Ic3 Map For Mkt Essentials

June 2002 – V1

Marketing Essentials

Marketing Essentials

June 2002 – V.1

This map offers a different way to explore essential parameters that affect a marketing strategy. It addresses top managers without marketing experience, yet with increasing marketing responsibilities and anybody who thinks the journey could be rewarding.

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As we enter the 21st century, one of the salient attributes of marketing is its growing pervasiveness. In companies that are really customer-focused, it spills over the traditional boundaries of the marketing department to impact all areas and levels of the organization.

Why a map? Although it is becoming prevalent, marketing is still quite difficult to define. Ask ten people what marketing means and you’ll get ten different answers with a bias towards the highly visible aspects of consumer marketing. Read ten marketing books and you will find over ten different intricate definitions of marketing as a discipline, a business function, a managerial orientation, etc It all depends on the angle from which one looks at a very vast domain spanning from high-level objectives in a corporate strategy to minute details of implementation tactics. Introducing new breeds of high-technology products in an embryonic market is quite different from promoting consumer commodities in a mature category. Explaining the benefits of a revolutionary technology has nothing to do with designing a new package for grocery items. Determining the right price for a service is far away from organizing a hot line for customer service.

“Things should be as simple as possible, but not simpler” Albert Einstein

This apparent chaos gave us the idea to design a map incorporating the essential parameters that affect a marketing strategy without which a company tends to waste time and money in unnecessary, meaningless or even ludicrous tactical programmes. The objective of this paper is to run you through the main elements of this map.

Marketing essentials So, what is essential? In other words, what are the foundations of a sound marketing strategy? Before diving into the intricacies of channel development, media selection, relationship management, and so on, a company has to get maximum clarity in three domains:

CUSTOMER

MARKET

PRODUCT

−

Identity & Vision - In the background, you need to understand where you stand in the market and where you want to go. This doesn’t have to be published but the boss needs to tell his/her team where she/he intends to go.

−

Differentiation & Positioning - To beat its competitors, a company and its products or services have to offer a positive difference and use it as a basis for occupying a unique position in the mind of customers, partners and opinion makers.

−

Attraction & Persuasion - Ultimately, the rule of the game is to get customers’ attention by standing out of the market noise and clutter raising their interest, and persuading them to buy.

But, above all, a company has to clearly answer the three fundamental questions that form the absolute core of any marketing thinking or action:

◊

Who is the customer?

◊

What is the market (and who is the competition)?

◊

What is the product (or service)?

This seems ridiculously obvious but companies that have clear responses to all three questions are quite rare. That’s why the -product—market—customer- axis is at the centre of our map. Note that, in the high-tech domain, these questions are often answered bottom up, starting with the product.

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Downtown CUSTOMER

The core of our map spans nine blocks that we explore in more details in the next chapters. The top three blocks belong to customer-land; the bottom three to product-land; and the centre, bordered by announcement park and delivery station, to marketland. All sales, support and communication channels are underground and not represented in details.

MARKET GENERAL NOTES CONCERNING THE MAP

∗The

terminology of the map was chosen with the high-tech sector in mind and, more specifically, for high-volume, packaged products. However we think that many aspects of the map are not restricted to this segment.

∗The map includes non-essential items, some with a wink at high-tech events or celebrities.

PRODUCT

∗There is no consistent scale across the map.

Product-land It all starts with a set of technologies that come out of research laboratories as main ingredients of products. Technologies can be simple methods in the public domain or complex, innovative, patented systems. If your ‘product’ is a service, the ‘technology’ is a set of skills that form the basis of your business. The platform combines the underlying technologies to form a coherent system that is often defined as architecture or standard, brand name or nickname, etc. The platform is often the basic product without associated accessories, packaging, documentation and services. Examples of platforms include the World-Wide Web, the GSM system, the Intel X86 architecture, the V.56 modem standard, etc. The product is what is also called the ‘whole product’, i.e. all items (accessories, packaging, documentation, services) necessary to make the ‘thing’ installable and usable. It requires attention to a multitude of details including correct plugs and connectors, labels, legal notices, packaging standards, up to trained technicians, service & support, and so on. Before its launch, a product also needs a price (or a pricing strategy) and, by extensions items or features that make it saleable.

EXAMPLES

MAIN TECHNOLOGIES

PLATFORM

PRODUCT

wireless telephony

wireless digital communications

GSM system

Vodafone service (incl. Brand X handset)

e-commerce

Internet technologies, JAVA, etc.

www + specific computer system (e.g. UNIX system)

sell-side website creation software

Broadband Internet access

DSL

Public telephone system

BT OpenWorld service

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Market-land The market is the place where companies launch their products and where customers place their orders after having been persuaded to do so. It is also the place where the order fulfilment takes place, including delivery and, in many cases, installation with associated services. And, of course, it is where you face your competition. In the high-tech sector, we often witness technologies in search of a problem. Companies rush products to the market without making sure that they are complete, usable and useful. By contrast, most customers have problems in search of solutions. They embrace new technologies provided they can use them for meaningful applications, bringing them real benefits that can be translated into measurable value.

EXAMPLES

TECHNOLOGY

PLATFORM

PRODUCT

APPLICATION

BENEFITS

VALUE

wireless telephony

wireless digital communications

GSM system

Vodafone service (incl. Brand X handset)

a plumber can receive calls while on a job and plan his next intervention

someone doesn’t have to mind the phone and can take a job outside

the household enjoys double income and can move to a better home

e-commerce

Internet technologies, JAVA, etc.

www + specific computer system (e.g. UNIX system)

sell-side website creation software

a company can add a new channel to sell its wares

it reaches customers that were unattainable with conventional sales

additional revenues and increased profits

Broadband Internet access

DSL

Public telephone system

BT OpenWorld service

replace a 56K modem with a 576K DSL connection

much faster downloads (x10) and permanent connection

elimination of dial-up costs and increased productivity

Customer-land The first thing you have to ensure for your customers is a complete satisfaction in all steps following a sale: delivery, installation, expected functionality, service, support and product performance. Then, and only then, can you try to enter into a positive relationship* with your customers. This two-way connection can bring repeat business, generate word-of-mouth, and feed new ideas back to the product developers and to the service providers. With time, the relationship engenders mutual respect, trust and starts, from the company’s point-of-view, the opposite of a vicious circle that we call virtuous spiral. The customer loyalty gets stronger and stronger as long as she/he is fully satisfied and enjoys the regular contacts. This spiral effect increases the value of your brands (company and products / services) and of your business.

* NOTE on CRM Too much hype again? The web still hosts too many companies that want to love customers to death but that are not able to present a sensible value proposition or that can’t take and fulfil a simple order.

CRM (Customer Relationship Management) is getting bad press for various good and bad reasons. CRM systems are very complex and the whole industry is still climbing the steep part of the learning curve. After having been presented as a miracle product CRM is generating horror stories of implementations that have missed sched-

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ule, budget, or both and have destabilised vast numbers of companies’ employees. CRM is successful when companies set reasonable expectations, implement it step by step with the right priorities, and understand that customer satisfaction is a prerequisite.

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Differentiation & Positioning To reach potential customers, you have to craft the right message about your company and about its products / services. Your challenge is to make this message stand out above the market tumult. So, it has to be somewhat different and attractive for the target audience; furthermore, it has to be memorable to stay in the prospect’s mind until he/she takes some action. The key ingredient is differentiation. Why should anybody buy your product if it is the same as the competition’s? It’s best to differentiate the product in the design phase*. But a product can also be differentiated by associated services and, of course, by its price. The differentiation is the basis for positioning a product or a company. Positioning means occupying a unique place in the customer’s mind. A strong position is difficult for competitors to attack when it is credible and passes the laugh test (“Come on! This $9.999 car can’t be as good as a Ferrari!”) and the yawn test (“Another scalable, expandable and integrated software! So what?”). CUSTOMER

MA

PRODUCT

MESSAGE

POSITIONING

DIFFERENTIATION

The message translates the positioning in different forms that depend on the media and the circumstances. Examples:

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advertising tag line (e.g. “Think different” - “We try harder” - “Connecting people”)

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“about us” on your website (how do you summarize your company or product in 1, 3, 10, 25 lines?)

−

elevator pitch (what do you tell Bill Gates in 30 seconds to get in his diary ?)

−

etc.

Note that, as the picture on the left suggests, the message can distil, beyond unique product features, attributes related to its acceptance by the market (application, benefit, value) and by the customer (satisfaction attributes). Once ready, the message is conveyed to customers, prospects and opinion makers through a combination of communication techniques (advertising, public relations, mail, website, e-mail, etc.) and media (TV, radio, Internet, etc.).

*NOTE ON PRODUCT DESIGN: Simplicity as differentiation factor One of the temptations of today's designers is to use high technology’s ever increasing capabilities to add more and more features. This results in over-complex systems and devices that are weighed down with rarely used functions. This trend is obvious in the PC area. After the widespread adoption of graphics interfaces made them easier to use, PCs are now becoming increasingly difficult to manage. Their power and functions are growing

faster than the manufacturers' ability to present these improvements in an intuitive way, or to make advanced features optional for users who don't need them. The telephony sector follows the same pattern. Anybody can make a call on a regular telephone by lifting the handset and dialling a number. Now this simplicity is being lost: wireless phones or PABX terminals require thick user manuals. It’s important to balance the urge to slap every conceivable feature on the drawing board with a clear analysis of what is important to users, and to translate this into concise design objectives.

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If your product is the first of its kind, a true innovation, you must set out the factors that differentiate it intrinsically and communicate them as a limited number of features, advantages and benefits. If the user and purchaser of your product are likely to be two different people, the benefits must be meaningful for both. If your product replaces an existing product (or attacks a competitive product), you need to develop a clear comparative differentiation and, again, focus on the main features that bring identifiable benefits to users.

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Attraction & Persuasion There are several ways to describe what’s happening in the prospect’s mind until she/he decides to buy. The map illustrates the so-called ‘AIDA’ model. Coming directly from your company or out of the media ‘tunnel’, your message has to catch the prospect’s attention. If you’re lucky, you’ll benefit from impulse buys from some of these prospects. Otherwise, the next step is to raise the interest of your audience. As victims of information overload, we will often react more positively to messages blending simplicity with high quality content than to a flood of impersonal, meaningless and pompous communications that litter our real and virtual mailboxes and other channels. If you don’t lose your customer to competition (or indifference), then begins the sometimes tortuous road where his/her intention, desire and conviction increase and end in a positive purchase decision. Depending on whether their products are simple consumer items or complex industrial systems, businesses use a large number of persuasion methods ranging from simple ads and publications to sophisticated demos performed by a direct sales force. This is where the devil is in the details of well designed plans for business / channel development and market communications.

NOTE ON CUSTOMER FOCUS: Should you listen to customers all the time? The map contains a ‘customer cathedral’ to evoke the quasi mystical attitude many pundits have vis-à-vis customer focus’. It is obvious that a company has to keep its customers in mind in most activities such as product design, website architecture, channel development, and so on. But the customer-centric ‘stuff’ has its limits. Listening too religiously to your customers could make you miss market opportunities

brought by disruptive technologies, changes in the business environment and plain crazy ideas.

lead to excess and create some forms of bigotry, fanaticism, dogmatism and, ultimately, blindness.

In the early 1980s, if you had asked early PC users what their requirements were, they would probably have answered ‘better MS-DOS, larger disks, faster processors’ and so on. Nobody would have described anything close to the Macintosh.

Your challenge is to balance an intense focus on customers with an open mind about other sources for new ideas. Scan research laboratories where the technologies for the next decade already exist. Engage your brain into lateral thinking by adopting radically different points of view. And - when the concept is ripe -gather a team of pioneers to plant the seeds of what could become the next new, highly successful business model.

The same moderation should apply to the relationship with other actors in the market. Apple invented the notion of ‘evangelism’ to gather the support of third-party software developers before the launch of the Mac. What worked very well at that time could

Conclusion This map is a somewhat simplistic view of the marketing landscape in a hightech product context. Many details are missing, especially in the area of tactical implementation.. But we think that it contains most of the essential parameters affecting a marketing strategy. As mentioned in the front page, the map addresses top managers with little marketing experience and yet increasing marketing responsibilities. It can also be used as a checklist by anybody involved in marketing activities, on any side of the sell/buy fence. We hope you found the journey rewarding.

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