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

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

3. A KNOWLEDGE BASED MARKETING STRATEGY WHAT DOES IT MEAN TO BE “SMART”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. RESOURCE RICH AFRICA INDONESIA OIL SURINAME BAXITE LEARNING TO MANAGE INFORMATION TO CREATE VALUE VALUE ADDED SOLUTIONS Columba - Seattle Washington India- Dominican Republic call centers

5. CAN BE SUCCESSFUL WHEN FIRM UNDERSTANDS WHAT CONSUMER WANTS? Caterpillar A : equipment, on a desert airport project or Arctic Circle oil would be fixed quickly 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 German trucking firm (MAN) Maschinenfabrik - Augsburg – Nuernberg TO WIN : one hundred million dollar contract no one matched value 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 - TRANSITORY COMPETITIVE & ABSOLUTE ADVANTAGES HISTORY OR RUBBER Manaus 1890-1920Manaus MORANO GLASS PLANS FOR THE FACTORIES OF LOWEL STOLEN FROM ENGLAND POLAROID -KODAK FUJI PRODUCT INNOVATION

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. NO FIRM OR GOVERNMENT NO MATTER HOW LARGE OR STRONG IS SAFE 1.“BIG STALE GUYS” NO LONGER RULE 2. MUST DRIVE OUT OLD ATTITUDES MARCU “C Komatsu 3. KNOWLEDGE, INNOVATION & “SMART” OLD MARKEING RULES ARE OUT

11. BUSINESS HAS REACHED END OF INCREMENTALISM CATCHING UP NOT THE SAME 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 PRODUCTION Engineering Model MASS PRODUCTION Engineering Model Make it  Store Inventory Sell to Consumerr Information Importance - Early Stage LEAN JAPANESE MODEL Just In Time (JIT), TQM, 6 SIGMA Match Production & Inventory / Sales Then Came 70s Today’s Competition INFORMATION AGE MODEL INFORMATION AGE MODEL EMOTIONAL TECHNOLOGY AND CULTURAL INNOVATION Consumer Information  Produce BETTER, FASTER, CHEAPER then

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

14. Emotional Technology Production Cultural Innovation DESIGN STYLE PRODUCT DESIGN ADD - VALUE OBM ODM OEM 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 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”. VALUE ORIENTATION PRODUCTION ORIENTATION Stan Shih Smile Curve

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. WHAT IS THE TECHNOLOGY? PACKAGING TUTOR NEEDED SPEED, DIRECTION USS CONSTITUTION BUILT IN BOSTON

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

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

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

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

22. THREE NATIONAL STORIES SHANGAI BRAHAIN DUBAI

23. “It is generally much easier to kill an organization than change it substantially.” -Kevin Kelly, Out of Control 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 “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

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

27. 27 PRODUCTIVITY GOODS SERVICE

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

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

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

34. Facebook 1 yr SPEED SMART

35. NEW CHANNELS TO CONSUMERS - SMART

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

37. 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? PART OF GAME OF INTERNATIONALLY COMPETITIVE IS BEING INTERNATIONAL

38. KEEPING UP WITH CHANGE Technology & 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 GO WHO ELSE WANTS TO GO THERE COMPETE THROUGH POSITIONING, CREATIVITY & STRUCTURE

40. THANK YOU