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

- Version 1.0 -

re-‐think:
Product
Planning
~
Why
Apple
can
create
blockbusters?
~

Chikafuji,
Ryu

For
persons
who
are
interested
in
consumer

products,
services,
and
markets.
–
Aug/25/2011
(last
revised
on
Dec/18/2013)

There
is
nothing
more
important
task
than
to
ﬁnd
out:
“what user-experiences the customer looks for,
values, and needs”.
Everyone
knows
this,
but
this
isn’t
easy
task.

Instead,
many
companies
give
an
ear
to
the
industry’s

influencers,
and
oversee
compeItors,
apart
from
their

target
customers.

A
Company

(a
consumer
products
company)

Target
Customers
Influencers

(big
research
firms,
oligopoly
firms)

Instead,
many
companies
give
an
ear
to
the
industry’s

inﬂuencers,
and
oversee
compeItors,
apart
from
their

target
customers.

A
Company

(a
consumer
products
company)

CompeItors

Target
Customers

Curious
to
say,
inﬂuencers
provide
the
vision
of
the
newly

deﬁned
product
category
for
their
customers,
the
consumer

products
companies.

(*) examples of influencers

Actually,
many
inﬂuencers
have
global
markeIng
plaLorms

to
survey
their
customers’
potenIal
market.

Problem
is
that
the
inﬂuencers’
happiness
doesn’t

correspond
the
companies’
happiness.

Everybody Netbook!
(with Wintel !!!)

The
inﬂuencers’
happiness
is
to
spur
an
intense
compeIIon

in
their
customers’
market
because
such
compeIIon
brings

them
huge
revenue.

The
inﬂuencers
elegantly
lead

their
customers
into
a
intense

compeIIon.

The
compeIIon
makes
the
inﬂuencers’
hearts
sing,

while
the
companies’
hearts
be
exhausted.

It’s
Ime
to
re-‐think.

Many
companies
start
from
products.

They
improve
exisIng
products
and
make
the
spec
table

beRer
one.

New segment

Existing market

Existing market

Sometimes they create a new segment.

Fewer
companies
start
from
people.

They
innovate
new
user
experiences
and
make
the

people’s
life
beRer
one.

Existing market

Existing market

Sometimes they create a new market.

New market

My
focus
here
is
clearly
on
the
laRer
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.

True
markeIng
says,
“These are the user-experiences
the customer looks for, values, and needs.”

True marketing says, “These are satisfactions the customer looks for, values, and needs.”
– Peter. F. Drucker

To
ﬁnd
out
”the user-experiences” is
the
starIng
line

for
new
product
planning,
however,

You can’t go out and ask people, you know,
what the next big thing.
– Steve Jobs
“Steve Jobs speaks out”, CNN Money, Aug/03/2008

[This
product
is
“Innova5ve”]
means
that
the
product

brings
far
be;er
user-‐experience
to
the
target
customers.

user-experience

New trajectory
Innovative Product

Discontinuity

Conventional Products

Conventional trajectory
(incremental improvement)

time

In
other
words,
there
must
be
discon5nuity
between

the
trajectory
of
convenIonal
products
and
an
innovaIve

product
in
terms
of
“user-‐experience”.

What
ordinary
people
can
imagine
is
limited
to

incremental
improvement
of
exisIng
products,

their
imaginaIon
can’t
beyond
this
disconInuity.

If I had asked people what they wanted,
they would have said “faster horses”

– Henry Ford
Founder of the Ford Motor Company

(Around 2000,) We did market survey about the demand for
camera-phone, not once, four times. Every time the results
showed negative. However, nowadays, camera-phone
became standard.
– A comment from a marketing director

(Martin Cooper’s Keynote Speech at IEEE Wescon 2005)

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.

It’s
us
who
have
to
answer
the
quesIon:

“what the next big thing”

Both Honda-san(*) and I had never started product
development from 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”

Masaru Ibuka,
photo from www.sony.net

(*) Soichiro Honda, founder of HONDA

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

"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.

Steve
Jobs
simply
described
Ibuka’s
way:

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

Once
we
reach
a
strong
conﬁdence
that

“a lot of other people are going to want it, too”,
then
most
barriers
which
prevent
us
from
innovaIon

are
removed.

You
may
have
heard
the
following
sentences.

“I
requested
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
compeMtor
could

do
it
and
we
are
in
for
it
now.
Stupid
engineering
team!”

Marketers

“I
asked
markeMng
guys
how
criMcal
to
implement
that

feature
for
our
business.
But
they
didn’t
show
any

compelling
explanaMons.
So,
we
had
to
make
it
lower-‐
priority
task.
Otherwise,
we
could
do
it!
Our
markeMng

team
doesn’t
work
at
all”

Engineers

Before
iPhone,
most
manufacturers
believed
that
it
was

impossible
to
implement
full-‐web
browser
on
mobile
handset.

But
just
less
than
one
year
a^er
iPhone,
many
manufacturers

released
mobile
handsets
with
full-‐web
browser.

What
does
all
this
mean?

We
see
a
lot
of
similar
stories
in
our
history:
Transister
Radio,
Home
VTR,
Walkman,
Personal

Computer,
Megapixel
Digital
Camera,
Full-‐ﬂat
CRT,
Large

format
LCD,
Boradband,
Tablet
PC,
…
etc.

Barriers
against
an
innovaIon
are
not
so
high

if
we
share
a
strong
conﬁdence
that

“a lot of other people are going to want it, too”.

This confidence fires up us to realize far better
user-experiences, innovative products,
no matter how high the barrier may be.

You
know,
potenIal
ability
of
engineering
is
much
higher

than
we
expect
and
engineers
can
be
more
ﬂexible
if
they

share
the
conﬁdence.

MarkeIng,
sales,
logisIcs,
legal,
producIon,
PR,
IP,
HR,

or
top
managements,
in
whatever
secIons,
persons
in

charge
can
be
more
passionate
and
creaIve
if
they

share
the
conﬁdence.

The
missing
piece
for
innovaIon
is
the
strong
conﬁdence

that
”a lot of other people are going to want it, too”.

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.
(by Concise Oxford English Dictionary)

chapter
3

think
about

Keynote speech, Mar/2011, from Apple.com

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

This
sentence
explains
about
the
advantage
of
Apple’s

products,
but
it
doesn’t
explain
why
they
can
create

such
aRracIve
products.

The
quesIon
I’d
like
to
ask
here
is:

“How
to
create
such
a`racMve
products?”

The
answer
must
be
very
basic
and
obvious.

Apple
has
strong
conﬁdence
that
she
gets

what
the
customers
want
to
buy.

Apple
is
always
striving
to
ﬁnd
out:
“what user-experiences the customer
looks for, values, and needs”.

Apple
spends
enough
Ime
for
this
task.

So,
Apple
o^en
enters
the
market
very
late,
and

she
gorgeously
re-‐deﬁnes
the
product
which

makes
customers’
hearts
sing
as
well
as
herself.
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

(*) Napster, etc.
(**) NTT docomo, etc

The greatest praise an innovation can receive is
for people say,
"This is obvious. Why didn't I think of it?"
– Peter. F. Drucker

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
introducMon
words
about
iPhone

It
may
sound
paradoxical,
but
Steve
Jobs
says:
“We do no market research. We don’t hire consultants.”

MeanIme,
Apple
has
been
building
a
huge
plaLorm.

Apple Store, Photo by Camillo Miller, Flickr

Apple
Store
was
launched
on
May/2001,
5
months
before

the
ﬁrst
iPod
would
be
released,
two
years
before
the
iTune

Store
would
be
launched.

(*)At
that
Ime,
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.

In
2011,
Apple
has
336
stores
in
11
naIons:

Switzerland:
3
Germany:
5
UK:
30

Canada:
20

China:
4

France:
7
Spain:
2
US:
240

Japan:
7

Italy:
6

Australia:
12

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

Apple Store Photo by Camillo Miller, Flickr

Apple
has
about
50,000
employees
and
about
30,000
of
them

are
working
at
Apple
Stores
as
full-‐Ime
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.

The only way to enrich their life is to be part of their life.
– Ron Johnson
Senior Vice President of Retail, Apple

Apple
Store
became
the
most
powerful

“empathy”
plaLorm
on
the
planet.

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

Empathy: [em-puh-thee]
- the ability to understand and share the feelings of the
target customers; “the CORE” ability of Marketing

Empathy

MarkeIng

Empathy: [em-puh-thee]
- the ability to understand and share the feelings of the
target customers; “the Source” of Innovation
encourage

Motivation (act)
Passion (triumph)

Empathy

Innovation (produce)
Creativity (think)
inspire
Imagination (feel)

[ref]“Towards a Definition of Creativity“, Wisconsin Task Force on Arts and Creativity in Education

“Empathy”
is
the
very
core
ability
for
both

markeIng
and
innovaIon,
the
two
basic
funcIons

of
business
enterprise.

Some
companies
already
executed
drasIc
investment

for
the
Empathy
as
an
system.

Apple
has
been
building
huge
and
gorgeous

Empathy
plaLorm,
Apple
Store.

Samsung
has
“Regional
Specialist
Program”,

a
very
aggressive
Empathy
culIvaIon
program.

(*) see http://is.gd/Eu0Gfy
This is very old program, since 1990.

Dyson’s
engineers
home-‐stayed
in
Japan
several
months

to
understand
and
share
the
people’s
lifestyle
before

designing
DC12.

Dyson’s vacuum cleaner DC12,
a strategic product for Japan market

However,
to
build
the
Empathy
as
an
eﬀecIve
system

is
not
easy,
especially,
in
this
profound
changing
age.

Life Style
Connected Society
Declining Birth Rate
and Aging Population
Sustainable Society
Diversity & Inclusion

Later Marriage

…

Global
Economy
Share
of
Global
GDP
Ø USA:

31%(2000)
-‐-‐-‐>
18%(2015)(*1)
Ø BRICS:

8%(2000)

-‐-‐-‐>
23%(2015)
-‐-‐-‐>
31%(2020)(*2)

Share
of
Global
Cell-‐Phone
Market(*3)
Ø USA
market:
50%
(1998)
-‐-‐-‐>
12%
(2015)
Ø Asia
market:
19%
(1998)
-‐-‐-‐>
50%
(2015)

E7
will
beyond
G7
in
2020
in
terms
of
GDP(*4)
(*1) IMF
(*2) BRICS Summit
(*3) Softbank
(*4) PWC

Lifestyle
changes
day-‐to-‐day,

market
changes
globally.

Once
again,
“Empathy”
is
the
very
core
ability
for
business.

Are
you
being
inspired
through

target
customers?

Are
you
culIvaIng
your
passion
through

target
customers?

Are
you
and
your
company
ready
for

the
next
decade?

visit: tansalink.com

An answer will be shared here in version 1.0

…
to
be
posted.

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

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

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

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