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Cristina Adum November 28th, 2016 Principles of Marketing: CMO Paper #3 Integrated Marketing Assessment: Recommendations for IBM’s Watson Global companies need to gain competitive advantage in the fast-growing frontier markets by addressing the social challenges faced in each country they operate. Harvard Business Review magazine described this tactic as “playing development to win”. IBM operates not only in a global market, but also in the technology market. This is an area that is also fast growing, and where many competitors already exist. Hence, IBM has developed a global strategy that targets three different fields: cloud, data and engagement. Throughout this paper, I will analyze the company’s current strategy in each sector as well as proposing recommendations for possible future marketing campaigns. Furthermore, I will expose various investments that could be made for Watson. Cloud Marketing For a company that has long worked to provide hardware to their clients, a shif to cloud services is a great transition. Moving into this new market, IBM changes from providing products for clients to held at their site, to services that clients access distantly. The best example of this transition is Watson. As has been analyzed before, Watson is a cloud-based service that allows companies to deal with big data by standardizing expensive solutions and then sharing them. IBM needs to successfully advertise the features of these services so that they can get greater innovation developed in frontier markets, because people there can access the same tools used by wealthier clients in wealthier markets. The movement from hardware technologies to the cloud can be a step change for how IBM, one of the biggest technology leaders, interacts with frontier markets. In this case, Watson’s cognitive learning system and natural language interface would have been unavailable to, for example, a South American ministry of finance looking to enhance tax collection. By moving Watson services to the cloud, IBM makes these types of technologies cheaper and affordable to almost anyone. Cloud computing keeps more of the technology at the provider’s site and not the client’s, reducing the risk of losing that proprietary technology to pirating. Thus, clients located in emerging markets, such as countries from the developing world, will be able to access this technology even if the intellectual property protection in their country is low. Data Marketing Because data is abundant, but worth little unless you refine it, collecting and refining data is what gives companies the competitive advantage in this market. To gain advantage as outsiders in the developing countries, IBM has to continue developing the project of Digital Aquifer. The purpose of this project is to collect analytics on 100

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million points of water across the African continent, with the purpose of informing better decisions on where is necessary to protect water, and where security issues might take place. The purpose of this project is to reinvent drought management. To do well on the mining and refining of the data, IBM needs to learn from the mistakes made extracting earlier generations. Comparing data to natural resources, the oil and gas companies were slow to ensure that the people in resource-rich regions felt fully informed and compensated. Also, they never considered integrating local companies in their value chain. The recommendations we can draw from these past lessons is that if IBM wants to aggressively gather and process the frontier market data, they have to begin by preventing and addressing this issues in order to be successful. Engagement All the advancements that IBM has been working on matter only to the extent that users will be able to engage with them. To do this, IBM has to work on a framework of engagement in mobile computing, social networks and security. Much has been said about the mobile revolution in frontier markets. However, the link to security in the market is little discussed. IBM has to promote trust and security to their current and future customers so that engagement and loyalty to the company can be achieved. In frontier markets, companies and workers are entering the economy exclusively on mobile devices. To illustrate this statement, lets take into account the African market. Of the 80% of Africans that do not have a bank account today will have one in ten years, but only because they will then own a mobile phone. Only through these devices, banking providers will be able to contact them. The emerging market customer needs to trust that there will be a mobile-based system that will be able to store their data and money securely, conducting all transactions reliably, even in the event of the device or infrastructure failure. For IBM to continue its growth during the twenty first century, they need to deliver the end-to-end trust that was discussed above. Taking into account that 90% of the world’s financial transactions flow through IBM’s systems, it is fair to say that this is the result of data security and transaction security that the company has managed to have during the past years. Since new economies are emerging primarily on the mobile platform (mobile banking, telecoms, government and retail), IBM must be critical to those mobile economies’ core foundations to acquire their market share. Analyzing IBM’s these three pillars is a way to think and plan corporate strategy. It is also relevant because it shows the emerging market growth. Without any impediment or limitations by legacy approaches to data, computing, and user engagement, emerging market countries and companies can leapfrog wealthy competitors and start to compete on the global stage as well. This is a vision that will energize their current generation of political and commercial leaders. Implementing this vision can also help determine the success of IBM for these emerging clients.

IBM Watson: A service that can revolutionize any field, including Marketing

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According to Michael Karasick, IBM’s Vice-president and Research Director, Watson is a computer able to generate predictions in almost every aspect of our daily lives: healthcare, customer service, investment advisory and culinary pursuits. However, IBM should not stop there. Watson is a product that has many capabilities, and one that has to be exploited the most is to use this platform as a service and then build apps that will add value to this product. Within five years or so, the Watson learning platform will be faster and more accurate with the predictions it can make, according to the different fields it will be able to understand. The amazing feature of Watson, as explained by Karasick, is that as a learning system, Watson can be an expert on domain A and domain B, and then it knows how to make the equivalence between terminologies in different domains. By using Watson as a service technology, a business could train Watson to understand its customers, and then use predictive models to recognize new products or services that, according to the customer profiles, they would be willing to pay for. Predicting new trends and shifting tastes Watson can store any type of data: credit card data, sales databases, social networks, location data and webpages, to mention a few. With this data, Watson can compile and categorize all this information to make predictions that have high probabilities of occurring. As expected from previous analysis, Watson is way ahead of its competition. Watson not only can analyze and interpret unstructured data and images, it can also recognize irony and sarcasm, properly apprehending the intended meaning of the message. Watson learnt sentiment analysis. Thus, it can quickly analyze large sample sizes to determine whether a product offering is going to work with the target market or if it would be a failure. Analyze social conversations and generate leads The market today has many social listening solutions that do an adequate job of giving the marketers signals and reports about their industry, competitors, partners and current customers. However, the marketer has to analyze the information provided by the service and then take action. Luckily, Watson has the competitive advantage of being able to foreseeably predict what information is most important and make recommendations on how to act on it, as it has demonstrated in other fields such as healthcare. In the marketing domain, Watson could be helpful, for example, if it finds a cluster of people discussing problems that a marketer should solve. Watson could automatically notify the sales team about the issue or take action on its own by educating the prospective customers about the inquiry they are having. Determine whether a new innovation will sell or not As mentioned above, Watson is a learning technology that can make high probability predictions. Thus, if a company that wanted to understand whether a new innovation would sell or not, it can use Watson to analyze this. The program could be used to analyze the company’s current market and customer base to provide successbased probabilities. The success of this relies in the implication that if Watson has

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enough understanding of the firm’s market situation, it will be able to produce insights that can give the firm a clearer picture of the current opportunities and threats of the industry in which they operate. Computer calculated and automated growth hacking Growth hackers focus on innovative testing techniques with the purpose of maximizing conversions on emails, websites, social media, online content or any digital media that is available. It is a cost-effective alternative to traditional media channels used by companies. This is another approach in which Watson could revolutionize marketing techniques. Watson could proactively and intelligently test, measure and optimize any digital content, such as ads, website pages or even the company’s actual product in order to maximize customer and market growth. Andy Johns of Greylock, a former growth hacker, stated that Facebook conducted six hacks a day to maximize growth opportunities. According to Mark Fidelman, CEO of Fanatics Media, Watson’s potential could easily handle ten times the Facebook’s amount of growth hacking. Watson has the potential to eliminate any ineffective marketing. As a result, it can upgrade good marketing to great marketing, and it can predict what is the best way to spend marketing money in the future. IBM and GM OnStar Go: in-car marketing IBM has already engaged in revolutionizing marketing through Watson. This past October, IBM and General Motors signed a partnership to provide the first cognitive mobility platform in the auto industry. The partnership aims to provide personalized marketing offers to millions of drivers. Hopefully, it will begin early on 2017. The project OnStar Go will use Watson’s cognitive learning and artificial intelligence capabilities in a car to offer deals and advice to the customer by portraying the different information in the vehicle’s dashboard. This system not only will be used for marketing campaigns, it will also help the driver avoid traffic, will warn if the vehicle is low on gas, will turn on a gas pump and pay for the gas from the vehicle dashboard and will order a cup of coffee for pick up while the customer is driving. The partnership is not only between IBM and General Motors. It also includes MasterCard, ExxonMobil, Glympse, iHeartRadio and Parkopedia. This project will be an expansion of OnStar’s AtYourService, which offers deals from retailers. OnStar is a subsidiary that provides subscription based on emergency, security, navigation and embedded Wi-Fi connectivity services along with adviser assistance. ExxonMobil is another company involved in this project. They will iuse technology to help the customer find gas stations and authorize a payment from inside the car. MasterCard, on the other hand, will allow drivers and passengers to make a payment for the items and services from the commodity of the car by embedding Masterpass in OnStar Go. The executive director of GM, Phil Abram, explained that on average, people in the U.S. spend more than 46 minutes per day in their car and these people ofen look for ways to optimize their time. By using OnStar’s connectivity and combining it with the power of Watson to their maximum advantage, this project aims to provide safer, simpler and better solutions to take the mobility experience to a whole new level and make it more valuable and productive.

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According to analysts, it is expected that the OnStar system will generate profit from twelve million connected vehicles on the road with Wi-Fi hotspots, allowing the flow of information and data. The analysts claim that the OnStar system is a longtime profit generator. The companies that would be working on this project established that the system would be available for more than two million vehicles in the United States, especially those that feature 4 G LTE Wi-Fi hotspots. It is expected that by the end of 2017, it will be available to millions of GM-brand app mobile devices. Watson will be used in order to learn a driver’s preferences, if the driver gives consent or not, and to tailor location-based deals according to what the companies working in this project are offering to their customers. Furthermore, Watson can remind a dad to do the shores he needs to do before getting home. With this innovative idea, IBM and GM will change and revolutionize the whole notion of where valuable, daily rituals occur. By combining IBM Watson and the new industry leader OnStar connectivity, vehicles will be able to provide intelligent-branded skills and services and to empower drivers and passengers. Definitely, it is a project IBM should develop further.

WORKS CITED

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Berman, Jonathan. "IBM's Emerging Market Strategy Has 3 Pillars." IBM’s Emerging Market Strategy Has 3 Pillars. Harvard Business Review, 27 Nov. 2014. Web. 20 Nov. 2016. Burden, Melissa. "GM OnStar Go Taps IBM Watson for In-car Marketing." Detroit News. N.p., 25 Oct. 2016. Web. 20 Nov. 2016. Fidelman, Mark. "IBM's Watson Set To Revolutionize Marketing." Forbes. Forbes Magazine, 4 Sept. 2013. Web. 20 Nov. 2016.

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