Category: Marketing

R. Siisi Adu-Gyamfi of Textron presented on “Profitable Growth in Emerging Markets.” With China now the 10th largest economy in the world (as of last week, he said), it’s an important trend for manufacturers.
The strategies he outlined, adopted by various companies (not all do all of these, but typically focus on one main one) were:

• Enter the New Market
• Move Some Production Abroad
• Disaggregate the Value Chain
• Re-engineer the Value Chain
• Create New Markets

He presented the case study of Carrier air conditioning going to China, and reducing its cost base by 47 percent. Profits from that effort led Carrier to get into creating New Value Propositions for New Customers (e.g. commercial refrigeration) and New Markets (Vietnam, Indonesia, etc.)

Sales have nearly tripled since 1993, and profits have gone from $10 billion to $911 million, and Carrier is now the largest business in this category.
Siisi’s call to arms for globalization:

• Use facts – not intuition
• Abandon incremental thinking – stop thinking small
• Use global assets effectively and efficiently
• Tailor your best practices to local conditions
• Aim for higher quality
• Learn from others – where have they succeeded and failed in globalization?

Ten years ago, 9 of the 10 most highly valued companies were U.S. companies. In 2006, it was 6 of 10. What will it be 10 years from now? Maybe three?

Businessweek says the EU will decline from 31 percent of the world economy to 25 percent in 2025 to 15 percent in 2050. The US will hold relatively steady, but by 2050 China will be the largest economy, and India will be bigger than the EU.

Get ready.

Technorati: Frost & Sullivan, liveblog, sales, marketing, globalization, conferences

Continued liveblogging from the Frost & Sullivan Sales & Marketing East 2007 Executive MindXChange.

James Mendelsohn of Capital One, with over 50 million customers and $180 billion in managed loans, gave a presentation entitled “Measure, Manage and Maximize Your Return on Customer Investment.” Capital One invented the credit card balance transfer; commonplace now, but an innovation when they first did it.

With 50 million customers, they are looking for ways to extend relationship with them into other financial services, where they are the 11th largest player in the nation. They see themselves as big enough to compete and change the game, but not so big and vested in the status quo that they won’t. For example, Bank of America has 10 times as many retail branches, so they have to make retail branches part of their strategy. Capital One doesn’t.

First innovation: smashing the cost of credit from an almost universal 19.8% to an average of below 10 percent. Another: the blank check for auto financing, taking the hassle out of buying a car so people don’t have to do dealer financing.

Financial services is attractive for innovation because it is huge and profitable, has an attractive industry structure, and ripe for reinvention because of negative customer feelings and the ability to create electronic/virtual products.

Consumer lending businesses are consolidating nationally, with for example 90 percent of credit card share in the top 10 players. It’s less consolidated in other segments, but the trend is toward consolidation.

One key point was that by de-averaging results from a marketing test, you can actually see places where a test that appeared to have “failed” vs. the control was in fact successful. This suggests that targeted media/social media and retailers groups would enable marketers to focus on groups that would be profitable.

For example, one retailer’s customers may be more loyal, bigger monthly spenders and more inclined to cash rewards points. Understanding this can help marketers tailor product offerings.

For call center customer satisfaction, in the final example, the location of the call center (U.S. or outsourced) made no difference in satisfaction scores. What mattered was the type of call. They use a robust data model to see what things matter for resolving problems (e.g. late payment fee waivers) to create more long-term, satisfied customers who will stay with the company.

I guess that’s why the phone system always says, “Your call may be monitored for quality control purposes.” They probably really are using them for marketing analysis.

Good presentation; James obviously needed to keep some of the data confidential because of competitive concerns, but he gave a good introduction to model-based, data-intense market segmentation.

Technorati: Capital One, Frost & Sullivan, liveblog, marketing, sales

Wedding marketing was the substance when Veronica Smith Katz of David’s Bridal presented “Enhancing the Customer’s Experience by making the Most of Multi-Channel Strategies During a Major Life Stage Event.”

They have something like 30 million unique visitors a year (or 10 percent of the US population), and because people spend more money in the five years after getting married than they do during the rest of their lives, David’s is in good position to introduce partners to people who are about to spend a bunch on honeymoon trips, opening bank accounts, buying houses, and much more. Wedding marketing leads to all sorts of other marketing opportunities.
The wedding dress is typically the first purchase in the bridal cycle, and the gateway to lots of other purchases, such as photography, catering, tuxedos, bridesmaid dresses and much more, as I recently learned first-hand with my daughter’s wedding.

We did things in an understated way, but as I heard in this presentation, we’re in the distinct minority.

Veronica spoke on enhancing the customer’s experience by partnering with “best In brand” companies. For example, they have partnerships with Sandals to host Caribbean nights, for brides and grooms to learn about various islands. A high proportion eventually convert to buy a Sandals honeymoon.

Brides are looking or this kind of information on associated needs. Veronica quoted a customer email that said: “All the discounts and goodies included when you purchase your wedding gown go beyond what you could ever imagine…” Customers see this as a benefit to them, a bonus that they get while buying their dresses. So, it’s a case of David’s doing well by doing good for their customers.

Clearly we have something of a relationship like this in Rochester, with restaurants, hotels and other organizations in the community providing services to Mayo Clinic patients and their families when they come to town. I believe Mayo tries to be neutral and not pick one community vendor over another, so the benefit from these community collaborations are indirect. But without community service providers it would be impossible for Mayo to serve the number of out-of-town patients we do.

To what other kinds of major life events might this approach be applicable?

Technorati: Marketing, wedding, Frost & Sullivan, liveblog