INNOVATIVE MARKETING STRATEGIES BEINNG BLOWN BY THE WINDS OF CHANGE

1. INNOVATIVE MARKETING STRATEGIES BEINNG BLOWN BY THE WINDS OF CHANGE Presented to Instituto Superior de Administração e Gestão January 19, 2010 DR. KIP BECKER BOSTON UNIVERSITY GOGLOBAL@BU.EDU

2. INN0VATION REQUIRES A KNOWLEDGE BASED STRATEGY WHAT IS A KBS? • IS NOT : ABOUT TECHNOLOGY / INFORMATION

3. A KNOWLEDGE BASED MARKETING STRATEGY • WHAT DOES IT MEAN TO BE “SMART” • HOW TO GET THINGS DONE - QUICKLY • WHERE THINGS ARE • SITUATION OPPORTUNITIES AND SOLUTIONS • CONSUMER ORIENTED – NEXT GENERATION “WANTS • HOW TO MANAGE CONSUMER INFORMATION SMART

4. LEARNING TO MANAGE INFORMATION TO CREATE VALUE RESOURCE RICH AFRICA INDONESIA OIL SURINAME BAXITE • VALUE ADDED SOLUTIONS Columba - Seattle Washington • India- Dominican Republic call centers

5. CAN BE SUCCESSFUL WHEN FIRM UNDERSTANDS WHAT CONSUMER WANTS? Caterpillar A guarantee: equipment, on a desert airport project or Arctic Circle oil would be fixed quickly

6. THAT SOMETHING ELSE value added component German trucking firm (MAN) Maschinenfabrik - Augsburg – Nuernberg TO WIN : one hundred million dollar contract Most matched MAN's pricing, no one matched value added component of their service: MAN offered mobile repair workshops, water supply facilities and driver camps complete with butcher shops and medical facilities. MAN's insight into the area's driving conditions, how to keep trucks working, drivers happy, gave them international competitive edge

7. OLD STRATEGIES - TRANSITORYCOMPETITIVE & ABSOLUTE ADVANTAGES PRODUCT INNOVATION POLAROID -KODAK FUJI • MORANO GLASS • HISTORY OR RUBBER • Manaus 1890-1920 PLANS FOR THE FACTORIES OF LOWEL STOLEN FROM ENGLAND

8. COMPETITIVE ADVANTAGES OLD ADVANTAGES • Low cost labor/ Labor relationships • Domestic subsidies • Protected home markets • Barriers to entry • Internet low costs • Less internationalizationon • SUBJECT TO: • SHIFTS IN CONSUMER DEMAND • LACK OF PROTECTION OF TECHNOLOGY • REPLACEMENTS OF PRODUCTS BY INNOVATION/TECNOLOGY

9. NEW ADVANTAGES • “Smart” Society • Consumer awareness • Responsive Company Infrastructures • Enthusiastic to Change and Quick to market • Technology & Innovation Driven • Value Added Products and Services • Competition: Contrived Advantages based

10. OLD MARKEING RULES ARE OUT NO FIRM OR GOVERNMENT NO MATTER HOW LARGE OR STRONG IS SAFE • “BIG STALE GUYS” NO LONGER RULE • MUST DRIVE OUT OLD ATTITUDESMARCU “CKomatsu • KNOWLEDGE, INNOVATION & “SMART”

11. BUSINESS HAS REACHED END OF INCREMENTALISMCATCHING UP NOTTHESAME AS GETTING AHEAD Strategy NEEDS TO BE CREATED FOR THE FUTURE NOT FOR THE PRESENT FORWARD

12. THE WAY THE WORLD THINKS IS CHANGING MASS PRODUCTIONEngineering Model Make it  Store Inventory Sell to Consumerr Then Came 70s Information Importance - Early Stage LEAN JAPANESE MODELJust In Time (JIT), TQM, 6 SIGMA Match Production & Inventory / Sales INFORMATION AGE MODEL EMOTIONAL TECHNOLOGY AND CULTURAL INNOVATION Consumer Information  Produce BETTER, FASTER, CHEAPER then Today’s Competition

13. WHERE IS THE VALUE COMING FROM? Cultural Innovation Emotional Technology Products with Personal Experience OBM Products with Personality R & D Brand Management Products with Difference PRODUCT DESIGN ADD - VALUE ODM VALUE ORIENTATION PRODUCTION ORIENTATION Innovation Marketing OEM Production Standardize Products OEM ODM OBM Design for Esthetics DESIGN STYLE

14. Stan Shih Smile Curve Cultural Innovation Emotional Technology OBM PRODUCT DESIGN ADD - VALUE VALUE ORIENTATION PRODUCTION ORIENTATION ODM OEM Production DESIGN STYLE Cultural Innovation“Buy me because through better marketing awareness of customer needs I am able to make you feel special in some important non specific non functional way such as the elegance and lack of clutter associated with the Apple Computer brand, the beauty of the Asus netbook’s exterior finish or integrated ease of use, or the playfulness of some Asian cell phone packaging”. Emotional Technology“Buy me because through incorporating technology I am better on some powerful but specific functional criteria such as lower price or lower weight” (as seen in the netbook’s list of features); iphone apps

16. WHAT WAS ONE OF BOSTON’S FIRST TECHNOLOGY EXPORTS ? FREDERICK TUDOR, 1806 146 TONS SHIPPING 1856 146,000 TONS SHIPPING INDIA CARIBBEAN S. AMERICA

17. TUTOR NEEDEDSPEED , DIRECTION WHAT IS THE TECHNOLOGY? USS CONSTITUTION BUILT IN BOSTON PACKAGING

18. 1848 LEWIS TEMPLE HARPOON SMART IS INFORMATION FOR CHANGE DOES NOT HAVE TO BE COMPLEX JUST RECOGNIZE THE PROBLEM 1800s Whaling changed BILLION INDUSTRY WORLD’S TOP 5 LAMP OIL $45 GALLON BONE $24 POUND

19. YOU CAN HAVE GREAT STRATEGIES BUTTHEY MUST RECOGNIZE CHANGE CANDLE MAKERS DO NOT LIGHT OUR HOMES 1920S THERE WERE WINNERS FROM HORSES TO CARS

20. SMART - MEANS WINNING BY FLANKING FLANKING • Attack the market where the competitor is weakest • INFORMATION INTENSIVE 60S JAPANESE CARS, COPIERS MOTORCYCLES 2000s KOREA COMPETITION Sidewinder

21. SMART - WINNING BY TECHNOLOGY BYPASS WATCHES SWISS to CITIZENS, SIEKO Offering new product making theirs unnecessary RESEARCH & CONSUMER INTENSIVE Japan TOTO COMPETITION POLAROID -KODAK FUJI

22. THREE NATIONAL STORIES SHANGAI DUBAI BRAHAIN

23. The problem is not really so much how to get new, innovative thoughts into your mind, but how to get old ones out “I THINK THERE IS A MARKET FOR MAYBE FIVE COMPUTERS” - THOMAS WATSON CHAIRMAN IBM 1943“THERE IS NO REASON ANYONE WOULD WANT A COMPUTER IN THEIR HOME” – KEN OLSON, PRESIDENT CHAIRMAN FOUNDER DIGITAL EQUIPMENT 1977 “It is generally much easier to kill an organization than change it substantially.” • Kevin Kelly, Out of Control

24. Knowing what the CUSTOMER wants not just what you want to make INNOVATION’S KEY IN GLOBAL STRATEGY

25. “… if they set up a completely independent organization and let that organization attack the parent.” • Clayton Christensen • The Innovator’s Dilemma

26. Technology, friend or foe? 1097 Pope Urban II outlawed crossbow Holy Roman Emperor ban crossbow THE DUTCH FLOWER GROWERS (DFA) AND THE TELE-FLOWER AUCTION (TFA) 11,000 SELLERS 3,500 FLOWER TYPES 5,000 BUYERS 120 AUCTION GROUPS

27. PRODUCTIVITY GOODSSERVICE 27

28. REACHING EVERYONE LARGE BOOK STORES INFORMATION BASED AMAZON.COM

31. WHAT ARE SOME VALUE ADDED ASPECTS OF A GLOBALIZED WEB? 31

32. 32

33. KOREAN GOVERNMENT DESIGNES AN INTERESTING APPROACH E-MALLS FOR ARTISIANS 33

34. SPEED SMART Facebook 1 yr

35. NEW CHANNELS TO CONSUMERS - SMART

36. NEVER HAS ENVIRONMENT BEEN MORE RECEPTIVE TO NEW IDEAS & MORE HOSTILE TO EXISTING FIRMS and NATIONSCOMPANIES MORE LIKELY TO BE AMBITION CONSTRAINED THAN RESOURCE CONSTRAINED WHAT DOES IT TAKE?

37. PART OF GAME OF INTERNATIONALLY COMPETITIVE IS BEING INTERNATIONAL WHAT TO DEVELOP? • HOW MUCH CONTROL ARE YOU WILLING TO GIVE UP? WHAT / HOW TO ASSIMILATE? • WHAT CHANGES TO CULTURE ARE EXPECTED? • WHAT IMPEDIMENTS TO CHANGE?

38. KEEPING UP WITH CHANGETechnology & Pace of Change SIU AND CHINESE BASEBALL • SONY WALKMAN HAS HAD TO PRODUCE 160 MODELS SO SUSTAIN IDENTY AGAINST CLONES • 1976 TEXAS INSTRUMENTS 90%MK SHARE LOW PRICED DIGITAL WATCHES ($19.95) • 1983 LOW END IS $3.00 TI CAN NOT BE PROFITABLE • In only 7 years TI went from MK leader to extinct

39. STRATEGY KNOWING WHERE YOU ARE WHERE YOU WANT TO GOWHO ELSE WANTS TO GO THERE COMPETE THROUGH POSITIONING, CREATIVITY & STRUCTURE

40. THANK YOU