Hanna Spicer

B2 Biodiesel - Marketing Plan

MGMT530 – Marketing Strategies

Ms. Deb Stockman

6 May 2012

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Abstract

In the emerging of a new company within a relatively new industry B2 Biodiesel desires the

creation of a marketing strategy. Through defining the scope of the company, project scope, and

implementation strategy; a marketing strategy for B2 Biodiesel is unfolded. By identifying the

direction for the company and marketing needs per analysis performed, this strategy will prove

to benefit the marketing efforts of B2 Biodiesel in the emerging industry of a sustainable fuel

source.

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Understanding the Industry

As the fuel-dependent economy in the United States is searching for alternative energy

sources, a variety of options have been posed as valid. Of them bio-diesel continues to emerge as

a leading option in selecting a green energy, renewable fuel source. As the government in the

United States urges energy research and development teams to continue developing and refining

the potential alternative fuel sources, deadlines for when “clean fuel” is to be utilized are being

established.

For the biodiesel market there are two aspects in which buy-in is required. The potential

consumers must understand the safety, efficiency, and utilization benefits of utilizing biodiesel as

the alternative fuel source and the feedstock holders, which currently dispose of the potential fuel

sources such as animal fat or discarded cooking oils. By gaining support and buy-in from both of

these parties, the industry of biodiesel will be successful.

Project Scope

While understanding this is very much a two part strategy in marketing biodiesel the

significance of this marketing plan is based on marketing to potential customers. There is some

direction given regarding the strategy for gaining feedstock providers.

In realizing that both the feedstock providers and potential customers are found at a rural,

local level; this project is based on implementation in a rural location in South Central Kansas.

At this time no company of this kind is located in the South Central Kansas, therefore the

implementation strategy and scope of project will be heavily based in the early stages of

educating the potential clients and consumers. Throughout implementation efforts, an emphasis

will be placed on the cycle of product usage as the feedstock, formally known as waste, is

recycled into a desired fuel source. Also an emphasis on the creation of a green, reusable fuel

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source will be focused upon and therefore provide a solid base understanding for the need of the

industry and company.

Mission Statement

The mission statement for B2 Biodiesel is as follows: as the next generation of renewable

energy, B2 Biodiesel manufactures waste products (feedstock) and converts the products into a

renewable fuel source for a clean energy source as an alternative to petroleum diesel fuel. By

focusing on the need for a renewable fuel source and clean energy resource, the mission of the

company is to create a cyclical concept for energy through manufacturing clean fuel from what

was previously identified as waste to local businesses, restaurants, and animal production

industries.

Need or Niche Intending to Satisfy

An opportunity for a distribution of waste for un-needed products that are most

frequently discarded including animal fat and vegetable oil, biodiesel can be produced. These

bio-products can be converted into biodiesel, a clean energy alternative in a very simple and safe

process. Also, there are bi-products resulting in biodiesel production that can result in other

markets being satisfied such as cosmetics.

Purpose

The purpose of B2 Biodiesel is to manufacture the discarded materials that can be utilized

to create biodiesel through a process of manufacturing to create a clean energy alternative. The

ultimate purpose is to eventually create a cycle to be utilized in rural, local agricultural industries

by which the materials frequently discarded as waste can be utilized as an alternative energy

source in the operations of the agricultural industry, thus creating a market for waste and

lowering fuel costs.

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Situational Analysis

While the diagram below remains small in font, it provides some quality perspective into

the situational analysis. The process mapping was utilized in determining the appropriate

Situational Awareness and Target Marketing Strategies. Through defining the target audience as

two main groups the process of breaking down the marketing plan and strategy could be defined

in detail. See the diagram below:

The situational awareness is regarded in understanding the three aspects involved,

including: internal, customer, and external factors. The internal factors include the aspects of

biodiesel being environmentally friendly, maintaining a low operation cost, the luxury of

providing a service all the while creating a commodity desired in the local economy, and refining

waste while creating consumables. Customer aspects include the creation of a green,

environmentally friendly and safe fuel creation source, increased percentages in the return on

waste investment, and the creation of a localized business cycle for an eco-friendly energy

source. The external factors included within the situational awareness are the need to have

knowledge availability to maintain confidence in the product in effort to retain customers, an

increased emphasis on green aspects of the process, an environment that is safe and secure to

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create, and a decreased dependence on foreign fuel sources which have strong implications on

fuel prices.

The Target Market Strategies are contained within three categories as well;

demographics, psychographics, and technographics. The physical demographics are relative to

that of local, rural business and agriculture companies. Agriculture and farmers will be the

strongest demographic and also included will be restaurant owners and operators, feedlot

companies, and fuel distribution companies. The psychographics are based heavily on

relationship building and maintaining. Trusting relationships will be significant in initial

implementation and education regarding the product. Developing a local belief in the production

of biodiesel is also essential. A final psychographic that is essential to the success in targeting

this marketing strategy is to lay a foundation for education on the safety and benefits of

biodiesel. The technographics will be much lower than that of urban, or other advance-developed

regions. Consistent tours of plants being made available and the consistent promotion of

technology use in creating a safe, green product that can be used as an eco-friendly, alternative

fuel source.

By fully understanding the situational analysis and being able to determine the areas of

opportunity and strength for both the Situational Awareness and Target Marketing Strategy, a

foundation for implementation can be laid. Through creation of the thought process map, areas of

opportunity were identified and thus a Situational Analysis could be performed; identifying the

Situational Awareness and Target Marketing Strategy. A situational awareness is required to best

determine the effective method of implementation and steps to be taken in implementing a new

industry into a rural region.

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SWOT Analysis

After accessing the current market in the local region, a SWOT Analysis was performed

in a effort to determine where the furthering of B2 Biodiesel remains. The image below provides

a visual understanding for the SWOT analysis determining the strengths, weaknesses,

opportunities, and threats associated with the implementation of biodiesel production with B2

Biodiesel:

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Strengths determined in the SWOT Analysis were summarized into a few specific content

areas. Biodiesel production contributes to the independent energy supply, which is a goal of the

United States Government that is nearing in implementation timing. It also reduces GHG

emissions and will have a profound impact on the contribution to rural development through

bringing in a localized business cycle. Another strength is that in the infancy of biodiesel

production, there has not been any fluctuation patterns as a result to armed conflicts or a shortage

of supply. Finally, the greatest strength for biodiesel production is the green energy, renewable

fuel source that will contribute to a cycle of commodity production and return on waste that will

benefit locally, nationally, and worldwide.

Weaknesses for biodiesel are essential to identify as the contribution in determining how

to detour them is essential in the early establishment of the company and the implementation of

biodiesel production. The lack of feedstock availability can result in required chemical

modifications, which depletes the entirety of the green energy source. Biodiesel production

processing is non-existent in many regions, thus the understandability of the product will be low

upon implementation. Legislation and taxes also contribute to the weaknesses for biodiesel

production, which will require changes for a greater population of biodiesel users. The final

weakness identified is the market as the distribution network is not currently ready for the full

usage of biodiesel and will require some modifications and mechanical adaptations for complete

usage.

With weaknesses come opportunities and for the implementation of B2 Biodiesel, those

are opportunities have been identified for the implementation strategy. One opportunity that will

require more extensive research and regulations is the production in accordance with sustainable

principles, thus producing biodiesel without creating any hazards or endangering the food or soil

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supply. Mills and glycerin as co-products provide additional products and markets to be fulfilled,

which is an additional opportunity. A final opportunity is that a contradiction between food and

fuel production can emerge in the agricultural industry.

To wrap up the aspects of the SWOT Analysis, threats have been determined with a few

of the significant threats for B2 Biodiesel. The competition with food application risk impacting

the industry image is a risk for a threat. Another threat is that land available for feedstock

production can impinge on biodiesel production development. The lack of preparedness for

blends also has the potential to lead to the threat of greater demand than supply. This threat could

then lead to a decreased interest due to the lack of supply. In identifying the threats along with

the other aspects of the SWOT Analysis a greater understanding for the target market was

developed.

Target Market Statement

When considering the factors considered for the target marketing statement, it is essential

to focus on the product quality and target market factors. The target marketing statement

includes a high quality product with a low price; in addition to value consistently being added to

the environment resulting in a richer environmental quality. The price is market-based, thus

supply and demand are most essential in price determination for biodiesel. Feedstock availability

and location are also essential factors as well as the current market value associated with both the

feedstock products and biodiesel fuel. A final factor to be determined in assessment of the Target

Market Statement is the environmental improvements that will take place as a result of biodiesel

production and manufacturing.

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Marketing Strategy

The marketing strategy has been identified by two audiences, a primary and secondary

audience. The primary audience is identified as the extensive potential customers that will be in

need of greater amounts of biodiesel. This population includes the over the road trucking

companies and agricultural companies. For this population, the strategy will be focused first on

education to the potential customer about biodiesel, potential savings, and environmental

impacts.

The secondary market is identified as basic customers, which includes business and

automobile operators. Like the primary users identified, education will be the first

implementation marketing strategy to help the potential clients recognize the benefits of

transitioning to bio-diesel. Through the marketing education seminars the offer to install

conversion kits needed for bio-diesel will be given as an incentive to convert to the alternative

energy source.

Marketing Goals and Objectives

The present goals for B2 Bio-diesel are summarized by initial company set-up and

marketing plans preparedness. With that, the first step is to educate potential customers regarding

the product, benefits, and implementations process. This will include a large emphasis on

regulations and product integrity to best show the potential customer the potential benefits of the

product. A second focus will be on the installation of the conversion kits which will be required

by all customers as a method to convert the vehicles to be able to utilize the biodiesel that did

were not manufactured to do so.

The future goals of B2 Bio-diesel are a slight amount more distant than the present ones

as the primary goals must be reached prior. The first future goal is for bio-diesel to be readily

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available at all fuel centers. Without a consistent supply of the fuel source, potential customers

are less likely to see the value in the conversion. Next, a future goal for B2 Bio-diesel is to

dominate the over-the-road shipping market as the primary fuel source used in semi and over-

the-road transportation. Finally, a futuristic goal to become the primary fuel source for South

Central Kansas with 90% of general, basic, and over-the-road transportation; powered by bio-

diesel fuels, locally manufactured.

Identifying the Four P’s

The four P’s of marketing include product, place, price, and promotion and in the

planning of the B2 Bio-diesel production, each of these factors were taken into consideration.

The product aspects are essential as this is an initial introduction of biodiesel to this population.

When considering the product, the factors of a clean energy source are heavily considered as it is

a driving factor in consideration of the transition of fuel source. Also, the reusability of the fuel

source in biodiesel is essential to take into consideration when gauging the product aspect

contributors for biodiesel production.

Location, location, location; as important as location always seems to be it also proves to

be important in the implementation and marketing plans for the B2 Biodiesel marketing plan.

South Central Kansas is the target area for the product and it is important to take into

consideration the aspects of the rural region for this implementation. Agriculture and rural

aspects reign strong with limited technology advances currently, the education for the product

will need to be based on a relationship built through the education of the product seminars and

education sessions made available to potential customers.

Price for biodiesel is somewhat challenging to determine in the stage that B2 Biodiesel is

currently in. The price will be based mostly on the supply and demand for the product as it is a

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commodity. With the current factors at hand, it is evident that the price will be lower than that of

petroleum diesel or gasoline on current fuel market. These factors will be emphasized in an effort

to gain price buy-in from potential clients and recognition for price importance within B2

Biodiesel; however until the supply is greater the price remains unknown.

Promotion may prove to be the most important of the P’s in this marketing plan as the

product of biodiesel is still in the infancy and promotion will be the largest factor in growing the

product and industry. By promoting the localization of business and environmental friendly

aspects, the layers of promotion will begin to unravel. The lower price and lower pollution rates

will also gain a large promotional base and will contribute to potential customers’ interest in the

product and company.

Implementation Strategy

The implementation strategy for B2 Biodiesel is most important as the business and

product are both new in the region. The tone in which the strategy is implemented and audiences

that are targeted are essential and will be taken at a pace that is manageable by the region as

determined on a “play-it-by-ear” basis.

As the biodiesel plant is under construction, education seminars will be taking place in

local forums throughout the region communities. Information regarding these seminars will be

made available by utilizing simple information pamphlets distributed via mail and hung in local

areas. Radio ads will be implemented as well in an effort to make the education seminars known

about. For the duration of construction at B2 Biodiesel (6-9 months), the education seminars will

occur on a regular basis.

Following the seminars, interested potential customers that have been identified will be

further pursued and met with regarding the transition to biodiesel for the respective company. In

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these meetings the offering of free conversion kits, kit installation, and kit maintenance will be

offered as an effort to show customer support from B2 Biodiesel. Consistent effort will be

exerted to develop and maintain relationships with potential, interested customers as the

marketing implementation strength will come from quality, belief-driven relationships in the

product and company, which will result in word-of-mouth travel and the most powerful type of

advertising.

A final marketing implementation strategy for the initial start-up of B2 Biodiesel is the

implementation of relationships with fuel stations to carry biodiesel from B2 Biodiesel as a

product of choice for consumers. Again, the origin of education regarding the product and

company will be the initial steps and will be followed by incentives to implement the fuel pumps

for biodiesel. This implementation strategy will allow for a supply to be readily available to

customers. Without the supply available, the product validity is null for consumers and will

result in no reason for them to make the transition to biodiesel.

Closure

By following the Marketing Plan and Implementation Strategy presented, B2 Biodiesel

will yield an increased interest, buy-in, and product belief in the region determined to be the

target market for biodiesel production and sales. The most essential aspect to this plan is to

develop strong, trusting relationships with potential customers in the product, company, and

benefits to come by making the transition to biodiesel. The following of this plan will lead to that

belief that is key in successfully marketing a new product in a new industry to a new target

audience.

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Reference

All content contained within this document is in reference to the actual development by the

author’s family, currently in development in rural, South Central Kansas and comes as

knowledge of the author; thus no outside sources were used.