The last five years have witnessed a shift towards ecommerce in Pakistan which has generated a compound annual growth rate (CAGR) of over a 100% and is expected to hit the $700 million mark in 2017 (Source: Tech in Asia, 2015). To tap this growing market potential, Bogo was launched in January this year.
Bogo was founded by three friends, Karim Kabir, Murad Somani and Karim Habib, and according to Shamsa Khoja, Director Marketing, “it stands for Buy One Get One Free – and the product is a compilation of vouchers.”
According to Khoja, “Bogo was created to bring together experiences that define Karachi, incentivise people to experiment and spend more time with friends and family.”
Kabir adds that while the product is new in Pakistan, the inspiration came from the success of a similar Dubai based product called The Entertainer.
The first step was to identify the primary target audience and the consensus was that the bulk of potential customers would be SEC As and Bs in Karachi. This includes people with high disposable incomes who dine out two to three times a week, travel frequently and regularly visit spas, salons and gyms.
With these demographics in view, the Bogo team addressed the next question of which brands to include. According to Tyrone Tellis, Marketing Manager, Bogo, “We wanted to include a variety of brands across different categories which had been delivering consistent service over a period of time.”
The next issue was minimising customer fraud. To resolve this, an activation code was created for every book and voucher which was mapped into the Bogo software. After a book has been purchased and before the customer can start using it, he or she has to text the activation code or make a call, an action that will register the book in the caller’s name. These security measures were incorporated to prevent any attempt of voucher duplication or redemption by unregistered users. Karim adds that at the time of delivery, each book is sealed and customers who receive one with the seal broken or tampered with must return the book.
Predicting customer response to the layout of the book and ensuring that the information on the vouchers was comprehensive yet easy to understand, posed a problem that took months to resolve. According to Khoja, the development of a creative identity for the brand and a layout of the book, required repeated sample development and involved various advertising agencies and freelance design consultants.
On pricing, the issue was to give people who bought the book value for money, while at the same time ensuring that the brand partners maintained profitability. After much calculation, the price was set at Rs 1,999; as Tellis points out, the only way the brand can succeed is if each of the three stakeholders, i.e. the Bogo team, the brand partners and the customers all benefit.
The team estimated that a customer who uses every single voucher in the book will be save approximately Rs 400,000 in a year. For Bogo’s brand partners, the incentive was increased product and service trial, greater market penetration and customer acquisition. Additionally, a special tracking mechanism allows the brand partners to determine what percentage of their increase in business comes via Bogo. For Bogo itself, the revenue generation is primarily through the sale of each book. According to Khoja, “to ensure Bogo’s integrity, we do not charge our business partners a fee to be a part of our book, their only commitment is to honour the vouchers when they are presented.”
In terms of marketing, given a limited budget, Bogo started with a digital teaser campaign in December, followed by a product launch activity conceived by Tellis, whereby the book was sent as a complimentary gift to the corporate communications and marketing departments of selected organisations, celebrities, bloggers and social personalities who have the ability to shape trends.
"To ensure Bogo’s integrity, we do not charge our business partners a fee to be a part of our book, their only commitment is to honour the vouchers when they are presented.”
— Shamsa Khoja, Director Marketing
In addition to the BTL initiatives, digital advertising has remained at the heart of the promotional effort and included a social media contest in partnership with Radio1 FM91, whereby the person who redeemed the highest number of vouchers won two premium passes to the Pakistan Super League Final inclusive of two return tickets. There are also ongoing promotional offers giving people the chance to win free gifts when they place an order with Bogo.
Khoja says the only mass advertising strategy they deployed was an outdoor campaign with 10 billboards across Karachi. The reason why the brand stayed away from conventional print and TV advertising was the fact that in addition to the cost, there would have been a lot of wastage. Tellis says that “on-ground and digital activities allow us to reach our target audience in an extremely cost-effective manner.”
Another reason for staying away from the print and TV was the fact that both mediums carry a lot of advertising from the one industry Bogo identifies as posing the greatest competition for them. In other words, banks offer credit cards to their high net-worth customers (the same people Bogo is targeting) and charge a nominal fee for the card or none at all and customers receive substantial discounts at almost no additional cost.
Bogo customers are asked to incur the expense of buying the book.
The market response, Karim says, has been extremely encouraging. Besides exceeding the short term sales targets, the team has been flooded with inbox requests from dozens of premium brands expressing interest in being part of the next edition.
An area the brand will have to work on is the distribution system, so as to enable customers access to the book in less than 48 hours (lag time between order and delivery); the latter has been addressed to a certain extent by making Bogo books available at Agha’s Supermarket and Springs Mart.
Looking to the future, Khoja says, “We want to ensure that the product becomes popular yet retains exclusivity. The number of books we print for a given edition have to be enough to allow us to generate a profit, satisfy customers and ensure our brand partners have the capacity to cater to the number of vouchers that are printed.”