I am still lurking this board. Here is a piece entitled: More on Geoffrey Moore: Mental Models in Strategic Marketing. I wrote it for the June, 2003 RTWReport @ www.rtwreport.com. It is long so I will have to break it into parts. Please make your comments about that on the Curmudgeon board, which I promise not to read. If you like it, drop me a message. If you find it interesting, then I presume you can discuss it on this board. And, given a favorable response, I will post some other relevant past posts for those of you who don't subscribe the RTWReport. So far, I have never been paid a penny for writing for them;I just enjoy doing this sort of thing.
More on Geoffrey Moore:
Mental Models in Strategic Marketing
Introduction
Why more on Moore? Much less three parts full. In The Gorilla Game, Geoffrey Moore contributed many ideas on how to find unusual investing opportunities in high-tech companies that had introduced discontinuous innovations. His investing guidelines originated from his consulting practice, with associated books, where he had developed set of models and integrated tools to be used by companies to develop a set of strategic marketing plans that corresponded to phases in his augmented version of the Technology Adoption Life Cycle. What’s new in this discussion is Moore’s perspective on how to market a discontinuity that disrupts an incumbent high technology infrastructure. His proven marketing models and tools also leverage ideas distinctly useful to investors in high-tech stocks.
But, first, the introduction of our protagonist. After receiving a Ph.D. in English Renaissance Literature at the University of Washington, Dr. Geoffrey A. Moore began his career as a Professor of English at Olivet College. He crossed the chasm between academia and marketing by parlaying his analytical and communication skills to enter sales and marketing. After nine years experience, he became a principal and partner at Regis McKenna, Inc (RMI) for four years. Currently, he is Founder (in 1992) and Chairman of The Chasm Group (TCG), a consulting practice in marketing strategy, and a venture partner with Mohr Davidow Ventures.
Moore is best known for: Crossing the Chasm (CTC, 1991, 1999), Inside the Tornado (ITT, 1995), Living on the Fault Line (LOTFL, 2000, 2002), and The Gorilla Game (TGG, 1998, 1999), written with Tom Kippola and Paul Johnson. Another TCG associate, Paul Wiefels wrote The Chasm Companion (TCC, 2002), a field guide to the set of tools used to implement The Chasm Group’s marketing strategies. Writing CTC was a significant part of the marketing strategy for advancing Moore’s Chasm Group. Each additional book expands their targeted market segments from companies crossing the Chasm to companies in a Tornado (or on Main Street), to traditional companies who must respond to the plate tectonic changes on the fault line of the Age of the Internet by distinguishing what is core from what is context, to investors and their advisors, and to training client-marketers in TCG methods.
In teaching clients specifically how to strategically market high technology, Moore identifies first principles, creates useful mental models from these principles, and develops tools to translate principles and models into planned and actionable steps that lead, with feedback to test each step’s success, to effective marketing. Let’s follow his trail.
In Part I, First Principles and the Master Model, we examine first principles, beginning with the heart of the social process of diffusion, taken from Everett Rogers’ summary of years of research. Both Regis McKenna and Bill Davidow postulated fundamental principles of marketing, drawn directly from their marketing experience, but still compatible with the body of research on the singular significance of word-mouth communication in diffusing innovations. Moore integrated a generative ideas¾like, say, the marketing first principles of leveraging word-of-mouth, segmenting markets, completing the whole product, but now wedded to Moore’s TALC psychographics, crossing the chasm, recognizing the imminent tornado, and realizing that competitive advantage equals economic value added¾to leverage his building blocks into an influential, comprehensive, and powerful theory that was carefully grounded in his master model based on his fundamental principle of self-referencing within segmented value domains.
His generative strategy was to crossbreed ideas derived from marketing with ideas drawn from the diffusion of innovation, specifically the revised and augmented TALC as his master model, and to systematize the offspring. Moore uses this master model to guide marketers and investors precisely because marketers must change from their previously winning strategy at inflection points in the TALC.
At the same inflection point, investors must recognize that it is far too soon to consolidate investment in the early market because of the Chasm, that gorilla candidates compete in the bowling alley, but that the emerging gorilla wins distinct competitive battles across and within the value chain during the tornado watch, that the effects of the tornado are permanent, and that main street can last a very long and profitable time. Not only are the specific clues to be detected by managers, marketers, and investors remarkably similar, but also these signs of seismic shifts occurring in the economic fault line require parallel changes in management, market, and investment strategies.
In Part II, Leveraging Complementary Models by Completing, Augmenting, and Extending The TALC, we examine complementary mental models. Mental models focus our attention on key features and relationships. A model is designed to leverage the individual’s power to predict, control, or understand a phenomenon of interest. If it proves effective, the model’s abstraction has captured significant features and relationships within a complex world that is too confusing to handle without using its key abstractions. Given an abstract model, we can experiment with imaginary changes in key variables to discover what happens with imaginary mental tinkering before we hazard the real effort. A master tool, human imagination is unparalleled in its power.
Once Moore had transformed the TALC into his master model, he integrated complementary models into it. The process of creating a theory is analogous to building a proprietary architecture from modules (models) or to assembling a value chain of ideas to create a whole product (a theory) that provides a complete solution. First principles serve as design rules that extend a theory’s reach and augment its richness.
Indebted to Michael Porter, Moore introduced a competitive advantage hierarchy built upon the category power of a discontinuous innovation in high-tech infrastructure. The abstraction captured by the GAP/CAP model enables Moore to link the gorilla’s unusual competitive advantage to traditional investment theory, including translating it into economic value added. The gorilla game taxonomy permitted Moore to make crucial distinctions about the ultimate power of market leadership while using a vocabulary that is both memorable and evocative. The model of gorilla game investing is grounded in CAP¾because the power relationships established in the tornado are permanent, and in GAP—because the gorilla’s competitive advantage of strategic control of a proprietary open architecture with high switching costs enables it to (a) get more customers, (b) keep more customers; (c) drive costs down, and (d) keep profits up because of its value-chain dominance of a discontinuous technology category. The model of the high tech value chain encompasses wisdom as diverse as a discontinuous technology must give birth to new value chain and the solution¾focus on what is missing during the tornado watch.
Indebted to Theodore Levitt for the model of the whole product, Moore still earns his keep by generating many illuminating abstractions: for instance, after the technology is transformed into a product, the weakest link in a whole product solution almost invariably is between product and application/system. Finally, the Competitive-Positioning Compass not only orients us, but also it refocuses attention on how to cross over the barrier that doubly-dissimilar domains create¾the gaping value-chasm between visionary supportive specialists and pragmatic skeptical generalists.
In Part III, Applying the Tool of the Marketing Trade, our attention turns to the practical use of tools. To apply the models effectively, you need a set of tools that help you transcend the gap between knowing what the models say and knowing how to apply the models to selected market segments. To concretize the tools and models, Qualcomm becomes a case study.
Two planning tools, Life Cycle Placement and Discontinuity Analysis Assessment are introduced and applied. Major emphasis rests on the Strategy Modeling tool, a Checklist for how to build the Market Development Strategy. Moore offers a hierarchical, recursive, iterative template as his master tool: (1) Target customer¾source of money; (2) Compelling reason to buy—source of demand; (3) Whole product—fulfills the compelling reason to buy; (4) Partners and allies—needed to complete whole product; (5) Distribution—function of whole product complexity; (6) Pricing—function of perceived value; (7) Competition—for customer’s money; (8) Positioning—relative to competition; and, (9) Next target—next move. Sub-models or tools are introduced and applied. [Part 3 is not yet written.] |
