Cisco case study

Question 1:
How is building a brand in a business-to-business context different from doing so in the consumer market?

The Cisco case study gives some examples of strategies that the company used as it transitioned into and gained market share in the consumer market, but to get some perspective of the two markets differences consider the following quote. “Consumer marketing presupposes powerful sellers and passive, inexpert buyers who can be influenced to purchase by a variety of advertising techniques. In contrast, industrial markets consist of very knowledgeable buyers (and often buyer teams) who analyze products and purchases in terms of user benefits often measured in dollars or as return on investment.

In the case of capital equipment, the salespeople do not get to talk to the final decision-makers— the board of directors.” (Collins 2011) With this in mind after nearly two decades of marketing to knowledgeable buyers who are looking at cisco products in terms of cost and return on investment and getting these purchases approved by the company’s board of directors it is a dramatic shift in product and marketing to enter the consumer market. “Today, Cisco continues to acquire companies – including 40 between 2004 and 2009 – that help it expand into newer markets such as consumer electronics, business collaboration software and computer servers. These acquisitions align with Cisco’s goal of increasing overall internet traffic, which ultimately drives demand for its networking hardware products.” (Kotler and Keller 2012) Rather than reinventing the wheel Cisco made strategic acquisitions that allowed them to achieve immediate market penetration, “Cisco’s revenues increased 41 percent from 2006 to 2008, led by sales increases in both home and business use.” (Kotler and Keller 2012)

In conclusion, to succeed when building a brand in the business to business environment it is important to emphasize the technical advantages of your product and then show how those advantages will increase shareholder value. In the consumer market extolling the intricate technical virtues of your product is likely to eliminate large sections of the market that just want a product that works. (Chahal 2013) So creating (or buying companies that already create) products that consumers buy, trust to work, and that will improve their lives is the name of the game. Collins, Mike (2011, June). Industrial Marketing is not Consumer Marketing. Industrial Maintenance & Plant Operation, P44. Kotler & Keller (2012). Marketing excellence, Cisco case study. Marketing management, Pp. 57-58. Chahal, Mindy (2013). Whats the language of your brand? Marketing Week (Online Edition). 7/17/2013, p18-18. 1p.

Question 2:
Is Ciscos’s Plan to reach out to consumers a viable one or not? Why or why not?

To answer the question of whether Cisco’s plan is viable or not we must first define what constitutes a “viable” plan. According to the case study, Cisco’s goal is to increase overall Internet traffic, which ultimately drives demand for its networking hardware products. (Kotler and Keller 2012) As Kotler and Keller also point out “Cisco’s revenues increased 41 percent from 2006 to 2008, led by sales increases in both home and business use. By the end of 2008, Cisco’s revenue topped $39.5b and Business Week ranked it the 18th biggest global brand.” Clearly they have achieved their goal of reaching out to the consumer market and in doing so have increased their shareholder value. Now that we have established what the target was and confirmed that Cisco had a viable plan to reach their consumers it’s time to answer the questions how and why.

Mindy Chahal put it this way when she was analyzing Cisco’s early struggles in the consumer markets. “Eradicating jargon internally and externally has also helped Cisco. It aimed to change the way in which it was seen by customers, employees and shareholders by changing how it communicates, defining and rolling out its tone of voice, which employees have adopted.” She went on to say that, “This was because engineers who developed the products were the ones naming and describing them. Those names were used internally and then externally by the sales force and marketing departments, among others. However, Cisco’s customers didn’t fully understand the product terms.” “Customers felt like they were wasting time — and these are people that are advocates, evangelizing our solutions and services,” says Michael Lenz, director of brand experience at Cisco. “The experience demanded clarity in the [tone of] voice and how we presented ourselves to our customers. …When we are designing the brand experience there are steps and foundational pieces that need to be put in place, one of which systemically we had to fix and that was language.” (Chahal 2013)

As stated in question 1, one of the biggest transition hurdles that had to be overcome was converting from being technologically specific to being simple to understand and easy to implement. As we saw from both Kotler & Keller and Chahal it took a combination of major language changes, market repositioning and significant acquisitions of subsidiary companies to allow Cisco to achieve its current level of success and continued projected growth.

Kotler & Keller (2012). Marketing excellence, Cisco case study. Marketing management, Pp. 57-58. Chahal, Mindy (2013). Whats the language of your brand? Marketing Week (Online Edition). 7/17/2013, p18-18. 1p.