive interview, BELIYA first of all would

like to focus on the German market since it is that large. They want to acquire

more German customers and supporters but they emphasize that someday of

course they want to expand internationally.