Buzz Marketing

Of the many marketing jargons and fundas, Buzz Marketing has quite proved its metal in time and has still not lost its charms; oh yah! it sounds cool too. It often finds use prior to launch of a product or a refreshingly new product variety or brand. You kinda drop clues here & there that you r working on a virgin project, one never seen or heard of b4 but always hold back the essentials and details. One may even start acting paranoiac, trying to conceal one's venture from prying eyes. But alas! its common knowledge, that such antics stimulate more people from enquiring about it, after all, we are descendants of Adam & Eve.

One such use of Buzz Marketing is highlighted in the release of Napster.

Shawn Fanning loved music & out of the love 4 it, the then 18 yr old Northeastern Uni. freshman brought a panic in the music world in 1999. Bugged by hearing constant complaints from his roommate about the nuisance of downloading Internet music from mymp3.com 7 attracted by a sudden surge of interest in computers, Shawn set his heart to develop a music download software package at the beginning of June 1999.

The tactic then used by Shawn is what is popularly known as Buzz Marketing. A working version of this software was give by him to about thirty people he knew for testing purposes; mostly youngsters he had met through chat rooms. His request to each of them was, " Try this & let me know about any problems or suggestions and please keep it to yourself because I don't want people to know about it yet."

A few days later, the software had been downloaded by 10,000- 15,000 people. The traffic soon increased in leaps & bounds and Napster took birth; the name being akin to Shawn's nappy hairstyle. Despite some sceptics view as to whether people would be willing to share files, by Oct. 1999, Napster had 32 million users and was adding another million Every WeeK!!!

So all it took was to create a little bit of curiosity quotient and a little hush-hush; with no advertisements, no push strategy, Napster had made a mark.

When Goliath Fell Prey To David................ The Britannica Saga

No competitor, big or small, direct or indirect should be considered trivial as one never knows who amongst them is the David who needs to take just one shot at you to make your empire crumble to dust; a leeson learned the hard way by Britannica. Lets take a look at it here.

In 1768, three Scottish printers began publishing an integrated compendium of knowledge – the earliest and most famous in the English-speaking world. They called it Encyclopaedia Britannica. Since then, Encyclopedia Britannica has evolved through fifteen editions and to this day it is regarded as the world’s most comprehensive and authoritative encyclopaedia.

In 1920, Sears, Roebuck and Company, an American mail-order retailer, acquired Britannica and moved its headquarters from Edinburgh to Chicago. Ownership passed to William Benton in 1941, who then willed the company in the early 1970s to the Benton Foundation, a charitable organization whose income supports the communications programs at the University of Chicago. Under its American owners Britannica grew into a

serious commercial enterprise, while sustaining its reputation as the world’s most prestigious and comprehensive encyclopaedia. The content was revised every four or five years. The company built one of the most aggressive and successful direct sales forces in the world.

By 1990, sales of Britannica’s multivolume sets had reached an all-time high of about US$650 million. Dominant market share, steady if unspectacular growth, generous margins, and a two-hundred year history all testified to an extraordinarily compelling and stable brand. Since 1990, however, sales of Britannica, as of all printed encyclopaedias in the United States, have collapsed by over 80 percent. Britannica was under serious threat from a new competitor: the CD-ROM. The CD-ROM came from nowhere and destroyed the printed encyclopaedia business. Whereas Britannica sells for $1,500.00 to $2,200.00 per set (depending on the quality of the binding), CD-ROM encyclopaedias sell for $50 to $70. But hardly anybody pays even that: the vast majority of copies are given away to promote the sale of computers. With a marginal manufacturing cost of $1,50 per copy, the CD-ROM as a freebie makes economic sense. The marginal cost of Britannica, in contrast, is about $250 for production plus about $500 to $600 for the salesperson’s commission.

Judging from their inaction, Britannica’s executives initially seemed to have viewed the CDROM encyclopaedia as an irrelevance, a child’s toy, one step above video games. As revenues plunged, it became obvious that regardless of the quality, CDROM encyclopaedias were serious competition. Britannic executives reluctantly considered manufacturing their own CD-ROM product. Months passed, and sales continued to plummet. In response, the company eventually put together their own CDROM version of the encyclopaedia.

The CD-ROM version engendered yet another crises: a revolt by the sales force. Even if priced at a significant premium over its CD-ROM competitors such as Encarta, the CDROM version of Britannica could not possibly produce the $500 to $600 sales commission its traditional counterpart produced, and from which it would obviously detract sales. Indeed, a CD-ROM version would have demanded a completely different channel. To avoid a revolt by the sales force, Britannica executives decided to bundle the printed product with its digital counterpart. The CD-ROM was given free to buyers of the multivolume set. Anyone who wanted to buy just the CD-ROM would have to pay $1,000.00. The decision appeased the sales force briefly, but did nothing to stem the continuing collapse of sales. Losses mounted. In 1995, the Benton Foundation finally put the company up for sale. For nearly eighteen months, investment bankers tried to find a buyer. Microsoft declined, as did

Technology Media and information companies.

Finally, in 1996, financier Jacob Safra agreed to buy the company, paying less than half of the book value. In less then five years, one of the greatest brand names in the English-speaking world, with a heritage of more than 200 years, was nearly destroyed by a cheap, shiny litle disk.

Is Change An Opportunity or Threat...........................The Disney Tale

Well, it all depends on the way one views it. By now, many of you might have heard the glass and water story; a glass filled with water can be viewed as being half empty, half filled or contrary to conventional thinking, stagnant. By bringing forth the Disney tale in the 1980s, I would like to give an insight to what most companies (the big daddies included) do in face of the advent of a new technology and how change and innovations have been a nightmare for an industry leader.

My last blog read about the Pixar story where mention was made of John Lasseter who was previously working in Disney, before joining Pixar as their main animator. Lasseter was a visionary who saw the importance of computers in adding a new graphical dimension to the then 2- D cartoon world, but his work mostly went unappreciated and was brushed aside in Disney. Lasseter got a breather when he was hired by the Pixar team which was then a small humble team of people who believed in the power of graphical animations and wanted to introduce the world to a whole new experience of story telling. But then where does that leave us with Disney. Here's a look at their end of the story.

The 1980s saw a fall in Disney's revenue with most of its films flopping, a reason that can be partly attributed to their inability to succeed in entertaining their audience. Here, let us give a thought to what business Disney is into........entertainment and pure entertainment. They have over the years banked upon capturing the imagination of people transporting them to a world of fantasy and fun. But come the 80s, audience were treated to a grand visual treat of blazing lasers and space-ships, of robots and aliens. Yes, this hint would suffice for any movie buff to guess that the era saw special effects in a never before mode in Star Wars, Terminator and Aliens. These movies not just transported the audience to a different age but went down favourably with the critics too. The resounding success stories of Computer Graphics finally made Disney accept the change and adapt the new era of computation. However, as it goes, a stitch in time saves nine if only Michael Eisner saw what potential John Lasseter held, the audience wouldn't have abandoned a Disney Movie for a George Lucas or James Cameron.

Wouldn't it have been more appreciably(and a matter of common sense........!!) if the then leader had taken an initiative to be the one propelling the change, given the fact that they had the technology as well as the resources.But then how many times have we learned from others sour experiences........ such incidents have been repeated by many a great companies time & again.

Pixar's Baby Steps In The Animation World

The above video titled Luxo Jr was presented for the first time at a convention in Dallas at the annual conference of computer graphics software, Siggraphs. Aimed at exhibiting the new technology developed under the Pixar Umbrella, this short set a landmark in the realm of animation. The 6k technicians who had gathered there were dazzled by the simple yet touching plot of Two Lamps(!!!), who exhibited emotions that even humans muster with great efforts on screen.

I would like put forth some stories related to this 1.54 sec short film that were relevant enough to leave a mark in the industry's history.

Story 1

The credit for making these inanimate characters project feelings and moods goes to John Lasseter, a prior Disney Animator who left the Disney World when he found that the organization under Michael Eisner was not open to change & believed that the existing practise of producing animations through pen & ink method is the best. Disney then viewed the advent of computer graphics as a threat to animation world assuming that such simplification of the entire cartoon making process and animating it would now be an art that would get commoditized.

Alas!! Its something g that many have done in past, be it be great monarchs or CEOs and a trend that is still prevalent. If well analysed and an open mind be kept, every threat would have a brighter side from wherein pops an opportunity; all it requires is "commitment" and "ability to accept change".

Story 2

The Pixar group (headed by Alvy Ray Smith and Ed Catmull) formally were under the George Lucas banner who had taken them in to enhance the visual delights of the movies he made in the league of the Star Wars gener. But then Lucas wasn't able to see the future and impact of animation in the times to come which reflects in the fact that when financial pressures started mounting due to his divorce, George Lucas didn't twitch before letting go the Pixar group at 1/3rd of the expected price. A decision made in haste indeed. The video loaded below titled "Andre And Wally B" was the first short produced under Lucas' production house in 1984 which enthralled the animation world with its 3-D touch and graphics. But yes, being under the Lucas Wings gave the Pixar group more visibility, a gem of an artist, John Lasseter had joined them during this time to work on Star Trek II- (the creator of Andre And Wally B) and last, but never the least, the genius who bagged Pixar was Steve Jobs, who was then a pariah from the very Apple World he had sowed and was desperate to prove a point in the market with his new initiative, NEXT.

Story 3

Under Steve, Pixar had its own ups & downs, but yes, it did grow and the above add- Luxo Jr was the first stepping stone of success for them. The picture won a Golden Eagle at CINE film festival in Washington D.C. & was also nominated for an Oscar. They didn't win the Oscar that year, but the buoyancy they got was enormous and the rest is History.

Today, Pixar has been brought under Disney's realm, but it still holds its own and continues to entertain the world(& mint money!!) with Monsters' Inc., Wall-E to name a few. It's logo depicts their first baby, Luxo Jr. the lamp and has been their trade mark since its phenomenal opening in 1986.

So sit back and enjoy these ads................. time has barely been able to tarnish its appeal.