At the time (mid 2000’s) it sounds like a plot from one of those classic animated Christmas movies I remember seeing on TV growing up. In a world often obsessed with focusing more on our differences and diversity where we have appointed times to celebrate sub segments of our population such as (Women’s History Month, or Black History Month), how could anyone then start a war on Christmas? Yet here we stood on the brink of a really good plot for a classic film:
Little Johnnie walks into a Walmart and asks “Where’s Santa”, his dad perplexed has to explain the difference between holidays and Christmas. Little Susie walks into a Sears and sees people bitterly arguing over the fact they wished somebody a “Happy Holidays”. Would they have to cancel Christmas? Would little Johnnie and Susie have to watch as everyone around them spiraled down into an angry debate between political correctness and religious indignation?
Those days have certainly cooled down now, from the high points in the tension in 2005-2007. There was one shining light in the business world who somehow managed to stay above the bickering with their own tradition: Starbucks.
Red Cup Days
Starbucks began this tradition in 1997, by converting from their traditional iconic white cups to red ones for the holidays. When this PR disaster hit companies Starbucks simply relied on their traditional cups and marketed “Red Cup Days” removing any hint on which way they leaned in the Christmas vs. Holidays war. At a time when bitterness was fast overtaking a holiday season that is supposed to be bringing people joy, Starbucks offered a reprieve.
Red Cup Days Now
I walked into Starbucks yesterday and say “Christmas Blend” and “Holiday Blend”, to be honest my first thought was I may have to buy both and see which I like better. Curious I wanted to know what the difference was, imagine my surprise at my naivety as a consumer to be told by a worker at Barnes & Noble that was selling the coffee that they’re the same. A look on Starbucks website seems to back it up as all the characteristics and the descriptors are remarkably similar:
Holiday Blend
From Latin America come bright, sparkling beans. Asia/Pacific beans provide their own smooth, full-bodied taste. And Aged Sumatran coffees – carefully held for 3 to 5 years – complete the blend with its signature spicy flavor.
Christmas Blend
Our Christmas Blend is sweet and spicy, with a flavor derived from bright, sparkling Latin American coffees and smooth, full-bodied Asia/Pacific beans. But it’s the Aged Sumatran beans, carefully held for 3 to 5 years before roasting, that give it that delicious signature spicy taste.
My take
It’s funny while I praise Starbucks for sidestepping this huge issue effectively through their marketing, that I would continue to praise them as they venture into this warfront now. The difference now is the mood and sentiment, in 2005 when this war was really going strong the economy seemed to be doing well, and had a looming war between conservative idealogy and liberals. Now in 2009 the focus has shifted to major issues facing the country and the economy. It was a safe time to create a “his” and “her” type lines for the product allowing those who practice or embrace Christmas to have their time, while not excluding those with separate beliefs.
“The term “Black Friday” originated in Philadelphia in reference to the heavy traffic on that day (see Origin of the name “Black Friday” below). More recently, merchants and the media have used it instead to refer to the beginning of the period in which retailers go from being in the red (i.e., posting a loss on the books) to being in the black (i.e., turning a profit).”
What else can Black Friday teach us outside of retail dynamics and health of the general marketplace? Can the deals that can be had on specific goods show us a trend in the marketplace?
Deals That Point to Irrelevance
One of the deals pointed out as a screaming deal were the $59.99 GPS unit from TomTom that Walmart had advertised. While these were quite a hot seller, and terrific deal for customers what did this deal really signify about the long term attractiveness of this category?
Seeing a TomTom GPS at such a low cost was a surprise this is a move I’d have expected from an also ran competitor not one of the two market leaders. This move follows news of Google’s map and turn by turn being added to the Android mobile phone platform, as well as aggressive movement from Apple into this field via the iPhone.
We’re likely seeing the slow extinction of the handheld GPS due to convergence with other products specifically phones.
Deals That Point to Maturity
LCD televisions so cheap they make and Xbox360 seem expensive? Yes, we saw those on Black Friday $248 for a 32in LCD or $450 for a 40in display. These all point towards the movement into the mainstream that is the flat panel monitor. I can remember two years ago when $1000 for a 42in DLP TV was a screaming deal. Now the future of DLP seems grim since its most attractive competitive advantage was price.
In addition we’ve also seen a $78 Blu Ray player. This along with the price point for the tvs is showing that high definition has arrived for your average consumer.
We’re likely going to see the complete transition away from CRTs and DLP tvs, alongside Blu Ray grabbing a increasingly larger share of the DVD business.
Deals That Point to Future Categories
While we could more accurately point to last Black Friday as the rise of the Netbook this holiday season we’re seeing increasing inroads in this category. With the Netbook hitting $200 a price point I’d expect from a higher end appliance not a low end computer, this category is really starting to drive share in the PC space.
The question OEMs increasingly have to ask themselves though is how do I trade a $600-1000 purchase for a $200 one and still make money? Is this something that can be accomplished by scale? Maybe sell it as “your second pc”? Or do you partner with service providers as some are doing to provide a “connected anywhere” experience that can be monetized.
It will be interesting to see, but I see Netbooks as a driver for lower cost wireless data services, and increasingly will change how we think about mobile computing.
Conclusion
We’ll see how these predictions end up but it’s almost as fun to look at what these sales could mean as it is to see what great deals exist. It is important to note the examples and what they can mean to positioning for your product in the retail space and holiday shopping.
Verizon has come out swinging at AT&T over the extent and availability of their 3G network in response AT&T has solidified a response with actor Luke Wilson as their spokesperson.
The First Spot
embedded by Embedded Video
YouTube Direkt
The Second Spot
embedded by Embedded Video
YouTube Direkt
Great use of the TV Commercial
Both spots for AT&T were 30 second commercials as opposed to the longer 1 minute spots Verizon has been running. The tactic AT&T is using is running both spots within the same advertisement break.
By sandwiching a couple of commercials in-between the two AT&T ads they give the impression that Luke Wilson had continued to cover the map with the post cards during the interlude. This type of storytelling really breaks down the fourth wall on the medium and acknowledges the presence of the audience.
AT&T Had to Answer
In addition to the Droid does ads Verizon has been running a series of holiday related ads that show AT&Ts 3G coverage in a poor light. AT&T has had some perceived issues with service mainly due to the strain the unparalleled success the iPhone has achieved has placed on their network. That being said, AT&T felt very strongly that Verizon’s ads on their coverage were missleading so much so they’ve actually filed a lawsuit against Verizon.
Rating the Commercial
I really like the testimonial from Luke Wilson, he comes off as a very down to earth celebrity and is very like-able. The commercial spots really played up this persona as well by having Luke’s dialogue interject a couple personal connections to some of the locations.
The use of the postcard gimmick was also really ingenious. Looking at a coverage map is a rather detached way of making a phone purchase decision. Putting it into perspective that all these places which are important to you, whether they are places where your family and friends are located or a vacation destination, drives a more human connection.
Conclusion
Verizon’s been on a roll with Droid and their aggressive attacks on AT&T, but these ads are a terrific response from AT&T. If the rest of this campaign features this kind of humor and ability to connect with the audience I think Verizon will have a fight on their hands.
I’ve been seeing huge movement towards cloud based services and I cannot begin to express how much this scares me as a consumer and why its even more concerning for the enterprise as a product offering. This post is my take on a discussion currently going on at the economist between a Microsoft Exec and the CEO of Salesforce.com.
First the Microsoft Definition:
• Private Cloud: An internal service-oriented environment optimized for performance and cost that is deployed inside a customer’s datacenter. Powered by packaged server products including Windows Server and System Center family of products, private cloud provides compatibility with existing applications.
• Public Cloud: Provided by service providers, public cloud offers customers the ability to deploy and consume services. In this category, Azure™ is a highly scalable services platform providing pay–as-you-go flexibility delivered from Microsoft’s datacenters.
Second the Salesforce Definition:
Cloud computing is a better way to run your business. Instead of running your apps yourself, they run on a shared data center. When you use any app that runs in the cloud, you just log in, customize it, and start using it. That’s the power of cloud computing.
Where I Stand on the Subject
I am diametrically opposed to what Microsoft calls the Public Cloud (which is just Salesforce’s definition of cloud computing) for the Enterprise except in the most trivial of applications. I’m more lenient of the cloud being used in consumer applications although I’m still opposed to it being main medium of storing my data, and being used to house personal information that I feel is sensitive. Additionally, anything I require substantial uptime for my personal use which I can conceivably get minus the cloud I’m in favor of.
What’s the Big Deal for Consumers?
Privacy – While there are some protections in place should your personal information be violated that doesn’t protect you from the fallout and the amount of time that needs to be spent cleaning up from a privacy violation.
Uptime – When you have everything on a computer its always available to you unless something is severely wrong with your pc (which usually would also ruin the cloud based service if you only have 1 machine anyways). The problem with the cloud is you’re on someone else’s schedule if they decide to take the site down for maintenance you’re out of luck. Also considering things like denial-of-service attacks or network outages you are almost assured to run into uptime issues at some point.
Speed – You can’t access the cloud at the speeds you can approach on your harddrive, while that may not be an issue for emails or word processing it does become an issue with things like High Definition Movies or large quantities of music and photos.
Data Integrity – If you don’t keep local copies you’re a slave to the retention policies of the service provider. Recent incidents like the SideKick fiasco create a clear concern of what can happen when you trust others to provide data backup and protection on your behalf.
What’s the Big Deal for the Enterprise?
Trade Secrets/Security – This is my favorite villain in this argument. If you’re accessing a service outside of your firewall you’re relying on someone else to implement an effective security policy. The problem with trade secrets is once they leak out you have little to no recourse on anyone who makes use of that information, sure you could sue your provider (unless your license agreement states otherwise) but that’s not going to get the genie back in the bottle.
Uptime – I’ve seen a service outage of a company that pulls in $200 million in revenues a year and it’s not fun. Doing the math their being down for 3 hours cost the company in all likelihood $300,000 in revenues. When you see numbers like that paying for your own servers and redundancy to secure uptime becomes a lot less costly.
Bandwidth Costs – Consider this if you move everything into the cloud just how much bandwidth would a company of 200 be generating? I don’t have the figures off the top of my head but this could be a sizeable cost and if you consider depreciating your in house assets you might find the variable cost of bandwidth usage exceeds the cost of the capital expenditures on equipment.
Conflict of Interest – Does the provider have the same goals as your enterprise? Having a always on service means there is a time when things need to be shutdown and cleaned up. While going to a 24 hour Wal-Mart at 3am you might notice restocking, you may see less checkers etc, and that’s ok because after all who is insane enough to go to Wal-Mart at 3am? Unfortunately, if you’re a successful cloud based service provider you have customers around the world meaning its always prime time somewhere. The worst possible scenario is a planned disruption in service that happens during your uptime as a business, and this is a likely occurrence with cloud services (see gmail and google docs going down during the West Coast prime time for 2 days in September).
Data Integrity – If you’re a business you have a disaster recovery plan/backup system (if not likely you won’t be in business very much longer). Here’s the question though, what is your cloud computing service provider’s backup system? I’m guessing most people can’t answer that question, and if you can its likely you’ve never seen it in action. This is a liability for a business that can’t be ignored and could even have legal implications depending on your business and what is cloud-sourced.
Control/Business Alignment – The great thing about having an in-house tool or hosted service is over time you can customize it to better fit your needs. Before jumping on the cloud bandwagon ask yourself if the hosted service you’re looking at is flexible enough to meet your needs.
The Private Cloud?
This is a product I can get behind it has the benefits people are looking for from cloud based services, but is controlled by the enterprise. I have always appreciated the server-side argument having dumb terminals that consume server based services but don’t store locally (provided the company has a solid IT staff and sufficient redundancy built in). The private cloud just expands upon this strategy by enable greater scalability for the private enterprise.
Not Without Benefits
I come across a little bit as one of those people up in the hills with a shotgun fighting the future I’m sure, but I don’t dispute that there are some attractive benefits to cloud computing. Things like scalability, remote access, cost reductions and simplifying your company’s IT environment. I also won’t dispute that cloud computing isn’t going to have a dramatic impact on the market-place; it has its market niche and can be a valuable service to some businesses.
Conclusion
In the end though I’m just not behind the transition to public cloud computing, put simply passing all my needs over to someone else is a bad experience. While I’m a firm believer on focusing on your strengths and bringing people in who can address your weaknesses in a corporation I do believe having people accountable within the organization is important to maintaining a solid foundation for the business.
Outsourcing is a reality and in some instances it does make sense, but whenever something ties directly into your core strategic strengths and product offering be very wary about how much you do outsource. The problem with cloud based services is they have a tendency to directly impact those strengths and offering and as such require heavy consideration before implementation.
Apple’s become quite the fixture in my blog lately much to my chagrin. Here goes another article about them, and all I can say is when you brand products this well it’s deserved when people are talking about.
What is Blue Ocean Branding?
I’m stepping a bit outside of what was intended in the Blue Ocean strategic product management philosophies outlined by W. Chan Kim and Renee Mauborgne. Their focuses were more on how an all up approach to creating a product that moved from a heavily fought area into an area where competitors had missed a market segment wherein their product with a unique value proposition could allow them to capture this segment.
My idea on Blue Ocean Branding is taking an existing product without changing it or with relatively minor changes refocusing the branding and messaging at a blue ocean space. This is not the same as what they’ve discussed previously and some may call it a “tacked-on approach” but we’ll see what value this kind of branding has given the example listed below.
Launching of the iPod Touch
When the Touch was released in September of 2007 it was focused primarily on updating the device look and feel for a music player, along with a secondary focus on a mobile browser and ability to receive content on the go with YouTube integration and iTunes Wi-Fi Music store.
Playing on the strengths of the iPhone the iPod Touch offered much of the value of the iPhone minus the cellular connection and AT&T service.
Personal Music Player Market Trends
This category has come under increased pressure due to 3 things:
• Apple’s previous success and large installed player base that is content with the product they already have.
• Zune and other lower cost device manufacturers trying to grab market-share placing downward pricing pressure on the entire category
• Phones and Mobile Internet Devices making huge inroads into this space
Where would the iPod Touch go?
The building blocks for this branding shift were available in the product from the day the iPod Touch was announced. but the ecosystem wasn’t in place until a full year after the launch.
Where was the iPod Touch going to go as the mp3 player was coming under attack? Into gaming.
Take a look at the current product pillars:
A great iPod
A great pocket computer
A great portable game player
There is hardly even a mention of the music player anymore in their marketing text. People already know the iPod plays music, the brand is synonymous with it in-fact.
Take a look into how they’re even defining iPod now:
iPod touch is music, movies, games, and apps. All at your fingertips.
Music may come first but its only one of four software/content offerings now.
iPod Touch as a Blue Ocean Branding Example
The product hasn’t changed since day one. The ecosystem built itself up around the product (I’m sure with more than a little bit of encouragement from Apple), but I really think the direction they went wasn’t a planned Blue Ocean strategy for this product. The focus and decision making has always been leading out with the phone but with 20 million iPod touches sold that’s too big of a market not to tap into.
In this case Apple looked around and had to wonder we have this shrinking product space, we have a device with some mobile computing power and capabilities where should we go with this? As the AppStore became attractive and developers rushed to be a part of this space they were given an opportunity to transition into a new space. This move by Apple created a blue ocean not just in the world of music players but also in the world of mobile gaming.
Conclusion
While there are some assumptions in this post (mainly around product planning of the iPod Touch) I do think this is a valid example of what I’m trying to get at. Unfortunately much like in the Blue Ocean Strategy book it is extremely hard to validate the assumption outside of the examples of reviewing publically available information (which I provided a link to above).
In this case, with minimal investment of time on product management, or new product design Apple has unlocked a new cash cow. By keeping the iPod Touch specs in-line with the iPhone from day one this opportunity was created.