Archive for the 'Market Research' Category

The Death of Commoditization. The Birth of the Small Business

October 20, 2009

by joseph.young.2009

Image Source: Wired.com

Image Source: Wired.com

In today’s society, there is the belief that “free is good.” I have this belief as well, but I do think there are times when the saying isn’t always true. A situation that stands out for me is new products in the marketplace. When you see or hear about a product from a friend, in the news, or by any other means, what you’re hearing a someone’s invention. It is something they (the company) created by trying to understand their customer (often themselves) and making a product that serves their customer. That is the essence of new product development. You find a need in the market, and then you try to fill it with a product that you think the consumer would enjoy and purchase. And you, as the creator would be rewarded. In today’s society, that reward is financial, social, or some other high value asset.

Source: stock.xchang

Source: stock.xchng

So back to the inventor. This inventor has created something that they think you will like. And by buying their product, you say, “I like your product and I will support you.” What makes you decide to buy it? Maybe you tried it. Maybe a trusted friend recommended it to you. By some marketing initiative, you became aware of the product and decided that you wanted it enough to be willing to pay for it.

Source: Stock.xchng

Source: Stock.xchng

The problem with commoditization is that it drives down the quality of the product as the price drives towards zero. One example of this direct relationship between quality and price can be seen in toilet paper. Toilet paper is, in essence, free. If you wanted to, you could get toilet paper free for the rest of your life and never have to pay for it. Now I don’t know where to get reliably source of free toilet paper from, but a quick search would answer that question. The bigger point is that even in a market with free products, people pay. And people will pay a fair amount for high quality toilet paper. The point is that a commoditized product is often of poor quality, so the majority of consumers will pay for a higher quality product. You can pay with money, as in toilet paper, or with information, as in Google.

Source: stock.xchng

Source: stock.xchng

My proposal to you, the consumer, is to consider, “Why would somebody create something in a commoditized market?” Are they trying to make a quick buck? Or are they making something they believe in and think will improve your life. If you believe the reason they made the product is to make your life better, then I ask you to buy it. By buying that product, you are supporting the inventor’s dream. You are an early adopter. You buy into their dream product. The current iteration of the product may not be your dream product, but by supporting them, you give them another chance to make something better. You keep their company in the race. By selecting a commoditized version of the product, you don’t give them the chance to even try again. Aren’t we supposed to support smart risk taking? Without such, society wouldn’t grown and flourish.

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New Product Development Spotlight

August 18, 2008

This is not a regular segment, but there is a company who’s products are standing out to me. A company that’s using empathetic design or the groundswell to lead their product development cycle.

Belkin


They have products that really show they understand the customer’s perspective. Whether it’s a washable mouse (with great marketing story), or a zip-up mousepad, or a USB hub with a clip, all the products show thought as to how they’re used in the real-world, and how they’re solving problems that people have with these products, or the modifications they make themselves.

Great Job Belkin!

How is the making of an American Idol like the marketing of a new venture?

May 27, 2008

Allow me to make the bold claim that the two are more alike than you think, and that making the comparison may be useful in fleshing out the principles of good marketing, that is, marketing that works.

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Microsoft Embraces Micro Segmentation, Acquires Yadata and Leaps Ahead In Behavioral Targeting

May 19, 2008

Market Strategy

During Q4 2007, a couple of fellow students and I had the opportunity to put a market strategy together for a small Israeli market data technology start-up. We took a look at micro segmentation, behavioral targeting and cross-platform advertising campaigns.

YaData

YaData develops unique algorithms and rankings systems to help the market research neophytes, and time-starved VPs, uncover customer potential. The YaData software carefully sifts through vast quantities of data, culling groups that would otherwise fall prey to poorly targeted ad campaigns, or misaligned products that fail to satisfy needs. With more identifiable segments, everyone wins. Consumers receive more tailored campaigns for goods that are a better match to their needs, and goods are refined to meet more granular needs.

Micro Segments

The secret sauce in the YaData development lies in the ability to accurately identify smaller (micro) market segments within vast customer data sets. These are often difficult to identify, overlooked, and more difficult to reach. However, the pursuit has merit. As Malcolm Gladwell, author of Tipping Point and Blink, recently lectured: “In marketing, its the move from the search for universals to the understanding of variability”. Through embrace of this philosophy to recognize consumer delight as unique, we realize the need for micro segmentation.

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Harnessing the Wisdom of Customers: Free Social Networking Tool Brings Companies Closer to Their Consumers

May 15, 2008

Connecting with Customers Quickly and Cheaply:
MBA students learn a few core marketing concepts over and over: First, we learn that customers are key to the development of any sound marketing strategy. Second, we learn the value of listening to customers and the wisdom of crowds. We also learn that the mere act of responding to a customer often increases loyalty. Unfortunately, maintating an ongoing customer dialogue can be both costly and time intensive. Social networking utilities are increasingly being used as a quicker and cheaper alternative to close the feedback loop. Read the rest of this entry »