Many companies conduct product management without product planning. They copy a product which is originally designed by other companies, and modify it. They strive to survey technology/market trends and roadmaps from leading companies/giant research firms. And they enhance the variety of functions and/or the numbers to make their spec table better. They love to swim in the ‘red ocean’. Apple is one of the companies which is carrying out product planning as well as product management. It often enters the market very late, but re-creates the market itself. Apple strives to understand what the user-experiences the customer looks for, values, and needs, and re-invents the product category to make customers’ lifestyle better. Apple loves to make her heart sing with her product.

1. Re-think: Product Planning
~ Why Apple can create blockbusters? ~
Chikafuji, Ryu
- Version 0.9c1 -

2. For persons who are interested in consumer
products, services, and markets.
– Aug/25/2011

4. Temptation
Chapter 1

5. The most important task is to find out:
“what user-experiences the customer looks for,
values, and needs”.
Everyone knows this, but this isn’t an easy task.

6. Instead, many companies give an ear to the
industry’s influencers and oversee competitors,
apart from their target customers.
Influencers:
- Big research firms
- Oligopoly firms
Competitors
Target
Customers
(*)
A Company
(a consumer products company)

7. Curiously, influencers provide the vision of the
newly defined product category for their customers
– the consumer products companies.
(*) examples of influencers

8. In fact, many influencers have global marketing
platforms to survey their customers’ potential market.

9. The problem is that the influencers’ happiness
do not correspond with the companies’ happiness.

10. The influencers’ happiness is to spur intense
competition in their customers’ market because
such competition brings them huge revenue.
Everybody Netbook!
(with Wintel !!!)

11. The influencers elegantly lead their
customers into intense competition.

12. The competition makes the influencers’ hearts sing,
while the companies’ hearts are exhausted.

13. It’s time to re-think.

14. Re-Think
Chapter 2

15. Many companies start from products.
They improve existing products and
make their spec table better.
Existing market Existing market
New segment
Sometimes they create a new segment.

16. Fewer companies start from people.
They innovate new user experiences
and make the people’s life better.
Existing market Existing market New market
Sometimes they create a new market.

17. My focus here is clearly on the latter case:
“Start from people”.
*Lots of theories, practices, consulting services are available for the former case, such as theory of
competition, product management practices, social media marketing, etc.

18. True marketing says “These are the [user-experiences](*)
the customer looks for, values, and needs.”
– Peter. F. Drucker
(*)In the original, the term “satisfactions” is used.

19. To find out “the user-experiences” is the starting
line for new product planning, however,

20. “You can’t go out and ask people, you know,
What’s the next big thing?”
– Steve Jobs
CNN Money, Aug/03/2008

21. “This product is ‘Innovative’” means that the
product brings far better user-experience to the
target customers.

22. user-experience
time
Discontinuity
Conventional Products
Innovative Product
In other words, there must be discontinuity between
the trajectory of conventional products and an
innovative product in terms of “user-experience”.
Conventional trajectory
(incremental improvement)
New trajectory

23. What ordinary people can imagine is limited to
incremental improvement of existing products,
their imagination can’t go beyond this discontinuity.

24. If I had asked people what they wanted,
they would have said “faster horses”
– Henry Ford
Founder of the Ford Motor Company

25. We did market survey (around 2000) about the demand
for camera-phone; not once but four times the results
showed negative. However, nowadays, camera-phone
have become the standard.
– A comment from a marketing director
(Martin Cooper’s Keynote Speech at IEEE Wescon 2005)

26. It’s really hard to design products by focus groups.
A lot of times, people don’t know what they want
until you show it(*)
to them.
– Steve Jobs
(*) From the context, “it” doesn’t mean prototype, “it” means
finished product such as shown at Apple’s conference.

27. It’s us who have to answer the question:
“What’s the next big thing?”

28. Masaru Ibuka,
photo from www.sony.net
Both Honda-san(*)
and I had never started product
development from a technological point of view.
The first and foremost priority was our goal
what product we really wanted to make.
– Masaru Ibuka, co-founder of Sony
Quoted from“The Soul of Monozukuri”
(*) Soichiro Honda, founder of HONDA

29. The idea for the Walkman had come from Ibuka, who was
over 70 years old, and Morita(*)
, himself approaching 60
enthusiastically supported it.
Not content to rest on their laurels, both kept looking for
new ideas and strove to understand what kind of
products would meet the lifestyle needs of young people.
– Quoted from “Sony History”, www.sony.net
(*) Morita: Akio Morita, co-founder of Sony
Sony Walkman TPS-L2 (1979)
Photo by GeorgeArthur, Wikimedia

30. "It was very nearly fetishistic, in fact – he even had a
collection of Sony letterhead and marketing materials,"
laughs Deutschman(*)
. "Sony was a company that Jobs
instinctively admired and saw as model from the very
beginning.”
By Jeff Yang,
"How Steve Jobs 'out-Japanned' Japan”, SF Gate
(*) Alan Deutschman, Author of "Walk the Walk", Professor at University Nevada-Reno.

31. Steve Jobs simply described Ibuka’s way:

32. We figure out what we want. And I think we're pretty
good at having the right discipline to think through
whether a lot of other people are going to want it, too.
That's what we get paid to do.
– Steve Jobs
CNN Money, Aug/03/2008

33. Once we are confident that “a lot of other people
are going to want it, too”, then most barriers
which prevent us from innovation are removed.

34. You may have heard the following sentences.

35. “I requested an engineering team to implement that
feature, but they said it was too difficult and too risky
to do it. So, we had to abandon it. However, our
competitor could do it and we are in for it now.
Stupid engineering team!”
Marketers

36. “I asked marketing guys how critical to implement
that feature for our business. But they didn’t show
any compelling explanations. So, we had to make it a
lower-priority task. Otherwise, we could do it!
Our marketing team doesn’t work at all”
Engineers

37. Before iPhone, most manufacturers believed
that it was impossible to implement a full-web
browser on a mobile handset.

38. But just less than one year after iPhone, many
manufacturers released mobile handsets with
a full-web browser.

39. What does all this mean?

40. We see a lot of similar stories in our history:
Transistor Radio, Home VTR, Walkman, Personal
Computer, Megapixel Digital Camera, Full-flat CRT,
Large format LCD, Broadband, Tablet PC, …etc.

41. What does all this mean?

42. Barriers against an innovation are not so high if
we share strong confidence that
“a lot of other people are going to want it, too”.

43. This confidence fires up us to realize far better
user-experience, innovative products, no matter
how high the barrier may be.

44. You know, potential ability of engineering is
much higher than we expect and engineers can
be more flexible if they share the confidence.

45. Marketing, sales, logistics, legal, production, PR, IP,
HR, or top managements, in whatever sections,
persons in charge can be more passionate and
creative if they share the confidence.

46. The missing piece for innovation is the strong
confidence that “a lot of other people are going
to want it, too”.

47. The key to get strong confidence is the ability
to understand and share the feelings of target
customers, that is, “Empathy”.
empathy:
the ability to understand and share the feelings of another.
(Concise Oxford English Dictionary)

48. Think about
Chapter 3

49. It's in Apple's DNA. The technology alone is not enough.
That is technology married with the liberal arts, married
with the humanities, that yields us the result that makes
our hearts sing.
– Steve Jobs
Keynote speech, Mar/2011, from Apple.com

50. This sentence explains about the advantage of
Apple’s products, but it doesn’t explain why they
can create such attractive products.

51. The question I’d like to ask here is:
“How to create such attractive products?”

52. The answer must be very basic and obvious.

53. Apple has strong confidence that gets what
the customers want to buy.

54. Apple is always striving to find out:
“what user-experiences the
customer
looks for, values, and needs”.

55. Apple spends enough time for this task.

56. Category Inception Apple Product Released
MP3 Player 1997 iPod 2001
MP3 Download(*)
1999 iTune Store 2003
Smart Phone 2001 iPhone 2007
Mobile App(**)
1999 App Store 2008
Netbook 2007 iPad 2010
Apple’s blockbusters
So, Apple often enters the market very late, and
attractively re-defines the product which makes
customers’ hearts sing as well as itself.
(*) Napster, etc.
(**) NTT docomo, etc

57. The greatest praise an innovation can receive is
for people to say,
"This is obvious. Why didn't I think of it?"
– Peter. F. Drucker

58. Looking back from today:
The demands for iPod & iTune Store was
obvious around 1999.
The demands for “Breakthrough internet
communicator”(*)
was obvious around 2005.
The demands for “big iPhone” was obvious
around 2008.
(*) Steve Jobs’s introductory words about iPhone

59. It may sound paradoxical, but Steve Jobs says:
 We do no market research. We don’t hire
consultants.

60. In the meantime, Apple has been building
a huge platform.

61. Apple Store was launched in May 2001, five months
before the first iPod was to be released and two years
before the iTune Store was to be launched.
Apple Store
Photo by Camillo Miller, Flickr
(*)At that time, Apple's annual revenue was only $5.4 billion and loss was $25 million.
There were only Notebook and Desktop computers in the Apple Stores.

62. In 2011, Apple has 336 stores in 11 nations:
Japan: 7
US: 240
Canada: 20
Australia: 12
France: 7
Spain: 2
UK: 30
Germany: 5
Italy: 6
Switzerland: 3
China: 4

63. 5.8 millions people come to Apple Stores each week
and 610,000 members in “one-to-one” service.
(data from ifoAppleStore.com)
One-to-one service at Apple Store
Photo by Phil Photostream, Flickr

64. Apple has about 50,000 employees and about 30,000
of them are working at Apple Stores as full-time
employees. 60% of employees are there sharing their
vision "Enrich Lives".
(*) Gateway, now a subsidiary of Acer, had similar retailing strategy, but they didn't hire
their own people, didn't own real estate. On the other hand, Apple does.
Apple Store
Photo by Camillo Miller, Flickr

65. The only way to enrich their life is to be part of
their life.
– Ron Johnson
Senior Vice President of Retail, Apple

66. Apple Store has become the most powerful
“empathy” platform on the planet.

67. Empathy
Chapter 4

68. The business enterprise has two – and only these two –
basic functions: marketing and innovation. Marketing
and innovation produce results; all the rest are “costs”
– Peter F. Drucker

69. Marketing
Empathy: [em-puh-thee]
- the ability to understand and share the feelings of the
target customers; “the CORE” ability of Marketing

70. Empathy
Imagination (feel)
Creativity (think)
Innovation (produce)
Passion (triumph)
Motivation (act)
encourage
inspire
[ref] ”Towards a Definition of Creativity”, Wisconsin Task Force on Arts and Creativity in Education
Empathy: [em-puh-thee]
- the ability to understand and share the feelings of the
target customers; “the Source” of Innovation

71. “Empathy” is the very core ability for both
marketing and innovation, the two basic
functions of business enterprise.

72. Some companies have already executed drastic
investment for Empathy as a system.

73. Apple has been building a huge and stunning
Empathy platform: the Apple Store.

74. Samsung has a “Regional Specialist Program”,
a very aggressive Empathy cultivation program.
(*) see http://is.gd/Eu0Gfy
This is very old program, since 1990.

75. Dyson’s vacuum cleaner DC12,
a strategic product for Japan market
Dyson’s engineers home-stayed in Japan several
months to understand and share the people’s
lifestyle before designing DC12.

76. However, to build the Empathy as an effective
system is not easy, especially, in this profound
changing age.

77. Life Style
Declining Birth Rate
and Aging
Population
Diversity &
Inclusion
Sustainable Society
Later Marriage
…
Connected Society

78. Share of Global GDP
 USA: 31%(2000)  18%(2015)(*1)
 BRICS: 8%(2000)  23%(2015)  31%(2020)(*2)
Share of Global Cell-Phone Market(*3)
 USA market: 50% (1998)  12% (2015)
 Asia market: 19% (1998)  50% (2015)
E7 will go beyond G7 in 2020 in terms of GDP(*4)
(*1) IMF
(*2) BRICS Summit
(*3) Softbank
(*4) PWC
Global Economy

79. Lifestyle changes day-to-day,
market changes globally.

80. Once again, “Empathy” is the very core ability
for business.

81. Are you being inspired through
target customers?

82. Are you cultivating your passion through
target customers?

83. Are you and your company ready for
the next decade?

84. … to be posted.
An answer will be shared here in version 1.0