Exploring geo-marketing as new business marketing tool

www.myCNI.com.my www.OOBEY.com

EXPLORING GEO-MARKETING AS NEW BUSINESS MARKETING TOOLCase Study, Concepts, and Debatable Ideas

Kenny OngCNI Holdings Berhad


http://www.mycni.com.my/

http://www.oobey.com/




Intro: CNI

1. 21 years old2. Core Business: MLM3. Others: Contract Manufacturing, F&B Retail,

Export/Trading, eCommerce, Shared Services4. Malaysia, Singapore, Brunei, Indonesia, India,

China, Hong Kong, Philippines, Italy, Taiwan, Oman, United States, Vietnam

5. Staff force: ± 5006. Distributors: 150,0007. Products: Consumer Goods and Services




Agenda

1. Strategic Segmentation Marketing

2. Geo-Marketing




Strategic Segmentation Marketing: Today




Marketing today…

13th April 2009

•Two Domino’s employees

•YouTube

•Apology from Domino’s after 48 hours

•1 million hits

•Twitter: questions on silence

•LinkedIn: suggestions by users in forum

BusinessWeek, May 4, 2009




What is Geo-Marketing?: Coors

• 70’s: problem of commercial distribution in US

• Build brewery and a bottling plant in strategic states, so the beer would last longer without spoiling and obtained a saving in the cost of shipping.




What is Geo-Marketing?: GfK

• How many households are located within a 60-minute radius of the furniture store?

• Create driving time zones

• Calculate and display population figures, household numbers




Types of Geo-Marketing

• Macro

• Micro

• Find You

• Find Them




The real goal of Marketing and Branding

Understanding our role in the whole scheme of things







What is the purpose of Marketing & Branding?

Ultimate Objective of Marketing: “Get more people, to buy more things, more frequently, at higher prices.”

Sergio Zyman

“Retention and Loyalty are useless if No Conversion is happening.”






“Retention and Loyalty are useless if No Conversion is happening.”

“Communication is useless if No Conversion is happening.”





What is the Objective?

1.Comm = Relationship (something like Dating)

2.Comm ≠ Media glitz 3.Comm ≠ ATL/BTL/BwTL/ArTL/FTL4.Comm ≠ CSR5.Comm = Get more people, to buy

more, more frequently, at higher prices





Business Model and Strategic Marketing

The biggest impact





The McPlaybook*

Make it easy to eat• 50% drive-thru• Meals held in one

hand

Make it easy to prepare• High Turnover• Tasks simple to learn

& repeat

Make it quick• “Fast Food”• Tests new products

for Cooking Times

Make what customers want• Prowls market for new

products• Monitored field tests

*Adapted from: Businessweek , Februrary 5th 2007





What is the Business Model?

USP

Market Discipline

Profit Model

•Google

•Tata Nano




What is the Business Model?

USP

Market Discipline

Profit Model




Business Model: Profit Model

Revenue

Cost

MarginCash Flow

Assets




Market Discipline

"They are the most innovative"

"Constantly renewing and creative"

"Always on the leading edge"

"A great deal!"

Excellent/attractive price

Minimal acquisition cost and hassle

Lowest overall cost of ownership

"A no-hassles firm"

Convenience and speed

Reliable product and service

"Exactly what I need"

Customized products

Personalized communications

"They're very responsive"

Preferential service and flexibility

Recommends what I need

"I'm very loyal to them"

Helps us to be a success

Product Leadership

OperationalExcellence

CustomerIntimacy





Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Market Disciplines









Market Disciplines




Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Market Discipline: Disciplines, Priorities, and KPIs









Alignment & Consistency








Alignment & Consistency

HP well-balanced portfolio, mass customization

Acer super lean cost structure, aggressive pricing

Apple powerful products, premium

pricing, limited range

Still Doing well in

2009/2010




Alignment & Consistency: Business Model

USP

Market Discipline

Profit Model




Introduction to Geo-Marketing

Why and How





Marketing & Growth Strategy

1.Base Retention

2.Share Gain

3.Positioning4.Adjacent Market

5.New Business

GROWTH

“Double-Digit Growth”, Michael Treacy




Marketing & Growth Strategy

1. Base Retention

2. Share Gain

3. Positioning4. Adjacent Market

5. New Business

GROWTH

“Double-Digit Growth”, Michael Treacy •Increase switching cost

•Customize products

•Preempt Defections

•Brand

•Neutralize Competitor advantages

•Superior Value

•Buy market share

•Spot growth opportunities

•Organized search

•Promising Market?

•Make or Buy?




How Markets determine Growth Strategies (1)

• Growth Rate

Growth Rate

Strategy Why?

Fast 1. Market Positioning

2. Share Gain

3. Base Retention

•Maintain market share in strategic segments•Prepare for market decline•Competitors focus too much on getting new customers

Flat 1. Base Retention

2. Share Gain (Acquisitions)

•Lose customers slower than competitors•Create scale economics, squeeze costs





• Churn RateChurn Rate

Strategy Why?

Low 1. Share Gain (Acquisitions)

2. Adjacent Markets

•Buying customer base is cheaper than own efforts•New products, old customers strategy

High 1. Base Retention

2. Share Gain

3. Adjacent Market

•Lose customers slower than competitors•Customers are always open to the best value and offer•Desperate to gain revenue

How Markets determine Growth Strategies (2)





Uses of Geo-Marketing

‘Location’ can play a role in all critical areas of business:

1.marketing

2.distribution

3.logistics

4.sales

5.finance

6.customer care

7.product development (R&D)




Geo-Marketing: What?

1. screen new potential locations

2. define an optimal long term expansion strategy

3. detect opportunities to launch marketing campaigns

4. set well-founded sales targets for all current outlets.





• Macro

• Micro

• Find You

• Find Them



Business Strategy vs. Consumer


Post Recession Trends and Implications

Industry Convergence/ Extinction

Social Networking

Green & CSR

Non-Profit/NGO increase

Increased RegulationsWhat do these mean to us?




Geo-related Trends

Back-sourcing

Bottom-up Innovation/Disruptions

Nationalism and Protectionism

Currency Wars

Mobile Devices

Power re-balancing

Mergers, Acquisitions & Divestment

Extreme Emerging Countries

Lower Middle Class rule

BRIC and PIIGS




Most Popular Question

“When will we return to the last time?”

Wrong Question




Marketing Today




Extreme Emerging Countries

• Pakistan

• Ghana

• Egypt

• Bahrain

• Lebanon

• Kenya

• Peru

• Angola

• Bangladesh

• Philippines

• Cypress

Businessweek, October 2010

1. Micro-economic Reforms

2. Consumer Growth

3. Expanding Middle Class

4. Lower Middle Class




Macro: The New World Order

Newsweek, September 26, 2010






•history •race •ethnicity •religion •culture





• Generous Welfare systems• 6 of the top 8 on Legatum

Prosperity Index • some of the world’s

highest savings rates (25 % or more),

• impressive levels of employment, education, and technological innovation.

The New HansaDenmark, Finland, Germany, Netherlands, Norway, Sweden






• Poverty rates are almost twice as high, labor participation is 10 to 20 percent lower (vs. Hansa)

• Huge government debt • Lowest birthrates• Some of the world’s oldest

populationThe Olive RepublicsBulgaria, Croatia, Greece, Italy, Kosovo, Macedonia, Montenegro, Portugal, Slovenia, Spain






• Rich in minerals, fresh water, rubber, and a variety of foodstuffs

• Suffer varying degrees of political instability.

• Trying to industrialize and diversify economies.

• Household incomes remain relatively low,

• Potential high-growth region.

The Rubber BeltCambodia, Indonesia, Laos, Malaysia, Philippines, Thailand, Vietnam






Newsweek, September 26, 2010• The Border Areas

• City-States:

– London, Paris, Singapore, Tel Aviv

• North American Alliance

• Liberalistas

• Bolivarian Republics

• Iranistan

• The New Ottomans

• Maghrebian Belt

• Middle Kingdom

• Stand-Alones:• Brazil, France,

Greater India, Japan, South Korea, Switzerland

• Russian Empire• The Wild East• Greater Arabia• South African Empire• Sub-Saharan Africa• Lucky Countries




Side Note: Disruptive Innovation

Per

form

ance

Time

Performance that customers

can absorb or utilizePerformance of present te

chnology driven

by sustaining technological improvements

New Performance trajectory

*The Innovator’s Solution, Clayton M. Christensen





• begin in unattractive or overlooked markets• high-quality, affordable alternatives• more convenient• less centralized locations• increasingly lower prices• for less complicated cases• less specialized training to deliver

Also known as ‘Downwards Innovation’






Examples of Disruptive Innovation in serving the “Under-served” markets:

1. Angioplasty

2. LASIK

3. Home Pregnancy Kit

4. MinuteClinic - diagnoses < 20 conditions

5. Sonosite – portable ultrasound machine

6. Quantum Dot – self diagnosis of complicated conditions such as prostate cancer






Abi

lity

to D

iagn

ose

and

Tre

at

General Hospital Inpatient

*Will Disruptive Innovations Transform Healthcare, 19 August 2001, John W. Kenagy, MD

Specialty Hospital Inpatient

MD Outpatient

Non MD O

utpatient

Alternative Care




Geo-Marketing: Mc Donald’s Menu

Product Variation:– 80% Global, 20% Local– home-style meals (Boston Market) – burritos (Chipotle)

– coffee (McCafé) – DVD rentals (Redbox) – Premium menu items (snack wraps, sweet tea

Frappes)




Geo-Marketing: Mc Donald’s Design




Geo-Marketing: Mc Donald’s Design

• $2.4 billion to redo at least 400 domestic outposts, refurbish 1,600 restaurants abroad, and build another 1,000

• Corporate design leader for each operating regions; that person contracts with a regional designer who can figure out what other local design elements might make a space feel individual and authentic

• Solicits ideas from leading design firms such as Ideo, Rockwell Strategic, and boutique firms around the globe.





• Macro

• Micro

• Find You

• Find Them




Geo-Marketing – How?

USP(How do I

position my organization?)

Trends

Internal

Competitor

Customer




Geo-Marketing: Where?

1. Where do my customers live, and where do they buy?

2. Where are my competitors?

3. Where are my marketing efforts invested?

4. Where are my opportunities? i.e. Where should I put my next Point of Sale?

5. Where are my sales representatives?

6. To what advertising medium do my customers respond? Billboards? Mobile coupons? Where were they when exposed to my campaign?

7. Are products sold better in particular zones? Where and why?




How? – Consumer Behavior

Some characteristics of consumer behavior are closely related to the:

• place where they live,

• climate,

• location and culture




How? – TRENDS & External Impacts

External impacts of consumer behavior are:• environment• socio economic• trade balance• energy• telecommunications• languages• religions• transportation




How? – Competition

1. Study similar companies and saturation that eventually end up eliminated each other.

2. Identify growth options where before there were normal distribution strategies,

3. Avoid errors leading to lost money and time.




Technology and Geo-Marketing

Why it’s possible





Which Company?

American Customer Satisfaction Index (ACSI) • 64 out of100-point scale: lower than IRS (Tax)• 2nd last among 30 companies surveyed• Lowest 5% among 223 companies surveyed• Bottom 5% of all measured private sector

companies

• 500 million customers

2010 American Customer Satisfaction Index (ACSI) E-Business Report




Popularly Unpopular

Popularity

≠

Affection




Geo-Marketing Apps: Enterprise

• MapInfo

• ArcGIS (ESRI)

• RegioGraph (GfK)

• Mapwindow

• JangoMail

• DIVA

• GRASS (Linux, Windows)

• MÖBIUS

• SimpleGeo




Geo-Marketing Apps: Public

• Google Map

• Google Earth

• Google Business Listings

• Google Analytics

• Facebook

• Twitter

• iPhone

• Android

• Foursquare

• Yahoo





• Macro

• Micro

• Find You

• Find Them




Find You…

Technology

Self Targeting

Location+

Incentive+

Call to Action

=




Location-based Social Media




Case Study: Placecast & Geo-Fencing

• Geo-fencing — the act of drawing an invisible boundary around a given location and serving an opt-in SMS message when users enter boundary




Case Study: O2, Starbucks, L’Oreal

• Six-month trial • Placecast’s geo-

fencing technology • 1,500 areas

offering deals.• Opt-in• Gender, age and

general interests. • Receive Special

deals




Case Study: McDonald’s, Facebook

• Starting June 2010

• Check in while featuring one of the products, such as a Big Mac, in their activity feed

• Geo-couponing




Case Study: Google, iPhone, Android

• Location-aware mobile display ads

• Incorporate maps for click-to-call

• Ad-unit: expands into a full ad that includes a map overlay with the business pinned on a Google Map

• Calls-to-action: “get directions” and “click-to-call.”




Case Study: Mobile, Google

Mobile Coupons And Google Local Business Listings




Case Study: Google Map, Listings

Google Local Business Listings




Case Study: Foursquare

• Ensure your business is listed

• Let your customers know you are on Foursquare

• Use the ‘Foursquare specials’ feature (Competitor)

• Give discounts• Foursquare analytics




Case Study: JoseGoes.com

• Displays special offers including discounts, coupons and events

• Join “The Club” to receive special offers via email

• Search by city or by restaurant name

• Consumers self-select by location





• Macro

• Micro

• Find You

• Find Them




Find Them…

Technology

Target

Location+

Incentive+

Call to Action

=

Statistics Database+




Case Study: JangoMail, Google Maps

• Determine the location of recipient activity on Opens, Clicks and Web Page Hits

• Segment a recipient list by location or by a specific distance from a particular zip code

• Send Personalized and localized email message.




Case Study: Mobius

• Point-Of-Sale Planner (POS Planner)

• GIS, cartography and reporting

• Customer behaviour model

• Sector specific, outlet- and environment-related indicators




Case Study: GfK

• GfK GeoMarketing, January, 2009 - Purchasing Power USA




Case Study: GfK

• How many households are located within a 60-minute radius of the furniture store?

• Create driving time zones

• Calculate and display population figures, household numbers




Case Study: Real Estate, GIS, CRM

• Take customer list over the past three or four years, and upload into the GIS and map to specific neighborhoods

• New discovery and update look and feel of ad to appeal more

• Customized ‘neighborhood’, then overlay on underlying data




Case Study: SimpleGeo, SpotRank

• Uses real-time location data from all GPS-aware devices to map out location trends for “Spots

• E.g: highlights location request frequency at 2pm on a Saturday in San Francisco




End Notes





Alignment & Consistency: Business Model

USP

Market Discipline

Profit Model




“…in the past 18 months, we have heard that profit is more important than revenue,

quality is more important that profit, people are more important than profit,

customers are more important than our people, big customers are more important than small customers, and that growth is the key to our success. No wonder our

performance is inconsistent"CEO, Anonymous





Ultimate Objective of Marketing: “Get more people, to buy more things, more frequently, at higher prices.”

Sergio Zyman




Thank You.

soft copy of slides: http://totallyunrelatedrandomanddebatable.

blogspot.com/

Exploring geo-marketing as new business marketing tool

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