Archive for category Marketing

My iPad thoughts

All the media craziness aside, I’ve been thinking a lot about the iPad in the last few weeks. I’ve naturally been trying to make up my mind whether I actually need one and if I decide that I do, which one I should get. I’ve also observed how this particular device starts to live up its hype by attracting people from all industries and all verticals.

At work I’ve seen how our customers (airlines) start asking whether we will make our applications available for the iPad in their cockpits and when. They, as other chosen companies in every other realm of activity, want to be innovators and follow Steve Jobs’ lead to change the future of portable computing.

This is the very first time I saw an iPad

I’m also constantly inquired by friends and family about the reality of the iPad: do I really need it? is it really THAT awesome? I always have to say first that I’m biased because of my long-time affiliation to the Apple fanboy population.

That made me realize that there’s a lot of confusion in consumers. Some people are wondering if they should give up buying a MacBook to get an iPad instead. Others don’t see the point in spending around 799 bucks in an iPad if for an extra 200 bucks they can get a white MacBook. In the midst of all this confusion and conflicting points of view, here are some arguments I’ve been using after reading a lot of and playing one week with the device:

  • The iPad is not supposed to be a substitution of a laptop (for the majority of users). The iPad works great to consume content (movies, music, news, web, YouTube, pictures, games) but is definitely not designed to generate content. This obeys to Apple’s goal to own strong and profitable media channels like iTunes and now the iBook and App Stores.
  • This device is not revolutionary because it’s not changing the status quo in an existing category. It was not created to compete with other tablets or with NetBooks or with Smartphones. It’s a new category, pretty much like what the iPod was in the year 2000.
  • For me, the iPad works best in specific locations like the kitchen, the bathroom, the bedside table and most importantly: the plane. There’s where the iPad is a game changer in my case. I don’t have to take my MacBook with me on short trips to watch movies, read my Kindle content or browse the web at landing or answer emails at 35,000 ft. The question here is: do I want to invest $600 USD to have a device that will only really benefit me in these specific locations? That takes me to the price argument:
  • The price point Apple chose was very adequate. I bet that the 500,00+ people who have bought an iPad as of today were not very sensitive to the price range. For them, this amount of money was not big enough to give it a lot of thought or struggle to make a purchase decision. It’s cheaper than the cheaper MacBook and slightly more expensive than the most expensive iPhone or iPod touch. It’s right there in that sweet spot. Perfect pricing.

This is what I think so far. And in a less objective note, after spending a week with the device in my possession, let me say that it is indeed a very beautiful piece of electronics, with a sleek design, the OS simplicity we’re familiar with and fast web and YouTube browsers.

Hit me with your (hopefully nonobjective) comments and iPad thoughts. Here and here are 2 excellent pieces I read about the iPad.

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Monetizing newspapers: Reforma and the NY Times

I’ve strongly criticized Mexican newspaper Reforma for maintaining a paid content model for their online presence. I thought it unimaginable that in 2010 a newspaper still charged for content. It is, however, the first Mexican newspaper I check online and the one I read the most. I do it only because my parents being paper subscribers, I get to use their online account. Reforma offers high-quality content but its site design hasn’t changed in a long time. Still, it’s my first choice.

The recent announcement of the NY Times, in which they introduce their new long-term strategy to increase online revenue by setting up a “pay wall” for frequent visitors to nytimes.com (incidental readers will have a set amount of articles they can pull up for free) turns out to be very similar to what I think Reforma has had in mind all this time. I’ve seen Reforma.com giving out “free access” to content more and more in the last year and that is exactly what the new model at the NYT will look like (they are postponing the launch of this new model until January 2011). Browse superficially, don’t pay. Want more and more pages, subscribe. People like me are loyal to a news source and therefore more willing to pay for it content.

I’m not suggesting that the way Reforma.com has operated in the last 10 years has been the ideal one. They come across as slow, old-fashioned and not forward thinking. However, I’m sure that with this announcement, more and more newspapers and news outlets will adopt this type of model. I think Reforma will start giving out more free content to attract incidental and superficial readers and will also enhance their monetization efforts for loyal visitors. At the end of the day, both newspapers will meet in the same place after going through very different paths.

I’m comfortable with the NYT’s new model. Whenever my browser ends up in one of their pages or articles and I want to read it, I just make a small note on my Kindle and then look up that article in my Kindle subscription to the Times. I won’t have to become a paying “frequent reader” because I already pay Amazon Digital Services $14 a month.  Did you notice the last words in bold? That’s the reason digital readers/tablets/Kindles are a whole different story. A story in which, I think, the true secret to sustainable revenue lies within.

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4 Quick Aviation Take-Aways

Sunset Take-off (Southwest Airlines)

I hope I’m not boring my four readers with more aviation content here. The fact is, my Reader is now full of aviation-related feeds and the research I’ve been doing at work in the last 3 months is merely about the airline industry in North- and Latin America. I’ve also been spending a lot of time tracking the Social Media activities of companies in this space, both airlines and airline suppliers, and I’ve learned a lot about the intersection of aviation and new media.

The good news is, it’s really interesting stuff and I want to record it somehow, using this everlasting resource (aka my rarely updated blog). Here are some of the take-aways:

  1. Unlike North American airlines, Latin American airlines are strong, privately owned and professionally managed companies that show figures of growth and profitability (look at Gol, Avianca, TACA and Azul). The roles have switched and these airlines now represent strong competition to the legacy North American players. While Latin America is home to some of the most profitable airlines in the world, North American airlines struggle to survive and find a path towards profitability. On the other hand, North American carriers still account for 57% of the world’s domestic passenger traffic and 17% of the international passenger traffic, making it the biggest airline market in the world.
  2. Both markets show signs of consolidation; Colombia-based Avianca and El Salvador-based TACA formed a new Latin American airline powerhouse with annual revenues of over $3 billion pushing it into the top 50 airline groups in the world.  Continental’s entry to Star Alliance marked the first step of a strategic partnership with United that many believe will lead to an eventual merger.
  3. 2009 was the year Social Media became important for airlines. Although carriers like JetBlue and Southwest have been active in Social Media since years, we were amazed by the strategies airlines like Lufthansa, Virgin, Continental and Volaris implemented this year. It is all an interesting preamble of the center stage position that Social Media will have in 2010 for airlines’ marketing and communications.
  4. B2B companies in this space are struggling to find context for Social Media activities. The key here will be to clearly connect Social Media to business objectives and gain a better understanding of how to measure the direct and indirect ROI of social media. Also, I always insist on the fact that Social Media can have a direct and traceable impact on the bottom line, serving purposes like lead generation or more cost-effective communications.

I hope you will find this useful in any way possible, dear reader. Comments or additional take-aways are highly welcome.

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Volaris: Social Media Best Practice

Last week I had the tremendous opportunity to attend a very important Latin America airline leaders forum in Colombia. During the last keynote lunch, Enrique Beltranena, CEO of Mexican low cost carrier Volaris, talked about the importance of Social Media for airlines and used the example of his own company to illustrate the impact and potential that this set of new tools have as part of the marketing mix. He stated clearly that Social Media should not be used as a substitute of traditional marketing channels but rather as consistent complement of an existing strategy.

Volaris.com.mx

Volaris.com.mx

I could write a long paper just describing the wide set of innovative channels the airline uses to communicate with its customers, achieving intimacy and focusing on them rather than on their products (which also happen to be disruptive and innovative); but in this post I’ll try to concentrate on the emerging digital channels they have chosen to formally incorporate to their mix. And this takes me exactly to the first step of their strategy: As Beltranena explained showing a slide with a big amount of emerging media categories and social networks, they had to first choose which ones they’d use according to their usefulness and relevance to their overall marketing strategy. They ended up choosing the fastest growing channels in Mexico after their assessment: YouTube, Facebook, Twitterand a Volaris-branded blog (coming early 2010). The message here is that these channels won’t necessarily be the ones everybody should pick for their Social Media strategy. In each case, resourcefulness, relevance and fit should be analyzed before picking a given tool. For a different company maybe MySpace of Flickr could prove to be more efficient and adequate channels.

Then Beltranena showed this video, which, in a nutshell, answers the question of why Social Media is not a fad. The best part of the afternoon was watching the faces of important CEOs and airline leaders while they saw the video with awe and realized that they had to do something about this quickly. Hopefully, they will take the matter seriously and, like our friends at Volaris, assign (human and budgetary) resources to it and instruct their CMO to make Social Media a cornerstone of their marketing and communications strategy.

To get a feel of what Volaris is doing, go to their Twitter, Facebook and YouTube channels and see how they are first listening, then connecting and at the end communicating with their customers. Please note the customization of the content according to the channel and the continuity they exercise in each one of them. Also try to see how they seek a healthy amount of activity that will demonstrate engagement without bother the user with excessive tweets, posts, videos or content.

I’m proud to say that Volaris is the first Latin American airline to successfully deploy Social Media as part of an innovative and disruptive marketing strategy, setting a precedent and putting Mexico’s name and digital literacy high above. Congratulations from this humble blog to everybody making it happen.

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Hoping April is not fool

I’m probably the worst blogger ever. I don’t even want to mention the date of my last post or the fact that one of my New Year’s resolutions was to “blog more”. But today is a brand new month and as we wrap up the first 3 months of the year (or, as financiers like to call it: “the worst Q1 in modern history”) I’m thoughtfully retaking my blogging responsibilities.

Fact to the matter is that I’ve been quite busy. The Dad-to-be role is a capital intensive and time consuming job that I’ve been enjoying every single second of. The excitement and eagerness grow exponentially as time passes and feelings tend to separate from everything we’ve felt in our lives so far and beyond any description possible. Mateo will breathe in this world any of these coming days. (He’ll also read this post someday, so, Mateo, this is your father before you were even born).

I’ve also been spending a lot of time creating a story and a presence for an ambitious project at Babson. Almost 2 years ago the individuals that today lead the Babson Latin America Business Club set out to plan and organize the first region-focused entrepreneurship event at Babson. Today, the Latin America Entrepreneurship Forum is a reality. It will be held on April 24 and will host more than 15 speakers and panelists with an expected attendance of over 300 MBA students and professionals interested in Latin America. If you’re feeling any sort of interest, you should check out the website or, even better, register online for the evemt.

I’m also thrilled to report that GroupGuess, the venture that has taken us to an amazing journey through Babson’s entrepreneurship elites, is a finalist in the 22nd Annual Douglass Foundation Graduate Business Plan Competition. We’ll be presenting the day of the Student Venturing event for a chance to win $20,000 in money prizes.

April will literally change my life. I hope that the news I get during this month are good ones for the most part and that I’m able to receive May (graduation month) with a better understanding of where my life will take me in the near future.

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Creating the entrepreneurial marketing mindset

To arrange a meeting with Mr. Bob Caspe, you have to go to his website and fill out a form (he’ll be teaching Marketing for Entrepreneurs this semester). During the first session he shared with us the books he read over the break, recommending specially one that changed his life. These are the kind of things you expect from a professor. Another of these things changed my marketing mind forever:

Marketing is the art of buying your customers.

This is how I’ll tackle my entrepreneurial marketing tasks this semester: Selling air to the first customer, buying him into acquiring my product.

I’m in for a thrilling ride.

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6 Chasms in the Need of Crossing

This is an excerpt of a final write-up assignment I wrote for a marketing class at Babson. It takes the form of a letter to a marketing manager at Xerox addressing the marketing challenges that the introduction of a new “erasable paper” poses to the firm.

In a 2001 essay published in the MIT Sloan Management Review, Anirudh Dhebar, marketing professor at Babson College (and one of the best professors I’ve had the honor to sit in front of), insightfully added 5 more chasms to precede Geoffrey Moore’s well-known chasm between early market and mainstream market that products in a high-tech context have to cross. These 5 new chasms apply to other constituencies and areas that the new product will have to convince in order to achieve long-term success for the company.

The first chasm is of the utmost importance in the case of erasable paper: the Chasm Within The Mind. Think of it: paper that erases by itself. It is indeed a completely new paradigm and all the members of the Xerox community must first cross this chasm, this gulf between the concept of paper as we know it (a disposable, low-value and neglectful item that serves a one-time purpose) and the concept of a product that can be used several times and has a “life of its own”, erasing itself and preparing itself automatically to bring repeated value to its user. This chasm has to be equally crossed by the consumer and other intermediaries in the paper and printing businesses. For this, a very creative and educational initiative has to be started and taken in front of the eyes (and minds) of all the instances that will participate in the market engagement of erasable paper. Xerox’s tradition of innovation and capacity to “think outside the box” will surely contribute to this effort.

Secondly, the crossing of New-Business-Model Chasm is also pivotal to this product’s success. The selling of paper that can be reused suggests a complete redesign of the business model behind paper and its complementary products. Being printing technologies a core competency of Xerox, this doesn’t affect Xerox’s core business enterprise architecture directly but it will certainly affect its value network, as paper manufacturers and distributors will react rather negatively to a product that will dramatically reduce its sales of paper. You, as marketer, have to worry less about the way the company will solve this interesting dilemma. Nevertheless, you have to make sure that the new business models that result of this paradigm shift are present in the marketing plan and are gradually understood by all interlocutors that will take part in the “marketing erasable paper” conversation. For this, I also recommend that the network externalities be actively managed so that Xerox can reap the benefits of direct network effects. The more companies that adopt an erasable-paper-printer, the more the benefits will increase and the greater the incentives for adoption will be for other companies, namely the ability to use this new paper seamlessly in every day life, without worrying about who uses it and who doesn’t.

The third chasm that has to be crossed is the Break-With-The-Past Chasm. In this case, the fissure between normal paper (and normal printers) and their compatibility with the new version of paper and printers: will new-paper-printers be compatible with the plain old paper? Clearly, the new paper will not be compatible with old printers and therefore the switching benefits and advantages of the new printers have to be clearly communicated to the customer and be also easily observable without the inherent ambiguity of improved versions of products. For this, the sustainable aspect of the new paper has to be constantly reminded.

The Disruptive-Technology Chasm in this case will have to be crossed when consumers (and other participants in the value chain) can’t initially notice the improvement of erasable paper compared to normal paper.

The fifth chasm is the Expedient-Fix/Strategic-Solution Chasm and its crossing suggests the realization of erasable paper as a long-term strategic offering by Xerox and not a temporary fix to a short-term solution (like wasting less paper).

After so much chasm crossing, hopefully the crossing of the original Chasm Between Early and Mainstream Markets may seem less challenging and will come as natural progression of the previous crossings. This, dear sir, is what I truthfully wish for this brave marketing endeavor and for the widespread adoption of erasable paper.

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The Swatch Quote

I must first say how much I’m enjoying the class of Prof. Anirudh Dhebar called “Marketing High-Tech Products”. It is some sort of philosophical marketing class in which we discover the inner mechanics of every part of the theory of marketing, heavily applied to products and services that have a high-profile or high-tech component.

In one of his classes he put marketing aside to briefly give us some advice in our search for a job. There’s one quote that really resonated in me (which I bold and underline below) regarding the way we present ourselves. I literally quote from the email he sent later to follow-up on this subject:

First and foremost, never, ever, ever, ever forget the following line (attributed to Nicolas Hayek of the Swatch Group conglomerate): “Everything you do and the way you do everything sends a message.” You want potential recruiters to treat you as “world-class,” then there is only one choice: In how you prepare for and conduct yourself during and after the interview, be world-class in what you do and how you do it. And that requires your “message” to be “strong, exciting, distinctive, authentic, consistent, clear, and credible.” Yes, a tall order!

Thanks a lot to Prof. Dhebar for this and if you know of somebody searching for a job, please forward him these thoughts.

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