Marketing 2.0

Kodak's 30-year Slide into Bankruptcy

Now that Kodak has officially filed for bankruptcy, it's time for a post-mortem. Here's an excellent analysis from Wharton on what went wrong. The irony is, of course, that Kodak invented digital photography. The problem is they couldn't risk disrupting their generous film margins. For the sake of short-term profitability, they sacrificed their future. Oh yeah, incompetent management is at the root of most of their problems too. Insular and incompetent. My question is, why is the CEO, Antonio Perez, still around? His strategies have failed and he's driven the company into bankruptcy. Now, it looks like his mission is to sell off patents and cut benefits for retirees. That's a hell of a strategy. Kodak needs a change at the top if it's to have any hope of surviving.

What's Wrong with This Picture: Kodak's 30-year Slide into Bankruptcy - Knowledge@Wharton.

Social media vs. Strategy

Everyone wants to get in on the social media party. The question I get asked most by potential clients these days is, how to build a social media presence. Of course, I remind them that you have to begin with a coherent marketing strategy, and only one piece of that is building a Facebook page or using Twitter. While social media is the marketing flavor of the day, companies often have core issues that need to get fixed before they can improve sales or profitability.

One of these core issues is competition. Marketers and senior executives often downplay the strength of their competitors in an effort to be positive leaders and inspire their troops. You have to be realistic. Strong competitors can make it virtually impossible for you to accomplish your goals, especially if you've set the bar too high on market share. While you can always find a way to position your brand and differentiate yourself, I'm really struck by how difficult it is to change consumer perception and convert them to your offering.

Consider the tablet market. We have Apple and Amazon entrenched in leadership positions. Who else has cracked this and made headway? HP? RIM? Microsoft? Dell? Nope. Barnes & Noble? Maybe. You would think a market that's growing this quickly would offer opportunities for everyone. What happened to the old saying that a rising tide lifts all boats? It's been replaced by the law of oligarchy — market share tends to be concentrated in the hands of a few powerful brands.

I think one reason for this is we are bombarded with choices in life and we need to make things simple. I do that all the time. I don't have enough free time to comparison shop and I don't want to risk making a bad decision, especially on a major purchase. When I need a television, I buy a Sony. New laptop? My only decision is between the 13" and 15" MacBooks. Time to relax and sip a capuccino? Where's the nearest Starbucks? I know there are lots of good alternatives to these brands but I don't have the time or the inclination to seek them out. 

So what do you do if you're not one of the big players in a given market? Don't give up but know that your job is going to be challenging. You will definitely need to innovate, find some way to change the game with either product design or customer service. Look for a niche segment that's not well served by the big guys. 

That brings me back to social media. If you haven't effectively differentiated yourself, don't expect people to sign up as Facebook fans or subscribe to your Twitter feed. Consider the entire brand experience and then find a way to use social media as one element in the marketing mix. Just remember to sort out your brand strategy and positioning first.

Kodak: R.I.P.

The latest news out of Rochester suggests that Kodak will be filing for banruptcy shortly. This will mark a sad end to an iconic American company. We all grew up with our "Kodak moments" and preserved our memories in photo albums and frames. I still sit down and look through my family's albums occasionally and these photos represent the only record I have of relatives and friends who've passed on. Kodak and its products have been an important part of my life.

What went wrong? The short answer is digital disruption. Digital cameras have now completely replaced traditional film technology. Kodak was a company built on market leadership in film. It simply has not been able to adapt to the world of digital imaging.

The irony is that a Kodak engineer, Steve Sasson, invented the diigital camera in 1975. You can read about it over at Fast Company Design. Here's a short video of Sasson created by David Friedman:

Inventor Portrait: Steven Sasson from David Friedman on Vimeo.

So why didn't Kodak dominate digital imaging the way it did film photography? I don't know the answer to this but I suspect a number of factors. The first is complacency. When you are literally printing money from film products, why jeopardize earnings by leading the way with a new technology? As we now see, product life cycles have shrunk in the digital age. In order to succeed, companies must be willing to kill off their popular products and introduce something new every 6-12 months. Look at the many iterations of Apple's iPod and iPhone. 

There are other reasons. Digital imaging opened the market up to new competitors like Sony. Major camera companies like Nikon, Canon, and Olympus provided stiff competition as they moved into the new technology. Kodak was not really successful in developing new products or services to replace film sales. This is the real digital disruption that Kodak could not overcome. Revenues from film, processing and printing essentially disappeared when people began using their digital cameras. Consumers usually don't print their digital images at all, meaning that Kodak had to live or die with its digital cameras in a field crowded with strong competitors. They didn't make it.

How to gain new business in a bad economy

I came across this article in Fast Company and thought it provided really good advice. A couple of the steps they recommended hit home with me. Here's my take.

• Don't go for everything at once - clients are very cautious these days about making purchase commitments. You might need to start with a small order or even a trial purchase. 
• Be prepared for long delays - hurry up and wait seems to be the operative phrase when converting a new account these days.
• Always have a next step in mind - too many sales people don't conclude a client     meeting with a commitment to the next step. 

A bad economy can offer a great opportunity to win new business. Everyone is under pressure and clients are more likely to be looking for vendors who can provide cost savings or performance improvements. You need to have a positive attitude and believe that your product or service can truly help a client. That genuine belief will come across and help you build trust. In times of uncertainty trust is paramount in gaining and retaining customers.

7 Steps To Scoring New Business In A Bad Economy | Fast Company.

Who owns your Twitter followers?

Here's an interesting legal case. Who owns the followers you attract to your Twitter feeds? In this instance an employee built a Twitter account on behalf of his employer. After leaving the company, he changed his username on the Twitter account but retained the followers. Now, the company is suing him. According to the company, Phonedog Media, "We intend to aggressively protect our customer lists and confidential information, intellectual property, trademark and brands."

This points out the need to have a clear policy within organizations on the use of social media. I know that any and all intellectual content, products, or creative ideas that you generate for your employer become their property unless you have an employment agreement that stipulates other. A Twitter following isn't the same as a customer list but it can be interpreted as a list of brand followers or prospective customers.

Lawsuit Claims Twitter Followers Belong To Company, Not Employee | LinkedIn.

Ten great free iOS apps

Were you one of the lucky kids who got a new iPad or iPhone for Christmas? There are hundreds of thousands of apps for your shiny new toy, but where to start? Here's a list of 10 free apps compiled by the people over at Macworld. It's a good place to start.

Ten great free iOS apps | Macworld.

We have a winner - ICO logo contest

Here is the new logo for Italian Carry out designed by the students in Prof. Adam Peruta's Brand Design class. Congratulations to everyone for doing great work on this project. Enjoy the pizza.

Are the 4 P's still relevant?

Here's a controversial article from Fast Company claiming that three of the classic 4 P's of marketing are dead. Oops, just when my students memorized them! According to the author only product matters in today's world. Place is irrelevant with e-commerce, many companies have succeeded with little or no promotion, and pricing is now transparent and driven by market forces. Well, I guess that's going to make it easier for me to teach Principles of Marketing.

Like most grand pronouncements, this one has some validity but limited applicability. Not every company is a pure-play, technology startup with a unique product developed by brilliant programmers working 23 hours a day. Some people are still opening pizzerias, bars, accounting firms, or trying to get established as independent consultants. Do they need to focus on all 4 P's? You bet they do.

Why Do B-Schools Still Teach The Famed 4P's Of Marketing, When Three Are Dead? | Co. Design.

Customer lifetime value

Over on Seth Godin's blog there's a good post on customer acquisition cost and lifetime value. The Internet makes it much cheaper to acquire customers. Meanwhile, customer lifetime value can also be small if companies like Facebook or Twitter spend virtually nothing to get you there in the first place. The payoff can come later when the company figures out how to monetize the traffic.

Seth's Blog: Lifetime value of a customer/cost per customer.

Italian Carry Out Logo Competition

Students have submitted their logo designs for Italian Carry Out. I have also included a couple of design treatments that I worked on when I first met with Tyler Salino, before he decided to set up the student competition. I'm posting all of the concepts here and encouraging feedback from everyone. You can leave a comment at the bottom of the post.