Liang Xing Xun Huan

Executive Summary

良性循环 (Liáng Xìng Xún Huán, meaning virtuous cycle) is a non profit organization that

brings high-quality Gaokao training to impoverished areas within China. Gaokao, often referred to

as China’s life-determining exam, is disadvantageous to students in impoverished areas due to a

lack of quality education. In regards to Gaokao training accessibility, the objectives of 良性循环

(Liáng Xìng Xún Huán) include (1) provide underprivileged schools with offline Gaokao educational

tools, (2) increase the percentage of students with disadvantaged backgrounds who attend top

universities, and (3) help underprivileged families escape poverty through the virtuous return of the

educational cycle.

良性循环 (Liáng Xìng Xún Huán) will begin its operations in the impoverished regions

within 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu) in Sichuan. The product offerings include learning

packages, which include video tutorials and related textbooks for Gaokao Math, Science and

English. Such packages will be given to the schools as a gift in order to build trust and establish

goodwill. As 良性循环 (Liáng Xìng Xún Huán) slowly establishes the brand, the NPO will increase

the product offerings and expand geographically.

Broadly, 良性循环 (Liáng Xìng Xún Huán) will be marketing to two different groups - the

county and donors. Within the county, 良性循环 (Liáng Xìng Xún Huán) is targeting three market

segments: the local government, low-tier school teachers and disadvantaged families. 良性循环

(Liáng Xìng Xún Huán) will use a multitude of marketing strategies including advertising on local

TV programs, on farming equipment and on billboards and highways to reach them. In order to

fund the operations, 良性循环 (Liáng Xìng Xún Huán) will also need donations and government

support. 良性循环 (Liáng Xìng Xún Huán) believes in making a compelling argument as to how

1 “Alleviating poverty… one STUDENt at a time”

such services can help boost the GDP per capita in rural China as well as close the income

disparity in China in the long term by promoting education equality. This will serve as the pitch to

entice the local government, various NGOs, as well as affluent individuals to donate to the cause.

Defining the Marketing Challenge

As a start-up organization, 良性循环 (Liáng Xìng Xún Huán) is a new player in providing

Gaokao education services and thus suffers from a lack of brand recognition. In order to

successfully market to schools and potential donors, 良性循环 (Liáng Xìng Xún Huán) needs to

establish a brand identity in 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu). Since the Gaokao exam is

seen as life-determining in Chinese high school education, schools are more likely to use products

from established firms. Thus, it is essential to build trust with the local schools so that they will be

willing to use 良性循环 (Liáng Xìng Xún Huán) products and services. This will have a knock-on

effect; giving 良性循环 (Liáng Xìng Xún Huán) credibility and enable conversations with potential

donors.

As schools begin to use 良性循环 (Liáng Xìng Xún Huán) products, the ensuing marketing

challenges will include maintaining and improving the levels of satisfaction as well as establishing

brand loyalty among the schools that utilize the services. Through improved Gaokao scores, 良性

循环 (Liáng Xìng Xún Huán) will have boosted credibility in the eyes of donors, low-tier schools

and prospective partners.

Market Opportunities


By 2020, the provincial government of Sichuan aims to alleviate poverty, increase levels of

economic development and save natural vegetation in the area. As highlighted by the Fung

Business Intelligence Centre, the government’s 13th Five Year Plan, which covers the time period

from 2016 to 2020, the plan includes local development through (1) coordination, (2)

environmental protection, (3) innovation, (4) opening-up and (5) poverty elimination. 良性循环

(Liáng Xìng Xún Huán) satisfies a very unique offering gap in this space, in that the government is

seeking innovative methods to alleviate poverty. Not only is it a benevolent opportunity to have the

government’s support here, but Sichuan is also one of the first 30 regions in China to actually

publically share the provincial development objectives. The fact that their provincial government

released objectives publically depicts Sichuan as one of the select few places in China where

products and services from 良性循环 (Liáng Xìng Xún Huán) would hold great demand.

In China, while poverty levels have been decreasing, there are still more than 70 million

people trying to survive and support families with less than $1.25 a day. According to the

calculated change in GDP percentage by Statista, economic growth in China reached a low of

approximately 7% annually and in Sichuan, the rate of economic growth, approximately 8.5%, is

becoming slower year by year. To combat this, the government in Sichuan encourages leading

domestic emerging enterprises and global Fortune 500 business to set up branches in Sichuan. In

fall of 2015, Sichuan brought in around 10,000 innovative technology enterprises to establish their

products there. Over the next five years, the government in Sichuan aims to bring in more than

20,000 businesses annually. This push to bring innovation and corporate mindsets to Sichuan is a

timely opportunity for the team at 良性循环 (Liáng Xìng Xún Huán) to set up partnerships and

develop a brand in this region.


According to China’s Tenth Five Year Plan, the policy objectives leaned towards obtaining

nine years of basic education universally, regardless of poverty levels. As a response, the World

Bank and the Department For International Development (DFID) in the United Kingdom worked

together from 2004 to 2009 to establish the Basic Education for Western Areas Project (BEWAP)

and fulfill the policy goals by improving education in underprivileged western provinces in China.

These provinces includes Gansu, Guangxi, Ningxia, Sichuan and Yunnan. The UK has also worked

with China to introduce a higher quality of education through long-term projects such as the Gansu

Basic Education Project, the Support Universal Basic Education Project and Southwest Basic

Education Project. These programs strived to provide more knowledge to rural teachers, increase

technology skills and offer Teacher Learning Resource Centers (TLRC’s). Unlike the generic basic

development of skills and teaching resource availability, 良性循环 (Liáng Xìng Xún Huán)

distinguishes itself in this market by uniquely positioning itself to offer offline learning

opportunities specifically catered to Gaokao training.

With values such as quality education accessibility, poverty alleviation and innovation

transparently evident in the Chinese Five Year Plans, it is clear that achieving these goals in

regions like Sichuan requires strategic partnerships with the government. It is a shared

responsibility to bring these training programs to Sichuan and ensure that no child is left behind.

Primary Target Market


Since secondary schools in top-tier cities are already equipped with adequate qualitative

resource to prepare students for the college entrance exam, such institutions no longer demand

extra learning packages to enhance performances. Therefore, the 良性循环 (Liáng Xìng Xún Huán)

products target secondary schools in low-tier cities and rural areas, specifically the mountainous

county of 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu) in Sichuan. The students in this region not only

experience financial instability, but also endure severe education inequality. The mountainous

geography not only serpentines the way to school for students, but also hinders the entrance of

external teaching resources, well-qualified faculty and updated Gaokao information. Since the

limited pedagogical resources are already outdated and the faculty is not qualified, the students

scores reflect a lack of professional training in rural regions. The students in this area urgently

need systematically training and up-to-date resources to keep pace with the students in top-tier

cities. The products at 良性循环 (Liáng Xìng Xún Huán) is a perfect match. With the updated

learning packages, students can not only supplement the necessary knowledge and training for the

exam, but can also gain more up-to-date practice from the textbooks. In this case, the learning

package exerts a non-negligible impact for the target customers, students in mountainous area, to

enhance education equality among top-tier cities and low-tier villages.

Other segments of target customers include potential donors and government

organizations. Since the goal is unified with the government in terms of eliminating poverty and

enhancing education equality, the government would be more than likely to welcome 良性循环

(Liáng Xìng Xún Huán) as a partner. Research holds that government officials are more accessible

than donors in the NPO world. By such means, the team will establish relationships with local

government officials prior to expanding networks to potential donors. With government credit, 良


性循环 (Liáng Xìng Xún Huán) is leveraged in the ability to highlight the merit of the products and

services to donors. For patronizers and philanthropists who are interested in donating to the

education area in China, 良性循环 (Liáng Xìng Xún Huán) would collaborate in order to advance

united non-profit goals to provide the inherit return on investment: quality, accessible content for

Gaokao training. It shall be a win-win situation.

Given that low-tier schools are more accessible than individual students and

underprivileged families, the schools will act as an aggregated place to reach low-tier students.

With the limited amount of schools in mountainous area, targeting selected schools as the

first-step marketing is more convenient and cost-effective. While 良性循环 (Liáng Xìng Xún Huán)

will still work to establish the brand identity amongst families and students, schools will act as the

primary channel to reach the individual students.

Product & Service Offerings

The primary product offered is a learning package. The learning packages include

up-to-date Gaokao textbooks and resources, CDs containing video tutorials as well as a projector.

Using these resources, students can broaden their scholarly vision, perspectives and opportunities.

The textbooks provided are the same as those used by students in the top-tier cities, while the

discs contain instructive videos of the Gaokao training courses. The academic teachers will

receive a few projectors from the team, if the academic institution does not already have an

screening projector accessible. Such resources (books, discs and projectors) are highly important

and simple for the team to deliver yet very challenging for students in such areas to access.


The textbook forms the basis of the college entrance examination. According to the

policies pertaining to making the questions for the Gaokao exam, all the information being tested

must appear on the textbooks, which is why our learning package provides the newest textbook for

the students. Firstly, students will be able to access all the basic information for Gaokao training.

Secondly, since the textbooks themselves are new, it offers the unused, unwritten material for

students, an experience many low-tier students rarely experience.

In addition to the textbooks, the learning packages include sample tests and essential

questions for Gaokao. These are often far too expensive for people in poorer regions of China. The

projector and discs are also highly imperative in the learning package because they ensure

students are able to have high quality instructive courses even without a high quality local teacher.

In the mountainous regions like 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu) in Sichuan, given

the difficulties involved with lack of highly qualified teachers, online resources and up-to-date

technology; our objective is to bring the resources digitally, in the accessible form of discs and

projectors.

Over the long term, 良性循环 (Liáng Xìng Xún Huán) will expand the product offering to

include exchange and immersion programs for both students and teachers. This will allow

students to further develop scholarly vision and broaden their perspectives. The immersion

programs will also enable teachers from 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu) to experience

how Gaokao training is conducted in top tier cities.

The program will not only enable students to have courses in the top tier cities, but also

allow teachers from the cities to come teach in rural regions of Sichuan. Once a firm government

partnership is in place, volunteers will also go to regions in Sichuan to raise awareness about


student scholarships, exchange programs and other external resources available. Lastly, 良性循环

(Liáng Xìng Xún Huán)’s package will include training programs for teachers, which includes but is

not limited to, guest speaker lessons and video instructive tutorials.

Product & Service Differentiation

There are four key unique features of products and services that position the NPO under

the following: (1) free offerings, (2) multi-angle visibility, (3) long-term sustainability and (4)

flexible targeting.

Free is one of the key features that makes the product stand out for low-tier regions.

Virtually all the foundations, companies and organizations in the market for education accessibility

ask partners and collaborators to pay a fee. The 良性循环 (Liáng Xìng Xún Huán) products and

services are free, donation-based, without any additional requirements for students, teachers,

volunteers or the local government.

The well-rounded multiple perspectives of the offerings enable the NPO to stand out in the

market. The 良性循环 (Liáng Xìng Xún Huán) products and services combine distinct resources

that are provided by diverse groups. The learning packages, as previously mentioned, include both

physical and nonphysical resources which benefit both the students and the teachers. The NPO

benefits students in the short-term with improved scores, and in the long-term to broaden their

perspectives. Not only is the objective to benefit each person affected by poor academic quality in

甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu) in Sichuan, but to eventually improve the education quality

and awareness in low-tier regions of China.


Though improvements in Gaokao scores are important, 良性循环 (Liáng Xìng Xún Huán)’s

long term impact in 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu) has even greater benefits. By

collaborating with schools, teachers and volunteers, students avoid repetition and systemic

courses in long term. In addition, 良性循环 (Liáng Xìng Xún Huán) hopes that by achieving

academic success (学有所成), its beneficiaries will have greater opportunities to find higher

paying jobs. Eventually, the hope is that the beneficiaries would return to 甘孜阿坝凉州 (Gānzī

Abà Liáng Zhōu) and contribute to the poverty reduction efforts in any way they see fit. It is with

this long-term perspective that 良性循环 (Liáng Xìng Xún Huán) envisions the virtuous cycle of

education access and execute poverty alleviation.

Flexibility and targeting, combined together, offer the final distinguishing aspect. Because

良性循环 (Liáng Xìng Xún Huán) provides so many resources, as the firm gathers feedback from

the local schools and students it serves, as well as uses the Gaokao test scores of the students,

there is flexibility to choose which resource has more weight in the low-tier academic institutions.

By merging flexibility and targeting, the system laid out by 良性循环 (Liáng Xìng Xún Huán)

becomes just that much more efficient.


Distribution Approach

The 良性循环 (Liáng Xìng Xún Huán) distribution channel includes both direct and indirect

channels. The direct channel is the primary focus of distribution at the initial stages. As producers,

良性循环 (Liáng Xìng Xún Huán) will directly deal with end-consumers - academic institutions. The

first learning package would be delivered in person to the school by Chief Outreach Officer Mu Xin

(a Sichuan local) and an International member of the Management Team. Delivering in person puts

a face to the name and also helps establish trust with the school.

Beneficiary schools would be able to place repeat orders by phone, direct contact during

visits, or WeChat. After the orders have been placed, 良性循环 (Liáng Xìng Xún Huán) will leverage

China’s extensive and inexpensive package delivery network to deliver repeat orders. In the long

term, the goal is to set up a number of branches in local areas, where schools and teachers could

pick up the physical products directly and provide feedback on the learning packages.

The indirect channel will be established in later stages of the NPO’s development. Due to

current government regulations, 良性循环 (Liáng Xìng Xún Huán) will have to collaborate with

other foundations or companies for distribution purposes. Third-party corporate partnerships

would enable a larger pool of low-tier academia contact information. Not only this, but such

partnerships would enable the NPO to ship products through external channels. The China

Foundation for Poverty Alleviation (CFPA), which has been providing students in rural areas with

lunches, would be one of our first projected partners. CFPA is supported by the government,

meaning they have access to virtually all the impoverished areas in China. Through the partnership,

our physical learning packages would be distributed to local schools along with their lunches.


良性循环 (Liáng Xìng Xún Huán) also offers education services, which means our

exchange teachers and volunteers would come to the Sichuan area to teach Gaokao lesson plans.

For these services, the academic institutions or students are able to provide “after service”

feedback through our local branches, phone contact, or online channels such as WeChat.

Attracting Customers

The underlying objective of our marketing efforts is not to increase profits, but rather to

increase consumer product usage through brand awareness and strategic advertising initiatives.

良性循环 (Liáng Xìng Xún Huán) plans on building a consumer base of schools, teachers and

families in 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu) to utilize the educational Gaokao training tools.

The marketing methods to build this consumer base come down to (1) print advertising, (2)

packaging, (3) personal selling and (4) guerrilla and marketing.

Print advertising refers to brand establishment and marketing on billboards, scholarly

journals, newsletters, newspapers and magazines. Due to budgetary restrictions as a non-profit,

the NPO will limit forms of print advertising to billboards and scholarly journals like Gaokao

training textbooks. 良性循环 (Liáng Xìng Xún Huán) will print advertisements primarily in the two

of the most widespread Gaokao training book, known as Wu Nian Gao Kao San Nian Mo Ni and

Tian Li 38 Tao.

Packaging of the learning Gaokao packages would be the second cost-deductive form of

marketing for 良性循环 (Liáng Xìng Xún Huán). The team will optimize coloring, style and overall

physique of the packaging so that it appeals to low-class academic institutions. The simplicity and


transparency of the circular water-below-sun brand logo, which mirrors the very essence of the

brand name, is also included in the packaging initiative to build brand awareness.

Personal selling is the first low-cost method of launching our brand and spreading the

purpose will academic institutions in Sichuan’s underprivileged communities. This includes the use

of volunteers, teachers and founders meeting with school advisers, teachers and families

face-to-face to talk about the program and the tools to be offered. Since the product is essentially

offline, the marketing form of personal selling would also be offline as it deters from conventional

marketing forms of web marketing, telemarketing and digital publicity.

The main form of print marketing will be on highway billboards, to target more

impoverished regions of China. Besides the billboards, there will be guerrilla marketing, which

includes other expense-free communication strategies such as posters, flyers and other creative

initiatives. The incorporation of posters and flyers across exam-taking locations not only increases

awareness about the brand, but targets students at a convenient moment in time. Through these

forms of marketing, 良性循环 (Liáng Xìng Xún Huán) aims to attract new schools to utilize the

tools, build brand awareness amongst institutions and increase partnerships to leverage growth

possibilities.


Situation Analysis

Please see below for a situation analysis, synthesizing components of the marketing plan thus far.

5C Analysis

Company 良性循环 (Liáng Xìng Xún Huán) is a non profit organization that brings high-quality Gaokao training materials to impoverished areas within China. As a start-up company, 良性循环 (Liáng Xìng Xún Huán) starts from secondary schools in 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu), with passionate volunteers and virtuous belief, to provide students with qualitative video tutorials and textbooks. In this way, 良性循环 (Liáng Xìng Xún Huán) helps promote education equality.

Collaborator Government(CFPA): 良性循环 (Liáng Xìng Xún Huán) would cooperate with the government as a practitioner of the government’s Five Year Plan. With the government’s political and financial support, 良性循环 (Liáng Xìng Xún Huán) could make progress at a much more sustainable pace. Logistics Company: Since the target customers are secondary schools in remote areas, 良性循环 (Liáng Xìng Xún Huán) will collaborate with distributors to deliver the product to customer

Customer The target customer starts from secondary schools in 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu) in Sichuan and plans to grow the customer base to other secondary schools low-tier cities as the brand name is built. Test score improvement for students in those regions is also one of the organizational objectives. Customers are likely to be exposed to our product when they travel on the highways, when they watching TV, or when they are doing farming work.

Competitors Competitors include other philanthropists and foundations that provide Gaokao training materials such as Basic Education for Western Areas Project (BEWAP) which has been founded by the World Bank and the Department for International Development, a UK based entity.

Context Part of government’s Five Year Plan is to alleviate poverty. Improving education quality is one of the effective approach to achieve the objective. As a standard measurement of education quality, Gaokao scores reflect the average education quality. In impoverished areas, students are disadvantageous in Gaokao due to a lack of quality education. The practice of the organization, which is to bring qualitative Gaokao training to student impoverished areas to promote education quality, directly corresponds to government’s projections. Following the trend of technology development, secondary schools in impoverished areas are also enhancing their technology equipment. As a modern pedagogical approach, 良性循环 (Liáng Xìng Xún Huán) provides video tutorials in the learning packages to students in


those areas for both convenience and reusability.

4Ps, i.e. the Marketing Mix

Product The main product is a learning package, which consists of video tutorials and related textbooks for Gaokao Math, Science and English. The purpose is to improve the secondary school education quality, and provide a better preparation for Gaokao Test across more rural regions of China. The video tutorials contain the updated Gaokao Training and the textbooks include solution-oriented examples and sample problems from past Gaokao exams. Students could watch tutorials as a supplement to the courses they took in class and make more practice on the textbooks. Compared to other training materials, there are additional video tutorials, which offer a more vivid and intuitive learning approach.

Place The organization would start from secondary schools in 甘孜阿坝凉州 (Gānzī ābà liáng zhōu) in Sichuan, and slowly expand to other secondary schools in low-tier cities in China. The organization would cooperate with the government to select the initial set of secondary schools. In addition to delivered learning packages, there will be occasional on-site support through volunteers.

Price The price of the learning package is free to the target students in secondary schools.

Promotion The organization would reach target students in secondary schools through billboards advertisements and farming equipment advertising, Local TV program advertising and teaching workshops will target the program to volunteers as well.


SWOT Analysis

STRENGTHS

As a start company, Liáng Xìng Xún Huán

operates with a highly-educated team devoted to

providing free visual Gaokao training materials.

The quality of the training material is guaranteed

through a scrutinized product selection process.

As Liáng Xìng Xún Huán targets secondary

schools in impoverished areas in China, it has the

quantitative and qualitative potential to resonate

with hundreds of underprivileged academic

institutions over a five year period.

WEAKNESSES

As an emerging social enterprise, Liáng Xìng Xún

Huán lacks a strong management foundation, so

that lack of experience could result in operation

disfunction. In addition, the organization not only

lacks an established brand reputation and fixed

distribution channels, but also lacks the selection

expertise for the proper teaching materials.

OPPORTUNITIES

As a rapidly developing economy, the Chinese

government has highlighted importance of

education as an approach to alleviating poverty.

The government also emphasizes the equality of

education as part of the five-year plan. At this

time, Liáng Xìng Xún Huán happens to have a

unique training package to satisfy the demand of

education resources within China.

THREATS

Although Liáng Xìng Xún Huán has a unique

training package, it has not applied for a patent,

so the product may be copied by others. Current

competitors also provide similar textbooks, which

is part of the organizational learning package.

As an international organization, Liáng Xìng Xún

Huán also only has limited access to some

impoverished regions because of legal

restrictions.


Metrics for Evaluating Performance

As an NPO, profit is clearly not 良性循环 (Liáng Xìng Xún Huán)’s primary objective.

Instead, 良性循环 (Liáng Xìng Xún Huán)’s management team has decided to use the following

three metrics to gauge success:

1. Number of schools served in 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu).

2. How much better our beneficiary students perform on the Gaokao compared to the

average of the 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu) area.

3. Percentage of our beneficiary students who find enrollment into tier 1 and tier 2

universities in China. (For examples of tier 1 and 2 universities see Appendix C)

Our forecasts are shown below:

FYE 06/2017 FYE 06/2018 FYE 06/2019 FYE 06/2020 FYE 06/2021

Schools Served 5 60 150 340 600

% Exceeding Average of 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu)

7% 8.50% 10% 13% 15%

% of Students Going - Tier 1 & 2 Universities

7% 7% 8% 8% 8.50%

Sustaining and Expanding the Customer Base


As a start up company, 良性循环 (Liáng Xìng Xún Huán) does not have a solid customer

base. Schools and students may not trust the quality of the learning packages initially. In order to

establish the brand name, 良性循环 (Liáng Xìng Xún Huán) would first introduce teachers from

target secondary schools to the secondary schools from top-tier cities, where the video tutorials

are recorded. In this way, the teachers would get an idea of how the secondary schools in the top

tier cities prepare their students for the college entrance exams. Accordingly, they may form

accordance with the pedagogical methods so that they could promote the learning package back

within their home schools.

Secondly, we would sponsor certain students from 甘孜阿坝凉州 (Gānzī Abà Liáng Zhōu)

to study at top-tier cities as an exchange program. Those student would be immersed with the

update educational ideas so that they would know how the top tier secondary school prepare for

the college entrance exam. After they come back to their hometown, they would not only introduce

their exchanging experience to their peers, but also relate their experience to the learning package

we provided as a more persuasive marketing channel . The word-of-mouth marketing from those

exchange student would increase the credibility of the learning package we bring from the top-tier

secondary school where these exchange student studied.

Thirdly, the NPO would send volunteers into the secondary schools in 甘孜阿坝凉州

(Gānzī Abà Liáng Zhōu) to promote the video material by teaching sample class to give students a

more intuitive vision of what exactly is contained in this learning package as well as how it could

assist them in preparing for the college entrance exam. Students need to familiarize themselves

with the learning packages before establishing credibility and really making use of it. Since

customers usually develop trust through free sample trial, 良性循环 (Liáng Xìng Xún Huán) has


the leg up by providing on-site free course experience. This makes it much easier to earn student’s

confidence in the product so as to grow the product’s popularity.

With the recognition of the product in impoverished regions of the 甘孜阿坝凉州 (Gānzī

Abà Liáng Zhōu), the NPO would expand the market to more low-tier cities in the western part in

China. At that stage, the intention is to collaborate with the top graduate students in the secondary

schools in top-tier cities, to promote volunteering programs and encourage teaching opportunities

at low-tier cities. As top-students, they are intellectually equipped to trained their peers for the

college entrance exam. As students who have also gone through the Gaokao training process, they

would provide more practical skills for the exam which is as equally useful as the video tutorial

provided by teachers in the top tier cities. By these means, 良性循环 (Liáng Xìng Xún Huán)

would include the essence of top-student teaching processes into the tutorials.

Another development program involves strategic partnering with the textbook provider. By

collaborating with textbook provider, 良性循环 (Liáng Xìng Xún Huán) could reducing the cost of

textbook. Academic institutions could get a free promotion in the low-tier cities and 良性循环

(Liáng Xìng Xún Huán) would save financial expenses. It’s a win-win situation for both.

Financial Model & Fundraising

The donor value proposition is that Liáng Xìng Xún Huán’s learning packages allow

underprivileged Chinese youth to break free of their constraints and receive a quality university

education. This in turn has great future benefits to China’s economic development. Despite the

logic behind this argument, 良性循环 (Liáng Xìng Xún Huán) believes people are by nature

altruistic as well as emotional. For instance, Jack Ma, the billionaire owner of the Alibaba Group


has pledged to support an eight year old - Fan Xiaoqin (known as junior Jack Ma) until he

graduates from university just because the eight year old’s facial features are similar to that of Ma

himself. Thus our pitch is strengthened manifold by emphasising the emotional appeal of giving

these children a fair chance at success and appealing to the pathos of potential donors such as

Jack Ma himself.

In order to gain start-up capital, 良性循环 (Liáng Xìng Xún Huán) will approach China

Foundation for Poverty Alleviation (CFPA) and seek funding from their “New Great Wall” project.

This project targets the poor group of pupils, who face both financial difficulties and psychological

pressure. Through the project, CFPA provides financial support to individual students as well as

organizations to improve the overall capability of the students. However, their current efforts are

outdated and inefficient. 良性循环 (Liáng Xìng Xún Huán)’s products are more effective in helping

the students learn and perform better in the Gaokao. The learning package is simply more

innovative, and surpass the status quo of the “The New Great Wall” project’s current ideas in both

impact and cost, making 良性循环 (Liáng Xìng Xún Huán) a compelling NPO to fund.

Establishing relations with the CFPA will give 良性循环 (Liáng Xìng Xún Huán) both start

up capital as well as credibility when approaching private donors. The CFPA, a non profit held in

high esteem is unlikely to donate money to a company that cannot provide a return on capital. In a

year’s time, once 良性循环 (Liáng Xìng Xún Huán) tracks the results of the learning packages with

the inaugural class, there will be hard facts and numbers with which to approach the CFPA and

private donors and other foundations, in addition to the NPO’s internal projections.

Though people have a natural desire to be altruistic, it is clear that this desire needs to be

stimulated. Part of Liáng Xìng Xún Huán’s marketing budget will be allocated towards television


and advertisements on social media such as WeChat. 良性循环 (Liáng Xìng Xún Huán) will also

allow donors to donate through AliPay and WeChat wallet, making it very convenient for the

Chinese population.

良性循环 (Liáng Xìng Xún Huán) will develop and nurture long-term relationships with the

CFPA as well as individual donors in order to receive consistent funding. The goal is for graduated

students to truly feel the benefits of the program to the extent where they voluntarily write letters

to donors, thanking them for their support.

After two years of operation, according to Liáng Xìng Xún Huán’s internal projections, the

firm will be the most popular Gaokao educational service in the area, covering 60 schools, with an

average Gaokao score of 600. (see appendix D). At this stage, the firm will be popular enough to be

able to charge for advertisement space on its tutorial videos and begin earning revenue. This is

likely to be especially appealing to firms selling farming equipment.

Also, at this stage the firm will have established enough connections in the area so as to

begin its exchange programs. The exchange programs offer students in tier 1 cities in China the

chance for an immersion program in a part of China that they may never visit in their life. Liáng

Xìng Xún Huán intends to charge these students, likely to be from well-off families, a premium for

this immersion program.

By the end of Liáng Xìng Xún Huán’s fourth year of operations, Liáng Xìng Xún Huán will

begin transitioning from a traditional NPO business model, reliant on donations, to a Social

Business model. This type of model, pioneered by Nobel Laureate Professor Muhammad Yunus, is

reliant on investors as well as the revenue generated by the firm. In this kind of model, investors

can invest in Liáng Xìng Xún Huán as it continues its cause driven business and the firm will use its


revenues to slowly pay back the investors. However, as 良性循环 (Liáng Xìng Xún Huán) is now

following the model of a Social Business, investors cannot receive any dividends after recouping

their initial investment. This model of Social Business is gaining popularity throughout the globe as

donors see themselves investing in a cause, and eventually recouping their money, rather than just

simply giving their money away. The fresh capital raised from these investors, as well as any

profits left over from the previous financial year will be re-invested into the firm and used to

expand Liáng Xìng Xún Huán’s operations geographically.

However, there is a caveat. As seen in Appendix D, even in the fifth year of operations, 良性

循环 (Liáng Xìng Xún Huán)’s greatest source of revenue is still the CFPA’s donations. This is not

a huge cause for concern as the CFPA usually gives grants for 10 years, after which firms can

re-apply. However, 良性循环 (Liáng Xìng Xún Huán) would like to become less reliant on CFPA

grants and become self-sustaining. The figures given for revenues earned through sales of

time-slots in 良性循环 (Liáng Xìng Xún Huán)’s video tutorials in Appendix D are conservative

figures and the firm hopes that with the success of the learning packages, it will be able to charge

a far higher premium for those time-slots. These time slots are likely to be especially appealing to

manufacturers of fertilizers, tractors and other farming related products.

Concluding Remarks

Given the unique beneficiary of the value proposition and donor value proposition, 良性循

环 (Liáng Xìng Xún Huán) can achieve the objectives: (1) provide underprivileged schools with

offline Gaokao educational tools, (2) increase the percentage of students with disadvantaged

backgrounds who attend top universities, and (3) help underprivileged families escape poverty


through the virtuous return of the educational cycle. By using the improvements in the Gaokao

scores of the students as an indicator of performance, 良性循环 (Liáng Xìng Xún Huán) would

strive to improve the quality and services provided. In addition, by forging, maintaining and

nurturing relations with the CFPA and individual donors, 良性循环 (Liáng Xìng Xún Huán) will

ensure financial security. With the vision of helping underprivileged Chinese students in rural areas

a more equitable chance at future success, 良性循环 (Liáng Xìng Xún Huán) is confident of

alleviating poverty, one student at a time.


APPENDIX A: 良性循环 (Liáng Xìng Xún Huán) Logo

The logo is a tilted heart. The upper half represents the students in the

impoverished areas. They are in need of help, so we colored it blue indicating

their tough living condition and poor education quality. The bottom half, a bigger

half heart, indicating our organization, 良性循环. We choose color orange, a warm

color to indicate our virtue mission: To bring quality Gaokao Training to help

students in impoverished areas to promote education equality. Combine students

and our organization together, we form a heart, which indicates we devote our full

heart into this virtus social enterprise.


APPENDIX C: EXAMPLE LIST OF TIER 1 & 2 CHINESE UNIVERSITIES (No Particular Order)

Wuhan University Peking University Fudan University Tsinghua University East China Normal University Sun Yat-sen University Zhejiang University Nanjing Zhejiang University Shandong University Jilin Zhejiang University Harbin Institute of Technology Xi’an Jiaotong University Tongji University Donghua University Heilongjiang University Fujian Normal University Hebei University Hefei University of Technology Shanxi University Jiangsu University


APPENDIX D: FINANCIAL ANALYSIS

Income Statement (in RMB)

FYE 06/2017 FYE 06/2018 FYE 06/2019 FYE 06/2020 FYE 06/2021

Revenue

Government Grants (CFPA)

100000 150000 200000 250000 300000

Advertising Sales 0 10000 30000 70000 85000

Exchange Program Sales

0 0 0 30000 50000

Investment 0 0 0 55000 170000

Total Revenue 100000

160000 230000 405000 605000

Expenses

Projectors 5000 40000 77000 153000 300000

Travel 15000 30000 45000 70000 70000

Advertising (Billboards)

37000 40000 43000 46000 50000

Administrative 20000 25000 30000 40000 50000

Salaries 0 0 0 55000 60000

Exchange Program 0 0 0 10000 25000

Delivery 5000 10000 15000 25000 30000

Dividends 0 0 0 5000 17000

Total Expenses 82000 145000 210000 404000 602000

Profit/Loss 18000 15000 20000 1000 3000



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