REAL TIME

1. REAL TIME Niina Aaltonen Ulla Ahlfors Heikki Karjaluoto Timi Kärkkäinen

2. 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.

3. 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

4. Real Time • Definition of time has changed: • short-time thinking, which allows for ”hair-trigger” 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. Time of Computers • Computers have affected factory driven business • 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

14. 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

15. McKenna quotes Drucker: Purpose of business is to satisfy customers and states: IT allows direct interaction between consumers and producers Consumer-Producer Dialogue Producer Consumer DIALOGUE

16. 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

17. Producer vs. Consumer Value Dialogue technologies create self-service, transparent interfaces, feedback, and 24-hour interaction between customers and producers The result is an information exchange through which both consumer and producer grow and learn in the process Producer Value Chain CoreCompetencies ValueProposition Delivery andServices TargetCustomers Consumer Value Chain Producer InteractiveDialogueSystem Consumer Purchase,Use, andServiceExperience CoreCompetencies BrandValue Needs andWants • Real time technology delivers the brand experience any time, any place

18. The Intranet, Extranet, and Internet Board TheReal TimeCorporation Intranet UserGroups Alliance-Partners Beta Users TheElectronicInfrastructure Employees Management Supplier-Partners Research andData Sources Distribution-Partners PotentialCustomers Consultants PublicMarketInformationAccess Competitors GovernmentRecords Extranet ResearchCommunity • Companies will use their networks to develop the infrastructure and communities of interest necessary for sustaining customer loyalty and brand equity The Media Universities FinancialData Internet

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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

26. Sources of Real Time Information • Market experience • Customer information • Field sales information • On-line information • Design and production schedules • Inventory data • Transaction data • Competitive information

27. 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

28. Thank you