Tag Archives: marketing

Marketers should go beyond SWOT analysis

Richard DAvneni

At the Dong-A Business Form, Richard D’Avneni, Bakala Professor of Strategy at the Tuck School of Business at Dartmouth University, gave an interesting talk about Hypercompetition, which is the term that he coined about 20 years ago arguing that there is no sustainable competitive advantage. In this talk, he emphasized the dynamics of market by telling us that Sears or the retailer with 90-year successful business history cannot help but leave the industry within only 15 years. Thus, he made a persuasive argument that well-known strategy/marketing tools such as SWOT analysis do not work anymore.

According to him, firms use the SWOT-based strategy for multiple times and, therefore, “learning” takes place. Imagine a firm uses the SWOT analysis and then selects a specific strategy based on some combination of Strength, Weakness, Opportunity, and Threat. In this case, the firm is highly likely to win over its competitors. However, those losing competitors learn what strategy the winning firm will select in the next round (e.g., when launching different products or when entering different markets) and they are able to respond to the same strategy smartly. This suggests that a single-shot SWOT-based strategy works but it does not work in the multiple contexts.

Then, what is an alternative tool that marketers could use when they want to conduct 3C analysis (understand consumers, companies, and competitors)?

Hyundai Motors, UX for car marketing

Hyundai i30

Hyundai released i30 in Europe. So far, most of its marketing messages focus on how it looks (design) and what special features it has (convenience). However, I came up with a different thought after watching a youtube video that one of my German friends recommended me to watch. In the video, Martin Winterkorn, the Chairman of the Volkswagen AG, studied the Hyundai i30 personally at the Motorshow in Frankfurt IAA 2011.

Between 1:30 and 2:00 minutes, he tilted up and down i30’s steering wheel and then said,

“There is no noise. BMW can’t do it. We can’t do it”

I am personally surprised that BMW cars make noises while Hyundai do not. Interestingly, some BMW drivers already posted this issue on a website to look for a solution (e.g., Creaking noise when tilting steering wheel). Hyundai marketers should go beyond traditional issues such as look & feel, convenience, or gas mileage to raise a new issue (e.g., noise of tilting steering wheel or, more broadly speaking, user experience) and differentiate their cars.

Interface between design and marketing

20111031_Huffington Post

Designers don’t just put cosmetics on the skin of a product!” During my interview with a graduate student at Ontario College of Art and Design in 2009, he argued that designers play a key role in developing a new product….

… The primary reason that marketing researchers often limit the role of designers is that they pay far too much attention to the “outcome” of designers’ activities. Many designers who research users, develop and evaluate concepts, and work with business strategists find it difficult to communicate with marketers, since marketers shed little light on the “process” of designers’ activities. …

 

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20111108_Huffington Post

In actual practice, designers often set the marketing input aside and start a project by looking at advertisements and websites for their client’s and their competitors’ products. They collect images and stories concerning the uniqueness of each product and make fleeting trips to the products’ point of purchase, taking pictures and playing with the products. If the budget allows, they purchase a sample of products for later disassembly and destruction in the studio. Ideas for new features often stem from the designer’s personal experience — including his cultural and social background — and their project research into nature, art, fashion, architecture, entertainment, and other products. …

… At the end of the day, marketing is often presented with three to five realistic finished rendered concepts from which they have to select one for detailing. Often flash will out compete content, since no objective metrics have been presented, so it is little wonder that design is still seen as art rather than as being business driven.

Do people like an unexpected design of a product?

burger king

We often meet a product with a unique form and find it difficult to guess how it works. Examples include a donut-looking tape by 3M, a burger/fries/coke-looking USB key by Burger King, or a chocolate-looking mirror by Meiji, a Japanese chocolate manufacturer. One of my Japanese friends even pointed me a website in which a designer keeps posting his/her design prototypes (Prototype 1000).

I wonder whether consumers like a product more when its form and function are inconsistent than when they are consistent.

Prototype1000

Noseworthy, T. J., & Trudel, R. (2011). Looks Interesting, but What Does It Do? Evaluation of Incongruent Product Form Depends on Positioning. Journal of Marketing Research, 48(6), 1008–1019.

Marketers struggle with how best to position innovative products that are incongruent with consumer expectations. Compounding the issue, many incongruent products are the result of innovative changes in product form intended to increase hedonic appeal. Crossing various product categories with various positioning tactics in a single meta-analytic framework, the authors find that positioning plays an important role in how consumers evaluate incongruent form. The results demonstrate that when a product is positioned on functional dimensions, consumers show more preferential evaluations for moderately incongruent form than for congruent form. However, when a product is positioned on experiential dimensions, consumers show more preferential evaluations for congruent form than for moderately incongruent form. Importantly, an increase in perceived hedonic benefits mediates the former, whereas a decrease in perceived utilitarian benefits mediates the latter. The mediation effects are consistent with the view that consumers must first understand a product’s functionality before engaging in hedonic consumption.