Do It Show: Question #1 - Marketing

Technology is the "goods and services" part of a marketing stratgy. It is not a stand alone component to be separated from a marketing strategy. The success of a marketing strategy depends on how well all componets are integrated to suit target customers' needs. The debate here is like a discussion of product (or technology) orientation vs. customer orientation. "Customer centricity" is the key.

I share with you the different advertisements that you could watch on the Korean TV.
You will find the two launching teasers presented in the exhibit 1 and also the “Nam June Paik” campaign presented in Exhibit 9.
Everything is in Korean, but still, when watching those ads, you will feel that KFT really communicated on their first mover status. They use lots of funny ways to introduce the new technology to their customers and to show how it will benefit to them in their everyday life...

http://blog.naver.com/bizfit?Redirect=Log&logNo=80055164797&fb_source=message

It seems from the previous posts that we all more or less recognize the success of innovative features with the introduction of 3G in the Korean market and the relevant marketing position as a player refreshing the mobile offers.

I woud like to bring the exemple of the French telecom market to prove hat innovation and marketing strategy ar not sufficient.
In France, Orange, SFR and Bouygues were the 3 main players 5 years ago, with Bouygues lagging behind the 2 first. Orange and SFR made the bet to introduce 3G in the market with an in-dept communication programme and a lot of investments to modernize the network and provide 3G compatible phones to their users. Bouygues couldn,t follow and responded with "all you can eat formulas" for cheaper price (the company didn't have to make up for the huge investment its two competitors incurred).
Bouygue faced an enormous success and regained market shares.
The market was not ready for 3G (not enough differentiating possibilities, slow stream, in spite of great efforts not enough users equipped with 3G phones).

What to infer out of this?
Timing is key, an innovation brought on the market not in tune with distribution, current devises and users capacity to adopt it remains an invention and do not strike the bowling alley

What was key in STK success is the timing of the launch of the innovation as much as the feature in itself and the marketing approach!

Hi guys,
I agree with the main argument, a good balance between technology and marketing can be the most effective receipt for success.
I would like to add that KTF has been the first official IPhone 3G operator in Korea, which may have strongly support the succesfull strategy...

I really love Diego's metaphor for marketing and technology as bacon and egg. I was majored in computer science in college, in the beginning of this semester, I feel depress when reading those marketing strategy or business resources. I thought there are hollow words, quite different from what I have learned in the pass.

Well, as the semester going, and at the same time being an intern in Microsoft, I started to value up the marketing strategy during the selling process. Technology is definitely the foundation, in this case KFT has make its target on 3G service based on their foresight. But technology are easy to copy (page 7, these features remained in the realm of product attributes that could be copied by competitors at any time), so in my opinion I think marketing strategy plays an important roles to a company’s success.

You can find out that there is so many software or services which provide similar features, but how could some of them stand out from the others? It’s the marketing strategy make the product being visible and attractive!! Technology is important, but it should be supported by marketing strategy to go further!

Xiaowei Wen wrote:KTF really well organized a series of marketing strategies before and during the SHOW Brand launched, like, made full research of 3G Market in Korea, established the totally new and creative direction, classified the total consumers into several groups and chose the target 3 market; Then selected the name, and make the company’s core brand identity of innovation more concrete, etc.
Better marketing and better tech are both important that led to KTF’s final success. However, I think the key factor should be the totally new 3G service they provided, through which they won a completely different market that surpassed the existing limits of all the brands. This techno creation also gives KTF an opportunity to make a better marketing campaign with the slogans like “SHOW—the world has never seen, the world is anticipating…” Though SKT knew, but they didn’t initiate first.

Dear xiaowey

You claim that the 3g technology was a key factor for ktf's success. But even though you have a highly-developed technology and no malfunctions at all, how do you sell your product if you don't serve device-modified content such as newspaper for small device screens?

Well Kai, there are indeed limitations in conducting such a strategy. For every situation that has critical characters similar as the ones provided in the 3 networks case, risk management would be the right answer! As we saw from the KTF case, such an investment in this sector requires a big sum of capital. To avoid the rolling-snow-ball effect, in this case, the company decided to invest further capital (with loss) to save the position the were trying to gain. This long term strategy have actually brought 3 Networks to gain a dominating position in the Danish market.

Please let me know if you want to know further about this particular case.

Cheers,
Diego

Ps: Mu JoU Boy, you have a cool picture!!


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Dear Diego

Thank you for your indepth comment. I also think that a mix between a well-developed technology and a catching marketing strategy to awaken the desire were crucial for the success for KTF. Apart from technology and marketing you also mention the price as a key factor for success.

However, if we focus on your expample in denmark, do you think their is a certain limitation when it comes to a low price strategy? I mean, the company must still be able amortize its investments, such as the devices and the 3g infrastructure.[/quote]

I think the most important key factor for KTF was that KTF decided to be the number one player in the new 3G service market, which offered stable video communication and high-speed data transmission as well as voice and text-messaging services. To do so, KTF developed a new brand, called "SHOW," and implemented various integrated marketing communication (IMC) strategies to attract customers. After only four months since its launch, KTF had successfully attracted more than one million members. These actions combined with technical improvement were in my opinion the most important reasons.

Mu Jou wrote:Why was KTF so successful with their marketing strategy? Was it better tech or better marketing? Most of the technics they have are also known by SK telecom, too. What is the most important key factor for KTF to triumph and exceed its competitors?

I think the success of KTF is mainly determined by its unique marketing and launching strategy. Especially the fundamental strategic decision (see page 5) to introduce a 3G service brand to break away was very smart. This helped to differentiate them from the competition.
Although doing significantly better than the competition, the mere technical service can probably be copied sooner or later. If you have a strong reputation, you have a big competitive advantage. All that KTF had, contributing to the success.

d.alsafi@gmail.com wrote:Mu Jou kid, Very good and valid question!


There are no doubts about the fact that the STP was well executed given the result we read from the case. I believe it is a combination between the good marketing strategy and the better technology introduced to the market (like the combo of egg and bacon, where these two complement each other producing a better outcome flavour).

In Denmark where I come from, I recall a similar situation where a new entrant to the telecommunication market (3 networks) tried the same tactics to enter the Danish market and conquer at the time the existing companies' consumers by introducing the 3G technology. The idea was new and appealing. But there were a couple of problems that were about to result fatally to the company. The marketing strategy was similar but the devices they introduced to the market where 1) costly 2) Malfunctioning 3) Big size in terms of practical use. (As a matter of fact I did purchase one of these devices).

The company's competency was the "Fast, stable network", but the user's experience was horrible and a lot of users began to loose faith in the co.

Very quickly and (I must say) luckily, quick reaction the at the time current crisis, the the devices price dropped dramatically (e.g from 500 euros to 5 euros pr. device) which attracted more customers and made the existing costumers give the company another chance.

It appears to me that the key factor for KTF's success was being able to administrate the the technology, manage the marketing analyses and, nevertheless, being ahead of the competitor.

Cheers,

Dear Diego

Thank you for your indepth comment. I also think that a mix between a well-developed technology and a catching marketing strategy to awaken the desire were crucial for the success for KTF. Apart from technology and marketing you also mention the price as a key factor for success.

However, if we focus on your expample in denmark, do you think their is a certain limitation when it comes to a low price strategy? I mean, the company must still be able amortize its investments, such as the devices and the 3g infrastructure.

Mu Jou kid, Very good and valid question!


There are no doubts about the fact that the STP was well executed given the result we read from the case. I believe it is a combination between the good marketing strategy and the better technology introduced to the market (like the combo of egg and bacon, where these two complement each other producing a better outcome flavour).

In Denmark where I come from, I recall a similar situation where a new entrant to the telecommunication market (3 networks) tried the same tactics to enter the Danish market and conquer at the time the existing companies' consumers by introducing the 3G technology. The idea was new and appealing. But there were a couple of problems that were about to result fatally to the company. The marketing strategy was similar but the devices they introduced to the market where 1) costly 2) Malfunctioning 3) Big size in terms of practical use. (As a matter of fact I did purchase one of these devices).

The company's competency was the "Fast, stable network", but the user's experience was horrible and a lot of users began to loose faith in the co.

Very quickly and (I must say) luckily, quick reaction the at the time current crisis, the the devices price dropped dramatically (e.g from 500 euros to 5 euros pr. device) which attracted more customers and made the existing costumers give the company another chance.

It appears to me that the key factor for KTF's success was being able to administrate the the technology, manage the marketing analyses and, nevertheless, being ahead of the competitor.

Cheers,

Hi everyone,

In my opinion, the reasons behind KTF's success are not only due to marketing, but to the implementation of a brand-new strategy along with the early development of the 3G service. In this case KTF was the first mover, compared to the previous competition on the 2G market in which KTF was clearly the number 2 because of the strong position of SKT (60% of market share in 2001), and so in the 3G battle KTF was clearly the winner.

Indeed, as we all know, the mobile and telecom market is an Oligopoly, as a consequence, the sequence to enter the market is really key to become a strong actor. In this case, the technological advantage of KTF was only to consider 3G as the next-generation mobile service before SKT, KTF was better at identifying the trends of the market and thus had the opportunity to capture new customers.

Their strategy was clearly comprehensive, they did a great marketing job in identifying their target market (pages 5 and 6), so that they knew how to formulate their brand strategy in order to appeal people. That's the first step in marketing: define your target. Then, they define their brand thanks to the name SHOW, in accordance with the targeted customers. That's when they differentiate themselves from SKT, they established something new, something more innovative, something different and in other words BETTER.
Their succes is of course linked to the WCDMA technology that provides a better user experience to people, thanks to high-speed data transmission. Nevertheless, the number 1 position of SKT enabled them to copy this technology as they had the means and the finance to do so. Yet, the brand strategy of KTF (SHOW), and the use of the IMC strategy were clearly the reasons of KTF's success and the way they managed to establish themselves as a new market leader.

KTF really well organized a series of marketing strategies before and during the SHOW Brand launched, like, made full research of 3G Market in Korea, established the totally new and creative direction, classified the total consumers into several groups and chose the target 3 market; Then selected the name, and make the company’s core brand identity of innovation more concrete, etc.
Better marketing and better tech are both important that led to KTF’s final success. However, I think the key factor should be the totally new 3G service they provided, through which they won a completely different market that surpassed the existing limits of all the brands. This techno creation also gives KTF an opportunity to make a better marketing campaign with the slogans like “SHOW—the world has never seen, the world is anticipating…” Though SKT knew, but they didn’t initiate first.

I agree with Glen on claiming the marketing strategy for the success achieved by KTF

Obviously a good technology must be surrounding but I think that the best work was done with the brand strategy, mostly through the Positioning.

The brand has been positioned as completely different from the previous technology (2G), targeting a different and "fresh" market audience, in order to acquire the "young-generation" consumers.

In my opinion, the IMC (integrated marketing communication) strategy which KTF implemented really worked,
that is, "changed to fit each launching stage".

For me, the most important task of marketing team is to create a right atmosphere,
an atmosphere of curiosity, and tell everyone it's time to CHANGE.
(this element is very useful not only during the presidential election ：p)

Another important thing is that they did everything based on their precise market research,
they even invested one year to come up with their brand name.
With their fully use of STP(Segmentation, Targeting and Positioning),
I think it is the reason why they can really touched the target market, and spent relatively lower cost on marketing.

Of course with only good marketing but without a good tech can't be successful,
but the tech can be copied by competitors at any time,
I think the key point is, they did a great job to separate their customer into 6 groups,
and made the functions really meet customers' needs.

Another success factor...is perhaps the STK's underestimate at the beginning.

Ok guys, for your own pleasure, here are two small video of the "LET'S GO SHOW!!" campaign:

http://channel.pandora.tv/channel/video.ptv?ch_userid=hichng26&prgid=36206175&categid=all&page=1

http://channel.pandora.tv/channel/video.ptv?ch_userid=hichng26&prgid=36206307&categid=all&page=1

enjoy

Why was KTF so successful with their marketing strategy? Was it better tech or better marketing? Most of the technics they have are also known by SK telecom, too. What is the most important key factor for KTF to triumph and exceed its competitors?