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EXPLORING GEO-MARKETING AS NEW BUSINESS MARKETING TOOLCase Study, Concepts, and Debatable Ideas
Kenny OngCNI Holdings Berhad
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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
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Agenda
1. Strategic Segmentation Marketing
2. Geo-Marketing
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Strategic Segmentation Marketing: Today
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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
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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.
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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
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Types of Geo-Marketing
• Macro
• Micro
• Find You
• Find Them
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The real goal of Marketing and Branding
Understanding our role in the whole scheme of things
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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.”
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What is the purpose of Marketing & Branding?
“Retention and Loyalty are useless if No Conversion is happening.”
“Communication is useless if No Conversion is happening.”
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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
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Business Model and Strategic Marketing
The biggest impact
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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
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What is the Business Model?
USP
Market Discipline
Profit Model
•Tata Nano
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What is the Business Model?
USP
Market Discipline
Profit Model
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Business Model: Profit Model
Revenue
Cost
MarginCash Flow
Assets
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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
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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
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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
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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
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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
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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)
Alignment & Consistency
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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)
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
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Alignment & Consistency: Business Model
USP
Market Discipline
Profit Model
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Introduction to Geo-Marketing
Why and How
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Marketing & Growth Strategy
1.Base Retention
2.Share Gain
3.Positioning4.Adjacent Market
5.New Business
GROWTH
“Double-Digit Growth”, Michael Treacy
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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?
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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
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• 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)
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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)
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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.
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Types of Geo-Marketing
• Macro
• Micro
• Find You
• Find Them
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Types of Geo-Marketing
• Macro
• Micro
• Find You
• Find Them
Business Strategy vs. Consumer
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Post Recession Trends and Implications
Industry Convergence/ Extinction
Social Networking
Green & CSR
Non-Profit/NGO increase
Increased RegulationsWhat do these mean to us?
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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
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Most Popular Question
“When will we return to the last time?”
Wrong Question
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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
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Macro: The New World Order
Newsweek, September 26, 2010
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Macro: The New World Order
Newsweek, September 26, 2010
•history •race •ethnicity •religion •culture
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Macro: The New World Order
• 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
Newsweek, September 26, 2010
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Macro: The New World Order
• 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
Newsweek, September 26, 2010
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Macro: The New World Order
• 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
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Macro: The New World Order
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
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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
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Side Note: Disruptive Innovation
• 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’
*The Innovator’s Solution, Clayton M. Christensen
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Side Note: Disruptive 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
*The Innovator’s Solution, Clayton M. Christensen
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Side Note: Disruptive Innovation
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
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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)
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Geo-Marketing: Mc Donald’s Design
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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.
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Types of Geo-Marketing
• Macro
• Micro
• Find You
• Find Them
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Geo-Marketing – How?
USP(How do I
position my organization?)
Trends
Internal
Competitor
Customer
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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?
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How? – Consumer Behavior
Some characteristics of consumer behavior are closely related to the:
• place where they live,
• climate,
• location and culture
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How? – TRENDS & External Impacts
External impacts of consumer behavior are:• environment• socio economic• trade balance• energy• telecommunications• languages• religions• transportation
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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.
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Technology and Geo-Marketing
Why it’s possible
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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
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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
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Popularly Unpopular
Popularity
≠
Affection
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Geo-Marketing Apps: Enterprise
• MapInfo
• ArcGIS (ESRI)
• RegioGraph (GfK)
• Mapwindow
• JangoMail
• DIVA
• GRASS (Linux, Windows)
• MÖBIUS
• SimpleGeo
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Geo-Marketing Apps: Public
• Google Map
• Google Earth
• Google Business Listings
• Google Analytics
• iPhone
• Android
• Foursquare
• Yahoo
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Types of Geo-Marketing
• Macro
• Micro
• Find You
• Find Them
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Find You…
Technology
Self Targeting
Location+
Incentive+
Call to Action
=
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Location-based Social Media
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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
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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
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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
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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.”
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Case Study: Mobile, Google
Mobile Coupons And Google Local Business Listings
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Case Study: Google Map, Listings
Google Local Business Listings
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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
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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
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Types of Geo-Marketing
• Macro
• Micro
• Find You
• Find Them
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Find Them…
Technology
Target
Location+
Incentive+
Call to Action
=
Statistics Database+
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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.
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Case Study: Mobius
• Point-Of-Sale Planner (POS Planner)
• GIS, cartography and reporting
• Customer behaviour model
• Sector specific, outlet- and environment-related indicators
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Case Study: GfK
• GfK GeoMarketing, January, 2009 - Purchasing Power USA
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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
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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
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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
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End Notes
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Alignment & Consistency: Business Model
USP
Market Discipline
Profit Model
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“…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
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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
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Thank You.
soft copy of slides: http://totallyunrelatedrandomanddebatable.
blogspot.com/