Strategic Marketing at Cisco Dean Eyers Senior Director - Strategic Marketing SVPMA - April 2nd 2008 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 1 Agenda Who? Strategic Marketing @ Cisco Customer & Custom Research Market and Competitive A Bigger Picture Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 2 My Background Dataquest Europe – Inquiry Desk – Mobile Analyst – European Telecoms Director Gartner – GVP Communications & Verticals Research – Technology Vendors - Product Manager Cisco – Competitive Leadership Team – Strategic Marketing - Market & Competitive Intelligence Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 3 Product Management/Marketing Product Manager ”…ultimately responsible for product’s success or failure” ”…discover a product that is useful, usable and feasible” Product Marketing ” messaging & positioning, pricing, promotions, customer acquisition, influencer marketing, sales & channel education” …Must have ”knowledge of the user, the technology, the domain and the market” Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 4 OK, but… Observations from Gartner & Cisco That’s a lot of Knowledge! Products don’t exist in a vaccuum Product Managers don’t run LOBs… …but they do have a key contribution beyond their direct responsibilities ”Together we are stronger than we can ever be apart” Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 5 Company Vision Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 6 Customer Focus—Market Segments Commercial Service Provider Enterprise Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Consumer Cisco Confidential 7 STRATEGY VISION Market Transitions… Customer Driven Network Changes Way We Work / Live / Play / Learn Innovation… Build / Buy / Partner Collaborate Technology and Business Architecture Network Becomes the Platform… IIN Cross Functional Teamwork / Prioritization All Forms Communication / IT Into Network EXECUTION #1 Product Leadership Enabling New… Business Models Productivity Entertainment Lead Layers 1-7 Convergence… Leader In All Customer Segments Quad Play Everywhere… UC Leader in Collaboration / Web 2.0 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 8 Collaboration: Characteristics Insights Network The ofExtends AInsights StrongExternally Insights Network Network Customers Analysts Business Councils BD Finance CMO Solutions Marketing CMO Linksys Ubiquitous, Open, Segment Marketing Fast, Responsive, Collaborative BU Product Strategic Scientific Management Multiple Forms of Sharing, Marketing Atlanta Joint Work, Creates Acuity, Theater IBSG EMTG BI, MI Adaptable, IT Enabled WebX Teams WW Field Ops Theater Planning and Ops Partners WW Channels CA Marketing Strategic Allliances Universities Think Tanks Consultants Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 9 Agenda Who? Strategic Marketing @ Cisco Customer & Custom Research Market and Competitive A Bigger Picture Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 10 Strategic Marketing: Vision and Mission Vision: Mission: Changing the Way We Plan, Target, Compete and Execute Deliver Unique Insight About Markets, Customers and Competitors Which Drives Positive Impact to Cisco, Its Customers and Partners Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 11 Positioning and Focus Strategy Focus Corporate and Segment Strategy Non-CMO Client Focus CMO Vision/ Strategy Brand Product Positioning (CDO 4Ps) and Shape Support Cisco SMO Target Overall Smart Selling (Sales) Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. CMO Client Focus Market Mix Optimization Execution Focus Cisco Confidential Shape and Analysis Support Cisco Marketing 12 Strategic Marketing Capabilities Capabilities Coverage Custom Research Solution/ Technology Global Market View (GMV) Market Analysis Secondary Research Integrated Market View Competitive Intelligence Enterprise Service Provider Commercial Database Analysis Database Strategy Customer Intelligence Consumer Data Quality/ Standards/Reporting Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 13 Tools & Resources Competitive Portal Wikis Research Portal Competitive Dashboard Global Market View (GMV) Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 14 Strategic Marketing Evolution Data Analysis Insight and Impact Core Focus Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 15 Agenda Who? Strategic Marketing @ Cisco Customer & Custom Research Market and Competitive A Bigger Picture Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 16 Customer Intelligence Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 17 Role of Customer/Business Intelligence • Delivers incremental value derived from data-driven models applied to marketing programs • Provides insights and directions for market planning and execution • Ensures customer data quality for marketing execution and reporting Applied cluster analyses Revenue generating models Data Quality Management US China UK Russia Italy Ind ia Brazil Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 18 Wireless Propensity Models Challenge Identify customers with high propensity to up sell or cross sell wireless technology in the next two quarters. Action Developed Propensity to Up Sell or Cross Sell Wireless statistical model. Deployed probabilities/scores. Results Purchase Rate Increased 2.4 Times! Deal Size Increased 3.4 Times! Generated $XXM in Additional Bookings! Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 19 Custom Research Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 20 SMO Custom Market Research Capabilities Product Research Brand Research – Identity Research (Naming, Audio, Logo) – Positioning – Brand Health, Brand Image, Brand Stretch – Brand Choice Drivers Communications Research – Messaging – Advertising (All media) Ideation – Creative/Product Concept Exploration Channel Research Presentation_ID Reseller Segmentation – Channel market landscape Cisco Confidential Concept Testing Usage Product Positioning Price/Feature Optimization Price Elasticity Industrial Design Targeting – – – Market Segmentation Psychographics Buying Behavior Other Capabilities – – © 2008 Cisco Systems, Inc. All rights reserved. – – – – – – – ZMET (metaphor elicitation) Ethnography 21 Which is the preferred consumer router design? (Europe) Preferred Neutral Negative “chunky” “kitchen scales” “80’s hi-fi” “solid” “powerful” “old-fashioned” “tidy” “sleek” “futuristic” “iPod-like” “modern” “why does it have a handle?” “fun” “clever” “cheap-looking” Presentation_ID “retro” “compact” “might tip over” © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential “sophisticated” “alarm clock” “too much like old modems” “toilet brush” “bulky” “ugly” 22 Price Elasticity Findings The price-demand relationship for products in the AP space is not linear. Interactions with other products and price points. Probable “uncertainty” among many people about the relationship between some key features and price. Typical plot (below) shows that when products are priced at points that are not close to competitive price points or are otherwise differentiated (e.g., lowest price), share tends to be higher. Price v. Share All Products 16.0 Share 14.0 12.0 10.0 3Com OCG 8.0 6.0 4.0 2.0 0.0 $0 $100 Linksys WAP55AG Cisco AP1121G Cisco AP1231G $200 $300 $400 $500 $600 $700 $800 All Respondents Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 23 Agenda Who? Strategic Marketing @ Cisco Customer & Custom Research Market and Competitive A Bigger Picture Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 24 Market & Competitive Capabilities Capabilities Coverage War Room Market Analysis Competitive Analysis Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential Market Assessment Market Sizing Competitive Deal Support Defining Addressable Markets Competitor Review Market Pricing Analysis Competitor Messaging Analysis Competitive Solution Reviews Competitor Technology Reviews Competitor Planning Market / Competitor Threat Assessment Competitive Market Modelling Quarterly Market Review Annual Market Review Competitive / Market Training Who, What , How & Playbooks 25 Market Intelligence Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 26 Global Market View model Addressed by Technology by Theatre (Phase 1) + Inputs by Vertical by Company Size: Addressed by Technology by Country by Vertical by Size Segment (Phase 2): Industry Sales Investment (Fixed Cap. Formation) External View By Vertical Comm. Spend. Etc. Prod. Categories Addressed by tech. by theatre Cisco Bookings 1000+ 250-299 Routing 20-249 Size Class Employment Industry Value-Add Ger. Can. China Switching 1-19 IPC Etc. Fin. Gov. Man. Edu. Etc. Verticals Input Sales IT Spend Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. D&B Data Cisco Confidential 27 Global Market View (GMV) Forecasts FY07-11 CAGR 35% Addressed technologies Adjacent technologies Wireless 30% ANS Wireless 25% IPTV 20% Security 15% Routing Security Storage Networking 10% Switching Optical Cable 5% Optical U C UC 0% 0 5 10 15 20 25 30 US$B Source: Cisco Global Market View, October 2007 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 29 Competitive Intelligence Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 30 Competitive Leadership Portal Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 31 Information by Competitor Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 32 Information by Technology Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 33 Competitive Dashboard Tool Click for technology market competitive landscape, facts and expert opinions Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 34 Find Information by Architecture Competitive Dashboard Tool Score and Comments on architecture components, ability to compare to “best of breed” solution Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 35 War Room Analysis of Front-Line Competitive Pressures Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 37 Competitive Categories Reflect Evolving Market Demands and Cisco Response IT Arbiters Network Solutions Network Products Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 39 Agenda Who? Strategic Marketing @ Cisco Customer & Custom Research Market and Competitive A Bigger Picture Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 40 SMO Capabilities ? Tactical Strategic Valuable Insights Consulting Experience Market/Segment Expertise Predictive Data Mining Custom Research Technology/ Solutions Expertise Competitive Analysis Opportunity Analysis and Forecasting Syndicated and Proprietary Market Data Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 41 SMO Capabilities Best options in the s/w business? Tactical Strategic Valuable Insights Consulting Experience Market/Segment Expertise Predictive Data Mining Custom Research Technology/ Solutions Expertise Competitive Analysis Opportunity Analysis and Forecasting Syndicated and Proprietary Market Data Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 42 SMO Capabilities How Do We Compete Against Juniper In North America? Customers I Should Prioritize? What are the underserved opportunities we can address to increase revenues? Features/ Price For Optimization? Accurately Forecast for China? Tactical Best Options in the S/W Business? Strategic Valuable Insights Consulting Experience Market/Segment Expertise Predictive Data Mining Custom Research Technology/ Solutions Expertise Competitive Analysis Opportunity Analysis and Forecasting Syndicated and Proprietary Market Data Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 43 Looking at the Big Picture helps to identify what sort of animal you are dealing with… Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 44 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 45