Final Marketing Plan 4a2611

Idaho Biodiesel Marketing Plan

Jason Curlanis Travis Goldsby Justin Hoffman Danyelle Keese Olivia Sarabia

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Executive Summary The University of Idaho has been on the forefront of biodiesel research since 1979, committing themselves not only to researching the product itself, but to educating people on why they should be adopting it in their practices, especially farmers and distributors. Biodiesel is a diesel fuel substitute made from vegetable oils, it releases less carbon emissions into the atmosphere, is a renewable energy source and is completely biodegradable and is considered a safer alternative than regular diesel. The University’s Biodiesel team is made up of a group of students and professors that are working on the research and education of the benefits of using biodiesel and hope to implement it into the everyday culture of American diesel consumers. With all of this in mind we have created a mission statement for the University of Idaho Biodiesel team, “To provide unbiased, science based information about the benefits of implementing biodiesel to everyday consumers and businesses in Idaho and the rest of the nation.” We created this in part from their goals listed on their website, “The goals of the Biodiesel Fuel Education Program are to provide unbiased, science-based information about biodiesel, and to assist in the development of educational tools for a national biodiesel outreach program.” Getting the word out about what the benefits of Biodiesel is one of our main goals. Currently competitors are dominating the market, gasoline is the main source of fuel for consumer vehicles and getting these people to switch from unleaded to diesel fuel would be a very high cost for the consumer and difficult to do, so we must focus on diesel fuel s. In order to even start to get the word out to consumers about biodiesel the University of Idaho will need to collaborate with other universities and environmental interest groups in Idaho to create horizontal partnerships. We will maintain and grow these partnerships through an online networking platform. This platform will work similarly like a blog and will be a place where anyone who has interest in biodiesel and connect with each other to share ideas, successes, and difficulties. The ultimate measure of success will be the creation of manufacturing plants and distributors in Idaho, creating more availability.

Company Overview 2

The University of Idaho’s Biochemistry and Engineering departments plan to help educate Northern Idaho and Moscow area about biodiesel. By creating biodiesel from used petroleum products, we can create fuel for our vehicles that burns much cleaner, producing fewer harmful particulates for the environment. The University of Idaho is on the forefront of the biodiesel push since 1979, committing themselves not only to researching the product itself, but to educating people on why they should be adopting it in their practices, especially farmers and distributors. The University alone has begun operating the steam plant with biodiesel created from the waste oil from various campus dining establishments. The next step is getting the rest of the country on board. One of the most difficult challenges we face is fighting the comparison many people have with ethanol, which is an inherently damaging chemical made from corn that is added to fuel in order to increase its yield. Not only is the physical burning of ethanol worse for the environment, it uses precious resources and land to grow the corn to be turned into ethanol instead of feeding it to our livestock.

Market Overview Currently biodiesel is not being produced for the public to purchase. One of the reasons for this is that not enough people know much about it, so there is not enough demand in the market for it to be produced on a larger scale. There used to be a producer in New Plymouth which allowed gas stations to use a blend, but after a few years of operation were shut down because they were not profitable enough. This was due to biodiesel being more expensive than regular diesel at the time, so gas stations would not purchase it for their tanks. If biodiesel is made in higher quantity than it is competitive with diesel. We believe this barrier can be overcome once the public is aware of the benefits, and we hope for it to be implemented throughout Idaho. Situation Analysis Context/environmental factors ●

Government investment in diesel

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Government policies 3

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Consumers are wanting more environmentally friendly substitutes

Collaborators ●

Other universities working on biodiesel

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Local companies using diesel vehicles who can use the biodiesel and help promote it

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Biodiesel Fuel companies already in existence

Customers/ target markets ●

People who own diesel cars

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Companies that own trucks and buses: school buses, semi-trucks

Competitors ●

Regular diesel

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Gasoline companies

High competition ●

Hard to get into this market

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Gasoline is the majority

SWOT Strengths ●

The use of biofuels can reduce GHG emissions

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Production of biodiesel contributes to secure energy supply

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The properties of biodiesel and fossil diesel are similar

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The co-product glycerine can be sold (In a lot of medicines and hygiene products, makeup)

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Lubricating effect of biodiesel would prevent wear in the engine

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The toxicity of biodiesel is lower compared to fossil diesel

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Existing cultivation techniques can be used for cultivating oil crops

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Provide new employment opportunities (longer value chain) 4

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Increase income of farmers

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Short transportation distances (locally produced locally used)

Weaknesses ●

Land and cost intensive

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Economic sustainability strongly depends on seed yields and income from byproducts (glycerin)

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Long term storage of biodiesel can cause degradations in certain fuel properties, requiring additives

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Cannot withstand all types of weather conditions

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Lower energy content per volume

Opportunities ●

Potential to replace large percent of fossil fuel and decrease dependency on oil

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Reduce air pollution

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Many research initiatives exist

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Waste oil can be used as cheap feedstock for biodiesel

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Tax exemptions and mandatory blending obligations could largely increase use of biodiesel

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Little to no modification needs to be done to refit vehicles

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Relatively new market

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Political lobby for biofuels is weak, especially compared to fossil fuels

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Certain scale of production required in order to be economically viable

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An increasing market for biodiesel will saturate the demand for glycerin and the price for

Threats

this co-product will decrease

Market Research 5

According to the U.S. Department of Energy, use of the most common blend of biodiesel, B20 (80 percent regular diesel and 20 percent biodiesel), cuts petroleum use by 19 percent, greenhouse gas emissions by 16 percent and hydrocarbon emissions by 20 percent.

Marketing Goals and Objectives Corporate Goals: ●

All University of Idaho’s diesel vehicles to increase to a B20 blend.

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5 horizontal partners after first year of implementation

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20 horizontal partners after 5 years of implementation

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1 vertical partner in next 20 years

Marketing Plan Objectives: ●

Increase customer perceived value of the Biodiesel by creating awareness of the environmental benefits as well as the mechanical benefits it provides through lubrication of the engine

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To separate Biodiesel Brand from university to increase brand strength and awareness

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Inform farmers and other potential collaborators of the benefits they would obtain in increasing the demand for biodiesel.

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Obtain partnerships throughout Idaho in order to create a biodiesel movement

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Establish small advertising budget in order to aid in increasing demand

These corporate goals and marketing plan objectives will be reached through the implementation of a networking platform. The networking platform will be a website where people with interests in seeing biodiesel brought to Idaho come together to share ideas and and set up meetings and spread the word about biodiesel with the goal of generating enough demand that a biodiesel producer will move to Idaho. The University of Idaho Biodiesel team will need to regionally (geographic) segment Idaho into three segments, North Idaho, Central Idaho and the Treasure Valley, and Southern Idaho. They will target 6

other universities and groups that have interest in biodiesel such as the Idaho Trucking Association through the networking platform. These groups will in turn the networking platform and spread word to the everyday consumer and in turn these consumers will also the biodiesel movement and increase demand.

Marketing Strategies Segmentation Since we are focusing on increasing awareness in the state of Idaho, we have chosen to segment it into geographic regions. These would include North Idaho, Central Idaho/Treasure Valley, and Southern Idaho in order to gain a presence all throughout the state. By using word of mouth to spread awareness about biodiesel it is crucial that we are reaching each major area to get the most people on board.

Target Marketing We will seek to target the following groups as well as anyone else who has interest in spreading the word about biodiesel and it's benefits.

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Colleges and Universities

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Environmental Groups

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Diesel Fuel Groups

These groups are large enough entities to make a difference. We are not looking to disregard the everyday diesel but rather reach them through these large interest groups. Through targeting we believe that the following positioning statement captures how the networking platform will be viewed by all potential partners and people interested in biodiesel.

Positioning

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Positioning Statement: The Idaho Biodiesel Education Program provides s of diesel fuel with education tools and networking platforms better than current biodiesel programs. This is done by creating a networking platform that brings consumers of diesel fuel and others who believe in a more environmentally friendly fuel together to share ideas, hold events, and increase awareness of biodiesel.

Differentiation The primary concern when promoting an educational non-profit program lies in differentiating yourself from the more widely-used alternative; in this case, traditional diesel fuel. Most transportation, delivery, and fleet vehicles currently run on diesel and giving ourselves an edge by effectively communicating the benefits of biodiesel to these companies is the best way to go about creating demand, which will in turn draw interest from suppliers and manufacturers. Aside from using our digital (website, social media) and traditional media (print media, wordof-mouth, and earned media), we can create the demand by partnering with transportation programs on the local level, such as city buses, university vehicles, and even government-issued vehicles. When the market is surrounded by organizations using and openly advertising their use of a green fuel source such as biodiesel, citizens will take note. Although IBEP is facing great opposition within the state, local, and federal governments, citizens vote with their dollar, and if we can truly create a demand for biofuel, the supply will come very quickly after.

Marketing Mix

Service Strategies Value Proposition: Use of a networking platform promotes the use of biodiesel and allows people who are ionate about it to connect and make a difference in their communities. This would show the benefits 8

of switching to biodiesel, and increase its demand in Idaho.

Networking Platform As part of our communication channel, the Idaho Biodiesel Education Program will create a website that will function as a form of horizontal communication for the college and organizations inside the network. This will not only hold a small bit of potential for advertising to non-, it also allows a space for those a part of the network to work together to set up events and coordinate their research, as well as provide a vehicle to deliver out messages to those on the outside of the network. By doing this, the IBEP will have also pushed their current branding beyond the scope of research solely at the University of Idaho. Although UI has been the figurehead and founders of the program, as well as led the research push, there is still plenty of from other universities researching in the same field, adjacent fields, or even offering degrees and emphasis related to biofuel research. One example is Boise State University’s Biomolecular Sciences, which also includes an optional emphasis in biofuel technology.

Branding Brand Promise: “A platform that unites ers and advocates of biofuel”. We wanted the brand promise to be simple and clear. The biodiesel team is here not only for the research but to get the community to listen and be educated on biodiesel. The team wants to bring all s together to bring awareness of the benefits and by doing that hopefully adding more ers. We have made a brand for the University of Idaho's Biodiesel Team to use throughout their marketing and website. We have an outline of guidelines that helps them use the logo for different medias such as a filer or social media use. We incorporated an Idaho logo to remind people that the research was done right at the University of idaho.

Call to Action 9

“If you are interested in protecting the environment while still maximizing the utility of your diesel engine vehicle, then with your help the Idaho Biodiesel Education Program will bring Biodiesel to the State of Idaho.” This call to action, although not necessarily mentioned word-for-word, will be the driving force behind recruiting more horizontal partners and ing citizens to the cause to generate demand around the state. It will be displayed on the networking platform and on each partner's website, linking back to the networking platform.

Marketing Communication Channels To increase people's knowledge and get the word out about biodiesel we will primarily use earned media. Since we have a small advertising budget we will do as much as we can with our formal promotion to target different channels. Our value networks would be through our vertical partners; manufacturers, suppliers, farmers, transportation companies. While our intermediaries already exist like fuel wholesalers and distributors.

Value Network When creating our networking platform, the Idaho Biodiesel Education Program will create a value network, partnering with other universities, colleges, environmental groups, relevant associations, and research institutions. This will, in essence, create a large group of ionate ers from many different backgrounds, which greatly strengthens our message and education goals. Some examples of possible partners for the value network include, but are not limited to: -Boise State -Idaho State University -College of Idaho -Lewis and Clark State College -North Idaho College 10

-North Idaho Building and Contractor’s Association -Idaho Transportation Department -Transportation Alternatives Program -Idaho Trucking Association

Pricing Once enough demand is created to bring a producer to Idaho, there are many factors that will affect the price such as government regulations and supply of regular diesel and biodiesel but prices should be competitive to prices of regular diesel. The price of the website will be low and the IBEP can either hire someone outside the biodiesel program to create it and continue to work on it to ensure it’s running correctly. The Biodiesel team can look to hire a University of Idaho student skilled in web design.

Promotion Idaho Biodiesel will develop a small advertising budget to operate statewide with the conventions and gatherings, as well as promoting the networking site. In order to function, each region will need to develop their own budget (whether that be through hip fees, fundraising, crowd-sourcing, or other sources is up to them) to promote in their own respective region. The Idaho Biodiesel state board will serve mainly as an organizer and overseer of each of the three regions. Eventually, the network may be large enough for the state board to pitch in money to help the regions.

Implementation

We came up with a seven step implementation plan that reads as follows:

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Determine marketing/advertising budget

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Hire Marketing Manager

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Develop networking platform (website)

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Assign regions

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Begin developing s and promoting networking platform

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Establish horizontal partners and begin sharing STP strategies

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Plan annual Idaho Biodiesel convention

We did not believe it was necessary to put a time frame around this implementation plan. We are unsure of how difficult it will be to create the horizontal partnerships we are seeking to obtain.

Evaluation/Controls

Evaluation: By tracking our success we will track our facebook page to see how many views we bring in a week. Every month we will compare the data to see the percentage of how much the viewers has increased. This process will also be used to evaluate our new website once it is created and see how many people have visited the website and how many are using it as a means to communicate with others about events and other gatherings.

Controls: Customer - Customer via the networking website and word-of-mouth will be the single most important way to see how well the marketing plan is playing out. In an education plan such as this one, a lot of the “success” is an abstract concept in that there isn’t a real way to measure how well-

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educated the general public is without giving them an exam on the topic. We also plan on doing periodic surveys whenever possible, as well as conduction before-and-after surveys at conventions and gatherings.

Market Share - Market share will be measured in the number of fueling stations in the state that offer biodiesel or a biodiesel blend as an alternative to regular diesel. As of right now, there are only a few in the state.

Partnerships - The number of vertical and horizontal partners is a great way to help understand the demand for biodiesel. Obviously, the more the better. As stated above, we consider horizontal partners to be those organizations that belong to the networking platform, and the more horizontal partners there are, the easier it will be to attract vertical partners (who are ultimately the ones that will determine whether or not diesel is distributed to the masses).

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Work Cited American Trucking Association. “Reports, Trends & Statistics.” American Trucking Association. 27 Mar 2017. Web. American Trucking Association. “Latest U.S. Freight Transportation Forecast Shows Continued Growth for Trucking.” American Trucking Association. 27 Mar 2017. Press Release. "Biodiesel and the Environment." Biodiesel and the Environment - Energy Explained, Your Guide To Understanding Energy - Energy Information istration. Web. 26 Mar. 2017. "Idaho Biodiesel & Alternative Fuel Locations." Idaho Biodiesel & Alternative Fuel Locations. Web. 26 Mar. 2017. Brian Hanson. University of Idaho - graduate student. Interview. 25 January 2017. Kendrick Oil Company. “What is the difference between clear and dyed biodiesel.” Kendrick Oil Company. 27 Mar 2017. Web. Luque, Rafael, Lorenzo Herrero-Davila, Juan M. Campelo, James H. Clark, Jose M. Hidalgo, Diego Luna, Jose M. Marinas, and Antonio A. Romero. "Biofuels: a technological perspective." Energy & Environmental Science 1.5 (2008): 542. Web. 2 Feb. 2017. SMART Transit. “About Regional Public Transportation.” SMART Transit. 27 Mar 2017. Web. University of Idaho. Biodiesel Education. Web. 2015. 15 February 2017.

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US Dept of Energy. Biofuel Basics. Web. 2017. 15 February 2017. "What Is The Difference Between Clear And Dyed Diesel?" What Is The Difference Between Clear And Dyed Diesel? - Kendrick Oil. Web. 27 Mar. 2017.

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