Fall+2008+Section+08-PJ+Week+2

=Class Discussion For Week 2= Link to class pictures on Flickr: http://www.flickr.com/photos/30397074@N02/sets/72157607377373685/show/with/2870711868/

This week’s lecture discussed the various methods of examining markets through segmentation. The three main authors we discussed were: 1. Yankelovich and Meer 2. Best __//Market Segmentation & Segmentation Strategies//__ In the past, our company used the mass-marketing strategy. The mass-marketing strategy suggested that the value proposition was used and a reflection of every physician/customer. The “one size fits all” message did not resonate with them and as a result marginally impacted sales. To better serve our customers, physicians were then segmented into four different categories. The physician segmentation allowed the sales force to better address the physicians’ need and benefit. Messaging became more personalized and catered to each individual. Understanding the customer and presenting them meaningful information was a benefit of the physician segmentation. This bought us more time with the physician and helped increase sales. 3. Christensen. While each author focused market segmentation, each had their own approach and methodology t owards the attributes that compose the individuals market characteristics.
 * __*Black Pumas collaborative work__***

Maslow’s hierarchy of needs and correlation of marketing: Almost every product does three jobs: Functional, Emotional and Social.

Great brands—Christenson

Counterintutive Risk Facts—being distruptive companhy gives you a 10X of succeeding.

Christenson—Endorser brands—make it easy to associate customer to brand. Customer is then prevented from making a bad decision.

Role of innovation

Cannibalization—Ambercrombie and Fitch—across all their brands. Factors: Aspire, Price, Cool Factor, Size

Let's look at iPod. Certainly it can be argued that the iPod does not gain it's market advantage from the cost standpoint, but rather from a differentiation and marketing advantage. To gain its differentiation advantage, it has become compatible with every imaginable device on the market. Everything from dvd players that come equiped with an iPod adapter, to an adapter to play your iPod in your car or boat. It is not limited to just headphones. Now it can be played in the car, on your boat and in every room of your house. It gains its marketing advantage from its brand recognition. Everything has the iPod name on it. Sony's dvd player says it plays your iPod. The Bose speaker docking station is built just for your iPod. The iHome plays your iPod. Let's face it, it is an iWorld!
 * Competitive Advantage:**

When the market for a product is segmented based on the "job" the customers want the product to perform, it becomes clear that the mainstream product is an "overkill" for some market segments. Disruptive innovation offers these a segments a less sophisticated product and gains competitive advantage in that segment.
 * Disruptive Innovation:**

An example of disruptive innovation at work can be found in the case of [|Jitterbug phones]. GreatCall, the provider of the Jitterbug phone, looked at the job people "hired" a cell phone for and found a market segment that was not being served well, people who wanted simple phones to do nothing more than to make a call. GreatCall provides these people, who tend to be senior citizens, with phones that are very basic and have bigger fonts and keys with no contracts. Jitterbug phones have no camera, are not capable of text messaging, and do not play MP3s; the only thing they can be used for is to make a phone call.

Another example of disruptive innovation is Under Armor's entrance into the performance and athletic apparel industry. In 1996 Kevin Plank, the company's founder and CEO, created a shirt to wick away moisture rather than absorb it. He started selling the product via word-of-mouth, traveling to college campuses and getting buy in from athletes. With double-digit growth (and sometimes larger), and net income that has increased tenfold since 2003 (See: http://online.wsj.com/quotes/a_earnings.html?mod=2_0483&symbol=UA&news-symbol=UA ) this innovation has clearly been disruptive to market leader Nike. Can they keep it up? Phil Knight's beginning day's at Nike (marketing his patented waffle-iron shoe from the back of his car at track meets) are strikingly similar.

One of my colleagues shared with me an early example of disruptive innovation. Before the invention of refrigerators, there was an "ice harvesting" industry that revolved around transporting huge blocks of ice from mountain elevations to basements and cellars of buildings in the surrounding towns. These blocks would then be covered in sawdust and used as a form of food preservation. Individuals in this industry were viewed in high esteem, and their product seemed to be indispensable. Even when the refrigeration technology began to come to fruition, the people in the ice harvesting industry did not believe there would ever be reason for individuals to no longer require their product and service. They were so focused on inventing methods to insulate the ice so that it lasted for longer periods of time, that they were not prepared when the artificial refrigeration industry put them completely out of business.

Additional reading by Clayton Christensen: http://www.claytonchristensen.com/

I had the opportunity of attending a Marketing brainstorm last August. Attendees included Brand Managers, Assistant Brand Managers, Director of Marketing, Operations Manager, and Technical representatives from corporate R&D. The brainstorm was led by a Marketing firm that we hired as partners in special projects. When I walked into the room, I noticed that there was music playing, and chairs around a squred table layout. On the tables I saw play dough, pipe cleaners, blocks, pads, post its, markers, marker boards, and many different examples of products sprawn about to engage thought. We were given categories to focus on from the Paint Applicator Industry: mini rollers, and wire brushes to name two. The steps of the Brainstorm were as follows: 1) Individual Brainstorm-We were asked to brainstorm mini rollers and write our ideas down, draw pictures, etc. for 15 minutes. When complete we took turns explaining the ideas. The coordinators took our notes, sorted them and posted them to a board. 2) We reviewed the categories and voted on the top five. 3) We broke out into teams to create detailed concepts from these categories. After about an hour of this, each group presented the concepts to the team. Team members were encouraged to build on the ideas of the group. 4) The detailed concepts were voted on by the group. 5) The Deep Dive: Finally we were assigned to certain groups where we spent an hour drilling down on the concepts. We had four questions to answer such as: What is the main purpose of this product?, etc. An artist was on hand to draw the concepts as well.
 * __Brainstorming New Product Ideas (Searching for disruptive innovations in the Paint Applicator Market):__**

In the end a presentation was submitted to our team with detailed conceptual drawings of our ideas. The next step will be to present these ideas to a focus group. The question is: Can a group of people in a room come up with a breakthrough or a disruptive innovator or should the people in the room be observing the job to find the next new product that the customer can "hire" to get the job done more efficiently?

__Problem__: Niche networking w/mass reach. The channel had a monopoly, but CNN and Lifetime entered the market in with their own fashion shows. The channel suffered from the following symptoms: -No focus -Uncertain -Losing competitive position -Advertising revenue is down __Possible Solution options__: -Programming change to target their two largest groups: the fasionistas and planners & shoppers -Increase ad revenue and cable distribution fees -Explore other market segments (ie under 18's or male segment)
 * The Fashion Channel case**:

The TFC was trying to be everything to everyone, but in the end was getting lukewarm response. The Magnum DI team decided that we should target our top two most profitable customer bases - the Fashionistas & Shoppers/Planners. In the end, targeting the Fashionistas was 1% more profitable than targeting both Fashionistas & S&P. Below is some good stuff regarding market segmentation and targeting the appropriate audience. = = = = = = = = = Toilet-paper researchers create 3-ply tissue =

Quilted Northern to market it those looking for ‘quality’ bathroom time
 NEENAH, Wis. - If two-ply toilet paper is good, then three-ply tissue must be better. At least that's what toilet-paper researchers in northeastern Wisconsin hope. Yes, there is such a thing as a toilet-paper researcher. And a team of them at Georgia Pacific's Innovation Institute in Neenah has come up with a three-ply version of its Quilted Northern product. The new product will be launched Monday. The company touts the toilet tissue as "ultra-soft" and says it plans to market the product to women 45 and older who view their bathroom as a "sanctuary for quality time."

Industry analyst Bill Schmitz is skeptical. He said extra layers make toilet paper stronger, not softer, although he said Georgia Pacific may have added extra fibers for softness. //Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.//