Why a big B2B brand is unlikely to succeed in retail electronics
Can a corporation, having worldwide well known brand selling web services in the B2B market, expect to have instant success in the retail market selling consumer electronics?
B2B Business web services
Market: limited
In web services for business, companies need to market and to address businesses around the world for signing up with their service.
Distribution: Internet
The delivery and the logistics of a web service are minimal or not existent as the Internet provides for the distribution of the services into every corner of the world. No barriers. No inventories.
Defaults: the advantage of the controlled environment
When offering web services, companies have complete control over the operations as all software and data bases are running on their servers in a controlled environment. Thus in case an error occurs, the event is within their reach and access. This gives the possibility to react upon hazards or defects swiftly.
Centrally managed
Business-to-Business web services are under control at the processing site. The operation itself is behind the scenes making instant action on operations is possible. Users only experience the result of the service and will hardly notice the problems related to operations.
Selling consumer electronics in retail
Market: mass
In B2C marketing needs to address the entire population of possible retail buyers using mass media advertising or social media. With the goal be in the minds of millions of people when they are deciding to buy.
Advertising is an area where Proctor & Gamble, present with many well-known brands, knows since long the rules of the game.
This is quite a different battlefield than Business-to-Business as many brands compete for the attention of the same consumer.
Distribution: physical
In order to sell to consumers the hardware products (consumer electronics) need to be available in retail stores requiring logistics for managing inventories and physical distribution throughout the target geographies.
Defaults and defects: in the field
In case of a problem with the device, the goods have to be repaired or returned to the manufacturer. Again this requires logistics, procedures and above all local partners for repair and warranty returns.
If a product is faulty, the end user is immediately confronted with the problem himself.
Retail is in almost all aspects quite different from B2B, as much as electronic devices are different from web services.
The challenge for Google
The company is Google: the leading web service for businesses in the online advertising market with Adsense.
Their challenge is to succeed in selling millions of G1 Android phones
Marketing and brand strength
Will their brand be strong enough to bring trust to retail consumers and convince them.
The consumers need to trust the brand name for a hardware device.
These same consumers are used to get services free from Google, but will they trust Google for their own money?
Although Google is into advertising, it never has spend any significant amount of money in advertising, but instead has offered free services like search, maps and email in order to promote it’s brand to both consumers as businesses.
Market:
Selling into a market that is being controlled by Nokia (#1) and Samsung (#2) will not make the case easier.
Fierce competition from Apple iPhone, Nokia N96, Samsung Omnia and SonyEricsson Xperia X1 from companies who all have already achieved obtaining a place in the retail store displays.
Distribution
In order to have retail distribution, Google uses retail presence of T-Mobile, similar to the distribution of the iPhone by AT&T.
Power of a supplier
As Samsung supplies electronic components to HTC the manufacturer of the G1 phone, this could be a possible hurdle if ever the G1 phone becomes a success.
No central control
In case a mobile phone is defect or the customer perceives a default; it is beyond the control of Google to act upon as it needs to rely upon the consumer, the local partners for service.
Question
Microsoft was experienced in retail as it had been selling software packages from their early beginnings.
Still the XBox 360 had issues and problems, costing Microsoft money.
Will Google succeed in this similar and very competitive retail market without any previous experience?
Having to rely and gamble its’ brand name on an OEM product from HTC?
Do you buy from Google or you do only trust them for their free services?
What do you think?
- Will the brand name of Google be strong enough to convince consumers to buy?
- Will Nokia, Samsung and Apple give Google the required space?
- Will Nokia, Samsung and Apple compete on features and pricing?
- Will Google succeed or fail?
More from LEADS Explorer
- Why awareness of your solution is key to success
- What is the most important in the B2B buying process ?
- In B2B Marketing is 1 to N – Sales is 1 to 1
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