1. New Paradigm for Marketing Wong Lip Wih, B.Pharm, MSc, PhD

2. Marketing A social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value Marketing Process 1.Analyzing market opportunities 2.Selecting target markets 3.Developing the marketing mix 4.Managing the marketing effort

3. The Marketing Process First through market segmentation, targeting and positioning, the company decide which customer it will serve and how. It identifies total market, divide into smaller segments, select the most promising segments to be focus & served. Next company design best marketing mix (4 Ps), need engages in marketing analysis, planning, implementation and control.

4. Marketing Process

5. The four Ps of the Marketing Mix

6. Content of a Marketing Plan Executive Summary Current Marketing Situation Threat and Opportunities Analysis Objective,issues &STP (segemntation, targeting, positioning) Marketing Strategy (using 4P aspects) Action Programs (using 4P aspects) Budgets Controls (how programs implemented &contigency plans)

7. Era of Marketing 1.The Age of Early Man Basic needs for food (hunting)‏ 2.The Age of Agriculture Cultivation, (plants, animals)‏ 3.The Age of Machinery Machines invention Working in factories

8. Era of Marketing 4.The Age of Service Banking, hotels Personal Computers (PC)‏ Information Technology Technology driving productivity 5.The Age of Creativity Technology driving creativity Era of participation/connectivity Shift of paradigm

9. Segmentation First step in the making of marketing plan. Geographic –Urban –Surbarb Demographic –Age Psychographic –Behavioral (Regular/unplanned purchasing)‏ –Lifestyle (Brand minded)‏

10. Segmentation Member within segment do not know each other. Segmentation is done by company in a vertical way (top to down). High budget high impact marketing –Costly market resource

11. Segmentation → Communitization Conventional segmentation (geography, demography, psychography, behavioral). New marketer must form community or utilize on community. Community = group of people with same interest/value (segment member interest differ). Communitization –Formed horizontally (segmentation formed vertically)‏ –Low budget high-impact marketing –No market research etc –Self maintenance –Offline (e.g. Harley Owner Group)‏ –Online (e.g. Face Book)‏ –Hybrid (Honda Tiger mailing list)‏

12. The Value of Community Sarnoff’s Broadcast law –Value obtained from a broadcast is proportional to audience (N) i.e. N (e.g. N = 5)‏ Metcalfe’s Net Work Law –Value obtained from a community is proportional to the square of the number of people in community (N) i.e. N 2 (5 2 = 25)‏ Reed’s Community Law –By utilizing different communities (exp several networking) the value obtained can be exponential, so if the audience in the communities N, the value is 2 N (2 5 = 32)‏

13. In radio/TV broadcast, information is one way (no interaction) → Sarnoff Law. In e-mail, there is interaction, transfer of information is increased → Metcalf’s Law. In face book (for e.g.) there are interaction between networks, so transfer of information is increased even more → Reed’s Law Communitization is according to Reed’s Law The Value of Community

14. Targeting : The next step offer segmentation is choosing which segment we serve → Targeting. Target market can be one or more segment. We need to do targeting as our resources are limited (Fitting Strategy). If resource limited, can target one or few segment only (niches). A larger company might offer complete range to serve all market segments.

15. Targeting : Criteria used in targeting : –Market size determines the number of consumers. –Market growth – even if market size still small, growth can be prospect. –Competitors situation – be careful when there are already many strong competitors. –Our competitive edge – all there factor above can be ignored if we have good competitive benefits.

16. Targeting → Confirming Target market usually determined by market size, market growth, competitive landscape). Now is not targeting but confirming. After identifying several communities, we confirm which community to join according to their : –Relevance (relation, same interest/values)‏ –Active level (how active is the community)‏ –Number of community network E.g. Face book. Also can form our own “community” –Invite relevant people

17. Positioning Arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the mind of target consumer. Toyota’s economical Echo states “At 41 mpg, it’s not you, it’s the car”. Lexus avows “ the passionate pursuit of excellence”. Luxurious Bently promises”18 handcrafted feet of shameless luxury”. In positioning product, a company must identify its competitive advantages either by –Charging lower price or –Offering more benefits ( to justify higher price).

18. Positioning Statement To target group, brand name is the brand of frame reference that benefits, points of difference because of reason why Example To those at risk of a CV event who benefit lipid lowering, Pravachol is the brand of statin that provides the optimal balance of proven, complete efficacy and safety because of it’s LDL lowering greater than 90 % of patients will get to NCEP goal

19. Positioning → Clarifying In conventional term, positioning is how we want the customers to perceive our products. Example in same product category Volvo = safety, BMW = ultimate driving machines, Mercy = symbol of luxury. Positioning can change with time, affected by various factors. By clarifying, we clarify sharper further our product character, continuously. Not just slogan / tag line, but clarifying your persona. Clarifying can be self process within community.

20. Positioning → Clarifying Example : MAC versus PC (Apple versus Window). –Personalified by characters of inventors (Steve Jobs & Bill Gates)‏ –Virus version (PC easily infected by virus)‏ –Restarting version (PC 'hang' easily)‏ Example : Airbus A 380 series of advertising. –Greener (Green Forest version)‏ –Cleaner (Island with blue sky)‏ –Smarter (Swimming dolphins)‏ –Quieter (Fishing on a lake)‏

21. Strategy for winning the mind share In strategy, we need to have customer knowledge. SegmentationCommunitization Targeting Confirming PositioningClarifying 3 Cs to win the mind share.

22. Tactics for winning market share If strategy is at Strategic Business Unit (SBU) level, tactic is at operational level (daily activities at market). In tactics, we must have competitor knowledge. Tactics consisit of: Selling (capture tactic, transaction oriented)‏ Marketing Mix (product, price, place, promotion)‏ Differentiation (context & content)‏ Coding Crowd Combo Commercialization

23. Marketing – Mix → Crowd Combo Market has turned into crowd. Crowd = more people oriented (individual contribution play more role now). Community = people with same interest / value while crowd = individuals. ProductCo-creation PriceCurrency PlaceCommunal Activation Crowd Combo PromotionConversation Marketing Mix

24. Example : Frappuccino launch in Shanghai Starbucks. Launched by Starbucks (Shanghai) in 2007.(bottling by Pepsi)‏ A film “A Sunny Day” short movies shown in train station. A few minutes segments (40 days). Communitizing the crowd (different individuals passengers). They will now have same interest (watching to the end episode). Crowd will then turned into confirmed community. Marketing – Mix → Crowd Combo

25. Differentiation → Coding Differentiated in content (what is offered) and context (how it is offered) supported by good infrastructure (enabler to offer) in the form of technology, personels and facilities. Differentiation can be copied by competitor. Customers blurred with our differentiation. Need to encode differentiation into DNA of product or customers. Example : DNA 11 case study (personalized art)‏ – www.dna11.com for size, color preference input www.dna11.com –Also kits for genetic information –Company must now differentiate up to DNA level, more connected with customers

26. Differentiation → Coding Example : My DNA fragrance. Clicking www.mydnafragrance.com. www.mydnafragrance.com Input of personal preference plus sending back DNA information. Will design personalized perfume that is different for everyone else. Every product will be different and the customers, will get product with personal identity.

27. KFC Secret Recipe- Guarding the DNA Recipe kept in special room & building only known to 2 persons in whole company Recently relocated with heavily guarded security KFC employs multi source (supplier) to keep confidential ingredient information It is the “DNA” of KFC Authenticity if the key in New Wave Marketing

28. Types of Authenticity James Gilmore & joseph Pine – Harvard Business Sch Press Natural Authenticity – derived from the nature/earth, non synthetic, eg.organic food Original Authenticity – originality in design/concept, eg.iPhone, iPad Exceptional authenticity – anything/service of highest care/standard eg Singapore Girls Referential Authenticity – authenticity of referring to a case/phenomenon eg.Call on Duty (refer to WW II) Influential authenticity – inspiring us to do good for mankind, eg.conflict=free diamond, recycled paper

29. When Coke Zero meets Silent Disco Event organized by Embassy club in collaboration with Coke. At Carnival Beach,Ancol, use Paul van Dyk as DJ. Attracted > 25,000 audience (teenager, student, young professionals). Most attractive one is Silent Disco –Make use of wireless headphone –Clubbers dance in ‘silent mode’ Silent = zero here as if no music loudness and no sugar

30. When Coke Zero meets Silent Disco Good example of experiential connector –Event based experiential connector (e.g. Coke Silent Disco)‏ –Screen based experiential connector (communal see like movie/TV and personal laptop/handphone)‏ –Identity brand experiential connector (I like Monday program by Hard Rock, Victoria Season Fashion Show sponsorship)‏

31. The Law of Honesty Explosive growth of communication has made people defensive about companies trying to sell them anything. When a message starts by admitting a problem, people tend to almost instinctively open their mind. With that open mind, we are in position to drive in the positive, which is your selling idea –AVIS is only No : 2 in rent-a-cars (---- we try harder) –With a name like Smucker’s, it has to be good –The 1990 VW will stay ugly longer (--- A car that ugly must be reliable) –Joy. The most expensive perfume in the world –Listerine fought back Scope’s “good tasting mouthwash” with “The taste that you hate twice a day” Cautions : –Your negative must be widely perceived as negative –Next, you have quickly shift to the positive –The purpose honesty is not to apologize.

32. Product → Co-Creation Product tend to be “static”, one way direction from producer. Co-Creation is more dynamic, interactive, from multi source. Cellular phone nowadays customized with different cover, decorations, wallpapers etc. Design of Nokia Communicator (input from customers). Components of Nokia from various countries. Domino’s Pizza – Big Fantastic Deal (BFD) builder. –Online order based on customers own recipe –Can give personalized names for own menu –All recipe& names listed&ranked on database –Most creative winner get $ 500 award –Low budget high impact

33. Customization vs Customerization Customization involves taking initiatives to customize the market offering e.g. Levi’s sales persona takes the person measurements and the company customize the jean at the factory. Customerization, the company leaves it to the individual customers to design the offering e.g. Jean customers may take their own measurements and add specific features that they may want, e.g. colorful patches. So company becomes facilitator & customers moves from consumer to prosumer

34. Price → Currency Conventional pricing : –Market based pricing –Cost based pricing –Value based pricing –Competitor based pricing –Reverse based pricing While price is usually stable, currency has greater flexibility. Applicable if product ingredients / spare parts is currency dependent. Airline ticket is good example.

35. Price → Currency Radiohead in 2007 launched Rainbow album with “It’s up to you” price during Oct – Nov 2007, digital download offer –In Day 1, about 1.2 million downloads (3000 unpaid, remaining pay average of £4)‏ –In one year, 3 millions copies sold as download –Extremely big publication and awareness –After that, Radiohead concert attracted 1.5 millions audience –Extreme example of horizontal pricing process between producer and consumers

36. Price → Currency Flexible pricing from advertising at face book At face book, can request placement according to our daily budget –Pay for click (how much our max bid /click /day)‏ –Pay for views Total bill charged will therefore not exceed our budget. In Google, additional cost per action when there is a sales transaction. Low budget high impact marketing, expense paid after sales is generated.

37. Innocentive : Crowdsourcing for Solutions Set up in 2002, it is a mediators for “Seekers” (Companies looking for problem solving) and “Solvers” (people/institution providing solution). Already > 160,000 solvers from 175 countries world wide (60 disciplines). Innocentive is an example of Crowdsourcing. Crowdsourcing is outsourcing done via various sources (vendors). It is lower cost due to “pay by results”. An example of R (Resource) = G (Global)‏

38. Innocentive : Crowdsourcing for Solutions In R = G business model, access in most important, and not possession of resource –We do not need to own various resources (skills, machinery etc). –Just need collaborate via internet. T-Ford Car (all resources from Detroit) while i Pod, the hardware from Japan, Korea & USA while the music contents is from all over world.

39. Case Study When David Kills Goliath : Air Asia vs MAS MAS established since 1947, Air Asia started Dec 2001. Air Asia positions itself as ‘low fare airless’ with tag line “Now everyone can fly”. In fact Tony Fernandez boasted in office an “The smallest Airline office in the world”. Secret is cut down all unnecessary fees –Pioneer in the online ticketing –Bypass travel agent fees –Optional food, luggage, seat position etc MAS sales dropped every year, making MAS from “flag carrier” to “lost carrier”.

40. Place → Communal Activation Place = marketing channel, distribution –Wholesale –Retail Traditional Modern –Supermarket –Dept. Stores –Convenience Stores Due to direct contact with consumer,retailer earn >producer –For e.g. Wall Mart can earn 3 times more than P&G

41. Place → Communal Activation Communal activation = Activating a Community via the leader/activists. Handling activists of the community easier and more efficient than conventional distribution channels. Activists speak common language, understand anxiety/desire of the community. Consumer/community will believe activists more than distributor.

42. Example of Communal Activation If a musician with no budget wants music production, can raise own fund find via sellaband By singing in at www.sellaband.com, up load music. www.sellaband.com 5000 parts @$10/parts, ’believer’ (fan) can buy parts. When $50,000 collected, Sellaband will arrange recording and production (CD and downloads). Believer (fan) will get copies according to parts purchased (can sell CD themselves above $10). Musician, believer and Sellaband all get profit.(win-win )‏ Example of Co-creation and Communal Activation (Fan community as consumers but as distribution channel as well)‏

43. Promotion → Conversation Promotion = inform, persuade, remind –Advertising (non personal promotion)‏ –Public Relations (maintaining corporate image)‏ –Personal Selling (personal presentation by sales force)‏ –Direct Marketing (phone, email, internet)‏ –Sales promotion (short term incentives)‏ Promotion is top-down, one-two-many. Conversation is horizontal, two ways, peer-to-peer, many-to-many, discussions of common truth.

44. Promotion → Conversation In brand activation company does selling broadcasting messages, in communal activation, company facilitate conversation among community members. Promotion (e.g. ATL/TV) is still needed, as long as it can trigger conversation among community (consumer). Power of conversation : Citizen Journalism –Rumour of Steve jobs heart attack –Ohmy News role in south Korean President election. –Aceh Tsunami coverage

45. Obama : The Era of Internal Presidency Franklin D. Roosevelt = the first radio presidency, JFK the first television presidency, Obama = the first internet presidency. Internet played mayor role in Obama Victory. www.barackobama.com –Connected with facebook, Myspace, Youtube, Flickr, Digg, Twitter, Eventful, Linkedln, Black Planet, Faithbase, Eons, Glee, MiGente, My Batanga, Asia Av, DNC Party Builder. Application for i phone and ring tone download (free) also available

46. Obama : The Era of Internal Presidency Obama Store (T Shirt, glass, hat etc)‏ Social networking site : my.barackobama.com –Supporters forum can share and discuss campaign issue. –My Blog allow us to tell our own stories. –Supporters can be sorted by interest or place. –Contact voters allow us to encourage our friends to vote. –Fundraising section enable us to contribute according to our own budget as well as our friends during fundraising

47. Selling → Commercialization Selling : 'capture' tactic –Feature selling –Benefit selling –Solution selling Selling in one way (Producer → Consumer). Commercialization is two way exchange of value, is not direct but via ‘engagement’ at same / horizontal level.

48. Selling → Commercialization E.g. Product RED –To get certified (use RED logo) must fulfill certain environmental criteria. –Part of sales of product will be donated to Global Fund (African HIV Patients). –In 3 years, $100 millions generated in Global Fund. –Compared to direct donation, with product RED logo, we can encode our product/company with DNA of “conscious image”. E.g. Victoria Secret’s Fashion Show (VSFS)‏ –Here VS ties emotional relations with it’s community via annual Fashion Show. –Annual parade of VS angels –Display of bra/lingerie costing millions dollar

49. The Hunt for Pirates of Caribbean by Volvo “The Hunt” is a competition program by Volvo in 2007 at times of “Pirate of Caribbean – At World’s End” film release. It is an online and offline puzzle competition globally organized in 22 countries. Map and information at www.volvocars.com/thehunt as well as at local dealers. www.volvocars.com/thehunt Create huge amount of fans, discussion forum. Volvo has done Co-creation, Currency, Communal Activation, Conversation and Commercialization simultaneously. Volvo has successfully encoded adventure/fun DNA ratio the XC 90 SUV