Team:Macquarie Australia/Entrepreneurship
Click here for full business plan!
Overview
We are living in a world of extremes. Temperatures are soaring. Sea levels are rising. Population growth is exploding. Non-renewable resources are dwindling. Our planet is facing the biggest environmental crisis in known history and what’s worse, we are running out of time to turn it around.
“Climate change is intrinsically linked to public health, food and water security, migration, peace, and security. It is a moral issue. It is an issue of social justice, human rights and fundamental ethics. We have a profound responsibility to the fragile web of life on this Earth, and to this generation and those that will follow.” – United Nations Secretary-General Ban Ki-moon
The transport industry is one of the biggest contributors to greenhouse gas emissions, responsible for a whopping 27% of emissions in 2015 in the US. Attempts to convert to renewable fuel sources have shown promise with solar and electric vehicles entering the market. However, levels of customer adoption have remained disappointingly low due to the high cost, poor efficiency and inconvenience of most alternative fuels. Governments have taken little action to build the supporting infrastructure necessary, leaving consumers with little choice but to resort to traditional fuel. Some that claim to be ‘green’ are not actually green at all, either – most methods of hydrogen production, for example, require fossil fuels!
WHAT’S THE SOLUTION?
A zero-emission energy source, produced with zero fossil fuels. No, this isn’t some pipe dream or wishful thinking. It’s H2GEM.
H2ydrogem’s revolutionary at-home refuelling station uses no harmful chemicals or pollutants, just modified e-coli and glucose. That’s it. No fossil fuels, fancy or expensive technology required. Pure hydrogen fuel produced on demand in your own garage, 24/7. As Australians make the switch to hydrogen-powered vehicles over the next two decades, H2GEM will be there to meet the demand for convenient, sustainable hydrogen fuel. We are putting the power to change the world back into the consumers’ hands, literally.
H2YDROGEM's MISSION
Customer Discovery
It’s an undeniable, yet often overlooked truth that no business venture can be successful without customers. As such, our team conducted extensive market research when designing our prototype to discover exactly who our target customers are and what they want, tailoring our offering to meet their needs.
Our first step in this process involved conducting an online survey that was completed by over 150 respondents across multiple age brackets and geographic locations within Australia. This survey was designed to give us insight into our potential consumers’ perceptions around renewable energy and what sort of product might appeal to the Australian market. A statistical analysis of the results was performed and yielded some extremely useful information: ( Click here! )
The second stage of our market research involved conducting face-to-face interviews with a sample of 40 different individuals chosen deliberately as a representative cross-section of our target market. The questions asked were specifically constructed to guide our design of the refuelling station (what features to include/exclude) as well as our pricing, promotion and distribution strategies.
Customer Needs
What are your main concerns about the future of Australia in terms of sustainability, energy security and climate change?
Conclusion: Our customers are very concerned about the long-term impacts of climate change and reliance on fossil fuels. They want the empowerment to be a part of the solution by taking their own actions.
What would convince you to consider purchasing a hydrogen-powered car in the near future?
Conclusion: Our customers are motivated by sustainability, durability, affordability, safety and convenience. These need to be our major selling points.
If you were to buy a hydrogen-powered car in the future, would you be more likely to purchase a home hydrogen fuel cell/generator as a combination with the car (i.e. the car and cell both sold to you as a package by the car manufacturer) or from a third-party seller after buying the car?
Conclusion: Selling the refuelling station as a bundle with the car would be the best distribution model for us to use.
What would be your primary concerns that would stop you from purchasing a home hydrogen fuel cell (if you owned a hydrogen-powered car)?
Conclusion: Our promotion strategy should focus on reducing cognitive dissonance, reassuring customers that our refuelling station is safe, trustworthy, time-efficient and sleek.
Prototype
Our product prototype, the H2GEM, is an at-home refuelling station for hydrogen powered vehicles. We have chosen this as our prototype for several reasons, dictated by our market analysis, survey results, interview results and research on the current hydrogen energy landscape in Australia:
- There is strong consumer interest in sustainability, climate change, renewable energy sources and the desire to take the power to make a difference out of the government’s hands and into the consumers’
- A significant majority of household owners express a desire to generate their own renewable energy, rather than purchase it pre-made from a company
- While currently small, the demand for hydrogen-powered vehicles in Australia is expected to grow steadily over the next decade as infrastructure improves and costs are reduced
- There are already several companies that sell hydrogen for various energy purposes (transportation, stationary power, etc) but no competitors currently exist for at-home refuelling stations, making this a novelty product
- Our team lacks the necessary capital and distribution channels to produce hydrogen gas and sell it directly to consumers, nor would we be able to compete with the existing companies scale-wise
A Viable Product
The H2GEM has been designed so that it is compact enough to fit within a standard Australian household garage. The unit itself is shaped as a compact, sleek lightbulb-shaped design. Its dimensions are 1 metre tall, 60 centimetres wide and 30 centimetres deep. It will be constructed using two rectangular pieces of sheet metal welded together at the top of the unit, with two lightbulb-shaped metal pieces at either end. A small input tray is located near the base so that feed stock can be inserted by the user with ease. A petrol bowser is connected to the base and coils around a holder at the side of the unit to allow for easy, compact storage. As stated in our overriding objective, sustainability is our team’s top priority. As such, the H2GEM’s exterior will be made from recycled stainless steel sourced from scrap yards which would have otherwise been destined for landfill.
The H2GEM’s interior has been designed so that hydrogen gas can be produced directly within the unit to then feed into any hydrogen-powered vehicle. The internal compartments were designed such that the E. coli vat would sit at the bottom. Nutrients such as the media and glucose would be delivered through biodegradable pouches which are inserted into the machine, as shown in the sketch above. The gases produced then pass through a hydrogen-selective membrane and are stored in the round compartment sitting atop the vat, which will help equalise pressure. The hydrogen gas then passes through a column to convert it into a more safely-stored aluminium hydride. When the gas is needed, it can be reverted back and used for consumption.
Business Model
The primary market research that we conducted revealed that our consumers’ purchasing decisions are motivated primarily by sustainability, longevity and price. As such, these are some of the key ‘selling points’ of the H2GEM that we will emphasise in our promotion campaigns:
- Fossil fuels are a finite energy source that will run out! Hydrogen is a renewable source of fuel for transport that, when produced using our unique e-coli technology, emits no greenhouse gases and is a sustainable, innovative alternative to petrol.
- The financial security offered by producing your own hydrogen energy at home – once purchased, the H2GEM requires minimal running costs and means that the user is not at the mercy of the volatile petrol/gas market prices
- The H2GEM gives the power back to the consumer, equipping them with all the tools they need to easily produce their own hydrogen energy
The Elaboration Likelihood Model of persuasion (a marketing theoretical model developed by Richard E. Petty and John Cacioppo in 1986 attributing consumer attitude change to exposure to stimuli) states that there are two types of consumers – high involvement and low involvement. Changing the attitudes of highly involved consumers is most effectively achieved through communicating information about the product while changing the attitude of low-involvement customers should be done through emphasising peripheral product details.
We hypothesise that most of the customers within our target market fall into the former category as purchasing a car (and subsequently, the H2GEM) is an expensive, risky endeavour which typically involves a significant amount of prior research and comparing of options. As such, we will focus our promotional material around the beneficial features of our product in order to persuade potential buyers.
As dictated by our interview findings, our promotional material will aim to allay any concerns that may prevent potential customers from purchasing the H2GEM. Some of the ways in which we intend to do this are as follows:
-“It’s too expensive” – our campaigns will highlight the Emissions Reduction Fund, a voluntary government scheme that provides financial incentives (in the form of Australian carbon credit units or ACCUs, which can be sold to generate income) for Australians to adopt emission-reducing practices
-“It’s not safe” – our campaigns will emphasise the rigorous government-approved testing that has been conducted on the H2GEM to ensure that it is perfectly safe to keep in a household garage
-“It’s too hard to use” – we will demonstrate how the product works using online, easy-to-follow video tutorials that will be mass marketed to our target audience via social media advertising, such as on Facebook and Twitter
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