Here's a little complexity theory from "How Hits Happen" by Winslow Farrell, partner in the Emergent Solutions Group at Coopers & Lybrand
The book applies complexity theory - the science that examines the interactions of various factors in complex systems - to modern business problems. (It can also be useful if you happen to own a 16 year old)
Hits build from the ground up. A movie, new toy, a fashion appears. It has appeal. It touches something inside us, tickles us. The word goes out. Other people get in on it. The word spreads. Suddenly itÕs a hot ticket. ItÕs more than hot - itÕs cool. And if the impact is large enoughk, it even begins to define cool. It becomes a phenom.
RE Marketing and Complexity Theory: Markets are made
up of individual consumers (the stars, dipoles, cells - of the economyy) who
interact with one another and communicate and talk and compare. Collectively
their chliices begin to defined wat is desirable. Patterns form. Choices
amplify themselves. Hits happen. Unexpectedly, brands appear, compete, lock in,
generate cash, disappear. Brands become
self-reinforcing phenomen
a.
Building produces, building brands, is like building
fires. A lot of care is needed at the start to see that the initial pieces
light the others. there is a critical phase where just a little boosting
ensures a subsequent blaze. If the wood is wet, no amount of huffing and
puffing can breathe life into the dampness.
There is a Òmeta gameÓ where managers can not only take advantage of reinforciing behaviour buut set up an environment of reinformcing behavior in their favor.
Promotion itself needs to be determined on the fly, because it depends on how the dynamics shape themselves. Expectations form because products can take off if enough people - and the right people - believe they will take off. Strategists need to determine which people are in a position to influence expectations, just as they must in a presidential primary or political campaign.
Consumers are influenced most by other consumers.
The central foundation of complexity theory is that making sense is the most powerful form of action. Gaining insight into how patterns are forming and structures are developing represents the most powerful way of managing in the new economy.
Complexity theory studies the complex, adaptive systems that are not formed by individuals, but are heavily influenced by the reaction of the masses to influential individuals. - Rich Melheim
Psychographics: Agents have the ability to form friendships, spread gossip about hot new products, have opinions, and quickly change them about new products.
Guerrilla armies have at most two layers of supervision over their ground troops.
Three Rules:
1) Time matters Over time, history creates Ògrooved pathwaysÓ that reinforce behavior. This may make it more likely that, say, certain products will succeed in the marketplace, regardless of their relative quality. Seek the level where buzz alone accounts for huge popularity. Succe[1]ss accrues in a reinforcing cycle.
2) More is different: At certain levels, one plus one equals three. You must see your markets as living systems that operate by the laws of physics, as opposed to machines that operate by the laws of simple mechanics. The important questions are A. how are things interacting, B. What are the developing patterns? and C. how can they be influenced? When a record hits the top 40s, it gains significan t lift and is in an accelerated sales market.
3) Learning is living.
Witness[1]§
the spread of an information contagion, where ideas are spread like an
epidemic. In this outbreak, words and enthusiasm from these evangelists can bre
infectious. Like a bee colony sharing information, these ideas, or memes,
spread from one person to another, in the process crowding out other , similiar
ideas. The first to build up a sufficiently
loose following can drown out others.
As long as the niche-based company is not large enough to really threaten, then coexistence is encouraged. But once these renegades gain sufficient degree of market penetraion, - way 30 percent - then the large playersiwll certainly shift stragtgegies from tolerance to all out war.
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