Week 5: A light week...

This week was kind of a relaxed one from a C570 perspective, but pretty hectic in the home front, where I got to spend a lot of quality time with my family. I reviewed the Fashion Channel Case and worked out the excel spread sheet based on the details that were provided in the case. We also initiated the discussion within our team on the case, but will wait for the next breeze session to get the details and perspective from Prof. Talbott to wrap up the discussion and prepare the memo. I look forward to a great year and hope that 2013 brings cheer, peace and happiness to everyone and takes us one step closer to our dreams and aspirations! 

Week 4 – My Activities and Thoughts

Week 4 saw a lot of collaborative efforts from our teams on the marketing plan. We had inter team meetings where we discussed the marketing plan deliverable. In the beginning, it was not very clear as to how all this will fall in place. But as we started to see drafts of the plan being formed, the direction seemed to get less foggier. I definitely see value in these team activities where we get to see and discuss the different perspectives and come to a consensus, as opposed to us just jotting down our single point of view from the limited research that can be done with the limited time. It was also interesting to see multiple folks in different teams coming up with the same researches and links – this was also reassuring in that we were all headed in similar directions, which I hope is positive, given that most of us do not have a marketing back ground. J

I also read the article on Market Segmentation, Targeting and Positioning – This helps to validate the struggle I experienced as I tried to put my thoughts together on the marketing plan. As Prof. Talbott pointed out in one of the articles that was shared,  “today's firms are awash in data but short on insights”. With internet and all other media around us, there is so much data that it makes you dizzy. Some of the data  from multiple research firms is even contradictory, as we discover in our own research. Also, in today’s world of extreme global competition, it is extremely difficult to find that key differentiator that sets you and your products or services apart in the market. Many companies attempt to differentiate themselves in a crowded market place and this in turn results in an intense price war that results in many businesses going bankrupt as they cannot sustain the model.

In the wireless telecom industry, price wars are not uncommon. A few years back Sprint was struggling to find that key differentiator and Dan Hesse the CEO introduced the ‘Simple Everything’ wireless plan that was a saving grace and key differentiator for Sprint. Details can be found in this article – http://newsroom.sprint.com/article_display.cfm?article_id=614, an excerpt of which is pasted below:

The move to unlimited pricing that includes data signifies a turning point for the wireless industry. Nationally accepted measures of voice quality now show very little, if any, difference among the top wireless providers.

"All major carriers have good voice networks," Hesse said. "Our network is about more than voice and more than just being the largest wireless data network. It is about allowing customers to connect with people, information and entertainment. It is about simplicity, usability and real value. The $99.99 Simply Everything plan eliminates overage surprises and provides a worry-free environment.

"Our investments in innovation and speed are becoming the new areas of differentiation. These are the areas where we perform best and where we can deliver a wireless advantage for our customers."

Market Segmentation, Target Market Selection & Positioning – My Takeaways

1)    Market Segmentation: Dividing market into groups of potential customers called market segments

2)    Two types of segmentation:

a.    Segmentation based on benefits sought by customers

b.    Segmentation based on observable characteristics of customers

3)    Target Market Selection: Evaluation of each market segment’s attractiveness and selection of one or more segments to enter

4)    Key to target market selection is understanding differentiation – This involves:

a.    Collecting and comparing data on the company and each of its competitors

b.    Synthesizing collected data into competitor capability matrices

                                               i.    Items of evaluation are listed as rows

                                              ii.    The company and its competitors are listed as columns

                                             iii.    Each entry is a rating corresponding to the item being evaluated

c.    Evaluating and determining which of the identified segments is most likely to succeed

5)    Positioning: Identification of a clear, distinctive and unique selling proposition for the product

6)    Differentiation: Clearly articulating to the customer as to the benefits that the product fulfills – clearly stating how it differs from the competitor offerings

a.    Vertical Differentiation – Differentiation based on quality – exploits customer’s willingness to pay for quality

b.    Horizontal Differentiation – Differentiation not based on the judgment of quality levels

c.    Differentiation can be achieved via any element of marketing mix – Product, Price, Place or Promotion

Week3: Videos And Articles - My Thoughts

  The video by Hans Rosling clearly shows how quickly the world is evolving and thereby how quickly the market is changing. His message emphasizes the rapid change happening in the world, the significance of statistics and the pre-conceived ideas that people try to stick to, without doing research and leveraging the available statistical details. We often say “a picture is worth a thousand words” – the visual representation of the ideas being conveyed not only helps in getting the point across easily, but also sticks with us for longer. I can very clearly relate to his view that we need to leverage the research data available, be able to find a means to dip into all the data that is already available in the numerous databases around the world, as we really don’t want to reinvent the wheel. Better quality of data we have at our disposal, better the outcome of our research. We can start via Secondary research and based on the preliminary findings from this, start the primary research and focus more specifically on segments and criteria of interest to us.

  Malcom Gladwell’s talk clearly states the point on market segmentation very clearly  - “they were looking for the perfect Pepsi, and they should have been looking for the perfect Pepsis”. Most often we look for that single answer and it was humorous, but also real when Malcom talked about the expectation to get a bell curve back. When the collected data does not match, it is often considered a data error. But today the customers have so many options, that they can choose to be picky and thereby the need for segmentation arises. We thereby need to concentrate on those segments where we can provide the best value and benefit the most from.

  The example of Nike given in the text also clearly illustrated the segmentation principle that Prof. Talbott showed in his lecture via the Tide example. Nike, even though are in the shoes business, embedded the digital chip into their shoes and integrated it with iPOD. By thinking outside the box and integrating with the growing fitness industry, they are expanding their market based on consumer interests/needs and probably added a new segment. They might cannibalize a bit of their current customers from one of their existing segments into the new segment, but overall they will attract more fitness freaks and more iPOD users into their overall market.

Chapters 3 & 4: My Takeaways

Chapter 3: Understanding Markets and Customers

1)      Market analysis is crucial to understand the dynamic needs and behaviors of the consumers and business customers that you want to target

2)      Markets can be defined as:

a.    Potential Market – All customers who may be interested

b.    Available Market – Customers with sufficient income and access to the offering

c.    Qualified Available – Customers who are qualified based on several criteria like    income, age etc

d.   Target Market – Customers the company intends to target for an offer

e.   Penetrated Market - Subset of target market who are already buying the product

3)      Market analysis feeds into the SWOT analysis, thereby determining new opportunities and threats

4)      Consumer wants, needs and behaviors are affected by personal factors, cultural considerations and social factors

5)      Business customers are influenced by Organizational connections and considerations.

6)      Planning market research includes:

a.       Primary research : to address a specific marketing question or situation (includes ethnographic redearch, online and neuromarketing- understand consumer (brain) reactions to marketing activities)

b.      Secondary research: using information already collected for another purpose and is usually the starting point for research.

Chapter 4: Planning Segmentation, Targeting and Positioning

1)      Marketers are moving from mass marketing to segmented marketing

2)      Segmentation: Grouping customers within a market based on similar needs, attitudes, habits that can be addressed through marketing

3)      Niches – Smaller segments with distinct needs or benefit requirements

4)      Target Market – The segment of the market that you choose to pursue

5)      Segmentation Variables: Behavioral, Attitudinal, Demographic, Geographic, Psychographic

6)      Segment Evaluation criteria: 1) Large, profitable, fast-growing, 2) potential for competitive superiority, 3) Extent of environmental threats 4) Economic and technological factors

7)      Marketing Strategies:

a.       Concentrated Marketing – concentrates marketing activities only on the most preferred segment

b.      Differentiated Marketing – Follows separate marketing strategy for each of the different segments being targeted

c.       Undifferentiated Marketing – Target all segments with the same marketing strategies

Week 3: The Plan

  I started this week off by meeting with our extended teams. We agreed on our ways of working and look forward to working together in the coming weeks and use our collective effort and insight in coming up with a detailed marketing plan for the Tablet Computer/E-Reader. I also read through the Chapters 3 & 4 and watched the three recommended videos. I also plan to review the article that was posted by Prof. Talbott on the data for Tablet Adoption, after which I will post my take aways and thoughts on all the details I have come across/learned this week.

Analyzing the Situation

             I am looking at Sprint/Ericsson and the wireless telecom service provider industry. Considering some of the external factors in this area, this is an industry where the consumer trends and business trends are changing very rapidly. We all know that i-Phone has revolutionized the cell phone world and there is a growing shift towards smart phones. We also have many android phones that have come into the market and there is no dearth for mobile applications. This emphasizes the need for research to analyze what features the consumers are looking for and the price they are willing to pay for these. Also with the growth in social networking sites like Facebook, twitter etc the data usage on the cell phones is also on the rise, not only among the business users  but also among the younger generation. Analyzing these trends closely will help in coming up with competitive data plans. Though Apple is leading the pack with the i-phones, other firms like Samsung, HTC and LG are also fighting for the market share. Sprint continues to compete with Verizon and AT&T as it tries to build alliances with these cell phone manufacturers. Sprint had passed up on the i-Phone when approached several years back and that was one of the gravest mistakes made by the then CEO, Gary Foresee and Sprint ended up paying heavily on that decision. There is constant threat from the competition and it is a very fast paced industry that has struggled in the wake of the recession as it is also a capital intensive business. So the company definitely needs strong leadership and good vision accompanied by strong business strategy to maintain market leadership.

Chapter 2: Analyzing the Current Situation – My Takeaways

1.      Best marketers actively scan for internal and external, micro and macro environmental changes.

2.      The scanning helps in creating a SWOT analysis – not only for your company, but also for each of your competitors, which helps in determining the possible influence on your marketing situation.

3.      Analyzing the internal environment – identifying strengths and weaknesses:

1. Mission statement should give clear vision and direction for market planning and implementation
2. Resources – human (workforce), financial (funding), informational (data) or supply (material/services) – are limited and must be balanced carefully for success.
3. Review all the offerings/product mix to determine how effectively they relate to the mission and resources, thereby determining strengths and weaknesses
4. Review results (sales, profits, financial results) with trends over past several years to separate effective and ineffective activities
5. Review Business relationships to ensure true partnerships
6. Pinpoint keys to success and focus on the right priorities, Scan for major warning signs that hinder success and make plans to avert them
3. Analyzing the external environment – identifying opportunities and threats
1. Demographic Trends – Consumer, Business, Economic, Ecological, Technological, Political-Legal, Social-Cultural trends are analyzed
2. Competitor analysis is performed
3. Based on analysis Predict, Plan, Prepare and Respond to changes in each arena

Week2: My Plan

This week I will be attending our first breeze session. In preparation for the same, I will try to complete reading chapter 2 of the text book as well as watch the video that Prof. Talbott has on Angel.  I hope to understand the value of SWOT analysis in marketing and also the impact of internal/external and micro/macro changes. I also hope to apply the knowledge gained to my company/industry and try to relate what I see there to the topics I learn. I have not yet looked at the Marketing Plan Pro software that came with the text book and am hoping to get some direction in this regard during the Breeze session.

Last week, I met with my team and had our introductory discussions. This week, I look forward to contacting the other teams in our consulting group and getting introduced to them.

Marketing Myopia - My Takeaways

  'Marketing Myopia' by Theodore Levitt struck me as an interesting article, especially so, since it was written in 1960, but still some of the key issues outlined by him are relevant even today. The myths outlined that cause the risk of obsolesence were very thought provoking. In today's world of economic recession, I can see the emphasis given to reducing unit costs in mass production, as we are all struggling to do more with less. The focus that is internal to us, where we look at what we can accomplish with the limited budget we have and prioritize based on our ability or perception of the market, as opposed to what the customer really wants, can be attributed to the lost market advantage that was once enjoyed by many firms and taken for granted.

 The author hits the nail on the head when he also talks about the Step Child treatment of marketing as compared to R&D, production etc. I have seen in my own companies where the sales and the marketing groups are the ones that are most impacted when there is a need to reduce costs. The 'keep the lights on' strategy that is adopted in such cases mostly cuts out customer focus that is key for survival and long term growth.

  The need for great executive leadership, who clearly knows where they want to go and also can get the entire organization enthusiastically on board with them is another key requisite to ensure success in the long run. The long term vision and goals that they set for the organization as a whole will be the key foundation that drives each of the organizatioal initiatives and if they are myopic, their existence in the market will also be short lived. 

Chapter 1: Marketing Planning - My Takeaways

1. Marketing is all about creating, communicating, delivering and exchanging offerings that provide value and is gaining importance day by day.
2. Value is the difference between the perceived total price and the percieved benefits
3. Citizen Marketing is a new trend in maketing where with advances in technology/media, consumers are getting involved in marketing by providing feedback via videos, word of mouth, online reviews etc.
4. A Marketing plan covers a specific period and summarizes
1. What was learned about the market place?
2. What will be accomplished through marketing?
3. How will it the accomplishments be made?
5. Marketing holds the key to customer understanding - lack of the same creates risk of losing customer loyalty and goodwill and in turn drop in sales - Tropicana packagng case is a great example
6. The stratefic plan (3-5 year plan), business plan (1year plan) and the marketing plan - specific operational direction on how an org will use marketing to achieve targeted results - are key to ensure success and require input and collaboration from within and outside (partners, suppliers and customers) the org.
7. A detailed marketing plan once implemented should still be continuously monitored to adapt to the changes in the market place (customers and competetion), technology and other factors like environment, economy etc.
8. The six step process in creating a marketing plan:
1. Research & Analyze current situaution
2. Understand markets and customers
3. Plan segmentation, targeting and provisioning
4. Plan direction, objectives, marketing support
5. Develop marketing strategies and programs
6. Plan metrics and implementation control
9. Primary Marketing tools (Marketing Mix - 4Ps) :
1. Product
2. Pricing
3. Place (Channel)
4. Promotion
10. A good marketing plan, encompassing the 4Ps and accompanied by support strategies for customer service and internal marketing, creates a unique blue print to:
1. provide value
2. build relationships 
3. make a difference
11. The guiding principles for a marketing plan:
1. Anticipate change (in environment, resources and capabilities etc)
2. Engage everyone (all emplyees, customers and contact points)
3. Seek alliances (Suppliers, Channel members, Partners, Customers  & Community)
4. Make marketing meaningful (How can you make a difference)

  In short, this chapter gave me a glimpse into the extremely scientific world of marketing which reveals that marketing is indeed a science and not just an advertising campaign that can promote sales and definitely distinct from the sales itself (which I presume is a common misconception based on some of the other blogs that I saw as well). The examples of Zappos, Tropicana, Costa Farms, Bank of The West, Honda, Best Buy etc that are provided along with each of the concepts being explained helped in getting a clearer grasp on the idea being conveyed. I am also beginning to get some idea around the division of topics that Prof Talbott has done when preparing the marketing plan as part of our assignments. I look forward to the deep dives in the subsequent chapters on each of the key topics that we were introduced to in this chapter.