FAQ Exam (12-23-10)

>What are the cases we should re-read?

Obama and Sermo.

>In the previous email you stated that Microsoft and Virden will also be on the exam. Just to clarify, they no longer are on the exam?

There will not be a question DIRECTLY related to these cases but as with all the other readings, these two texts will surely come in handy here and there.

>for products that are highly 'technology based'; is it better to do direct marketing (sell to ppl who are already users) since 'tech savy' ppl are a niche market? (from the Jim Merrick case)

this is not just relevant for technology products but complex products more generally (and complex need not mean what is 'inside' the product, because a car these days is a pretty complex thing but using it is not). The more complex the product or service from the consumers point of view the more challenging the job for marketers. The market needs to be educated. Whether that means, however, that personal selling and direct marketing is the best approach would depend on a number of things. The ATM machine was considered a complex service by the users but there was no direct selling or "ATM user clinics" on weekends or such things. TV ads that showed how it works and WOM over time did the trick just fine.

>radical innovation and disruptive technology is the same thing?

not always. In the 1900s the Teddy Bear transformed (disrupted) the market for children toys for ever and I think the ice cream cone (low-tech, I suppose) was invented around 1910 and changed forever the consumption of ice cream. 

>product life cycles are becoming shorter b.c barriers to entry are becoming lower and its easier for competitors to come in. Are barriers to entry becoming lower b.c everyone has easy access to information?

well, model life cycles is a better concept...yes, information is part of the story but also rise in competition and the nature of products (many now knowledge based, not industrial-heavy resource based which are markets that are much harder to get into, obviously). It is easier to get into the market of portable music devices or software than ship building or consumer retailing (like Loblaws). Hence, establishing and if possible raising barriers of entry in knowledge- or information-based markets (think eBay or Yelp or CIBC) are quite different than in old economy businesses like resource and mining or other heavy industrial businesses like car manufacturing.

>for the case, will you ask us 'case type question' such as: "propose a recommendation to the problem faced in the case", or will it be more 'lecture type question' such as: "how does the obama campaign align with the marketing concepts in the 21st century"?

the latter

>On your slides, when it says

"•IT lets firms recognize the customer as an individual with a history, a present, and a future, and be treated as such.

•IT lets marketer manage customers for profit,"

Does IT refer to information technology? YES

And information technology is referring to company's database? YES

is this correct? YES

>do you want us to memorize all the different types of online communities (e.g. User development community, User product collaboration innovation community, etc.) or do you want us to know the general gist of online communities?

I expect you to know what characterizes these various communities and what they are correctly called.

>Also, I know you said you won't ask questions directly about the readings; but just to confirm, a question such as 'what can we learn from wikinomics', will not appear on the exam? Or 'how should NikeID incident affect their online strategy?'

No. What I said was that I won't ask specific details from the readings. I might very well refer to a reading as in "As Virden states..." where I expect you to know what article I am referring to (even though it may not be critical in answering the question successfully). So, to your question whether your example questions from above would not appear on the exam? These are in fact exactly the kind of questions that could appear on the exam. They refer to a general concept or well known phenomenon, they do not ask for some specific detail, and they allow you to draw on the various resources and discussion we had in class. Great examples, actually. I shall think about including them.

>In the Marketing Strategy of High Tech Market slides, is specifically states:

High innovation costs plus shortening PLC means strategically:

1)Enter as many market segments as possible at the same time to shorten pay-back time.

2)Develop a broad geographical strategy as low entry barriers allow competitors to exploit uncovered territory.

However, in the article written by you on Advice every marketer charged with innovative products should keep in mind: your number 3 rule is to choose your market segment wisely, stating that distributing the risk over too many market segments has shown to be ineffective. I am confused.....

This is a smart question. First off, there is a slight difference in the nature of products these two essays talk about. Radical technology innovations are slightly different animals than radical innovations that are not technology-based because technology-based product categories have faster Model Life Cycles making the risk of entering several segments at once more justifiable. The more time a marketer has before competitors will enter, the more deliberate s/he should be about growth strategies. The general thrust in both articles is the same, though. Neither author suggests to enter 'bad' segments. So, entering many segments at once, especially geographically dispersed ones does not mean that beyond geography the segments must differ much. So, where we agree is that segments still, in both cases must be chosen wisely. Going after the teenage/early twenty-somethings at the same time as the Zoomer market is not advisable.

what exactly is the difference between the pioneers and the early adopters, and to which of these two categories are you referring when speaking of lead users?

there is a number of terms referring to the same sort of idea, namely that there are users that are really early, even so early that they become part of the R&D. They can be called lead users, innovators, or pioneers, depending on author. They are often geekish in culture. Basically all the same with insignificant differences. Early adopters are actually the early real buyers who then run around telling other people. The geeks don't.

SAMPLE QUESTION

Question: how did the Obama campaign align with the marketing concepts in the 21st century?

First, the question is confusing but I assume what you mean to ask is "How did...align with the marketing concepts OF the 21st century? Or alternatively: "How did...align with 21st century marketing concepts?"

a good answer to such a question should start by stating what the marketing concepts of the 21st century are and then provide concrete examples of his campaign and show how each of them aligns. I would probably ask for 3 or 4 salient ones.

say one concept you'd identify is "Interactivity"

then you name a specific campaign activity (maybe a forum), explain a little bid about it and, for an "above expectation" level answer, conclude by stating whether this interactive forum added value to the campaign or if not, why not?

Possible suggested answer by student:

- He segmented his market: by age group, ethnicity, political stance, etc.

I would deem this to be a bad answer: segmentation not specific to 21st century marketing. has always been with us. it does not matter that his segmentation is along dimensions specific to his task. The activity is segmentation. Not new!

Keep in mind that when I do not specify a number of answers and you just list and list ideas and answers but half of them are bad answers, it does not matter much that the other half is good. Wrong or bad answers usually work against you because they often show that you have not really grasped the question and that you are shooting in the dark to see what sticks.

>with PLC, you said that those who innovate fast can charge premium and leave others behind. but isnt the PLC shorter because competitors are catching up fast?

yes, sometimes that is the case and sometimes it is the market leader doing the shortening itself (like Apple) to always stay ahead and be able to charge a premium for the newest model (maximizing profit). As I said, the fastest innovator will benefit from shortening life cycles and the followers will lose.

>I am unclear on the difference between 'user development' communities and 'user content collaboration innovation' communities.

for 'user development' community the customers are collaborators and dont have to be tech savy e.g. wiki

what is an example of 'user content collaboration innovation' community?

you need to look at the slides again. All you need to know is there.

>and all i know about 'user product collaboration innovation' communities is that we do not yet know much about this group.

good for you. however, that is not what I said. We know a lot about these communities as a phenomenon, what we know little about is how they can be relevant for a company's marketing strategy.

>also, in your notes it says that before value was created through a single product, but now it is created through 3 networks (the customer network, the compliment network, and the producer network)... did all this exist before the internet? were there always compliment products and competitive products?

The internet is not necessary to the category of products you are thinking of. Not all products fall in this category, though. A chair does not, obviously. So, yes, they existed before the internet. Maybe even for ever but that is an awful long time.

>one of the differences between marketing radical innovation vs incremental innovation is that the role of advertising for radical is primary demand and for incremental it is selective demand. can you elaborate on this?

we discussed this in class. In brief: Primary demand builds the category, secondary demand aims at brand preference.

****************GENERAL QUESTIONS AND ANSWERS FROM PREVIOUS CLASSES*******************

I am preparing for the upcoming ecommerce exam and wanted to clarify as to the nature of questions. You mentioned that we do not need to memorize specific facts (ie. exact growth rate in Canadian internet usage, etc). Though I understand we can use such knowledge to back up our answers to more theoretical questions, would students be asked any direct fact questions such as how many of something or in what year did something occur, etc?

No.

Will any of the exam questions refer directly to case studies?

Yes.

Will the research project topics be tested?

A couple of questions related to your research projects are possible because I deem research topics and presentations testable material.

With regards to the case questions. How will you deal with the following difficulty: if you ask a question specific to one case, two of the groups will have an advantage in responding to this question because they prepared the case solution?

If I draw questions from a case, I'll disseminate that information ahead of the exam.

In the Innovative Progress publication where you have an article, is it just your article we have to read?

yes.

What do you mean by thin clients and RSS in the youtube, facebook intro lecture notes.

Just a wiki-read away....

I do have a question regarding lecture 4 where we discuss the shifting paradigm from branding products to branding customers. I’m a little unclear as to how marketers are branding customers? How’s this “branding” different than segmentation? I understand the desire to customers towards the diagonal but am unclear as to how that involves branding the customer?

segmentation is a very crude form of branding customers --it is related to anticipated brand equity based on some other variables used to make segments. The branding idea has to do with the ability to see the actual customer data and make a judgment of each individual customer's real value for your organization (loyalty programs try to do that often for networks of organizations. critical is a firms ability to see cost and contribution per individual. Only then do you have a chance to see customers as various brands. Remember that identifiability is instrumental here.

Could you briefly recap the notion of an incremental and a breakthrough innovation? I had problems understanding them in class, and I'm not entirely sure how this difference helps marketers?

breakthrough products shift market structures, represent new technologies, require consumer learning, and induce behavior changes. Hence, from a marketing perspective larger challenges arise with regard to pricing (how do you price a product that is first in the new market?), communication strategy (e.g., primary vs. secondary demand), and channels. Also, when and how do you shift to another marketing mix once competition moves in and you need to launch new models as incremental innovations. Often, how you arrive at breakthrough technology is different from incremental. Key to establishing teh right marketing mix is knowing whether consumers perceive your product to be breakthrough (or "really new" or "radical"). Hence, your marketing mix is contingent (contingency theory) on establishing a match between your mix and consumer perceptions.

Is there a difference between positioning and framing or is it just semantics?

You should understand by now that in marketing, there is no 'just' in semantics. Words matter! A lot! Both are related but Framing, according to the concept's inventor Moon at Harvard, relates to the creative construction of a frame for consumers to understand new to the world product. It's therefore more comprehensive and more specific to a product class than the more hands-on, pragmatic concept of positioning. Positioning can also refer to brands, while framing is much more product-launch focused. In other words, what will be the story we'll tell about this product so consumers' interpretation of what they see is shaped in a way we want it to.  

Is it always desirable to cross the chasm and build market share? Are the innovators and early adopters really too small a segment on which to build a profitable product assuming you don't want to go mainstream?

Keep in mind that the lure of mass adoption drives competitors into the market, hence flooding the field with players that all initially compete for the early adopters. Only a few players will stay standing when the technology does cross into mainstream. That is the reason why it's such a lucrative proposition, and the early markets are less so. Furthermore, if you are a big player like, say, Nintendo that has the capacity to produce for mass markets getting to mass adoption is crucial for overall organizational success.