Download - Kellogg miami slideshare
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How the Re-Invention of the Music Industry Can Inspire New Approaches to Marketing Strategy
John Greene Kellogg School of Management
September 14, 2014
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Hello.
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I believe the future of marketing innovation can be inspired by the re-
invention of the music industry.
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You want me to apply lessons learned from the music industry?!?
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Sometimes, re-invention happens only when
there is no other option.
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“For years, the record labels had a business model that was consistent and single-minded: (1) bundle together a dozen songs on a CD, (2) ship the discs out to retailers, and (3) collect money. “
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And then, suddenly, music could no longer be sold like cereal.
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The scary news: Every industry has a Napster.
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The better news: You can be the Napster.
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Through a decade of collapse, innovators within the music industry have had to re-invent their approach to everything.
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And the re-invention in the music industry illuminates new ways of
looking at three fundamental questions that can help any industry
stay ahead of their Napster.
What do we really sell?
Who are our true competitors?
How do we inspire our customers?
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TODAY’S AGENDA
What do we really sell?
Who are our true competitors?
How do we inspire our customers?
Pharrell’s “Happy" and How to Design
Hit Brand Experiences
Avicii, Aloe Blacc, and The Age of
Liquid Expectations
Beats by Dre, Emily Dickinson, and the End of
Insights
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Pharrell’s “Happy” and How to Design Hit Brand Experiences
#1: What do we really sell?
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#1: What do we really sell?
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“We rent DVDs.”
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“We sell film.”
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“We sell newspapers.”
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Products in any industry can be quickly and devastatingly Napster-ed.
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“Customers don’t buy hammers. They buy a beautifully hung picture on their wall.”
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$0.05 $5.00
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Shift #1:
Products Experiences
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- Guy Oseary, Madonna’s manager
“In the past, people would tour to sell their albums; today they put out albums to promote their tours. The pendulum has swung.”
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It turns out that a hefty number of “MDNA” albums weren’t sold the usual way. For every ticket sold online to Madonna’s upcoming shows, purchasers automatically receive a copy of “MDNA.” They get a link to a free purchase on ITunes, or they can send in their mailing address for a physical CD. It doesn’t matter if the concert ticket is $52 or $350.
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- John Philip Sousa, 1906
"I foresee a marked deterioration in American music and musical taste, an interruption in the musical development of the country, and a host of other injuries to music in its artistic manifestations, by virtue -- or rather by vice -- of the multiplication of the various music-reproducing machines."... The player piano and the gramophone strip life from real, human, soulful live performances.”
In partnership with McSweeny's, Beck's forthcoming Song Reader will be "an experiment in what the album can be at the end of 2012," there will be no CD, no LP, no mp3. Just the sheet music, ready to be performed by anyone willing.
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What can Pharrell’s “Happy” teach us about designing contemporary brand experiences?
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“We should consider every day lost on which we have not danced at least once.”
- Friedrich Nietzsche
Yes, that Nietzsche.
That’s how powerful dance is.
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“Danceable grooves have just the right amount of gaps or breaks in the beats. Your brain wants to fill in those gaps with body movement.”
- Maria Witek, Arhaus University in Denmark
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Witek says that people all over the world agreed on which drum patterns made them most want to dance: “Not the ones that have very little complexity and not the ones that had very, very high complexity… but the balance between predictability and complexity.”
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Designing hit brand experiences: Molecules, Gaps, and the Right Amount of Surprise
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Think of your brand experience as a molecule of experiences from your customer’s perspective.
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The Challenge: Only 1 in 3 young adults between the ages 21-27 have ever tasted Budweiser.
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You’re not selling liquid. You’re a catalyst for a social experience.
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Celebrating the New Americana that is being created each and every day.
“Makers of Tomorrow” TV Spot Premieres During
Olympics Opening Ceremony
Print Ads
Made In Parties in Local Markets
Teaser Video on Life + Times
On-Premise Promotion
Instagram Flag Mosaic
30 Artists Perform on 4 Stages
Project 12 Local Brewery Feature
Made In America Merchandise
Live Mural Painting
R/W/B Project for Young Artists
Mobile App
Live FanCam
Over 1.3 Million Festival Live Streams
MadeInAmericaFest.com Over 600 Million Earned
PR Impressions
Commemorative Budweiser Bottles
Forthcoming Documentary from Ron Howard
Proceeds to the United Way
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“MAKERS OF TOMORROW” TVC 1500% increase in Budweiser Social Conversation TOTAL FESTIVAL ATTENDANCE 90,000+ TOTAL LIVE STREAMS 1,310,256 (Goal was 500,000) TOTAL MEDIA IMPRESSIONS Over 2 Billion
NEW FACEBOOK FANS Over 1.19 Million (238% above goal) UNITED WAY DONATION $700,000 to Local Philadelphia Chapter
Celebrating the New Americana that is being created each and every day.
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Start with your mission.
From products to experiences
Design the molecule that includes everything your customers experience; not just those that you directly create/sell.
Leave the right gaps for your customers to fill in on their own.
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Start with your mission.
Identify the core pillars of the customer experience.
Array their product offering off of the pillars of the experience.
Exercise #1: Brand Molecule
Identify opportunities for product expansion: new audiences and need states where they have yet to scale off of the core pillars of the experience.
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Start with the Mission
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Identify the Core Pillars of Your Customer Experience
(feel free to add more)
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Scale Products off of Your Core Experiences
(feel free to add more)
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Identify New Audiences and Moments of Need
(feel free to add more)
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And, Importantly, Identify Opportunities for Growth
What Other Consumer Markets Need to Have Movement Evolved?
What are other ways to create products/revenue streams off of the core pillars of the customer
experience?
What Other Consumer Moments Need to Have Movement Evolved?
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15 Minute Team Exercise: My Take
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evolving the way the
world moves
Start with the Mission
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evolving the way the
world moves
On-Demand
Real-Time Tracking
Invisible Payments
Identify the Core Pillars of Your Customer Experience
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UberBlack
evolving the way the
world moves
On-Demand
UberX
Real-Time Tracking
Invisible Payments
Uber Taxi
Uber Rush
Scale Products off of Your Core Experiences
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UberBlack
evolving the way the
world moves
On-Demand
UberX
Uber Family
Real-Time Tracking
Invisible Payments
Uber Taxi
Uber Rush
Whimsical Deliveries
Uber Chopper
Ice Cream Delivery
Kittens
Identify New Audiences and Moments of Need
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UberBlack
evolving the way the
world moves
On-Demand
UberX
Uber Family
Real-Time Tracking
Invisible Payments
Uber Taxi
Uber Rush
Whimsical Deliveries
And, Importantly, Identify Opportunities for Growth
Uber Chopper
Ice Cream Delivery
Kittens
What Other Consumer Markets Need to Have Movement Evolved?
Why Not License the Software Experience (eg, Amazon Cloud
Storage)?
What Other Consumer Moments Need to Have Movement Evolved?
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Avicii, Aloe Blacc, and The Age of Liquid Expectations
#2: Who are our true competitors?
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“Avicii Unveils Bizarrely Twangy Mumford & Sons Reinvention During Ultra Set.”
“Hey, you got your bluegrass in my techno!”
“EDM Superstar Avicii Makes a Kazoo-Heavy Kinda-Country Record.”
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#2: Who are our true competitors?
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Business breeds us to be fighters.
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Direct Competitors
Original iPhone Launch
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But often it’s not the competitor right in front of us that we should be most worried about.
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Experiential Competitors
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Experiential Competitors
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Customer expectations are becoming increasingly liquid across every category.
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Perceptual Competitors
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Shift #2:
Static Expectations
Liquid Expectations
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The Age of Liquid Expectations
Direct They sell products that compete with ours.
Experiential They sell experiences that
replace ours.
Perceptual They change the expectations our customers have for us.
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Team Exercise #2: Liquid Expectations
Direct
Experiential
Perceptual
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Team Exercise #2
Direct What competitors sell products/services that compete with Uber?
Experiential What competitors offer
experiences that are threatened by Uber?
Perceptual How does Uber change the expectations that consumers have
for brands in other industries?
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Direct
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Experiential
Direct
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Direct
Experiential
Perceptual
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Team Exercise #2
My Take
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Direct
For Londoners and tourists alike, Wednesday was a headache-inducing travel day in the city. In a new show of solidarity and anger against the taxi app Uber, around 12,000 London cab drivers suspended their service and took to the streets.
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Direct
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Direct
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Experiential
"We get customer feedback everyday saying, 'Hey I just sold my car; I don't need to pay for parking at home or work.' Lets say that's $500 a month for both. We just saved them $6,000 a year. ... I think that's why so many people are using Uber and getting rid of their cars."
- Travis Kalanick
Direct
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Direct
Experiential
Perceptual
Uber has made payments invisible by making the entire checkout experience, well, invisible. Getting out of the taxicab is the equivalent of checking out of the taxi, with payment automatically triggered at that moment. The overall experience is predictable and hassle-free.
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Direct
Experiential
Perceptual
Uber has made payments invisible by making the entire checkout experience, well, invisible. Getting out of the taxicab is the equivalent of checking out of the taxi, with payment automatically triggered at that moment. The overall experience is predictable and hassle-free.
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Direct Black car companies, taxi drivers, delivery companies
Experiential The Auto Industry
Perceptual Anyone who connects people to a service, anyone in the payments
industry…
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Beats by Dre, Emily Dickinson, and the End of Insights as We Knew Them
#3: How do we inspire our customers?
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What can a 19th Century poet teach us about how to inspire
customers?
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“Tell all the truth but tell it slant
Success in Circuit lies Too bright for our infirm Delight
The Truth's superb surprise
As Lightning to the Children eased With explanation kind
The Truth must dazzle gradually Or every man be blind – “
Emily Dickinson
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Success in Circuit lies Too bright for our infirm Delight
The Truth's superb surprise
As Lightning to the Children eased With explanation kind
The Truth must dazzle gradually Or every man be blind --
Emily Dickinson
“Tell all the truth… But tell it slant”
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Success in Circuit lies Too bright for our infirm Delight
The Truth's superb surprise
As Lightning to the Children eased With explanation kind
The Truth must dazzle gradually Or every man be blind --
Emily Dickinson
“TELL ALL THE TRUTH… But tell it slant”
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REAL ACCURATE >
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ACCURATE: Laps/Can has risen among passives, slowing raw/new growth for State Farm.
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REAL: Too many people see insurance as more or less the same, so why not get a lower price.
90
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10
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21-‐27 Years 28-‐34 Years 35-‐49 Years 50-‐65 Years
ACCURATE: Budweiser is losing market share amongst their most important market segment.
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REAL: Budweiser is a relic of Norman Rockwell’s Americana.
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ACCURATE: Sales of the Big Mac have steadily slipped, especially among young adults.
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REAL: Once a cultural icon, the Big Mac is invisible in plain sight.
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Success in Circuit lies Too bright for our infirm Delight
The Truth's superb surprise
As Lightning to the Children eased With explanation kind
The Truth must dazzle gradually Or every man be blind --
Emily Dickinson
“Tell all the truth… But tell it slant”
95
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If you had to choose, would you rather be interesting or right?
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“If I were President of the United States, I would rather be right than interesting. If I were a CEO of a company, I would rather be right than interesting. But I am a journalist– what journalist would rather be right than interesting?”
- Malcolm Gladwell
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TRUTH + SLANT
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“YOUR STUFF IS COVERED… BUT ARE YOU?”
Insight Provocation
PEOPLE PROTECT YOU IN A WAY THAT A 1-800 NUMBER CANNOT
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“IT’S ONLY WEIRD IF IT DOESN’T WORK.”
Insight Provocation
NFL FANS TRULY BELIEVE THEIR ACTIONS AFFECT THE
OUTCOME OF A GAME
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“DON’T TRY TO OUT-THINK YOUR TASTE BUDS.”
Insight Provocation TRY AS YOU MAY, YOU
CAN’T QUITE EXPLAIN WHY YOU LOVE A BIG MAC
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Shift #3:
Insights Provocations
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"You listen to Apocalypse Now (on iPhone headphones), and the helicopter sounds like a mosquito."
- Jimmy Iovine
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Insight A generation missing out on audio fidelity.
But that’s not the real story.
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Insight Provocation A generation missing out on audio fidelity.
It’s better to look good than sound good.
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The Fidelity Era The Fashion Era (Insight) (Provocation)
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What do we really sell?
Who are our true competitors?
How do we inspire our customers?
Staying ahead of Your Napster
Products Experiences Static Expectations
Liquid Expectations Insights Provocations
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Why the Apple/Beats Deal Should Terrify CMOs from Every Industry
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The Age of Liquid Expectations
Direct Terrestrial Radio, What’s left of the CD industry, Spotify, etc.
Experiential Where are you spending time now that Apple/Beats steals?
Perceptual Why isn’t everything that I enjoy delivered with trusted,
contextually-aware curation?
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“The national TV Guide's first issue was released on April 3, 1953.”
Why are you still watching TV that way?
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“Music, we realized, sells everything but music.”
- Troy Carter
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+ + + How will you stay ahead of this Napster?