Outside-in or inside-out?

Bob DeWit and Ron Meyer (2004) describe the competitive strategies of companies for being external vs internal driven. Companies having an inside-out perspective rely on their internal capabilities such as processes, technology and design – creating a competitive advantage that is difficult to imitate. On the contrary, an outside-in approach is more based on market sensing, bonding with customers and monitoring technology, not inventing it. Whereas an inside-out driven company might focus on order planning and generation, an outside-in driven company would focus on fulfilling customer demand, billing and payment.

Wouldn´t you think that a company can succeed only having its emphasis on external market conditions? Understanding what are customer needs and demands, how competition functions and what is the next consumer trend? On the other hand, if your company can offer something unique that customers cannot even dream of, customers would not even understand to build demand unless they see and try the product.

Considering that Apple and Google have built most advanced, easy-to-use and smart products (services) – don´t they show both technological and design capabilities that no-other company possesses? And haven´t they yet built their services purely on what customers are in need of, having the most active consumer dialogues asking for feedback and participation? Therefore, can there be inside-out without outside-in? One without the other?

Hanna Viita

It´s about perception

Our MBA class visited various sites downtown Helsinki on a Saturday to look into how brands are implementing their strategy. We visited Nokia flagship store with high expectations. And the experience was great: staff greeted us, was very helpful, spoke various languages. All products and applications were showcased, atmosphere was good. After the visit the group still felt that something was missing. “Where was the ultimate experience”? What caused most discussion was how the staff was dressed (in sweatshirts and sneakers). After all the discussion I felt that visit to Nokia store is not just about Nokia. A Nokia flagship store in Helsinki with its wooden design represents the whole Finnish technology knowhow and culture. It should be the ultimate experience that shows what our nation can do with the eyes of Nokia. I felt the sweatshirt discussion was just partly concretizing the customer experience for it could still be developed further. More than changing uniforms.

Another interesting notion was how Finland brand sounds. We discussed how in the morning train Finns prefer to sit in quiet and enjoy the peaceful moment they have before rushing off to work. The same sound experience – quietness – was experienced at Finnish design forum at Erottaja. No music in the background, great element for showcasing Finnish design, having its origins in our nature and culture, as plain as it is.

Hanna Viita

Marketing as a service

If there is any one dream a marketeer has, it is influencing customer behaviour by the activities a company offers. Marketing can offer activities as services and complement the actual product by making communications truly beneficial for the customer. The crucial thing is to base the service on company´s core values.

What customers wish for today is time, independence and convenience. An article by Trendwatching.com states many companies now are turning their marketing campaigns into broader services.

In Trendwatching.com article numerous examples of such services were iPod applications. Since mobile applications still reach a limited audience, my favourite case was one by Adidas with an actual physical service. What they created was a running store in Tokyo offering locker rooms and showers for customers who want to take a run. Anyone can use the store as their home base for an exercise. You also have equipment for rent. How often I´ve had time to spare downtown thinking where to go for an hours exercise that does not require a membership. Loved it.

What is crucial is to start from benefits the brand can offer. According to Trendwatching.com this could be related to information, saving costs, connectivity or simply getting healthier or happier. Plan what you can offer and select a channel where you best can support, help and guide your customer.

Hanna Viita

Pricing on demand

I listened to an YLE radio interview of CEO Risto Juvonen from Live Nation, a concert organizer in Finland. Risto Juvonen was predicting a change to pricing model of concerts in a few years time.
Juvonen predicted a similar model for concerts as is the case for flight tickets currently; you don´t know what the person sitting next to you is paying for. There will be the ones who are willing to pay more for better seat or better service, as some are willing to have less for a smaller amount of money.
What would you be willing to pay for a concert? Or an airline ticket? And what would you pay for? A seat in the first row? Good food and service? Great lounge and shopping arrangements? In-flight entertainment or the actual show? Having a sense of belonging or travelling to a trendy destination? Again, this direction requires more specific customer segmentation and being able to tailor service offering accordingly. Which other industries will this concern? Gyms, restaurants, sports events, parking, public transportation? And how far will it go? Backseat passes, pick-up from home, dinner, merchandising included?

Hanna Viita

Quality services in springtime

During one service management class we discussed Tropicana Premium Orange Juice. Best quality, real flavour, no added sugar. 2,58 Eur per liter at Stockmann department store. Must have for many despite the high price. Tropicana has become one of the most popular orange juices in Finland. How? We agreed that despite the high price, the flavour is so much better that people are willing to pay more. They even drink less.
I started thinking of my own consumer behaviour. When going to a café, I prefer a cozy place with a good location and good coffee. When going dancing, I pick a place that features the best band in the country. When once a year going for a lovely massage, I stay away from the sports masseurs and pick an exotic spa with scents and music. I like doing grocery shopping at Stockmann´s.
What my choices have in common is that for me they are scarce but I prefer them because I feel they have top quality. I´m not an optimal consumer - I don´t buy services too often. But I may be a potential consumer if companies have me buy more of these services. I already like what they offer. If only I had more money or more time.
I came up with one solution. My friend told me how she dislikes wearing 60 den pantyhose still in March due to cold weather. Solution therefore is: spring. Focus shifts from cold weather, shovelling the snow and pantyhoses to going out and enjoying everything around you. More cafes, more dancing, more things outside. One month to go for a summer opening. Hopefully service providers do much better soon!