Nov 18, 2009 | Branding, Change, Marketing
Market research now has a pretty sophisticated set of tools, all sorts of ways to tell you what to do, to provide a crutch for decision making, to take away the responsibility for making a courageous decision.
However, it boils down to the option of qualitative, collecting behavioral patterns, and quantitative collecting numbers.
Many years ago, as the one responsible for the marketing of Ski yogurt in Australia, I struggled with the reality that we were number two in the Australian market, just ahead of a swag of alternatives and the leader had nearly three times our share. Whatever we did, however much we spent, the number did not change much. One day, in a supermarket talking to a young Mum buying yogurt in a 1kg container, I noticed she had to use both hands to pick up the round container of Ski, complicated by the fact that her youngster was insisting on being carried. The solution was blindingly obvious, use a rectangular container, she could pick it up with one hand, and the side benefit was that it now fitted in the door of a domestic fridge, and gave retailers better shelf space efficiency.
The result of the launch of the new rctangular pack was a huge increase in Ski’s market share, and an appetite for innovation that enabled several other ideas to hit the market, resulting in leadership in a relatively short time.
The lesson is that the quantitative data did not tell us this stuff, it told us consumers, both the ones who preferred Ski, and those whose loyalty was to Yoplait, the market leader, were happy with the product, loved the taste, consistency, packaging, and so on, but the approval of the product just did not translate into sales beyond a modest market share. However, the behavioral insight coming from just watching how the product was handled, qualitative data, gave us the insight, it answered a question we had not thought to ask, and with which the consumer had no experience, as all tubs to that point were round, and nobody had suggested any alternative.
Nov 16, 2009 | Change, Innovation, Marketing
Not just the “bits”, the original target of Moore’s Law are halving in price every couple of years, lots of other things are as well.
For many goods and services, the whole notion of charging at marginal cost has been thrown on its head, because in many cases marginal cost has become negligible.
The internet has created the most competitive market the world has ever seen.
Barriers to entry are almost zero, and the marginal cost of production is zero. Therefore, how do you price this product, as price has always followed the marginal cost in traditional models.
The consequence is that over time, as things evolve on the internet, the for “free” component will increase, and the audience will increase, in numbers, but those who want “depth” will still be prepared to pay for it.
Disruptive innovation has used this model for 150 years.
Jell-O, effectively dried granulated gelatin in a box was given away in the 1880’s as a means to develop a market.
Linux software is the best known recent example of free stuff on the net, but it is every where, so the marketing challenge is to evolve a business model that enables you to make money when giving it away.
On of my clients has a unique information product that offers useful generic information covering an industry, but then has the scope to generate very specific and competitively useful information for individual enterprises and situations at a much deeper level of analysis. The debate about the best pricing model is proving to be very interesting indeed.
Nov 16, 2009 | Change, Innovation, Marketing
In the welter of new media arriving almost daily, is there an element of individuals being empowered to exercise their right to make their own choices after a lifetime of being told what they want by others.
Boys are taught from an early age to want a sports car by the role models and advertising thrust at them, and girls are taught what to want by magazines and their peers and role models, but do we really need most of it?
After several generations of honing the ability to filter out the mass market advertising we do not want to see, perhaps twitter and the other emerging social networking tools are an opportunity to express stuff that was previously just a personal consideration. The marketing implications of this ability to filter communications coming in, and respond directly to those that attract us for some reason are as important to marketing as Henry Ford was to automobiles.
Nov 2, 2009 | Change, Innovation, Leadership, Marketing, Small business
We talk about vision, mission, and all the rest, but at a more fundamental level, evolving a point of view, shared throughout the firm, about the “shape” and trends of the industries we are in, and those of the industries we intersect with, is a really basic thing to do.
Having a point of view about the “green” economy enabled GE to start their “Ecomagination” program before climate change was on the general agenda, it enabled them to disrupt their own light bulb business with the compact flouro, and it drives their current efforts to rebuild their huge medical devices business by developing small, cheap, mobile devices that fulfill a more basic need in developing countries .
All this because Jeff Immelt developed a point of view, and drove it through the business as a catalyst for massive and disruptive innovation.
Have you developed a “point of view” about your industry, and the role your business will take? Few are as influential as GE, able to change the “shape” of their industries by their actions, but it is no less important for small firms to have a point of view, and a plan to deal with the “shaping” influences as they emerge.
Nov 1, 2009 | Change, Innovation, Marketing
The path to free will be a major challeneg for the current century, as the price of stuff follows the marginal cost of producing it down to virtually free.
Music is effectively free off the web, despite the best efforts of the music industry, yet the other parts of the industry are doing well, tours, merchandise, the amount of product is increasing, devices like the iPod are booming, just the sales of the CD’s are tanking.
Software is now largely for free, you can still pay full whack for Windows or Office if you like, but few outside corporate do so, and there are thousands of “apps” emerging for devices that are very cheap, approaching free, and streaming of movies is increasingly happening, although as the penetration of Blue-ray increases, it will slow the “free” uptake a bit as people figure out how to beat the security.
What about games?
They are still $99 from the retailer in the mall, and when a new blockbuster comes out, the retailers are packed with kids buying them, the same kids who would not pay for a new song from their favorite artist. Why are the games not yet for free?? Will it happen?? Inevitably.
Anything that can be digitised will follow the road to (almost) free, the money will be made in the value adding products and services, the way Red Hat Have made a business providing service to free Linux software users, and Apple have made a business out of selling the iPod when the music is essentially free.
However, you will probably still have to pay for your carrots down at the green grocers.
Oct 28, 2009 | Change, Innovation, Leadership, Management
In a world of disruptive change, the perhaps usual path to the CEO’s office needs to be rethought.
Over the last 50 years, CEO’s have largely come from accounting and business management backgrounds, more latterly, marketing & strategy have had their shot, but in a world changing at such a huge rate, it makes sense to source the CEO from the ranks of the product and design people.
Would the US car industry be in such a mess if the top blokes came from the engineering and innovation streams, instead of from the financial side that crushed innovation under the cruel hand of spreadsheets that assumed more of the same, only better?
Elon Musk, creator of Paypal, where he took on the banks, and Tesla, the first fully electric car, is an entrepreneur with an engineering background and a profoundly restless mind, who just believes, and who has created 3 hugely innovative businesses that destroyed the status quo. What could such a person have done at General Motors with the resources of that former giant at his disposal.
