Problem
The issue that has to be answered in the case is what the college students, as target customers for online dating service, ideally would like to be offered. So the problem is whether Biff should start the business or not.
Objective
Online dating services that are offered do not satisfy many customers and thus require more accurate search response for partners. Thus, an online dating service targeted only to college/university students.
Opinion
An online dating service itself is an innovation for itself. So far, the dating facilities and options provided by the usual service providers like Yahoo do not cater to areas of interest or location or college or university. A student studying in a particular college would ideally like someone from his or her campus or someone from the subject background. These are specific interests of a student and therefore targeting the students is a good idea. Therefore two criteria, which can make the business a success, are:
- The niche target, which encompasses a large segment of single population.
- Provision of value added services like “Biff’s Bash” or chaperone or background check.
Areas of Strength
The internal strength of the business idea that has been presented in the case is present. Online dating business has become a success, with 31 percent Americans using online dating sites in 2009 (Angel). According to the U.S. Department of Education, in 2007 there were 13,782,702 students enrolled for full time and part time courses in the US colleges and universities and is expected to increase 10 percent by 2017 (National Center for Education Statistics). Further, the total population within the age group of 18 to 24 years is 29,435,332 (US Census Bureau). Moreover, there are 47% single men and 53% single women in the US according US Census data (Dating Sites Review). Therefore, there is a large market if the target is to be done towards college students in the US. The market is expected to grow as the online dating industry has grown even during recession (Dating Sites Review).
There are various niche target-dating services operating in the US and they are all relevant to people as they find the general dating services inadequate to meet their demand. There are no targeted online dating services for college or university students where these factors are taken into account. Further, this will increase the credibility of the site and its operations as background checks will be easier for people who are enrolled in some king of university course. The other ideas, which will enhance the innovativeness of the service offering, are the bashes for couples and background checks. This will help ease the fear of online dating frauds.
Areas of Concern
The areas, which cause concern for the business, are first related to recession. With the number of revenue avenues declining for online businesses, there will be fewer revenue generation from advertisement (Dating Sites Review). Thus, the business will solely have to depend on subscriptions.
Further, how can the dating service check if the person is really enrolled for a course in college? Background checks will become mandatory and will increase the cost of operations. Therefore, the pricing has to be done more cautiously.
Another area of concern is the positioning. Though the site will the dedicated solely for college students, these students would also like to date with other service provides. Therefore, there would be tough competition in this area as there is intense competition in online dating services. The competitors would be Avalanche, LLC (Date.com, Matchmaker.com, Amor.com), Chemistry, eHarmony, FriendFinder Network (FriendFinder, Senior FriendFinder, Adult FriendFinder, Passion.com, etc…), Match.com, Spark Networks (AmericanSingles.com, Date.ca, JDate.com, BlackSingles.com, etc…), and Yahoo! Personals (Dating Sites Review).
The market for online dating has become very competitive most of the companies have engaged in providing value added services to the customers. Therefore, more concentration needs to be given on customer support and services.
Recommendation
Overall analysis of the dating service shows that in a highly competitive market the inclusion of a niche marketing plan is a good idea (like college student online dating) as this will provide more niche and targeted customer group. Therefore, niche marketing in a market, which is already saturated, is an ideal plan.
The other plan that must be considered is the value added services. The plans that Biff has thought about i.e. bodyguard or a bash for active and subscribed couples is a good idea as this way the security issues related to dating can be taken care of. Apart from this, the other value added service that can be used is online gift ending process. This is an opportunity for the business as in the US the virtual goods industry is $1 billion in 2009.
Customer care and servicing is important. Therefore, in order to increase customer satisfaction background checks and verifications should be made mandatory in order to ensure safety of the people who are using the services.
The revenue model must be split between subscriptions and advertisements, as this will diversify the revenue generation opportunity for the company. Further, for the bashes proposed for subscribers, travel agencies can be contacted who could partner or sponsor such bashes.
Conclusion
The business of online dating is still nascent and is expected to be on a growing stage. There are a lot of single men and women in the US who are already using the services and a niche service provider for college students will provide a good business opportunity.
Reference
Angel, Jennifer. “Online Dating – Statistics.” 2009. Ezine. Web.
Dating Sites Review. “Current Online Dating and Dating Services Facts & Statistics.” 2009. Dating Sites Review. Web.
National Center for Education Statistics. “Digest of Education Statistics, 2008.” 2009. U.S. Department of Education. Web.
US Census Bureau. “Educational Attainment US.” 2008. 2005-2007 American Community Survey 3-Year Estimates. Web.