Radical Marketing

From Harvard to Harley, Lessons from Ten that Broke the Rules and Made it Big

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Table of Contents
Definition: Radical............................................................................................................... 3 Radical Vs. Traditional......................................................................................................... 3 Passionate Rules ................................................................................................................. 3 Radical Marketing ............................................................................................................... 4 10 commandments of radical marketing............................................................................ 4 Case Study........................................................................................................................... 8 N.B.A. .............................................................................................................................. 8 BOSTON BEER COMPANY ............................................................................................... 9 HARVARD BUSINESS SCHOOL ....................................................................................... 10 CAVINKARE.................................................................................................................... 13 BHARTI AIRTEL: First Movers ........................................................................................ 14 Baba RAMDEV............................................................................................................... 15 DELL............................................................................................................................... 16 Conclusion......................................................................................................................... 18

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Definition: Radical
 Chemically, these are the atoms, molecules, usually something which is highly reactive. o This is the reason why we call ourselves Reactive Molecules Arising from or going to a root or source. Departing markedly from the usual or customary o Radical is something which is different or usual or traditional

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Radical Vs. Traditional
Radical Marketing
Deeply skeptical of most market research Have tiny marketing departments; passionate missionaries Marketing plan based on grassroots communication

Traditional Marketing
Rely heavily on market research Professional marketing departments Marketing plans based primarily on advertising

Passionate Rules
1. Radical marketers have very strong intuitive ties with a specific target audience. (They make a visceral connection with their customers. They understand their customer very well.) 2. Radical marketers tend to focus on growth and expansion rather than profittaking. (These Radical Marketers believes in growth & expansion rather than short term profits.) 3. Radical marketers tend to be very resource-constrained and are forced to make do with marketing budgets that are far smaller than average. (They make the best of what is at hand.)

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Radical Marketing
Radical Marketing is just not innovation or traditional marketing. It is wilder and crazier.   You know how the Grateful Dead used its fanatical following to build a $100 million band despite the fact that the band split up in 1995? And how the upstart Boston Beer Company revolutionized the beer industry? It’s all through Radical Marketing. Radical Marketing focuses on big picture growth and expansion rather than on short term profits. Radical marketers make a visceral connection with customers, a long term commitment to the cause and make the best of what’s at hand.

10 commandments of radical marketing
1. The CEO owns the marketing function  For radical marketers, the chief executive officer is also de facto chief marketing officer.  Harvard business school would be a suitable example for it, as the dean was in charge of the marketing of the school.  Clay Mathile at IAMS is so involved in the marketing process that he helped design the company’s new corporate logo on a paper napkin over lunch.  Shailesh Mehta, CEO at Providian Financial, shows up regularly at the company’s back office operations with boxes of cookies and milk and settles in with other senior managers to review customer files and plot new product and marketing ideas. 2. Make sure the marketing department starts small & stays flat  Information is a dish best served warm.  Jim Koch at Boston Beer refused to have a marketing department at all for the company’s first ten years in business  Providian integrates marketing into all disciplines rather than treating it as a standalone department.

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3. The CEO & senior management regularly interact in the market with the customers.  For radical marketers, customer proximity is an absolute essential. They prefer data directly to second hand data.  Jim Koch of Boston Beer hangs out in bars  Every EMC executive, including chairman Dick Egan, has a list of favored customers whom the y call, visit, and actively court with books and perks.  The grateful Dead were legendry for spending more time on the road than any other band and they paid close attention to all aspects of their live performances.  David Stern, NBA, sits in the stands at basketball games, not in the skyboxes.  For radical marketers, “face- to face” is a mantra. 4. The marketing department uses market research cautiously.  Radical marketers argue, if market research is used to supplement a wellgrounded intuitive understanding of the market, it is a valuable help.  If, however, it is used as a substitute for genuine consumer understanding, it becomes a dangerous distraction.  The problem with market research is simple- it deals with averages.  There are no average customers. “Some people like iced tea and some like hot tea, but very few ask for lukewarm tea” 5. Hire only passionate missionaries.  Since the marketing department is kept small each person can be handpicked by the CEO.  Boston Beer’s first employee was Koch’s ex- secretary, who was young enough to know the local bar scene and who shared her boss’s enthusiasm for the product.  Providian hires iconoclastic engineers and quantitative analysts who love mining data for business opportunities. All share a zealous passion for their customers and products. 6. Love & respect your customers.  Iams’ Clay Mathile once said “I know who buys our dog food, it’s people just like us.”  Phil Lesh of Grateful dead says “We are them & they are us.” 5

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Kim Clark, dean of Harvard Business School, says of the alumini, “They are our best salesman.” Snap-on has over a million customers, the company views them as a million individuals.

7. Create a community of customers.  Radical marketers actively encourage their customers to think of themselves, and of the brand as a unifier of that community.  Harley: HOG (Harley Owners Group)  The Grateful dead: Deadheads  Snap-on Tools: Unique dealer network 8. Rethink Marketing mix.  Radical marketers devote huge amounts of money, time & effort in communicating with their customers, but they rarely have huge advertising budgets.  In fact, Providian Financial, Doesn’t even have marketing budgets…why?  Such Budgets act as “entitlements” and encourage spending when none is needed- or, conversely, as ceilings, discouraging marketers from spending more when they see an opportunity  It was a lot more difficult for Jim Koch, to drive from bar to bar convincing bartenders to push Sam Adams than to run newspaper ad, but it is extremely effective.  The objective of such one to one marketing is dialogue. 9. Celebrate uncommon sense.  Radical marketers believe in uncommon sense, Bucking traditional wisdom.  Their eyes light up when they hear the words, “Well, everybody knows that the only way is to…” They refuse to apply the simplistic formulas of marketing.  For a young Jim Koch, already earning a six- figure salary with Boston consulting group, jumping into beer business could only be marketing madness.  But Koch’s decision was no more insane or impossible than Dick Egan and tiny EMC attacking IMB head- on. Or David Stern’s challenge to turn around the moribund NBA. Or Clay Mathile trying to defeat the huge Ralston Purina marketing machine in St. Louis. 6

10. Be true to the brand.  Every Radical marketer would rather go out of business tomorrow than diminish quality today.  Iams almost went out of business rather than substitute cheaper ingredients in its dog food.  They know that cutting corners on quality is like cheating on a diet- the results are cumulative and certain to show up sooner or later.  Harley cuts its ad budget to zero and funnels its resources into increasing production and improving manufacturing quality.

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Management trick: “Draw sufficient conclusions from insufficient premises.”

Case Study
N.B.A.
In 1998, NBA held a glittery celebration, in the middle of the celebrations media members asked Stern, what would happen to the NBA after Michael Jordan retired? Stern fielded each question with a practiced statesmanship, gradually NBA produced a few replacements for Jordan, who’ve now become the face of NBA with the likes of Shaquille O’Neal, Kobe Bryant, Alan Iverson, Lebron James, NBA has become one of the most star studded leagues in the world.  Living Brand: o The only way to sustain & drive a dynamic brand is to respond quickly & effectively to the circumstances that roll in like a string of thunderstorm. BAA+NBL=NBA: o In 1949, Basketball association of America merged with it’s rival National Basketball League to form a unanimous body for the sport, it was then NBA was born. World’s 2nd most popular sport: o Soon after stern took charge, his leadership took NBA to a height where it was second most popular sport in the world. Emotional bond: o Stern measured the global markets early in his tenure, thus he started putting fulltime NBA personnel in foreign cities to foment interest in the sport & league & local television rights & product sponsorships. Marketable Brand: o Stephen A. Greyser, a sports marketing professor @ Harvard business school said, Stern exhibited remarkable vision, focusing on brand equity, when no other sports league or fewer companies even thought about it. 8

Key Alliances: o NBA raised a whopping $3 billion through 150 licensing partners & 15-20 sponsorships worldwide. It also honed the craft of brand extension from licensing it’s teams’ logos & creating WNBA, a women’s league cast in it’s own image. NBA has evolved a set of guiding principles: o Stern said “This is our brand & we better take care of it, we might share it at a time like joint custody, but never give it up for adoption.” o League’s emergence& growth could not be done alone, strategic partners were carefully selected & nurtured & the league remains loyal with whom it does business. A new entrant can’t come in & buy someone’s existing partnership.

BOSTON BEER COMPANY
The BOSTON beer company was founded by Jim Koch In1984. The beers were originally contract brewed by the Pittsburgh Brewing company but today approximately 35% of its beer is produced at the company’s brewery. The total production of the company is 159million Litres. As of 2007, the company produces 12 varieties of beers like Samuel Adams, honey porter, and four seasonal brands:-White Ale (Feb- April), Summer Ale (April-August), Octoberfest (September-October), winter Lager (November- Jan).

How they went for being radical
 Intuitative connections with customers o Jim Koch used to go to a bar at night and do a promotion and talk to people. Doing this repeatedly, he had a good idea about what the customers want. He believed, they had better beer, so the most important thing is to get it in front of consumers and store it in a visible way so that people would try it and be reminded of it. Hire Passionate Missionaries o Young, attractive and outgoing Rhonda Kallman was the first employee hired in Boston. She had worked as bartender & waitress at night. She knew the bar scene in a way the shy Koch did not and provided him with 9

both an entrée and insight into market without resorting to expensive market research. o Kallman enabled them to know how bars operated, who had the buying decisions, and what it would take to move the beer.  Rethink marketing mix o Radical marketers are not trying to reach huge segments of people in hopes that someone will find their message appealing and thus buy the product. o They have defined a core group of loyal users around whom they have built their business and designed their marketing communication. BOSTON markets continuously and devotes huge amounts of money, effort and time to communicating with their customers. o Initially, they spent less on advertising compare to other marketing communication. With the success of SAMUEL ADAMS and increasing demand for it left Koch in dilemma whether to go with mass population or to continue with their defined customer groups.

After ten years without a formal marketing department Koch hired a brand development vice- president few years ago. Koch agreed to a series of approaches that would have been unthinkable a decade ago such as market research studies, focus groups, huge advertising budgets. They changed the packaging- best beer in America to snowmen and sail boats. But it all went into vain. Then Koch realized it’s better to stick with the old grass routes.

HARVARD BUSINESS SCHOOL

Introduction
  Harvard defined the MBA and built a lucrative market around it. It was founded in 1908 and since then it has thrived by adhering to a consistent theme among radical marketers Stay focused on a clear mission o to be the best o Remain close to the core customers o Maintain relentless brand control 10

The alumni directory of the B-School is a who’s who of global business leaders, chief executives, entrepreneurs,consultants, and venture capitalists.

CUSTOMER COMMUNITY:     Harvard’s brand management extends well beyond the classroom. The B-School alumni office keeps close tabs on most of its 66,000 living alumni, tracking their careers, their earning power, their families and their civic and social contributions. Indeed, the alumni directory is a more powerful testament to a brand than a spot on Fortune magazine’s most admired companies list. Again, the alumni network of the B-School is 6 times bigger than it’s closest rival.

BRAND EXTENSION:  Radical marketers excel at creating product line extensions without losing brand integrity. For, HBS, it’s executive education program has been the consummate brand extension- leveraging a complementary product line perfectly, generating growing revenue, adding luster to the brand without diluting it. The program was started in 1940s. The HBR was started in 1922. It had built lucrative business with both HBR reprints and sales of the thousands of case studies written and published by its faculty. Later on they founded their own publishing arm.

TOP MANAGEMENT INVOLVEMENT:  More than brand managers, the deans have served as keepers of the mission, guardians of the trade marks.  Like a CEO, each dean has owned the marketing function and refused to delegate it down into layers of bureaucracy.  All the other faculty represented as brand manager and the graduates passing from it was a product. SHAPING THE PRODUCT:  During the World War II, the B-School shut down operations in order to become a training centre for production management and supply logistics for the military and statistical control of military aircraft was handled with such efficiency that it played a major role in the outcome of the air war against Germany. Later in 11

1943, they started executive education program and included the production management and supply logistics program.

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“What is radical today will represents the mainstream tomorrow....” Because marketing, at its bests is a dialogue with consumers, filled with creativity and passion that makes a lasting and intuitive ties. The book was published a decade ago (in 1999), hence the rules the companies follows in the case studies we discussed from the book, have now become a mainstream. Below are a few case studies of companies which can be called radical in the present scenario. So, we believe that a company’s road to success is a mix of radical as well as traditional strategies. Marketers rethinking the rules & reinvesting the game in 21st Century

India
Infosys Future Group Baba Ramdev Bharit Airtel CavinKare

Worldwide
Dell Yahoo SouthWest airlines Amazon Dell

CAVINKARE
Success is a journey not a destination  C.K.Ranganathan – Chairman & MD of Cavinkare is the man who has shown the world that it is possible to beat the multinationals in the most difficult FMCG Market.  He started his business from Rs.15000 and is now worth Rs.750 Crores.  Main strategy used by Cavinkare is to strengthen the distribution & marketing. Raganathan says, “One of the many things which were Radical sometime back but is now mainstream activity for Cavinkare is using consumer insight”. Whatever he make, he want the coolies and the rickshaw pullers to use o So he launched the concept of sachets. o CavinKare used to introduce the products according to the customer needs. o He used out of the box strategy while launching the sachets o He offered free chik shampoos sachets with every 5 empty sachets of shampoos of other brands. o After some time he started giving one free sachets with every four empty sachets of chik shampoo.this one for four was a great success to cavinkare. 13

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He covered the untapped customers in going to rural areas particularly to low cost sectors. He redefined segment o Eg he introduced meera with shikakai in tamil nadu, karthika mixture of herbs in karnatka, Reasons behind success o Team Work  Backing up on teamwork company has managed to cater 25 lac outlets nationally with the total employee volume of 1880 only. o Innovation  First they introduced the sachet system according to the customer needs. Then they introduced shampoos with different fragrances. Then they introduced fairness cream as fairever.

BHARTI AIRTEL: First Movers
 They were first to introduced many things before their competitors. Such as o They introduced full roaming services on prepaid in the country. o They introduced voice quality enhancers to improve voice quality and acoustics. o They were the first telecom company in the world to introduce iso 9000:2000 certification. o They used matchbox strategy that wherever matchbox is sold, Airtel should be sold Express Yourself: o They have tried to convey the message to the people that Airtel is the mean using which you can express yourself to the world. It also helped them to establish an emotional bond with the customer. They maintain one to one customer relations. They were basically innovators because of few reasons o They were first one to start tele voting such as in KBC and Indian idol. o First to offer Saas Airtel, was the first to provide electronic recharge for mobile phones. They were first one to change revenue model to minutes of usage per customer from earnings per customer.

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Baba RAMDEV
  Maverick is used for a person who is independent in thought and action or exhibiting such independence: maverick politicians; a maverick decision and now a maverick Guru [Possibly after Samuel Augustus Maverick (1803-1870), American cattleman who left the calves in his herd unbranded .]

Pull up a chair. Get comfortable. Take a deep breath. Relax. Let’s talk about how you can increase your business---and achieve anything else you may desire--- through the magic power of “Spiritual Marketing.”    Baba Ramdev: The MAN who Reinvented Yoga, made it simple and easy to practice, an art that originated 2000 years ago Televised Guru: Over 85 million see his show on TV in 170 countries Carefully planned strategy for success: Right from pranayam and yoga exercises to his rants against cola and junk food companies: carefully planned strategy for success o Malpractices in the agricultural sector: Swami Ramdev says that the overuse of fertilizers and pesticides has lead to increased profits for those in trade, but it poses a big threat to the health of the common man since fruits and vegetables are increasingly becoming contaminated with disease causing chemical compounds. o Consumption of fast food and soft drinks: At most of his yog shivirs (yog camps) Swami Ramdev has raised the issue of increased consumption of fast foods, packed foods and soft drinks by common people. He says that these products are disease causing junk and are far from anything to be eaten. He says that soft drinks like Coke and Pepsi are no better than pesticides or toilet cleaners and this is enough to explain what effect it has on the human body. Target segments: partners in innovation, marketing and growth of his organization.

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DELL
Many rivals copied the digital idea that dell initiated but no competitor could manage to match dell’s i) ease of use ii) clarity iii) speed iv) cost v) personalization.       Real time feedback about product offerings, Service and competition Controlling the link: connection between customers and suppliers Streamlined asset base and Low inventory levels Started selling via dell.com o Now also at retail stores (e.g.: Croma, eZone) and dell exclusive outlets Tracked order status via internet On- line configurator o An on- line configurator is relatively easy to imitate however, behind- the screen aspects of customer service are much harder to copy. o Competitors found it really hard to copy the business design assets that are hard to duplicate like accuracy, timeliness, thoroughness, supply network management expertise, and branding. Reversing the Value Chain o Dell followed an altogether different and innovative approach called the REVERSING THE VALUE CHAIN. o Customers first placed the orders electronically after which the production process was activated. o Thereby, minimizing the inventory levels. Again, collected the revenues from customers first and then paid the suppliers. o This protected economics of dell while delivering great value to the customers. Dell’s genius lied in its Choiceboard. o Dell said lets create one Choiceboard and supply network, and let the millions design an infinite variety of products that will meet their individual needs. Dell also provided an additional layer of customization through its PREMIER PAGES to its corporate customers. o Premier pages were customized Web pages which offered a powerful combination to sales, service, and technical support in digitized form. Dell model of Delivery outsourcing o The "direct-model” of Michael Dell is simply a way for Dell to cut on the standard supply chain cycle and deliver goods directly from the manufacturer to the customer. 16

o They created partnerships with several suppliers such as Sony, Intel, and others to deliver goods effectively at the time of the order to Dell's plant where the assembly took place. o The delivery and shipment were outsourced through a dedicated service that also insured delivering the monitors directly from the supplier at the same time. o Mr. Dell talks about how suppliers are benefiting from the fact that Dell buys more items from the supplier keeping no inventory and only requesting faster delivery upon orders. Dell Financial Services o Another major step that Dell took towards expanding the customer relationship was in fast growing equipment leasing, purchasing, and financing business, known as Dell Financial Services (DFS). o DFS is wholly owned joint venture of Dell Computer in partnership with the CIT financial group. o Dell’s objective was to make DFS a total IT equipment solutions provider.

Dell’s objective was to create an ECOSYSTEM MODEL. Dell uses its customer expertise to sell goods and services.

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Conclusion
 “A true professional marketer is the one who is radical with traditional roots”  “Tattoo test” is an extreme but useful barometer of the successful community. Obviously, a tattoo is sufficiently painful and permanent that it makes a strong statement about commitment. “Traditional marketers who pass the tattoo test= “TRADS/ RADS” ”

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