Collaborator Analysis

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Collaborator Analysis
Chad Milewicz University of Central Florida
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Wheres the Text???

• There is none!
• These notes are taken from multiple sources
• No single marketing textbook (that I have
  identified) gives a concise overview of how and
  why we analyze collaborators.
• Yes! These notes are fair game for your exam.

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What Do We Do, Here?

• First, We analyze collaborators (including
  channel partners, government entities, and even
  competitors)
• Second, Collaborator Channel goals are set
• Then, we use the information to improve our
  strategies and implementation of our marketing
  mix variables.

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Types of Collaborators to Consider

• Channel Members (e.g. suppliers)
• Financial Partners (e.g. shareholders, banks)
• Advertising Agencies/Sources (e.g. types of
  outlets)
• Government Agencies (e.g. small business
  association, industry regulators)
• Professional Service (e.g. Web designers)
• Other specific outsiders who help us create
  value for customers (e.g. international
  alliances competitor alliances)

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Information to Collect Analyze

• Name of
• Potential Collaborator's Organization
• Their Product/Service
• Common Market(s) That We Serve
• Similarities Between Their Product/Service and
  Ours
• Advantages of Collaboration
• Disadvantages of Collaboration

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Upstream Alliances

• Upstream backward
• Alliances with
• Suppliers, technological/research leaders
• Potential advantages
• Cost reduction
• Technological capabilities
• Learning
• Limit competitors access to particular external
  resource

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Downstream Alliances

• Downstream forward
• Alliances with
• Complementary product/service providers
• Potential Benefits
• Broader distribution
• Improved customer information, customer linking
• Signal increased market position to investors

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Horizontal Alliances

• Alliances with
• Competitors in same industry
• Co - opetition
• Potential Benefits
• Synergistic effects of combining resources
• Can combine marketing capabilities
• Added benefits of combined brand images
• Added access to customers across geographic
  markets
• Can strengthen the industry (make a larger pie)

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Lets Consider an Example

• The Context
• Previously, we discussed strategic planning
  customer analysis.
• Today, we discussed company analysis
  collaborator analysis.
• These analyses are all part of strategic
  marketing planning.
• Now, lets consider Toyota and its creation
  introduction of the Prius.

Fortune, Mar. 06, 2006
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Positioning Prius

• The G21 project, which eventually led to the
  modern day Toyota Prius, began in 1993 (total
  cost of development, approximately 1 billion).
• In 2005, Prius global sales were over 160,000
  vehicles (U.S. sales were almost 120,000).
• U.S. sales have more than doubled for the last 2
  years (2004 2005).

Fortune, Mar. 06, 2006
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Nay Saying Nissan

• Some of our competitors say they are doing
  things for the benefit of humanity. Well we are
  in a business, and we have a mission of creating
  value (p. 124) Carlos Ghosn, Nissan CEO
• " positioning is not what you do to a product.
  Positioning is what you do to the mind of the
  prospect. That is, you position the product in
  the mind of the prospect."- Al Ries and Jack
  Trout, authors of Positioning The Battle for
  your Mind (1981)

Fortune, Mar. 06, 2006
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Does it Save Enough Money to Pay for Itself?

• Critics said, the 3,000 or more the technology
  adds to the cost of the vehicle cant be recouped
  with gas mileage. (p. 122).
• Prius marketers replied, Thats not the idea.
  Whats the true cost of a gallon of gas, if you
  factor in foreign aid, Middle Eastern wars, and
  so on? The truth is on our side. (p. 124).

Fortune, Mar. 06, 2006
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In the Beginning

• I was trying to come up with the future
  direction of the company. I didnt have a very
  specific idea about the vehicle. -
  Katsuaki Watanabe, corporate planner 1993.
  Current top Toyota executive.
• He set two goals in 1993
• Develop new production methods
• Get more fuel economy out of traditional
  internal combustion engines.

Fortune, Mar. 06, 2006
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From Fast Follower to Innovator

• Toyotas previous strategic position was as a
  fast follower.
• Executive V.P., Akihiro Wada, said in 1994, It
  was not enough to be a simple extension of
  existing technology. (p. 114)
• As for Toyotas position in the consumers mind,
  it did not want to be remembered for producing
  another Japanese econobox.

Fortune, Mar. 06, 2006
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Engineering VS. Sales

• Sales executives feared that premium prices
  required for a hybrid car would make it
  impossible to sell.
• Engineers firmly believed a hybrid was the best
  route to achieving corporate goals.
• They focused on oil depletion, emissions, and
  long-term future of the automobile society

Fortune, Mar. 06, 2006
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6 Years, 625 Sales Growth

• Toyota expects global sales of hybrids to grow
  to 1 million by early next decade.
• Its current strategic goals include
• Improve production engineering
• Develop better technology in batteries, motors,
  and inverters.
• Begin to improve hybrid model vehicles quickly
  and cheaply in the near future.

Fortune, Mar. 06, 2006
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Problems Positioning in U.S.

• Consumers would have to be taught that the car
  didnt come with an extension cord (p. 118)
• Difficult to build consumer technology awareness
• Early consumer complaints
• Dont like the feel of the breaks. Interior
  looked cheap. Arm rest too low. Rear seats
  dont fold down. It was a Japan car.

Fortune, Mar. 06, 2006
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No for Advertising!!!

• So, how does one position radical technology
  when margins are too low to support extensive
  advertising?
• Toyotas approach (Prius U.S. debut 2000)
• Special internet ordering (helped I.D. hotspots
  for cars hurt some dealer relations)
• Funded grass roots marketing public relations
  events

Fortune, Mar. 06, 2006
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And the Award goes to

• In 2001
• Leonardo DiCaprio and Cameron Diaz each buy a
  Prius and are photographed with car..by the
  press, not in a commercial shoot!
• Chauffeur-driven Prius delivers celebrities to
  2003 Academy Awards.
• From 2003 2004, U.S. sales double
• From 2004 2005, U.S. sales double

Fortune, Mar. 06, 2006
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The New Fast Followers

• After dismissing hybrids in 2004, GM vice
  chairman Bob Lutz now admits The manifest
  success of the Prius has caused a rethink on
  everybodys part. (p. 124)
• Ford licenses Toyotas technology promises
  capacity to build 250,000 hybrids by 2010.
• Nissan is now building hybrids.

Fortune, Mar. 06, 2006
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Marketing Take - Aways

• Good ideas dont always come from marketers
• Toyota engineers pushed for the Prius. But
  marketers are responsible for positioning good
  ideas. (Company Customer Analysis)
• Effective positioning does not always require
  mass-advertising. (Collaborator Analysis)

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Marketing Take - Aways

• Horizontal Collaboration can benefit competitors
  by expanding the size of the market
• Ford Toyota both benefit by Fords use of
  technology (Collaborator Analysis)
• Proper positioning can support margins that seem
  counter-intuitive. (Math..2 weeks!)