First session of the advanced course Business model marketing of the Fontys Academy for Creative Industries

1. business
model
marketing

2. bmm,
an
advanced
course

3. today
introduction, definitions, the goal, getting to
know each other, planning, the importance
and relevance, looking at business models,
searching for business models, changing
markets, changing people

4. me?
-John Verhoeven, 34
-Dutch
-lecturer marketing & branding
-development group CE IEMES
-researcher lectureship
-freelance marketing advisor
-musician

5. hello, is there
somebody out
there?
-J.Verhoeven@fontys.nl
-room 1.02
-Monday, Tuesday & Thursday

6. and you?
-name?
-background?
-passions?
-work experience?
-expectations?

7. goal
-to recognize new business models
-to learn more about the industry
-to discover new marketing tools
-to fire up entrepreneurship
-to create a holistic view
-to stimulate creativity
-to cooperate
-to inspire

8. TO INSPIRE
L
L 571.00

9. Are you
changing the rules
of the game...

12. and changing
the game...

13. but.. has this game
got rules anyway?

16. How did this happen?
Did Mark Zuckerberg do some..
• Extensive market research?
• Use an intensive segmenting, targeting and
positioning process?
• Attend a lot of marketing conferences?
Please watch the movie:
‘The Social Network’.. for the answer

17. When you thought
that marketing is only about numbers
and rational decisions...
It is not!
marketing is NOT
an exact science

18. Marketing is looking
around you and learning
from the successes and
mistakes of others
and of yourself!

20. about the
book..
-Alexander Osterwalder
& Yves Pigneur
-5 chapters
-1 method
-lots of examples
-real life!

25. overview advanced
course
-2: business model patterns
-3: business model design
-4: business model strategy + process
-5: business model presentation
techniques

26. DIY
Assignment ‘Act different’:
-in groups
-deadline January 13th
-businessplan + …?
-a new or existing organisation
-making use of the models from ‘BMG’
-read the hand-out thoroughly

27. act different..
- exercise “act different”
- go through the business model design
process
- stay within the creative industry
(pick an existing organisation)
- or come up with a new organisation
- you will create a total business plan
- making use of several BMG figures
- working in groups
- more info later

28. why this
course?..

29. “…the present economical, ecological and technological
changes are so big and also so fundamental, that you
cannot deny that we are in the middle of a system shift.
No matter how you look at it, fact is that many structures
are rapidly eroding.
Big organisations are busy looking for new markets and
alternative ways to keep existing markets profitable. And
smaller organisations question themselves how to react
on the fast changing environment..”
Source: Businessmodellen.. Houtgraaf en Bekkers

30. which leads
to..
-”branding and brand activation”
-”blue ocean strategy”
-”the long tail”
-”the experience economy”
-”the challenge economy”
-”the conversation manager”
Lots of theories…
But what does really happen?

31. business
changes..
(that’s nothing new..)

34. .. the traditional
model..
Competitors: Sony, Microsoft
Target group: hardcore-gamers
Buying criteria: graphics, game quality and processor speed
Average price: console: €400 game: € 88
Result: production of expensive consoles, which
are sold with a loss, earnings from their own
games and licences sold to third parties
(e.g. EA-games)

35. .. the traditional
model..
New game console
attracting game players
attract new game developers 
offer of games 
attractiveness of console increases  attracting
game players
etc.
Result: heavy competition and Nintendo almost
bankrupt

37. .. the Wii-model..
Target group: very big group casual gamers
Buying criteria: fun, simple, family
Average price: console €135 game €30
Competitors: ?
Result: production of cheap consoles, selling consoles
with profit, also earnings from their own games and
licences sold to third parties, also motion controlled
technology to third parties

38. “…Wii doesn’t intend to be a best-ofbreed videogame console. Nintendo is
trying to bring non core gamers back to
gaming with the Wii. Wii is not just a
video game, Wii aims at meaning fun.
Nintendo focuses on the consumer’s
feeling rather than its product…”
(source: Nintendo)

39. organisations
change, because
business models
change..

40. totally new
organisations
emerge..

42. a group coupon
“…Groupon negotiates huge discounts—
usually 50-90% off, with popular businesses.
We send the deals to thousands of
subscribers in our free daily email, and we
send the businesses a ton of new
customers. That's the Groupon magic…”
L

44. but how does it work?..

47. free music?
“..Spotify launched in Europe four years ago.
The basic idea behind the company isn't
brand new. Music streaming services —
sites where you pay a monthly fee for
access to zillions of songs — have been
around for a decade. But they've never
broken through to a mass market..”
L

49. how does it work?..

50. how does it work?..

51. new
organisations
with totally new
business models
emerge

52. Forming of the
groups...
• Form groups of 5/6 people
• Try to find people that share the same interests
(passion, industry, etc.)
• Don’t choose the most easy solution
• Foreign students must mix-up
• Exchange contact information

53. looking for the‘three’!
“..leave this room and start searching for three
new organisations with a totally new business
model..”
“..try to find out how these organisations earn
their money and in which way they distinguish
themselves from other competitors..”
“..make a drawing of the business model (like
the spotify example), prepare a presentation”

54. A business model..
-
Is about how money is earned
About how business is done
About how the company is organized
About how the products are sold
About how products are created
About how customers gain value
About what the brand stands for

55. definitions..
-
Earning model
Organisation model
Selling model
Publishing model
Advertising model
Branding model
Creation model
User model

56. new
business models..
-
In every part of the world
In every industry
In big and small organisations
Profit and non-profit
Totally new business models are created
With a totally new shape or
By simply altering the current model

57. bodystorming..
Find a new way of:
- organizing a music event/festival
- organizing a corporate event
- spreading literature
- showing a movie
- exposing art

58. bodystorming..
• Bodystorming is a technique sometimes used
in interaction design or as a creativity
technique.
• The idea is to imagine what it would be like if
the product existed, and act as though it exists,
ideally in the place it would be used.
• Its going through an idea with improvised
artifacts and physical activities to envision a
solution.

59. bodystorming..
- Identify different roles/products to play
- Assign roles/products to group members
- 1 member doesn’t play, he/she observes
(makes notes!)
- Set the stage, act out your idea
- Prepare your role, use labels, thought bubbles, a
narrator
- Turn your thoughts into actions
- Use each others contribution
(use ‘Yes, and..’-thinking)
- Play the experience
(start at the very beginning)

60. bodystorming..
- What results did you get?
- Where these results useful?
- What do you think about this technique?

61. A business model,
huh?
“.. the definitions in management science
confuse entrepreneurs and marketeers.
How often don’t we use the definition
‘business model’, hoping our listener
understands us..”
Source: Business modellen, focus en samenhang in organisaties, D. Houtgraaf en M. Bekkers

62. so what is a business
model exactly?

64. the business
model canvas

65. 9 building
blocks...
(in order to explain this basic principle)

66. value proposition..
- Bundle of products that creates value for a
particular customer segment
- What is the reason the customer choses you?
And not a competitor
- Which customer problem does your organization
solve?

67. value proposition..
Mix of distinctive elements:
- Newness (mobile phones)
- Performance (cars)
- Customization (Factory 121 horloges)
- ‘Getting the job done’ (aircraft engines)
- Design (Apple)
- Brand (Ferrari)
- Price (Ryan air)
- Cost reduction (Independer.nl)
- Risk reduction (Bovag label)
- Accessibility (Netjets)
- Convenience / Usability (iTunes, ipod, ipad)

68. customer
segments..
- Customers are the heart and soul of the
business model
- Different groups of people or organisations on
which the organisations focuses its effort

69. -
customer
segments..
Mass market: no difference between segments
Niche market: a small specialized market
Segmented: different segments are chosen
Diversified: two segments with totally different
needs and problems
- Multi-sided markets: earning money on two
different sides (example: advertisers & readers)

70. channels..
- How does the organization deliver its value?
(distribution)
- How does the organization communicate with its
customers?

71. channels..
1.
Awareness
2.
Evaluation
3.
Purchase
4.
5.
Delivery
After sales

72. customer
relationships..
- What kind of relationship with the customer does
the organization want?
- Is the contact personal or automated?
- What kind of relationship does the customer
expect?

73. customer
relationships..
-
Dedicated personal assistance (Private bankers)
Personal assistance (Mc Donalds)
Self-service (Albert Heijn)
Automated services (Amazon.com)
Communities (Runkeeper)
Co-creation (Nike, Lays)

74. revenue streams..
- How much money does the organization earn
from a particular segment?
- For which value is a particular segment willing to
pay?
- An insight into the earning model

75. revenue streams..
Different kinds of earnings:
- Sales of goods
- User fee
- Subscriptions
- Renting / leasen
- Licensing
- Brokerage fees
- Advertising

76. key resources..
- What are the most important assets of the
organization?
- Which assets make delivering the value
proposition possible?
- Assets can be owned, leased or obtained by
making use of key partners

77. key resources..
Key resources can be:
- Physical (buildings, machines)
- Intellectual (brands, partnerships)
- Human resources (knowledge, experience)
- Financial (cash, stocks)

78. key activities..
- What are the most important activities an
organization has to carry out in order to make
the business model work?
- Which key activities result from our distribution
channels, customer relationships and revenue
streams?

79. key activities..
Examples of key activities:
- Design
- Innovation
- Problem solving /advice
- Knowledge management
- Database management
- Platform management
- Service
- Promotion
- Cost reduction

80. cost structure..
- Description of the most important costs that are
made in order to make the business model
possible?
- Some businesses are more focused on cost
reduction, others more on value creation

81. key partnerships..
- Description of the network of suppliers and
partners that make the business model possible
- That can be:
- Strategic alliances between non-competitors,
- Joint ventures between organizations from different
industries
- Buyer-supplier relationships
- Coopetition: strategic partnerships between
competitors

82. key partnerships..
Three motivations to start partnerships:
- Optimization and economy of scale (in order to
reduce costs)
- Reduction of risk and uncertainty (splitting risk of
innovation: Blu-ray)
- Acquisition of particular resources and activities

83. business model canvas

85. revenue
generation?
“..a business model makes clear how an
organisation generates its revenues in order
to survive..”
Bron: Interactieve marketing, H. Janssen, M. Van Reijsen & T. Zweers

86. a business model..
- earning model: how does the organisation
make money?
-distribution model: how does the organisation
deliver the product?
-(co-) creation model: how do the products
originate?
-user model: what about the power of the
customers?

87. Business
models
Earning
Distribution
(Co-)creation
User
model
models
models
models
Subscription
Bait and hook
Tupperware
Online sales
Mass-effect
model
Mass
customization
model
model
model
Freemium
Package
Clicks & bricks
Franchise
Open source
Community
model
deal
model
model
model
model
Service
Advertising
Labeling
Multi-channel
Multi-sided
model
model
model
model
User-generated
content
Auction based
Brokerage
Affiliate
Open business
model
model
model
model
Yield
model
Unbundling
Insurance
models
model
platform
Long tail
management
model
Bronnen: Interactieve marketing, Businessmodellen, Business model generation

93. DIY..
- Take a large piece of paper
- Think of your chosen industry and choose an
organization, company, platform or brand from
that one
- Sketch the business model canvas grit
- Visualize every building block in order to create
an image of the business model of that
organization, company, platform or brand
- Prepare a short presentation in which you can
explain how the business model you have
sketched out works.

94. homework..
Literature/theory/background
-study today’s slides
-study BMG page 1- 51

95. act different..
• Read the hand-out
• Pick your industry and search at least three articles
about trends that may lead to opportunities and threats
for that industry
• Dive deep into your future customer segment (s)
• Use the empathy-map (page 126 till 133) to get the right
customer perspective
• Figure out (do some research among friends):
What does the segment want to change?
What attracts the segment to the product?
What does the segment hate/love?
Which problems do the segments stumble upon?

96. till
next week!