Microsoft Suffers from Device Burn Over Debut of XBox One at E3 Conference in Los Angeles

On Saturday, June 15, 2013 we noted a conversation on Google +. Someone complained about Microsoft’s recent presentations at the E3 Conference just concluded in Los Angeles. As a side note, from all we’ve read about Microsoft since June, 2012, we’ve concluded someone in Microsoft’s product marketing team, at a high level, decided it’s very important to adopt and maintain a highly polarizing, contentious position in the PC, cloud, and, now, what we’ve come to call the “small smart device” markets. Perhaps, subliminally, all of this contention will prod the market to endow Microsoft with the same rebellious disrupter profile Steve Jobs used so effectively for his product marketing plans for Apple.

One party in this conversation was clearly angry. He reported Microsoft used a PC to project the new Xbox games debuted at E3. The objection? The games will never look as good on an Xbox as they did at the conference. Someone agreed and used an expletive to add some spice to the comment.

We call all of this “device burn.” Independent Software Vendors (ISVs) get “device burn” when they use one hardware platform to promote and present solutions for a different hardware platform. Perhaps it requires a special sensitivity to anticipate the kind of market response Microsoft actually generated with this approach (if the participants in the conversation are correct). But product marketers working on big revenue generating opportunities like Xbox can’t afford to be insensitive and should have planned for this reaction. The technical chatter on Google + might be indicative of a small cut of the market for Xbox, but it is nevertheless a highly influential one.

If your business has a solution for mobile devices, it makes sense to use a mobile device platform to present the features of the solution. Hardware devices can attract a base of fans (even the Radio Shack TRS 80 had a cadre of die hard champions, and never forget the Amiga). Better to anticipate the type of chauvinistic reaction these Xbox fans had when you think about your next public announcement than make the same mistake twice.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


Distribution Channel Conflicts Can Substantially Diminish the Effectiveness of Product Marketing Strategies

Businesses with more than one product distribution channel need controls to insulate revenue plans from the negative impact of conflicts between distribution channels. Barnes & Noble is an example of a business in need of these controls. The company sells products through its website, and through an extensive network of retail locations. We found pricing on books through Barnes & Noble’s website to be a couple of dollars higher than the same item as priced on Amazon. The retail price for the same book, but purchased at one the company’s retail locations was substantially higher.

We think Barnes & Noble is missing a significant opportunity to take market share from Amazon as the result of the pricing difference between its online store and brick and mortar equivalents. If, for example, the couple of dollar difference between the cost of the same book on either Amazon or Barnes & Noble’s website is put together with a zero cost shipping option, then Barnes & Noble wins. The zero cost shipping option can be achieved by permitting the online purchaser to pick up her item at a Barnes & Noble retail location. But this option isn’t available.

In the interests of protecting the profitability of the retail sales operation, only, the option isn’t available. Retail booksellers have to operate under substantial pricing pressure on popular titles. Retail location operating costs are certainly much higher than the cost of operating the online store. But when protecting profits requires a 75% uplift against the online store price for the same item, then some sort of control is required, or else plan on losing market share.

We have a call into Barnes & Noble requesting a conversation with someone in their marketing team to learn more about the rationale for the pricing differences. Macy’s, BestBuy and others are all trying to match Amazon’s prices from the retail location. We think this is a much better approach.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


Early Stage Enterprise IT ISVs can plan on a Single Role for Head of Sales and Marketing

Enterprise IT ISvs can plan on combining responsibilities for marketing (including product marketing and marketing communications), and sales into one leadership position. In fact, it makes complete to implement this staffing strategy. The facts are that it is critically important that product marketing, communications, lead generation and sales move, almost in lock step through this early stage of growth. There is no better way to respect this requirement than to select one leader for both of these business functions.

The individual selected for this role should have first hand experience with all four sets of responsibilities. Individuals who can demonstrate past successful roles as a pitchman are usually worth consideration.

What’s special about a pitchman is that this type of sales person is very comfortable delivering presentations. Of course, marketing communications is all about branding, presentation and audience. Therefore, a pitchman who is adept at delivering presentations may also be comfortable producing them. If a sales person is identified who meets these criteria, then management should move quickly to interview and determine whether or not there is a fit, as this type of hiring opportunity seldom arises.

It is important to keep in mind that there are many types of presentations that can be suitable for pitchmen. An ability to produce high level presentations — meaning those presentations that communicate concepts, and, even, methodologies to business users who make purchase decisions — represents a skill that should be highly prized.

A hire for the position of head of sales and marketing must also be able to demonstrate an ability to deal with data for the purpose of performance analysis, etc. Usually an Excel whiz who can write macros and produce charts makes a good hire for this role.

Finally, a successful leader for these functions should be able to demonstrate past success managing teams of subordinates. Certainly, at an early stage a head of sales and marketing will be called on, personally, to at least contribute to closing business, if not close the deal him or herself. Nevertheless, as the business grows a head of sales will likely add additional staff; therefore, a good choice for the position is an individual who can demonstrate at least 10 years prior experience in this type of leadership role.

We do not advise bringing an individual into this role who may be a very strong individual contributor, but has little, if any experience leading teams. The rewards that motivate an individual contributor will not likely motivate a team leader, and vice versa.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


Innovative Technology Compensates for Clumsy Sales and Marketing

Technology innovators targeting enterprise business and other large organizations in the public and not-for-profit sectors should look to product development for substantial, defensible barriers to competitor entry. Entering today’s ultra competitive markets for traditional solutions (for example, ERP) requires highly sophisticated sales and marketing. Human resources with the right skills for these sales and marketing requirements may not be available to start ups. Nevertheless, a very keen eye for products is required to determine precisely the right markets for product development.

It’s worth spending a brief moment simply highlighting the very high level of sophistication required of successful enterprise sales personnel selling into highly competitive markets. Merely a careless harsh phrase, or a momentary lapse in judgement can push promising sales opportunities off a cliff. Please understand that in these highly competitive markets, the true driving force is not the product or service, rather, it is precisely the sales person who is the driving force for customer interest. Betting a business on sales personalities is at best a highly risky endeavor and, at worst, a strategy with a highly limited upside. This mediocre scenario plays out clearly in the contract technology consulting business where a limitless number of businesses compete to deliver human resources with the same skills to enterprise customers. In fact, it is not uncommon in this marketplace for the same IT consultant to be present to the customer by multiple consulting firms.

Better to take the time to study markets very closely to determine aspects of IT operations and processes that are broken and in sore need of repair through open ended conversations with enterprise prospects who are directly involved in these very same procedures. Building specific fixes for one or more of these aspects can pay off with the required revenue to launch a promising business. These niches do not have to be dramatic. Rather, through engaging in carefully structured conversations with industry participants information can be gathered that will illuminate probable marketplace value for a method of fixing an aspect or two of an important IT system. Better to take this approach than to be on the lookout for exceptional sales personnel who can flawlessly handle any high pressure engagement with prospects. In our experience these sales personnel are in very short supply. Engaging with a talented individual can end up to be a very costly exercise for an early stage business.

If you are embarking on a new business effort and understand the value of sampling marketplace opinion about IT operations and processes, then we would like to hear from you. Please contact Ira Michael Blonder at +1 631-673-2929 to further a discussion. You may also email Mike at imblonder@imbenterprises.com.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


Pharmaceutical Product Managers Could Still Use a Dose of Michael Porter’s Five Forces Competition Theory

We read a blog post by Dr. Jim Anderson, Product Managers Could Learn to Love Lipitor. We were interested to learn the steps that Pfizer has publicized that it will take to protect market share once its patent for Lipitor® expires. According to Dr. Anderson, these steps include:

  1. offering cards directly to current retail customers that will not expire when Pfizer’s patent expires. These cards lower out of pocket co payment expenses for these customers to $4.00 per month
  2. Directly delivering the product to retail customers. In addition, Pfizer will notify retail customers who choose to participate in the program when prescriptions need to be refilled
  3. Negotiating with Health Benefit plans to ensure that the cost of Pfizer’s drug is completely aligned with the cost of generic alternatives

The common theme that runs through each of these three steps, as we see it, is an effort to lower cost for retail customers (only) and improve access (for retail customers only) to this medication. The third step, negotiating with benefit plans, could end up benefiting Pfizer at the expense of benefit plans.

If, in fact, Pfizer has taken these three steps as Dr. Anderson contends, we think they could have done a much better job had they paid some serious attention to Dr. Michael Porter’s Five forces. As long as Pfizer has demonstrated that their production costs are lower for Lipitor than is the case for their competitors and, further, that they can retain profit margin despite keeping retail customer out of pocket costs at no more than $4.00 per month, then the card program works. Ditto for the notification program.

Nevertheless, we think they should have attempted to identify customers using their drug for unexpected conditions with an eye towards identifying higher margin markets which, if developed skillfully, would permit Pfizer to retain present pricing levels despite a pending onslaught of generic competition.

Further, we hope that Pfizer thoroughly briefed its benefit plan partners about its planned three steps well in advance of notifying the public of its plans. All three steps could end up benefiting Pfizer at the expense of its benefit plan partners — not a skillful tactic over the long run. We think that methods of defending Pfizer’s market position could be formulated that would benefit benefit plans as well as Pfizer. These latter methods deserve study in that we don’t think that Pfizer should hastily burn its bridges with benefit plans. After all, benefit plans provide very high volume conduits into the marketplace.

If you are interest in product management approaches and are grappling with products in commodity markets, then we would like to hear from you. Please contact Ira Michael Blonder at +1 631-673-2929 to further a discussion. You may also email Mike at imblonder@imbenterprises.com.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


Injecting Brand Strategy into TeleProspecting Activity

Over the last several years we’ve worked with tech innovators who have eschewed traditional marketing communications activities as the result of a larger business effort to operate under the radar. We’ve treated the rational for pursuing this larger business effort in detail in earlier posts to this blog. Nevertheless, it is worth recapping: staying under the radar buys time for tech innovators who do not want to leave a trail that may be easily pursued by bigger competitors. As well, staying under the radar opens up an opportunity to play with ready fire aim while product specifics are refined and/or market hypotheses are tested with minimal exposure of the core business brand. In sum, under the radar marketing sometimes makes lots of sense.

Teleprospecting and any other engagement tactics with prospects provide a legitimate opportunity to implement brand strategy decisions. Indeed, if the marketing communications component of the marketing plan for the business is not to go entirely into sleep mode (absolutely a not recommended approach) it is essential that the brand strategy apply to teleprospecting activities. For example, key phrases within any teleprospecting scripts should align perfectly with brand strategy. As well, objectives for teleprospecting calls should include ensuring that each substantive conversation with prospects include informing the person on the other end of the telephone call with the most important (and easily communicated) features of the brand message. Governance methods for teleprospecting activities should include verification that any/all important features of the brand message were correctly communicated during each substantive conversation with prospects.

With marketing communications established in a healthy, but limited role within the direct marketing activities for the business (including the above mentioned teleprospecting example) an overall brand strategy can continue to evolve within the natural evolution of the business. In sum, there is no need to relegate marketing communications strictly to traditional media; rather, innovative direct marketing tactics like teleprospecting can deliver impressive results for core brand strategy with little risk of exposure for tech businesses operating under the radar.

We strongly encourage out of the box thinking like opting to operate under the radar, just be sure to make a spot for each of the essential pieces of your marketing plan within your operation. When/if you opt to go overt with your new business, then the transition will deliver much stronger results of brand strategy did not take a breather during the under the radar phase.

We welcome opportunities to discuss how powerful direct marketing tactics like teleprospecting can be utilized to build brand strategy for tech innovators targeting enterprise class business targets. Please call me, Ira Michael Blonder, IMB Enterprises, Inc at +1 631-673-2929 to further a discussion.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


Value Based Pricing Should Never Equate With Expensive Pricing

Dr. Jim Anderson authors the blog, The Accidental Project Manager. I read Dr. Anderson’s post, “Confessions of a Product Killer” with interest. After all, Dr. Anderson communicated in simple phrases some foundation-level principles of product marketing, principally that overlapping products rarely make sense (though they do make sense for a multi channel marketing strategy with OEMs and manufacturers selling the same products into competitive markets) and that much less sense where pricing will work to the detriment of a business.

I would like to clarify, however, that when Dr. Anderson alludes to value pricing for products, in a marketing context as “expensive”, I see a meaningful opportunity to differentiate my view from his own. I do not see value pricing for products as a process that renders a marketing message “expensive.” In fact, and further, if the pricing appears to be “expensive” then the marketing team has not done its homework to demonstrate to the public just why a comparatively higher price is, in fact, a substantial bargain versus actual costs that would otherwise be incurred to get the same job done via existing resources or, better yet, competitive products.

Certainly it takes a substantial amount of work to determine the hard dollars and cents savings to be realized through the purchase of a product versus continuing with status quo business operations. For example, one needs to collaborate with prospects and customers to unearth the real specific costs incurred to perform the activities that will be enhanced by a new product. Further, one needs to be open to the possibility that these savings will vary from customer to customer and, thereby, opt for a complex selling strategy with, perhaps, different pricing for different applications.

Nevertheless, value based pricing, as a feature of product marketing, should never result in an “expensive” price as perceived by the market. Certainly, the price might be out of the reach of prospects who cannot afford to capture value from their purchase, but the price should be compelling and inescapable for the right market segment.

I specialize in this type of work. I actively pursue opportunities where I can help customers realize substantial value through saving precious funds that would otherwise be expended on inappropriate and ineffective product pricing methods. Please call me, Ira Michael Blonder, IMB Enterprises, Inc at +1 631-673-2929 to further a discussion about why value pricing makes the most sense for your IT product marketing efforts.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved