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Total Access
Total AccessNew Marketing Strategies
Regis McKenna
September 9, 2004College of Engineering
San Jose State University
Total AccessRegis McKenna ©2004
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Marketing: Expansion of Infrastructure. A variety of corporate activities performed prior to
selling or promotion. The role of consumer credit. “A highly refined system of thought and practice”
necessary for the development of a market economy
Mass Production: Age of Reach
Age of Push: Mass media
Television (Mass Media) is the premium brand building medium
Marketing + behavioral research turn marketing into a creative social science
Expanding middle class population & suburbs
Marketing: Expanding distribution and mind share
© Regis McKenna 2003
Marketing Evolves – Pushed by the Technology
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“George Murphy, senior vice president for global brand marketing for the Chrysler Group, complains that his company is spending too much on television ads. It galls him that the price of a 30-second commercial continues to rise at a time when the broadcast networks are steadily losing their audience—and when his own marketing budget is flat because the car industry hasn't been able to raise prices for five years.”
"The traditional marketing model is broken"
Jim Stengel, Procter & Gamble's global marketing officer
Source: FORTUNE/ Nightmare on Madison Avenue, By Devin Leonard, June 14, 2004
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The Laws of More (and cheaper) Information
0
2
4
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10
$12
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Source: 1999 Disk/Trend Report
Ave
rag
e P
rice
Per
Meg
abyt
e
Year
Rigid Disk Drives
The performance & price curves of basic digital technologies: processing, memory, storage, bandwidth & software continue their trends and pace of progress absorbing more and more of the value of complex, costly labor intensive processes.
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$0
$20
$40
$60
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19701980
19902000
2002
Wo
rld
wid
e S
emic
on
du
cto
r S
ales
($B
)Building the Infrastructure for
Access Worldwide Semiconductor Shipments
Sources: WSTS, Applied Materials Corporate Marketing estimates, Dataquest, IDC
Industry Transformation
Non-ComputingSemiconductor
Shipments
Silicon Consumptionby Computing Products
MainframesApple
PC
386PCs
Internet
Windows3.0
Servers & Storage486 PCs
IBMPC
Win ‘95
Wireless
Courtesy David N.K. WangExecutive Vice PresidentApplied Materials
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Shifting Drivers of Growth
Source: IDC Directions
Mainframes
PersonalComputing
Digital consumer/personal
appliances
Mill
ion
s o
f U
sers
1970 1980 1990 2000 2010 . . .
10
100
1,000
Courtesy David N.K. WangExecutive Vice PresidentApplied Materials
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Technology and Social Change1875 – 1985
1985 – 2004 +
Social Acceptance and Change
Traditional Institutions React
Social Acceptance and Change
Rapid Market Diffusion
Technology Innovation
Controlled Diffusion
Institutionalized Control
Technology Innovation
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Digital technologies provides enormous opportunity for redefining the meaning of “local presence” to a
customer
o Moore’s Law
o Metcalfe’s Law
o Gilder’s Law
o The Law of Storage
o The Law of Software
Shift to value-added services
Everything is connected
Full Human expression via bits & bytes
Consumable Data (Services)
Mass customization & personalization of services
Market/Value PerspectiveTechnical Progress
© Regis McKenna 2004
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Information Distributors
Co-Presence Operators
Traditional Customer
New Customer
User Advocates
Edge Devices
Retail
InformationResources
Financial& Media Partners
Operations Support & Solution Partners
Customer Networks
The Enterprise
Human Resources
Finance
Information TechnologyMarketing
R&D
Operations
Sales
Network Supplier
SupplierSolution Providers
Development PartnerPoint of Presence
Partners
Outsourced Operations
Content Supplier
Research Institutions
Consultants
Government
Information Partner
Stakeholder
Financial Institutions
Stockholders
Industry Analysts
The Media
EnterpriseServices
Ecosystem
Age of Total Access
© Regis McKenna 2004
(Hidden) Persuaders
Digital Understructure Platforms
o Microprocessorso SS Memory/storageo Software platformso Storage Networkso Programmable toolso CAE - Computer Aided Everything
o World-Wide Webo Digital platformso TCP/IP, Java, XMLo Satelliteso Wirelesso Broadband Communications o Intelligent interface
Programmable Applications
Real Time Personal Adaptable Connected Ubiquitous Cheap
Constant
Novelty
Infinite
Choice
Self Service
Consumable Data
Temporary
Perceptions
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24/7 Presenc
e
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New Realities
Competition for customers, sustaining productivity and market uncertainties are forcing a restructuring of real time business models based on new value- creating information architectures, standards, interoperability, enterprise processes
Access replace broadcast Real Time enterprise systems close the space-time service gap Digital information devices, networks and applications
dynamically alter the supplier-producer-consumer dialogue Logistics manage efficient, dynamic information and physical
goods distribution networks and define the leaders in every industry
IT is is the fuel energizing service economies Marketing & IT converge Challenge: Preparing the enterprise for the technology-driven,
real time global marketplace filled with uncertainties
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Marketing & IT Converge Redefining Its Functionality as a Learning Process
Marketing is the continuous process of organizational learning and the subsequent adaptation to technological and market changes over time. It is a process rather than an event. It enables the enterprise (producer) to acquire and apply knowledge efficiently by interacting with customers and the marketplace (infrastructure) so as to innovate and respond, reliably, consistently and profitably.
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Consumable/Disposable Information Society
36 Billion Gigabytes - Total new information generated ’02 and ’03
Almost 800 MB of recorded information produced per person each year... Up from 250 MB in 2000.*
Present human and machine access points growing exponentially
ATM’s (US): 12B Transactions/year –doubling in last decade Wi-Fi explosion just getting started Identity thefts estimated by Justice Dept = 700,000/year Number of reported cyber-incidents doubling every 6 months –
78 % increase from 2001 Digital Networks defy past models of complexity, management
models and value creation
* UC Berkeley School of Information Management & Systems
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Marketing Evolves as it Involves
The goal of Marketing is to build and sustain buyer & seller relationships and to expand and sustain those relationship over
time.
Technology isn’t doing away with that concept; it’s expanding the responsibility for developing & sustaining the value of the customer relationship across the enterprise and it’s network of value-adding, expanding resources.
The new tools of marketing integrate the customer and are network-based, mass customized enterprise solutions that
help foster a direct, engaging, sustained buyer-seller service relationship.
“Loyalty” is transparent to both producer and consumer
Marketing then becomes a process of integrating the
customer as a collaborating partner in long-term value creation
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Customer Preferences Tuned to Suit the Time & PlaceTechnology shapes behavior
o Choiceo Priceo Noveltyo Trusto Loyaltyo Serviceo Simplicityo Accesso Conveniento Secureo Presenceo Speedo Brand
© Regis McKenna 2003
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Total Access Shifts Center of Marketing Gravity
Customer now has the power to initiate the contact and make purchase decisions based on a whole new set of market-induced, constantly changing preferences.
Access is an expectation of being conveniently connected to the marketplace anytime, anyway and any place
Competitive leadership has an added dimension – deploying and maintaining the customer relationship 24/7
Service productivity will demand increased automation of marketing or all producer-consumer transactions that can be codified
Marketing & IT converge enabling the enterprise to become an architecture of trusted services
Marketing is the integration of all Network of Market-Driven Solutions & Services
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Moore’s Law applies to chips not people
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Creative Destruction
Between 1960 and 1999, both manufacturing’s share in America’s GDP and its share of total employment roughly halved to around the 15% mark.
In 1960, manufacturing was the center of the American economy, and of the economies of all other developed countries. By 2000, as a contributor to GDP it was easily outranked by the financial sector.
The Economist 10.13.2001
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1970-1990 Minicomputer 1:1
1980- Workstation 1:10
1990- Enterprise Networks 1:100 +
2000- Real-Time Broadband secure networks
1:1000 +
1960-1980
ERA
Mainframe
Platform10:1
People to Machine Ratio
Source: Adapted from V. Khosla/Paul Johnson
Productivity and IT Services
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As service transactions become more automated, marketing will increasingly be integrated and customized to the time and place and specific nature of the transaction.
Demand for increasing IT and service productivity will hasten self-service automation.
The reliability and responsiveness of both the products and the information generated, although seemingly mechanical, are
critical to the long-term customer relationship. Human involvement in many of the traditional functions of
marketing is already diminishing. IT architectures are better at most aspects of marketing than
humans: 24/7 access and service, choice, real time customer history, comparison shopping, price, feedback, monitoring and control
The Automation of Marketing
© Regis McKenna 2004
Customer Satisfaction: Automation & Synchronization
of All Service Access Points/Presence
Marketing Architecture
On line Mobile
Services Office
Anywhere/Anytime
Home Partners
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Factory
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Marketing Functions
o Product Definitiono Distributiono Pricingo Forecastingo Segmentationo Researcho Serviceo One-way communicationso Competitive Analysiso Customer Management
o Direct Customer Feedbacko Logisticso Market-Mediatedo Simulationo Data Miningo Transaction Feedbacko Self-Service Networkso Dialog Web Serviceso Context Search Engineso CRM
Replaced By
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Market Architecture
A network of services inside & outside Automate processes customer services Self-sustaining & self-learning Scaleable Real Time Enterprise Platform Presentation interface & transparent services Application flexible, adaptable Real time - persistent presence (brand) Information & presentation synchronized to all support & customer touch points Integration of end to end processes with existing IT assets
© Regis McKenna 2004
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Communications is More than Information
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Experience Media
Static Media
High
Touch
High
High
Low
Information Richness
Low
Interactive Marketing Evolution
Newspaper
New Dimensions ofInteractive Multimedia
Radio
Computer
Broadband ServicesDigital Broadcast
Internet Online Services
Television
Regis McKenna ©2004
Band
wid
th
Total AccessChordiant Software Systems
Relational Databases
Transaction Systems
CT Sources
External Data Sources
Other Applications
Enterprise Platform
Marketing Sales & Service
Self Service Channels Assisted Service Channels
PhoneATM WWW Kiosk BranchDealerCall Center
Agent
Real Time Customer
Adaptive Applications
Consistent Coordinated Intelligent
Interactions
RT Process Integration
Leveraged IT Assets
Closed-Loop Marketing Architecture
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Goal: Customer Life-cycle Relationships
Real Time Single View of Customer/client Quickly identify potential issues & opportunities Integrated Extended Enterprise Knowledge exchanged real time via diverse media types Intelligent Consistent Customer Interactions Improved Marketing Effectiveness –closed loop Reduced Operating Costs -productivity Access multiple & diverse databases & locations Interface & superior customer (Brand) Experience
Source: Chordiant/Regis
Regis McKenna ©2004
IT Foundation for Sustaining Brand Loyalty
Trust (Responsive, secure Information Architecture)
Reliability (Customer communications is Mission Critical)
Customer knowledge & service (Self service and feedback loop)
Innovation/novelty (R&D direct dialogue with infrastructure & customers)
Quality of support services (Synchronized Operations and communications)
Presence/ Brand Experience (Total Access: personalization, Intuitive Interface)
Sustained, reliable experience (Productivity, investment, knowledge and evolving market ecosystem)
Innovation (Monitoring customer patterns, preempting competitors and enterprise-wide response)
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New Media & Marketplace Call for Creativity
Caution: use of “tyranny of best practices” in changing times
Marketing and brand have are meaningless terms unless customer experience fosters long-term loyalty
Marketing success requires sustaining presence over customer life-cycle needs & wants
All business and enterprise functions are services Applied marketing is not generic Use other people’s assets Creativity & innovation must become an essential
enterprise-wide asset
Regis McKenna ©2004
Regis McKenna 2004 ©
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This presentation is copyrighted by Regis McKenna, Inc. It may be used for noncommercial, personal use only. It cannot be modified, reproduced or used for commercial purposes without written permission of the author. For more information, please contact Ingrid Mifflin, Regis McKenna, Inc. 2109 Landings Drive, Mountain View, CA 94043, [email protected]