Marketing 2.0

Myths about Innovation

Great article from Co.Design about the process of business innovation. It's not always a visionary CEO or strong competitors driving innovation. The authors uses several examples of successful and not-so-successful companies to debunk popular myths. I learned that Nokia invented the first touch-screen for a mobile handset, well before Apple got around to it. They just didn't want to disrupt their own successful products and market share by introducing it. This reminds me of Kodak. They invented the digital camera but didn't want to risk losing the profits generated by their film products. Companies need the courage to disrupt their own business models if they are going to be true innovators.

Let’s Debunk 4 Myths About How Great Companies Innovate | Co.Design: business + innovation + design.

Social media vs. Strategy

Everyone wants to get in on the social media party. The question I get asked most by potential clients these days is, how to build a social media presence. Of course, I remind them that you have to begin with a coherent marketing strategy, and only one piece of that is building a Facebook page or using Twitter. While social media is the marketing flavor of the day, companies often have core issues that need to get fixed before they can improve sales or profitability.

One of these core issues is competition. Marketers and senior executives often downplay the strength of their competitors in an effort to be positive leaders and inspire their troops. You have to be realistic. Strong competitors can make it virtually impossible for you to accomplish your goals, especially if you've set the bar too high on market share. While you can always find a way to position your brand and differentiate yourself, I'm really struck by how difficult it is to change consumer perception and convert them to your offering.

Consider the tablet market. We have Apple and Amazon entrenched in leadership positions. Who else has cracked this and made headway? HP? RIM? Microsoft? Dell? Nope. Barnes & Noble? Maybe. You would think a market that's growing this quickly would offer opportunities for everyone. What happened to the old saying that a rising tide lifts all boats? It's been replaced by the law of oligarchy — market share tends to be concentrated in the hands of a few powerful brands.

I think one reason for this is we are bombarded with choices in life and we need to make things simple. I do that all the time. I don't have enough free time to comparison shop and I don't want to risk making a bad decision, especially on a major purchase. When I need a television, I buy a Sony. New laptop? My only decision is between the 13" and 15" MacBooks. Time to relax and sip a capuccino? Where's the nearest Starbucks? I know there are lots of good alternatives to these brands but I don't have the time or the inclination to seek them out. 

So what do you do if you're not one of the big players in a given market? Don't give up but know that your job is going to be challenging. You will definitely need to innovate, find some way to change the game with either product design or customer service. Look for a niche segment that's not well served by the big guys. 

That brings me back to social media. If you haven't effectively differentiated yourself, don't expect people to sign up as Facebook fans or subscribe to your Twitter feed. Consider the entire brand experience and then find a way to use social media as one element in the marketing mix. Just remember to sort out your brand strategy and positioning first.

Are the 4 P's still relevant?

Here's a controversial article from Fast Company claiming that three of the classic 4 P's of marketing are dead. Oops, just when my students memorized them! According to the author only product matters in today's world. Place is irrelevant with e-commerce, many companies have succeeded with little or no promotion, and pricing is now transparent and driven by market forces. Well, I guess that's going to make it easier for me to teach Principles of Marketing.

Like most grand pronouncements, this one has some validity but limited applicability. Not every company is a pure-play, technology startup with a unique product developed by brilliant programmers working 23 hours a day. Some people are still opening pizzerias, bars, accounting firms, or trying to get established as independent consultants. Do they need to focus on all 4 P's? You bet they do.

Why Do B-Schools Still Teach The Famed 4P's Of Marketing, When Three Are Dead? | Co. Design.

Ok, we were just kidding about that Qwikster thing

Just as they were heading off the cliff by splitting the company up, Netflix has come to their senses and pulled back. While they might receive criticism for inconsistent strategies, at least they now recognize the folly of their original plan to separate streaming media from DVD's. Better to catch it before investing in a new brand and really upsetting customers. As the late Steve Jobs taught us, consumers like simplicity.

Netflix Aborts Plan To Separate DVD, Streaming Services | Fox Business.

HP's radical portfolio management

We're all familiar with the product portfolio matrix first developed by the Boston Consulting Group. Most marketers have been taught to use the four-quadrant matrix to manage their products.

HP announced they are spinning off their PC business and exiting the tablet market only months after releasing their new Touch Pad. Meanwhile, they're spending $10 billion to acquire the  software company Autonomy. In simple terms it means that HP wants to get out of the hardware business and become an enterprise software company like Oracle or IBM. 

This wouldn't be the first time that a company has exited the PC business but what makes the decision tough to understand is that HP is the market leader in PC's. When have you ever heard a market leader say, "We're dumping our business?" On top of that, they have lost a ton of credibility by pulling the plug so soon on their tablet (guess they saw it as a problem child) as this where the growth is coming from in the personal computing space.

Go back and look at the matrix and remember what you were taught to do with it. HP's PC business is clearly a cash cow, even with declining margins. You generally use the cash cow to fund growth and development in other product areas. Maybe HP feels that slaughtering and selling their cash cow will fund their future growth. The question is, where will that growth come from? 

In the meantime, investors have rushed for the doors and the stock has tanked. It's a shame that this venerable company seems to have lost its way since the HP Way was once the template for enlightened management. It seems the current CEO is ignoring or at least accelerating the traditional approach to product portfolio management by making this bold announcement. So far, investors and business commentators are not buying in.

User-Led Innovation Can't Create Breakthroughs; Just Ask Apple and Ikea | Co.Design

We always talk about Web 2.0 as an age of user-generated content. The power has shifted from marketers to consumers. We need to create one-to-one experiences and innovate based upon peer production and crowd sourcing. Yada, yada, yada. At least that's the view presented in this article from Fast Company. If you examine two of the most successful marketing organizations in the world, Apple and Ikea, you'll find the opposite is true. Creative people work together, usually in secret, and develop transformational products that consumers didn't know they needed or couldn't articulate.

User-Led Innovation Can't Create Breakthroughs; Just Ask Apple and Ikea | Co.Design.

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.