iPhone - Most Desired Smartphone? (source: www.journaldugeek.com)

In my last post I was referring to some of the reasons why Apple is not a exclusivist company anymore, but rather a mainstream one (as mentioned by Wired). Today, I’ve ran into a funny picture that was used as a signature by someone posting on a video games forum. The image reflects exactly the feelings expressed in the third comment of the previous post:

“I just bought a few weeks an iPhone 3G and I don’t understand why I have paid a price for it as for a SmartPhone and all I have got from them is a crippled phone with [almost no] functionality. There is no basic functionality that other smart phones on the market have.”

If we look at the picture to the left, an important number of standard features of today’s smartphones, or even regular multimedia phones, for that matter, are missing in the iPhone. Despite not having what we call costs of entry for this type of phones (their product category), the iPhone is still one of the best selling smart phones out there. If we still had any doubts, this should probably confirm to us that customers do purchase on emotional impulses rather than rational choices among alternatives.

So why is the consumer behavior such a strange animal? Why do we still buy products that we’re not really happy with or that we know that others are not happy with as customers? We call ourselves rational and social animals, yet we buy based on emotional reasons (most probably, our social aspect kicks in here, because we all like to be seen as cool). Have you ever rationally dissected your purchase behavior to see wether you’re exhibiting an emotional or a rational buying behavior? How does this differ depending on the type of products you’re buying?

I have to agree with Vivi on this one, since, as I was mentioning in a comment on his blog, I experienced the same thing recently, working on a project focused on the auto industry. Auto News Europe published a while ago an article discussing about the current global economic crisis and its impact on the auto industry, interviewing the top executives from the biggest car manufacturers worldwide. Their reponses were:

Carlos Ghosn, Renault-Nissan CEO: “We don’t know if we’re at the beginning of the end or the end of the beginning.”

Sergio Marchionne, Fiat Group CEO: “There is a level of nervousness out there that I have never seen.”

Carl-Peter Forster, GM Europe President: “Consumer confidence in Western European markets is as bad as it was in 1993.”

Norbert Reithofer, BMW CEO: “In 22 years in the industry, it’s the first time I have seen something like this.”

Giles Michel, Citroen Head: “We do not know how big, how deep, how far this downturn will go.”

I assume it is clear that even top executives running multi billion Euro companies spanned across the whole world refrain from making any estimations related to the development of their industry. The main reason why they are so conservative in making any predictions is the fact that every industry in every country is heavily dependant on the global financial and economical infrastructure and the effects that the financial crisis can cause in any of these industries is highly uncertain.

However, I think it doesn’t hurt us to be optimistic when we predict the outcome of the Romanian online advertising in 2009. In the end, it might bring a bit more confidence that the industry is not so much haunted by the global financial crisis and advertising clients sure need this comfort. Who knows, maybe forced by their companies marketing budget cuts they will be looking at cheaper, but still high quality, marketing channels and the Internet is still out there, mostly unaffected by the crisis and still cheaper than most of the traditional media channels.

As I was mentioning yesterday in my post, the current global economic crisis might prove to be an opportunity for a lot of industries that can reposition themselves in the new context. The Romanian online advertising industry could pass through this crisis highly unaffected, preserving its high growth level as shown in the past couple of years. However, we will not know for sure until a few months of 2009 have already passed by.

The general tendency during a crisis is to tighten up pockets and kill or stale all cash hungry projects, often times these being marketing campaigns or new development projects. Unfortunately, companies often focus only on downsizing or cutting potential losses rather than identify actual opportunities that a crisis can bring along (and I don’t refer here to pure financial or exchange rate speculations).

Ironically enough, an economic crisis can be a boost for quite a few types of businesses. Educational programs, such as MBA’s, are becoming more attractive during a crisis, either because managers struggle to keep their potentially insecure jobs or because they want to change their current jobs into better looking jobs in another company or industry, as Zoya Zaitseva, QS World MBA Senior Operations Manager, recently declared in Ziarul Financiar.

However, the boost in educational business doesn’t happen necessarily without schools lifting a finger, just watching applicants flocking their hallways, hungry for knowledge. It is important for schools to position their offering in such a way that it appeals to both managers wanting to develop their professional skills, as well as companies wanting to train their employees to better deal with a crisis, both categories driven by an urgency call to improve their security, a much stronger drive and much easier to sell to. 

It is interesting how this urgency call, the initial step in the typical change process, comes out so clearly and loud during a crisis. Clearly, during an economic crisis, companies need to change and adapt to the new environment by readjusting their positioning in such a way that they can travel safely through the troubled waters, while even making money in the process. But beyond adapting to the environment, companies should also look out for opportunities, because cutting costs is most often not the best alternative out there.

There are many opportunities out there, opportunities that often companies treat as a low priority, simply because the context is not usually there to bring them into the spotlight. The automotive market is quite a good example of this behavior, because during a financial crisis, both companies and customers try to minimize their expenditures, but companies don’t see how this customer behavior is actually an opportunity for them.

A recent Hitwise article shows the fact that the number of UK Internet searches containing “second hand” increased with 22% over the last 12 months, with cars being the most popular second hand product, accounting for four of the top ten searches containing the above mentioned sintagm. In Romania, Trafic.ro Tools shows that second hand cars are by far the most searched for items on the online second hand market with five of the top 10 searches for “second hand” being related to cars or auto parts and another three of the top 10 searches being linked to lighter two and four wheels vehicles (ATV’s, motor bikes and scooters).

The Romanian auto importers are whining about the decline in their new car sales. However, instead of tightening up their belt and hugging their new cars tight in order to resist to the global financial crisis they should focus their operations on their second hand divisions (and most of them have important second hand businesses running alongside their new car sales networks). The second hand auto market is actually booming in Romania right now, fueled by both the global financial crisis, as well as the reduction in the local environmental tax charged for the car’s first matriculation.

As seen in the examples above, a financial crisis can actually be an opportunity for various industries, despite the negative outlook of the global economy. If we think about this for a moment, leaving all fears aside, a crisis is nothing more than a context for our businesses, but a context that creates a sense of urgency that forces us to leave our comfort zones and change in order to adapt and survive.

If we think about this in marketing terms, the issue is actually a repositioning process generated by a change in the context that we do business in. The question is: why do we need a crisis to force us to reposition in order to take advantage of opportunities that have always been out there?

Moreover, the competition now lies not only within the boundaries of the Central and Eastern European region, but globaly, since bright professionals from these regions are more and more attracted by the highly coveted names of schools such as Harvard, MIT, INSEAD or London School of Economics. This attraction works also the other way around, since top universities are actively seeking and recruiting the brightest individuals from our region as well.

In such a competitive market, how do you actually differentiate from rest of the pack when you’re offering an intangible and generic product (at least by name), such as an MBA? How do you make your product offering really relevant for the region you are active in? What more than just business can you teach the young professionals in this region?

When Paul Garrison became the new Dean of CEU Business School, he recognized immediately these challenges, based on his vast experience in strategic marketing. He knew that he had to reposition the school’s offering on the market to competitively differentiate from all the other MBA Programs offered in the region. What was the one thing that the CEE region had that was different than the rest of the Western world? The answer was simple: the region was an emergent market.

In a regional emergent market there are a lot of national, cultural, political, social and ethical issues that highly influence the business environment. The future business leaders of this region need to be well prepared to lead the region in its continuous change process towards a mature market. In doing so, they need to be highly attuned to not just business, but all the other factors mentioned above.

In doing so, the CEU Business School is actually creating a new model: the transnational leader that is not just a professional business manager, but also culturally, politically, socially and ethically attuned to the specifics of the region he or she will do business in. With these new abilities, the new transnational leader will be better equipped, not just to adapt to ever changing environments in this region, but in fact lead the change process itself.

From now on, it will not suffice to get your MBA program participants ready for success, offer them a world class MBA or develop them in the future business leaders, because there is more than just doing business in this region. CEU Business School MBA Program is now differentiating itself from the rest of the products offered by the other schools, positioning its offering as the foundation of creating the transnational leaders of tomorrow. By doing so, the CEU Business School is actually redefining the rules of the game and expanding the costs of entry for every competitor on this market.