Big Data and Data Warehouse – a flea market and a pharmacy

Big Data and traditional data warehouses. How to compare them? What are the differences and the roles? Who wins? No one actually.

Lately I’ve been often faced with questions about differences between the so popular big data initiatives and the traditional data warehousing concepts. Few months ago I tried to distinguish the two in context of overall information management paradigm in a blog post that I wrote for the “IBM.Talking about” blog from IBM Croatia. In the rows that follow, I bring the English translation of the text .
For those of you who are unfamiliar with it, the term big data refers to the overall phenomenon of dramatic growth of available amounts of data due to global acceptance of the Internet, incredible amounts of data from social networks and mobile technologies, as well as due to billions of sensors worldwide and massive digitalization of practically whatever we do. Big data also refers to technologies that are able to process such large amounts of data coming from heterogeneous sources, regardless of whether it is structured such as database transactions records, or in form of unstructured records such as pictures or videos. These technologies are based on specific repositories that are able to store different types of files in their native formats and use principles of massive parallel processing to analyze and process such data.

Structure against the free form; pharmacy against antique store

Compared to data warehouses, big data solutions handle data which is “cheap” per terabyte. It is filthy, not standardized, without a dictionary, scattered in different formats. It is “cheap” also due to considerably lower effort to load it into repositories based on technologies such as Apache Hadoop (which itself is an open source project), but also due to the relatively inexpensive processor units and storage capacity that rely on distributed clusters with relatively high error tolerance. The data in our traditional Data Warehouses is on the other side pretty “expensive”. It has to pass substantial control, cleansing and standardization before it even gets the chance to knock the door of a well structured data warehouse. Compared to the big data cluster, a data warehouse seems like a pharmacy in comparison to a grocery store. In fact, even the mention of a grocery store is too pretentious, we are rather talking about relationships between pharmacies and something without a structured and standardized content – more like a flea market or an antique store.

Boring and exploring

After having had to do with pharmacies (here synonym for data warehouse) for so long, in the era of big data we are starting to visit places that will be supplied with a variety of items at a low entry price, without fancy supply chain, without traceability and complicated regulatory requirements. However in such places, a connoisseur could gain surprisingly lucrative outcomes … just like a data scientist would be able to gain by analyzing large amounts of variety of data forms inside a big data repository. From certified sellers (pharmacists), through severely certified products (pharmaceuticals) to certified point of sales (in many countries pharmacies get permissions by population density), the pharmacies are expensive places per unit sold. We enter there with a recipe (or it is already “brought there” through an IT system) and with unambiguous motives (e.g. stopping the pain). On the other hand, such structure disappears in an antique store. We enter there rarely with a particular intention. On top of that, usually inexpensively furnished shops, offer all sorts of things – from art and books over dishes to useful little things that nobody needs, and precious objects from the distant past.

Pharmacy and flea market
Pharmacy and a flea market

Unlike pharmacies, usually you will not know in advance the nature of outcome of your purchases. You might be keeping something really valuable in your hands. Perhaps, with further research, you can realize that the painting you have just purchased is actually worth a fortune and that you may no longer need to play the lottery. I mean never more! Your visit to the pharmacy will certainly never end with the idea of not ​​playing the Lottery again or terminating the private business you hold. The outcomes from a traditional data warehouse are just as such – boring and predictable. With rare exceptions aside, DWH is generally built with the outcomes known in advance. Users are left to search for relations, understand trends and identify extremes. It will rarely become a journey into the unknown, combining the incompatible and correlating distant phenomenons. That part of the job we leave to the big data.

Comparing the two

Let’s try once again to quickly compare, still generalizing, some aspects of traditional data warehouse and big data solutions. The sole technology implementation, generally is easier with big data. To build the repository it is not necessary to design an extremely detailed data scheme and have ready an exact spot for each byte of data stored based on its type and place in the hierarchy. The logistics of data supply (ETL and data governance) is again much more complicated in traditional DWH. Administration is similar, as well as the learning cycle in adopting the technology.
In case of traditional DWH, for the (already prepared) analytics, there are no experts needed as data is usually packed into predefined syntax and predefined analytical processes which are used by common users – business, scientists, analysts, … With big data this part is much more complicated. The collected massive amount of data needs someone who knows how to filter it in order to reach the value ​​that resides within. Common big data scenarios (e.g. marketing targeting) are often based on “chewing” the data all over again across different dimensions and unstructured attributes. Someone has to distinguish the important from the unimportant, coincidences from rules. He should know filtering techniques and data modeling, be familiar with different tools and algorithms, such as those that are able to connect a person to an image, recognize a script from a picture or understand natural language semantics… Due to its unfiltered nature big data is significantly “more expensive” at this stage .

Who leaves and who stays?

And finally, a little disappointment to all of those who are fed up with continuously optimizing data warehousing models, with immense work when changes or additions occur, concerns about naughty data derivates and ever changing data sources. Big data and DWH are here to stay together side by side, each in its role, just like a flea shop and pharmacy, complementing each other… at least for some time*.

 

*It is very likely that in the future we will have a single platform for both structured and massive unstructured data. To get to this point some basic technologies such as fast SQL query requests on unstructured repositories should be developed. From the other side the convergence between the two will be further supported by the emerging infrastructure technologies, such as in memory databases, different high performance computing technologies, flash storage and specialized compute architectures.

The Jobs’ impact

After Steve Jobs has passed away, many articles were written about the impact of this great individual. In this post, I give my view on the two of many dillemas presented lately in press articles and blog posts.

As I’ve been engaged in some discussions lately about Steve Jobs‘ heritage, I felt tempted to summarize my opinions expressed mostly through comments to the hbr.org on line community. Some of the thoughts were exchanged before this great personality has passed away.

When browsing through numerous articles, I noticed two dilemmas that I found worth discussing. One was the most frequent and natural question about whether Apple will continue to be such a successful company even after Steve Jobs died. Much more intriguing discussions were about the fact that Steve Jobs’ death solicited enormous interest in press and social media, compared to some other great personalities of our time that passed away – the creator of the C programming language Dennis Ritchie or the winner of Nobel prize in medicine, Dr. Ralph Steinmann who found some essential mechanisms of how the body reacts to infection. I’ll discuss the two dilemmas, starting from the latter.

The media attention

In his hbr.org blog post, Scott Berinato, an editor at the Harvard Business Review, shared his thoughts about huge difference in public and media attention that followed Steve Jobs’ death, compared to the few articles that noticed that Dr. Ralph Steinman passed away.

My comment was that one of the greatest virtues of Steve Jobs was his capability to manipulate media and rise public curiosity. Jobs was not jet an other marketer. His marketing was more than that, it was genuine show business.

He was a performer, a media star. If that wasn’t the fact, the world would have been less keen to recognize his major contribution in leadership and innovation.

By gaining positive publicity we reward sympathy and a stronger public recognition. I’m pretty sure that outside the short-term publicity by press or social media, the work of either Steve Jobs, Dennis Ritchie or Dr. Ralph Steinman will be recognized in the fields where they have contributed the most. They will all be cited and their work elaborated in thousands of pages in scientific, technological and leadership literature for the generations to come. After the lights of the current public attention will turn off, the genuine human heritage of the three great men will remain.

The post – jobs Apple

What about Apple in the post Steve Jobs era? This is among the most frequently asked questions these days. After Steve Jobs announced his retirement from Apple several months before his death, James Allworth, Max Wessel, and Rob Wheeler proposed this question at the Harvard Business Review blog post Why Apple Doesn’t Need Steve Jobs.

The authors argued that the „Jobs’ way“ is already so infused within the Apple culture and that “Today at Apple is going to be exactly the same as yesterday.”

No one is able to predict how will Apple respond in the future years, but I do believe that in either of cases, the future generations will study the „Jobs’ impact“. The core answer about how much a single person can impact a corporate performance hides in the Apple of next decade. Will it keep its market performance and innovation agenda after Steve Jobs haIf Steve Jobs managed to embed the “Jobs’ way” into the fabric of Apple’s culture, then this will be the heritage of a great leader to the rest of us and probably the most searched and cited corporate culture impact of an individual in the future.

In the opposite case, if the “after Jobs” Apple fails (again) instead, this will be the most valuable evidence of all the times of a leader’s impact on organization’s success. I believe that it might start a new era of self-conscious individuals starting great things with trust that they can make the difference – because “Steve did it that way”.

This post is my personal tribute to the person who made the difference. Thanks Steve.

 

KCTXDZFA4ZCP

The three most read posts on Alen’s Think Place

The three most read articles at www.gojceta.com during the past year

After more than a year of posting to www.gojceta.com, it seems that the most popular articles were those written with intention to be posted to Alen’s Think Place. In competition with English translations of my articles published in Croatian business and technology magazines during the past decade, the winners were the two posts created out of pure intellectual joy, reflecting my thoughts, without expectation for a financial reward.

The most read article on www.gojceta.com was the story of my experience at the first McCafe’ in Zagreb: “A coffee shop in the hamburger kingdom“. It explored the business model and the McCafe’ service in general.

The other most read article, missing only one visit to equal the McCafe’s score was the story about brand extension of Cedevita multivitamin drink to their line of tea. “Dad does it dissolve in water?” was doomed to be written the day when my son confirmed to me that my own confusion with the brand message goes beyond my own perception.

The third most accessed article was “The bdp triangle – my framework to managing successful proactive telephone campaigns described in an article in Croatian business magazine Lider. Despite the fact that the “triangle” was around 10% behind the two winners, I’m very proud of this concept and I believe that it has deserved the position.

The most read articles at www.gojceta.com:

  1. A coffee shop in the hamburger kingdom
  2. Dad does it dissolve in water?
  3. The bdp triangle

The above articles are copyright of Alen Gojčeta

©2006-2010 Alen Gojčeta

Brief History of CRM

The post presents the history of Customer Relationship Management (CRM) within the context of academic research and business applications. This is the excerpt English from the article published in Croatian in April 2010 in “Mreza”, magazine for IT professionals. The CRM history is described from its starts in mid eighties to day, with a view on the years to come.

The history of CRM can’t be observed without considering the development of business applications with contemporary academic research.

Eighties, THE second half

MARKETING SCHOLARS: After the concept of services marketing, particularly developed within the so-called Nordic school of marketing, a new concept has emerged. Early definitions of Relationship Marketing could be found mid eighties (1985 Jackson).

BUSINESS APPLICATIONS: Sales Force Automation (SFA) and Customer Service (CS) applications were still considered as part of the wide family of ERP solutions. Few years later a new and distinct software solution category emerged and SFA and CS became part of so called Customer Relationship Management (CRM) software.

Nineties, the first half

MARKETING SCHOLARS: Relationship Marketing has been studied by Morgan and Hunt (1994) and Reichheld (1996). In 1995 Relationship Marketing was defined by Koiranen as “approach to establishing, keeping and enhancing the long-term relationships with customers and other shareholders.”

BUSINESS APPLICATIONS: Analysts from the first half of the nineties still did not recognize the rising strength of CRM. SFA and CS were classified as a small sub-segment of the ERP market. In 1994 the total CRM software (SFA and CS) market amounted to around 200 million US dollars, compared to the 6.4 billion of the global ERP sales.

Nineties, the second half

MARKETING SCHOLARS: Unlike Relationship Marketing, the CRM was studied relatively late by the academics. First academic definitions of CRM were written relatively late compared to Relationship Marketing. In the 1999 Srivastava, Shervani and Fahey described CRM as a broader concept than Relationship Marketing defining it as “a process that identifies customers, creates knowledge about customers, builds relationships with customers, and forms customers’ perception around the organization and its offerings.”

BUSINESS APPLICATIONS: Towards the end of the nineties, CRM fever heats up. The awareness of the big new market is rapidly growing. Everyone sees the opportunity for a continued growth in a somewhat saturated ERP market. During previous years, ERP applications have generated and stored an impressive amount of data about customers, so indispensible to fuel successful CRM initiatives.

Year 2000 to date

MARKETING SCHOLARS: Despite some terminological dissonance, academics are better aligned with the business practice. Through basic research, they contribute to the development of business concepts that are being embedded within CRM.

BUSINESS APPLICATIONS: Many applications are experiencing their maturity, backed up by better understanding of business processes as well as motivation agendas of individuals and departments within organizations . This maturity was influenced by the evolution of information technologies backed up by cheaper and faster data storage systems, accessible broadband and flexible IT environments, like service-oriented architecture (SOA), SAAS (software as a service) and cloud computing.

2010 and years to come

MARKETING SCHOLARS: The intensive progress in behavioral studies over the past two decades creates the basis for “intelligent” approach to large customer segments. In addition to corporate business systems, such segments are emerging within the social networks of the coming years.

BUSINESS APPLICATIONS: Social networks are opening a new page on the CRM agenda. Facebook, Twitter, LinkedIn, Second Life and other engaging social media networks, enable a more precise segmentation, affinity grouping, customer participation in offer definition and their impact on formulating corporate strategies, in a way that has never been possible before.

 

Social Networks' role in CRM
Social networks in CRM ecosystems enable a more precise segmentation and customer involvement. ©2010 Alen Gojčeta, Mreza magazine April 2010

This is the excerpt in English from the article published in the issue of April 2010 of Croatian magazine for IT professionals “Mreža“. The work above us the copyright of Alen Gojčeta and the Mreža magazine. The CRM history is part of the findings of the research done for author’s master degree thesis “Segmentation models in CRM”, 2006.

 

About my Commentary Printed in Harvard Business Review Jan/Feb 2011

I had an honor to have the edited version of my comment to Harvard Business Review case study “Preserve the Luxury or Harvest the Brand?” printed in its January / February 2011 issue. Here is the case…

I had an honor to have the edited version of my commentary to Harvard Business Review case study Preserve the Luxury or Harvest the Brand? printed in its January / February 2011. The commentary was part of the gojceta.com initiative and it is embeded in my web 2.0 “personal strategy”, which is partly described in one of my posts.

Snapshot from the Jan/Feb 2011 HBR

I posted the comment to the hbr.org community in October 2010 after having read the intriguing case study. The complete text is available in the Jan/Feb 2011 issue of the Harvard Business Review, or on the HBR.org. In short, the case was about an imaginary French winery Chateau de Vallois. Vallois is a typical family business with simple business model combining vineyards cultivation with wine making. They are traditional in producing high quality wines and selling it through the traditional channel which exists for centuries in Boreaux. The negociants are wine merchants that diminish the risk of wine placement, but take the majority of the sales margins in return.

The youngest member of the family, after her MBA study and engagement with a leading consulting firm, wanted to make some change and start branding and selling wine on a much larger scale, targeting lower market segments. The young women’s idea engaged the family into discussion. Others were concerned about Vallois’s ability to market, their capacity to go for large scale, the relationship with negociants and similar.

The authors of the case study Daniela Beyersdorfer and Vincent Dessain wanted to hear opinions about going with a more affordable wine or stay with exclusivity.

This was my original commentary to HBR.ORG Vallois case study

Personally, I would’t go from exclusivity to wide market. We learned lessons from different industries such as car producers or fashion brands where this was often a bad idea.

I would rather use an even more exclusive wine*, sold directly from the chateau as brand exstension. Brand extension is fair even if adding several percent to profits of a business. Let’s say, in this case a new wine would make only 5% of the total quantity. Its margins would be double than the usual shipments due to direct sales and would add a 30% due to exclusivity. In this case the 5% of the revenue could contribute with additional 13% to the margin, assuming their selling price as base price and that the new production wouldn’t generate excessive additional cost (vine making is their core business anyway).

The new brand extension with exclusive price, channel and quantities would be a lever to increase demand for other wines purchased by negociants. The 5% of the total quantity wouldn’t create problems with the lack of grapes and would not harm the negociant’s market, but rather increase the whole brand value through scarcity of the newly introduced wine. The new wine would allow the owners to gain marketing expertise and establish the new business model with a low risk approach.

*In the original text it stands “vine” instead of “wine”

What was my point?

The approach I suggested was keeping the family business set up, while giving them the opportunity to start building their sales and marketing capability. The approach with even a more prestigious vine brand, sold directly from the vinery, would have been focused on profits rather than revenues.

How did I reach the above calculation?

Negiociants used to resell Chateau de Vallois’s wines with around 100% margin. If the Chateau would have had produced additional 5% of a more exclusive wine with higher margin of 7 value points from 5 quantity units, compared to the 135 value points they gain from 100 quantity units through negocitants (supposed cost ratio is 80 value points per quantity of 100 for both vines), it would contribute with 13% of additional profit margin (7 of 55).

New prestigious wine Actual wine
Quantity units 5 100
Production cost (value points) 4 80
Price sold out (value points) 12 135
End consumer price (value points) 12 200
Ch. de Vallois margin (value points) 7 55

What did I mean by lessons from different industries where brands have eroded due to switching from serving exclusive segments to wide markets?

Different exclusive car producers have given up their exclusivity to address a wider market. Not many of them have succeeded. Instead, many have struggled for years to regain the original brand proposition. Some of the examples were Porsche’s front engine GT models discontinued in 1995, or Jaguar’s trip into middle class car production.

Summary of the first year of Alen’s Think Place

The first full year of Alen’s Think Place is represented by 12 peaces of written work. Here are the summaries and links to 5 business articles translated to Englsih, 5 blog posts and 2 reviews of positioning / branding strategies…

The 2010 was the first full year of Alen’s Think Place is represented by 12 peaces of written work:

  • 5 translations of my articles published in Croatian business magazines during the past decade. Mostly on CRM.
  • 5 classical blog posts. Some of those were quick thoughts, and some other were excerpts from my recent articles
  • 2 reviews of positioning / branding approaches (McDonalds and Cedevita)

Alen’s think place is meant for business professionals, mostly for those who deal with sales, marketing, CRM and business strategies in general. I hope that you have found value for yourself and that you will keep finding it at www.gojceta.com.

CRM education – the follow up

11/23/2010
I used the www.gojceta.com to write the follow up of the CRM seminar I hosed. The conclusions are interesting to any professional dealing with CRM.

The CRM seminar redesign – the whys and hows

10/24/2010
In this post I announced the facelift of my CRM seminar and shared some thoughts about the approach.

The “bdp Triangle” – my Article on challenges of telesales campaigns – (English translation), Liderpress, 11/2005

09/09/2010
The “bdp Triangle” is among my best sales concepts….

Cedevita tea: “Dad does it dissolve in water?”

06/27/2010
I just couldn’t resist to write the article about this unconsistent branding approach…

Redefining the concept of Alen’s Think Place – the imperative of consistency

06/15/2010
A small “Alen’s ThinkPlace” strategy: consistent content to the consistent audience using a single language…

My Article on Organizational Gaps in CRM (translated to English), Banka magazine, March 2003

04/26/2010
The article elaborates the problem of a “CRM organization”…

Story about Mr. S and the failed CRM project

04/11/2010
Small insight in my latest article published in Mreza magazine through a story inspired by a true event…

7 wisdoms for a successful CRM implementation

03/16/2010
English preview of the implementation part of my April article – the 7 wisdom for a successful CRM implementation…

My Article on CRM customization (translated to English), Banka magazine, September 2002

01/31/2010
The concepts from this article from 2002 are just today becoming really mature and useable…

“Tasting” the McCafe’ business model

01/18/2010
In 2010 this was one of the most read articles at www.gojceta.com. Check why…

My article on IVR systems – PART 2 (translated to English), Banka magazine, May 2002

01/11/2010
A pretty long article about Interactive Voice Response set in two parts. Still relevant, but with the major change about the handy nature of mobile Internet access. Read first the part one below 🙂

My article on IVR systems – PART 1 (translated to English), Banka magazine, May 2002

01/02/2010
Part one of the above article.

All of the work above is copyright of Alen Gojceta. If you use it in academic or professional publications, please cite the author and the respective sources.

CRM education – the follow up

I had the opportunity to host a CRM seminar for a great group of professionals. Here are the conclusions written in form of follow-up letter to the attendees. I’m sure you will find it interesting too…

Past Thursday I had an opportunity to host a seminar on CRM for a group of experienced professionals. I have announced the education in my recent post, describing challenges and uncertainties around the topic and the potential audience. This post is written in form of a follow-up letter to the seminar attendees, but it might be interesting to many of you who deal with CRM and who are interested in what were the major take-aways from the intensive 6 hours CRM education.

Dear attendees,

thank you for taking part of this seminar that showed to be very productive and interactive, due to contribution of all of you.

All of my concerns before the education about the homogeneity of the group vanished when I received the first list with your names, your companies and business functions. The group was very compact in terms of CRM understanding as well as your experience in managing customer relationship or implementing CRM systems. A bank, several telecommunication companies and two CRM vendors made a perfect audience for a focused and productive education.

I really enjoyed the experience and I hope you did as well.

The customer's hidden attributes

There are ten points that I want to stress out and that I’d like you to keep in mind as points to take away from the lecture:

  1. No one needs CRM because it is fancy (’cause others „have“ it too) unless they plan to waist time and money
  2. CRM often doesn’t need „implementing CRM“. In many cases, I’d rather advice you to take a look at you core processes and make it fast, responsible and transparent.
  3. Basics of a healthy customer relationship management lies in you customer focused corporate culture in opposite to the one that arises from product or process orientation (remember our first exercise?)
  4. When you work on aligning your company’s agenda with that of your customers, don’t forget about different motivations of your departments as well as talents and motives of individual employees
  5. Manage customer experience through managing their perception. Perception is often tightly related to expectations. Take care! Expectations are set by your organization’s „CRM processes“, your marketing communication, as well as by your competitors.

    The "Moments of truth" exercise
  6. Manage touch points. Those are the essential „places“ where customer experience occur. Try to use „Moments of truth“assessment in combination with customer expectations or even emotions as a powerful tool to manage total customer experience.
  7. Customer data derive from customer oriented processes not vice versa
  8. „Critical point of CRM implementation“ is the one where you know what do you want to achieve, why do you want it so much and what is the frame within you are able to do it
  9. The message of the story tale „Wolf and the three piglets“ is that we have to build solid basis for a lasting survival (business) model. The same is with social media and their use in CRM ecosystem (sCRM): invest time, engage to get them engaged
  10. …ah yes, segmentation. Some of you stated that you didn’t get enough. You asked for more. More of theory, more of tools, more of segmentation methods. It is homework for me and a great feedback from your side. Thank you.

When talking about segmentation, is not only about splitting customers into (more) manageable groups. And especially it is not just

The list of touch points from one of the exercises (in Croatian)

about distinguishing them based on their spending (value based segmentation). It is about what does your offering or your organization mean for different customer groups (benefit segmentation). It is about events from the CRM ecosystem that create dynamic

segmentation attributes and micro segments. The segmentation is about the general approach to certain customer profiles, as well as small operational activities. This is in particular case for the segmentation of the CRM era where you are able to track in real time what your customers are doing, experiencing or even saying.

About trends of the future, remember that today’s products can become powerful interactive touch points. Use QR codes in combination with Web 2.0 tools.

I encourage you to try in your everyday work what you have learned. Think customer. Think expectations. Think experience at touch points. Think about service – the fast one, responsive and transparent.

Thank you for your active contribution and for sharing your time, energy and experience with all of us.

Alen

P.S. Feel free to comment about your experience or suggestions for further improvements.

© Alen Gojceta 2010

The CRM seminar redesing – the whys and hows

After several years, I’ll keep an open seminar on CRM. Read about the challenges and the approach I took to overcome them.

Some time has passed since I held my last open seminar on Customer Relationship Management. In the mean time I had some engagements on universities or in form of in-house education.

From my experience, open seminars are particularly challenging comparing to the other two forms of lectures. In-house educations allow precise matching the content to the audience. Thorough preparation and understanding of expectations of the audience can be performed before the actual education. Usually one or more preparatory assessments and meetings are performed. The company that orders the education is in most of the cases a fair candidate to be used in business cases.

Academic lectures, from the other side, usually have homogenous audience. The lecturer has to prepare more facts, is able to offer long definitions that students systematically write down. Faculty students are unfortunatelly, in general, passive in terms of expectations over the quality of lectures and speakers. This puts lower pressure on the lecturer, despite his decisiveness to invest time to gain the maximum quality.

Open seminars however attract people with very different expectations, mostly totally out of lecturer’s control. It does not help much even when put the maximum effort to understand each seminar attendant’s „why“. You will usually have 3 or 4 different homogenous sets of people within an usual group of 10 or 15. Here are some profiles from my experience:

Est. share Profile Their motivation
40% The general knowledge seeker I heard a lot about this CRM. I’d really like to learn more about it.
30% The CRM professional Let’s see what does this guy have to say that I still don’t know.
20% The project guy We are implementing the XY software, we will learn how to do it (usualy 2-3 persons from the same organization)
10% The victim of transformation My boss has sent me ’cause we have te fancy HR initiative in our organization, but I don’t care much about the topic. You don’t mind if I leave after lunch?

The bottom line is that you will never be able to make everyone perfectly satisfied with the content. Therefore I usually estimate which of the groups is dominant and then try to narrow the content for that group, without forgetting the rest of the audience.

My first open seminar after several years has some additional challenges comparing to the previous ones. The education provider (Institute for management / Istitut za menadzment) offers mostly soft skills educations such as coaching, fast reading techniques and creative writing. My CRM course stands out from the self–transformational and workshop–like educations. I estimate that the general tone given by most of the lecturers at Institute for management will impact expectations over my content and educational style. Therefore I have decided to adapt the seminar, making it more interactive with more usable material to take away. My next imperative, independent to the Institute for management’s clients, was to modernize the content, make it more attractive and up to date. So I’ll spend some time during te seminar on the Social Media role within CRM and I’ll open a discussion about a new CRM concept. I will share some of my thoughts about new possibilities of Web 2.0 enabled CRM development, which I call the in-the-product CRM.

The CRM seminar redesing

Wow, I’m looking forward to lead the course on 18.11.2010. at Institut za menadzment, Zagreb.

Cedevita tea: “Dad does it dissolve in water?”

For some time now I’ve been cultivating the idea to write a few lines about an unusual branding that the Atlantic group applied to their tea product line. Probably the idea would never have grown into a decision, and the decision into action, if there wasn’t the observation of my eight-year old son that has confirmed my suspicions…

For some time now I’ve been cultivating the idea to write a few lines about an unusual branding that the Atlantic group applied to the tea product line acquired from Pliva in 2001. Atlantic’s decision was to keep the teas within the Cedevita line of business and also to use this very popular brand of refreshing beverages to promote the teas. Cedevita was among the most popular drinks in former Yugoslavia. Today it is packed in plastic jars in form of granules that dissolve in water with an effervescent effect that create a fruit tasting refreshing multivitamin drink.

Probably the idea about the mentioned article would never have grown into a decision, and the decision into action, if there wasn’t the observation of my eight-year old son that has confirmed my suspicions. Passing near the “city light” advertisement at one of the Zagreb tram stations, the child begins this unusual conversation:

Lovro: “Dad, will we buy this Cedevita tea?”.

Me: “But my son, we have it at home – an ordinary tea in filter bags.”

Lovro (enthusiastically): “Oh, it is kept in bags, you mix it with water, shake and drink?.”

I (taking a deep breath): “No, my son …”.

Yes, the tea is not an instant beverage in granules, and still it is called in the same way. How’s that possible?

Before of Atlantic’s re-branding, in consumer’s perception Cedevita meant only one thing: an instant vitamin drink. Time ago, when Pliva used to

bubbles cedevita
Graphical elements that garnish the web page of Cedevita teas

pack Cedevita in medical jars, consumer perception recognized the drink as a serious diet supplement. Still today, the text on the package states that it is just about it and that the recommended daily dose should not be exceeded. The package itself, however, does not reflect such seriousness any more, and the same goes to the related consumer perception (and habits, I’d add).

We know that the perception of a brand is usually established early in childhood. If we consider that children are the main consumers of Cedevita instant beverage, and that for them Ce-de-vita means exactly this, the confusion when encountering teas with the same trademark does not surprise.

I believe that applying brand attributes of a recognized instant beverage to the tea product line, represents a negative shift in the strategy of such brand. The confusion is further increased by recent investments through package redesign and intensive advertising of Cedevita teas – by ads that, by large portion of our perception, actually promote vitamin instant beverage. Judging by the web pages of Cedevita teas, it seems that even Atlantic’s marketing experts weren’t able to detach from such perception. The pages that belong to the teas represent just a subset of the Cedevita site, therefore the new tea packages are surrounded by orange bubbles on the move, so characteristic for the instant drink sharing the same name.

In this discussion I will disregard the hypothesis that the people from Atlantic deliberately push the more profitable Cedevita instant beverage on the account of (supposing) less profitable tea product line. Knowing this private company by a decisive and pragmatic management, I believe that the line of former Pliva teas, would have been rather sold to competitors than kept to serve as advertising billboard for a more successful product line.

Brand Communication: boiled water, granules, thirst, freshness, basketball …

Returning to the Cedevita brand and its communication. Cedevita, comparing to natural tea satisfies a completely different need. Even when we drink it, somehow subconsciously we do not believe that we are doing something really healthy. Effervescent effect when preparing the drink, during which the glass becomes temporarily transformed into a test tube, and sugar as one of the basic ingredients, suggest that we are going to consume a refreshing vice, rather than a healthy beverage. What remains as consolation is that we get the necessary “power of seven vitamins” as a food supplement.

While the primary function of Cedevita is a cold drink for refreshment and thirst, the tea is a warm beverage of health and relaxation. It implies a natural herbal mixture, kept in a previously boiled water. Tea is aromatic. Cedevita is the freshness and the sound of the dissolving granules. The tea are leaves and dried fruit,  while Cedevita is the powder with “natural fruit flavor”, as stated on the label.

In this whole discussion the potential synergy of the brand should be taken into account. Cedevita drink, Cedevita tea, Cedevita basketball team … When such unified brand has been stretched through consistent marketing communication at a wider region, then this approach carries a synergistic effect and significant savings. In the case of Cedevita, this region includes Croatia and its neighboring countries. Basketball club that plays in the regional league under the name of Cedevita and marketing campaigns that can be recycled in several markets with little intervention, reduce the cost and increase the synergy effect of a long-rooted brand. But it is exactly this “rootedness” to be the reason for confusion by the communication that places the instant beverage and the tea in same basket.

Cedevita teas and brand internationalization

If we consider the brand in terms of its internationalization and ignore the neighboring countries whose consumers grew up Cedevita, then we raise the question of purpose of a brand shared among instant drinks and teas. While in Croatia and the region, brand recognition can encourage a faster acceptance of Atlanic’s tea product line, this is not the case in other countries. Assuming that Atlantic plan to address a broader market with their teas, the arguments above seem to loose the ground. Even in a market that has never heard of Cedevita / instant drink, the question is how well will consumers associate that name to teas. The name itself evokes the C and D vitamins, or the life (Latin vita = life).

Lipton
Lipton guarantees a share of tea from rain forest to their consumers

Successful global brands of tea are appealing to lifestyle, environmental production, originality. They try to give a breathe of colonial times and distant places to their products. The aroma of such teas evoke the smell of the wooden hulls of sailing ships, pollen, rain forests and the value that ingenious merchant achieved before the tiny amounts of crushed leaves ended up in our tea paper bags. Looking at the world’s most famous tea brands such as Lipton or Twinings, we can notice the above patterns, also successfully applied by Franck to their campaign for Gunpowder premium green tea. Gunpowder communicates exactly that – exclusivity of each peace of tea leave, for which Franck claims to be specifically cut, highlights its premium quality, appeals to inner peace, and evokes travel. Tin box in which the tea is sold and kept, returns us back to the times of our grandmothers and precious shipments from distant places.

Returning to Cedevita teas. What would be the brand that Atlantic could have had applied to their warm herbal drinks, which would ensure its fair share in the hearts and minds of their consumers? Atlantic have already separated brands of their line of functional teas from those intended for enjoying the warm pleasure. Functional teas are set apart under the brand Naturavita. My objection would be that these teas are also promoted under the umbrella brand of Cedevita (the web with bubbles).

Franck
Franck’s Gunpowder communicates exclusivity of each tea leave, premium quality, inner peace, travel…

Personally, I would be more inclined to place them under the umbrella of Atlantic’s Dietpharm line of business that covers dietary supplements. As for the rest of the tea line, I believe that some variations of Atlantic’s corporate brand carry the greatest potential for the purpose. My suggestion would be to use the Atlantic ocean as link of the New and Old World: “Atlantic genuine tea”, “Old Atlantic tea”, “Atlantic premium tea”, …

Conclusion

This article is not work of a professional brand manager, but an attempt of a consumer who is educated in marketing to share his thoughts about the confusion created in his perception, by a brand expansion to the “adjacent” product category.

There are many similar branding cases that confuse, such as Podravka‘s use of an extremely successful brand of baby food Čokolino [Chocolino] for its excellent chocolate spread, or even worst, the decision of the city of Zagreb to promote through an expensive ski world-cup race (Zagreb has a ski resort with a very limited capacity).

Although this article represents a critical review of a business decision, it is not supported by relevant research or market survey. I am personally convinced that, even in Cedevita’s “clothes”, Atlantic’s tea product line will have its success on the market, primarily due to excellent distribution and managing of sales channels, but also due to investments in other elements of marketing mix that make some product line successful, such as design, quality, pricing policy, promotion as well as management of costs of good sold.

And finally, I think that what happened to the former Pliva teas is the same that usually happens to user-oriented processes in companies with strong organizational silos. I believe that the experts from Atlantic started their considerations from their own organizational views when branding the line of teas, instead of stepping in the shoes of their consumers. I believe that the organizational view, in this case (as with every other silo), was narrow and was saying only one thing: “We are Cedevita organizational unit, and our teas are Cedevita teas”.

Atlantic teas logo idea
Atlantic’s corporate brand could be suitable for the tea product line

Notes to Text

Atlantic, Cedevita, Cedevita tea, Dietpharm are trademarks of Atlantic Group. Franck, Lipton and Twinings are trademarks of their respective owners. The text reflects personal conclusions of the author, and is by no way influenced by author’s current employer or any other third parties.

In case you use this text or its parts, please quote the author and the source (Alen Gojčeta, www.gojceta.com, June 2010).

Redefining the concept of Alen’s Think Place – the imperative of consistency

I have decided to keep “Alen’s ThinkPlace” consistent by delivering consistent content to the consistent audience using a single language. Here is why…

I have decided to keep “Alen’s Think Place” consistent by delivering consistent content (marketing / mainly CRM, sales, management, leadership) to the consistent audience (CRM experts, marketers, business leaders) using a single language (English).

I gave up writing posts in Croatian language and I have cancelled the category “Better Croatia”. Therefore I’m in process of translating some of my already prepared work in Croatian language on marketing and CRM to English.

This concept transformation is the major “why” I haven’t post a word for some time.

I believe that this is a good decision because success of any source depends on how consistent its message is for the targeted audience.

If I’d ever decide to write in Croatian it will be on a separate web site / blog. If I’d ever decide to use my Twitter account for chatting with my friends, I’ll open an alternative account. If I’d ever decide to use Facebook for business, I’ll create an additional profile.

Us – the individuals appear in many forms: as professionals, friends, relatives, hobbyist, thinkers, artists… The many of ours become one among different appearances in front of different audiences – our bosses, partners, subordinates, parents…

The appearance of the one is always consistent, so shall be this web site.

Alen