Marketing 2.0

Dell hooks up with Wal-Mart

This is a major development in channel marketing. After years of succeeding with its innovative direct sales model, Dell is now opening up a retail channel. Their first partner is none other than the world's largest retailer, Wal-Mart. In case you missed it, Dell has slipped from its perch as North America's market leader and has started to fall further behind the new leader, HP.

Will this new strategy work and what does it signal? Computers are in the late maturity phase of their life cycle. When products become commodities the typical strategy is to open up a very broad distribution channel for maximum customer convenience. Other than Apple, there's not much product differentiation going on so distribution and pricing become paramount. In this sense, Dell's move is strategically sound. I think that customers were increasingly unwilling to transact over the phone or the Internet when they had lots of options at the local mall, from well-priced HP units at stores like Best Buy to the fashionable products sold through the Apple boutiques. Dell got lost somewhere in the middle.

With this change Dell is focusing its future clearly on the consumer segment of the market. They can pretty much kiss the enterprise market goodbye. What IT chief is going to trust her company's core business system to products sold at the local Wal-Mart? By choosing Wal-Mart Dell gets exposure to a large client base including those late adopters who are finally getting around to buying a home computer. The price they pay for this exposure is in brand image, especially in the corporate market.

Link: TheStar.com - Business - Dell hooks up with Wal-Mart.

Top 12 Marketing Sins

Are you a marketing sinner? Uri Baruchin has posted the top 12 sins of marketing gurus. You don't even need to be a guru to commit all of these sins. Most of us have at one time or another.

I don't agree with Uri on all points. For example, best practices have been a very useful strategy for improving marketing efforts in organizations I have worked with over the years. This is especially useful if you are using new techniques like e-marketing and blogging to reach your audience. If you're not an expert, you can learn a lot by following a few best practices from those with more experience.

The rest of the advice seems specific to those who want to establish themselves as experts or consultants. If you aren't a marketing guru but would like to become one, you can read this post and start sinning right away.

Link: Marketing Babylon � Blog Archive � The top 12 sins of Marketing Gurus (and their books).

Guy Kawasaki Offers The Top Ten Lies of Marketers (with bonus)

Here is a very funny list for all you marketing professionals. Guy Kawasaki presents the Top 10 lies that marketers propagate. My favorite one is "Our product is so unique it has no competition." How many times have you heard this from someone shilling their product to you? Too many times.

Link: Signum sine tinnitu--by Guy Kawasaki: The Top Ten Lies of Marketers (with bonus).

Just say no to average work

Here is an inspirational posting from Seth Godin on holding out for work that fits your potential. It's too easy to accept a job or a consulting assignment simply because you need the money, don't want to be stretched too far, don't want to turn business down, etc..
Link: Seth's Blog: "No" to average.

10 Great Selling Tips

Here are 10 basic but good tips for effective selling. Too many sales reps and their companies have relied on technology solutions to try and improve sales — web conferencing and e-mail blasts and the always popular CRM (Customer Relationship Management) program. Somehow, the magic software solution (glorified contact manager) will drive sales. That's why I love rule number one: invest in face-time with customers. This Top 10 list (don't we just love the top 10 format?) was compiled by Dave Pollard and George Coutts and comes via Dave's excellent blog.

Link: How to Save the World.

The Art of Off-site

Here's a short but informative guide to managing special events off-site. I can relate to Tip # 1 - Articulate your goals. Any organizational event has to begin with a goal. What are we really trying to accomplish here? The goal (along with the budget) drives all of the other decisions you will make. This Fast Company article doesn't mention budget at all but I would put it in the number 2 position, right after the goal. Establishing a budget will frame other decisions such as location selection and will reduce a lot of unproductive planning. There's nothing worse than designing the perfect off-site meeting only to be told to trim the budget by 25%.

Link: The Art of Off-site.

What Every Good Marketer Knows

Here's a great posting from Seth Godin's blog on the fundamentals that every marketing professional should know. Here are some of my favorites among the points that Seth makes:

- Making promises and keeping them is a great way to build a brand.

- Conversations among the members of your marketplace happen whether you like it or not. Good marketing encourages the right sort of conversations.

- What people want is the extra, the emotional bonus they get when they buy something they love.

- Good marketers tell a story.

Click on the link to see the rest of the Seth's manifesto on good marketing.

Link: Seth's Blog: What Every Good Marketer Knows.

The Customer is King

Here is a link to a great article from the Economist discussing recent trends in marketing. The author, Paul Markillie provides insight into the changes in marketing facilitated largely by the Internet.

First, we now have transparency. Consumers are increasingly well-informed about products (both features and price comparisons) before they actually buy. The chief marketer at Dell notes that even small price changes result in immediate consumer reaction on Dell's site traffic and transactions, a sure sign that people really understand price points and price/value relationships in the computer market.

Another major trend is disintermediation — a marketing term than means taking out the middle man in plain English. With consumers able to do their own research and connect directly with companies, what happens to the traditional layer of marketing communications and advertising? Do we still need traditional advertising to attract customers in the digital age?

While advertising probably still has legs, companies are focusing on new media to deliver their messages. In this process, they are moving more toward genuine conversations with their constituencies. That's a really positive trend in my view. What do you think?

Link: .

H-P Fires Carly Fiorina

Here’s my take on the departure of Carly Fiorina from Hewlett-Packard. She was a strong leader and a capable manager who made a fatal, strategic error in buying Compaq Computer in May of 2002. With the value of hindsight it all seems so simple. Why would you buy a company that operates in a brutally competitive market, with slowing growth and shrinking margins? Maybe out of hubris, out of a belief that you can magically transform it into a Cinderella company, the belle of the ball.

At the time that Fiorina pursued the merger, she was strongly opposed by Walter Hewlett, the son of H-P’s founder. During a very nasty proxy fight, Fiorina’s troops characterized Hewlett as a dilettante, a musician who really didn’t understand the nuances of business strategy. It turns out that Carly didn’t understand this basic concept — you can’t turn a sow’s ear into a silk purse even by spending $20 billion.

By all accounts Fiorina did a good job managing the merger process and integrating Compaq. She cut thousands of workers and restructured the new organization in an attempt to improve margins and stimulate growth. I guess the merger went well but what didn’t happen was product development or sales growth. When was the last time you saw a really cool product with an H-P logo on it? Oh, yeah, when they started selling the iPod under license from Apple.

In the end, sales didn’t grow fast enough and the company could not compete with Dell on the basis of cost or efficiency. Face it; you are just not going to beat Dell on execution. They are simply too good. You take a road like Apple, make insanely great products that clearly differentiate themselves and are happy with your share in PC’s. Meanwhile, you look to grow in new segments like digital music or any market where you are not banging heads directly with Michael Dell and Kevin Rollins.

At the time of the merger, Scott McNeely offered this acerbic observation, “The visual I see is two garbage trucks colliding.” He may not have been wrong. Compaq was losing the PC battle to Dell and H-P couldn’t seem to find another star product other than printers. Nothing much has changed in the three years following the merger, despite all of Fiorina’s promises and strategies.

I went into Staples last week to look at laser printers. I saw a nice, inexpensive model from Brother and a very sleek machine from Lexmark. Then I looked at a butt-ugly model with the Hewlett-Packard name on it. It had similar technical specs but a higher price tag than the other two models. Even in printers, H-P couldn’t seem to turn out cool products anymore.

So Carly rides off into the sunset with her $21 million severance package (not including stock options) and the pundits are left to speculate on where H-P goes from here. Here’s my advice to H-P’s board and Fiorina’s eventual successor. It’s all about the products. Build cool products and develop new markets and customers will follow you. I think that should be the H-P way.

The 6 Myths Of Creativity

Here is a good article from Fast Company on the 6 myths surrounding creativity in the workplace. Teresa Amabile, a professor at Harvard, recently completed a large study, collecting 12,000 journal entries from 238 people working on creative projects in a variety of industries. Her research explodes the following myths:

1. Creativity Comes From Creative Types
2. Money Is a Creativity Motivator
3. Time Pressure Fuels Creativity
4. Fear Forces Breakthroughs
5. Competition Beats Collaboration
6. A Streamlined Organization Is a Creative Organization

Follow the clink to the original full article and see all of the results from this fascinating research.

Link: Fast Company | The 6 Myths Of Creativity.