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September 28, 2006

Safety is a relative term...

The standards in different countries seem to be widely different...

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Applying the WTF filter to tech prose...

Mike Manuel has a best-of-breed, feature-rich and truly robust post on the (ab)use of buzzwords in high tech client-speak and pr-speak. In the spirit of adding value to this highly innovative, distributed conversation on the topic of marketing 2.0 in this new scalable social web 2.0 environment I thought it would be good to increase the high availability and disaster recovery capabilities of the consolidated global virtual repository of knowledge on this topic by posting a dynamic link to his streaming enterprise-class embedded post here.

Enjoy! And while you're at it you might also enjoy Mary's truly thought-provoking method to create corporate mission statements!

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Thriving on the edge of chaos

ants small.jpgFortune's most recent issue has a number of articles on the increasing chaos in markets, technologies customer behavior, and products. Business models that sustained companies for decades no longer work. Companies can now enter and leave markets at a moment's notice. Market disruptions happen faster and faster.

According to the article, the way to manage chaos is not by retraining managers, it's by changing people's mindset and assumptions about business, management, and most economic principles we grew up with. Successful companies are meeting the challenges of a chaotic environment with chaos - by loosening controls, getting rid of hierarchies & titles, providing full transparency into all aspects of the business and more.

What causes all this change? For starters, the fact that companies can now operate free of physical assets makes them both more flexible and vulnerable at the same time. Next is the fact that with the advent of the Internet we have witnessed a dramatic power-shift towards the consumer. Information about products and services, which used to be controlled by the seller - giving them an unfair advantage - is not only widely available, it is complemented with free flowing consumer generated content that gives the consumer the upper hand in the power play.

And the chaos is here to stay. As the article points out "the forecast for most companies is continued chaos with a chance of disaster."

The only way to survive is to allow your company to operate at the edge of chaos - something that nature knows all to well how to do. Perhaps the best training for company executives and employees will not come from business schools but from science departments who are studying complexity theory and how self-organized systems can thrive in nature -even in the worst of circumstances.

If you are starting a new company it may be easy for you to inject that right kind of culture in your company's DNA. For existing companies the only answer is change, dramatic change that is - and as scientists have found, change hurts, and people naturally resist it.

So should we get ready to see many corporate icons dissapear in the near future?

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September 27, 2006

97% of IP addresses should be blocked!

According to ReturnPath, fewer than 1% of sending IP addresses are not sending SPAM (full research brief here via revenue)

Could any self-governance guidelines from an industry association or government regulations have prevented this total distruction of email marketing? Are other popular marketing techniques going to end in the same boat?

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September 26, 2006

Another Virgin Mobile Ad...

These are hilarious...

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Virgin Mobile Customer Service ads

I guess we won't be seeing these Virgin Mobile customer service ads anytime soon :)


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The future of the Internet

The Pew Internet & American life Project just released a new report on the Internet Evolution - The Future of the Internet II (download full pdf here)..

Major predictions by 2020 include:


  • A low-cost global network will be thriving and creating new opportunities in a “flattening” world.

  • Humans will remain in charge of technology, even as more activity is automated and “smart agents” proliferate. However, a significant 42% of survey respondents were pessimistic about humans’ ability to control the technology in the future. This significant majority agreed that dangers and dependencies will grow beyond our ability to stay in charge of technology. This was one of the major surprises in the survey.

  • Virtual reality will be compelling enough to enhance worker productivity and also spawn new addiction problems.

  • Tech “refuseniks” will emerge as a cultural group characterized by their choice to live off the network. Some will do this as a benign way to limit information overload, while others will commit acts of violence and terror against technology-inspired change.

  • People will wittingly and unwittingly disclose more about themselves, gaining some benefits in the process even as they lose some privacy.

  • English will be a universal language of global communications, but other languages will not be displaced. Indeed, many felt other languages such as Mandarin, would grow in prominence.

Some of those predictions seem like they are already upon us and not 14 years out into the future.

It is especially great to see that 56% of the people who were surveyed believed in this scenario: "By 2020, this free flow of information will completely blur current national boundaries as they are replaced by city-states, corporation-based cultural groupings and/or other geographically diverse and reconfigured human organizations
tied together by global networks."

Unfortunately, many still believe that "governments and corporations will not necessarily embrace policies that will allow the network to spread to under-served populations; that serious social inequalities will persist." And according to the report "The experts and analysts also split evenly on a central question of whether the world will be a better place in 2020 due to the greater transparency of people and institutions afforded by the internet: 46% agreed that the benefits of greater transparency of organizations and individuals would outweigh the privacy costs and 49% disagreed.The experts and analysts also split evenly on a central question of whether the world will be a better place in 2020 due to the greater transparency of people and institutions afforded by the internet: 46% agreed that the benefits of greater transparency of organizations and individuals would outweigh the privacy costs and 49% disagreed."

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A few interesting upcoming events

I will be attending a few interesting events on innovation. The first is the Business Innovation Factory's second Collaborative Innovation Summit, which will be hosted by Richard Saul Wurman and Walt Mossberg. The second is the Babson University Center for Innovation & Corporate Entrepreneurship's Idea-to-profit summit, where they will be looking at the role of marketing on innovation.

Hopefully we will see you there!

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September 22, 2006

Crowdsourcing vs. community outsourcing

crowdco.jpgCrowdsourcing has been a popular term ever since it appeared in a Wired Magazine article earlier this summer. This past week, Business Week jumped on the crowdsourcing bandwagon with an article in their second issue of Inside Innovation (may require subscription - but you can find a good description of the article by Renee Hopkins Callahan over at IdeaFlow).

What is confusing about the "crowdsourcing" terminology in both articles is that they use "crowd" to refer to the "wisdom of crowds" - a term introduced a few years back by James Surowiecki to describe the fairly simple idea that large groups of people are smarter than an elite few. Many of the crowdsourcing examples used in both articles, however, like the use of iStockphoto to source images cheaply, do not rely on wisdom of crowds at all. Getting your images from iStockphoto instead of from a professional photographer is like outsourcing your photography to the public - where everyone can be a semi-pro with high end cameras below $1,000 these days. In the end you still buy your images from individual photographers. There may be a crowd, but there is no wisdom of crowds involved here.

When a company like John Fluevog Boots & Shoes asks its fans to submit and vote on new shoe designs - that is a model based on the wisdom of crowds. The wisdom of the mass is more likely to identify a winner than a select few (see also related post on when wisdom of crowds does not work).

The Business Week article spells out four rules for successful crowdsourcing - or should it be to outsource your task/process to an outside community.

First, be focused and provide clear guidelines to what you want to have done. Not really all that different from any outsourced project. If you give vague guidelines you will likely get something back that you did not expect.

Second - get your filters right. Since by outsourcing a task to a large set of people you will get a large number of ideas, you need to filter all those ideas so that you can find the gems. But why not use the wisdom of the crowd to do the filtering? IBM solicits ideas from customers and employees during two day innovation jams - which led to 37,000 ideas the last time around. They then use their own employee "crowd" to filter those ideas. As most companies do not have 140,000 employees to draw upon, they could use their fans and customers to select the best ideas. An idea could be emailed to a randomly selected set of active people for voting, rating or ranking.

The third is to tap the right crowd. Pretty obvious when you think about it. Just like you would not outsource a complex engineering problem to a company of 14 year old summer students, you need to be picky about the community you outsource your task to.

Lastly is to build your community into social networks. While this may be key to success in getting certain communities to function in the long run, enabling networks or teams to form within your community goes against the principle of the wisdom of crowds - adding to the terminology confusion.

Renee adds two more rules in her post - find ways to feed the ideas into your company's existing processes and fund the process - as incentives fuel creativity.

In the end, successfully outsourcing product innovation and other processes to outside communities comes down to a deep understanding of two factors:

  • understanding of the traditional keys to success for that particular process
  • understanding of the fundamentals to successfully create (if needed), manage and interact with communities - virtual or otherwise

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September 21, 2006

Commercial buddies and friends on MySpace

helga.jpgClickZ Experts has an interesting article on Social Network Marketing by Sean Carton. In it he lists some of the profiles of advertisers on MySpace.


It all looks pretty cheesy - surely there must be better ways to promote products to the youth market.


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The difference between perception and reality in shopping

ic185-foot-easybutton.jpgCool News has an interesting article today - Costco Confusion. In it, Tim Manners explains how what looks like a good deal at your local Costco or Sam's Club, may in fact be cheaper elsewhere.

Even though we now have the ability to compare prices across channels - something economists call "perfect information" - we still make stupid buying decisions and overpay for products. Quoting from an article on the same topic in the NYT, he says it is because "we can only focus on one thing, and that one thing tends to be a distraction. At Costco, “the very size of the product is the distraction.” If it’s that big at that price it must be a bargain, right?"

While it is easy to agree with that, another possible factor is that we tend to buy things that we did not research or even intended to buy when going on our weekly or monthly trip to Costco or Sam's. And once we're there, it is really hard to start comparative shopping from your cell phone - even if you have an Internet enabled phone with a larger screen. And besides the bulk size of the items - which indeed implies a bargain - some retailers like Staples will have signs promoting their price match policy - giving you another false sense of "security" when you buy an item.

Buying at a higher price than what might be available elsewhere happens probably more often when a buyer is making multiple purchases at once - as is the case with groceries or office supplies. When a buyer is buying a single item, say a car or a camera, they are probably more likely to go where the best bargain is.

Well, as pointed out in the article, and based on interesting research done by Hahn Lee from Stanford and Ulrike Malmemndier from UC Berkeley, this may not be the case. They studied auctions at eBay and found that "in a majority of auctions, the final price is higher than a fixed price at which the same good is available for immediate purchase on the same web page." The longer the listing period, the more overbidding occurs, and the most experience bidders are most likely to bid sub-optimally (download pdf here)! It is like gambling. The funny thing is that overbidding has been a known side-effect of auctions for a long time.

So all in all it seems like there are still many ways left in which to get an premium price for an item which is widely promoted with a lower price elsewhere...

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September 20, 2006

The lowest bidder wins...

Limbo is an online auction system - except that the lowest UNIQUE bidder wins (via Business 2.0 - not online yet). Apparently someone walked off with a Mini Cooper for $50.43, while another person got a plasma TV for $8.85.

So say you are bidding for the Sony Cybershot which ends Saturday, you text your bid in via phone. The system then responds via SMS and tells you whether there are other bids like yours or if yours is unique, whether there are people who have unique bids lower than yours. As you keep bidding, the system also gives you hints - so as of this minute there are 2 unique bids under $2.07.

Another interesting business model...

Warning - this site is very addictive!

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Blogging the coup in Thailand

While many of the traditional media outlets may be limited in what they can do, you can follow the coup in Thailand from one person's perspective on this blog (via Infoworld).

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September 18, 2006

Integrating "status skills" into your offering

pgvirtualcampus.jpgTrendwatching.com has an interesting article on the importance of integrating "status skills" into your offerings.

No matter what you market, people will consume your offering based on how the product or service makes them feel about themselves in the presence of that product or service. The authors of the article refer to this as "providing your customers and clients with status" - perhaps a little too consumer-focused, but true for all industry segments nonetheless. As the authors rightfully point out: "there is little that consumers do that isn't consciously or subconsciously influenced by a desire for recognition from family, friends, and any fellow consumers they come into contact with."

In consumer goods, providing status may be conveyed through luxury, smart-buying, or eco-friendly symbols - symbols that will often be based on "too expensive," "too scarce," "too inaccessible," or other physical and experience based status symbols that will impress others. In the B2B space, status symbols could be conveyed through smart-buying, well negotiated, achieving results - symbols that are often based on the characteristics that make for a model employee in a particular business culture, and which would likely result in career advancement or increased reputation amongst peers.

According to the authors, consumers increasingly value creativity over passive consumption - a trend that originated in the online world - where your fighting skills may not be what is most valued anymore, but perhaps the originality of your avatar, the number of friends in your tribe, or the uniqueness of your home page. They call it "status skills," and define it as follows: "In economies that increasingly depend on (and thus value) creative thinking and acting, well-known status symbols tied to owning and consuming goods and services will find worthy competition from 'STATUS SKILLS': those skills that consumers are mastering to make the most of those same goods and services, bringing them status by being good at something, and the story telling that comes with it."

Several brands are already incorporating "status skills" into their customer interactions - including
Craft, Switch, BMW, Volkswagen, Nikon, Home Depot, Lego, and many other companies which are described in the article. Another example recently covered is the open source beer, which combines a new business model with the belief that many people will want to brew their own beer and improve their reputation as beer connoisseurs through the widespread adoption of their recipe enhancements.

With sites like Flickr and YouTube, where consumers can easily show off their creativity, it shouldn't be that hard for brands to embed at least some basic "status skills" into their offerings.

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September 15, 2006

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September 14, 2006

Neanderthals lived longer than expected

The Journal of Nature reported yesterday that the Neanderthals may have lived 2000 years later than originally thought.

And all along I was convinced that you could still witness fine Neanderthal specimen in corporate life as well as in politics.

...surely, there must have been some cross-breeding.

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September 13, 2006

You cannot always control the context of your brand

(via perspective)

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Most important trends for global business in the next 5 years

mckinsey trends.jpgMcKinsey quarterly just reported (requires subscription) on a survey which they conducted with executives from around the world. In it they asked those executives to identify the top three trends that would affect global business and how those trends would impact their company's profitability.

The top three trends to affect global business over the next five years are:

  • the growing number of consumers in emerging economies
  • the shift of economic activity between and within regions
  • the greater ease of obtaining information and developing knowledge

Other noteworthy trends from the top 10 include: the increasing communication/interaction in business and social realms as a result of technological innovation (#6), shifting structures/emerging forms of corporate organization (#7), and more social backlash against business (#9).

Interestingly enough, the survey found that executives perceived the potential impact of those trends to be significantly larger on global business than on their own company's profitability - perhaps signaling a weakness in their ability to translate global trends into corporate strategy.

Another finding - perhaps predictable considering who was surveyed - is that 85% of the executives describe their business environment as more competitive than it was 5 years ago.

When asked what single factor contributes most to the accelerating pace of change in the global business environment today they identified the main reason as innovation in products, services and business models. Other interesting reasons were greater ease of obtaining information, developing knowledge (#2), and rising consumer awareness and activism (#8).


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September 12, 2006

Open source beer...what is next?

free beer.jpgIn the last issue of Wired Magazine, Larry Lessig writes about a Danish artist collective, called Superflex, which started a new brewery that produces beer based on the software industry's open source model. The beer is aptly called "Free Beer" (or maybe it's going to confuse people who are not familiar with open source, as the beer is actually not free.)

The idea is that the beer's recipe is open and licensed freely. Anyone can make improvements, but when they do they must release the changes as well. Superflex maintains a log with all the improvements at www.freebeer.org. The project seems to be off to a good start - with their first batch of beer sold-out overnight and the company now trying to close distribution deals with other breweries.

If you operate in markets with many lead users, a term coined by MIT Professor Eric Von Hippel to refer to users who tinker and modify your product to better suit their needs, then an open source business model seems to make a lot of sense. It comes down to embedding user innovation directly into your product innovation process.

But do all industries have lead users? And is that the sole criterion for potentially rolling out open source business models? Some markets clearly have them. Think about scientific instrumentation markets, where scientists in labs, universities and hospitals routinely make custom modifications to products, so that they would work better within their particular research constraints. Does that mean that an open source business model based scientific instrumentation company could survive? Assuming that a company could get over the culture shock of giving up its patent protections on product innovations, and considering that every competitor could now offer the same instrument, is there a big enough market for that to happen in a sustainable and profitable way?

What could work is to put widely used sub-assemblies in open source - think for example of a lens motion compensation system. In this case the innovation could be embedded in all sorts of products - including scientific instruments but also consumer cameras and perhaps other products. By doing this you would not only ensure a large enough pool of innovators to make it worthwhile from an innovation point of view, but you would also address the market size and differentiation issues which are probably key to make this work in a profitable way.

Yochai Benkler, quoted in the article and author of The Wealth of Networks, has it right when he says: "we are in the midst of a quite basic transformation in how we perceive the world around us and how we act, alone and in concert with others."

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September 11, 2006

[Off Topic + Personal] Remembering September 11th, 2001

Like millions of others all over the world I remember exactly where I was when the first plane hit the World Trade Center on September 11th, 2001. Fortunately, my business trip to Chicago had been canceled, and I was almost at work when the first reports of something burning in the WTC started to come in.

I spent all day watching this most horrible tragedy unfold between the conference room TV and my office computer - sharing the pain, the questions, and trying to understand the magnitude of it all, with colleagues, friends and family all over the world.

In the subsequent days, my internal thirst for basic answers became almost intolerable - driven in part by the need to have to explain what was happening to my 6 year old son, and in part by the changing attitudes of some people towards foreigners - especially those that were unfortunate enough to "look" like they were from Middle Eastern origin. Here in Boston, a woman from South America got assaulted in plain daylight at a busy intersection - mistaken for an Arab, as if that had all of a sudden become a valid reason. A friend of mine of Indian origin, got spit at in a popular suburban mall.

As I do in most cases when faced with the new and the unknown, I started reading everything I could get my hands on that would possibly help explain the "why's" behind what had happened. Of the many books that I read, three stand out as truly useful in understanding the situation, two of which were written prior to 9/11 - God Has Ninety-nine Names: Reporting from a Militant Middle East, by former New York Times reporter Judith Miller, Nine Parts of Desire: The Hidden World of Islamic Women, by former Washington Post reporter Geraldine Brooks, and Imperial Hubris: Why the West is Losing the War on Terror, by former senior CIA official Michael Scheuer.

Feeling the need to do more in fostering understanding for what had happened I also started a discussion thread with a few friends of mine - called thechasm.org. While it never materialized as a vibrant community, we had some very interesting discussions which included people from all over the world - including Palestinians, Arabs, Persians, and even an self-proclaimed IRA member.

Soon, however, it became clear that the "why's" of what had happened would not matter much longer. It is “because” of what had happened that fundamental changes started to rip through our society that would forever alter its fabric.

While some would have described the pre 9/11 American culture as a “juvenile” culture – one where everything is possible, one where failing as part of learning is acceptable, one where people are eager to explore the new and the unknown, one where differences in cultural background and social origin were not barriers, one where diversity was embraced and turned into a strength, etc. – the post 9/11 America was one that was growing up too fast – skipping some critical steps along the way. We lost almost all our friends and allies, we enabled terrorism to take hold and flourish in places where there was none before, we tolerated religious extremism in this country to interfere with government, science and education, and we allowed socio-economic, religious and cultural differences to become real barriers once again. As was the case with Katrina, those socio-economic differences proved devastating for thousands of people.

We also allowed fundamental freedoms to erode in the name of security - but are we really better off and more secure?

Now I can just hear the echo of that sales woman in the shoe section of a major department store a few years back - yelling at me when I was politely trying to prevent someone from cutting in line: "GO BACK TO YOUR COUNTRY IF YOU DON'T LIKE IT!"

The problem is that I do care, and I do love this country. Thankfully I still have a juvenile attitude about how all of this will unfold...and I still believe that things will be better in the end.

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September 8, 2006

More people unhappy with Hummer...

ronaldmchummer.jpgApparently McDonald's is giving away toy miniature Hummer cars with their happy meals, irking environmentalists and causing the Environmental Working Group and HybridCars.com to create the Ronald McHummer Sign-o-matic site (used to create the image in this post).

Responding to the widespread negative feedback to the co-promotion between McDonald's and Hummer, Bob Langert, the VP of Marketing at McDonald's wrote on the company blog - which is ironically named "open for discussion" - "the miniature Hummers are just toys, not vehicle recommendations or a source of consumer messages about natural resource conservation, greenhouse gas emissions, etc."

Talk about the misuse of a corporate blog as a communications vehicle or a marketing tool.

First off, do you think that McDonald's VP of Marketing seriously believes that Hummer is in the business of making kids happy? And do you think that he is expecting people who read his blog to believe that? A cross-promotional deal with Hummer is obviously meant to promote the car to young people. Other car manufacturers like Toyota have clearly decided that pitching cars to this age group will be beneficial in the long run. On a good corporate blog one would expect frank and honest talk - not corporate speak like this.

Matthew Fried from Enviroblog obviously thinks that the VP is either naive or disingenuous, and in doing so exposes the second misuse of McDonald's corporate blog. Apparently he left a comment on the Marketing VP's post yesterday - which still has to be approved. So much for calling the blog "Open for Discussion!"

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September 7, 2006

What happens when consumers really do not like you?

This is apparently what is happening to Hummer H2 - with a few people setting up the web site FUH2.com and hundreds of others sending in their own FUH2 pictures - which led to the creation of a poster as well as the video below (via John Winsor).

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Social marketing vs. social marketing

save the earth sm.jpgAs you probably will have noticed, the "social marketing" terminology has been popping up left and right lately.

Nedra Weinreich from Spare Change and others, who had been using "social marketing" for decades to refer to the use of marketing to address health and social issues, took issue with the new usage of the terminology - especially when Forrester launched a "Social Marketing Bootcamp" and Jupiter launched a "Social Marketing" practice. Forrester backed down and renamed their bootcamp "Social Computing Boot Camp," while Jupiter refused to rename it's practice - fueling the ongoing feud over the use of the terminology.

While it is unclear to me how good a term "social marketing" is to refer to the marketing of social issues - I disliked the new usage of the terminology from the get go.

Using "social marketing" as a catch-all category for the (not-so-new) marketing techniques which include viral marketing, word-of-mouth marketing, community marketing, consumer-generated-content-based marketing, and other social media-based marketing "techniques," not only "hypes up" the value of those methods unnecessarily - it also engenders the danger for misuse, abuse and the ultimate destruction of those marketing techniques for everyone.

Many clueless and panicky marketers, who have witnessed the decline of marketing programs like email marketing and other interrupt-based marketing methods - which incidentally they destroyed in the first place - will now jump on this latest craze and screw it all up! As usual, they will throw dollars and especially technology at the issue without understanding the underlying fundamentals and ethical considerations that allow those methods work in the first place.

You don't believe it? By now, the value of word-of-mouth marketing is being threatened by the lack of disclosure by very large and respected marketers like P&G and others. And with so much "fake" consumer-generated content going around, some people are already asking for some sort of "organic labeling" before it is too late. When it comes to "community marketing," the jury is still out as it is one of the younger hot new marketing memes - but history shows that it will only take time for some clueless marketers to latch on to that one as well and potentially spoil it for the rest of us.

I really hope that Jupiter and other industry analysts and industry associations will show leadership in this space and try to create some sort of self-governance amongst their clients and members - but somehow, and based on the descriptions of those new services, I am not so sure that is part of the agenda.

Hopefully I am wrong!

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September 6, 2006

Some cool shopping bags

Here are some interesting shopping bags...

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September 5, 2006

If we cannot predict hurricanes - how are we to predict buying behavior?

David Wolfe over at Ageless Marketing has a great post on the difficulties associated with predicting consumer behavior. Comparing the process to our inability to predict hurricane paths with the help of supercomputers he says: "I have to believe that human behavior reflects more variables and is significantly more complex than weather behavior."

The good news according to David is that customers will tell you what they want - but in order to get that information, you need to get it in "real life context" - as opposed to research environments where customers tend to behave differently than in real life.

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In Marketing death valley - the changing fundamentals

marketing death valley small.jpgIn order to kick-start the series on the changing face of marketing that was announced a few weeks back, here is list of marketing fundamentals that have profoundly changed or are in the process of going through dramatic transformations. Periodically we will tackle one of them and look at what the changes mean to the new ways of marketing.

If you think that some fundamentals are missing, add them to the comments and every now and then we will refresh this post and link to it from future posts in this series.

List of Marketing Fundamentals that have dramatically changed:

  • Role of marketing in the organization

  • Marketing strategy

  • The marketing mix

  • The marketing environment

  • Understanding buying behavior

  • Marketing research

  • Marketing metrics

  • Market segmentation

  • New product development process

  • Branding, advertising & marketing communications

  • Pricing

  • Packaging

  • Distribution

  • Services decisions

  • Sales and marketing coordination

What else is missing? Some topics, take competitive strategy as an example, are not listed as separate topics as they are part of one or more areas listed above - in this case marketing strategy, just to name one.

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September 2, 2006

Playing with the new camera in the back yard...

(click for larger picture)

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