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  This article is about marketing information and communication technology (ICT) products and services. Can you think of a more exciting subject? I doubt it. Even after the end of the well-famed Internet bubble, new technologies are still fascinating to us all.  

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  I C T  M A R K E T I N G (PART SEVEN - ICT MARKETING MAPPING - cont.)  
   
 

ICT Marketing Mapping (cont.)

On the other hand, a similar trend in the opposite direction can be observed on professional (B2B) markets. Most people would in fact associate the corporate market to bespoke products and services. However, one is forced to observe that there is a strong movement towards the commoditisation and generalisation of a number of services that used to be considered as high range, specific and professional. This is indeed the case in the software arena.

 
   

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The software industry is probably going through a certain number of issues, which are the foretelling signs of future major disruptions. This industry, once all geared towards bespoke software design, opted for an all-ERP approach at the turn of the 1990’s. To a large extent, this era of ERP is not completely over, as we speak, but an increasing number of ERP experts are now finding themselves on the shelf whereas finding a job for them was so easy only a few years ago. Indeed IT standardisation – through the copying of best practices – is becoming increasingly pervasive. But the standardisation is no longer going through Business Process Reengineering (aka BPR) as one used to do at the end of the 1990’s. Best practices are indeed more and more to be found within the software itself, by dint of improving it upon the recommendations of previous customers and users who have contributed to its improvement. (if anything, it will contain too much functionally, and very seldom not enough functionality). Software corrections and upgrades are thus delivered through the new versions of modern software[34]. Of course this is a trend, which will take years to mature and believing that our entire universe will be wiped out overnight would not be reasonable. But one has to admit that a great number of software houses – amongst the largest – are now in search of new business models. This quest for new business models is at the heart of new IT strategies with the soaring impact of offshoring but also nearshoring[35] practices.

Numbers are there to underpin my comments about the commoditisation of IT. In France, rumour has it that already 5% of all projects could be offshore projects, but accounting for not more than 1% of the sector’s overall revenue[36]. In the United States, according to an IDC report, offshore has now gone beyond the status of fad and is now turning into mainstream. “In 2004, the value of IT services provided to U.S. businesses through offshore labor will double to $16 billion. In the subsequent three years it will almost triple yet again to $46 billion, capturing almost one-quarter of the U.S. opportunity[37].” To give you an idea of what $8 bn are worth, Capgemini’s revenues in 2001 worldwide were not higher than that. And they are certainly lower now. Such frightening prospects are enticing many Americans to believe that it is no longer a good sector for their children to work in, hence certain reactions such as “Mama, don’t let your babies grow up to be IT workers” by Shelly Powers[38]. However, if observation shows that the consumer and enterprises domains are seriously intertwined (mass market and bespoke solutions, consumer and enterprise) as far as products and services are concerned, one has to admit too that the ways such products and services should be marketed vary greatly.

 

 
 

Tentative segmentation of ICT marketing

B2C (Business to consumer, aka consumer, ICT products marketing)

This is certainly the most popular type of ICT marketing and it is inevitably drawing on standard consumer marketing techniques. One of the main differences though is that it won’t apply to perishables but durables or semi-durables instead. Because new technology and hi-tech products are increasingly successful with the general public, ICT Consumer marketing is naturally closer to the marketing of household appliances and mainly that of sound and video systems. As a matter of fact, traditional products such as computers, PDA’s etc. and sound and video products and now being merged into hybrid devices which combine high-end multimedia with IT and vice versa in order to produce increasingly sophisticated systems aimed at broadcasting – or should we say ‘narrowcasting’ instead – multimedia contents, where video plays an ever increasing role, and where wireless technology is ubiquitous. In a little more than three years, the good old stereo has now been replaced by more sophisticated equipment. It may even disappear in no time[39].

B2B (business to business) ICT marketing

This type of marketing, which is aimed at professionals, is also well known. The necessary divide between Corporate and SMB B2B marketing however, is far less known, or at least, field practice shows that very few people master the subtle difference between diverse B2B segments i.e. Soho, SMB and corporate accounts. Large corporations often are international; in fact, very few aren’t if we except central government bodies. Their number is limited and they require face-to-face, personalised contact over a long-term period. Selling to large corporate accounts mobilises large account-teams, which can amount to dozens of dedicated professionals in certain cases (sales, business consult engineers, and delivery….). This investment in sales resources is justified in so far as the revenue, which is generated by such mega accounts is proportionally huge too (sometimes above €100 m p.a. for one particular account).

Conversely, SME’s are more varied in shape or form and they are more difficult to describe. First and foremost, SME’s can be segmented in more than many ways: size, number of employees, revenue, international presence, whether it is independent or part of a larger group…); secondly, because SME’s differ greatly from one another. How could you compare an independent organisation of 15 employees with another larger entity, whose staff goes beyond 500, which is scattered across 3 different sites and, lastly, which belongs to a large multinational group? These two organisations would not be said to have much in common at the end of the day, I would say.

As a result, marketing products or services to SME’s is a job in itself for it requires a lot of sub-segmentation. Selling to SME’s is all things to all people; sometimes on the fringe of consumer marketing, some other times on the fringe of corporate marketing. At the bottom of the SME market segmentation, one can find the so-called SO-HO market. The behaviour patterns of the latter are very close to those of consumers. The smaller the target customers, the more ICT marketing techniques and know-how will be necessary to maximize the hit-rate/contact-cost ratio.

B2E (business to employee)

B2E marketing is a little less known than the previous categories, which we have just described. B2E covers those activities aimed at corporate employees, mostly service-orientated. One of the most striking examples I know of is Dominique Beaulieu’s Accor services concept (née Affiniteam). The concept hinges upon the notion of “Cliemployee” an interesting concept, whereby Beaulieu advises corporations to treat their staff as if they were clients, which as a matter of fact they have really become, by dint of recurring job-frailty and difficulties on the employment market, which naturally lessen corporate loyalty and emphasize more self-centered strategies on the part of individuals.

 
   
Table of Contents
Part One (The Context 1/2)
Part Two (The Context 2/2)
Part Three (Basic Principles)
Part Four (Basic Principles - cont.)
Part Five (Basic Principles - cont.)
Part Six (Basic Principles - cont.)
Part Seven (ICT Segmentation - cont.)
Part Eight (ICT Marketing mapping)
Part Nine (ICT Marketing mapping - cont)
Part Ten (ICT Project Marketing)
Part Eleven (ICT Project Marketing - cont)
Part Twelve (Innovation Project Methodology)
Part Thirteen (Innovation Project Methodology - cont)
Part Fourteen (Innovation Project Methodology - cont)
Part Fifteen (Methodological toolbox 2)
Part Sixteen (Methodological toolbox 3)
Part Seventeen (Methodological toolbox 4)
Part Eighteen (Methodological toolbox 5)
Part Nineteen (Strategic Marketing)
Part Twenty (Strategic Marketing 2)
Part Twenty one (Strategic Marketing 3)
Part Twenty two (Strategic Marketing 4)
To be Continued ...


[34] Cp my summary of Nicholas Carr’s IT DOESN’T MATTER available at http://www.visionarymarketing.com/articles/it-doesnt-matter.html

Critical material of this article are also available at that address.

[35] Definition of Nearshore outsourcing (source http://searchcio.techtarget.com/) : “Nearshore outsourcing is the practice of getting work done or services performed by people in neighboring countries rather than in your own country. Many companies in the United States, for example, outsource work to Canada and Mexico. Geographic proximity means that travel and communications are easier and less expensive, there are likely to be at least some commonalities between the cultures, and people are more likely to speak the same language”. In other words, nearshore outsourcing is similar to offshore outsourcing but this kind of outsourcing is operated from neighbouring countries as opposed to remote countries. In France, most of nearshore developments are carried out in Spain, namely for CAPGEMINI who set up their nearshore “factory” in MADRID (their offshore operations are in MUMBAÏ, India.

[36] However, it has not been possible for me to confirm such statistics with hard facts.

[37] Source, IDC Predictions 2004: New IT Growth Wave, New Game Plan Insight #30499 - Dec 2003 by Frank Gens. Voir également le dossier consacré à ce sujet par The Economist, Special Report Offshoring, Decembre 13th 2003, pp79-82

[38] More about this engrossing debate online on Phil Wolff’s Klog (Knowledge Weblog) A Klog Apart at http://dijest.com/aka/. Read the article entitled “Where does IT go from here?” (direct access from http://dijest.com/aka/2003/11/03.html). The beginning of it all was Shelley Powers’s article entitled “The state of Geek Part I : Temp jobs, no health” available now at http://weblog.burningbird.net/fires/life/the_state_of_geek_part_1_temp_job_no_health.htm. Powers’s exclamation ‘Mama, don't let your babies grow up to be IT workers’ struck the imagination of many a ‘blogger’. It is also tale-telling with regards to the growing disenchantment of many US citizens regarding IT after the Internet bubble burst.

[39] Read The sound of the stereo fades into history, By Simon London Financial Times, Nov 18, 2003 (Music is everywhere - on computers, portable players, home theatre systems, mobile phones. Sales in the US of home audio...) http://www.zerogain.com/forum/showthread.php?threadid=1794

 

 

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