Phone Wars: Android and iPhone Create a Storm

Imagine being able to carry a computer in your pocket with you to work, church, or school without worries that it will weigh you down. Imagine being able to listen to music whenever you want, communicate with whoever you want, and create any document you want at the convenience of your fingertips at any time of the day. What device does all this in such a compact casing?

A laptop? Smaller.

A netbook? Even smaller.

A cell phone. What was once a brick-sized device that could store maybe a 100 contacts and was intended to only make and receive emergency phone calls, the cell phone can now do so much more. Cell phones of 2009 are slim, can take pictures, text, check and compose emails, create, review, and revise documents, browse the web, and stream video. It's amazing to see what phones are now used for. I'd even venture to say that over 50% of cell phone usage is not to make or receive calls. With these new demands of cell phone users, how are cell phone providers reacting? How are they staying one step ahead of the consumer and making sure that they beat the competitor?

The first real revolutionary cell phone (in my opinion) was the Blackberry, which was released in 1999. With a full QWERTY style keyboard and internet access, a device with similar capabilities of its size was unseen and unheard of. But this phone was limited to the corporate user. Research in Motion (RIM), creator of the Blackberry, understood the corporate user fairly well. They provided him/her with enterprise email, a calendar, and wireless internet. But RIM soon realized that there was a segment out there that they weren't tapping into. Cell phones were used by everyone, so why had they focused only on the corporate user?

Enter the Blackberry Pearl. The release of the Blackberry Pearl blurred the lines between personal and work life. More compact and "hip"-looking, RIM was beginning to understand the regular cell phone user. This was the cell phone user who was still unfamiliar with 3G and WiFi; the cell phone user who had not heard of a smartphone or its functions. Blackberry was slowly introducing new functions to the cell phone user.

Aside from big techies, hi-tech phone functions were relatively foreign to everyone. But as time progressed, more and more people began to learn about these new functions. Wireless capabilities and constant connection to the world-wide-web became a common demand. So Apple decided to meet those demands and more.

Before the iPhone, Blackberry was the only large player that had added functions other than texting and phone calling. While geared more towards the regular cell phone user and not the corporate user, the iPhone added features that were unimaginable by the cell phone user. Touch screen and streaming videos from the internet, the iPhone user was getting a whole new experience from their cell phone.

The iPhone was much more successful than the Pearl at capturing the regular cell phone user market segment. By allowing users to “customize” their phones by downloading iPhone Apps for a small fee, users were taking more ownership to their phones. Apple set the stage for future phones to come. Google’s Android/G1 project took customizability to another level. By catering to the open-source user, anyone can write and share programs for free.

So where was RIM during all these releases? While Blackberry was sitting back and watching all these new competitors pop up in its landscape, it decided to create a Storm of its own, literally. Blackberry may have been less successful than the other two at capturing the personal cell phone user, but Blackberry knew what it was good at – selling phones to the corporate user segmentation. The Blackberry Storm was RIM’s reaction to the iPhone and G1. Due to high switching costs, corporations are likely to continue to use Blackberry products. But those that wish they could carry an iPhone or G1 into their office meeting have a product that is friendlier for the corporate environment.

The next moves of cell phone makers are unpredictable. As new market segments continually sprout up, cell phone makers have to tailor experiences to fit their needs. And with so many options to choose from, cell phone makers have to make sure that their product fits exactly what the consumer is looking for.

This topic of cell phone wars interests me because I am a huge fan of technology. As an early adopter, I’m always reading up on the newest technologies and trying out beta versions of the latest gadget or software.

The topic of phone wars relates to our class because it addresses the need of cell phone makers to tailor customer experiences for specific market segments.

In Fortune’s January 19, 2009 publication, I found an interesting article about iPhone trying to go corporate after the release of the Blackberry Storm. It discusses how Apple may have found a roadblock because it is not as corporate friendly as its rival.

It’s hard to tell what the next move of Google, Apple, or RIM will be as they try to stay ahead of each other and ahead of customer’s expectations. Until one phone maker finds a way to truly capture the entire cell phone market, the phone wars will continue. So pull on your silicone cover and get ready to text for help because it might get bloody.

Regional Tastes for Food

I am a huge foodie, so anything that relates to food excites me. Heck, I even write in a blog about things I eat or make. So when we were given the opportunity to write about anything that we wanted to, I knew I had to write about one of my passions – food.

I’ve recently done a lot of traveling both within the U.S. and outside of the U.S. and I’ve taken great notice to how foods are different depending on where you are in the world. Whether it’s historical culture or behavioral profiles of a society, people around the world eat different foods. What’s most remarkable to me though, is the fact that many regional foods are just that – regional. If you try to look for a very local food in a different city or country, you’d have a hard time. And if you did find it, it usually isn’t very authentic or isn’t very successful.

The regionality of foods is market segmentation at play. Only certain foods survive in specific areas because of consumer tastes and lifestyles within that region. The consumer foods market reflects the individuals within an area.

TEXAS
There’s a saying that “everything is bigger in Texas”. For the most part, this is true. Our vehicles are bigger, our land is larger, hat brims could catch Texas-sized raindrops, egos are sometimes monstrous, and our food portions are sufficient to serve 2 people. Imagine finding a 120 oz. steak in France or even in California. It is because Texans have grown so accustomed to bigger things that they have expectations for bigger foods as well. I know that I personally am shocked and a little disappointed when I go to a nice restaurant and am served an entrée that could easily fit into the size of my palm. I’ve just grown so used to eating large servings that it is almost abnormal to receive anything less. In other states and countries, such large portions would scare away the customer.

In a 2009 ranking of America’s Fattest Cities by Men’s Fitness magazine, 4 of the 15 fattest cities are in Texas. I credit the large portions to much of the ‘fattiness’ of the state. A Texan’s behavioral profile also supports unhealthy foods that survive in our state. Few Texans (minus Austinites) exercise, so it is less likely that they care what kind of bad foods they put in their bodies. Healthier states may have a problem with the large portion sizes or greasiness of Texan food offerings.

CALIFORNIA
On the flip side, I’ve noticed that California foods are much healthier and portion sizes are typically smaller. My roommate and I went to San Francisco last month and I immediately noticed a difference in the food of the western coast state. One local restaurant that we visited, Café Gratitude, offered extremely small, completely raw foods. I ordered a bowl of yogurt with homemade granola with fresh cubed apples on top, all for a whopping $10. In Texas, I could have easily gone to Applebee’s and gotten a juicy steak and buttery potatoes for that same price. If I had paid that much for a bowl of yogurt in Texas, I would have been furious, as many other Texans would have been. A friend of mine ordered a “pizza”, but it was basically a cracker topped with raw spinach, fresh cheese, and fresh sliced tomatoes for $16. None of it was cooked. Something like that could never sell in Texas.

But the demands of a San Franciscan are different than a typical Houstonian or San Antonio resident. People of San Francisco, ranked the 12th fittest city in America, value their health and beauty. They are willing to spend a little more for something they know won’t bring them to cardiac arrest. Another example of their health demands is reflected in their interpretation of Mexican food. Instead of Tex-Mex, they call theirs Fresh-Mex because it’s much lighter than the Texan interpretation. Instead of mounds of cheese, Californians add mounds of fresh vegetables to fill the consumer.

ASIA
But it’s not just behavioral profiles that help segment food markets. Sometimes cultural differences help segment consumers as well. I visited China and Japan this summer and as one would expect, the foods there are much more different than here in the states. One thing that stood out to me was the differences in McDonald’s menus. It was interesting to see how one company operated completely different in different countries. For example, I bought a McFlurry in Tokyo, but instead of the regular vanilla McFlurry with candy mix-ins, this McFlurry was a green tea flavor with Oreos. This certainly would not have sold well in the States, as most Americans would find the dessert bitter-sweet and overly powdery. American tastes have developed a taste for smooth, sweet ice creams, so the Green Tea McFlurry would be more like a punishment than a treat, whereas it’s a delight for the Japanese. Additionally, green tea is a staple in Japanese culture and diet, so it’s not so weird to see it in dessert form. Americans have not fully adopted green tea in their diets or lifestyle, so it’s still considered something strange and foreign.

Another menu item at McD’s that I figured was not in the States due to cultural differences was the spicy garlic chicken. Asian cultures have a strong liking for garlic (my mother and I fight over it in our Chinese dishes), but Americans use it in more subtle forms. I can only think of one instance where the word garlic appears in the name of a food item – garlic bread. I think Americans fear the after-smell of garlic on their breath, so are very hesitant to consume something that was explicitly heavy in garlic. Asians have much less of a problem with this (just think Koreans and kimchi), so using garlic and naming a food item with the word garlic is actually a draw rather than a turn-away.

CHICAGO
A more local example of cultural tastes is Chicago deep-dish pizza. I just went to the windy city 2 weekends ago, and had genuine Chicago-style pizza for the first time. I had experienced it once before in Florida, but this was definitely a different experience. I travel a fair amount within the U.S., and I can honestly say that I haven’t seen deep-dish pizza in many cities. Thin-crust seems to be the most popular option, and I think the reason for the scarcity of deep-dish is due to cultural differences. Chicagoans have been raised with deep-dish, so they hardly know anything else. In fact, it’s difficult to find New York-style pizza anywhere in the Second City.

Different regions both within the U.S. and outside of the U.S. all have different behavioral and cultural profiles. These different profiles affect how a marketer may segment populations. Even foods, as I have shown, can be segmented based on these differences to ensure success in specific regions. Too bad there’s not a segment for the foodie like me. Looks like I’ll have to keep exploring different parts of the world to satisfy my appetite for regional foods.

Paradox of Choice

Gone are the days where stores only offered a handful of goods. Now, companies fight for shelf space, competing to win a small unit of area and trying not to drown in the sea of similar product offerings. From a consumer perspective, the liberty to choose from a multitude of goods and services would appear to be a liberating experience and provide a sense of decision-making power, but does this logic really follow?

One would think that having so many options and the freedom to choose mean that there’s guaranteed satisfaction for the consumer. But this is where the paradox presents itself. Not providing enough options to the consumer leaves him unsatisfied, wishing he could be more selective on certain features. However, too many options is equally unsatisfying because he doesn’t know where to begin in his decision-making. Instead of seeing a positive correlation between the number of options and satisfaction, we rather see a diminishing level of satisfaction with an increasing number of options.



The above graph perfectly illustrates consumer satisfaction in relation to the number of options offered. Intuitively, the logic follows that increasing the availability of options leads to increase consumer satisfaction, but there is a limit to this consumer happiness. The ‘sweet spot’ as the graph puts it, is the point at which we begin to see a decreasing level of satisfaction. This decreasing level of satisfaction could be a result of many things, but in my opinion is primarily due to increased input needed to complete a purchase. Our society has grown so accustomed to speedy transactions, and increasing options greatly slows us down. We spend more time researching, deciding, and evaluating the different choices we could make. Additionally, we spend more time reflecting on our purchases because we ponder what choices we could have made and are sometimes left disappointed, wishing we had made a different decision. Given fewer options, we never could have set so high of expectations, so our level of satisfaction would not be so affected. In other words, our expectations would be lower with fewer options, so it would be much easier to reach satisfaction.

To put this diminishing level of satisfaction into perspective, let’s consider this real-life example of mine from this past weekend. I was brave enough to venture to Chicago during 7 degree weather and failed to bring any form of chapstick. Wind-chapped and blistering, my lips were shriveled and felt like sandpaper. Going into the local drug store, I ran into 25 different options: medicated, flavored, scented, non-scented, all-natural, small, big, glittery, gloss, balm, push-up, roll-up, flip-top, removable cap, etc. The list of options could probably have stretched down the aisle, around the corner, out the door, and back to the chapstick aisle. I stood there contemplating which features I liked and did not like. What normally would have been a 1 minute “my lips are dry and I need moisture” became a 5 minute “stand there and think about how I want my lips (and chapstick tube) to feel, look, and taste”. After considerable thought, I went for a small, all-natural, scented, lip balm with a flip top. Excited about my new purchase, I immediately opened it and saved my dying puckers, only to find out that my expectations were not met.

Had I not had so many options, I could have easily walked into the drug store and grabbed the generic cherry flavored Chapstick brand and not thought twice. I wouldn’t have seen the different glosses and flavors, sizes and styles, so I wouldn’t have had the chance to wish I had made a different decision. In other words, I wouldn’t have been disappointed not only in my poor choice, but in the wasted time spent on something so futile. Additionally, because I thought I discovered a chapstick that suited exactly what I needed, anything less than that expectation only led to upset. This is just an example of the paradox of choice for a simple good that costs less than $5. Imagine the bitterness a consumer feels when purchasing a $50,000 car and realizes that the option combination they selected was only half of what they anticipated.

The paradox of choice puts marketers in between a rock and a hard place. Not offering enough disappoints the customer because they want goods and services tailored to them specifically, but having too many options makes decisions too difficult. Consumers, although autonomous for the most part, still require some hand-holding through the decision-making process.

In my opinion, marketers and companies should be wary of the number of options they offer. Instead of saturating the shelf with one product that has 25 different combinations of options, companies and marketers should aim for that sweet spot to achieve the greatest level of satisfaction. But that’s obviously easier said than done.

What’s really interesting to me is that consumers are the ones that created this paradox in the first place. Their demands created all these options, but after companies responded, they ended up being dissatisfied. I guess this is what makes marketing a true science. When we think we finally fine-tune the needs and desires of a consumer, their demands change and we react. Times are changing and so are the people, but marketers are always there to respond to those changes.