An Example of Product-Push vs. Market Pull Commercialization: Smirnoff Twisted

In what is arguably the most pathetic demographic targeting/marketing campaign/etc. I can immediately recall (its 2am give me a break), Smirnoff (known for their vodka, for those of us sober to need a reminder), has rolled out a TV, etc advertising campaign for Smirnoff Twisted beverage freaturing "Ari", who is as far as I can tell, an unemployed eastern-european/Russian who somehow attends chic events and makes what I'm sure were intended to be witty, whimsical remarks. Now, run-on-sentences aside, lemme break down why this is a dissapointment. Smirnoff Twisted is a line of fruit-flavoured malt beverages, comparable to Zima or whatever other concoctions are in that category. [Originally beverage marketing of this particular type of libation are, and have been aimed at women, and amazingly, most of these drinks are bought - yup, you guessed it - by women.]
The point is, that I don't know, because what virtually anyone in the male, 18-34 (give or take) demographic will blatently tell you, is that no self-respecting man would even consider drinking a "fruit flavoured malt beverage" instead of a beer while out at a bar, club, etc (or else risk eternal damnation by his chums).

Now, in my never-ending quest for eternal objectivety, I conducted an informal, ad-hoc survey of some friends, acquaintances, etc (that majority of which, admittedly are between 18-24, in the interest of full disclosure), and the overwhelming response seemed to be, as one individual so politically-incorrectly put it, no young man in the aforementioned demographic would voluntarily ever drink Smirnoff Twisted, etc, in his words "at least not one that likes women..." Another, when prompted with the question "If we were at a bar and I asked you if you'd like a Smirnoff Twisted instead of a beer/shot/other drink?", replied with "i'd probably laugh, and after realizing your were serious call you a faggot...because of the feminish persona they have." Before you go out calling me or anyone quoted a homophobe or a stereotype-monger, understand that these are the actual opinions of most young men!

Now, judgements aside, and without first-hand knowledge of the situation (you're all welcome to refute this if you can back it up), lets look at whats going on here. This appears to be a case of a bunch of executives/managers getting together and saying something like "Ok well we need to boost sales/profits/etc, so what do we have laying around that we can repurpose/remarket/rebrand/etc (i.e. spend the least effort to reach our goal)?" The problem with this sort of decision making is that it is simply pushing a product/service onto some arbitrary consumer group/demographic. In this case, the decision likely went something like, "Well we have this drink, but only 1/2 of people (women and a few men?) drink it. We can double our sales if we just convince men that its cool!"
This is an example of a Product-Push approach (the more generic classification of Technology-Push), where in this case, to oversimplify, they had a product aimed at one demographic, and decided to thrust this product upon a completely different demographic, without acknowledging the fact that perhaps, just perhaps, this other demographic has COMPLETELY different characteristics/ideas/opinions/etc.
Contrast this approach to what we refer to as Market-Pull commercialization, in which the 1st steps in product development involve thorough analyses of demographic, market, and industry trends. The product or service is then developed from initial conception to address the specific niche, demographic, need, etc, which was uncovered in the prior analyses. As any Joe Schmo can see, whenever possible (deciding when is a complex and contested discussion), Market-Pull is the way to go! (hey that rhymed, aren't I the cunning linguist)
So I realize an hour after I began this post, and it is in no way, shape, or form, a "quickie", so I'll just summarize what we've learned:
Just because managers and executives get paid thick salaries does not necessarily mean they are good business people (you'd think it would though...). [I'll avoid for the moment my more general belief that eventually, and inevitably, investor activism will result in the elimination of inefficiencies and poor management in all firms, or else those firms will eventually fail (we'll save this discussion for another time folks, dont' worry).] Investors, etc need to be wary of this potential pitfal, and allocate their hard-earned $ accordingly.
I could go on and on here, but its 3:30am, and i've got 12hrs of studying tommorrow (oh hell, thats today, boo). Comments, etc appreciated as always. Party on!

What Happens When Managers Sell Their Textbooks Back...

For those who aren't aware of current trends in the collegiate textbook industry, there is an increasing propensity for students to not only attempt to purchase as many of their textbooks used, but also to sell as many books as they can back to the bookstores (or conceivably to other students if that option exists) to get some quick cash. Personally, I've sold back the vast majority of my books which, even under the most random circumstances, I could not ever see myself opening after the last day of class. On the other hand, most of my legitimate business/finance books and a few others have made the cut and are currently resting peacefully (if not a little dusty) on a shelf in my basement at home. While I think I have only gone back to these books on maybe a handful of occassions (my first inclination is usually to just 'google' stuff I don't remember, obviously), I'm almost certain at some point in the future I'll need to go back and re-read/learn some material.
Getting to my point, just today, while studying for a Multinational Financial Management final later in the week, I came upon alot of interesting discourse in the textbook. One section, however, drew my particular attention, specifically Chapter 17 ("Capital Budgeting for the Multinational Corporation"), heading #8 ("Getting the Base Case Right"). Without overcomplicating the matter, the Author (Alan C. Shapiro if anyone is that intrigued) says:

"To come up with a realistic base case, and thus a reasonable estimate of the incremental cash flows, managers must ask the key question, 'What will happen if we don't make this investment?'"

He goes on to cite General Motors' decision in the 1970's to forgo investment in smaller cars which were, at the time, less profitable than GM's current stable of gas guzzlers and land-yachts (which I think were also referred to as "sedans" at the time, but given their proportions, handling, etc, Land-Yacht seems much more appropriate). As anyone who's laid rubber on any road in this country in the last 20+ years can attest, this decision has clearly hurt the financial health of what was once the largest, most influential company in America in ways from which it may never recover, all while Toyota, Honda, etc have thrived at their expense. I could not agree more with Shapiro when he asserts that the critical error made by GM (and others) is to ignore competitor behavior and assume that the base case is the status quo. GM, in opting not to come out with new products for fear that they will cannibalize its existing product line left a profitable niche for the Japanese automakes to exploit and profit from. They failed to realize that sales would be lost regardless, and for their arrogance we'll call it, those sales were given up to a competitor.
Not every American company has faltered thusly, however. Take the recent revival and success of Apple with their iPod line. A few months ago some analysts were mind-boggled by the company's decision to cease production of its most popular product - the iPod Mini - and to replace it with the liliputian iPod Nano. Looking back on Apple's decision, anyone who's walked into a Best Buy or even browsed the virtual aisles of ebay has witnessed the enormous customer reception the Nano (as well as Video) has encountered. That is not to say I agree with their decison, but consider a line from my finance textbook which I think makes a very important point (one that is occassionally lost on managers):

"In a competitive market, the rule is simple, if you must be the victim of a cannibal, make sure the cannibal is a member of your family."

If we examine the situation with Apple thusly, the decision to launch the Nano and cannibalize Mini sales seems to make alot more sense. With Flash-memory prices dropping steadily, it was only a matter of time before someone else introduced/marketed a product that had the right combinition of characteristics (form factor, price, usability, etc) to lure would-be iPod Mini buyers away, perhaps bringing the profit machine that has recently been Apple to a grinding halt. I just did a quick search for flash-memory based mp3 players, and lo-and-behold, C|Net has a review of their editors top picks (accessable here: http://reviews.cnet.com/Music/4521-6532_7-5021434-2.html), which indicates that every major competitor (Samsung, iRiver, Creative, Sony, to name a few) already has a competing product on the market, some of which garnered equal praise as the nano, for almost 1/2 the price! While we can never be 100% certain what would have become of the iPod Mini had Apple been complacent to rest on its laurels, it is more or less certain that, at least for the forseable future that Apple will continue to be a force to be rekoned with in the consumer technology (and now music and video distribution) arena.

While I haven't spoken with Mr. Jobs since running into him @ Macworld NYC a few years back, I'm gonna go out on a limb and guess that someone at Apple, if not Jobs, still has a few old college textbooks laying around somewhere...

Welcome to the Blog

Ok folks, so here it goes, this grand experiement of mine...

Business.Technology.Innovation.

These are a few of my favorite things, and these, my friends, are the issues about which I am very passionate. Hence, it is here then, that you will be able to find my thoughts on a wide variety of sub- and related topics. In case you were wondering (come on, you knew you were), I do not confine myself to any one sector, industry, or vertical, so pharma, financials, telecom, new media, defense, you name it and chances are I know something, so bring it on!

Some posts you might see alot of:

• What is BTI?
  
• Why BTI?
• Examples of BTI as strategic drivers of success across the board
  
• Reactions/commentary to news/current events as they pertain to BTI
• Random stuff that doesn't fit into the above 4 categories...

I'd like this to be a very interactive blog, so comments, discussions, etc are all encouraged, so don't take everything I say as ipso facto, argue your point if you disagree (but you better come ready to support your argument!). Hopefully, we'll eventually get this thing popular enough so that people are coming to me with questions and I can address them in kind, sort of what Jim Cramer does on Mad Money on CNBC.
I'm very interested in developing some thought leadership, establishing best practices, etc as far as BTI go, so somewhere along the line my writings might drift towards those ends, so don't be surprised if you see it kiddies.