In October we had the second module at Skolkovo focused on marketing. Over a few days, working in a small group with other students, we came up with a new product for the market and built a marketing strategy for it.

We went through the journey: figured out the context → identified the customer’s pain points → answered the question in their head, “What will you change in my life?” → defined the core emotion we want to trigger → described the solution → mapped out which channels and how we’ll connect with our customers.

I was a bit skeptical at first. I’ve already worked on growing both service and product brands, so I worried the module might be full of generic, disconnected stuff. I’d also heard from the MBA-7 that there were some complaints about it. And half of the pre-reading was straight from Kotler, way too academic for my taste.

My worries didn’t come true, I finally pulled my scattered marketing knowledge into a clear structure. Before, I could talk on a single topic and jump from one to another. Now I understand the whole system, I can spot the actual problem faster instead of just the symptom.

We had two guest speakers at the module. The first, Dmitry Kuznetsov, head of Google Russia, talked about VR and artificial intelligence. His presentation was very restrained and corporate. The second guest, Vladimir Pirozhkov, is an industrial designer who spent many years abroad working at Toyota and Citroën. He now runs an innovation and industrial center in Moscow. He spoke about printing living microorganisms, military developments and building factories on asteroids. It was truly inspiring.

The course was led by Luis Martinez, an eccentric professor from the Spanish business school ESADE. He taught with great energy, guided us and gave feedback on our group work. Teamwork once again turned out to be probably the most important part of the learning experience. Here are a few takeaways from the module:

— Marketing – choose me darling;

— It’s about building skills, not just collecting knowledge, that’s what the module is really about;

— We’re not competing with companies; we’re competing for customers;

— Entrepreneurs build companies based on one of these assumptions:

1. A technological innovation at the core (technology-driven). For example, once it became possible to embed the internet into home appliances, we started seeing refrigerators with screens that let you order groceries right from the door. Fewer than 10% of these companies ever become profitable.
2. The other approach is focusing on “people with problems” (pain point method, customer-centric). Companies that take this route are far more likely to turn a profit.

— A more effective market approach is built around solving people’s pain points now, not in the future;

— A marketer can’t think in terms of B2B or B2C, only H2H, human to human. People buy from people;

— Among all target groups, it’s crucial to understand your main one – marketing resources are limited;

— You can target two audiences, but only if they overlap;

— Strategy is about cutting the excess / denial exercise. When building a strategy, say “no, thanks” as often as possible. Avoid the phrase “why not?” and don’t jump at every new idea;

— The rule of innovations – don’t ask customers what they want in a new product. Air conditioning was invented by understanding the audience’s problem, not by running surveys;

— A customer usually goes through this chain: I know (awareness) → I’d try it (branding) → I got it (distribution strategy) → I use it (product) → I evaluate it (meets expectations). If it’s OK → they go back to “I’d try it” (loyalty). If it’s NOT OK → they’ll never use it again. And right now we’re being bombarded from all sides at the “I know” stage, all those ads and banners everywhere. But the whole chain has to work effectively. Otherwise, you just burn out the market.

— There are key success factors in a company, KSF – the things that let a company win. And there are key not-failure factors, KNF – the basics a company must have by default, like the entry ticket to the industry. For example, if you’re selling real milk while all your competitors are selling powdered water, that’s your KSF. But once everyone starts selling milk, it turns into a KNF.

— When we make mistakes, the only thing we really need is progress;

— The more macro functions you strip away, the more successful you become. That’s basically how new businesses emerge and how competition is won, when a single micro-process ends up changing the entire infrastructure and approach.

Working on the marketing strategy

Step One. Define the context and try to understand the customer archetype. Here, it’s important to dig into the details, constantly asking “why?” The key is to go deep, not wide, when describing the archetype.

Example: Richard is 38 and has been working at “Ros-Ruki” for the past six years. He’s the company’s technical director and his team is developing a device capable of collecting soil from the moon’s surface. There are eight engineers on Richard’s team, and they all end up working late to meet the project deadline. Because of this, Richard is having family issues, his wife is upset that he spends so little time with their daughter. The head of Ros-Ruki, Mike, is pressuring Richard, since in six months he’ll need to present a spending report for the grant funding the project. Mike knows he could lose his job if he doesn’t show results. Richard feels Mike’s pressure but also realizes hitting the deadline will be tough, they’re currently working on the device’s PCB, which is meticulous and highly responsible work.
A PCB is that green board with all the little soldered bits you see inside any electronic device.

Step Two. Define the customer’s “pain point.” For our team it looked like this: Richard is stuck doing routine work and has no personal time.

Step Three. Define the “flag.” This is the customer’s answer to the question: “Brand X, what do you mean in my life?” Here’s the framework for creating a flag:

1. You…
2. The role you play in my life…
3. How my life will get better…
4. Which part of my life improves, in what context or situation.

For Richard you are Ironman that multiplies the ability to develop edgy technologies.

The flag is never shown directly to the customer and never appears in advertising, it’s for internal use only. Think of it as an internal guideline for the company. For example, it’s a handy way to explain what the company does to a new employee.

Step Four. Choose one core emotion – the main feeling you want the customer to experience when interacting with your brand. You can use an emotion map for this. For engineer Richard we chose empowerment.

Step Five. Think about how everything we’ve outlined so far will be reflected in the product or service. For our fictional engineer, the product was going to be a computer program where he could input the requirements for the final board and it would generate a functional circuit diagram, a list of necessary components and even a layout model for the board.

Step Six. Map out the customer journey— rom the first touchpoint to purchase and actual use. Think through every interaction and what happens at each one. In our case, we imagined Richard visiting a website for board components, seeing our banner, getting demo access, exploring the product and then going to his top manager, Mike, to tell him about the solution…

Step Seven. Final implementation of the strategy.

Cortex and limbic System

— There are two systems in the brain involved in decision-making. The limbic system consumes little sugar, works at about 11 MB/s, makes reactive decisions, drives emotions and relies on habits. The cortex is slow, burns glucose, works at about 40 bytes/sec and requires deliberate thinking. The limbic system is involved in decision-making much more often than the cortex.

— It’s great when marketing manages to reach the customer’s limbic system. Customer loyalty is beneficial for both the client and the company. The company spends fewer resources on retaining customers and the client doesn’t waste energy deciding whether to buy. Very often, to save energy, decisions are made in the limbic system.

Example: You’re driving down the road and catch some movement in the woods out of the corner of your eye. If your cortex were in charge, it would go like this: Hmm, something big is moving → maybe it’s an animal → could it be on two legs? → no, too big for that, probably four legs → likely a deer → weighs about 200 kilos… Meanwhile, your limbic system reacts like this: Danger → hit the brakes. That’s how you can survive.

Conclusion

I’d give the module a 6 out of 10. The good part is that it gives a universal framework and can be useful even for people with marketing experience. Group work was awesome. The downside is that the content density was low, I’d double it, and the prereading with old-school Kotler felt outdated and didn’t really connect to the module slides.