Decision Time at Qode
Qode’s parent company—NeoMedia Technologies,
Inc.—started out in the late 1980s as a
systems integration company. Chas Fritz,
NeoMedia’s Chairman, envisioned an organization
nimble enough to pursue leading-edge,
technology-driven opportunities. In 1995, Chas had the vision
to link content in the physical world to accessibility in the cyber
world. To get there, his firm began an aggressive strategy of
developing 14 patents in 27 countries. In the late 1990s a unit
of NeoMedia called Qode was born, with a focus on secure
documents and linking from paper documents to Web content.
Today, the Qode brand has morphed into the solution
called “Qode” (pronounced “code”). Qode leverages mobile
platforms and allows marketers to deliver the best content to
the right person at the right time—at the time the consumer is
actually interacting with the product or promotion. This is
accomplished on a cell phone by simply entering a keyword or
clicking a SmartCode that automatically links a consumer to
the mobile content (look Ma, no long URL to type in!). A
SmartCode is a bar code that both machines and humans can
read. When either clicked on or keyed into a query box, this
code connects the consumer to the Web content through a set
of rules the marketer sets. And, the same code or keyword can
deliver different content to different consumers based on their
gender, age, language preference, country, time-of-day, phone
type, and carrier—true one-to-one marketing messages. If
NeoMedia has its way, in a few years you’ll be able to “click”
a bar code with your cell phone and instantly access many different
applications wherever you are. These might include:
• Acode on a movie poster that plays a trailer for the movie
• A code on a “For Sale” sign that launches a virtual
tour of the house that’s for sale
38 PART ONE MAKING MARKETING VALUE DECISIONS
• A code on a package that activates a promotion and gives
you a coupon you can redeem when you buy the product
• A code on your sweatshirt that other people can click
to access your personal Web site on MySpace
Rick Szatkowski and his team are leading Qode’s
strategic market initiative for NeoMedia. To get an idea of
how you’ll be able to use Qode, we’ve provided several
SmartCodes here. These codes will “direct connect” you to
additional information about Qode, marketing case studies
and business applications that have been launched using
Qode after this book was written and published, and some
fun content we felt you’d like in the mobile environment.
In the U.S. market, the most obvious path to launch
the product is through the cellular providers—they are
essentially the gatekeepers for on-phone applications—that
is, in an ideal world Rick’s team at Qode would simply
work with those providers to ensure that when a consumer
buys a phone, the necessary enabling software is already on
it. Mobile Web sites (or mobisites, which end in .mobi
rather than .com) have to conform to a set of rules and be
optimized for the “small screen” and mobile/cellular datatransmission
speeds.
Unfortunately, life is not so simple for Rick and his team.
As NeoMedia’s management predicted, in the United States the
cell phone is slowly but steadily becoming a “third screen” in
consumers’ lives (the first screen is television and the second is
the PC). However, a couple of factors have made it difficult for
the cellular providers to “see the light” in bundling Qode’s software:
(1) their cellular companies’ history and roots from the
standard telephone days—most were “Baby Bell” companies
who started as standard phone providers; and (2) they set the
internal bar for revenue opportunity unreasonably high, meaning
that they can’t seem to see the long-term opportunities in
shifting their business from billing for “minutes” to billing for
Rgames - this will be a deep link to casual
games (free).
Rmmktg - this will either be a link to the Mobile
Marketing Association's mobile web site or a
mobile web site with global case studies and
mobile marketing industry information
Rjokes - this will be a deep link to jokes.
Rmovies - this will be a deep link to current
movie information. Deep linking on the
World Wide Web is the act of placing on a Web
page a hyperlink that points to a specific page
or image within another Web site, as opposed
to that Web site’s main or home page.
Rapps - this will be a mobile site/page outlining
some unique mobile applications Rnews - this will be a deep link to current news.
Rqode - this will be a mobile site/page providing
updates regarding the qode solution (including
case studies, published metrics, etc.)
Rweather - this will be a deep link to current
weather information.
ISBN: 0-536-48410-4
Marketing: Real People, Real Choices, Fifth Edition, by Michael R. Solomon, Greg W. Marshall, and Elnora W. Stuart. Published by Prentice Hall.
Copyright © 2008 by Pearson Education, Inc.
CHAPTER 2 STRATEGIC MARKET PLANNING: CAPTURING THE BIG PICTURE 39
“clicks.” In short, the cellular providers have a bad case of
“Marketing Myopia” —failure to see the vision of where the
telecom business is actually heading.
In the more progressive global cellular arena, marketers
are beginning to realize they can create highly targeted messages
to reach individuals through this third screen—the cell
phone. The cell phone is the only device that can be completely
personalized (think ring tones, wallpapers, games, contact list,
colors, and all sorts of other bells and whistles)—it’s an electronic
bling . . . it’s all about me! In 2005, Northwest Airlines
ran a promotion in Tokyo where consumers “clicked” on a
billboard-sized code to instantly receive a special offer. Even
Japanese Web sites are exploiting this emerging medium by
putting temporary tattoos of a clickable code on people.
Given the enormous degree of customization and personalization
the cell phone provides, one would assume that
the cellular providers who “own the relationship” with their
subscriber base would jump on the opportunity to provide
content and brand messaging to their vast networks of
users. Unfortunately, try as they might, Rick’s team at
NeoMedia has been largely unable to get these traditional
domestic cellular providers to seize the opportunity. Even
though the European marketplace was further advanced in
deploying mobile marketing campaigns, the company
encountered similar reluctance with EU cellular providers.
If the traditional cellular carriers could see past their old
business model and open up to the new capabilities Qode provides,
both they and Qode would surely end up big winners.
They would truly be creating a new market. However, given
the reality of the reluctance to date of the carriers to change,
Rick and his team at Qode have to make an important decision
on what go-to-market strategies they should execute to get the
Qode product into the hands of consumers. How might they
do this in a way that breaks the bottleneck created so far by the
cellular providers? Rick and his team considered their options:
Option 1 Continue the headbanging—partnering with the
cell phone carriers is essential.
Staying the course involves recognition that a breakthrough
with one or more of the major cellular providers can start a
domino effect that might make the Qode software widely
available—maybe ubiquitous—nearly overnight. Ramping up
the pitch to the carriers to bundle Qode with their services
might include these approaches: (1) Think “Google”—the
rapid emergence of interactive marketing overall and paid
search in particular on corporate revenues provides a very
compelling argument for the cell phone carriers to provide
Qode; (2) Create an “ecosystem” of targeted offerings focused
on demographic or geographic groups that are strategic to the
cell carriers’ own growth strategies—the cell companies
should see that they can package a community in a way that
will be critical to their businesses. As an example, the Hispanic
market segment has been one of the fastest-growing segments
in the United States. By partnering with consumer brands,
quick-serve restaurants like McDonald’s, music companies,
TV, and radio stations, Hispanic consumers in a region could
be connected to targeted offerings through the use of
SmartCodes and keywords that are entered into the Qode
software loaded on their carrier’s phones. This, in turn,
becomes a strong differentiator and “magnet” for this rapidly
expanding consumer segment to subscribe to that cell company’s
services. Upside: Big reward if a win eventually occurs
and avoids huge investment in developing end-user consumers
from the ground up. Downside: Big risk if it never pays off.
Option 2 Leverage the huge popularity of social
networking and related channels.
MySpace.com, Hi-5.com, Facebook.com, and the like have
created a whole new channel for reaching early adopters of
products such as Qode—and thus are a very attractive audience
for marketers of many types. Extensive research on social
networks indicates that those who use such forums typically
come to the table with a set of specific needs, the top three of
which are self-expression, recognition, and discovery. By
downloading the software vis-à-vis the social network channel,
thus providing each individual their own bar code, Qode can
help satisfy those needs. Qode could work directly with these
social networks to distribute the software. What’s in it for the
social network site? For one thing, their base becomes mobilized
and now has access to unique offers customized for each
person. In addition, the social network site establishes a new
conduit for revenue generation through the advertising. What’s
in it for Qode? Instant community-building with just the right
group of consumers! What’s the downside? Qode will be banking
that the popularity of these forums will be sustained for a
good while and that the present backlash against some of the
content on them doesn’t grow into a full-scale revolt.
Option 3 Focus on brand-driven distribution.
As part of a marketing or promotional campaign by any
brand, the brand could direct a consumer to download Qode
software to unlock a marketing message, a special deal, or
some other connection. Consumers would like the opportunity
to tap into things such as valuable consumer information,
usage tips, FAQs, user ratings, etc. Fun incentives could
be made available, including wallpaper, ring tones, games,
and all sorts of other connectors to the brand or product
image. Customers would like this because they receive
instant gratification—think of it as a reward without a wait.
Brands would like this because it allows them to create a
branded on-phone application that becomes the portal to
developing a richer relationship between the customer and
the brand. Strong consumer identification with and loyalty
to a brand can result. Qode can also provide a playing field
for complementary brands to cross-market to customers—
very difficult for brands from different companies to pull off
today. And finally, the capability enabled by Qode becomes a
powerful way for marketers to develop a database of users
and link it to the Qode client software ID. A real potential
downside to this option is the confusion created on the handset
through “application clutter” and a brand’s desire to
restrict access through its branded application or “portal.”
Now, put yourself in Rick’s shoes: Which option
would you choose, and why?
ISBN: 0-536-48410-4
Marketing: Real People, Real Choices, Fifth Edition, by Michael R. Solomon, Greg W. Marshall, and Elnora W. Stuart. Published by Prentice Hall.
Copyright © 2008 by Pearson Education, Inc.
40 PART ONE MAKING MARKETING VALUE DECISIONS
business planning
An ongoing process of making decisions
that guide the firm both in the short term
and for the long haul.
business plan
A plan that includes the decisions that
guide the entire organization.
marketing plan
A document that describes the marketing
environment, outlines the marketing
objectives and strategy, and identifies
who will be responsible for carrying out
each part of the marketing strategy.
Business Planning:
Composing the Big Picture
Rick Szatkowski at Qode understands that planning is everything—well, almost. Part of
Rick’s role as a planner is to help define his product’s distinctive identity and purpose.
Careful planning enables a firm to speak in a clear voice in the marketplace so that customers
understand what the firm is and what it has to offer that competitors don’t—especially
as it decides how to create value for customers, shareholders, employees, and society.
We think this process is so important that we’re launching into our exploration of
marketing by starting with a discussion about what planners do and the questions they
(both Qode and marketers in general) need to ask to be sure they keep their companies
and products on course. Then, at the end of the book, we’ll come full circle and see how
Qode answers these questions to maintain its advantage. To make things even clearer,
we’re giving you a “road map” to follow later in this chapter—a pull-out marketing plan
template you can use as you make your way through the book to keep the “big picture”
in mind no matter which chapter you’re reading.
Whether a firm is a well-established company like Tupperware or Reebok (which we’ll
feature in later chapters) or an upstart like Qode, planning for the future is a key to prosperity.
Sure, it’s true that a firm can be successful even if it makes some mistakes in planning
and there are times when even the best planning cannot anticipate the future accurately.
It’s also true that some seat-of-the-pants businesses are successful. But without
good planning for the future, firms will be less successful than they could be. In the worstcase
scenario, a lack of planning can be fatal for both large and small businesses. So, like
a Boy Scout it’s always better to be prepared.
Business planning is an ongoing process of making decisions that guide the firm both
in the short term and for the long haul. Planning identifies and builds on a firm’s
strengths, and it helps managers at all levels make informed decisions in a changing business
environment. Planning means that an organization develops objectives before it takes
action. In large firms like Sony and Kodak, which operate in many markets, planning is a
complex process involving many people from different areas of the company’s operations.
At a small business like Mac’s Diner, however, planning is quite different. Mac himself is
chief cook, occasional dishwasher, and the sole company planner. With entrepreneurial
firms like Qode, the planning process falls somewhere in between, depending on the size
of the firm and the complexity of its operations.
Qode’s business model is built around capturing the right information in the lens of
your cell-phone camera, positioning the image correctly and snapping the picture you’ll
need to set things in motion. A business plan is a lot like that. In this chapter, we’ll look
at the different steps in an organization’s planning. First, we’ll see how managers
develop a business plan that includes the decisions that guide the entire organization or
its business units. Then we’ll examine the entire marketing planning process and the
stages in that process that lead to the development and implementation of a marketing
plan—a document that describes the marketing environment, outlines the marketing
objectives and strategies, and identifies how the strategies imbedded in the plan will be
implemented and controlled.
When you finish reading this chapter, you will be able to:
Explain the strategic planning process.
Describe the steps in marketing planning.
3 Explain operational planning.
2
1 Explain the key role of implementation and control in marketing planning.
Discuss some of the important aspects of an organization’s internal
environment. 5
4
O B J E C T I V E S
ISBN: 0-536-48410-4
Marketing: Real People, Real Choices, Fifth Edition, by Michael R. Solomon, Greg W. Marshall, and Elnora W. Stuart. Published by Prentice Hall.
Copyright © 2008 by Pearson Education, Inc.
CHAPTER 2 STRATEGIC MARKET PLANNING: CAPTURING THE BIG PICTURE 41
Who Does It
What It Is Strategic Planning
Planning done by top-level
corporate management
Functional Planning
(In Marketing Department,
called Marketing Planning)
Planning done by top
functional-level management
such as the firm’s chief
marketing officer (CMO)
Operational Planning
Planning done by
supervisory managers
What They Do 1. Define the mission
2. Evaluate the internal and
external environment
3. Set organizational or
SBU objectives
4. Establish the business
portfolio (if applicable)
5. Develop growth
strategies
1. Perform a situation
analysis
2. Set marketing objectives
3. Develop marketing
strategies
4. Implement marketing
strategies
5. Monitor and control
marketing strategies
1. Develop action plans
to implement the
marketing plan
2. Use marketing
metrics to monitor
how the plan is
working
strategic planning
A managerial decision process that
matches an organization’s resources and
capabilities to its market opportunities for
long-term growth and survival.
functional planning
A decision process that concentrates on
developing detailed plans for strategies
and tactics for the short term that
support an organization’s long-term
strategic plan.
The Three Levels of Business Planning