"Why Apple can create blockbusters?" ~ Re-think: Product Planning


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Many companies conduct product management without product planning.
They copy a product which is originally designed by other companies, and modify it.
They strive to survey technology/market trends and roadmaps from leading companies/giant research firms.
And they enhance the variety of functions and/or the numbers to make their spec table better.
They love to swim in the ‘red ocean’.

Apple is one of the companies which is carrying out product planning as well as product management.
It often enters the market very late, but re-creates the market itself.
Apple strives to understand what the user-experiences the customer looks for, values, and needs,
and re-invents the product category to make customers’ lifestyle better.
Apple loves to make her heart sing with her product.

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  • In order to really create a new category of devices, those devices are going to have to be far better at doing some key tasks. – Steve Jobs
  • Martin Cooper
  • “ To establish a place of work where engineers can feel the joy of technological innovation, be aware of their mission to society, and work to their heart’s content.” Masaru Ibuka (Co-founder, Sony Corporation)
  • Sony Walkman TPS-L2 (1979) Photo by GeorgeArthur, Wikimedia
  • "You know how you see a show car, and it's really cool, and then four years later you see the production car, and it sucks? And you go, What happened? They had it! They had it in the palm of their hands! They grabbed defeat from the jaws of victory! "What happened was, the designers came up with this really great idea. Then they take it to the engineers, and the engineers go, 'Nah, we can't do that. That's impossible.' And so it gets a lot worse. Then they take it to the manufacturing people, and they go, 'We can't build that!' And it gets a lot worse." Read more: http://www.time.com/time/magazine/article/0,9171,1118384,00.html#ixzz1Uf1Ug8I8
  • "It's not about pop culture, and it's not about fooling people, and it's not about convincing people that they want something they don't. We figure out what we want. And I think we're pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That's what we get paid to do. "So you can't go out and ask people, you know, what the next big [thing.] There's a great quote by Henry Ford, right? He said, 'If I'd have asked my customers what they wanted, they would have told me "A faster horse." ' " http://money.cnn.com/galleries/2008/fortune/0803/gallery.jobsqna.fortune/2.html
  • Sony also often entered market Radio -> Already widespread in 1955 -> Transistor Radio, pocket radio Color TV -> in 1960s, color TV’s market share was growing to 25%. -> Sony released the color TV very late. But it was Trinitron, very bright. Sony had got market leader next over 30 years. VTR -> entered late, but like Apple’s Apple II, first home use VTR Game -> Nintendo, Sega -> PlayStation Walkman and bunch of “world first all transistor xxx. Digital tape, CD, MO, MD
  • “ Towards a Definition of Creativity“ Wisconsin Task Force on Arts and Creativity in Education
  • "Why Apple can create blockbusters?" ~ Re-think: Product Planning

    1. 1. Re-think: Product Planning ~ Why Apple can create blockbusters? ~ Chikafuji, Ryu - Version 0.9c1 -
    2. 2. For persons who are interested in consumer products, services, and markets. – Aug/25/2011
    3. 3. Temptation Chapter 1
    4. 4. The most important task is to find out: “what user-experiences the customer looks for, values, and needs”. Everyone knows this, but this isn’t an easy task.
    5. 5. Instead, many companies give an ear to the industry’s influencers and oversee competitors, apart from their target customers. Influencers: - Big research firms - Oligopoly firms Competitors Target Customers (*) A Company (a consumer products company)
    6. 6. Curiously, influencers provide the vision of the newly defined product category for their customers – the consumer products companies. (*) examples of influencers
    7. 7. In fact, many influencers have global marketing platforms to survey their customers’ potential market.
    8. 8. The problem is that the influencers’ happiness do not correspond with the companies’ happiness.
    9. 9. The influencers’ happiness is to spur intense competition in their customers’ market because such competition brings them huge revenue. Everybody Netbook! (with Wintel !!!)
    10. 10. The influencers elegantly lead their customers into intense competition.
    11. 11. The competition makes the influencers’ hearts sing, while the companies’ hearts are exhausted.
    12. 12. It’s time to re-think.
    13. 13. Re-Think Chapter 2
    14. 14. Many companies start from products. They improve existing products and make their spec table better. Existing market Existing market New segment Sometimes they create a new segment.
    15. 15. Fewer companies start from people. They innovate new user experiences and make the people’s life better. Existing market Existing market New market Sometimes they create a new market.
    16. 16. My focus here is clearly on the latter case: “Start from people”. *Lots of theories, practices, consulting services are available for the former case, such as theory of competition, product management practices, social media marketing, etc.
    17. 17. True marketing says “These are the [user-experiences](*) the customer looks for, values, and needs.” – Peter. F. Drucker (*)In the original, the term “satisfactions” is used.
    18. 18. To find out “the user-experiences” is the starting line for new product planning, however,
    19. 19. “You can’t go out and ask people, you know, What’s the next big thing?” – Steve Jobs CNN Money, Aug/03/2008
    20. 20. “This product is ‘Innovative’” means that the product brings far better user-experience to the target customers.
    21. 21. user-experience time Discontinuity Conventional Products Innovative Product In other words, there must be discontinuity between the trajectory of conventional products and an innovative product in terms of “user-experience”. Conventional trajectory (incremental improvement) New trajectory
    22. 22. What ordinary people can imagine is limited to incremental improvement of existing products, their imagination can’t go beyond this discontinuity.
    23. 23. If I had asked people what they wanted, they would have said “faster horses” – Henry Ford Founder of the Ford Motor Company
    24. 24. We did market survey (around 2000) about the demand for camera-phone; not once but four times the results showed negative. However, nowadays, camera-phone have become the standard. – A comment from a marketing director (Martin Cooper’s Keynote Speech at IEEE Wescon 2005)
    25. 25. It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it(*) to them. – Steve Jobs (*) From the context, “it” doesn’t mean prototype, “it” means finished product such as shown at Apple’s conference.
    26. 26. It’s us who have to answer the question: “What’s the next big thing?”
    27. 27. Masaru Ibuka, photo from www.sony.net Both Honda-san(*) and I had never started product development from a technological point of view. The first and foremost priority was our goal what product we really wanted to make. – Masaru Ibuka, co-founder of Sony Quoted from“The Soul of Monozukuri” (*) Soichiro Honda, founder of HONDA
    28. 28. The idea for the Walkman had come from Ibuka, who was over 70 years old, and Morita(*) , himself approaching 60 enthusiastically supported it. Not content to rest on their laurels, both kept looking for new ideas and strove to understand what kind of products would meet the lifestyle needs of young people. – Quoted from “Sony History”, www.sony.net (*) Morita: Akio Morita, co-founder of Sony Sony Walkman TPS-L2 (1979) Photo by GeorgeArthur, Wikimedia
    29. 29. "It was very nearly fetishistic, in fact – he even had a collection of Sony letterhead and marketing materials," laughs Deutschman(*) . "Sony was a company that Jobs instinctively admired and saw as model from the very beginning.” By Jeff Yang, "How Steve Jobs 'out-Japanned' Japan”, SF Gate (*) Alan Deutschman, Author of "Walk the Walk", Professor at University Nevada-Reno.
    30. 30. Steve Jobs simply described Ibuka’s way:
    31. 31. We figure out what we want. And I think we're pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That's what we get paid to do. – Steve Jobs CNN Money, Aug/03/2008
    32. 32. Once we are confident that “a lot of other people are going to want it, too”, then most barriers which prevent us from innovation are removed.
    33. 33. You may have heard the following sentences.
    34. 34. “I requested an engineering team to implement that feature, but they said it was too difficult and too risky to do it. So, we had to abandon it. However, our competitor could do it and we are in for it now. Stupid engineering team!” Marketers
    35. 35. “I asked marketing guys how critical to implement that feature for our business. But they didn’t show any compelling explanations. So, we had to make it a lower-priority task. Otherwise, we could do it! Our marketing team doesn’t work at all” Engineers
    36. 36. Before iPhone, most manufacturers believed that it was impossible to implement a full-web browser on a mobile handset.
    37. 37. But just less than one year after iPhone, many manufacturers released mobile handsets with a full-web browser.
    38. 38. What does all this mean?
    39. 39. We see a lot of similar stories in our history: Transistor Radio, Home VTR, Walkman, Personal Computer, Megapixel Digital Camera, Full-flat CRT, Large format LCD, Broadband, Tablet PC, …etc.
    40. 40. What does all this mean?
    41. 41. Barriers against an innovation are not so high if we share strong confidence that “a lot of other people are going to want it, too”.
    42. 42. This confidence fires up us to realize far better user-experience, innovative products, no matter how high the barrier may be.
    43. 43. You know, potential ability of engineering is much higher than we expect and engineers can be more flexible if they share the confidence.
    44. 44. Marketing, sales, logistics, legal, production, PR, IP, HR, or top managements, in whatever sections, persons in charge can be more passionate and creative if they share the confidence.
    45. 45. The missing piece for innovation is the strong confidence that “a lot of other people are going to want it, too”.
    46. 46. The key to get strong confidence is the ability to understand and share the feelings of target customers, that is, “Empathy”. empathy: the ability to understand and share the feelings of another. (Concise Oxford English Dictionary)
    47. 47. Think about Chapter 3
    48. 48. It's in Apple's DNA. The technology alone is not enough. That is technology married with the liberal arts, married with the humanities, that yields us the result that makes our hearts sing. – Steve Jobs Keynote speech, Mar/2011, from Apple.com
    49. 49. This sentence explains about the advantage of Apple’s products, but it doesn’t explain why they can create such attractive products.
    50. 50. The question I’d like to ask here is: “How to create such attractive products?”
    51. 51. The answer must be very basic and obvious.
    52. 52. Apple has strong confidence that gets what the customers want to buy.
    53. 53. Apple is always striving to find out: “what user-experiences the customer looks for, values, and needs”.
    54. 54. Apple spends enough time for this task.
    55. 55. Category Inception Apple Product Released MP3 Player 1997 iPod 2001 MP3 Download(*) 1999 iTune Store 2003 Smart Phone 2001 iPhone 2007 Mobile App(**) 1999 App Store 2008 Netbook 2007 iPad 2010 Apple’s blockbusters So, Apple often enters the market very late, and attractively re-defines the product which makes customers’ hearts sing as well as itself. (*) Napster, etc. (**) NTT docomo, etc
    56. 56. The greatest praise an innovation can receive is for people to say, "This is obvious. Why didn't I think of it?" – Peter. F. Drucker
    57. 57. Looking back from today: The demands for iPod & iTune Store was obvious around 1999. The demands for “Breakthrough internet communicator”(*) was obvious around 2005. The demands for “big iPhone” was obvious around 2008. (*) Steve Jobs’s introductory words about iPhone
    58. 58. It may sound paradoxical, but Steve Jobs says:  We do no market research. We don’t hire consultants.
    59. 59. In the meantime, Apple has been building a huge platform.
    60. 60. Apple Store was launched in May 2001, five months before the first iPod was to be released and two years before the iTune Store was to be launched. Apple Store Photo by Camillo Miller, Flickr (*)At that time, Apple's annual revenue was only $5.4 billion and loss was $25 million. There were only Notebook and Desktop computers in the Apple Stores.
    61. 61. In 2011, Apple has 336 stores in 11 nations: Japan: 7 US: 240 Canada: 20 Australia: 12 France: 7 Spain: 2 UK: 30 Germany: 5 Italy: 6 Switzerland: 3 China: 4
    62. 62. 5.8 millions people come to Apple Stores each week and 610,000 members in “one-to-one” service. (data from ifoAppleStore.com) One-to-one service at Apple Store Photo by Phil Photostream, Flickr
    63. 63. Apple has about 50,000 employees and about 30,000 of them are working at Apple Stores as full-time employees. 60% of employees are there sharing their vision "Enrich Lives". (*) Gateway, now a subsidiary of Acer, had similar retailing strategy, but they didn't hire their own people, didn't own real estate. On the other hand, Apple does. Apple Store Photo by Camillo Miller, Flickr
    64. 64. The only way to enrich their life is to be part of their life. – Ron Johnson Senior Vice President of Retail, Apple
    65. 65. Apple Store has become the most powerful “empathy” platform on the planet.
    66. 66. Empathy Chapter 4
    67. 67. The business enterprise has two – and only these two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are “costs” – Peter F. Drucker
    68. 68. Marketing Empathy: [em-puh-thee] - the ability to understand and share the feelings of the target customers; “the CORE” ability of Marketing
    69. 69. Empathy Imagination (feel) Creativity (think) Innovation (produce) Passion (triumph) Motivation (act) encourage inspire [ref] ”Towards a Definition of Creativity”, Wisconsin Task Force on Arts and Creativity in Education Empathy: [em-puh-thee] - the ability to understand and share the feelings of the target customers; “the Source” of Innovation
    70. 70. “Empathy” is the very core ability for both marketing and innovation, the two basic functions of business enterprise.
    71. 71. Some companies have already executed drastic investment for Empathy as a system.
    72. 72. Apple has been building a huge and stunning Empathy platform: the Apple Store.
    73. 73. Samsung has a “Regional Specialist Program”, a very aggressive Empathy cultivation program. (*) see http://is.gd/Eu0Gfy This is very old program, since 1990.
    74. 74. Dyson’s vacuum cleaner DC12, a strategic product for Japan market Dyson’s engineers home-stayed in Japan several months to understand and share the people’s lifestyle before designing DC12.
    75. 75. However, to build the Empathy as an effective system is not easy, especially, in this profound changing age.
    76. 76. Life Style Declining Birth Rate and Aging Population Diversity & Inclusion Sustainable Society Later Marriage … Connected Society
    77. 77. Share of Global GDP  USA: 31%(2000)  18%(2015)(*1)  BRICS: 8%(2000)  23%(2015)  31%(2020)(*2) Share of Global Cell-Phone Market(*3)  USA market: 50% (1998)  12% (2015)  Asia market: 19% (1998)  50% (2015) E7 will go beyond G7 in 2020 in terms of GDP(*4) (*1) IMF (*2) BRICS Summit (*3) Softbank (*4) PWC Global Economy
    78. 78. Lifestyle changes day-to-day, market changes globally.
    79. 79. Once again, “Empathy” is the very core ability for business.
    80. 80. Are you being inspired through target customers?
    81. 81. Are you cultivating your passion through target customers?
    82. 82. Are you and your company ready for the next decade?
    83. 83. … to be posted. An answer will be shared here in version 1.0