Lesson 5/Week 12: Community Relations 2.0

I finished all the required material in the course today, watching:

• Camtasia video on Community Relations 2.0
• YouTube video on pace of change in society

The lesson 5 module asked us to look at a couple of questions this week with regards to 

1. Does your firm use social media in its communications effort? How?  Is it effective?
2. What types of messages do you think work best in Social media? Why?
3. Will social media make other Marketing Communication forms obsolete?

My firm, Sprint, definitely uses social media in our communications effort.  We recently launched an innovative plan called Framily, in which people can band together into groups and get discounts on their cell phone bills.  Each person has their own bill, so no one is responsible financially for other people.  We have been tracking social media responses to our plans from the launch.  Our IMC included specific messages on Twitter, Facebook, YouTube, and other social media outlets.  I'm not sure how effective the plan will be, but I have no doubt the social media we've used has made the impact larger.  So it is definitely effective.  The metrics we've tracked on clicks, impressions, page views, etc., have all indicated this is the fastest spreading offer we've ever launched.  

I think messages that work best in Social Media are the ones that are efficient and informative, and those that encourage a viral spread of the message.  The potential for messages to go viral are what makes social media so unique.  I also believe that defending against negative publicity is the type of communication that works best in Social Media, for the same reasons of how rapidly the information can be disseminated.  The cases we saw in class like Domino's pizza are instances where response time is of the essence.   

I do not think that social media will make other marketing communication forms obsolete.  People will always watch TV, listen to music, read periodicals, and visit the movies.  These are all ways that companies cannot afford to simply ignore in attempting to get their message to consumers.  

So with that, it has been an excellent quarter.  I thank the professor for organizing the class into a framework that made learning the subject very practical.  It was fun blogging, and this is my first experience with it.  Our consulting group still needs to compile our table of contents and executive summary for our Marketing Plan, but that's the last deliverable.  A week off after this, then back at it for the Summer!  Two quarters to go!!   

Lesson 5/Week 12: Every Day is Day One

Well, the 12 weeks have gone by quickly.  So far this week I've covered:

• Article "Community Relations 2.0"

We were asked for this week in general terms to consider what we've learned and reflect on what we think Marketing is at the end of our studies.  

I've learned a ton this quarter, and most of it will be helpful even outside of marketing.  Here are some of my key takeaways:

• Marketing is probably the most critical business discipline for success.  This is because it is the only area of business school that focuses on customers.
• Customers are everything.  They are what makes a company valuable, not what's on a company's balance sheet.  You have to obsess over them and exceed their expectations, even if you follow Apple's method of showing them what they want instead of asking them.  Even after you show a customer what they want, they will still develop expectations.  These have to be met.
• Marketing is so much more than just advertising, which is how I thought about it before the class.  Quantitative techniques like CLV and marketing analytics rival corporate finance in terms of data collection and analysis. 
• You have to compete to be different, as that's where sustainable competitive advantage will come from.  If you have strong positioning, based on solid STDP, positive outcomes are more likely.  
• The four P's is a great framework to think about marketing holistically.
• Brands are extremely valuable and difficult to compete against.  They can definitely be measured quantitatively and should be on company's balance sheets.

With these key learning points, I'd turn to my ending definition of marketing.  I really like a quote from the CLV article last week:  "marketing is quickly becoming the science and art of finding, retaining, and growing profitable customers."  

This pretty much covers every activity required by marketing, which is so much broader than I thought in week 1.  Some of it is quantitative and approaches science, like CLV's, and other activities like connecting with a customer's mind is more art.  However, just as the goal of a company is to maximize shareholder wealth, marketing's goal to find, retain, and grow profitable customers is the path to get there.  Sometimes volume and market share my be temporary goals, but I like this definition because a company that lets its marketers stray too far from this goal for too long will not maintain competitive advantage. 

Lesson 4/Week 10: Intro to Brand Valuation

Materials that I read/watched for this week include:

• Article on Brand Valuation
• Article "Why it's time to put brand on the balance sheet"
• Article "Avoid the Four Perils of CRM"
• Article "The mismanagement of customer loyalty"
• Watched CRM Camtasia video
• Watched Brand Valuation Breeze video

I also hopped on the quiz early and did it at the start of the week since this will be a very busy week in my other class.  As a result, this will probably be the only blog for this week.

The four questions were were asked to consider this week were:

1. What makes a brand valuable?
2. What do brands do?  How do they create value?
3. What are some of your most favorite brands?  Why?
4. Should Brands be on the balance sheet?  Why?  Why not?

First, brands are valuable because they create economic profits for the company and prolong the lifecycle of products.  They can help keep products differentiated indefinitely, and represent the best way to avoid competing on price.  A brand is perhaps the strongest method of building loyalty, and it encourages repurchases, referrals, and positive word-of-mouth.  Additionally, it allows a company to charge premiums compared with undifferentiated generic products. Brands are also valuable because they can contribute to organic growth.  For customers, brands create the benefit of forcing companies to innovate more frequently, and spend more on R&D.  This means customer needs are met quicker and more fully.

Next, a brand helps consumers sift through the endless choices.  With so many retailers developing private brand labels, it is becoming harder for shoppers to discern what differences actually are between competing products. They all seem to offer the same basic features and functionality.  A brand cuts through all this and offers a simple and lasting message that sticks with customers.  They create value by building trust, and customers become reluctant to purchase an unknown unless they are absolutely sure they are getting the same quality.  Brands also create value by conferring status on the buyer.  Even if jeans are functionally the same, the pair from Abercrombe will carry with it more social status than the generic brand from Wal-Mart.  Finally, brands also create value because they can last for extremely long periods of time, sometimes over a 100 years, like Coke.  

As some of my previous posts have probably hinted at, one of my favorite brands is Google.  It doesn't matter what they do, they are disruptive and always have the cool factor.  I like them over Apple, because Google's products are just as well designed, but they aren't trying to go after huge premiums from end users.  I'm sure they get great margins from their ads, but they make the world a better place by allowing all of us to get to information easily.  One of my favorite products is simply Google Maps.  I cannot live without it, and it's free.  I choose Android phones because of it.  My last posts discussed my affinity for Google Fiber.  The multicolored rabbit is a great symbol for their product.  To me, it conveys happiness and speed.  Finally, although expensive right now, Google Glass is just really cool.  I know that Google's brand image means it will work well, and it will be cutting edge.  

                

Another of my favorite brands is Chic-Fil-A.  Their commercials are just awesome.  I have been amazed, eating at various locations throughout the country, how they manage to create such a consistent experience.  They always have the best customer service, and the food is always the highest quality for fast food.  Their restaurant areas convey a sense of family, with large indoor children's play areas, and the booths and chairs are padded.  I've asked owners why this is, and they explain that they are not trying to get people to come in, eat quick, and make room for more volume.  They want to engage with the customer and build a relationship.  If I could pick any franchise to purchase, it would be one of these.  Their brand is all about family and a wholesome atmosphere.  

  

Finally, I absolutely think that brands should be on the balance sheet.  It seems ridiculous reading the articles for this week that IFRS and other parts of the world have embraced this already, and GAAP hasn't.  At least, not with respect to internally created brands.  M&A has always been an area where brands were recognized as goodwill.  Why would they not be included when they are organically created?  Maybe there isn't a great valuation methodology yet, but the articles we read seem to show that there are some methods that are great starting points and have enough adoption to be contenders.  Simply put, everyone knows that brand equity is a huge part of the value of many of the most successful companies.  We have to find a way to quantify it and communicate that in financial statements.  It cannot just be ignored. 

  

Lesson 3/Week 9: Culinarian Cookware

This week my team is responsible for submitting a case memo on the Culinarian case, so there will be no blog.

Lesson 3/Week 8: Pricing/Channels and IMC

On to the last two questions for this week.  First, how does Google utilize price and place to enhance the value of its offerings and why does their choice work well together?

For Google Fiber, their price point of $120 includes not only the fastest internet in the country, at GB/s speeds, it also includes the boxes that people need to actually receive the cable.  Sometimes, these can cost another $10/month or more with other providers.  I get angry now whenever I see the $59.99 cards in the mail for TV/Internet bundling.  This is because after you add all the fees (like HDTV access), taxes, equipment rentals, etc., it will cost more than Google and you get an inferior product.  People thus perceive a lot of value at that price point. 

Google utilizes place in this offering by going into markets that they feel they can capture a significant portion right off the bat.  Most cable areas are served by only one company, maybe two.  So Google has tried to focus on mid-size cities where it can potentially dominate.  That’s why Kansas City and Austin were chosen first.   They are large enough to provide enough customers to make the fiber build worth it.

For other products like Chromebook and the Nexus Smartphone, they have tried to bring prices down to make their products accessible to customers, and provide a contrast to higher priced Apple products.  Its primary channels are Best Buy, cellular retail stores, and Amazon.  With Amazon, the place enhances value because a low price for the Chromebook is reinforced by the convenience of ordering online.  Many times there is free shipping on Amazon, reinforcing a low cost strategy.

Last, we were asked about whether the company has a unique approach to communicating with their target audience and if that approach is well suited to other elements of their mix.  I think the company has a very unique approach to communicating with Google Fiber.  The process starts by working with the respective city to sign agreements to allow the building of the fiber network.  Concurrently, neighborhoods are hit with television and mail advertising, providing a window of time to commit to buying Google service.  In this way, they find out if the market will support the development costs before they incur high CAPEX.  It also causes potential customers to become marketers for the product, because if enough people do not sign up, the development is abandoned.  Those that really want it become recruiters for more customers.  It all causes more word of mouth and buzz.   

This approach is a good fit with the other elements of their mix.  They don’t launch unless it’s going to be profitable, but the price point is compelling enough that their direct communications work to create ‘pull’.   

Lesson 3/Week 8: Pricing/Channels and IMC

Moving on to the next couple questions for this week:  Google's target audience and its tangible products

Google really targets anyone who has a need to move information around.  One of its core missions is to organize all of the world's data.  It the traditional sense, Google's customers are really advertisers, and it obtains most of its revenue from AdWords and AdSense.  It designs tons of free software though and is the market leader in search engine technology, which helps to make its advertising business much more attractive.  They also make quite a few tangible products.  For these, they target customers who want really great designs (like Apple) and want an alternative to iOS or Microsoft.    

Some of their tangible products include:

• Chromebook - laptops running the Chrome OS designed by Google
• Nexus 5 - newest android smartphone manufactured by LG, but marketed as the "Google phone"
• Chromecast - USB media streaming device that turns regular TVs into SmartTVs
• Google Glass - wearable computer with a Heads-Up-Display and camera, allowing consumers to interact with applications and the Internet via voice commands
• Google driverless car - just what it says, trying to eliminate congestion and accidents

These are just some of the tangible products, to say nothing of its software based solutions that make people's information gathering and sharing much easier and lives more productive.  

Lesson 3/Week 8: Pricing/Channels and IMC

After discussing the Colgate-Palmolive Cleopatra case in our private team forums, and in the Breeze session, it's back to blogging this week.  Material covered so far includes:

• Read Chapters 8 "Developing Channel and Logistics Strategy" and 9 "Developing Marketing Communication and Influence Strategy" in the Marketing Plan Handbook
• Watched Camtasia video on Marketing Channels and Integrated Marketing Communications

The points of discussion this week center on the following questions:

1. Reflect on a firm or product you like which you believe is highly effective in bringing all the elements of the Mix together to create beautiful symphony for their consumers.
2. Who are the target audience for the company's market offerings?
3. What are the tangible products the company offers?
4. How does the company utilize price, and place to enhance the value of its offerings and why do you think there choice work well together?
5. Does the company have a unique approach to communications with their target audience? How is the approach well suited to the other elements of their mix?  

When I read this, Google is the first company to pop into my mind.  I really love how they have attempted to disrupt a lot of different markets.  I first appreciated their efforts to make maps and navigation capabilities free on smartphones, which really hurt Garmin.

Living in Kansas City, I have anxiously been awaiting the launch of their new Google Fiber Internet and TV service  (https://fiber.google.com/about/).  I really think they bring the four T's together in this offering in a beautiful way.  First, the product is amazing, offering the potential to have Gigabit internet speeds that far exceed anything in the market right now.  Google claims 100x faster than today's average broadband speeds.  Second, the price is very competitive, or even less, than the competition's flagship internet bundles.  At a $120/month, it is a compelling value.  It seems to be a neutral pricing strategy.  What is more revolutionary is that they are giving away free broadband internet (lower tier speeds like 5 mb/s download) as long as customers pay a one-time $300 construction fee.  I pay $37.99 right now for speeds not all that much faster from Time Warner.  So this is going to put a lot of pressure on ISPs to lower prices, which is great for the consumer.

Next, the "place" in the marketing mix refers to whatever community in a given area has pre-registered for a "Fiberhood" in sufficient quantities to make it worth Google's time to build the network.  By being exclusive and forcing customers to band together to sign up en masse to get their neighborhood connected, it is creating a lot of buzz.  By only moving to selected cities and publicizing their efforts widely, it is building a lot of excitement and demand for them to expand rapidly.  Right now, they are taking a very methodical approach.  Kansas City, Provo, and Austin are the three pilot cities, with San Antonio, San Jose, Portland, Salt Lake City, Phoenix, Nashville, Atlanta, Charlotte, and Raleigh-Durham on tap.

Their promotion has been very effective, but understated.  They know their technology is awesome, and have focused on getting out the message across various KC suburbs as to the required timeline to sign up when your area is eligible.  If you pass on the first opportunity, there may never be another, because I believe they have to build right to the house.  Most of the advertising is on television and is direct marketing.  Word of mouth communications are very positive among the communities that already have the service too.  They have focused largely on creating 'pull' demand from customers through their process of getting sufficient commitments before spending CAPEX.

Google has done well with coordinating the mix with Google Fiber.  I only wish my local city council in Overland Park hadn't messed up royally and angered Google.  As a result of their mismanagement of the contract process, we are on indefinite hold while the rest of KC gets the service.    

Lesson 3/Week 6: Invent on Behalf of the Customer

The final discussion prompt for this week was to consider how product development has been affected by shorter product lifecycles and how technology has affected product development.  I stumbled on a website article that claimed 50% of annual company revenues across a variety of industries come from new products that are less than 3 years old (link below).  That’s amazing, as it means that the Maturity stage in the graph below is a relatively short time frame.  Companies are then not able to harvest profits for an extended period of time.  Product development must be focused on continual innovation to survive then. 

I would think this makes it much more critical to keep development costs under control.  As the article mentions, forecasting is huge for demand because decisions to move forward have to be made quickly.  If a company takes too long to launch the product, someone else will capture the market first.  Thus, I think product development timelines have probably decreased on average.  I think technology helps firms meet the accelerated timelines though.  Better manufacturing technology, supply chains, and logistics can counter some of the shorter lifecycles and allow companies to meet time-to-market challenges.   

An example that crossed my mind is the movie industry.  I think they can predict the total gross revenue from a movie fairly accurately now just from the first two or three days’ ticket sales.  Movies are basically following an extremely condensed version of the product life cycle graph below.  The growth, maturity, and decline stages happen within a span of 3 weeks now.  I can remember 20 years ago a blockbuster would stay in theaters for a whole summer.  Nowadays if I can’t catch the movie in the first 3 weeks, it’s hardly playing anywhere.  I’m not sure there is as much impact to the product development stage for the industry compared to tangible products, but it does seem that trilogies have gone from every 3-4 years between movies (original Star Wars) to every other year (Hunger Games or Lord of the Rings as examples).  This probably has a lot to do with making sure the actors cast do not change so much in appearance.

http://www.sourcingfocus.com/site/opinionscomments/the_product_life_cycle_is_in_decline/

Lesson 3/Week 6: Invent on Behalf of the Customer

Another question we were asked to think about for this week concerns the various levels of products we currently use.  There are generally 3 levels of a product:

• Core – the benefits itself we set out to obtain as consumers
• Actual – the physical product we purchase
• Augmented – additional non-tangible benefits a product can offer and customers find useful

The first two levels are fairly self-explanatory.  However, the idea of augmented products includes areas like sales service, help lines, warranties, or free delivery.  Here are a couple of my favorite products:

Core	Actual	Augmented
Blu-Ray movie player, games console	PS3	PS Network for games, Smart-TV replacement
Mobile communication and information capability	HTC One M8 Cell Phone	Sprint’s 4G LTE network, Google Android Apps
Sustenance	Papa John’s Pizza	Fast service, convenient online ordering, frequent promotions

Lesson 3/Week 6: Invent on Behalf of the Customer

One of the questions for this week’s learning blog was to consider products that have become obsolete.  Products are tools that provide consumer benefits, and if a better tool comes along that provides the same core benefit but is easier to get, cheaper, or more fun, the old tool will be obsolete.  I went searching for examples, and found a link with some of the biggest ones over the last 10-15 years. 

http://www.businessinsider.com/21-things-that-became-obsolete-this-decade-2009-12?op=1

The first one on the list was the one that immediately came to my mind:  The PDA.  I remember I was issued one of these at Officer Candidate School in the Navy in 2000.  I though my Palm was the greatest thing ever.  Of course, it became completely obsolete when Blackberry allowed calendars, phone calls, messaging, email, notes, etc., all in a single product.  Then the touch-screen smartphone killed it.  Palm tried to get into the smartphone market, but they were too far behind.  I believe they were bought by HP and then discontinued.

The next one was E-Mail accounts you had to pay for.  My first interaction with email was through school in the late 90’s, so college students by and large had free access early on.  But America Online was selling it as part of their service, which got killed by Gmail, Yahoo!, and Hotmail.

There are lots of other great examples, like video rental stores supplanted by Netflix/RedBox, dial-up internet replaced by DSL/Cable broadband, Maps (I still have a few stuffed in the side pocket of my car though), VCR’s, and long-distance charges (killed by Skype, VoIP, and cell phones). 

I’d love to have been a fly on the wall when executives were trying to decide what to do after becoming aware of all of the threats posed to these now obsolete products.  How much marketing myopia was going on?

Lesson 3/Week 6: Invent on Behalf of the Customer

Materials covered this week included:

• Read Chapter 6: Developing Product and Brand Strategy, the Cleopatra case, and the article Apple and Innovation:  From Ruins to Riches
• Watched the Rory Sutherland's TedTalk video and Parts 1/2 of the recorded lecture

Deliverables:

I have an idea I'm excited about for our Individual Ideation Project.  My segment will focus on meeting the needs of working adults who are pursuing graduate degrees and are also looking to change careers  We'll see if it gets picked by the Prof as one of the best ideas...

I also have to complete a 10 question quiz, so I'll have to review the first six weeks' worth of material. 

Lessons Learned:

This week's lesson was focused on the product development process.  We learned about the product life cycle, which is a cool concept.  I never paid much attention to it, but I guess all products eventually die.  The four stages are:  Introduction, Growth, Maturity, and Decline.  The early stages are characterized by rapid sales growth, which levels off by the Maturity stage and eventually declines.  Profits are highest in the maturity stage.  

There are various things a company can do to prolong this cycle and harvest profits for as long as possible.  For instance, marketers can continue with product development, changing features that refresh an offering.  They can do marketing development by expanding to new geographical markets.  They can also target deeper market penetration by highlighting secondary uses and trying to improve the usage rates of a product. 

We also learned about the new product development process, which has 8 steps, although different sources will have a different number.   It all starts with Ideation, and ultimately ends with Commercialization.  The biggest takeaway for me was that it is important that there IS a process, even more than what the specific steps are.  Companies have to be disciplined in how they go about developing new products, or it will just increase the already high failure rates.

In Sutherland's Life Lessons from an Add man, he made awesome points about how so much value is intangible value, which relates to the book's concept of brand equity.  My favorite quote was (paraphrasing) "Saving is just needlessly delaying consumerism."  What would the world be like without brands.  I am convinced that if I ever want to strike out on my own, building a brand may be the most important part of the business.  Continual innovation combined with a strong brand may be the only thing that comes close to creating sustainable competitive advantage.

Lesson 2/Week 4: STDP

This week we are studying Segmentation, Targeting, Differentiation, and Positioning.  I had to read the HBR article on the topic last week to get ahead as our team is required to submit the first part of our consulting group's marketing plan at the end of this week.  We were responsible for looking at the electric and hybrid vehicle markets in North America to try and identify the best segments to target.  I also read Chapter 4 in the textbook in preparation for my responsibility to focus on the STDP part of the marketing plan.

There were numerous questions posed this week for learning:

How does segmentation facilitate consumer obsession?
I think segmentation helps because it forces the company not to view all its customers as being the same, because they're not.  Grouping them into logical cohorts allows the company to pinpoint a marketing message that will speak directly to that group.  The text talks about how companies are going away from undifferentiated marketing because it's not as effective.  My guess is that marketers want their customers to feel like they're being obsessed over, and treating them as unique through a disciplined segmentation process seems a necessary part of the process.

When a firm chooses a particular segment for targeting what are its primary considerations?
I think a firm should choose by balancing areas like market factors, competitive factors, business environment factors, and economic & technological factors, as the book lays out on pg 73.  There are always trade-offs, but the firm will seek to find the optimal mix of growth rates, barriers to entry, bargaining power for buyers/suppliers, investment required, political/legal/regulatory concerns, threat of substitution, and the degree of differentiation it feels it can bring to the market.  These are just some of the primary considerations, but there are others.

What is positioning?  Where does it reside?
To me, this is communicating the aspects of the brand or product that differentiate your offering based on what customers find meaningful and what influences their buying decisions.  This is basically the book definition, and it is a good one.  If a company has solid positioning, it should be able to obtain a competitive advantage.  I would think it should reside in any medium the firm is spreading its marketing message for a particular brand or product.  It should be on the product's website, television and print ads, etc.

Think about a couple of companies competing in the same space with different segment focuses.  Discuss these firms and their various approaches.  Why are they different?
An example that comes to mind is Goldman Sachs vs. Edward Jones in the wealth management/Personal Financial Adviser space.  Both essentially compete for assets to manage from investors for retirement, but they target very different segments.  Goldman goes after the high net worth individuals and leverages its reputation as a top notch investment bank on Wall Street.  Goldman Sachs' Asset Management division tends to operate in large cities.  Edward Jones, in contrast, focuses on investors of modest means who are interested in long-term buy and hold strategies and highly value personal attention.  Because of this, Edward Jones will set up it's financial advisers in an office by themselves, and try to blanket an area with many offices so customers feel more like they're visiting a neighborhood adviser.  Both are very successful models, just different target segments.

Looking forward to reading our first case, The Fashion Channel for next week....

Lesson 2/Week 3: Using Market Research to Gain Consumer Insights

I had no idea about how Sprint conducts market research before today.  I reached out to a Market Researcher and was able to learn a lot.  Sprint conducts both primary and secondary research, although we try to lean on the latter as much as possible for costs.  A primary research study can cost from $20-60K.  When we do commission primary research, we will internally design survey questions and then reach out to outside resource partners to execute the survey.  Once we have the results, we will synthesize all the data in-house.  Our core consumer marketing groups do more primary research than our business segment marketers, with the former doing a lot of CSAT surveys.

Peg, the employee I spoke with, explained how her job is in our MVNO segment, which include companies looking to use Sprint's network but do not own the infrastructure.  Sales will ask Peg's group help with very specific business partner requests for analyzing a market for them.  She'll utilize resources like MRI or Personicx for demographic research and IDC, ADI, E-Marketer, or Nielson for market information.  The requests can involve producing qualitative or quantitative research.  Only if the request is so specific that answers can't be found with our existing relationships will she seek out a primary study.  An example she gave of something that would require primary research would be 'What ethnic group in the U.S. buys mobile phones for their kids under 10 years old in major metropolitan areas?'

My group has started with the IU library resources to find secondary research applicable to the hybrid and electric vehicle industry.  We've already looked at Frost&Sullivan, Gartner, Marketresearch.com, and Passport.  I was able to find a report from 2010 about the worldwide electric vehicle and plug-in hybrid markets.  The price tag was over $3K for the report!  Glad IU is footing the bill for that one.

Lesson 2/Week 3: Using Market Research to Gain Consumer Insights

We watched a fascinating YouTube video for a Hans Rosling TEDTalk this week.  I don’t know how Dr. Rosling was able to animate his analysis on the slides he had in the video, but the insight is so much more powerful watching motion convey the differences over time.  Time series data graphed as multiple lines on a chart are very helpful, but watching motion is so intuitive for seeing the magnitude and speed with which values are changing.  I remember my first Kelley Connect week, where some tools for data visualization were presented that blew my mind.  I had never really seen a bubble chart before, where 3 variables can be represented in 2D space by having the bubble size correspond to a third variable.  Another example occurred this week as we were presented a collage of our wiki responses from the first week of the definition of marketing.  More common ideas showed up in the collage as larger words to convey their relative frequency.  These ideas are causing me to be less and less patient with the traditional way of presenting data, where teams believe that an overwhelming number of line and bar charts in a PowerPoint deck will get the point across.  I think the goal is for anyone in your target audience to be able to instantly grasp the information that’s conveyed visually. 

The overall insight Dr. Rosling found was that the ‘we’ and ‘them’ characterization of the world is rapidly changing.  It’s not just developed vs. Third World anymore.  Even developing countries are seeing families shrink and live longer, looking more and more like developed countries.  Family planning was cited as a key driver.  Dr. Rosling points out that we need to look at the data rather than just make assumptions that lead to myths.  He also pointed out that even regional perceptions can be wrong, because there are huge differences among the data within Arab states, Africa, Eastern Europe, or Asia.  For instance, he discussed the strong correlation between GDP/Capita and Child survival percentage, but within a given region there are huge differences depending usually upon governmental attitudes towards trade, etc.  We just need to be cautious of the averages we use and the context in which we use them.

What’s amazing is that he was using publicly funded data and advocating strongly that we improve the ability to search these free databases.  A lot of insights can come from it.  It certainly shattered my impression of the Third World being a place where life expectancy dramatically trailed the West because of income disparities.  Dr. Rosling may not have been using these data for market research for a product, but the big takeaway was seeing how real data will provide the insights to make good, informed decisions.

Lesson 2: Obsess over the customer (My own company)

I've only been with Sprint for a little over a year, so I had to do some research about what our mission/vision statement is.  We must have one, but it isn't easily accessible and visible.  I asked another employee and they didn't know either.  As best as I can tell, our vision is "to be a world class company, the standard by which others are measured."

If this is our mission, it's difficult to interpret how a marketing plan could support something so broad.  We face numerous external challenges to our wireless businesses, as there are significant trends towards price competition.  The industry hopes to compensate for this by going away from a decade-long model of subsidizing phones for customers.  Networks have been upgraded to provide fast 4G LTE data speeds, although still not competitive with wired broadband from cable internet providers.  The main threats to my company is in trying to improve our network through our "Network Vision" initiative.  Sprint sees an opportunity to differentiate by being able to offer unlimited data to our customers when the competitors cap data consumption.  Wireless data consumption is growing at an extremely fast pace, and capacity constraints are going to be challenged.  Our particular technology can be aggregated in a way that will potentially provide breakthrough speeds over the next two years.  In time, a big opportunity exists to potentially compete with cable internet providers.  The problem is that we have to completely rip out our old equipment on every tower and replace it with our new equipment, rather than just upgrade side by side as our competitors have been able to do.  As a result, our base sees degraded performance during the upgrade process and customer satisfaction takes a huge hit.

Our company obviously provides a service that has an extremely broad customer base.  The vast majority of adults (and even children 7+) have a need to communicate with others and exchange information while mobile.  Our CEO and Chairman have both publicly advocated consolidation in the industry so we can more effectively compete with AT&T and Verizon by realizing purchasing and operating synergies with a company like T-Mobile.  Regulators have been reluctant to support a merger or acquisition, showing the political stance in Washington is still favoring four national carriers.  Our argument has been that the industry is really a duopoly, so allowing a merger will really increase competition from 2 to 3 national carriers.  If the external political environment shifts, a huge opportunity for a combined Sprint/T-Mobile will open up.    

Lesson 2: Obsess over the customer

I've spent a bit of time this week thinking about what it means to obsess over the customer and targeting the right segment for your business.  One area that I follow a lot is the cable industry.  As a cord-cutter, I fall in the camp that doesn't think the $150 I had to pay for AT&T U-Verse each month was a good value, no matter how many channels I received.  I use U-Verse as an example, but I've compared every offer I get in the mail almost daily and they seem to be close in price regardless of company.  We haven't had cable for several years now and rely on OTA HD broadcasts for the networks and Redbox for movies.  We still have to pay for broadband internet though.

The rallying cry for the cord-cutters is 'give us a la carte pricing and we'll save a bunch of money'.  I'm not sure that's the case, but it sure seems like there is a sizable market out there who are all feeling the same way.  I'm wondering why no company has come up with a model to serve this segments needs.  Who really wants to be hostage to renting the equipment monthly too?

Comcast is trying to merge with TWC, which I am absolutely against.  The link below discusses how some people think the merger will give the combined company the leverage it needs with ESPN and other content providers to finally get prices down to where they can offer a la carte programming.  Whether or not this occurs, I spent more time thinking about whether I am the customer Comcast and all the other cable companies are even trying to serve.  Southwest Airlines was successful because it had a unique value chain with decisions that supported low costs, like no meals or pre-assigned seating, while offering point-to-point service instead of using a hub-and-spoke system.  Herb Kelleher once wrote a letter to a customer who habitually complained about such choices, "Dear Mrs. Crabapple, We will miss you.  Love, Herb" (I think this was in the book Understanding Michael Porter).

Kelleher knew that the toughest decision is how to stand by your choices of whom not to serve.  Cord-cutters are perhaps the most price conscious out there.  Maybe we simply aren't who the cable companies want.  An argument can be made that the cable companies are just being product focused though, and not consumer focused.

They are standing pat knowing there are some key external factors that indicate a shift in the market.  The trend is that people want access to everything on-demand, and will continue to watch sports live most likely.  Additionally, the trend is that people perceive the value they get for cable is sub par.  With streaming capabilities, this market is changing rapidly too.  They may be safe as long as they also provide internet service, because cord-cutters still have to pay them to get entertainment through the computer.  Nevertheless, there sure seems to be an opportunity out there for some company to obsess over us.

http://www.newyorker.com/online/blogs/elements/2014/02/the-real-problem-with-the-comcast-merger.html

Lesson 1: What is Marketing

The key learning point this week is that marketing is a lot more complicated and broad than I had ever assumed.  Without much experience in business (I have spent over 12 years of my career as a Naval Aviator), Sales and Marketing have always been blurred roles, and it is easy to think of the two as the same thing.  The first reading from Marketing Plan Handbook dispelled that notion.  Sales is basically selling, but Marketing is so much more.  The text states that marketing is "everything the company is and does to consistently provide competitively-superior value to win customers and earn their ongoing loyalty."  Looking at the contents of a marketing plan makes it clear that marketing involves every aspect of the business, from creating a thorough understanding of customer needs to develop a product to the marketing program's mixture of the 4 P's, financial and operational plans, and metrics to ensure an initiative is successful.

The material I read/watched/reviewed this week included:

Chapter 1, Marketing Plan Handbook
Jeff Bezos video on YouTube
Week 1 Slides
HBR Article: Marketing Myopia

Additionally, I contributed to the class Wiki, where I took a stab at the definition of marketing.  I wasn't too far off, as I knew that the concept of creating value for the customer is a key pillar. 

Marketing Myopia was an outstanding article, and really helped me gain perspective on how critical and wide-ranging the subject is.  I have often wondered why more companies don't engage in creative destruction to ensure their ongoing competitiveness.  It was interesting to read the critical views on the oil industry not taking the lead in new energy development.  The idea of framing your industry in terms that permits managers to see new opportunities is key to long-term survival.  Levitt argues that the railroad industry wouldn't have suffered its decline had it thought of itself as simply being in the transportation business.  However, it is always easier to see in hindsight why a company should have anticipated how new industry, products, or production methods would make old ones obsolete.  But the overall point was well-taken, that companies like Exxon or BP should be the ones to develop alternative energy forms so they control their destinies.  Better technology will eventually win out.

Bezos' video was really interesting.   While he had multiple things he 'knew', the one that sticks out to me is obsessing over customers.  I have no trouble believing that this is crucial to exceptional performance, but the problem is learning what that means.  Learning 'how' to obsess over customers is what I'm hoping to learn in the coming weeks.