Facebook for Business – Social Media in Your Marketing Mix: Product
Corporate strategy would typically define in some reasonably broad parameter product and place. Unless you’re in a web based business or a web substitute (more on that later) there has not been an appreciable change in product since Al Gore invented the internet. Yes, many products have become web enabled, but that’s a matter of product differentiation, not typically corporate strategy. There are also a plethora of products that would not exist if not for the web.
Pity poor Blockbuster, never has a firm been through so many technological rollercoaster rides and not woken up to the reality of the competitive environment. First it was VHS versus Beta, stocking both technologies until VHS finally won the battle. Then the painfully slow migration from VHS to DVD followed. Again stocking both until VHS became a thing of the past. Finally the shift from DVDs to BlueRay was the last product shift.
Why, having been through so many high impact changes did they not see the possibility of the expensive storefront changing from their large retail locations with tons of inventory to a relatively inexpensive vending machine stocking just the hottest titles. Redbox.com’s ingenious strategy of employing a very old distribution system in a new technology market is masterful. Blockbuster now has its own kiosks, but only 10,000 compared to 34,000 plus for Redbox.
Netflix.com of course eliminated the storefront all together. Delivery of DVDs by mail and now streaming movies directly to internet enabled devices would seem even more of an obvious migration path than vending machines. Oddly enough, Blockbuster missed it and now their retail stores are going the way of full-service gas stations, dial-up internet service and mom and pop department stores. Both Blockbuster and Hollywood video have filed for bankruptcy.
Similarly, Borders did not foresee or react strongly enough to the early success of Amazon.com. Here again, expensive storefronts with massive inventories were fatally inefficient compared to an online storefront and a centralized inventory. Barnes and Nobel did successfully develop an online presence and now finds its storefronts with far less competition for those that still enjoy the bookstore experience.
Most technological innovation will result in this kind of new product opportunities and differentiation. Some of the greatest opportunities come from companies that leverage technological innovations to dramatically change the cost structure of an industry. Companies that adapt to a changing technological and competitive environment will survive and those that do not, will not. Natural selection if you will in the capitalist system.
Think about the products that have all but disappeared during your lifetime and the impact those changes have had on once revered brands:
- Slide rules
- Photographic film
- Trading stamps
Technological discovery, adoption, maturity and replacement are nothing new. Some technologies can have profound changes in the marketplace. Changes that can influence not only the growth of new products, but dramatically change distribution channels are rare and cause equally profound changes in the competitive landscape. This is exceedingly true with the internet, but does not change the fundamentals of product in marketing.
This blog is the third in a series that will examine the fundamentals of marketing and how social media is being used effectively as a promotional tool in the marketing mix.