Archive for the ‘Mktg – Strategy’ Category

Remember when a Blackberry was cool?

February 24, 2012

Punch line: Remember when you’d secretly watching out-of-the-corner of your eye for that blinking red light? Yep, we all did it – and it even fed our egos of feeling somewhat important when we knew we had a message pending… Well, RIM,  the makers of the “crackberry,” first dominated the marketplace but seem to have lost sight of its strengths, and customer needs. Now, it struggles for survival in the marketplace …

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Excerpted from mashable.com “7 Marketing Lessons From RIM’s Failures

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Long before the iPhone the took the world by storm, and before Google even dreamed about getting into the phone business, Research in Motion was on top of the consumer electronics mountain.

Today, sadly, it is buried under it, and industry insiders everywhere wonder whether RIM will survive …

Here are seven marketing lessons from RIM’s dark and difficult journey.

1. Make Great Products

Consumer electronics success begins with excellent products. The BlackBerry was once perceived as the very best smartphone — or, at least, “emailing phone” — available. It was exciting, emotional and it made people feel good. RIM sold BlackBerries on the strength of word-of-mouth recommendations. BlackBerries were aspirational, and people wanted to own one because friends and colleagues were so passionate about them.

Now, fast-forward to today.

Consider the excitement and energy around the iPhone and all those Android handsets. RIM enjoys none of that today. Not one percent of it. In part, it’s because it stopped making good smartphones in favor of a poorly received tablet called the PlayBook.

Successful marketing begins with having a tremendous product or service to market. Nothing happens without this.

2. Build on Strengths Instead of Improving on Weaknesses

For RIM, the BlackBerry was a great strength, and they all but abandoned its development and marketing for a year or longer to create the tablet. RIM did this to try to prevent the world from passing it by in the tablet space — which it did anyway. Tragically, as a result of diverting talent, attention, resources, investment and innovation from the BlackBerry to the Playbook, the consumer smartphone world has also passed RIM by.

If you focus on developing weaknesses, your strengths will atrophy due to neglect.

3. Gravity Pushes Backwards

If you’ve attained a measure of success, you must continue innovating your products, services and your marketing just to maintain your position. Because you can bet the competition is innovating aggressively, and they’ll pass you by in three seconds if you stop doing the things that brought you success. RIM not only stopped releasing new BlackBerries while focusing on its PlayBook, it basically stopped talking to its customers about them for an extended period.

Gravity pushes backwards in business. Consistent and aggressive innovation is required not only to attain success, but to maintain it.

4. Know Precisely Who Your Customer Is

RIM’s management famously disagreed on who their customer was. Then co-CEO Mike Lazaridis felt the customer was the corporation. Others, probably including his counterpart Jim Balsillie, wanted to aim BlackBerry products at consumers. If you don’t know exactly who your customer is, it is impossible to market. Language, messaging, platforms, branding and public relations change completely depending on the customers you target.

So identify your customers as precisely as possible, and aim all of your marketing efforts at them.

5. Executives Set the Marketing Tone

Consider the most successful companies in consumer electronics (and two of the most successful companies in all of business): Apple and Amazon. Their chief executives set their marketing tone, and everyone follows. If you haven’t seen it yet, watch this YouTube video of Steve Jobs introducing the iPad, and listen to how everybody who followed him on stage used exactly the same words.

This is no accident. The next day, thousands of articles used the same words to describe the amazing, remarkable and awesome iPad. Amazon’s Bezos is the same way. The best marketers have high-level executives setting the tone. They not only teach the rest of the company how to talk about their products and services, but the customers, the media, and the market itself. Obviously, RIM’s co-CEOs did not set this tone. They couldn’t even agree on who the customer was.

6. Avoid Unforced Errors

Most marketing problems are self-made and entirely avoidable. Consider the major developments from RIM’s recent past:

  • It voluntarily stopped focusing on the BlackBerry to make a product it had no experience with.
  • It could not identify its customer.
  • It stopped marketing to consumers, allowing competition to roar past.

7. Keep Talking to Your Customers

If RIM had talked to its customers like this, it would have quickly learned that they probably weren’t particularly interested in a BlackBerry tablet without built-in email, messaging or contacts!

If you’re not talking to your customers, you’re just guessing from a conference room.

Edit by KJM

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Marketing Strategy Rule #1: Follow the money …

January 10, 2012

When diagnosing a current marketing strategy or developing a new one, most marketers jump right in to thinking about market segments, products, or ads.

Wrong.

I  encourage my students to always, always, always start with an analytical understanding of the business economics: how companies make money in the business.

It’s “Ken’s Rule #1” of strategy …

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Historical note: During Nixon’s Watergate scandal, a source to Washington Post’s Woodward and Bernstein – nicknamed “Deepthroat” – kept telling the investigative journalists to “follow the money”.  That advice coined the now popular expression.

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SABMiller refocuses on “organic” … organic growth, not ingredients.

September 28, 2010

TakeAway: Beer giant SABMiller, revamping its business model in an effort to stimulate growth, is asking the top managers in its 75 countries to focus on “organic growth” and far less on acquisitions operations restructuring..

Former “MarkStratians,” rejoice!  Indeed, marketing matters.in driving organic growth.

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Excerpted from the Wall Street Journal, “SABMiller Refocuses On Sales, Marketing” By David Kesmodel,September 17, 2010 

SABMiller announced the shift away from a decentralized structure this week to managers at the brewer’s global leadership conference. The change is aimed at boosting sales and profits from existing operations, after many years in which SABMiller generated much of its growth from acquisitions. SABMiller executives – who essentially have acted as local CEOs – now will concentrate on building brands and gaining shelf space at bars and stores.

SABMiller, the second-largest brewer by sales after Anheuser, is streamlining its business by centralizing back-office finance, human resources and manufacturing systems and parts of its supply chain.

SABMiller and other beer giants are trying to build on the strong sales-volume growth they’re seeing in emerging economies such as China, while adjusting prices and trimming costs to offset slower growth or declines in markets such as the U.S. and much of Europe.

Edit by AMW

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Full Article:
http://online.wsj.com/article/SB10001424052748703440604575496284288649798.html

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Brainstorming strategic assumptions …

November 5, 2009

Question: What are the “killer assumptions” that underlie your strategy? 

STRATEGY & INNOVATION, Not-So-Risky Business, September 16, 2009

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Start by asking:

Consumer:
Who is the end user?
What are they willing to pay?
Will they have to change their behavior?

Solution:
What constitutes “good enough”?
What are the technical challenges?
Are there logical external partners?
Do we have/need IP protection?

Profit System:
What price makes sense?
What do we expect in terms of trial/repeat purchase?
What capital investment is required?
What marketing support will be needed to launch?

Channel:
Who are the necessary channel partners?
Are they willing to push the solution?
What incentives are required?

Competition:
Who are they?
How do we expect them to respond?
How quickly?
What impact would it have?

Organization:
Do we have the capabilities required?
Are resource allocation processes conducive to success?
Will we gain buy-in from key internal constituents?

Upside:
How scalable is the solution?
What are the stepping stones to the broader opportunity?
How will we achieve longer-term competitive advantage?
 
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Full article:
http://www.innosight.com/innovation_resources/article.html?id=842

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McKinsey’s “enduring” strategy frameworks … Check this out !

November 2, 2009

McKinsey consultants are in the process of constructing an interactive site with tutorials on core strategic analysis frameworks.

Below is a snapshot of the current “map” of frameworks .. those in green are active; those in blue or black are under development.

To access the site, go to http://tinyurl.com/n75fea

A great resource for current students and alums …

 

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 http://tinyurl.com/n75fea

Is it too soon to think about marketing AFTER the recession?

May 4, 2009

Excerpted from HBS Working Knowledge, “Marketing After the Recession”, John Quelch March 18, 2009

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Congratulations. Your business is surviving the recession. You made the necessary adjustments, weeded out under-performing distributors, shed unprofitable or unreliable customers, deleted poor-selling products from your portfolio, and concentrated your marketing dollars on media and channels that you could prove delivered a strong return on investment. You may have downsized, voluntarily or involuntarily, since the recession began; but at least you’re still in business.

Now, you are waiting for the recovery, the chance to again have some fun and make some money. Here are my seven top recommendations for marketers looking to plan ahead:

Focus on high-potential customers. Make sure you focus on building relationships with ambitious customers in growth industries where pent-up demand is going to be unleashed once the economy turns the corner. If you’re running a B2C business, focus on cash-rich or long-term-oriented consumers to lead you into recovery. But don’t forget to stock up to take advantage of the pent-up demand that will be unleashed once other consumers get their confidence back.

Don’t assume a return to normal. The longer and deeper the recession, the more likely consumers will adjust their attitudes and behaviors permanently. Their coping mechanisms may become ingrained and define a new normal. In addition, the competitive landscape will have changed. A competitive shakeout along with new product launches may mean consumers are looking at your products and services through new lenses. Listen closely to your customers and revise your market segmentation assumptions.

Assess your target customers’ trust in your brand. Clearly, trust in financial services brands has taken a beating. Many well-known brands like Merrill Lynch will simply never win back consumer confidence; if you are working for such a brand, dust off your CV and move on. But bad behavior in the financial services sector has bruised trust in all corporate brands. Confirm that your target customers still trust you but plan to add service support and hold their hand more firmly in the short term, even though your service quality, measured objectively, has remained constant.

Stay focused on costs. Many manufacturing industries (as opposed to services industries) are plagued by global overcapacity, relative even to pre-recession demand. Combined with excess inventories in the supply chain, especially in consumer durables, the result will be continuing downward pressure on prices. Economic recovery will not allow producers to let up on tightening cost controls and improving productivity.

Know your lead indicators. Every good marketer knows the specific indicators, macro or micro, that predict demand for his or her product in the next period. Use common sense. If the Wal-Mart parking lot looks less crowded, some consumers are probably migrating back to Target and vice versa.

Develop scenarios. How long the current recession will last is widely debated. And whether the eventual economic recovery will be gradual or dramatic is equally unknown. Marketers planning for 2009 and 2010 should bear in mind Peter Drucker’s wise advice: “A strategy is a sense of direction around which to improvise.” Know how you can source supplies and expand distribution in a hurry if demand suddenly spikes. Don’t wait for permission. Most companies will not begin reinvesting until the Wall Street Journal or Ben Bernanke officially declare the recovery underway. Get ahead of the crowd. Craft your recovery plan now, and pull the trigger when your lead indicators say go.

Smart hedging has outweighed smart marketing. The current recession has not been kind to marketers. In many multinationals, the positive financial impacts of recession-busting marketing plans have been obliterated by commodity price volatility and weaker-than-expected overseas earnings due to the unexpected strengthening of the dollar. Economic recovery will bring greater commodity price and exchange rate predictability. Marketing will again come to the fore as a differentiator between successful businesses and also-rans.

Edit by NRV
Full article:
http://hbswk.hbs.edu/item/6139.html

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Coke’s Challenger Brand Hopes to Power over Gatorade

April 6, 2009

Excerpted from Ad Age, “Gator Baiter: Powerade Jabs at Powerhouse,” By Natalie Zmuda, Mar 23, 2009

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The billboard shows the vertical half of what appears to be a Gatorade bottle on one side, with the other side open to the bare blue sky. But what might at first be taken for a mistake is explained by the text: “Don’t settle for an incomplete sports drink.” A few feet down the road perches another billboard, this one showing a fully intact bottle of Powerade. It’s tagged: “The complete sports drink.”

It’s a classic challenger strategy, except it comes from one of the world’s biggest marketers, Coca-Cola Co. The company might be a giant when it comes to soda, but in sports drinks, Coke’s Powerade runs in the shadow of PepsiCo’s Gatorade. So in true competitive fashion, the smaller rival is undertaking a bold and innovative print and outdoor effort that positions the category leader as only half the brand Powerade is.

Powerade’s plan is to blitz the market with messaging that Gatorade is an inferior method of hydration, and says it has the science to back it up. Since early last year, Powerade has been in the lab reformulating its trademark sports drink to include four electrolytes — sodium, potassium, calcium and magnesium — lost during exercise. Gatorade’s formula contains just two electrolytes, sodium and potassium

To get its message across, Powerade … developed a clever comparative campaign that pits the brand against PepsiCo’s Gatorade. “They’re the lion in the category, and we wanted to compare what our drink does for you vs. the competition,” Mr. Kahn said. “People associate [Gatorade] with the category. When you’re another brand competing, you want to make sure to give people a point of difference.”

Powerade also … will take over the cover of ESPN The Magazine, marking the first time the publication has mingled editorial properties with advertising on its cover. It will feature a blank flap obscuring half of the cover image but retaining the magazine title. The front of the flap states, “You wouldn’t want an incomplete cover.” And the back of the flap shows half a Gatorade bottle with the text, “Don’t settle for an incomplete sports drink.” Powerade is then held up as the “complete sports drink” on the inside of the front cover …

According to Beverage Digest, Powerade controls 22% of the sports-drink market, while Gatorade has a 77% share … For its part, Gatorade is shrugging off the attack, maintaining that all Powerade has done is create a spinoff of its Gatorade Endurance Formula, developed in 2004 …

Edit by SAC

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Full Article:
http://adage.com/article?article_id=135436

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Now, it's the phone, not the carrier calling the shots …

January 5, 2009

Excerpted from Business Week, “How Apple’s iPhone Reshaped the Industry”, December 11, 2008

Today, apps are where the action is, and consumers are reaping the benefits

A few years ago, if someone asked what sort of cell phone you had, your response would probably be to name a network, like Sprint or Cingular. Wireless carriers so completely controlled the business, especially in the U.S., that many manufacturers weren’t even allowed to put their brand names on handsets. Now this relationship is changing in ways that will reduce the power of carriers and, with luck, increase consumers’ choices.

The relationship started to shift when people began using phones for more than voice calls and text messages. As browsers and e-mail systems became important, it mattered more whether you had a Palm Treo or a BlackBerry than whether your phone ran on the Verizon Wireless or AT&T network. Then along came Apple’s iPhone to rewrite the rules completely.

The conventional wisdom holds that AT&T scored a coup when it signed on as the exclusive U.S. iPhone carrier. The company reported that it activated 2.4 million of the new 3G iPhones in the third quarter, that 40% of those customers came to AT&T from rival operators, and that their average monthly bill was 1.6 times that of other subscribers.

But the impact on AT&T’s bottom line is another story. Mostly because of the fat subsidy it pays Apple for each iPhone, AT&T’s third-quarter earnings of $3.2 billion were $900 million less than they would otherwise have been.

More importantly, the carrier has probably lost forever its ownership of the customer, through a process economists call “disintermediation.”

Before the iPhone, relatively few owners of any phones—smart or dumb—downloaded applications. The carriers had a nice business selling ringtones and the odd game. But with iTunes and the App Store, Apple became the exclusive supplier of applications as well as music and videos. The content suppliers got about two-thirds of the revenue, Apple kept about a third, and the carriers were frozen out.

A key test of the new relationship between handset makers and smartphone software publishers, carriers, and customers will arrive when turn-by-turn driving instructions come to the iPhone. Apple seems to have created the phone with navigation in mind. Rumors are flying that Apple plans a navigation offering that leaves carriers in the cold.

This shift in power is a bad thing for wireless carriers, whose nightmares of being turned into commodity sellers of bandwidth are coming true. But it may be a win for everyone else.

Full article:
http://www.businessweek.com/print/magazine/content/08_51/b4113078121012.htm 

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Now, it’s the phone, not the carrier calling the shots …

January 5, 2009

Excerpted from Business Week, “How Apple’s iPhone Reshaped the Industry”, December 11, 2008

Today, apps are where the action is, and consumers are reaping the benefits

A few years ago, if someone asked what sort of cell phone you had, your response would probably be to name a network, like Sprint or Cingular. Wireless carriers so completely controlled the business, especially in the U.S., that many manufacturers weren’t even allowed to put their brand names on handsets. Now this relationship is changing in ways that will reduce the power of carriers and, with luck, increase consumers’ choices.

The relationship started to shift when people began using phones for more than voice calls and text messages. As browsers and e-mail systems became important, it mattered more whether you had a Palm Treo or a BlackBerry than whether your phone ran on the Verizon Wireless or AT&T network. Then along came Apple’s iPhone to rewrite the rules completely.

The conventional wisdom holds that AT&T scored a coup when it signed on as the exclusive U.S. iPhone carrier. The company reported that it activated 2.4 million of the new 3G iPhones in the third quarter, that 40% of those customers came to AT&T from rival operators, and that their average monthly bill was 1.6 times that of other subscribers.

But the impact on AT&T’s bottom line is another story. Mostly because of the fat subsidy it pays Apple for each iPhone, AT&T’s third-quarter earnings of $3.2 billion were $900 million less than they would otherwise have been.

More importantly, the carrier has probably lost forever its ownership of the customer, through a process economists call “disintermediation.”

Before the iPhone, relatively few owners of any phones—smart or dumb—downloaded applications. The carriers had a nice business selling ringtones and the odd game. But with iTunes and the App Store, Apple became the exclusive supplier of applications as well as music and videos. The content suppliers got about two-thirds of the revenue, Apple kept about a third, and the carriers were frozen out.

A key test of the new relationship between handset makers and smartphone software publishers, carriers, and customers will arrive when turn-by-turn driving instructions come to the iPhone. Apple seems to have created the phone with navigation in mind. Rumors are flying that Apple plans a navigation offering that leaves carriers in the cold.

This shift in power is a bad thing for wireless carriers, whose nightmares of being turned into commodity sellers of bandwidth are coming true. But it may be a win for everyone else.

Full article:
http://www.businessweek.com/print/magazine/content/08_51/b4113078121012.htm 

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GM’s Marketing Missteps

December 23, 2008

Excerpted from Harvard Business Online, “How General Motors Violated Your Trust”, by John Quelch, December 11, 2008

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The top eight reasons why GM has failed as a marketer:

1. Focus on products, not customers. For years, Detroit wrongly viewed product types as market segments. Cars were classified as subcompacts, compacts, intermediates etc. But no consumer ever left home passionate to buy an “intermediate car.” Segments are groups of customers, not products.

2. Too many products, too many brands. The Toyota and BMW product lines are very simple, easy for a salesperson to explain and easy for the consumer to understand. There is a logic to the product lineup. Desperate to retain share in the US, GM continues to add to its already confusing array of 60 models under 8 different brand names. The positioning of each brand has long been unclear, a problem magnified by look-alike models built on common production platforms with frequent model changeovers adding complexity costs to production. Buying a car is an infrequent purchase; the consumer needs a clear roadmap of what is on offer.

3. Too many dealers. GM did not reduce its dealerships as it lost share. As a result, dealers began competing on price against each other rather than external competitors. Slipping sales caused dealers to consolidate two or more GM brands on a single lot, further undermining any pretense at distinctive positioning for each marque. And the need to keep sales up at each dealership limited GM’s enthusiasm for embracing new ways of taking new car orders from consumers over the internet.

4. Losing market control. You know you are the market leader when the other players in the value chain – producers, dealers, consumers – all look to your product line as the bellwether alongside which they organize theirs. Today, GM is correctly trying to regain control of the middle with the new Chevrolet Malibu. But will it be able to displace the Toyota Camry and Honda Accord?

5. Bigger is better. Higher wage and benefit costs make it harder for GM to make money on small cars. But the real reason for the migration of the product mix to SUVs and trucks is that the “petrolheads” who run Detroit are all big, tall men. They would rather go down in Detroit history as the guys who brought you the Escalade, not the Prius. They are Jack Palance, not Billy Crystal. Over half the cars bought in the USA are purchased by women; would you know that from the lineup of senior executives at GM?

6. No global brand. Here Ford has a clear advantage over GM. Ford is a global brand. The company name is the brand name. Sure, they have Lincoln and Mercury but the vast bulk of Ford’s marketing dollars worldwide back the mother brand. GM, by contrast, is a house of brands, none of which is global. Marketing resources at GM are inevitably dissipated.

7. Not invented here. Smaller than GM, Ford has been prompted by necessity to better integrate its worldwide operations. In a well-run multinational, this involves US headquarters learning from its subsidiaries, not just telling them what to do or letting them run independently. For decades, Detroit has spurned US launches of high quality vehicles conceived and made in its own European factories.

8. Finance focus. GM has not been run by marketers. It has been run by accountants. The cost focus has crowded out needed emphasis on consumer insight and marketing. Instead of obsessing over the $1,500 per car labor and benefits cost differential separating the big three and the foreign transplant brands, GM should have exploited its market access to develop brilliant new designs that the American consumer would gladly have paid more for. Instead, the Toyota Prius has trumped Detroit and GM’s belated answer is the $40,000 electric Volt.

Edit by DAF

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Full article:
http://discussionleader.hbsp.com/quelch/2008/12/how_general_motors_violated_yo.html

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