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PRODUCT INTELLIGENCE (PI), a challenge to marketing from market consumer experience.

Lic. Pablo Aristizabal

C.E.O at Competir.com

Teacher at U.B.A (University of Buenos Aires)

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The present work aims at debating and discussing an analysis about the current concept of “Product” to “Intelligent Product1” (IP), capable of satisfying the evolutionary desires of customers and, at the same time, of achieving a sustainable business model2 for companies in a framework of ongoing value creation.

It is about concept and reference, aiming at fostering brainstorming to contribute to better decision making.

This IP (object, not subject) is a value proposition which represents a commitment to providing a set of attributes to the expectations of someone (subject, not object) who, in turn, will be willing to exchange something for it.

1 In this article we refer to Product as a wide concept of need Satisfier

2 The business model must reflect how the company obtains returns from the products and/or services it provides.

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IP is an experience whose best attribute is its ability to remain in time. However, for this to happen, products will have to be conceived out from people’s everyday life, not from abstract theories. Therefore, we must learn how to read into people’s everyday lives. We must build up the satisfier from costumers´ experience, from their surrounding world. We must think from an interdependent point of view -where there are factors related to customers’ feelings, idiosyncrasy, relationships and communities-, stepping aside, at least for a moment, from abstract theories.

“With abstract theories we tend to get borders so close to us that if we took them seriously, it wouldn’t be worth living in this world”

We must explore new universes which are much closer than we think. We must only go for them, and expand our narrow vision, which keeps us from “watching”. Expand this shortness which keeps us from understanding, and, consequently, prevents us from taking action, getting control. We are limited at understanding, surveying, exploring, assessing; we work and make decisions based on abstract models which can only be conveyed on a piece of paper; we must

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learn how to train and believe in our own critical and creative thinking. Only that will enable us to take in information and turn it into knowledge, and be innovative enough to consequently deliver a satisfier other than a cheap imitation.

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Introduction

This cheap-imitation culture is the biggest mistake to correct, a mistake which keeps us from making progress, stops us in an economy wishing to generate wealth through value. Imitating suggests dependency, lack of talent, less wit and no creativity; its synonyms, copying, pirating tell us many things, but one of them in particular tells us more: “execution”; because we are placing creativity before the fire squad when only creativity will lead us to a legitimate market share within international market, competitively.

If we can really be touched by the biased behavior of our target segment and relate it to emerging attributes of our exclusive offer abilities, the legitimate relationship between offer and demand will generate real positioning, where the customer will be the one setting the foundations…therefore, creating a sustainable competitive advantage.

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Every day, we notice a changing behavior in costumers; this change is only the reflection of changes in circumstances around them.

"Man is man and his circumstances".

Ortega y Gasset

Globalization, the boom in media, the World Wide Web, the change in thinking from an analogic to virtual logic, affect our environment paving the way to new circumstances which induce changes in people’s behavior.

The immediate access to information (in most cases already processed by many different speakers), demanded requirements, the expected quality and generated expectations, have produced and produce substantial changes in each one of us.

This situation demands from marketing professionals an evolutionary decision making3 over each product component, as well as at its 3 Decisions in hand with the necessary evolution of

products and their components. Continuous dynamic decision making.

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different life cycle evolutions, facing the challenge of thinking from outside (a point of view that generates fear, since it is a place different from ours) but being involved “in” the company. We should consider that our customer´s mind is the ultimate goal of our positioning.

“At the beginning of this century (XX) product life cycle extended over many decades. In the midcentury, it was reduced to less than a decade, and, by the end of the century, products and services last a couple of years on average, or in some cases – as massive consumption products -, much less. In some extreme cases, owing to technological evolution, there are products that have become almost useless at entering the market, or are left out by the latest technology” Consultant Teacher Jorge Stern

Product life cycles are reduced day after day. There is a new costumer profile, more volatile, less loyal, more demanding, which impacts directly on product and portfolio strategies developed by companies.

With a long term vision, companies used to develop their products with a traditional method of making full use of their Life Cycle, planning a

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long term return on investments in the design and launching stages. The projections indicated time was a unit usually measured in years.

This vision must be reconsidered under the current paradigm, which invites us to learn to learn4, to learn to unlearn, to relearn, to create, to recreate, to think, and to rethink about new strategies to apply in every stage of the life cycle, in order to reach an effective value management. For this, companies will have to group, regroup, ungroup according to the context, “outside in”, to produce value, and sustain its generation and company life cycle.

"Thinking is creating" and "creating is enduring" Gilles Deleuze5

Writers such as Manuel Castells6, Joseph Pine7, Jeremy Rifkin8, Alfons Cornella9, introduce

4 Prof. Pablo Aristizabal, Passion for Learning

5 «Philosophy is the art of creating, inventing, manufacturing concepts», Deleuze´s quote from Qu'est-ce que la philosophie? (What is philosophy?).

6 Manuel Castells is a senior professor at UOC and researcher at Instituto Interdisciplinario de Internet.

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some concepts worth reviewing: online economies, experience economies, immediate access era, innovation, and opportunity as crucial factors of competitiveness.

These concepts refer precisely to changes taking place in this new starting era, with a new type of individual and where new ways to network are turning markets into complex trade networks, where a considerable part of economic life takes place in cyberspace and the new economic satisfier consists of buying and selling experiences (Amazon.com, Suzuki Fun, Mc.Donald’s, Village Cines, etc.)

7 Joseph Pine, The Experience Economy. He is also lecturer and consultant of Fortune 500 companies.

8 Jeremy Rifkin has a B.A in Economy and International Relations. He is a teacher at Wharton’s Finance and Trade School and President of Foundation on Economic Trends

9 Alfons Cornella is Founder and President of Infonomia.com, an innovative initiative for the development of ideas and ongoing training to understand what an online company is.

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The economies are interconnected; the paradigm is “if you are logged or you can have access, you exist”. The companies are re founded towards a connective tissue, where genuine applied innovation is fostered and the offer is not the starting point, but the real time experience of the individuals to be satisfied.

The goal is to achieve higher competitiveness, boosting company value to reach differentiation, which is increasingly difficult to get and easier to imitate among companies.

Strategically speaking, this situation only forces us to assume the role of businessmen, realizing that there are new rules in the game, spreading them and reinventing them, even to the extent of considering that the first rule is that the game has no rules at all, and, therefore, take it into account.

According to Joseph Pine, author of “Experience Economy”, those businessmen who only frame their business into the limited field of goods and services will be left out of the game.

To compete, to create real value propositions, it is necessary to create enriching, innovative, significant and moving experiences; but from

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outside, close to costumer experience, since they are the only experiences which will truly touch the costumer.

Resuming the examples mentioned in the previous paragraphs, in Village cinemas it is possible to sit comfortably on the seats, listen to surround sound and even enjoy a hot pizza; this experience competes with any other experience offered by similar entertaining activity.

The real sense of physical and psychological entertainment which takes place at buying, consuming and/or, in some cases, after buying or consuming, when individuals understand, interpret and live their experiences, is the basis from which real competitive advantages will emerge.

Thus, in a world where our assets are intellect and experience, we must address them under new strategies, re thinking business model/s in a dynamic way.

Having explained these factors, our thinking leads us to analyze how to make it possible that each new product launched into the market can be reinvented and be dynamic, in order to adopt

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the different ends the costumers’ minds wish to have in each coding throughout its evolution.

“Made to last means made to be destroyed and reinvented endlessly”.

Tom Peters

Despite the alleged implications from research on this “consumer experience” and the dynamic design of products, we should not think it as a concept exclusively destined to be conceived by big companies. Actually, costumers´ experience is often closer to small companies than to big corporations which, trapped in their system, more frequently than not lose touch and forget the experience sensitiveness of those individuals whose needs and desires they are trying to satisfy.

“What is essential is invisible to the eye”.

Antoine De Saint-Exupéry

From this phrase we learn that in order to create an intelligent product we must learn to look at what surrounds us holistically. It is not enough to take only one stance, but we must go for all the others.

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"…to start listening, we must leave certainties aside. If I relay on my certainties I can hear what people say and even repeat what they say, but I will never fully understand them because my certainties will block my way to get into their stories, their sensitiveness, their differences compared to mine".

Rafael Echeverría

Viewpoints on Product Life-Cycle

“Life-Cycle is the existing time and stages of evolution featuring the development of a product in the market, from its birth to being withdrawn from it”. CT. Jorge Stern

Although many researchers have identified between six and seventeen different life-cycle patterns10 which show different alternatives in growth-maturity-decline stages, according to the traditional interpretation of life-cycle, products

10 John Swan and David Rink, “Fitting Market Strategy to Varying Product Life Cycle”; Gerald Tellis and Merle Crawford, “An Evolutionary Approach to Product Growth Theory”.

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evolve in stages: first they are introduced in the market to go on to next stages: maturity, positioning and its consequent positive income flow for the company.

At this stage and according to what has been previously mentioned, we may ask the following questions: is the maturity stage enough to recover investment and generate positive returns in the business unit? Is the product life cycle enough to get the return on investment necessary to go through the cognitive11 and emotional stage, reaching the positioning of the brand/item and finally solving the behavioral stage translated into purchase?

We understand that the reduction observed in PLC answers negatively the question posed in the previous paragraph, but at the same time, invites us to think of products from the point of view of the demand. We must understand that products from the point of view of the demand, are satisfiers of needs or wants of costumers´ experience, and acknowledge that all products must be conceived to die sooner or later.

11 AIDA Model, Market Orientation, Philip Kotler.

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According to what can be observed in current markets, through positioning we seek to solve the present and future of our products, but we must always consider that positioning is defined in the market. However, if we work to achieve positioning without considering the fact that the intelligent product is designed to extend its life-cycle maturity stage, in the best of cases what is reached is only just the solution to the present of our products (a present that becomes increasingly faint). Positioning here only allows us to solve the short term problem.

Are we ready to allow that the effort we´ve made in product development be overridden by factors external to the company?

Daily business seems to indicate that it is no longer enough to create a product just taking into account its current or immediate positioning prospects. On the contrary, it all seems to indicate that, if we want to count on a product able to counteract the “natural” tendency to life-cycle reduction we must think and create products assessing many future possibilities of redefinition and/or repositioning, generating new value propositions. In this sense, along time, the goal is to make the product known as the best

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value proposition12 , as the product which best fits the Set of Expected Attributes13

from our 12 “The final result of positioning is the successful creation of a value proposition focused on the market, a considerable reason for the target market to buy the product.” Philip Kotler, Marketing Direction.

13 Expected Set (CONES): “The “CONES” concept is reflected on the words of REVLON: ‘We don’t sell lipsticks, people buy hope from us’. CONES is the set of attributes expected by the costumer. However, expectations are not the requirements and technical specifications of “an item by means of which lips can be coloured with a pasta”; but the realization of that hope…” “…CONES is a ‘symbol’ of what the costumer imagines the “object” must look like to satisfy that need: how the costumer imagines the lipstick, mayonnaise, restaurants, personal computers, touristic destinations, candidates or mayors or, in T. Levitt’s example, “the steel bar of 72 inches, number 302” (Levitt, 1960). It is the “complex set of value satisfactions” he or she was expecting from the “object”. And this is what makes “the object” worth it. That is, it has value or not. This concept is not static. Expected requirements or attributes change, some are adopted, others die. These changes take place due to countless influences related to economy, technology, society, psychology or culture. Nothing dies, everything changes: the “object” turns into something else which turns into… What are we doing to make the “object” seem to meet a desire in order to continue operating in that market segment? What do we have to include in our “object” to “mean” satisfaction? How can we answer these questions if we don’t know what the client “thinks” the “object” must look like? How can we survive if we can’t understand mutations, transformations or changes of that appearance?...” “…But even more important, what are we doing to make our “object” mean something better than the “objects” we compete against? The war among “objects” is not a competitive strategy. The competitive strategy is the war among consumers’ interpretations of “objects”. The winning product is the one getting closer to the concept the customer has of how his/her need should be met. The product is its interpretation, not “the object”; therefore, the battle field where opposing strategies collide is in a symbolic and subjective level, and not in a “tangible reality”…” Alberto Levy, Leading in Hell.

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objective public and to extend its maturity stage with the consequent profit increase.

In an economy of opening and closing opportunities amid short times, we must think about companies capable of watching instead of seeing and of listening instead of hearing, in order to identify such opportunities. Thinking this way at product development will lead us into the creation of what we call “an intelligent product”.

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We must keep in mind that an intelligent product should tend to become an experience whose distinct feature is its possibility of permanence in the market. At virtual logic, geography does not count and, in essence, the aim is to conceive products as the result of company abilities, although thought of from the point of view of demand, from the experience of the customers; to create the satisfier out from customers´ life experience.

In the knowledge era, we understand that it is necessary to think about our ambassador “the product” from a dynamic point of view.

We define a product as “static”, as long as it has a “normal” life-cycle, going through introduction, growth, maturity and declining stages, without the capacity to change to widen its positive cash flow. A product of this kind can hardly enjoy an acceptable performance in the current context. Thus, today it is necessary to pay attention and be dynamic to the product, as in its related Business Model.

Nowadays, it wouldn’t be appropriate wasting time (and money) redefining or repositioning a declining product. As for the offer, we can’t offer our target market a satisfier which easily

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decreases its salience index1413, and it is easy to

imitate by our competitors. If our product is likely to be easily copied or imitated we are not affecting the business unit but the company sustainability.

We must be a constant source of competitive advantages and make such advantages seem “materialized” in our offer, in our Value Proposition; we must seriously consider the treatment given to the service component included in the concept of satisfier (remember the concept of satisfier means not only the product/service itself, but also includes all those actions the company may develop to get closer to the customer, showing him/her the company is aware of his/her experience and wishes to satisfy him/her as much as possible).

“The product is the “ambassador” of the company in the market, through which all the

14 “…The salience index of a brand is expressed as a value the customer assigns to the brand’s competitive advantages in contrast to others…” Alberto Levy

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company’s activities and outcomes are materialized”. Jorge Stern

From the Idea to the Product

In the creation of a product we can identify 2 previous stages: first, we think, imagine the idea, we visualize the future: we will call it “what?” Second, we are interested in getting to that future, that is, how to apply intelligence to solve the problems of making the idea come true: this second stage will be called “How?”

“What?” is the stage of “the World of the Uncreated” or “the World of Ideas”. It is about the thinking, knowing what. This leads us to the creation of an idea, a beginning, to visualize the future, to find a vision (“see beyond”). In a beginning stage, we will never get a full vision. While starting an idea (2nd stage How?) we will feed it and improve it based on our experience. That is the reason why in this uncertainty stage, we will constantly face unusual situations, suspicion, and deja vu, which will work as “hints”, some parts of the map we are trying to figure out.

The most usual questions: what is the need to be met? what kind of product do I want to create?,

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which is my market? what is the innovation?, what value will the market gain from my product?, what are my resources?, etc. We state thinking is ability.

At this stage, we will analyze the following 2 components: generated ideas and already existing. By the latter we mean personal and/or group abilities or skills, and physical, monetary, human resources, etc. we already have which enable us to get ready to generate an idea with a higher potential, reaching beyond.

Regarding the creation of ideas, we usually attribute more importance to the role played by creativity in this process. Most of us fall into the trap of misbelieving that creativity is something only pertaining to an exclusive group of people who “are born” with this ability, who are able to “create” ideas. Something given, which is impossible to train. Well, creativity is as intelligence, it helps us solve problems in a creative way (2nd stage How?), but it does not inspire us to create new answers. Therefore, considering it as ability, it is a very useful tool which we can be trained and developed. Now, what is important at this stage is to develop our creative thinking, considering it as the ability to imagine, create new worlds, new responses, new

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products, and new ways to do things. The challenge has to be huge; the value has to be perceived by all our stakeholders. An instance of creative thinking has a whole story behind to be told, a new world to inhabit. If the dream is big, there is always excitement behind, challenging paradigms from where it was conceived. Einstein used to say: “we can’t solve problems through the same reasoning we used when we created them". Thinking different is essential, we must believe in ourselves; believe it is possible to create the impossible.

Observation: we would like to state at this point that there are no “better” or “worse ideas”. Ideas must be considered from a “degree range” and are relative to the “already existing”.

What do we understand by Already Existing? On the one hand, there are the personal abilities we already have. What can we do? , what am I good at? (cooking, fixing, researching, manufacturing, speaking languages, playing an instrument, working in teams, etc.). On the other hand, we have certain initial resources. They can be physical (goods, money, budgets, real state, vehicles, tools, etc.) or other (experience, knowledge, contacts, etc.)

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At matching creative thinking and our already existing we can answer “what?”

Another factor involved in this process is the perceived value of the market and of our customers. Are we adding value? , is there a need being met? , can the market really decode the idea as we think it does? We state that if a product can add value, then it can have a price. That is why we must take into account how we connect with our customer. Connecting with the customer implies me moving inside out, it is about establishing a real connection, a conversation, telling a story. It also implies thinking how we will move our customer, how we will make him/her perceive our added value. The value added forms a flow of positive funds, which means the customer invests $1 and perceives he/she gets $5.

It is also important to figure out in what maturity stage or process my market is: is it mature enough as to introduce and apply my idea?

Intelligent Product: “Being Born to Die” The second stage is related to the application of the idea and the creation of an intelligent product. We will call this “Real World”: this is the field

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of intelligence, of solving problems, of answering the question How?

The creation of this field implies performing a strategic analysis before launching, in such a way as to prepare our product to face a highly competitive market. This analysis is based upon holistic thinking of many factors affecting its creation:

-Business Model Component: it is the way through which we plan to generate income with our product. Business models are dynamic in time, which makes us be alert and question them all the time. This item is supported by Business Plans, Market analysis, Benchmarking, SWOT, Porter´s five forces, Entry and Exit Obstacles Analysis, Strategic Plans, short and long term goals, etc.

-Vital World Component: The intelligent product must also take into account what happens “outside”, and try to generate a connection with customer experience. How will we communicate with our customer? , what relation do we want to create? , what kind of conversation connects us?

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Knowledge component: in knowledge society (we mustn’t confuse this concept with information society) it will be established by the transformation of such information into applied knowledge which will provide us with the tools to make better decisions; then it is when it regains value. At this moment information turns into intelligence and allows us to improve our competitiveness, not only to create economic value, but also social and political value. This is what sustainability is about.

Under this framework and from a practical point of view, the knowledge component is materialized in a set of services which, will not only boost the physical product helping make the difference in offer and as value perceived by demand, but also will be the means to get closer to consumers’ experience.

Starting this dialogue with customers will allow us to acknowledge different ways they code messages inherent to the propositions of value of the offer. Moreover, it is the main source to generate relational data bases (knowledge management, balanced scorecard, datawarehousing, datamining) which enable us to notice, in real time, changes in costumers’ behavior materialized in evolutionary needs and

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desires which will modify their expectations in a dynamic way.

This which may seem a hard task has been simplified with the emerging of new technologies enabling us to create relational marketing of massive customization.

Since technology tends to turn into a commodity, the way to keep competitive advantage is to focus on intelligent reading of data and on how fast we can react and turn information into new and dynamic value propositions, shaping the intelligence of the product.

Innovation Component: as an initial measure, we must not understand innovation as great disrupting changes in the organization; instead, it is about introducing new ideas which alter the current situation, leading to the development of a satisfier in accordance with the competitive framework and the existence of replacements. Intrinsically, the concept of innovation must be built up from hard replication: the product is innovative when it is hard to replicate.

In this aspect, it is important to define a strategy and think product attributes from the customer´s expected set of attributes in such a way that

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competition cannot easily imitate the product. Given that the company has invested money for the original product to go through the cognoscitive stage, the goal is to prevent competitors from taking the investment for themselves, positioning it from the emotional stage and gaining market penetration, reducing costs. For this component to have real value as a competitive advantage, it must be preferred over our competitors´ offer and reach a sustainable salience index. If a service can be easily compensated by competition, the product becomes standard and is not perceived as any different from the rest.

Positioning Component: this component is essential because it has been given to us from outside, from the costumer’s mind15. An intelligent product should be conceived to anticipate changes in the market. The main idea is to be able to plan ahead different change stages in the creation of the original product, focusing on possible codes made by our costumer at comparing (because, before buying, the consumer compares the propositions), in such way as to extend its life-cycle. These 15 Positioning, Al Ries – Jack Trout

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changes aim at incorporating attributes perceived by customers and renewing the product (redefinition) or modifying the product’s present bond16 directing it to a new segment (repositioning). Next, we will focus on these two topics and how they impact on the business model and product life-cycle.

16 Bonding Segmentation, Strategic Marketing Alberto Wilensky.

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1. Product redefinition

Our investment will not be fruitful enough if its life cycle has been limited to “normal”. We believe that the enlargement of our product maturity stage and of its permanence in the market must be built up from endogenous factors (born inside) and must depend on ourselves, even when they are defined outside our companies owing to different forces and perceptions operating over our satisfier.

We shall strategically look for some way to set the future of our product. It must be developed, not just considering short-term immediate positioning but also the evolution and development of our value proposition and future positioning at least in the mid-term.

To include within the product life cycle analysis the possible future positioning is referred to as product redefinition. This concept basically consists in trying to increase the number of potential customers by introducing changes onto the original product, while keeping brand loyalty bonds with existing customers.

We redefine the product for our current clients and reach new ones by positioning. The whole

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market knows the brand and the deodorant, but when a fragrance is no longer in fashion there appears another one to replace it. The launch of the new fragrance reinforces affection bonds with its clients, based on their acquaintance with the brand.

That is the case for Axe deodorants: the manufacturing company periodically launches new fragrances slightly redefining the product through communication to the customer, but always keeping the same relationship subject-object-the other17. This is about revitalizing Axe concept life cycle out from these innovations. The right moment to try redefinition is that when our product starts losing competitiveness before

17 Subject-object-the other: a relationship present to some extent in all consumption decisions. It is based on the Mirror Theory, according to which, as subjects we build up our self out from “the other” and that “other” is who tells us what we must be like. That “must be” apparently affects our consumption behavior, impelling us to look for “that thing” we need to feel ourselves complete in the products we consume. But once at cycle end, future redefinitions should be thought not from the cognoscitive stage (because they already know us) but looking for an emotional response (they prefer us) more according to the new value proposition.

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our competitors at the end of its development and market introduction stage and at early maturity. When a product is launched into the market, the evolution of its life cycle seems unpredictable at first sight. However, it is against this apparent uncertainty that we should fight, and build up our strategy.

Graphically:

As regards initial positioning, the uncertainty should be fought at cognoscitive and emotional stages.

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Following BCG18 matrix, when a cash-cow (“milking cow”) product starts losing productivity (along the way to becoming a “dog” product), we could call it “old cow” because this “cow” is now producing less “milk”. At this situation we should be ready, that is, have thought beforehand the strategy to adopt in order to try product redefinition.

Product behavior then should be foreseen as follows: the product is developed and launched into the market. Then, at the right time we kill it to prevent real death, then we make it be born again. For example, in the case of Skip Soap, their successive innovations on the product kill the original product but revitalize the concept and renew value proposition.

It seems evident that it is not possible for all cases to determine the needs our product will meet along time. However, what we are trying to develop is a product which, beyond the cognoscitive stage, is ready to adequate itself to newly emerged needs, to new expected attributes 18 It is a diagnosis matrix used to assess a company business units/ product lines. It has been created by Boston Consulting Group, a global management consulting firm.

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and which, turned into a new value proposition, can be launched from the affection stage, and subsequently, save investment.

Any try to meet the needs of two or more segments with the same product concept or design might be dangerous. Proper market segmentation entails different groups of customers with different needs and wants. If the segment has been properly characterized, these needs and wants should be distinct enough and the ideal product requirements sufficiently concrete. Alberto Levy.

In a context in which hyper competition compels companies to offer more products and better service to customers, permanent advertising arises customer’s apathy towards our marketing tools (and consequently, towards our products). Profits decrease and the struggle among companies to have a place in current and potential customers’ minds turns into a “life and death” battle. To develop a product whose time is finite and “will be over” sooner or later, is an advantage in relation to other companies which conform to a “normal” life cycle for their products.

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Basically, what we are talking about here is time. At planning the death and re-birth of our product beforehand we shorten product “repositioning time”, understanding the latter as the time taken on the recovery of a lost position (which, if at all recovered, will hardly be as good as it used to in the past).

2. Repositioning

Repositioning suggests a larger “bet”, because it consists in introducing the product into a different target market where it will try to meet the needs and/or wants of a new group of costumers with other attribute expectations. The product is repositioned into current customers’ minds and positioned in the minds of new customers. The value proposition is different now. Usually, repositioning will come in hand with a physical change on the product (though not necessarily), a technological improvement or a change in the communication to the customer.

A good example of repositioning is offered by the case of Fiat Uno: the product was initially launched associated to status and differentiation.

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After some repositioning (Fiat Uno 5 doors, then exterior restyling) and probably having reached value proposition maturity, it turned into a more popular version, easily accessible to the average costumer (Fiat Uno SL, CL) till becoming the most economical car in the market (Fiat Uno FIRE).

As abovementioned, it results evident that repositioning entails the search for an emotional costumer´s response at this stage, given that the cognoscitive stage has been dealt with at positioning.

We are not talking about enlarging product life cycles capriciously; the failures of hundreds of companies put us to wander what should be taken into account at strategy design which can step out of the belief that only by waiting for product maturity will it be possible to recover investment. As we visualize it a possible solution is to face such failure before launching the product. What we are trying to prove is that if a product is conceived contemplating the fan of its multiple evolutions, and regarded as a Dynamic Value Proposition, before launching, the possibilities of recovering the investment and of achieving higher returns increase consistently.

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The advantage of this, to put it in other words, is, nothing more, nothing less, than an initial investment recovery period much more in accordance with the company needs and expectations.

However, at this point there is a caveat to consider – namely, that not all products can be repositioned. To develop a product susceptible of repositioning implies –according to SWOT19–the possession of a highly-competitive strength, given that it will be very difficult for competitors to reach it. In any case, repositioning, the same as redefinition, is based -without exceptions- on new abilities, of which the company takes advantage.

Graphically:

19 Method to evaluate the Strengths, Weaknesses, Opportunities and Threats involved in a business venture.

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Following the aforementioned we may conclude that there exist two ways of not falling into the trap of ever-shortening life cycles:

What we have called extended maturity, brought about by subsequent product redefinition, which extends product profitability, eventually enabling investment recovery at introduction and growing stages. And repositioning, which entails taking the original investment as a starting point to create a new life cycle, a big leap to another which implies deeper changes in the satisfier, from the product attributes to costumers´ perception of those attributes. Repositioning requires being in real time and creating from customers’ experience.

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Reproductivity and productivity

The acronym I + R + D stands for the process of innovation, research and development applied to a product life cycle. The acronym is usually known as I + R&D and poses a question: is it possible to carry out research and to develop a product, and then put it all through the sieve of a disruptive innovation? Are innovation and research + development players of the same team?

That´s the reason why we suggest reversing the order. An intelligent product is born by means of an innovation and later it is further developed through cycle research and development. After that, it dies and is repositioned and redefined by means of a new innovation.

At the R&D (research and development) stage new attributes are introduced to the product or those processes extending product life cycle are improved further, while at the same time redefinition takes place. We state that at this stage product reproductivity is improved, because we are not producing anything new, but improving in the reproductivity of such product. Conversely, at introducing an innovation we position the product before new customers and

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reposition it before current customers. Here, we do improve in productivity, as we produce something new, a more innovative product, that is, the big leap.

Graphically:

Rough product now versus final product later

Again, owing to the fierce competition of the globalized world, those companies which spend “a lifetime” doing research and developing “the” product, end up realizing, once they have launched their product, that their competitors are so much head of the wave that it is impossible to reach them. We dare say that intelligent products, in optimal conditions, should be

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amortized before “being”, that is, before their maturity as concepts or products. To put it in other words, value proposition life cycle must extend over product life cycle. Products must be finished in the market and it is the customers who must tell us if we are doing well. They must guide us to the aim of constant improvement in our search for offering the best satisfier. As Alvin Toffler stated, we are talking about a “prosumer”, about a “do it yourself”. We are talking about a customer/partner who is the proper authority to show us the way to “his/her” product.

This point can be easily seen in Microsoft Explorer development. The company chose to launch a product which was not definitive and without exhaustive testing, incorporating their own customers to the development process. Customers provided the necessary product attributes to develop versions closer to the final product. Thus costumers play their role as prosumers and contribute actively to the creation of a product which meets their needs. At the same time, the company was ahead in time to

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market20, launching a product before any other of his competitors (the main one, Netscape) and saving research and development expenses. There are no losers in this strategy: the company while improving their product from demand, enjoy –though minimally- investment recovery; the costumer gets the chance of taking part – to some extent- on product design, which will increase his likelihood of finding a satisfier susceptible of meeting his needs, wants and expectations. The only losers will be those who have been unable to interpret in time that their product was finished.

Standing on the shoulders of previous developments

Similar to what has been previously mentioned about products presenting a “normal” life cycle, we can explain such cycle through the different quadrants on the BCG Matrix.

20 Time to Market: the length of time it takes a product to reach the market; opportunity.

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OBSERVATION: the reader must study the following analysis abstracting himself from the matrix axis and focusing on what each product represents conceptually in relation to its position on the matrix.

Coming back to redefinition and repositioning, we believe that an intelligent product first redefinition must take place when it is at its “star” stage given that this is a growing stage and may constitute a good time to offer more “value”, reach new definition and get a light increase in the number of costumers. That would allow progressing to “milking cow” product

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stage (cash cow) with higher relative market share.

Thus, an intelligent product must be redefined with a loop in the product “star” quadrant (here “loop” is defined as the fluctuations which products undergo, when a redefinition and/or repositioning strategy is applied to them).

Now for the case of cash cow products we believe that it is more appropriate to apply repositioning instead of redefinition, although the latter is possible too. Following BCG matrix, “milking cow” products reach at this point a relatively steady sales level, from which we may infer that the product deserves undergoing a drastic change. A change to re-direct such product to another market, a move that must be performed by means of an adequate communication strategy arising emotion. The product is already known. The brand is positioned. However, we believe this is the right time to appeal to another group of costumers, with different needs and wants. Therefore we shall try to introduce our product in a new position, which surely will not be only through communication, but also through changes on the product in order to satisfy needs and desires as appropriate.

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If we have been able to interpret market opportunity and to readapt our value proposition and if we know how to communicate it, our “repositioned” product will return to the product “star” quadrant, with which we will have broken one of marketing “laws of gravity” (namely, that of product “normal” life cycle).

Graphically:

Of course “redefinition” and “repositioning” possibilities are restricted.

They will be determined by the way our product has been developed, our value proposition -from

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conception onwards-, as well as by the “wisdom” of our company to pick up the right moment to operate changes on the product.

At redefinition scales tilt to the demand, as it is more significant than offer. However, at repositioning, scales tilt to the offer; in both cases, the counterpart is always considered as we have already said that the prosumer plays an active role at product development. The first situation should be interpreted as “Co-Demand” while the second as “Co-Offer”.

On the following chart interaction between offer and demand under real time working conditions can be easily observed.

Systemic interaction between offer and demand

• Product results from company abilities and must be conceived to die.

• A Value Proposition must be created: Satisfier

• Actions are executed to launch that satisfier.

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• Positioning: the satisfier is encoded by the costumer and has a place –a position- in the costumer´s mind.

• Redefinition: based on new company abilities, a new value proposition is created with new attributes in accordance with target expectations.

• Repositioning: based on new company abilities, a new value proposition is created for a new target and it is communicated.

• The product is repositioned in current costumers´ minds and positioned in the minds of new customers.

Seeing into the future…

Seeing into the future does not consist in waiting cautiously for something which is there but we can´t see and we would be able to see if we had binoculars. Many risk capitals believe in the camera to take photos of the future. In my humble opinion, far-seeing is the future we would like to see us in, the future we dream about. It is to imagine what actions we can carry out in our present to make some things happen in

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the future we have in mind. That which we would like to have for ourselves, for our children and for our children´s children.

We are talking about thinking the company out from our customers´ experience21, about being

21 Ortega y Gasset, Obras completas, Revista de Occidente y Alianza Editorial, 1983. But, what is this? What is it that we have come accross? That, the radical event of someone who sees and loves and hates and wants a world and in it he moves and because of it he suffers and in it he makes efforts, is what has always been called in the most humble and universal of the vocabularies “my life”. What is this? It is, simply, that the main reality, the event of all events, the information for the Universe, that what is given to me is… “my life”, not me alone, not my hermetic concience, those are just interpretations, an idealistic interpretation. “My life” is given to me, and my life is mainly being in the world; not vaguely, but in this world, in this current world and not vaguely in this theatre, but at this very moment, doing what I am doing, in this theatrical play of my experience. Gabriel Zanotti, Philosophy Teacher. This topic about life experience goes beyond subject-object dialectics. A passive subject receiving information and an object as “information” independent from the subject´s life experience. Whenever I step into a classroom I say “I am in class” and that “being in class” is not “information” but a part of my life experience, and in that sense, it is not something which can be understood without my

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open to look at them, to listen to them, with the aim of developing dynamic products with an extended period of investment return; we are facing a market of opportunities where time to market does not wait for us.

In order to swim in these waters it is necessary to build up a network of organizations with the ability for innovation out of the dictates of present paradigm dynamics. And for that, it is necessary to manage a corporate company, where leadership is built up by people´s passion for getting things done, for learning and for setting the example as to make up high performance teams capable of making things happen.

subjectivity. But this does not take out a hint of its truthfulness… Morín 1999. Consequently, “a contextualization capacity tends to produce an “ecologic” thinking in the sense that it places each event, piece of information or knowledge in a closely knit relationship with the environment, cultural, social, economic, political and of course, natural. It places an event in its context and encourages observing how this event changes the context or presents it under a different light”.

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This should be the main ability upon which value proposition should be based: from “inside” but systemically interacting with “outside”.

And that is precisely what makes a company competitive: the total sum of its people´s competence. The overall distance walked by all parts needs to be longer than that walked by each one of them.

We must search for human resources highly committed to business and connected to their customers´ life experience. We must assign passionate members, who enjoy their activities, and feel they are part of the value proposition and of customer´s need satisfaction.

It is necessary to foster a team-based environment supporting employees’ sustained knowledge, seeking their understanding of the importance of their role within the organization and of their own stake in the creation of value.

Thus they can also be encouraged to be proactive and, having realized their role importance, the ones to make things happen.

Nowadays it is easy to notice –just taking a look at the world around us- how competitiveness has changed. There is no point in appealing to

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solutions from the past, not even to answers which were useful in previous paradigms. Old answers are useless. The only pathway to being competitive is the ability to generate new, daring, better questions.

And even under those conditions, our capacity of reasoning will determine the right time to take action. Sure enough we shall not have at hand a schedule for future redefinition and possible repositioning… “Do not fix that which has not been broken yet”. And this job is ours and only ours, from the offer without losing sight of the demand.

We must figure out the way current products can also become future products (bearing in mind that a product and a costumer relate to each other symbolically, in a world of perceptions).

This is our aim, to think intelligent products, to take conscience of this “evolutive reality” we are immersed in, but first it is necessary to “realize” in order to “account for”.

Intelligent Products. Case history

ANNEX: Costumer Experience Cases

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Customer experience 1

What did Topolino or Jack mean for children two or three decades ago? A sweet, a toy, chocolate, a surprise, a collection…

Nowadays we are all witnesses to Kinder´s success. What is a Kinder egg and which life experience has given origin to it? Remember what used to happen at home when our parents bought the Easter Egg? what was it all about…? Beating the egg, eating it, seeing the content… Tradition had it that it was necessary to wait until Easter for all that to take place. That is our life experience, or at least, it used to be… Because one day someone, standing on a cognoscitive and emotional stage positioned in our minds, managed to shorten the distance between what we wanted to do and what we were allowed to do, without affecting traditions… that´s why today we can eat “Easter” eggs everyday… which, alternatively, can be an Easter egg, a sweet, chocolate, a healthy sweet, a toy, a surprise…

What is a Kinder then? It is a satisfier developed from the costumer´s standpoint and from the buyer´s standpoint… not surprisingly, Kinder is nowadays a world leader.

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Customer experience 2

Let´s take the case of cereals… what is the life experience after this satisfier? It´s a healthy meal for children, especially in winter… but by adding milk or yoghurt it turns into a fresh summer breakfast meal… and customers were glad because they could try something different from milky coffee in summer. Thus the product got new redefinitions. Later there was a new turn on the screw… it went after adults… different ingredients were added, as fruit, honey, dietary fiber…offer was segmented and differentiated: there were cereals for children and cereals for grown-ups… then light products appeared in the market… as a response to a current growing trend…

Thus redefinition moved into repositioning when molds were broken: someone said “you do not need to eat cereals from a bowl or cup”, “you may easily eat them while walking down a street… and then, what would you be talking about? Cereals, sweets, healthy meal…No market research is necessary here. .. This is similar to learning our baby´s gender beforehand! A bit of feeling or, if you lack it, learn to get it. Just look at drugstores shelves and you will see that cereals have overrun

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chocolate… and lately with the shapes and colours of the packaging, it has become a sweet among sweets.

Costumer Experience 3

What time of the year do people eat Christmas Pie? The answer seems “obvious”… at Christmas… Well, I know about at least three restaurants that broke two traditional concepts, namely that Christmas Pie is delicious ONLY if baked at a bakery and that it may not be eaten any time of the year…What! But, isn´t it sold only at Christmas?...Well, yes, but these restaurants wanted to differentiate their service and so decided to serve coffee together with something sweet… and they chose mini Christmas Pies for that! And that also serves the purpose of selling full size Christmas Pies all along the year… More services, more business, more advantages, more value…

Customer experience 4

What is Starbucks? What is the key to its success? A cafeteria? What did they do to make customers feel they are so close to their life

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experience? Could it possibly be marketing, good quality coffee…?

First of all, they broke with a deep-rooted tradition (almost as rooted as the American flag): they turned from serving filter coffee to coffee espresso… Who dared? If someone had seen that on the business plan, he would have asked, “does it make sense?”

Even to this very day there are superficial analysis trying to explain Starbucks´success… for example, because of the excellence in the processes of the service provided (a typical statement of a consulting company)… aahh, so that was the reason of their success…! Well, then, what was it that brought success? They just managed to understand American customers´ experience. Because Americans like drinking coffee along the whole day and to satisfy that need it was necessary to create a satisfier with that “attribute”, namely a cardboard-made cup which allows customers to hold their coffee for as long as they want.

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Costumer experience 5

Le Cirque du Soleil… What is that? Didn´t they say that the circus was finished? That customers had moved to other types of entertainment?

Many people allocate Cirque du Soleil´s success to the fact that they do not use animals in their shows… Who cares about animals? Animals do not make the difference here… Their success is that they have understood that entertainment must not be a sequence of attractions which start and finish at each performance… on the contrary, they are great story-tellers, they appeal to costumers´ emotions through the contents they generate and so costumers not only attend their shows but also are ready to pay the most expensive ticket in the market!

Where are now those great business critics who stated that the circus was dead? Le Cirque du Soleil understood customer experience and they redefine themselves in every show thus repositioning the satisfier into a new category, a mixture of theatre, opera, cinema and traditional circus… everything under the name Cirque du Soleil.

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Costumer experience 6

Let´s examine the case of yoghurts. Just consider how many different kinds of yoghurt there are now on supermarket shelves and how many there were 10 or 20 years ago… Nowadays we can easily count over 30 different varieties… that is because it is on continuous redefinition… but at some point it is also repositioned… when? When someone says “let´s compete with what consumers already have in their minds about yoghurts but within the “drinks segment”. “What? Have you gone mad?”

Yes, I have. All of this is about being mad. And then liquid yoghurt, for drinking, appears on the market. It does not ONLY compete with other types of yoghurt, but also with other drinks, from the offer and from the demand. Besides, it´s healthy. But they go for more… Now it is going to compete not only with other drinks but also with medicines! What?! Yes, medicines… and there appears Actimel, which solves health problems, but is not a medicine… it´s a yoghurt… that you can drink because it´s liquid, it´s a drink… What is it? It is repositioning the product into a new category… but with an origin in customer experience: vitamins, taking care of oneself, longing for youth without taking pills

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for that… because taking pills is “for ill people”… well, so there is this product on the market now… something healthy, but not a medicine… similar to yoghurt… easy to drink… and useful for solving something which was already present in customers’ life experience…

Costumer experience 7

What about eBay, Yahoo!, Linkedin, Blogger, MonsterDivX, Google, MSN, Wikipedia, Skype…? What is the key to their success? They are all web sites, first movers, with a positioned brand… yes, but it is not that… they are great because of their contents and their content services… “ah, ok, they are content companies”… No, they are not. It is not that either… It is someone uploading something here which someone will download down there. All expressions of the consumer experience…

Let´s take an example: what did you do when you wanted to find a job? You needed to contact someone… And when a laborer was wanted for farming activities? Well, you used to ask another laborer if he knew of someone who could work for you… this is what we do all the time… how many marriages exist thanks to a brother, cousin or friend´s introduction… that, for example, is

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Linkedin. It is not an application. It is not a brand… It is a system based on trust which stems from our friends and acquaintances!

What did our parents and grandparents do when they needed a cradle for a newly-born baby? They asked: “Do you know someone with an older child who wants to sell a cradle? Basic… customer experience… good, this is eBay.

Costumer experience 8

What is an iPOD? … 20 gigabytes, 30, 80… What is that?! Is it something with a nice design…is it having the latest technological jewel… is it the convenience of something small…? Or is it the power of permanently carrying with us something that has been there for us since time immemorial: music. Music is our company in quiet moments, in moments of great happiness, when we feel lonely, during love encounters, when travelling… well, now you can have 5000 songs at hand… 5000songs?! But who can listen to 5000, 10000 songs? It does not matter. Who said the songs were meant to be listened to? It is only to have them near you… “even when I cannot listen to all of them, I like them to come with me…”

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Pablo Aristizabal

CEO at Competir.com. Regular Assistant Teacher at FCE/UBA. Director of Entrepreneur Programme “Génesis XXI” FCE/UBA

SPECIAL PARTICIPATION: Lic. Gustavo Alonso

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