I link to a range of topics in this forum. These references represent events and trends I’ve observed in my day-to-day work. While some links may appear to be in the weeds, many were acquired through a purposeful search, although, likely on a tangential topic. I post them because they “relate”; albeit mostly in my own warped little mind.
In this mode, I am tracking and doing work on several unrelated competitive issues and consumer opportunities. I wish to state that a real (and I consider reliable) way to determine consumer trends is to monitor the pocketbook of your target demographics: on what are they spending their money?
Case in point: a rise in pop and hip-hop music, Britney Spears and American Idol resulted in an opportunity for the Bratz dolls to compete head-to-head with Mattel’s Barbie (Baseline, August 2005, Case 177, “Barbie Lost Her Groove, Competitors Picked It Up”). The Bratz created a market amounting to nearly 50% of Barbie’s annual sales share in under four years, while Barbie’s sales were steady to lower.
The article describes how Barbie is in danger of being seen as a “baby toy”; as “age compression” (kids are growing up faster) takes its toll. This is interesting as well: my sons are knee-deep in “Half Life 2” for the balance of their summer vacation (only a few days left); one is twelve (going on sixteen), the other is seven. The seven-year-old has been immersed in first-person shooter (FPS) games for three years. That’s a long way from playing with Hasbro’s G.I. Joe.
Mattel’s response included the “American Idol” and “My Scene” dolls (the latter are coincidentally covered in makeup and injected with a bit of collagen). To further reach, the My Scene gang has several “webisodes” already. In fact, they’re planning a trip to Hollywood (to be released on DVD). My six-year-old daughter just scored one of the “American Idol” models for her birthday (she got to make her own selection when visiting her grandmother).
As Bratz stuffed a platform shoe in the door opened by the pop culture opportunity, other competitors have risen (Janay and Friends from Integrity and the Princess line from Disney, among others), and the market is getting crowded. Is Mattel out of the woods? Not yet, really, but they’ve learned some lessons and can potentially make good progress.
Let’s look at technology in this light. On what are the geeks and freaks spending their allowance? Some of their purchases are obvious, falling in the realm of “low-hanging fruit”. Gadgets are big; hand-held devices and beefy cell phones, albeit lacking standardized features for interoperability and access. Games like “Half-Life” and “Halo” dominate the market, spawning a number of wannabes. However, the wannabes in both zones rarely rise to the top: you need cachet to disrupt markets, much like Apple’s success with the iPod.
Now, how do you explain a game like Katamari Damacy? This implausible, first-person, immersive, non-shooter, roll-and-gather game thrives on the console platform, emptying piggy banks and wallets as it goes. The graphics are a bit on the cheesy side, but it has kids in the 6-14 age range captivated. The game describes well-defined goals and gives the player the means to make and track their progress. Is goal completion, i.e., “beating the game” all that matters?
I’ve taken a liking to Freelancer lately. I’ve even set up a server so I could play with my sons and their friends. This is a game that allows the player to behave in a mostly independent manner within a well-structured and highly-graphical universe. The player decides how they’d like to earn their keep and advance: as a hero, a trader, a pirate or more. There’s a lot of exploring, ship-to-ship combat and trading opportunities. There’s a story that serves as a tutorial to get the player up to speed (memo to the Freelancer team: I miss my Juni). You’ve seen this before: anyone who has played a multi-user dungeon (MUD) or any of the massively multiplayer games is aware of how attractive a virtual can be.
Yet, with all these interesting attributes, this game is mostly unheard of. It’s still played (released in 2002) and has a robust community who host forums and mods, but it’s not something you hear discussed at McDonald’s.
What of the business user? Well, there’s low-hanging fruit there as well, but solving a business problem doesn’t necessarily come in the form of a specific product, but rather integrated solutions. The baseline of a business user is pretty consistent, and likely includes: security, stability, productivity, scalability, and low TCO (business will refine the order of these bits to meet their needs). That said, what are the “wow” factors? I wrote an article on evoking a “wow” from a business user some time ago.
George Day, a Marketing professional at the University of Pennsylvania’s Wharton school recently wrote a Harvard Business Review article about scanning the periphery. In this paper, he cites several examples, including the effect of the “personal beer” experience: the rise of microbreweries and the effect on the majors. This article is referenced heavily in Baseline Magazine magazine (referenced above).
He also states that not all competitive risks come from rivals. Politics, society, shifts in the economy and disruptive technology can catch a market leader unprepared.
During the 1980s, Weyerhaeuser was doing business as usual: harvesting wood from forests in the Northwest and supplying the products to an increasingly-hungry building market. Environmentalists frequently (and accurately) accused the company of "clear cutting", thus disrupting the ecosystem and wildlife, and increasing the risk of erosion.
Amid a growing public relations crisis, the company adopted and made public their practice of replanting forests with saplings. The saplings would save the soil and provide haven and food for displaced fauna. Over time, the saplings would grow to trees, the result of which is a renewable resource to be harvested at a later date.
The company posted signs in the regions that identified the dates the forests were harvested and replanted. This tactic provided passers-by the means to admire the company’s forward-thinking handiwork. Their new slogan: “The future is growing”. Very nice, don’t you think?
All this happened in a “business as usual” environment: increasing sales and product demand, upper management who wasn’t listening to the pulse of the public and poor site selection and management. The site management bears special note: a particularly large clear-cut region was in the Washington state, right around the I-90 corridor through Snoqualmie pass. The bald mountains were enjoyed by around 32,000 cars and trucks on a daily basis, throwing wood on the fire (so to speak).
Even though Weyerhaeuser recovered nicely, they suffered a loss of goodwill with the public. Did this affect sales for those years? Not likely, as building was happening at such a rapid pace that consumers couldn’t get enough wood products. Today, the PR folks are ensuring the public knows about the company’s policies, they’ve published the informative “Roadmap for Sustainability” document on their web site.
While it’s critical to listen to your customers and watch your competitors, it’s also important to monitor community activity around your products and the space in which your products exist. Determine “who” is doing “what” with your products, and “how” are they doing it? How other products in your space the same? How do they differ?
Find the right people in your organization to gather and manage this kind of information. With this information, they can propose competitive responses, partnership strategies and other opportunities. When a threat arises, take heed and resist the urge to shoot the messenger.
Watching isn’t enough, however. You also need to be prepared to act when threats rise to the fore.
OpsanBlog 