Category Archives: Business Strategy

China : Factory to Studio?

Read my assessment of China’s  prospects of moving from being a factory for cheap goods (and  code) to becoming an origin point for new products, designs and business models.

http://www.ddb.com/yellowpapers/

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P&G : Getting Men ?

The action in male personal care market keeps hotting up. Dove’s  Men range : Men+care , launched 2 months back in US , Europe and Australasia. Vaseline (from Unilever) launched a Men’s range in India in March. Now P&G’s OLAY has launched Olay Men solutions in China, riding on its mega brand status in the country.

While DOVE  and VASELINE are  attempting to stretch a specific equity – Care and moisturization- across genders, OLAY is  riding on a broad equity- skin care expertise, which it can claim via its dominance of the female skin care market in China. All packs in the OLAY Men solutions range feature “Refreshing energy” as a common line, which is clearly a new thought as it hasn’t been used before in brand communication or packaging.

However the brand which should have been first off the blocks in this segment- Gillette- is still struggling to be a serious player in men’s face care. It is frankly stunning that they still don’t have a Globally consistent face care range . The UK site has pre-shave wash & scrub  and post-shave moisturizer but  I couldn’t find anything on the Gillette US website. They test marketed Gillette COMPLETE skin care range in US in 2005, and it didn’t work. Instead we saw the launch of a hair care range in 2008 which is already de-listed in UK.  Gillette’s equity is in men’s skin care not hair care. What are they thinking ?

Clearly, P&G is still trying to “get” Men !

Starbucks: Big bucks in China

If you hold Starbucks stock, I suggest hold on to your shares. With the margins they have in China and the huge potential to increase the store density this is a 1 way ticket to print money. While prices are 10-15% higher than Hong Kong and London, the labor and real estate costs are almost half.  Even with the import duty on coffee beans the margins are clearly VENTI size. The table below says it all. Should we drink to that?

Visual thinking

I hear talk in the communication business around the increasing importance of the key “verbal”, given the growth of consumer communities, social media, word of mouth etc. Having worked in a category where the “visual” is banned in most countries, the key verbal was bread and butter for most marketers in the company. There are enough books on the topic ranging from ones written by academics (Robert Cialdini is a leading one in the area) to those written by people from the communications industry (copywriters and DM gurus). NLP, Linguistics, Psychology all come into play here.

But don’t count out the key “visual” yet!

It is perhaps going to conquer new frontiers and move up the value chain in organizations. As we become more inundated with data and information, the ability to elegantly visualise data, information, problem, situation and solutions is going to be a very important skill. And this is not about software and technology, as this quote from an article in Businessweek says  : “Ultimately, data visualization is more than complex software or the prettying up of spreadsheets. It’s not innovation for the sake of innovation. It’s about the most ancient of social rituals: storytelling. It’s about telling the story locked in the data differently, more engagingly, in a way that draws us in, makes our eyes open a little wider and our jaw drop ever so slightly. And as we process it, it can sometimes change our perspective altogether”

Personally, I largely think and communicate in words and frameworks filled with words. This never worried me when I was on the client side. Everyone was doing decks filled with words, charts and tables. After all, even McKinsey articles and decks are replete with templates, frameworks etc. This was “the” way to do it.  Sharp, analytical, conceptual, loaded with facts and words. They represent the best of right brain thinking.

All this changed, 6 months back when I discovered Dan Roam, his books and the concept of “Visual thinking”. Brilliant Right brain thinking to turn a complex problem, situation, information/data set, solution into an elegant left brain type expression. How cool is that ! Imagine how powerful this can be in any business situation, where you have to land your point with clarity and impact in a short span of time. Don’t we all have to, all the time?

In his 2nd book, “Unfolding the Napkin”, which is the companion workbook to the 1st book “The back of the Napkin”, Dan walks the reader page by page (of course in a visual manner) on how anyone can develop these skills. The highlight to me was a case where his company summarized a 100 slide presentation in 1-2 simple diagrams for a strategy meeting for the board of one of their clients. Simply brilliant! The book is worth it just for this case.

My professional goal for 2010 is to become a better visual thinker and communicator.  I am some distance away, considering I needed “words” to explain “visual” thinking.

Out with the 40 slide strategy set up in a pitch deck. Are you wondering what implications this has for the presentation software market? I am. Steve (Ballmer or Jobs), are you listening?

The alternative to crowdsourcing

Enough has been written recently about crowdsourcing and more specifically its potential impact on the agency model. Right now only a few major clients have explored it, with Unilever being the most talked about with its decision to let go of Lowe as its global agency on Peperami and put the brief on the crowdsourcing site www.Ideabounty.com (while this was talked about a lot, actually the first Unilever crowdsourced brief was on www.bootb.com for Dove deodorants)

At its core the move to crowdsourcing reflects clients’ dissatisfaction  with the quality, quantity and the speed at which they are getting Ideas, given the high cost of the time based retainers for their agencies of record (AOR). I was a client myself till one year back, and often shifted uncomfortably in my seat during agency presentations when they tried to “sell” me what in their view was “the” best idea. In short, clients don’t think the retainer based AOR model has good ROI. And new compensation models being tried by P&G and Coke are not going to fix the issue.

Instead of moving from one extreme i.e the current model of the AOR responsible for the communication Ideas, to another i.e the whole world pitches in with their Ideas on a brief put on a crowdsourcing site, there is perhaps a more practical middle ground which needs to be embraced and explored.

This is Co-create. In essence, it is crowdsourcing but wherein the crowd comprises people who know the market and brand context. It entails harnessing all the marketing brains working on that piece of business/brand to create Ideas for answering the brief. This includes client marketing teams, media agencies, research agencies, digital agencies, PR agencies, activation agencies and advertising agencies. This is very easily a “crowd” of 20 marketers who have been working on that brand for some time.

So would you rather get these 20 brains to work collaboratively to crack the brief, or 200 people scattered all over the world working in isolation without knowing the brand and market fully. While it is not an either or situation, we need to be mindful about the pitfalls of net based crowdsourcing, the most obvious one being confidentiality.

This approach of having a collaborative group session might sound 101 and familiar, but the reality today especially in China (and perhaps largely true in rest of Asia) is that very few clients are benefitting from a collaborative and simultaneous input of all their marketing partners on their communication and marketing briefs. These sessions might be happening for big projects, but arguably this should be the normal way of working. Even when various agencies get called together for a project it is mostly for information cascade, rather than for a collaborative co-create session.

The positive motivational impact of such an approach on the marketing partners should not be under-estimated. Instead of clients sitting in judgement on the Ideas the ad agency has decided to “sell” them, clients come to other side of the table to use all their knowledge about the business and the brand to ignite better Ideas at an early stage of communication development. This not only creates a sense of partnership with all the agencies but also a buzz for the client within the marketing partners’ offices, leading to all the best people vying to work on the account. Without spending a dime extra, you have motivated marketing partners and also better and more Ideas, faster.

This is not all nice words and a dream. This can be done and has been done. At DDB China we tried this successfully recently on one of our MNC clients with very positive results on the quality of output and team morale and spirit (they are my favorite client now)

Yes, no doubt Clients have to play along, but first agencies need to embrace it. But this requires 2 key changes.

1. An attitude Change :
We need to recognize that ideas can come from anyone and it is in our interest to tap into that. This means clearly delineating “Idea” from “Expression”. Ideas inspire great expression. Ideas can come from anybody, while expression (or storytelling) is an art form and is better left to the creatives. This delineation requires the creatives to come down from their ivory towers and co-create Ideas with others to ensure they get the raw material and stimuli to create a masterpiece. Ideas are ego-less, but how often have we seen a good idea not being taken up for development because the creative team feels it reflects on their “originality”.

2. A tight process : You can’t just get people in a room and do a normal brainstorm during a co-create session. Enough proven and structured ideation tools and techniques exist in the world (courtesy Edward De Bono, Michael Michalko etc) to open up a problem/thought. They are used frequently for NPD (new product development) ideation sessions. I find it amazing that in the communications/agency world we see them as anathema and still treat creativity as a Eureka light-bulb moment. These techniques need to be embraced as they will improve productivity and boost the slim margins. Even when we don’t use co-create and use the current sequential silo driven process, creative teams can benefit from being well versed in these tools and techniques. Infact, Ralf Langowst’s (spoke in Spikes Asia in Sep’09; unfortnately passed away in Oct’09 due to a heart attack) company in Germany called “Ideamanagement” offers a course called  “The Creative Path Analysis”  which shows up the strengths and weaknesses of the creative deveopment process and explains how it can become faster, more effective and therefore more profitable

In summary, agencies need to take control of the crowd-sourcing agenda and co-create is one of the ways to do that. The risk of not doing this is being treated as suppliers of a commodity called “creativity” which can be crowd-sourced via websites like bootb, zoppa and Ideabounty. However this requires a change in attitude and also embracing a more organized approach to creativity, no matter how oxymoronic it sounds. After all, isn’t a big idea all about resolving the tension between two contradictory thoughts.

Social Media ROI and Enterprise 2.0

So many brilliant people are racking their brains, blogging, putting awesome presentations on slideshare, youtube (like the one above)  on how ROI of social media campaigns can be measured and how several companies are already benefitting from making social media a key part of their marketing efforts. Continue reading

Amazon learns from Apple ?

After selling just the Kindle reader for 2 years, Amazon first launched the “Kindle for iphone” app and now “Kindle for PC” . It was high time. Not everyone into reading is happy to spend USD250 for the Kindle reader or has a iphone. Despite being a voracious reader I have been dawdling a bit about buying a Kindle. With “Kindle for PC”,  you get a reading experience half-way between the book like experience of Kindle  reader and the current reading experience on a computer screen. So 50% improvement at zero cost. Continue reading