The Day of the Drone

Author – Charl Benckendorff | Student ID: 216201542

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(Source: Geo Sense. Image by Unknown)

Drones, as a consumer product, have really only hit the big time in the last 6 years thanks to some big key players, REALLY BIG PLAYERS! In 2006 DJI was founded by Frank Wang. Today DJI is worth $3.6 billion. It holds a large majority share in a very competitive market.

drone_share

(Source: sUAS News. Image by Unknown)

From a product positioning perspective, drones appeal to majority photographers (52%), from amateur teenagers through to prosumers (professional consumers). With the ability to shoot amazing aerial photographs and videos DJI have turned amateur photographers into professionals. One strong point of the DJI drones is that they can accommodate a GOPRO camera for further cross brand functionality.

In overlaying the Product Life Cycle (PLC) graph over the below graph you could draw the conclusion that that DJI has had a relatively slow market introductory from 2009. This is however not uncommon where technology is new to the consumer. In DJI’s case it’s a product developed and made in China, immediate perceptions may suggest its cheap with average quality. Until 2009 only DIY hobbyist used drones as well as the military. The mass market was somewhat ungroomed albeit the product was developed from the bottom-up stemming from the tech savvy DIY hobbyist movement. As can be seen from the below graph from 2012 onwards, DJI as a brand, excelled as sales growth skyrocketed into what Iacobucci (2014) categorises as the market growth phase. What helped DJI was the partnering with potent pitchman, Colin Quinn. Colin was a gifted marketing guru who solely developed DJI’s market penetration into America. Today over 30% of DJI’s revenue is from the North American market outstripping sales from America’s local brand 3D Robotics.

0505_drones-mkt-share-chart_1200

(Source: Forbes. Image by Unknown)

DJI is enjoy a fruitful growth phase and it is far from over. With new product lines being released at least yearly in both the consumer and prosumer market, DJI are buzzing. In the B2B space there has been considerable interest. Early last year Accel Partners poured $75 million into DJI as a venture capitalist to grow the ‘drone ecosystem’. In more recent news, Measure, a company that specialises in commercial drones has partnered with DJI in using it’s drones for applications such as mapping, imaging, agriculture and mining. Additionally, a company called Zipline, has received $18 million in venture capital is using drones to deliver medical supplies to remote locations such as parts of Rwanda. ‘Doctors without borders’ will soon be a mainstream service.

TOP20-VC-funded-drone-companies

(Source: Crunchebase, Droneil.com)

The drone industry is seeing very high growth. Consumer confidence and its applications in in the commercial arena will continue to see DJI’s successful upwards trajectory. As a very fast emerging brand name, DJI is known for high quality and consistency as a drone manufacturer. DJI have been able to develop their unique brand personality over a long period of time by creating an emotional bond with their exquisite aerial drone photography of holidays, weddings and adventures, Aaker, (1996). The company’s slogan, ‘The future of possible’, plays further on the customer relationship with the brand communicating it’s at the forefront of future innovation. Shirazi (2013) writes, although brand identity is regarded as the most fundamental asset to a brand’s equity, the worth of a brand’s identity would become obsolete without ongoing brand communication.

According to Kotler et al. (2009), a brand’s identity may deliver four levels of meaning as below. The secret in DJI although its selling drones it’s also selling memories in the form of personal photos and videos.

Attributes – DJI provides a product that sets it apart from its competitors. It’s a competitive price point, renowned quality and advances in technology are second to none.

Benefits – DJI brings a new enhanced experience to the everyday photographer and professional. You can now capture aerial photography in Full HD from perspectives rarely achieved.

Values – DJI has captured the consumer who values the next level of photography. Their slogan ‘The future of possible’ sums this up in capturing photos and video with a high degree of quality.

Personality – DJI brand identity provides that personal interaction with the brand.

In doing a quick search on Gumtree there was no shortage of older DJI drone models for sale. Within the descriptions more often than not the reason for sale is simple: Selling due to upgrading to a new DJI model. This is a positive sign as far as brand loyalty is concerned. DJI as a brand has captured the market and emotionally attached customers for repeat sales – well done DJI, well done. We can all look forward to DJI’s continual growth and advances in the commercial space in the very near future.

References

Aaker, D. (1996) Building Strong Brands, New York: The Free Press

 Chitty, W (2005). integrated marketing communications. Thomson

 Iacobucci, D 2014, Marketing Management (MM4), Student Edition, South Western, Cengage Learning, Mason USA.

 Forbes (2016). Founder and CEO of DJI. [Online] Forbes. Accessed at: http://www.forbes.com/profile/frank-wang/ [Accessed on 26th August 2016]

 Fulco, M (2015). For DJI, the Sky is the Limit. [Online] CKGSB Knowledge. Accessed at: http://knowledge.ckgsb.edu.cn/2015/09/28/china/for-dji-the-sky-is-the-limit/ [Accessed on 26th August 2016]

 Kay (2016). These are the TOP20 VC-funded drone companies to have on your radar in 2016. [ Online] Drone Industry Insights. Accessed at: https://www.droneii.com/top20-vc-funded-drone-companies-2016 [Accessed on 26th August 2016]

 Kotler, P (2009). Principles of marketing. Pearson Education, Australia

 Measure (2016). The Next Generation of Commercial Drones: Measure and DJI. [Online] Measure. Accessed at: http://www.measure.aero/the-next-generation-of-commercial-drones/ [Accessed on 26th August 2016]

 Mortimer, G. (2015). Forty eight percent of commercial drone platforms in the USA made by DJI. [Online] sUAS News. Accessed at: http://www.suasnews.com/2015/06/forty-eight-percent-of-commercial-drone-platforms-in-the-usa-made-by-dji/ [Accessed on 26th August 2016]

 Nambiar, R (2016). How Rwanda is using drones to save millions of lives. [Online] CNBC. Accessed at: http://www.cnbc.com/2016/05/27/how-rwanda-is-using-drones-to-save-millions-of-lives.html [Accessed on 26th August 2016]

 Nicas, J. and MacMillan, D (2915). After Fresh Investment, Chinese Drone Maker DJI Valued at About $8 Billion[Online] The Wall Street Journal. Accessed at: http://www.wsj.com/articles/chinese-drone-maker-dji-raises-75-million-from-accel-partners-1430915407 [Accessed on 26th August 2016]

 Popper, B. (2015). DJI is about to be come the first billion dollar consumer drone company. [Online] The Verge. Accessed at: http://www.theverge.com/2015/3/12/8196413/dji-drone-funding-billion-dollar-sales [Accessed on 26th August 2016]

 Shao, H. (2015). Drone Overlord Frank Wang On DJI’s Milestones, Miscarried GoPro Partnership & Corporate Espionage. [Online] Forbes. http://www.forbes.com/sites/forbesasia/2015/05/07/drone-overlord-frank-wang-on-djis-milestones-miscarried-gopro-partnership-corporate-espionage/#2e0ead6e3012 [Accessed on 26th August 2016]

 Shirazi A, Lorestani HZ, Mazidi AK. (2013) Investigating the effects of brand identity on customer loyalty from social identity perspective. Iranian Journal of Management Studies. 6(2):153-78.

 Snow, C (2016). Insights from New Market Research on Drones Sales. [Online] Drone Analyst. Accessed at: http://droneanalyst.com/2016/04/25/insights-from-new-market-research-on-drones-sales/ [Accessed on 26th August 2016]

 

BIG DATA makes the world go round

You’ve heard of the 5C’s and 4P’s but have you heard of the 4V’s ? Volume, Velocity, Variety and Veracity! Marketing research has excelled to a whole new level and it reached this new high with the help of consumer information. Consumer information is all around us and even the most unsuspecting consumer contributes to it every day!

big-data

(Source: Rymond 2014)

Consumer habits mean BIG Data

 Volume, Velocity, Variety, and Veracity are all characterise of Big Data that provide for very future in market research. Some fast facts below explain how our everyday online habits and retail transactions contribute to the Big Data phenomenon:

  • Every day consumers make around 11.5 million payments by using Paypal
  • Every hour, Walmart (chain of discount department stores) handles more than 1 million customer transactions
  • 510 comments, 293000 status and 136000 updates are posted on Facebook every minute
  • Every second, ~7000 tweets are made on Twitter

The sheer volume of the data that is collected through the use of everyday applications that have become a normal part of life for millions of people which means there are endless possibilities for the evolution of market research.

So what? We have always had data

In today’s digital world we have the capability to collect data with even greater ease, then process the data to target the right audience in a meaningful and captivating way via multiple channels such as Facebook, LinkedIn, Instagram, etc. As McAfee, A. & Brynjolfsson, E. (2012) citied, executives can measure and therefore manage more precisely than ever before. It is now possible to make even better predictions and smarter decisions about the needs, wants and aspirations of every day consumers from a phenomenally broad range of backgrounds from across the globe. Marketers can target more effective interventions in areas that so far have been dominated by market research and intuition rather than by market research and the tangible possibilities of accurate BIG data straight from the target audience

All eyes are on the 4Vs

Although no one can estimate the growth of Big Data increases, volumes will without a doubt increase year on year. Take for example IoT (Internet of things), it is believed we will be living in the world along with 50 billion interconnected devices within the next 5-10 years, Williamson, J. (2015). Think of current integrated technologies, your laptop, smartphone, TV, car, home and security systems.

Marketers can build digital footprints of insightful information and draw on a variety of new data types such as geospatial and location information. This may translate to what you did, where you did it and when you did it. What this translates to is tailored content to appeal to consumers that have been exclusively gleaned through various data-mining activities as described by Couldry, N. & Turow, J. (2014).

The frequency (velocity) of data generated is advantageous to marketers. Think about Facebook status updates or credit card swipes being sent over your telecommunications provider every minute of every day. Daily habit and shopper trends can model marketing strategies.

BUT this data is only as good as it is accurate and trusted for business decision making. The veracity of data depends heavily on such tasks as data mapping to drive insightful trends and habits of consumers.

In combing all 4V’s we can create value. Some would argue value to be a 5th V. Imagine the opportunities for cross-selling, cost cutting, new product lines.

All hail social media applications

At the forefront of the digital age and Big Data collection and marketing channel, we have online social media applications such as Facebook, Instagram, LinkedIn, Twitter etc. These big players are massive contributors of data-driven marketing. Without these types of social media applications, BIG Data would simply not be as readily available. They collect a vast array of information but are also marketing channels for hundreds of thousands of businesses worldwide. Companies have leveraged off their CPM (cost per thousand advertising impressions) offerings to not only market products and services but gain statistics on effectiveness and success rates to better drive strategic marketing decisions.

In Q1 of 2016 CPMs were up 71 percent year-over-year on Facebook. This tells us it’s a reflection of the marketing strategies companies have undertaken and their keenness in online marketing. Not only have companies increased their investment with CPM providers but they have scaled horizontally. For companies who have gone multichannel in their marketing strategy have experienced an average of threefold increase in ROI when moving from a single channel to multichannel campaigns. This means more feedback data for companies to drive company initiatives and decision making.

Today’s Big Data ecosystems have found its feet and has had a major impact on traditional cost inefficient marketing research practices such as collecting qualitative information via such means as case studies via focus groups. The era of clustering target audiences by demographic stereotypes and bombarding them with irrelevant ads is over. Companies are already making their interactions with customers personal drawing of Big Data marketing strategies.

Abstract Stock Market Charts. Zip includes CDR, AI and high-res JPEG files.Map source: http://visibleearth.nasa.gov/view_rec.php?id=8392 Software used: CorelDRAW X6 Date created: 14.10.2012 Layers of data used: Outlines

(Source: Jitterbit, Image by Jitterbit)

Big Data is going to get HUGE

With or without recognising it we are contributing new voluntary information to large company’s data stores in online social media applications, retail credit card purchases, browsing the internet via multiple different devices. A questionable ethical debate for the general public? Some companies have already disclosed data policies to their customers. With this fast growing trend, Big Data is going to get HUGE! How this will be legislated in the future will be a very interesting to see play out – watch this space!

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(Source: Tisuchi, Image by Tisuchi)

References:

Ayush (2015). How to collect big data? [Online] Big Data Science Training. Available at: http://bigdatasciencetraining.com/how-to-collect-big-data/ [Accessed 12 August 2016]

Couldry, N. & Turow, J. (2014). “Advertising, Big Data, and the Clearance of the Public Realm: Marketers’ New Approaches to the Content Subsidy”. International Journal of Communication. 8: 1710–1726.

Leochner, T. (2013). Twice As Many Brands Have Gone Multichannel In 2013. [Online] Media Post. http://www.mediapost.com/publications/article/211390/twice-as-many-brands-have-gone-multichannel-in-201.html#axzz2j2fVtwzM [Accessed 12 August 2016]

McAfee, A. & Brynjolfsson, E. (2012). Big Data: The management revolution. Harvard Business Review

Rymond, T (2014). 4Vs of Big Data [Online] WordPress. Available at: https://tomyrhymond.wordpress.com/2014/08/08/4-vs-of-big-data/ [Accessed 12 August 2016]

Vamosi, R. (2015). Collecting Big Data From IoT [Online] Forbes. Available at: http://www.forbes.com/sites/robertvamosi/2015/01/22/collecting-big-data-from-iot/#3e53829a7de3 [Accessed 12 August 2016]

Williamson, J. (2015). “Getting a Big Data Job for Dummies. For Dummies. Indianapolis, IN

First in best dressed – Amazon Web Services a success story

Author: Charl Benckendorff                     Student ID: 216201542

Ask anyone about cloud computing 5 years ago and you probably won’t have received an answer as to what it is and what it does. Today however it’s big business the *aaS (* = Infrastructure, Software, Platform as a Service ) revolution has been one of the biggest technology disrupters in the last decade. The basic concept is large technology companies host online hardware, software and platforms for corporate consumers, small businesses and startups to utilise at a reduced cost compared to privately hosting your own datacenter infrastructure and systems.

cloud-computing

 

According to Gartner the public cloud services market is forecasted to reach $204 billion in 2016. AWS (Amazon Web Services) continuing to dominate worldwide market share at over 31% in the first quarter of 2016. With competition from the likes of Microsoft, IBM and Google, what does set AWS apart?

Cloud2016

This year AWS turns 10. In 2006 AWS released its cloud storage and cloud computing offering. AWS was the first company on the market to release such an offering. From its early days it has had almost 50 price slashes. Being the first on the market however doesn’t grantee success but coupled with being the best dressed does.

From its beginnings AWS has been a market leader. Gartner notes: AWS is a thought leader; it is extraordinarily innovative, exceptionally agile, and very responsive to the market. It has the richest array of IaaS features and PaaS-like capabilities. It continues to rapidly expand its service offerings and offer higher-level solutions. Although it is beginning to face more competition from Microsoft and Google, it retains a multiyear competitive advantage.

Gartner

Gartner: Magic Quadrant for Cloud Infrastructure as a Service 2015

In overlaying the marketing model STP (Segmentation, Targeting and Positioning) clear parallels can be drawn in the analysis of AWS’s current state and the success it’s had.

Segmentation

One selling point of AWS services is that it pitches its products to not only large corporates but also B2C such as Netflix, B2B such as SAP and your everyday low budget entrepreneurial startups who require the flexibility in scaling up services as required. To further strengthen this AWS have positioned themselves to be global leaders by saturating worldwide geographical points of presence above and beyond its competitors. Within the Australian finance sector for example where companies must store data within the country of registration due to regulatory bodies such as APRA. So far AWS has continued on a positive trajectory in market segment domination and doesn’t look to be slowing down with 4 new regions coming soon.

Global_Infrastructure_global-infra_6.14

Targeting

For as little as $15 per month small business\startups can take advantage of AWS virtual servers offering. Compare this to the cost of a small business DELL server at around $2000 up front. Expand this figure out to large IT corporates and add in additional services and you have a pay as you go recipe for success. This year Q1 profits speak for themselves at $2.57 billion this is up 64% from a year ago. With operating costs at $604 million, there is no question AWS is onto a good recipe from a ROI standpoint. Given the YoY growth AWS could expect more price reductions and better cost efficiency. With ongoing growth from investors FY17 profits are look very healthy.

AWS-Segment

Positioning

With AWS leading the Cloud Services in size, points of presence, diversity in business uptake as well as innovation in offering a multitude of services it has strategically placed itself as a top tier provider with a fruitful future. Whilst pricing is comparable to the likes of Microsoft offerings it does provide additional services and draws in startups with its AWS Activate program which provides free services and discounts. It has been a proven contender in the innovation space also which has kept AWS ahead of the pack. It is clear AWS has a ‘catch all’ strategy from the basement developer to the large IT Corporates.

A quick take of how AWS SWOT analysis stacks up and it’s obvious from an internal (the S&W) perspective the company’s strengths out strip its weaknesses. One key weakness to focus on is a self-serve model – Think simplicity, intuitive in use and ease of provisioning services for the non-technical customer base. When assessing external (O&T) factors, AWS are positioned well however overcoming competitor market share creep needs focus as market share statistics have revealed, by no means a threat given the gap however to be closely monitored.

Strengths

First to market in 2006

Large services offering

Large client base

Capacity 5 X Capacity that of 14 competitors

Higher Investment than business rivals

Weaknesses

Outages

Complexity for customers

Opportunities

Growing market for big businesses

Server\storage costs less in the cloud so business want to move to the cloud

Growing suit of products and services that complement AWS

Continued investments and expansions

Threats

Hardware pricing

Competitors

Price Wars

Technology trends

References:

Amazon Web Services. (2006) Announcing Amazon Elastic Compute Cloud (Amazon EC2) – beta. [Online] Amazon Web Services. Available at: https://aws.amazon.com/about-aws/whats-new/2006/08/24/announcing-amazon-elastic-compute-cloud-amazon-ec2—beta/ [Accessed 24 Jul 2016]

Amazon Web Services. (2016) AWS Activate [Online] Amazon Web Services. Available at: https://aws.amazon.com/activate/ [Accessed 24 Jul 2016]

Amazon Web Services. (2016) AWS Global Infrastructure [Online] Amazon Web Services. Available at: https://aws.amazon.com/about-aws/global-infrastructure/ [Accessed 24 Jul 2016]

Bourgeault, G. (2015) Amazon’s Strategy To Dominate Cloud Computing With AWS [Online] Seeking Alpha. Available at: http://seekingalpha.com/article/3567446-amazons-strategy-dominate-cloud-computing-aws [Accessed 24 July 2016]

Chu, B. (2013) Amazon Web Services SWOT & Competitor Analysis [Online] Slideshare. Available at: http://www.slideshare.net/BessieChu/amazon-web-services-swot-competitor-analysis?next_slideshow=1 [Accessed 24 Jul 2016]

DELL (2016) PowerEdge Tower Servers  [Online] DELL. Available at: http://www.dell.com/au/business/p/poweredge-tower-servers [Accessed at 24 Jul 2016]

Iacobucci, D 2014, Marketing Management (MM4), Student Edition, South Western, Cengage Learning, Mason USA.

Say, M. (2015) AWS now 10X the size of its competitors: Is the cloud arms race over? [Online] TechRepublic. Available at: http://www.techrepublic.com/article/aws-now-10x-the-size-of-its-competitors-is-the-cloud-arms-race-over/ [Accessed 24 July 2016]

Soper, T. (2016) Amazon’s cloud computing cash cow: AWS, now a $10B business, fuels record quarter for company [Online] GeekWire. Available at: http://www.geekwire.com/2016/amazons-cloud-computing-cash-cow-aws-now-10b-business-fuels-record-quarter-company/ [Accessed 24 Jul 2016]

Stamford, C. (2016) Gartner Says Worldwide Public Cloud Services Market Is Forecast to Reach $204 Billion in 2016. [Online] Gartner. Available at: http://www.gartner.com/newsroom/id/3188817 [Accessed 24 Jul 2016]

Synergy Research Group. (2016) Big Four Still Dominate in Q1 as Cloud Market Growth Exceeds 50%. [Online] Synergy Research Group. Available at: https://www.srgresearch.com/articles/gang-four-still-racing-away-cloud-market [Accessed 24 Jul 2016]