New Name for Class?

May 7, 2009

OK, so I’ve finished one semester of the class currently titled “Internet Marketing.”  The basic idea of the class is that it includes all aspects of the ways that organizations utilize IT to market to customers.  As a result, it includes issues related to Analytics, CRM, and the marketing of software, none of which are adequately covered by the title “Internet Marketing”.  In a Web 2.0 way, I’m looking to get ideas for the name of the class.  Please select from the options below or suggest your own.


		

Congratulations!

May 4, 2009

It has just been announced that at group from my Internet Marketing class won a $3000 award from the Price Chopper Innovation Challenge! I just wanted to say a quick thank you to the team (Ming-Chih Chung MBA ’10, Chinwe Egboh MBA ’10, Doyeon Lee MBA ’10, and Lily Zhou Pathfinder MBA ’11 ) for their hard work on the proposal and to Golub/Price Chopper Supermarkets for their “class sourcing” innovation model which provided an excellent opportunity for students to think big and propose their ideas to senior management.  The announcement is currently featured on the RPI website.


My Switch to Mac and the Windows 7 Installabration

February 21, 2009

What is it about computers that makes people so passionate about their operating system choice? I’ve always been very pro Windows and did not understand why my in-laws used Macs. Over the past year though I’ve been increasingly frustrated by my laptop’s inability to do such things as hibernate or find wireless connections without a frequent reboot. My wife’s Vista machine is even worse. Over the summer I purchased an iPhone and it turned me into an instant Wanna-be. I wanted to be an Apple guy.

I recently became one.

I’ve written before about trying out a Mac and have very recently switched over to using one (almost) full time. The overall experience has been amazing. I’ve been hesitant to write about it because it always seemed a bit annoying to me how Mac users were so passionate and inspired about their machines. It is true though. The experience is better in nearly every way. Things are faster and the laptop is better designed than any I’ve every used.

I only long for the second button of the built in laptop mouse.

Is there hope out there for the frustrated Windows user? in class today I got some initial feedback from students who have adopted Windows 7. After seeing a quick demo, it does seem to be a big improvement over Vista. It was very quick and responsive. A tab viewing feature also appeared to be quite an improvement, maybe even better than OS X.

What is more Windows 7 seemed to have instilled a passion in the student that I’ve only seen from Mac and Linux users, at least since Vista came out. He is hosting a Windows 7 installabration party over the weekend, in which everyone was invited to bring their laptops and install the Windows 7 beta.

If Microsoft can begin to inspire passion in its user community…well the old Microsoft Apple debate might just get interesting again.


The Flat World and Your Customers

January 28, 2009

(Contribution by Todd Posey as part of the Interactive Marketing and Information Technology Class)
The world is flat. The cost of information and digital content has radically dropped and is now close to zero. In the worlds of Thomas Friedman, “Whatever can be done will be done.” Since the cost of information has dropped so much and the trade-offs of richness and reach have changed, this makes the connection to the customers from the manufacturer or originating organization significantly easier and less costly. One implication of this is the increased incentives for manufacturers to distribute and communicate directly to the end customer. The only aspect of the value chain that a manufacturer cannot compete on now is the physical delivery, or distribution of the item. For high margin products with low shipping costs, the incentive is high to sell directly to the customer. For low cost, low margin products, traditional channels such as Wal-Mart offer economies of scale that cannot be replaced. Yet even in this situation it is hard to name a major brand that does not have a website to increase richness.

In traditional businesses there has always been a frustration with the richness and sales services offered by retail and other distribution channels. Retailers tend to be more order taking in nature and less sales based. This causes the manufacturer or originating organization in many cases to take on the role of selling the product and the retail establishments just take on the role of distribution. Traditionally these companies were forced to spend on expensive forms of media in order to get the reach necessary to be marketable. The richness was limited to the packaging because print media TV and radio advertising does not provide affordable richness. This has created natural barriers to entry that require larger economic resources to overcome. New products were extremely difficult to do on a national level without substantial investment. With the reduction of the cost of information, reach and richness can now be offered through the web. This is likely to have a major impact on the number of companies that go direct to the customer. A retailer’s value to a manufacturer as a distribution center has lowered as a result. The success of Dell is a good example of the advantages that going direct has to offer and how richness and reach can be affected by the internet.

This reduction in the cost of reach and richness opens the doors to new markets for products and services that are smaller players in the value chain. Niche markets can now compete outside large metropolitan areas because the economies of scale required to stay in business can be met by creating a national market on the web instead of relying on local customers. One such example is Christmas tree stands. There are a number of simple traditional products available for low cost at the typical retail channels. There are also more expensive models that offer better stability, easier set-up and other hard to find features that are too expensive for the masses, but offer real value propositions. These products can be found on the web and in specialty stores that would for all intensive purposes be unavailable to me in Bennington, VT. Now they can be easily purchased by anyone who is interested. In this way, the information revolution is having a profound effect on the variety of products available.


GM’s Apple Like Comeback?

December 10, 2008
Tom Friedman is one of my favorite writers.  It is not just his insights into global phenomena, but his wit that I enjoy.  He recently noted that it was unbelievable that the automakers needs billions of dollars to “retool for innovation.”  Clearly, GM et al. forgot that business is the business of innovation.  If we look back at the performance of the American auto industry over the past 10 years, I can only think that managers in Detroit were all marketing majors, and perhaps they never got into advanced study of innovation.  Over and over it seemed that companies spent millions to market small differences between brands and revive dying brands, spending money to split the pie without providing value.  Why would I ever care if I had a Hemi vs. another extremely inefficient oversize motor.  Did someone read a case on Intel and think it made sense to do the same thing?  My grandmother had a Buick.  Just because Tiger is being paid to drive a Buick do I buy it? No.  Just because Tiger is being paid to drive with a Nike do I buy it? Well, maybe.  I can’t believe the number 1 golfer in the world would use an inferior product to play golf but why wouldn’t he drive an inferior car.  The trouble with the US auto industry is that they actually have come a long way recently in terms of reliability, but it is very difficult to change consumer perceptions.   

So here is my plan for the US auto industry.  GM should make 7 cars: a truck, a minivan, an SUV, a sports car,  a sedan, an economy car, and a luxury car.  They should deck these cars out with everything they can and provide customers greater value because of production savings.  A built in computer integrated with maintenance, entertainment, etc.  OnStar, on board, all the time.   This is actually just what Steve Jobs did when coming back to find that Apple was making dozens on models, with no clear differences.  They should brand all these cars with whatever their best brand is.  Saab? Cadillac? Something new.  Doesn’t matter.  Only some type of radical move like this is likely to change direction.  Once they have reinvented themselves they can then figure out the automotive equivalent of the iPod.  Electric car?  

So this raises questions of how diverse a company should be in its product line and industries.  Ross Perot slammed the GM board in the 80’s for focusing on the satellite business when they couldn’t even make a reliable car.  Disney’s animation department was considered to be so terrible around the same time that the company considered killing it.  In contrast, GE has done a relatively good job at managing growth in a wide range of industries.  What is the difference? When should a company expand outside of its core industry?  Comments?

Marketing on IT: The Good, the Bad and the Ugly

October 27, 2008
I’ve recently had cause to notice the issue of marketing on  IT related products.  

 

THE GOOD. Whenever I was sitting at a cafe or at my desk typing on my loaned macbook air (see other post), anyone could clearly see that I’m using a Mac.   The brand is broadcast to the world as part of the technology.  I also feel a little bit cooler because I know the world knows that I’m using a Mac.  There aren’t little stickers all over saying that the processor is Intel and the sceen is made by X and Microsoft approves this computer like on my Leveno/IBM.

 

THE BAD. Several weekends ago, much to the dimay of my legs, decided to run a half marathon.  I showed up a day early to pick up my number and, rather than being handed just a typical .  As part of the “swag bag”  given to all runners I found a PDA.  Yes, you did not misread that.  I found a Personal Digital Assistant as part of a swag bag for running a half marathon in upstate NY.  While I didn’t finish last (1:38:52) I am not of the caliber of athlete used to receiving such sponsorship.  OK, below is a picture of the PDA front and back.  
Free PDA?
Free PDA?

 

I put this under “the bad” because of the waste.  I honestly can’t imagine anyone using this, and it is destined to end up in a landfill for 99% of the folks receiving them.  I find it actually amazing that an organization can basically provide a PDA in the same role they may provide a balloon or stress ball in the past. 

 

THE UGLY.    In looking around my office and in thinking about most of the server rooms that I’ve been in during the past, it is clear that the impact of the creative folds in the organization has had little impact on technology design.  The predominant design pattern of the day screams functional, both in form and style.  In a world in which markets for toasters and other kitchen appliances from famous designers are commonplace, it is surprising that the word of technology has remained so functional.  And it is true that when your significant other comments that your coat looks very functional what he/she really means is that it is ugly.  My Thinkpad and my wife’s Gateway are both pretty ugly.  I never really cared what a computer looked like till I borrowed a new Mac.

Marketing of IT: Why Apple Gets It

October 17, 2008
First, some background.  I’ve always used Windows.  Though I was a chemical engineer, I took a real interest in computers and eventually pursued it as a career.  I was always a PC guy and thought that my in-laws (and everyone else) strange for their love of Apples.  Knowledge was part of the issue.  I could generally fix any problem with a Windows and even Unix while I had no experience with Apple.  Even now-though my practical knowledge has decreased with advanced degrees-I feel like I generally can fix just about any problem on a windows PC.  
I have however, become frustrated with my current system.  Despite doing everything possible (scanning for viruses, defragmenting, uninstalling unnecessary programs) my school issued IBM Thinkpad is still amazingly slow.  Rebooting can really be a 10 minute affair.  I also ended up getting an iphone and absolutely love it.  
My friend, who happens to be the educational rep for Apple, ordered me a MacBook Air to try for two weeks.  First the disclaimer.  I’m not being paid by Apple.  They haven’t offered me any free technology…..just a 2 week trial of an Air and a regular Macbook.   If Apple would like to offer me something in the future….please do…I’ll give you the address to send it!
So, about the Air.  I loved it.  It was amazing.  Sure, I had some switching problems.  I couldn’t get it to read my backup drive (NTSF format) and I never could get a remote drive to map.  I expected the switching problems.  
On the positive side, the MacBook Air is so wonderfully cool that I wanted to go places just so that people could see me using it.  I walk around just so I can feel how light it is….and I wondered if I would have to get a decidedly smaller bag if I were to own one.    I was cool and hip again, and it felt good.  
It was a fun 2 weeks, but unfortunately I just had to give it back.   
In the PC space,  competition has focused primaril on general functionality.  What is the best combination of RAM, HD space, video, etc. that I can get to fit me?  Sure, every company had the five different models and Dell provided the ability to customize to exactly fit customers.  Dell’s ability to customize while integrating supply chain efficiencies is a favorite case in many business classes and textbooks.
Apple, on the other hand, competes on cool.  THE ad campaign is one part of it, but I would argue that it goes down to the very foundation of the products that Apple puts out.  The silver finish and stylish precise nature of the keyboard design are just exuding coolness.  I am sure that among the high school crowds the MAC PC debate is less technology and more fashion.  Sure it costs more.  However, so do all good fashion brands.  

The technology aspects of the laptop exceeded my expectations.  It started up and hibernated very quickly (my two personal issues with my laptop) and was very stable.  

While the execution of my Mac experience has been great, it is still unlikely to convert me to a full time Mac user anytime soon.  First off, the organization that I work for  does not support Macs.  Supporting end user technology is a difficult and often thankless job.  Contact with end users is typically initiated only when problems occur, and there is a need to be able to offer a quick solution.  For this, adding an additional operating system to the mix complicates things for the support personnel.  

In addition, I have a great deal of existing technology and work process built into the way I work.  For example, I store articles in pdf forms in a directory on my computer which are connected to a local web server.  This enables me to link the articles directly from endnote, a bibliographic management software.  In other words, it would probably take me a good bit of work to duplicate the things I can already do.

The third reason is that I don’t have any money left in my IT budget.  If I did…then I may just be willing to look past 1 and 2.

For discussion and comment:

1. Does your organization support both Mac and Windows software?  If so, how do you justify the additional expense associated with supporting more than one operating system?

2. How much do you consider or value the coolness factor when considering a laptop purchase?

3. How large to you consider the switching costs between Mac and Windows?  Are the switching costs lower now than in the past?  What are they likely to be in the future?

Marketing of IT: Keep End Users in Line or Support Your Customer?

October 16, 2008
Effective marketing of technology can generate demand for the latest technologies among employees.  These priorities create inherent conflicts between the end users and the individuals tasked with providing support.  As marketers, we are thrilled when our customers support the bleeding edge.  As IT support personnel, it terrifies us.  

 

The question of the role of the IT organization in personal support is a difficult one.  As a key task, the IT support department must insure that licenses related to propriety software are strictly adhered to.  In addition, the IT department wants to be able to resolve 100% of problems in a reasonable amount of time.  Standardization of technology can help the IT support department meet each of these goals.  However, standardization also can potentially limit the productivity of employees as well as limiting the organizational knowledge of how well a particular technology will work in an organization.  For example, a company standardizing on the Vista may not know that within their organization salespeople utilizing a Mac are more satisfied and require less support.

 

Consider the following scenario:
The Acme company supports all Dell laptops throughout the organization.  One senior VP of marketing decides that he needs to order a stylish new red Toshiba tablet that better supports his/her personal brand than the Dell.  When it comes in, the laptop can’t be given the standard image used for machines throughout the rest of the organization.  As a result, the configuration and support of the machine ends up taking up approximately 10 times what support for a normal machine usually does.  

 

In the same organization a group of ten contractors have been recently hired to fill out the creative end of the marketing department.  These users petition the CIO for permission to purchase 10 MacBook Pros.  Having worked in the creative field for most of their lives, these individuals feel they can be more productive using Macs, have had bad experiences with Vista, and are able to do most of their own support.  Having just heard about the problems with the Dell laptop, the CIO forbids them from purchasing the Macs and, in an official memo to the entire organization, states that all nonstandard technology will not be supported.  

 

The individuals do not relent and with the permission of the VP of Marketing, the individuals purchase 10 MacBook Pros.  While the individuals do most of their own support, there is a significant additional challenge to handle issues of hardware failure.
     

  1.  What is the function of IT desktop support management within an organization? Provide key insights into IT decisions for end users?  To set and enforce standards throughout the organization?  To support end users at all costs? 
  2.  

  3. How does the IT manager justify the costs of supporting multiple operating systems?  This added complexity is likely to have an added costs.
  4.  

  5. What do you do when individual departments have the capability to purchase their own IT?  Do you disown unsupported technologies or support only until the support becomes too expensive?   

Price Discrimination on the Web

October 16, 2008

Since the emergence of electronic commerce, the web has been used as a way for organizations to segment the market and enable price discrimination — i.e., offering different prices to individuals shopping online compared with individuals shopping offline.  This has typically resulted in a situation in which consumers shopping online for books, CDs, and even cars pay a lower price than individuals shopping offline.

In one of our recent studies of the auto indudustry, we identified a mechanism that involves price discrimination within the online channel rather than between the online and offline channel.  By examining the search process of consumers and specifically the use of online buying services (OBS, websites specifically focused on providing information) as part of the purchase process, we found three distinct clusters—price OBS, product OBS, and portals—which were associated with significant differences in the price paid.  Individuals utilizing product OBS paid more than individuals utilizing price based websites or portals. We further found that underlying differences in search behavior were associated with consumer demographics.  

What is the take away here?  Obtaining information about the type of site a consumer is coming from may provide you with a way to price descriminate based on information—with those individuals who are likely to be more concerned with quaility information generally willing to pay a higher price.  

 The full paper associated with this post has been published in the Journal of Marketing.

Viswanathan, S., Kuruzovich, J., Gosain, S., and Agarwal, R. 2007. “Online Infomediaries and Price Discrimination: Evidence from the Automotive Retailing Sector,” Journal of Marketing 71(3) 89-107.

 


Site Launched

September 22, 2008

I’ve just launched this blog site as a way to both learn more about the actual process of online marketing as well as to provide a venue for what I hope to be interesting commentary on this topic area.  Stay tuned for future developments!