Wednesday, September 8, 2010

Is Xerox Wasting Their Money?

The Wall Street Journal announced last week that Xerox Corp. is launching its most expensive advertising campaign in two decades with the hope of repositioning the company away from being just a copier maker and expanding into business services.  In fact, Xerox has already purchased outsourcer Affiliated Computer Services to help it do just that.  It now faces the tough task of changing the perception customers hold of Xerox.

This announcement begs a question to be asked.  Why do some companies, such as Apple and IBM, have such great success reinvigorating growth through market repositioning while others like Xerox, Polaroid, and Kodak struggle?

All of these companies have a few things in common.  They have all had success selling their products and, as a result, are known for something.  Once their growth rate slowed, each of them invested in launching new products and services.  Some, like Kodak, have even won awards for them.  However, the market has not rewarded all of their efforts equally. 

We all know how Apple has transformed from a computer company to a mobile device and entertainment company with their slick iPod, iPhone, iPad, and iTunes products.  As a result, they are now the most valued technology concern on the planet.  Similarly, IBM moved from being predominantly a hardware/mainframe business in the 1990s to being one of the largest IT integrators/outsourcers.  Their reputation for being technology experts has given them the right to do this in the minds of their customers.  In contrast, Xerox has tried for years to move from being a manufacturer of photocopiers to a document management services company.  They have had marginal success.

I believe the answer lies within how these companies repositioned themselves.  Both Apple and IBM found an important problem the customer was struggling to get done, developed a superior and sustainable solution, and then provided clear and credible points of distinction to help build their “story” in the minds of their customers.  They connected who they are to how they can help customers get other jobs done.

On the other hand, Polaroid and Kodak, both known for early innovations in photography, have failed to carve out a valued position in the digital world.  They have struggled to develop new products AND tell the world why their products are superior to other solutions already on the market.  To customers, there was no clear link between what they were known for and the new solutions they had launched.

Now, Xerox is planning to launch a very expensive ad campaigns to do just that – tell the world why they should consider Xerox for help with mundane business processes.  Will they be successful?  Have they “earned the right” to do this from the customer’s perspective?  This depends on whether or not they help customers see how a copier manufacturer can be much more than that.  If they don’t, then they are just wasting their money.

Friday, September 3, 2010

Why Apple's iPad is a Success

A few months ago, I predicted that Apple’s iPad would not be a success.  To summarize the reason I made this prediction, it appeared at launch that Apple was simply going to position the iPad as a device that sits between the mobile smart phone and the laptop.  As I stated at the time, I did not believe that consumers would want to purchase yet another hand-held device.

In hindsight, I was wrong.  The iPad has been a runaway success and has compelled others to create new tablet devices.  However, even though I was wrong in my prediction, Apple was also wrong in how they saw the iPad being positioned in the minds of customers.  The iPad is not perceived by consumers simply as a device in the middle-of-the-size continuum.

Despite it’s form factor, consumers judge products based on the jobs it helps them get done.  As a result, the iPad is being grouped in the minds of consumers with other portable electronic reading devices like the Amazon Kindle and the Sony Reader.  What all these devices have in common is that they enable people to read books and keep up with information while on the go.

My theory about why the iPad is selling so well has to do with this grouping.  When we begin to seek out a solution to a job we are trying to get done, it is because we want to get that job done.  However, when we make decisions about what product or service to purchase, we do so by comparing one option against alternative options.  We then base our purchase decision based on how well we believe the solution will allow us to get the job done.  This includes everything from making the purchase to learning how to use it to maintaining it and, ultimately, disposing of it. 

As a result of the iPad being grouped with these other devices, consumers are choosing to purchase the iPad because of it’s perceived superiority in how it gets the job of reading books and keeping up with information done.  It’s intuitive user interface, numerous apps that seamlessly sync desired content, and high resolution color screen are all often given as examples of why it is a desirable solution over the Kindle and Reader.

From Apple’s advertising and marketing campaigns, I do not believe they intended to have consumers pair their new device with these other e-readers.  Rather, consumers have done this on their own based on the job they are hiring these solutions to get done.  As a result, Apple has a product consumers are choosing to buy more often than not.  The only question that remains in my mind is whether or not Apple could have even more success with the iPad if they purposely positioned it in this way.