Cycle times

MM: Isn’t another dimension of supply-chain theory or supply-chain strategy, cycle time and defect rate? How quickly things move through? And how many times I have a defect or a rework at various parts?

MB: Clearly a focus on product quality and rapid processes—manufacturing and replenishment cycle times—are foundational capabilities today. Companies often lack visibility, quality and cycle time metrics across the organization. These metrics are often not visible to senior management, suppliers, and other key stakeholders in a company. The data may be buried in a Manufacturing Execution System (MES) or an isolated system that tracks quality, perhaps even on a spreadsheet. One of our solutions targets quality and operations reporting, and it can make these metrics or dashboards visible to all interested parties.

Consider managing inventories across the extended supply chain—from suppliers, through one’s own supply chain through to your customers’ inventory levels. The largest players have developed sophisticated systems to have visibility of inventory across the channel or extended supply chain. The options for the mid-sized players are much more limited and often they have not been able to afford these systems. However, Web-based SaaS BI solutions, such as Oco’s offerings, now level the playing field and make these capabilities available to mid-sized companies.

MM: In your presentation at SaaScon, you had used an example of—I believe it was—Welch’s, as I recall?

MB: Yes. Welch’s is one of our customers.

MM: You were describing the notion of a vertical business intelligence and the notion of a horizontal business intelligence. Then you coined a new term called, “diagonal,” business intelligence. Could you just give us a quick reprise of vertical-horizontal and then the new neologism of “diagonal?”

Diagonal Business Intelligence

MB: Yes. Sure. This is the business school concept—vertical and horizontal markets.

A horizontal market is a solution designed for a specific business function or application area—such as a business intelligence software product. A horizontal market is one that can be used across industries (or across several industries).

MM: Databases. Web content management systems.

MB: That’s right.

In many cases, HR packages, for example. They’re not particularly industry-specialized. . They don’t have any inherent industry-specific requirements built into them.

Now, in many cases, in order to use them effectively, a company that purchases one of these packages has to build in or configure in that domain knowledge or best practices themselves.

MM: In fact, they really instantiate a database or tool with a digital business model. Or at least the logic of their business model.

MB: That’s right. And there is substantial cost involved in doing that. .

Vertical applications involve solutions that are really specialized to particular industries. In the retail industry, you might have size assortment planning for clothing. It’s absolutely specific. Not just for retailers, but for clothing retailers.

Or in the financial services area, a really good example is anti-money-laundering kinds of activities. These things are very specialized to a particular industry and add tremendous value. But the number of places that you can sell such a software product is a lot smaller than one of these horizontal solutions that you can sell across many industries.

–

PvT: Okay. What regional considerations must firms accommodate in their global marketing strategy?

MM: Sure. Let’s start by breaking localization into four geographic mental maps.

First, we have what many call pan-regional marketing area. For example, this typically includes Asia Pacific (also called APAC) or in some cases Indo-Pacific where the mental map falls along the lines of English-speaking areas (which would include India, Australia, and New Zealand) And, EMEA—Europe, Middle East, and Africa as well as Latin America (although my Brazilian clients remind me that Brazilians do not consider themselves as Latin Americans!)

In each of those areas, a global marketing organization has to localize the marketing material, both print and online, across dozens of languages and currencies.

There’s a whole new business eco-system that has begun to emerge around facilitating or driving pan-regional localization of marketing content, as well as services related to the pre-sales and post-sales interactions with customers.

Then, the second geographic mental map address cultural markets with a more or less a unified language and currency, emphasizing the challenges how to maintain a global voice and cultural resonance. From an operational perspective, this emphasizes the integration of traditional and newer marketing processes.

So it’s, if you will, a global brand with local flavors. For example, many Americans make the mistake—I should say many North Americans—make the mistake of translating a piece of collateral or web content into German and consider their work done—that it will work well or good enough in Germany, the German-speaking parts of Switzerland, and Austria. In most cases, it does not work.

You don’t need more than 5 minutes in a conversation in the café in any one of those areas to understand that they are incredibly tribal, and they make hyper-acute discernments about haircuts, shoes, facial expressions, so as to establish you’re part of my tribe or you’re not part of my tribe.

What works in the Southern part of Germany doesn’t work in the Northern part of Germany, and it certainly doesn’t work in Switzerland, and it categorically won’t work in Austria; different metaphors, different visuals, different motifs, and different underlying narratives in terms of what it means to be a consumer and in a relationship with the brand and the tribe of brand users.

The third geographic mental map address mini markets within a country—I’ve already tipped my hand by saying micro-localization within a country.

So, for example, my work with clients in the Netherlands led me to discover the hyper-tribal nature of their local markets. I am astounded just in this tiny little country of the Netherlands, the Dutch remain fiercely tribal with respect to the very southern parts of the Netherlands, such a Einhoven, to the greater Amsterdam area, to the northern parts which are more Flemish as opposed to the more French folks in the southern parts. The Dutch make very, very sharp distinctions about, again, haircuts, clothing styles, inflected speech, manners of metaphors, key words and phrases, that all mark out, oh, you’re not one of us; oh, you are one of us.

Neo-tribalism

You know, Marshall McLuhan was right. All this technology of electronic media cools us down, making us very primal and triabal—what he even called Neo-tribalism. Wow, if he could have only seen instant messaging, SMS, and social networking in action, he would smile with great satisfaction of having understood the root sociology of the Networked Age.

As this relates to marketing, it means that marketing has to become much more tribal too–much more specific to the subcultures and niches within an otherwise unified market.

And finally, we come to the fourth geographic mental map of localization.

It has to do with the newer developments of mass customization, shopper marketing, and remix culture.

Shopper marketing drives the idea of segmentation into the floor plans of individual retailers and shopping malls, specifically drawing upon the very rich practice of database marketing and database analytics.

Shopper marketing takes that same analytic principles to the actual physical footprint of each retail store, specifically asking the question, ‘Who are my most profitable customers?’ and ‘How can we stage products micro-theaters, or ‘design moments’ in interior design-speak that engage with very specific shopper demographics.

Say, for example, a married woman with 3 or more children. Single dad with 1 or 2 kids. Divorced or bachelor male, late 40s. And when these individual demographic or psychographic segments walk into a store, they have certain core needs that you could think of as the basic staples. Then around those staples, shopper marketing details higher margin impulse items that we know appeals to that particular shopper demographic. Imagine that these little stages track to particular local high school or college sporting events.

I see this Whole Foods and WalMart—at both ends of the competitive spectrum.

So as a global brand marketer, you must have brand architecture and promotional content that express the basic narratives and core values of the brand while providing enough flexibility, within a robust framework, that will work at the pan-regional, cultural, in-country, and shopper-marketing levels.

So localization now means getting it right down into the individual store.

For marketing organizations, this means that they must specify and source content in ‘liquid’ form. They must have content that various staffers and partners can mix and match into very unique expressions right down to an individual store kiosk, or a trade show booth, or a direct mail piece like a catalog, and so on.

Key challenges marketer face today

Peter van Teeseling: Michael, in those firms with whom you consult, what do you consider as today’s greatest challenges in marketing?

MM: Well that constitutes a fairly open-ended question. So let me respond with a kind of a similarly open-ended response and then we can build from there.

Most organizations drive their businesses against a strategic plan with pretty clear objectives and quarterly milestones against those objectives. In one way of looking, that means that most organizations really represent executional systems—where most of the roles and responsibility, and more specifically, the clarity about who does what, relates to activities and tasks directly related to execution of annual objectives and quarterly milestones. And that’s all great so long as the strategy and objectives remain aligned with customer requirements or congruent with the realities of the world; however, increasingly that’s not the case.

In today’s world, customer requirements and preferences continue to change more, if not transform, in ways not easily predicted. Paraphrasing the cyperpunk novelist, William Gibson, “The future arrives unevenly distributed.”

Increasingly, many global organizations find themselves not well-aligned with customer requirements, including a broad range of capabilities and/or offerings, and/or services of the organization. In particular, customers seek deeper, more interactive, and personalized communications, flexible interactions and mash-ups, and collaborations with brands AND the community of brand users.

Next, generally, and this is a distinction I draw between what I’ll call senior marketing executives and junior marketing executives. Junior marketing executives think in terms of programs and campaigns, and what I’ll call easily defined, easily recognized wins in their particular market, and that’s all good, that’s why we have junior marketing executives.

Senior marketing executives don’t think in terms of tactical wins, they think more in terms of a broader front – in the language of generals, you’d call it a theater – and more specifically building operational capabilities by which to monitor the execution many programs and campaigns. Do get me wrong, senior executives want to achieve short-term wins; it’s not their primary focus; it is the primary focus of their subordinates.

Senior marketing executives watch the measurable progress against objectives. Increasingly, the data has become real-time and granular—specific to a market or segment. These granular or detailed data become proxies or suggestive of larger patterns of execution and marketing effectiveness.

If we examine the idea or underlying assumptions of an operations capability and say, “Well, what does the term really mean?” I think that it means that senior executives understand a hard won lesson in their career: You can manage people or you can manage systems, with the one caveat. People are unmanageable! So operational capability really means that senior executives know their sustainable success directly correlates to their building systems, process, and accountabilities by which to execute strategy – by which to marshal available resources for competitive advantage.

And so senior executives, for the most part, grapple with working through which of their existing operational capabilities should be enhanced which ones they build from scratch, which ones to secure through acquisition, and which ones to secure from partners, understanding that the operational aspect of marketing drives major global organizations forward, and more specifically, gives them competitive advantage.