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Applying the Marketing Center of Excellence (MCOE)

A case for the MCOE: The HP TouchPad "Fail"

The HP TouchPad was launched July 1, 2011, and was discontinued August 18, 2011. The Marketing Center of Excellence (MCOE) may provide a framework for understanding (and preventing) the sorts of “black swan” marketing failure that HP experienced with its TouchPad launch. I think the key value provided by a MCOE for reducing the risk of a “black swan fail” is its enablement of a holistic, cross-disciplinary approach to marketing at enterprise level.

Leslie Ament, SVP at Hypatia Research Group, asked a great question that points towards the complexity underlying the situation, and the potential value of a MCOE: “Is this a failure of 1) product features, 2) timing of launch, 3) targeting of market segment and/or 4) demand generation, branding, and execution of campaigns?” In the framework of a MCOE, the operator here would be an “and,” rather than an “or.”

Hypothesis: Events and Issues
These events may have lead to HP’s decision to discontinue the TouchPad:

A number of poor reviews. 
Per Sean Portnoy at ZDNet, “The bottom line was the TouchPad was released with several crucial flaws that led to mediocre reviews…" Mediocre would be an understatement; here’s a small sample:

Walt Mossberg wrote, “[The HP TouchPad] suffers from poor battery life, a paucity of apps and other deficits.”

Said David Pogue, “In this 1.0 incarnation, the TouchPad doesn’t come close to being as complete or mature as the iPad or the best Android tablets; you’d be shortchanging yourself by buying one right now…”

Matt Buchanan on Gizmodo opens his review, “I am so goddamned tired of the iPad. Which is why I was so excited for the TouchPad. And that's why I feel so completely crushed right now.”

And from Eliane Fiolet on Ubergizmo: “Overall, the results speak for themselves: the touchpad is the slowest tablet that we have tried in 2011. … The HP TouchPad did not stand up to expectations, so much that it died before getting a chance to be improved.”

Underwhelming consumer demand at launch compared to projections. 
The poor reviews may have contributed to the serious gap between potential customer interest and inventory forecasting. Best Buy sold “less than 10 percent of the units in inventory” according to the “OuchPad” article in All Things D. Other retailers reported similar issues with inventory, per International Business Times.

Reading through an aggregated analysis of the HP TouchPad fail on The Week, some high-level themes emerge:
Poor price-to-performance compared to a market leader. The most serious concerns noted in reviews were slow performance; at a $599 launch list price, people just didn’t choose the TouchPad over the iPad unless they were “A.B.A.” (However, when HP dropped the price to $99 to clear out inventory, retailers sold out.)

Channel issues. As reported by Matt Rosoff in Business Insider SAI, "Best Buy doesn't want all that unsold inventory taking up shelf space, and is asking HP to take them back. Todd Bradley or another HP exec is reportedly going to fly to Minneapolis to try and persuade Best Buy otherwise." While no other channel issues surfaced in my research, Best Buy can’t have been the only retailer pushing back.

Launch issues. HP had a daunting task—to cut through WebOS being lumped into Android “me-too-ness” while grabbing market share from Apple’s iPad. Rather than launch later, which would have put its new product in the run-up to the 2011 holiday shopping season, HP chose to launch on the July 4 weekend.

Despite the July 4th timing, Google Trends shows an incredibly steep climb in search volume for “HP TouchPad”; there was a lot of buzz and interest. Unfortunately, the climb quickly dropped off into a cliff that seems to represent an abrupt collapse in interest and demand.

Using the MCOE evolutionary model to respond to Leslie Ament’s question, what Marketing Communities of Practice would have been involved?
The issues noted by reviewers related to performance would be R&D and Product Management’s domain. The price-to-performance issues would be Product Marketing (possibly compounded by issues on margins and the cost of Bill of Materials involving Product Management). Channel issues would rest with Product Marketing. If there were problems caused by the timing of the launch or pre-sales Demand Generation/AR/PR, they are not reflected in the spike of interest shown by Google Trends. (It’s hard to say what the actual comparative search volumes were in Google - at this moment, “HP TouchPad” shows about 75-100 searches per day, and “Apple iPad” shows roughly 900 per day.)

If we make the assumption (and I know it’s a whopper) that a company like HP would at least be at Levels 2 to 3 on the MCOE Maturity Model across the horizontal domains of People, Processes, Technology, and Data, how could a failure of this magnitude occur?

Using the MCOE framework may help clarify where things broke down:

People. Even if each disciplinary area was focused on “best practices,” were there shared goals to drive and support cross-disciplinary work by the Communities of Practice? Were there breakdowns in communication like this one, but among disciplinary areas? How was conflict (for example, possible conflict between the Hardware team and the WebOS team) managed?

Processes. How were risks (for example, press/reviews) identified and weighted among and by the Communities of Practice? Was some form of cost/benefit analysis applied to risk, so executive management could be advised?

Technology. What inventory and sales forecasting systems were used, how accessible were they to the Communities of Practice, and could they provision for fast (near real-time) corrections?

Data. Were there issues with the data used in planning/reporting that affected accuracy?

In my opinion, the biggest risk to an organization from enterprise-scale marketing comes from silos that inhibit business agility and useful communication.The key value provided by a MCOE - not just for reducing the risk of a “black swan fail,” but also for enabling innovation, effectiveness, and efficiency—is its enablement of a holistic, cross-disciplinary approach to marketing in the enterprise.

More Stories By Lori Witzel

Lori Witzel has provided marketing leadership for software and technology services organizations. Her new approaches to strategy and execution, with a focus on demand generation and operational excellence across all marketing disciplines has created positive response, results and success.

By applying lessons learned from the business analysis and software engineering communities, marketing operational excellence can be transformed, yielding a faster Return on Marketing Investment (ROMI).