The Market in Global Times

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The “David and Goliath Economy”

In the New "Global" or "Digital " Paradigm the consumer is invested with a power that humanity has never seen before: there are many cases in which social networks such as Yelp or Foursquare propel the resounding success of a business or, in some cases, even its ruin. This consumer’s power outlines a sort of David and Goliath economic model.

With the popularity of social networking, dissemination of supply and demand for goods is accessible with scarce resources. It is also immediate, which implies that the "opportunism" (in a good sense, that is, the ability to bring the good demanded at the right time) gives unprecedented competitive advantage, giving room to  phenomena such as Uber, where an initially small company with little investment ends up putting in check giants of the Industry.

 

Here are some of the competitive disadvantages of the old giants:

  

In general, they have invested heavily and have a coarse structure to maintain, what takes them to minimize risks and be stingy with their know-how, while creative entrepreneurs whose major goal is to be known, lavishly spread their knowledge. Are largely regulated, having to deal with taxes and some other impositions, while, on the other hand, law regulation still fails to classify new business’ practices aroused under the digital paradigm; and thus many new startup are, as a matter of fact, at least temporarily away from regulations burdens (as in the case of Airbnb who, mediating between supply and demand for accommodation, has moved from its leadership position more traditional hotel companies.

Telecommute: The proliferation of telework

Estimations show that there are about 30 million independent workers in the United States, and that this figure will rise to 40 million by 2019. It is expected that this phenomenon will expand globally to the extent that technology products are more readily available in other countries.  What will the Millennial do in this new situation? Will they develop their creativity and surprise the world with a massive impact with no precedents? Or, conversely, will they succumb to the weight of the old re-aligned giants, generating a catastrophe in the Social Security system?.

 
I would venture to say that the answer to this question will not take many years to come.

The generations of the Global Era

Rethinking History

Picture by Matthew G. via Flirck under Creative Commons

Everyone says that the new millennium has brought a new paradigm. But how exactly has this new frame changed the way people live and communicate?, how far is today's market from the market where the sale and consumption of goods took place 5 or 10 years ago?

Let's start with how history and historical studies are built today.

The generations of the Global Era

Traditionally generations have been conceptualized and studied regionally. In the old paradigm made ​​sense to think of the generation of '27 in Spain, circumscribed to a literary phenomenon [i] , or the generation of "Baby Boom" in the United States, designed to account for demographic events. The reasons that led to the conceptualization of these and other age groups were certainly local. Now it seems legitimate to ask if it makes the same sense to categorize the various generations sticking to a regionalist approach.

Surely the reader has heard of Millennials. This term refers to people born between 1981 and 2000 and whose ethos is characterized by a strong attachment to the use of technological means [ii]. Millennials check their smartphones several times a day; use social networks consistently and for extended periods of time, have a consumption pattern that relies heavily on the "word of mouth" rather than on what is advertised by the brands or celebrities.

Is not this a global phenomenon? Does it makes sense from this point forward to continue conceptualizing the new generations in regional terms?

Democratization and Socialization

The use of mobile phones means that anyone can communicate with anyone, basically anytime. Besides "mobile" current phones are usually "smart" meaning that not only communication is immediate, but also research activity: access to encyclopedias, to dictionaries, breaking news is possible pretty much everywhere. By accessing the Cloud, our own portfolio, the files we work with are accessible from anywhere without even carry a pen-drive. Bitcoin, PayPal and Square are leading us to an economic space in which not even our wallets will be needed when we leave home (yet, do not forget your Smartphone or your Google Glasses!).

Similarly, access to the social media marketing provides an advertising tool to entrepreneurs who otherwise would not be able to afford a marketing campaign (a status update of an average user, without many contacts Facebook, is seen by approximately 50 people in a single session). This way, technology achieves goals on a ground where ideologies have failed.

 

[I] Wikipedia, Generación del 27

[Ii] Melissa Hoffmann ,   ¨ Here Is Everything You Need to Know About the Millennial Consumer on AdWeek.com

The Social NetPlots

Click "I detest it"

Image by Frits Ahlefeldt-
Laurvig  under
Creative Commons 
License

The Social Networks seems to be a fertile ground for innovation in matter of complaints and protests.

A mixture of creativity, humor, and ease gave an unpredictable turn to the disappointment and anger that aroused by a discriminatory act in a small Texas town some months ago.

Indeed, a gay couple stopped to have breakfast at the Big Earl City Pittsburg, Texas bar last May. The waitress (she was the owner's daughter) came over to tell the couple that they would not be welcome next time as the restaurant "does not provide services to f*#s". By the way, in front of the restaurant there is a sign that reads  "Welcome to Big Earl Where Men act like Men, Women act like ladies, not saggy pants, we reserve the right to refuse service to anyone",  which in Simple Creole tantamount to saying:  "if you're gay or black, best keep driving . " With such idiosyncrasy, it doesn’t come too difficult to imagine the impact that would have caused to the owner of the local the reaction of the gay community: instead of publicly ousting the place, and launch a derogatory campaign against it, they turned to social media to sponsor the restaurant as a fantastic destination for those gays looking for a good breakfast in town.

Perhaps you're familiar with social networks that are, at once, portals for reviews and criticism for various premises that provide products or services to consumers (restaurants, gas stations, retail outlets, etc). In the case of Big Earl's the virtual stage protest that was chosen was  Yelp (a review portal and information guide popular in the United States). The end result was that the corresponding page to this restaurant ended up looking more like a political grandstanding than a list of recommendations and suggestions. Perhaps this was the reason that Yelp’s executives finally cleared away much of the comments. However the consumer backlash worked, and still parading through the door of Big Earl myriads of gay couples line up to get sure that the restaurant’s manager never forgets the lesson.

Advertisement: new forms of fugacity

Picture by Esther Vargas under
Creative Commons License

You may have noticed the gradual trend to brevity exhibited by the most popular online platforms

such as Facebook, Instagram, and more recently Snapchat, all characterized by a casual, brief, increasingly fleeting and ephemeral style.

Brands are challenged to promote their products through an application in which the content disappears in seconds. Not an easy task for advertisers to come up with a shocking announcement, interesting, "sticky", efficient enough to capture the attention among that waterfall of twitters, status updates, and conversations often disjointed and lacking in consistency. Especially in the case of Sanpchat (currently the 3rd. most popular social application among youth, behind Facebook and Instagram), the randomness of conversation sometimes makes it difficult even for robots aimed to detect the use of keywords, get to determine what kind of notice or advertising is more or less relevant. However, advertisers are including such platforms in their advertising efforts, and even beginning to capitalize on unexpected benefits of their campaigns.

As per Instagram, this application introduced the first paid ads (for mobile version) in last November. Less than a month later, the report released by the company showed the experience as a great success: three out of the four sponsors included in the report revealed having achieved the perception that they were pursuing for their brands, reaching an audience of between 7 and 9 million users without flooding Instagram with their ads. Indeed, in a span of nine days Levi reached nearly 7 million users in the US, while Ben & Jerry achieve similar results, reaching nearly 10 million people in a campaign the same period.

Although, as noted above, the information exchanged on these platforms is highly volatile, fleeting, and most chaotic cases, this type of advertising has virtually endless possibilities. Imagine the kind of information available to applications like Facebook or Snapchat: the average teenager publicize events such as their new relationship, or if they’ve gone on vacation to this, that and such place; if they have visited some disco and found it brutally boring ... This is like a diamond in the rough for the advertiser trying to define the profile of its consumers. And to skillful miners, half a nugget is gold...

What does CRM, Pipeline and Sales Funnel mean?

What is CRM?

The word CRM (English Customer Relationship Management ) is a marketing concept that refers to a method or system to organize and keep track of the various stages that make up the sales chain of a company. As such, ie as a method, it can be executed on paper or verbally. However, in common usage, the term is used to refer to software business management and business administration such as Salesforce, Zoho, Workbooks, Microsoft Dynamics, etc.

What is Pipeline?

This term is used to designate engineering based on different branches, which have valves and pumps to drive, at each distance, the flow of a given substance (in this case, a "commercial substance"). This type of data stream output implies that a phase is another input. Thus, the various stages or phases are linked in the manner of a pipe, making the flow speed through the pipeline. Perhaps a valid translation of the term into Spanish would be "Aqueduct sales" ( AS ).

Why is the concept helpful? One reason for segmenting the calculations, is that it improves the diagnosis of the present situation of the company: where is the business today, what sections of the marketing chain are neglected, where are they over-allocating resources and eventually the causes.

What is Sales funnel ?

Like the word Pipeline, the English term funnel (in Spanish embudo) is graphical and pretty self-explanatory: the top of the funnel, the widest part illustrates all potential customers ( CP ) consumers or users of the service or product the company sells. Includes thus, in a vague and undifferentiated way all potential candidates  that the company has indexed in its database as potential customers, even in the case of people who are not even been shown the product or service yet .  

The bottom of the funnel, illustrates what is happening as you go through the sales process after product presentation, negotiations, etc., until it reaches the narrowest part representing the final percentage of actual buyers or consumers.

The sales funnel is a marketing tool to quantify potential customers (or sales value) at any given moment of the marketing process.

Its utility lies in helping to predict the number of CPs that with probability, will become customers of the company.

Another of the advantages is that through continuous monitoring of the coefficients, detects problems in the sales pipeline and take corrective action before it is too late.

The  sales funnel shows AV obstructions, downtime outside the standard norm, or if there is an insufficient number of CPs in a given stage of the process. This knowledge allows to determine where sales agents should focus, efforts to maintain sales at the desired level and to meet sales targets.