Tuesday, August 30, 2022

New Product Development - Corporations versus Startups


It is interesting to compare and contrast how we approached new product development within Hallmark's Product Discovery & Development division versus how startups that I coach through RIT's Venture Creations business incubator do it.

Hallmark is a large corporate entity that is marketing-driven, but also risk adverse. While the startups that I coach are created by entrepreneurs who are willing to risk much to see their startups succeed. Most of these entrepreneurs have technical backgrounds, but little to no understanding of marketing including marketing research.

Given Hallmark's high profitability hurdles, risk aversion, and large marketing research department, we often succumbed to analysis paralysis. 

At Hallmark, we would explore trends through our resident environmental scaling manager, who would report a new societal trend in depth each month. We would also hold new product ideation sessions for each market or trend that we identified as "high potential." We conducted more than one hundred focus groups a year to explore different potential markets. When one of our new business strategists came up with an idea, we would have that person develop a concept statement and later an "ad-form" concept statement (including a visual), which we tested against a normative database (ConScreen was one of them) to determine market need and gap and to project potential sales volume. Each concept needed to explain the product concept including its primary benefit or benefits simply and without any modifying superlatives. 

After the concept testing, we would often refine the concept, and if it seemed that it had enough potential, we might conduct a few more focus groups to refine it even further and then test its marketplace need and gap again against a normative database.

The Hallmark new product development process is based on the concept of a screening funnel with most new product concepts dropping out at some phase of the evaluation process. We often developed product prototypes. We sometimes performed attitude and usage (A&U) studies to size a new market and determine its sales potential for a specific category of products. We used conjoint analysis to refine product functions and features. Sometimes we would conduct market segmentation analysis. And sometimes we would test product package designs.

The final step in the funnel process for the successful product concepts that had made it that far was a full-blown market test in which the product was developed and tested in a test market. A component of those tests was testing different marketing approaches for the product to determine which might work best for the full product launch.

Now I want to contrast Hallmark's approach to new product development to that of our mostly younger entrepreneurs. We have to work hard to get those entrepreneurs to develop unique value propositions for their products. And we push them to conduct "customer discovery." Sometimes, that consists of only ten interviews with potential customers, although it should consist of far more interviews than that to increase the likelihood of success. 

One of the flaws, but also one of the advantages, of entrepreneurs is that they often (but not always) jump into their startups without much knowledge of what they are getting into regarding industry, product category and business functions outside of their general knowledge or academic training. This makes me think about the Dunning-Kruger Effect, which recognizes that the people who are the most ignorant about something are often also the most confident about it. This can lead to many stumbling blocks and mishaps, but it can also lead to novel solutions for problems that industry experts and others with more knowledge assumed had no solutions. This, in turn, can lead to true breakthroughs as there are no preconceived notions that align with those of industry insiders.

Entrepreneurs often start with what is called minimum viable products (MVPs) and incrementally add functions and features to the products as dictated by early adopter feedback and as their resources allow. 

I hope this illustrates the two ends of a continuum regarding how new products can be developed. One end is based on exhaustive, methodical research. The other end is based on learning as you go, nimbleness and rapid pivoting. 

Thursday, August 4, 2022

The Essence of Marketing in One Paragraph

 



Recently, a Venture Capital intern asked me to explain marketing to him at the end of our two-hour interview. While I have spent more than 40 years working on hundreds of successful marketing campaigns for almost as many brands, and while I could spend days talking about the nuances of marketing research, brand strategy, brand architecture, PR, pricing strategy, distribution strategy, digital marketing, marketing automation, package design, retail merchandising, etc. - I believe in simplicity. So, I explained the essence of marketing to him in less than one minute, which can be articulated in one paragraph. This is what I said...

The first step in marketing is being able to completely put yourself in the customer's shoes. What are her hopes, fears, beliefs, attitudes, values and behaviors? What are her pain points? What does she need and what does she desire? What problems is she trying to solve? Then you must craft a product/service solution that uniquely meets those needs and then articulate that unique value proposition as simply and powerfully as possible. Your brand's unique value proposition must be presented to her in as many ways as possible as often as possible to build her awareness of and emotional connection to your brand. And finally, you need to possess common sense to say and do the right things at the right times to move her from brand awareness to brand purchase and then ultimately brand loyalty and even brand advocacy. 

It's as simple as that. All of the rest of marketing is just tactics, which can be taught.

Thursday, June 23, 2022

Customer Discovery


Customer discovery must run deep. You need to talk with a lot of people and you need to probe deeply with each of them. That means understanding their hopes, fears, aspirations, anxieties, beliefs, attitudes, values and more. While a highly trained marketing research moderator may use a variety of qualitative research techniques (including projection, ideation, guided imagery, sorting exercises, etc.) to discover these motivations and behavioral drivers, you can do much of this yourself by asking open-ended response questions and spending more time listening than talking. 

The types of questions that can elicit deeper responses include the following:

  • What keeps you up at night?
  • What is your most pressing need right now?
  • If this product or brand were a movie/book/car/party/musical genre/food/etc., what type of movie/book/car/party/musical genre/food/etc. would it be and why?
  • How does it make you feel?
  • What is missing?
  • Do you think the product says anything about you, about who you are?
  • Would you recommend this to a friend or colleague? Why or why not?
  • What about this appeals to you?
  • What is the most important need this would fulfill?
I will give you an example of superficial customer insight versus deep customer insight.

Superficial Insight

Q: Why did you purchase a Tesla?
A1: Because gasoline prices are soaring, electric vehicles (EVs) make increasing sense financially.
A2: Because I care about the environment.

Deeper Insight from Deeper Probing
Q: Why did you purchase a Tesla?
A1: I have always admired Elon Musk and wanted to buy one of his cars.
A2: Teslas are the coolest, newest cars on the road.
A3: Tesla acceleration makes it fun to drive.
A4: Tesla stereo systems are "to die for." I enjoy tooling around listening to some of my favorite music.
A5: I like their clean lines inside and out. They are aesthetically pleasing. 
A6: I love showing my car off to others.  
A7: I want to support society's transition from fossil fuel powered vehicles to EVs.
A8: I want to help slow down climate change. 
A9: When I drive a Tesla, people view me as successful, progressive, an early adopter and environmentally conscious.
A10: Teslas are really fun to drive. They perform very well on the road.
A11: I can always beat other cars across an intersection after a full stop at a stoplight or stop sign.
A12: Teslas have fun "toys" - whoopee cushion noises under seats, light show, caraoke, Netflix movies, etc.
A13: I am just really happy when I am driving my Tesla. It is a joy to drive.

Looking at this list that was compiled from deeper probing, we now have to determine which of these are the primary drivers of the purchase decision. And then we have to distill that to a unique value proposition and brand messaging.

A possible unique value proposition for Teslas given this list of purchase motivations might be:

  • Teslas are the coolest cars on the road. They are really fun to drive and they are good for the environment.

Wednesday, May 25, 2022

Branding & the Customer Experience


Mostly, when people talk about brands and branding they are thinking about the brand's name, identity system, positioning, and marketing messaging. They are not thinking about its underlying order fulfillment, customer service, technical support, crisis management and other systems and policies that create the overall customer experience. And yet, a brand's reputation can be enhanced or tarnished by these systems and policies. 

Think of a surly customer service representative that you have interacted with. Or, alternatively, think about a particularly empathetic and helpful customer service representative.

Think about someone who hung up on you when you were seeking help versus one who stayed on the phone with you for hours until your problem was completely solved. 

Think about an order that took dozens of screens and multiple inputs to complete versus one that was completed with one click. 

Think about a hotel employee who personally saw to it that your request was fulfilled versus one who passed it on to someone else, or worse yet, one who never followed through on your request. 

Think about input screens that were very confusing or that timed out versus those that were simple and intuitive. 

Think about brands that create a huge series of walls so that you can never reach a live person versus those in which a real person answers the phone. 

Think about systems that anticipate your needs versus those that can't seem to to help you find what you are looking for. 

Think about the FAQs that never seem to address the question you have versus those that are thorough and help you solve your problem.

Think about an order that arrived overnight versus one that took weeks and weeks to arrive.

Think about brands that surprise you by including unexpected product enhancements after your purchase versus those that surprise you by including unexpected hidden costs and surcharges.

Think about assembly instructions that were incomplete and impossible to follow versus assemblies that were so intuitively obvious that you didn't even need instructions.

Think about retail establishments in which you were immediately greeted in a friendly but unobtrusive way versus those that didn't even acknowledge you. 

And think about warm and welcoming brand environments versus sterile or off-putting environments.

These systems, processes, policies and constructs all contribute to the brand experience. It doesn't matter how cool the brand's identity or marketing messages are. If your interaction with the brand frustrates you or makes you angry versus putting a smile on your face, your perception of and loyalty to the brand will suffer. 

Wednesday, May 4, 2022

FREE Marketing for Startups Webinar

 


FREE Marketing for Startups Webinar on Wednesday, May 18 from 11:30 am to 1 pm ET. Sponsored by RIT's Venture Creations Incubator and Nextcorps. 



Thursday, April 14, 2022

95 Trends Shaping Our World


Sometimes it’s useful for marketers to understand trends that may affect their businesses. Here are some of the current trends that I am monitoring:

  1. 5G technology
  2. The Internet of Things
  3. Mobile Internet
  4. Cloud technology and distributed infrastructure 
  5. Democratization of technology
  6. The world becomes hyperconnected
  7. Move toward all media consumed through the Internet
  8. Seamless language translation, making the world even smaller
  9. Exploration of more direct human-computer interfaces (HCI)
  10. Electrification
  11. Electric vehicles (EVs)
  12. Autonomous vehicles
  13. Drones
  14. Battery technology
  15. Microgrids
  16. Grid-connected renewable energy systems
  17. All forms of clean tech
  18. Atmospheric (electromagnetic) energy
  19. Software defined vehicles (SDVs)
  20. AI & machine learning
  21. Deep structured learning
  22. Autonomic systems
  23. Generative AI
  24. Big data analytics
  25. Edge computing
  26. Quantum computing
  27. Nanoparticles
  28. Next generation materials including honeycomb lattice
  29. Photonics
  30. Quantum teleportation
  31. Virtual and augmented reality
  32. 3-D multisensor transmitters
  33. Advanced robotics
  34. 3-D printing 
  35. Process automation and hyper-automation
  36. Explosion of smart devices
  37. Genomics/genetic engineering
  38. Health care data analytics
  39. Personal medical devices
  40. Telehealth and mobile medicine
  41. Hyper-personalized medicines
  42. Social determinants of health (SDOH) receive greater attention
  43. Mental health becomes a larger priority
  44. Unbundling of health care
  45. Web 3.0
  46. Homomorphic encryption
  47. Blockchain (distributed ledger) technology
  48. Cryptocurrency
  49. Non-fungible tokens (NFTs)
  50. A cashless society
  51. Privacy and cybersecurity
  52. Biometric technology (face, voice, eye, hand and signature security)
  53. Deglobalization
  54. Redesign of supply chains
  55. Increased self-service
  56. Recurring revenue streams
  57. Distributed enterprises and remote employees
  58. Increased flexible work 
  59. Continued growth in the gig economy
  60. Huge need for retraining for new economy jobs
  61. Minimum living wages as an alternative to job loss
  62. Increased time sharing of all things
  63. Extreme personal profiling
  64. Hyper-targeting and hyper-geofencing 
  65. On-demand personalized customer experiences
  66. Move from retail stores to Internet distribution centers and home delivery
  67. Move toward unique and boutique in retail
  68. Increasing use of personal digital assistants
  69. Cameras, cameras everywhere
  70. Struggle for personal privacy
  71. Increasing popularity of veganism and vegetarianism
  72. Increased focus on personal health
  73. Decrease in romantic relationships
  74. Increasing acceptance of sexual freedom 
  75. Decrease in organized religion, increase in personal spirituality
  76. Continued decreasing trust in traditional institutions, especially government
  77. Shift from a patriarchal society to a matriarchal society
  78. More focus on the home
  79. Increasing self-care and compassion toward others
  80. Increasing importance of pets as family
  81. Increased frequency and severity of natural disasters due to climate change
  82. More eco-friendly lifestyles
  83. The private sector steps up its support of social and environmental issues
  84. Distributed localized agriculture through hydroponics and aeroponics
  85. Increased “fake news” and disinformation
  86. Increased sophistication of deep fakes
  87. Increased botnet activity
  88. More censorship, less free speech
  89. Increased public awareness of and pressure to address economic inequality
  90. Less capitalism, more socialism
  91. Continued urbanization
  92. Continued population shifts to less expensive states
  93. Less abundance thinking, more scarcity thinking
  94. The blurring of war and crime with the emergence of terrorism
  95. Rethinking of the criminal justice system

If you aren’t familiar with some of these, I would recommend that you search on and read about those that most interest you. 

Tuesday, March 29, 2022

Brands and the Digital World

 


Here are some of the effects of the digital world on brands:

 

  • A brand’s online presence can improve brand awareness.
  • A brand’s website is critical to the perception of that brand because most people investigate a brand by going to its website.
  • Blogs can create thought leadership and emotional connection for a brand. But consistent new content over time is required to activate these effects.
  • If a picture is worth a thousand words, then videos are worth ten thousand words. Consider creating a YouTube channel for your brand.
  • For thought leadership, consider podcasts too.
  • SEO is still important.
  • A third (older) to a half (younger) of people investigate brands through social media before they purchase. 
  • Advertising in social media makes it easier for people to become aware of and try new brands, including brands that could not break though in the analog world because of lack of marketing funds. This, to some degree, levels the playing field for smaller brands.
  • More and more product offerings are delivered through social media feeds.
  • Low follows, likes, views and shares can reflect negatively on a brand.
  • If you are just starting with your brand’s online presence, use Facebook and Instagram first. 
  • Consumer targeting is significantly improved through Facebook and Google ads. Data analytics can result in highly targeted or even tailored product offerings to individuals.
  • Brands would do well to set up pages on Facebook and Instagram as a way to interact with customers.
  • The Internet provides many forums for people to provide feedback on brands, including negative feedback. It would behoove brand advocates to monitor as many of those forums as possible and respond as appropriate. It is important to respond as quickly as possible.
  • Online forums can increase consumer engagement with brands.
  • The Internet leads to greater brand transparency, but skilled marketing can also make a brand seem bigger or more popular than it actually is.
  • Marketing automation can generate quality leads.
  • Marketing automation makes it easier for people to respond to offers without prior awareness of the brands behind the offers.
  • One needs to be extremely careful about how the marketing automation is set up or it can backfire on the brand. This is very similar to how automated telephonic customer service can backfire on the brand. 
  • Geofencing can encourage immediate purchase when a consumer is near a retail outlet. 
  • Geofence in the places that your target customers are at the times when they are there. Think this through carefully 
  • Apple Pay, Google Pay, Samsung Pay, Venmo, PayPal and Amazon’s 1-Click Ordering make it easier for people to purchase things online with fewer clicks.
  • The online presence of brands makes price comparison much easier, which can drive down prices or at least direct the consumer to the cheapest source of the brand.
  • Online clothing brand sales are still tricky. Several approaches have been implemented to help with sizing and visualizing the clothes when worn but there still are issues with tactile qualities of the fabric, quality of the construction and fit. This may lead to more returns for online purchased clothing brands than store purchased clothing brands.
  • The younger the consumer, the more everything is transacted on the smart phone. All brand interactions must be optimized for mobile. 
  • To some degree, the digital world has made people more savvy and cynical about brands, mostly due to increased transparency.