REAL TIME
Niina Aaltonen
Ulla Ahlfors
Heikki Karjaluoto
Timi Kärkkäinen
The Author
• Chairman of TheMcKenna Group in Palo alto, California,
USA
• Active investor: financed over 12 start-ups;
– Weblogic (www.weblogic.com) ,
– Graham Technologies (www.graham.com),
– Real Time Knowledge Systems (www.rtks.com)
• Helped launch technological innovations:
– 1st microprocessor (Intel Corporation)
– 1st personal computer (Apple Computer)
– 1st recombinant DNA genetically enginered product
(Genentech, Inc.)
– 1st retail computer store (The Byte Shop)
• Participated in technology marketing:
– 1st local area network
– 1st electronic spreadsheet, etc.
More about the Author
• Published 4 books in different areas of
Marketing:
– The Regis Touch: Million Dollar Advice from
America’s Top Marketing Consultant
Marketing (1986)
– Who’s Afraid of Big Blue? How Companies Are
Challenging IBM - and Winning
(1988)Relationship Marketing: Successful
Strategies for the Age of the Customer (1991)
– Real Time: Preparing for the Age of the Never
Satisfied Customer (1997) Harvard Business
School Press
Real Time
• Definition of time has changed:
– short-time thinking, which allows for ”hairtrigger” responsiveness as measured against
European or Japanese companies
– ultracompressed time, forshortened horizons --> fragmentation
– ultraresponsiveness of real time / is it really
true in interactive business today? If so, do
companies embrace the possibilities?
• The Future is out, Now is in:
– gap between need and fulfillment ---> zero;
marketers a pushed towards instant service
or delivery
• Rapid internal processes
Real Time
• Even with a new time concept, it takes time to
build success in the internet marketing;
compare with TQM
• Real time wrecks hierachical organizations by
making instant access tor activities anywhere,
anytime, all the time
• Processes and activites in companies become
more & more transparent
The Never Satisfied
Customer?
• Real time marketing enables constant updating
of consumers’ likes and dislikes
• Customisation is expected
– i.e. Levi’s customised jeans since 1995
• Progressive firms allow access to corporate
product-related and service databases
– 800 number and URL on the package label
• Interactive relationship with companies leads
customers to expect it also from other
companies
Message & Medium
• What is the message when the medium is
everywhere?
– Media is usually interpreted as the media (TV,
newspapers, magazines, www etc.)
– actually: plural form of ’medium’ which is a tool, a
medium through which messages are sent
• Internet is everywhere - new challenges
– interactivity
– content
• Time and space are transformed by real time
information technology
Message & Medium
• Entertainment is a driving force
– charm of novelty entertains adventurous people
(early adopters)
– expanding bandwidth will offer new forms of
information combining voice, video, and e-mail
feedback
– entertainment is engagement, attracting and holding
attention
• Companies try to take advantage of new
features
• Society viewpoint:
– some happy for variety
– some sceptical, fear control & manipulation
• Companies should understand service Vs.
exploitation
A Brand New Brand: Internet
• Online technologies (e.g. Internet) have made
real time market research possible
• Market Research before:
– long lasting: 7-8 Months
– No real time data
• Market Research today via Internet:
– Real time data
– Awareness of customers needs
– Live marketing databases to which everyone in a
company can get access
– Real time marketing changes the way traditional
businesses operate
Brands Redefined
• Before:
– Successful brand names commanded
unquestioned loyalty
– Heavy advertisement through mass media
– One-way messages were absorbed like virtual
instructions on what to buy and where
• Today:
– Internet has an impact on brands in various
ways
– Brand is redefined as
• “An Encapsulation of actual, experienced value”
– Brand is defined with interaction between
customer and producer - i.e. In dialogue
Changes in Brand Marketing
• Companies reduce their dependence on brand
marketing - winning consumers by ascertaining and
responding to their real needs
• Procter & Gamble
– Brands are confusing customers
– Reduction of consumer choice leads to purchase
– Consumers always want more choice, but they do not
want to be burdened by it
– Succesful companies redirect efforts from marketing
brand names to building close relationships with
retailers and customers
– Unilever (Kauppalehti Extra 31.10.2000)
• Reducing brand names
– Software business:
– McKenna does not compare different businesses
– These statements seem to hold truth also in SWB
New Brand is Information Rich
• Interactive information technology will
become the next major investment for
companies
– Gives consumers the power to choose and
shape brand relationships with suppliers
– Products and services are information
dependent
• Low level consumer choice:
– Pepsi or Coke
• High level consumer choice:
– Surgeon, Lawyer, Banker
Time of Computers
• Computers have affected factory driven
business
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–
–
–
–
–
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Easier and cheaper product development
Acceleration of delivery times
Higher quality
More efficient distribution
Better market segmentation
Fragmentation of markets
Competition
Direct marketing techniques deployed
• Addressing and targeting niche markets
• Customers are increasingly irritated by
advertisements bombarded
Brand New Marketing
• Producer - Customer interaction
– IT helps
• Basis for building long lasting customer
relationships
– create and maintain brand loyalty
• Information systems need to be tuned to
real time
– timely responses to customers
• on-line customer support (SWB, IMP, B-To-C)
• customer feedback -> changes
Consumer-Producer Dialogue
• McKenna quotes Drucker: Purpose of business
is to satisfy customers
Producer
DIALOGUE
Consumer
– and states:
• IT allows direct interaction between consumers
and producers
New Brand High Touch
• Brand is more than just a static name
– Brand is an active experience of service
– In the information age, all businesses will become
service businesses
• American Express
– Quick responses to troubleshooting -> brand marketing
winner Vs. losers
– Exceptional service linked to highly responsive,
computer based systems
• Microsoft
– 80% of improvements stem from customer feedback
• Brand is a virtual experience derived from the
consumer’s experiences w. product, service, or
company - not from the messages of broadcast media
Producer vs. Consumer Value
Producer Value Chain
Core
Competencies
Value
Proposition
Delivery and
Services
Target
Customers
The result is an
information exchange
through which both
consumer and producer
grow and learn in the
process
Consumer
Consumer Value Chain
Producer
Core
Competencies
Interactive
Dialogue
System
Brand
Value
Dialogue technologies
create self-service,
transparent interfaces,
feedback, and 24-hour
interaction between
customers and
producers
Purchase,
Use, and
Service
Experience
Needs and
Wants
• Real time technology delivers the brand experience any time, any place
The Intranet, Extranet, and
Internet
Board
The
Real Time
Corporation
Intranet
User
Groups
Beta Users
Employees
Management
Research and
Data Sources
Potential
Customers
Government
Records
The Media
Universities
Financial
Data
The
Electronic
Infrastructure
Consultants
Competitors
Public
Market
Research
Information Community
Access
Internet
AlliancePartners
SupplierPartners
DistributionPartners
Extranet
• Companies will use their networks
to develop the infrastructure and
communities of interest necessary
for sustaining customer loyalty and
brand equity
Real Time Communication
• Networks encourage people to talk more frankly
and groups to generate more proposals for
action (democratising effect)
• Employees can get an overview of the entire
company
– Computers show each employee how his or her
contribution affects the organisation
– New ideas, innovations, and information can be shared
with colleagues
– Real time communications can break down barriers
between traditional adversaries within the company.
• Businesses will apply techniques from
entertainment and deploy interactive resembling
Continuous Discontinuous Change
and Preparing for It
• To succeed managers must understand
and adapt to discontunuity
– from economies of scale to economies of
time
– from broadcast to access, or monologue to
dialogue
– from data content to people content
– from fixed boundaries to open space
– from the satistied to the self satisfied
consumer
Speed
• Consumers have grown to like speed
• Technology helps winners to get to the
market first
• Changes create opportunities for
companies, whose rankings change
overnight (Apple, HP, Porsche)
• Technological and marketing forces move
rapidly and managers must see the
warning signals
Access and Dialogue
• Access: dissemination of the same information
to everyone, and customers choose what,
where, when and in what form they want it
• Customers must have easy and quick access to
satisfaction
• To satisfy customers companies must build
databases, respond to suggestions and
criticism, and customize products or services
• The average consumer is not interested in
technology, but when bandwidth means
”dialogue”, it also means more control and
choice of content by consumers
People, Content and Open Space
• Data, voice and graphics can be combined into
new forms of human interaction that consumers
love
• More choice of content, people become content
• Bandwidth expansions allow (mimic) human
expressions like smile, frown, head shake, hug
and kiss
• New ideas are not limited by technology of
resources but the limits of imagination (Dave
Packard)
• Organizations must get out of the boxes and old
rules to creative thinking, knowing what makes
the industry tick
How to Satisfy the Customer?
• Quality in time and service
• Understanding: attentiveness,
convenience, assurance, and comfort
• Consumer’s time is valued
• self-service vs. loyalty
• 800 phone number, URL and on-line
registration are real-time services
• investing in technologies that let
customers satisfy themselves
The Real-time Manager...
• monitors constantly changes
• expands toolkit of sensors
• communicates with customers and
would-be customers
• develops perspectives on customers’
buying patterns and actions
• uses customer information to develop
better products and services
• reorients the whole company strategy in
a blink of an eye if needed
Sources of Real Time Information
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Market experience
Customer information
Field sales information
On-line information
Design and production schedules
Inventory data
Transaction data
Competitive information
Criticism
• In 1997 wireless techniques were unknown
• Real-time information has been the basics of
business since stone ages. The new possibilities
are not available to everyone because they need
investments and infrastructure.
• It depends on business which ones should or
can be used (b-to-b, b-to-c, SMEs etc.)
• Yet, the group members find the texts in the
book somewhat ”populistic” and non-scientific;
light reading for a common person
Thank you