Published in Philippine Daily Inquirer, November 5,2004
IN THE mid-90s, two noted corporate strategists â€“ Gary Hamel and C.K. Prahalad â€“ gave the world the term convergence. It is the strategy of putting together separate products and services to come up with a new value offer to meet the needs of the target market.
Convergence is a process that requires out of the box thinking. C.K. Prahalad has stated “todayâ€™s customers are more informed, networked, active and global. These new market characteristics have led to anew form of value creation, where value is co-created by the both the company and its customers.”
The two great strategists underscored product success only when customers are involved in their development.
But not all marketers and organizations can effectively handle or initiate disruptive innovations. Most experience difficulty when creating entirely new markets and introducing changes. Below are tips on how to manage successful market-driven innovations. These are timeless marketing principles re-engineered to suit new age marketing in a convergent market.
These include: identify and knowing the target market while discovering emergent markets; recognizing unarticulated needs and making customers co-creators of the value offer; maximizing people creativity; using technology as an enabler; and sustaining co-creation by responding and anticipating the evolving needs of the market while maintaining functional relevance.
Know your market; identify an emerging market. There are several emerging markets in the world. Two of these are the overseas Filipino workers and the Muslims.
The OFW market is the third largest in the world next to Mexico and India accounting for an estimated $7.6 billion remittances in 2003 from roughly 8 million Filipinos.
The three largest Muslim populations are in Asia â€“ India, Bangladesh and Iran. In the Philippines, the Muslim population is estimated at 5 percent or an estimated 4.2 million.
Make consumers co-creators of the value offer by discovering unarticulated or latent needs. Smart and Globe have tapped into the OFW market with Smartâ€™s Padala and Globeâ€™s Kababayan and G-cash.
The two services allow financial service, in particular remittances, to be conducted via telephony services.
Another is Korean brand Ilkone i800 marketed specifically to address the needs of the Muslims while addressing their culture, tradition and lifestyle. Ilkone i800 is a cellular phone that has standard features plus it provides stored religious text messages, reminders on prayer times and a compass to point the user to the right direction for prayers.
Same with Mocha Blends CafÃ©. Coffee lovers can now enjoy full meals capped with their favorite espresso or specialty coffee. Moving beyond the usual coffee, cookies and pastries associated with cafÃ©s, Mocha Blends CafÃ© provides hot meals pastas, beef stew, pork stroganoff and chicken ala king au gratin, gourmet sandwiches, fruit teas and shakes, saving its customers a separate trip to a diner.
Maximize people creativity. Todayâ€™s marketers are challenged to develop new, disruptive products and services responsive to market needs. New age marketers are capable of imagining products and services, new markets and entire industries that do not yet exist and give them birth and life.
One example is in education. The De La Salle Graduate School of Business MBA-JD program is the first dual-degree program in the Philippines that combines business and political science thus, making graduates of the program better suited to a future career as a corporate lawyer.
Another is in healthcare with the fusion of medical needs and tourism. Bumrungrad Hospital is the largest private hospital in Thailand. Aside from its top-ofthe-line facilities, expert doctors and patient care services, Bumrungrad Hospital has a unique International Patient Services Center that caters to the needs of the hospitalâ€™s foreign patients and their family. At the center, foreign patients can avail of interpreters,
an international concierge service, embassy assistance, VIP airport transfers, e-mail access, international insurance coordination and even city tours for relatives waiting for their sick relatives to recuperate.
In the banking sector, deregulation has allowed banks to offer insurance products to its customers. Both Banco de Oro and Standard Chartered Bank offer a fusion of banking and insurances giving life to bancassurance services.
Even retailing is not exempt from convergence. Shoemart began as a shoe store more than three decades ago then metamorphosed into a department store while maintaining their business of selling shoes. In 1994, Shoemart made a giant leap to the convergent concept with a super mall designed to bring together shopping, entertainment, leisure and amusement, quick service and casual dining restaurants as well as convention and trade exhibition centers under a one-stop shopping experience.
Such is the same with gas stations and their C-stores like Caltex Starmart, Shell Select and Petron Treats that allow vehicle drivers and owners to buy groceries or better yet fill up hungry stomachs while having a gasoline refill.
Technology as an enabler. Internet has allowed marketers to bring their brand to anywhere around the world. Godiva, a local skin manufacturer, uses an online storefront and e-commerce to reach global consumers. Among its market include Caucasians and African-Americans who swear by the efficiency of the productâ€™s key ingredient called licorice that whitens skin.
Another is Bizsum, an online storefront that offers subscription business book summaries to professionals, businessmen and the global community alike who wish to be abreast with the latest business insights, trends and practices but do not have the time to read through hundreds of pages of one business book.
Even media is capitalizing on technology and co-creation with television consumers. TV networks, for one, have taken advantage of text messaging in shaping the plot of their shows much like the creative approach of “Sanaâ€™y Wala Nang Wakas” that made the viewers decide on the ending of the soap.
Another is the highly popular Emmy nominated reality show “American Idol” that kept Filipino viewers in the United Sates and Hawaii glued to their seats weekly and whose text messaging rallied Jasmine Trias to finish in the final three.
Sustain co-creation by anticipating the marketâ€™s evolving needs. Of course, in Japan and other wealthy markets there are smart toilets like the $3,000 Toto toilet that warms the seats, spritzes, dries and deodorizes oneâ€™s buttocks. Soon to be marketed are toilets that provide diagnostic medical information and daily health checkups, while keeping an accurate record of the userâ€™s toilet habits and health thus making it easy for
the family doctor who is greatly in need of accurate information.
In Malaysia, C-stores are not only selling fast moving consumer goods (FMCG) and fast food menus but have bundled other value-added services like postal and courier services, box office booking, utility payments and dry cleaning.
This kind of sustained forward thinking is one of the key factors that propel a company toward success.
Convergence allows marketers to stretch their minds farther resulting in revolutionary products and services that answer present and future needs of the market.
Marketing practitioners are never too old to innovate. Gary Hamel once said, “We must be capable of reinventing our deepest sense of self and core businessescontinuously, year after year. It requires a never-ending effort to engage and capture the imagination of every single individual, every single target market. More importantly, itrequires a relentless quest to bring profoundly new benefits to consumers.”