20501005 - Entry 14

How to Build Brand Friendship
To create a truly powerful brand, you need to establish a sense of belonging, friendship, and dependability between product and customers

Summary

Human beings are social creatures. We need interaction with one another. It's the way we're made. When we meet someone new, we tend either to be drawn to them or to be disinterested for a whole host of reasons (some of which we may not even realize). Over time, however, we develop a continually evolving stable of relationships, some of which last for a lifetime.
That human dynamic is the root of brand loyalty as well. Our "relationships" with brands aren't nearly as deep or meaningful as human relationships, but they do share some of the same characteristics. The extent to which you can create a sense of belonging, friendship, and dependability between your brand and customers is the extent to which you have a powerful brand asset.





My Opinion


Throughout this semester, prof.Lee emphasized the importance of Value creation. What is the value creation? This article tell us that we can enhance and create brand value through creating a sense of belonging, friendship, and dependability between the brand and customer. It seems to me that the value of brand is priceless. Whenever I studied about some successful cases, the cases were always related to the strong brand power. It is critical to make the brand powerful. If somebody asked you "Is Nike a better shoe than Reebok?"You might say "Sure" Can you answer the reason? How do you feel when you hear the word'Nike'?Well, I might think of "Just do it"and also if we see soccer game,we can see many players who wear nike products.This can be a consequence of adding value. Brand managers should reposition the value of brand into customers' heart by using creating those I mentioned above.





Reference: "How to build brand friendship" by Steve McKee , Business Week, May 9, 2008

20820007 Entry - 14

How Nokia Users Drive Innovation

By Jack Ewing

Through online aps such as Sports Tracker and Nokia Beta Lab, the Finnish handset giant gathers customers' ideas from around the world—virtually free

In March 2007, Nokia has introduced a new mobile phone application Sport Tracker on a company web site. Program was designed to take full advantage of the computing power in some Nokia handset models. Customer’s response was great to it more than 1 million people downloaded the program for sports that developers never dreamed of, like hot- air ballooning and motorcycle riding. Therefore users gave criticisms to develop online groups where users can share favorite routes and photos they took along the way. Sport Tracker became opportunity to Nokia experience with user- generated innovation. That’s the premise behind Nokia Beta Labs, a web site where the Finnish handset maker lets users test Smartphone software. The site became a good opportunity to them to survey and focus groups to measure reactions of customers to new product. At Nokia. Com users can share applications they created such as games and screen savers. Besides it, Nokia designers have traveled overseas (Mumbai, Rio de Janeiro, Accra in Ghanna) to sketch users their own dream mobiles. People were very innovative: one person’s design included a sensor to test water quality and another wanted a handset that flashed the word “Peace” that help defuse conflicts. Since Nokia launched the Beta Labs web site last year with Sport Tracker as the debut application it become a prime destination for lead users – tech savvy buyers of high- end. Nokia is benefiting from free applications such as Sport Tracker because they could capture how users are creative than just make phone calls. They are seeing that the application at amateur athletes was too narrow.

Opinion

I think Nokia is very sensitive and creative about the market where they operate. They benefited from free applications they offer for customers which bring them idea that not only great new product ideas come inside the company but there are many potential ideas inside the company. The most interesting thing is they are getting ideas and innovations free. I think reason is because Nokia is offering free services for its users to use their handsets fully which is making chance to express their feelings about new products and services just after try it. I have never heard about mobile with sensor to test water quality if Nokia can implement this kind of innovative ideas they can be first movers in this industry which will help them to deliver value more effectively by meeting customers changing needs. Therefore for company where most sales come from new products very important listening to the customers in order to prevent future risks they might face.

Reference : How Nokia Users Drive Innovation, by Jack Ewing
http://www.businessweek.com/globalbiz/europe/special_reports/20080428europeaninn.htm?chan=globalbiz_europe+index+page_innovation+%2Bamp%3B+design

20820014 Entry- 14

The New IPhone Is Ready for Business

Apple’s iPhone was announced ready for business at an Apple technical conference in San Francisco.
The new iPhone will use a “3G,” and wireless network to transmit data about three times faster than the EDGE network it currently uses. Also it will support Microsoft’s Office software, including Word, Excel and PowerPoint; and it will have built in GPS, which allows estimating salesperson’s direction and exposing destination..
A software upgrade for the iPhone designed to make it more appealing to businesses. The software makes it possible to access Microsoft’s Exchange email over the iPhone and employs technology from Cisco to ensure that data sent between businesses and employees’ iPhones are secure. So, it requires businesses to develop their own software for the iPhone to distribute the software through Apple’s new App Store.
The business-technology leaders talked to were ambivalent about this last feature: A customers, who used Apple products were reluctant to share their internal software with Apple, which is necessary to get it into the App Store. However, Apple announced that businesses will be able to distribute soft through corporate intranets.
Details of the new service are still sketchy, so, some businesses feeling uncomfortable with employees storing corporate data on Apple’s equipment.
But Apple CEO Steve Job said that 35% of Fortune 500 companies are testing the iPhone. That’s a huge number, even if the tech departments at some of these businesses are probably just tinkering with the device
My opinion
Well, IPhone was announced ready for business. Whereas, are business companies ready for IPhone?
Apple has announced for a long time, it is producing new improved phone which makes business more comfortable, friendly and easier through its software program. I noticed this from this article to utilize or connect with IPhone corporate internal net, companies must install new service. Therefore companies are willing to connect this network?

In addition, new products and services keep consumers and launch customer loyalty but I wonder that this article says Apple consumers don’t want to store their data in this network. Probably, this is nice opportunity to Apple to get know its consumers through their network, and I don’t understand why consumers want to hide their information?

According to chapter 11 Developing new products, analyzing Iphone’s compatibility, observability , trialibility, and relative advantage I phone has high potential for sale because:
- It’s famous brand. So observability is much more noticeable than other phones. Many believe that Apple has high quality, so relative advantage is perceived it can be the best alternative, and also its GPS and own software makes it easy to try and enhance trialability

Title: IPhone is ready for business written by Ben Worthen, June13, 2008.
http://blogs.wsj.com/biztech/

20501005 - Entry 13

Hyundai Motor targets Russia`s middle class


▲Rolf Altufijevo dealership in Moscow

Summary
MOSCOW - Hyundai Motor Co. is looking to tap the growing middle class to consolidate its position in the Russian car market. Since first exporting to Russia in 1990, the company has grown rapidly to become one of the country`s largest carmakers. The company currently has the second largest market share among foreign carmakers in Russia after General Motors Corp.`s Chevrolet. Among all carmakers, Hyundai Motor holds the third largest market share. Last year the company sold about 148,000 units and recorded a market share of 9.3 percent. For 2008, the company hopes to raise sales by 35 percent to reach 200,000 units. "In the past, cheaper Russian cars like the Lada were popular but with more people joining the middle class, Hyundai cars are gaining more and more attention," said Dmitry Sergeev, the director of the Rolf Altufijevo dealership in Moscow.

My Opinion
When I was in New Zealand, I was very proud that there were many Korean company cars on the streets. Among those I could see many Hyundai cars. Most of my foreign friends said they prefer Hyundai cars to Japanese cars such as Toyota, Mizda. I asked them why. The reason was cheap price but also practicality. As you see Hyundai cars have comparative advantage in price compared to other cars, Benz, Toyota, GM etc. So Hyundai decided to reposition in Russian car market for the middle class. The middle class people might be eager to have a car that has lower price than luxurious cars and practicality. I think Hyundai made a good decision. Getting into international market is very important for Hyundai because of domestic market which is already saturated. A few monthes ago, I heard Hyundai launched selling new model 'Genesis'. When I saw its prototype, I was shocked. It was amazing, and I could not believe Korean company made it. Anyway Genesis has many advantages(strengths) in price, practicality, design, and power. I think Genesis will be a beneficial model for positioning in the middle class. In FTA era, we can only survive by improving and changing ourselves. I hope Hyundai will successfully change into a real global company by knowing foreign customer's value and needs.

20400442-ENTRY 13

One Laptop Meets Big Business

For this week's article, I chose the story of "One Laptop for Per Child" planned and exercised in Peru by the government. The article is cynical about so many problems of bringing about OLPC in third world countries to innovate the social and educational conditions.

They say that the fate of OLPC is uncertain, and it's too early to judge the effectiveness of the computers. Still, it's possible to draw lessons about the difficulties of such grand-scale social innovation. The group's struggles show how hard it is for a nonprofit made up largely of academics to operate like a business and compete with powerful companies. They also show what happens when differing philosophies of education and beliefs in how software should be created go head-to-head. Values the group has promoted have met resistance in the marketplace, government bureaucracies, and classrooms. That Negroponte and his colleagues took on way more tasks than they could handle only complicates the situation further.

Opinion

Reading this article paraphrasing how hard it is to implement one laptop for every child in third world coutries, one thought came to my mind that it could be a chance for Korean portal sites like Naver or Daum to go worldly-known sites. Google, for instance, has not only their original English sites, but also so many sites world-wide in so many different language and properly culturalized services and programs.

Third world coutries, in another words, are countries where potential markets with less competitors exist, especially internest business. In my opinion, carefull and thoughtful marketing can be a first big step toward the world for Korean big portal sites to become so much successful like Yahoo and Google through OLPC!

Reference: One Laptop Meets Big Business by Steve Hamm and Geri Smith , Business Week, June 5, 2008

20501034 - Entry 13

Lee's trouble deepens, undermining mandate

Original Article by Hwang Jang-jin on Jun. 3. 2008

(Korea Herald)

The relationship between political crisis and candle business

Summary.

President Lee is in trouble. Tens of thousands citizen took to streets in recent days demanding scrapping the beef import deal. Following violent police crackdowns Saturday, the slogan changed to “Resign Lee Myung-bak, Down with the Dictatorship.” Not only US beef import deal but also English-only education and Canal bring people into the street to protest against President Lee with candle.

My opinion

It is very natural that sales of products increase along with economic growth. However, sales of certain items such as noodle and Soju increase when economy go down. It is called ‘Giffen goods’.

I found the peculiar products like candle that has tendency to boost its sales along with political crisis. In most developed countries, Candle is obsolete as the infrastructure became stable and there is less and less possibility to happen electrical black-out. However, somebody found another way of using candle and they started to use candle to protest against government policy. Once candle protest culture settled in Korea, the sale of have been soared whenever political crisis happened. It could be compared with the concept of value preposition which Professor Lee taught us in the class with example of baking soda.

For business students, it is so important to think out of the box. From now on, not only somebody who create something new but also someone who can find different use of existing material will be valuable business man.

20820007 Entry – 13

Coach builds It’s Brand in China

The leather goods maker has opened a new Hong Kong flagship and plans to acquire all of its outlets in China, Hong Kong and Macao managed by local distributors.

By Frederik Balfour

Hong Kong is label- conscious society where you can identify women’s place by the bag on her arm. Many people are making bee lines for these luxury hand bag stores like Luis Vuitton, Ferragamo, Gucci and Hermes. President of Coach Bickley says that they see a big opportunity in China and if they opened flagship store it will find a place on shoppers’ itineraries. Coach bags cost from $200- $400 making it top of the premium segment or the bottom of the luxury segment. According to New – York based Coach figures that Coach has more awareness and attracts loyal customers. Bickley estimates the market for woman’s leather goods in Great China region will more than double in the next five years, from $1.2 billion to $2.5 billion. He is going to increase the current sales from $30 million with a 3% market share to 10% with $205 million in sales. In order to achieve this growth they made a decision to manage its own stores. It currently has 24 locations and planning to open 50 new stores in China, Hong Kong, and Macao within the next five years. Also company hopes to open Coach’s first flagship store in Shanghai within the next 12 to 14 months. Bickley think that now China and rest of Southeast Asia will keep the company busy and Coach is not going to enter India where retail distribution is still immature.

My Opinion

I found that according to New - York based Luxury Institute’s Luxury Brand Market analysis for luxury hand bags Coach has largest mindshare among wealthy customers, 52 % of them said that they are familiar with Coach Brand and it leads at 29% of market share. It means that Coach is leading company in producing luxury hand bags in America and Europe. I think hand bags are very important accessory for woman which defines the wealthy woman’s social class and her fashion tastes. Therefore it is very common phenomenon in China too, especially in Macao and Hong Kong where many people can afford for Coach Bags worth $200. It is realistic that Chinese rapidly growing economy with 1.3 billion people can keep 50 stores in it driving the company to increase its market share within 5 years. Moreover Coach’s partnership with Imaginex will build brand awareness in Greater China to win customer’s confidence about the brand.

Reference: http://www.businessweek.com/globalbiz/content/jun2008/gb2008064_054209.htm?chan=top+news_top+news+index_global+business

20820014 Entry- 13

Infosys CEO Muses on Globalization

How are India-based tech companies trying to win U.S. customers, dealing with high turnover, and globalization?

Gopalakrishnan, CEO of the India-based outsourcing company Infosys talk about some issues his company is facing. Some highlights:
*The tech-services industry continues to evolve rapidly. While India-based companies made their names offering low-level programming at a low price. The one tactic to expand its margin Infosys would like to buy small consulting firms in countries.
*Tech companies in India have high attrition rates because there’s so much demand there for experienced engineers. One way that Infosys is combating the problem is transferring employees to facilities in smaller, more remote cities in India–where there are fewer competitors to try to steal its workers. To encourage workers to move, Infosys pays the same regardless of whether someone is in Bangalore, the city at the heart of India’s tech boom, or Jaipur, a city in the rural state of Rajasthan where the cost of living is substantially lower.
*Infosys is sensitive to immigration concerns in the U.S., but the tech sector is evolving makes further globalization inevitable. India graduates 450,000 engineers each year and China 650,000. The U.S. only graduates 150,000. With numbers like this, U.S. companies will have little choice but to hire engineers from abroad or open development centers overseas.

Gopalakrishnan points out that globalization is a two-way street: U.S. products from corn flakes to California wine are now widely available in India, which is hurting the 70% of the population there that works in agriculture. “These people are the poorest of the poor and they are losing jobs,” he tells us.

My opinion
This article seems very similar our case study article in someway. They both use same strategy which is to buy small firms to expand its market and deal with troubles. I realized that how marketers take advantage from small business companies or globalization especially if those companies were placed in developing countries with low expense, and low labor cost. In one hand it seems unfair. Because those small firms product have same quality and acceptable to the market like big brand company. But they cannot sell it under own name with same price as big companies. Once professor mentioned that Samsung had sold under the name of Sony in U.S. In fact customers get same value of both those products.
On the other hand, both companies can take advantage from this commitment, could be mutually lucrative. Even though small firm sells its product with lower price, their market share has high potential to increase rapidly. In this case if small firms indeed can produce high quality or high tech product it has high potential to increase its market and make high profit. After that probably small firm could separate its business and sell its products under own name or evolve brand.
Also, I see that how marketers prevent from competitors by building invisible wall between them
– move high experienced employers to countryside. In addition, it is very astute and deceptive decision to move workers in lower cost of living area. Even though company pay same salary as it did before, because of lower cost of living this same amount of salary could be incentive.
Reference: Infosys CEO Muses on Globalization
http://blogs.wsj.com/biztech/2008/06/05/infosys-ceo-muses-on-globalization/
June6, 2008 author name was not written.

20501005 - Entry 12

Low Prices Are Not Always Your Friend
Cutting prices might seem reasonable given the state of the economy, but doing so could backfire over the long run, argues our columnist

Summary
1. Price as an Indicator of Value
2. For Long-Term Success, Higher Prices
3. Face It, You're Not Wal-Mart
The author's idea
That thought reminded me of another shopping experience, this time revolving around jewelry. I recently inherited a ring from my grandmother that was somewhat dated, but featured a beautiful aquamarine, my wife's birthstone. I knew she would love the stone, so I set out to find a jeweler who could redesign the ring into a pendant in time for her birthday.
I visited three or four different jewelry stores, trying to find one that would offer design talent, a personal touch, and a willingness to work within my budget. And as I evaluated my own decision process, I observed something interesting and somewhat surprising—I gravitated toward the most expensive option.

My Opinion
Last semester I happened to research about Starbuck's story, and I realized that one of its successful strategies was 'High Pricing Stratagy'. Especially in Korea, it works really well!!
There are many women who want to become like Hollywood stars tend to like Starbuck's coffee. Most of them go to Starbuck only for a cup of coffee but for a take-out cup which can be a fashion item. Moreover there is a word for this situation. Have you heard of 'Veblen Good'?
I'd like to tell you about this term. According to the economic dictionary, Veblen goods are a theoretical group of commodities for which peoples' preference for buying them increases as a direct function of their price, instead of decreasing according to the theory of supply and demand. It is claimed that some types of high-status goods, such as diamonds or luxury cars, are Veblen goods, in that decreasing their prices decreases people's preference for buying them because they are no longer perceived as exclusive or high status products. Similarly, a price increase may increase that high status and perception of exclusivity, thereby making the good even more preferable. The Veblen effect is named after the economist Thorstein Veblen, who first pointed out the concepts of conspicuous consumption and status-seeking.
It is very interesting for me and I think I have experienced this effect before. When I worked as a waiter in an Italian restaurant, there were lots of expensive dishes. However, I saw there were always lots of customers who had willingness to pay. I could not understand at that time because It was too expensive, But now I understand that hige price can be good in some fields of business. Because people might think high price has higher value.

Reference: Businessweek Sales&Marketing by Steve McKee April 14 , 2008
Wikipedia.org

20501034 - Entry 12

An iPhone Request: GPS, Please


May 30, 2008 by Hesseldahl from Business Week



Original Article

Summary

Apple’s iPhone ‘s users are asking the function of GPS(Global Positioning System). The smartphone’s chief competitors like blackberry offer real satellite navigation systems. And Nokia is also considering GPS strategically important that last year it spent $8.1 billion to acquire Chicago’s Navteq; a digital mapmaker that supplies all the major navigation device companies.

As a matter of fact, iPhone provide GPS but it is often described as pseudo GPS to determine its location. Instead of getting a true location fix from the GPS satellites orbiting Earth, it determines its position in part by using the nearest cell towers, using technology from Google. The thing is that it isn’t quiet accurate. Sometimes it shows you a block or two away from where you actually are. Frequently it will put you within 100 feet.

My opinion


I am not using iPhone. I am using Samsung’s Anycall. It functions as camera, mp3 player, movie viewer, blue tooth, calculator, memo, dictionary and etc. It is obvious that cell phone is evolving in a way of combining numerous functions inside of it. Navigation function hasn’t embedded in mobile phone yet but I think in couple of years it will be very common to find navigation in the ordinary cell phone. Navigation will work in various ways and it will create numerous new business opportunities. Can you imagine that if one is hungry, cell phone automatically recommend you the nearest restaurant. Can you imagine that if one gets hurt, the cell phone find the nearest hospital and asking for an ambulance. Cell phone navigation will be the most popular advertising tool because it brings right information for the right people. In my perspective, if cell phone’s navigation system is combined with database system, it will have huge impact on the society because cell phone, itself can sort out highly desired information for the cell phone owner based on what he chosen in purchasing history.

20820014 Entry-12

Who Benefits From Higher Gas Prices? Auto Insurers.

Drive less, Pay less

The article is generally about how insurance companies make a profit due to steeply increased price of gasoline. As the increasing cost of gasoline forces U.S. drivers to keep their cars in the garage, as a result, there is less chance for an accident.
It makes sense to less driving means fewer accidents, which will help boost auto insurer earnings. U.S. Department of Transportation report indicates that auto mileage dropped by 4.3% in March compared to the year ago month. As a matter of fact, the report won’t be news to auto insurers, because they have already seen the reduced accidents
The third- largest auto insurer company “Progressive” offers “drive less, pay less” campaign which encourage drivers’ less risky- driving habits.
However insurers get benefit from increased price of gas, still there is negative effect to the repair companies. Due to higher material cost, the cost of repairing vehicles also increased.
My opinion
One barrel crude oil costs $126.62 in the U.S market by the report of May 30, 2008 on the wall street journal. As we all know that crude oil price has increased steeply in recent few months. Gasoline as a basic cost of all goods and services, almost in each country it causes high inflation. In Mongolia due to increased price of raw material ( gasoline, wheat etc) and unstable government situation, inflation up to almost 30% . Therefore I thought that increasing price of gasoline only benefits to huge oil exporter countries like Saudi an Arabia, Emirate or any other big exporters and never imagine that insurance company or third part companies could be benefited. From this article I saw that agile marketers can find out any expected advantage or value even situation is tough.
But I read that oil price tends to decrease in second quarter. Or probably because of some government actions like embargo, international agreement on trade, oil could cost less. At that time people will drive more, and accident rate could be increased again.

reference:

http://blogs.wsj.com/marketbeat/2008/05/29/who-benefits-from-higher-gas-prices-auto-insurers/

TItle: Who Benefits From Higher Gas Prices? Auto Insurers, by MarketBeat Staff

May30, 2008

20820007 Entry - 12

Mobile Service Boom in India

300 million cell phones vs. 30 million PCs

Indian mobile market is ranking in the second place on earth. Today about 300 million people are using cell phones and 8 million new subscribers sign up every month. Last year Indians spent about $250 million on extra services such as text messaging, games, wallpaper for mobile display, music and internet. Why demand for these services is huge? Because there are only 30 million PCs in the country and e-commerce is still not popular through Internet. Therefore average revenue in the country is $10 compare to China $12 and $30 in United States and the mobile cost per minute is as little as 1.2 cents vs. 8.4 cents in Pakistan and 3.5 cents in China. So while offering low price calls many services remain luxury for many Indians who use cheap cellular phones but want the same services available for premium handset. The demand for these extra services became a reason for many multinationals like Google, Yahoo and Microsoft’s MSN to be sharer in the market. They are cooperating with great number of top telecom providers such as Vodafone, Reliance Communication and Tata Teleservices in order to offer information like taxi services, stock quotes, news and hospital and business listings. The range of offerings is extensive. Airtel, Indian leading company offers weather forecasts and sells mobile services which allow users to make purchase in stores and book train and flight tickets using their mobile instead of credit cards. Hence by these services telecom providers want to increase the share of their income currently 10% of revenue and 13% of profits on average, to about 20%.

“India is leading the way for mobile solutions globally.” Manoranjan Mohapatra CEO at carrier Bharti Telesoft.

Opinion

I think Indian telecom providers can increase their revenue share if they find the ingenious ways to fulfill needs of mobile users considering big market and population of the country. Now days customers are mostly focusing on convenience and leisure so many users in India think that handsets are their extension of their self and a cool one stop shop for many personal needs. Especially young people have high aspirations but they can’t satisfy it from banking to entertain. So it is very important to make value preposition by understanding customer’s expectations because service is intangible, perishable, variable and inseparable. Indian cellular phone users expect to get more than from their mobiles then just talk. Let’s see how companies in the country will please their customers and increase their revenue.

Reference: http://www.businessweek.com/

20400442--ENTRY 12

LG Will Clean Up, With or Without GE

This week's article is about our home-proud company LG. The LG Total Capacity Refrigerator which has 15" LCD TV with FM radio, temperature adjustment, room temperature display, water controls, a weather & info center, recipes, digital photo album, calendar, BioShield Anti-Bacterial Seal and other features.

LG is "clearly one of the leading candidates," GE Chief Executive Officer Jeffrey Immelt said during his short visit. One might thing, 'What on earth is he talking about?'. It is that LG is trying to move to the continent of money, America market, to achieve further success, like it is showing in India and other countries. LG is occuping merely 70% of Korean house appliances. However, it is not all that easy.

Success in the more mature U.S. market would, of course, be harder to achieve on its own. Still, in the U.S., LG has made remarkable progress in the past four years with its strategic focus on premium segments. The Korean maker has targeted consumers willing to pay a few hundred dollars extra for snazzy designs and high performance. LG's sleek washing machines, for instance, last year commanded a 22.8% share of the market for more expensive front-loading washers priced at up to $2,500. That's up from only 6% three years earlier.

That is why LG is considering a close business relation with GE.

Opinion

When I was in Thailand and America for my junior-high, I still remember how shocking it was to see a building-sized samsung logo on the broadway. And also, LG flat TV hung at the UN lobby. They are the promotion of Korea as a successful nation with high technology and high standard of living.

As we studied in the class, Korea has high technology to sell around the world, but marketing strategy is so bad. One example is Hyundai compared to Toyota. Toyota's tech is not so up high, but they use the tech in such a way to fulfill customers' delicate taste.

International market penetration require much research about the market's specific preferences. In this sence, merger with GE would bring positive effect to LG.

Reference. LG Will Clean Up, With or Without GE by Moon Ihlwan, Business Week

May 29, 2008

20820014 Entry-11

Predicting the Apple brands by 2013
Apple Daydreaming Report Predicts Move Toward Home Devices
/ summary /
According to the Apple fans purchasing tendency, the Forrester Research draw a crystal ball in a new report that imagines the Apple products of 2013. The research firm uses the company's recent history as a guide to forecasting.
Forrester's conclusion: While much of Apple's great successes have been mobile products such as the iPod and the iPhone, the company will seek to colonize rooms throughout the home.
Among the new products Forrester predicts Apple will create are wall-mountable digital picture frames with small high-definition screens and speakers that wirelessly play media, including photos, videos and music, stored on a computer elsewhere in the home.
For the bedroom, Apple "clock radio" pipes in music and other media across a home network. Possible, too, is an "AppleSound" universal remote control, also with a touch-sensitive screen, that lets users browse their music collections and change the songs playing through their stereo as they stroll around the house. This latter technology is already available in primitive form through an application of Apple's iTunes program.
Forrester also thinks Apple could extend into the home the technical assistance currently offered by "Genius Bar" personnel in Apple retail stores. Apple in-home installation services will become especially important as its array of products for the home grows.
Moreover, one long-running prediction proved that Apple might make a television set. Apple will one day get into the business as conventional TV makers start to integrate into their sets the ability to surf the Web. Apple already designs computer displays that are as large as some HDTVs.
Researchers think Apple could simplify the traditional functions on TV sets, like the bewildering electronic programming guides that list the hundreds of channels available to viewers. "Most people find operating high-quality TV systems incredibly awkward”
My opinion
It's interesting thinking about what could be Apple’s next digital invention in five years. Apple has already built strong sustainable competitive advantage its world of delivering display devices. The iPod remains the top MP3 player, with more than 70% of the market, and Apple is now the top retailer of music in the nation. Less than a year after entering the cell phone business with the iPhone, Apple became the second-largest provider of smart phones in the U.S. I don’t know exactly whether my opinion is right or not. But since the company has succeed its current market, it should innovate new products for its not only existing market but also new market to increase its wallet share. As time goes today’s star products sale rate would be decreased. At that time use its large lucrative products as cash flow to produce new star product to remain its competitive advantage and number1 retailer position.
Reference: http://online.wsj.com/article/SB121140284684611795.html?mod=fpa_mostpop,

Apple Daydreaming: Report Predicts Move Toward Home Devices by Nick Wingfield, May 23, 2008

20501005 - Entry 11

Jeju seeks investment to become business hub

Promote Jeju!! Make Jeju a place where everyone wants to visit and do businesses.


Summary
The Jeju government said yesterday it will focus on three key development projects -- medical tourism, technology based-industrial complex and English town -- to develop the resort island into an international business and tourism hub. Calling the island, "the land of promise," Kim Tae-hwan, governor of the Jeju Special Self-governing Province said in an investment seminar held at a hotel in Seoul yesterday that he will make the island the most favorable place to stay and to invest in East Asia. The investment forum, which drew about 600 participants, was jointly hosted by the government of the Jeju provincial government and the Jeju Free International City Development Center.

My Opinion
This is an article about how Jeju tries to reposition and create value for attracting foreign people and investors . It seems to me it is very similar to what president. Lee said couple of weeks ago in Korea investment forum. In that forum, President Lee suggested and promised he will reduce many barriers such as tariff and many taxes to attract foreign direct investment. It was very impressive that president. Lee stated “Welcome all of you to Korea, please invest to Korea! I am CEO of Korea and I am here to promote Korea!” He seemed to be a marketer who sells the product ‘Korea’ to foreign companies. I think he did very good job. This is an era in which Korea is suffering from economic recession. I think we can't overcome the economic difficulties without F.T.A or direct investment from foreign companies. Like president. Lee did, Kim Tae-hwan, governor of the Jeju Special Self-governing Province is doing good job. He emphasize on Jeju’s strengths; medical tourism, technology based-industrial business and tourism hub. I was very surprised that Daum, which is one of biggest IT companies in Korea, has moved its head quarter to Jeju Island.
To sum up, these efforts might be very helpful to Jeju. All leaders should be a great marketer and promote well. This is how we can survive in such competitive era.

Reference:Jeju seeks investment to become business hub by Cho Chung-un(christory@heraldm.com), May 22, 2008, The Korea Herald

20820007 Entry – 11

Your Employees Are Dying To Be Heard

Poor communication could be costing you business in more ways than you might imagine.

By Carmine Gallo

/Summary/

A firm which is working 60 year on research - Opinion Research (IUSA) found that ‘poor communication’ is main factor that makes employees to annoy. And unsatisfied and unhappy employees may cause danger in your business that you will never imagine. So they are suggesting some suggestions how to make better communication between your employees.
Solicit opinion. In U. S many employees think that they can not participate and influence in the organizational activities. Also in 2007 research showed that employees were annoyed by their managers who are failed to talk about company’s news.
Communicate change. We are living in constant changing economy so that managers should communicate with their workers and tell them why the change is necessary and how should they implement changes to prevent further danger. It makes positive atmosphere even it is not acceptable by all of them at that time. If you do not do these it may cause negative perception, disengagement and makes changes tougher to implement.
Include employees in feedback loop. Many companies do surveys to get feedback from customers by via the Web, over the phone or with suggestion box to make sure how their products and services perceived in the market but they usually do not communicate and inform results to people who are actually doing the selling and presenting the brand. This situation produces no chances to implement the necessary changes.
Make communication personal. Many managers are loosing chances to make good impression to their employees just sitting in their offices instead of meeting them face to face. Opinion Research are suggesting to contact personally with your employees at least once a week.
Finally, if you want to know whether you are communicating enough with your workers Reilly director of Opinion Research recommends you ask: “Are you getting enough information to do your jobs effectively?” Then do not forget to make special attention to the answers.

Opinion

In text book says that we are not living in vacuum, we are interacting with other people and we need a communication with others especially with our staffs in the organization. Definition of Business is achieving organizational goals through people. And this article reveals what is the main internal problem in the organization that makes consequences to achieve these goals. The problem is communication. I also agree that when people feel comfortable and confident work hard and achieve their full potential. Comfortable and confidence comes by communicating and by knowing thought of others and putting it into action that they can know they are important. Also I understand that it is very important to always to make sure to which direction company is going, what kind of changes they should do in order to reach the final point and what they think about the process. In other hand there might occur the questions when employees have not sufficient information about products and services they presenting. In this case book focuses to educate employees before present our service and product so we can succeed and gain customers trust.

Reference: http://www.businessweek.com/

20400442-Entry 11

"Marketing Bullet" vs "Customer-motivating Design"

Johnson & Johnson's, one of America's most prominent Fortune 500 companies, is focusing on the packages and overall design; previously Johnson & Johnson's hasn't have their own design derictor, but they have outsourced their packages and design.

Apparently simple repackaging of J&J's flagship brand keeps the iconic teardrop but adds cleaner type and tinted bottles. Furthermore, big box stores considered Band-Aid's previous cardboard bulk package to be forbidding. The new version features a set of interlocking plastic cases—and is now stocked by stores such as Costco. Johnson & Johnson acquired the Rembrandt brand in 2005, revamping the product line before relaunching it last May. All these changes are to focus on the customers' value and as a result design truely motivates the customers to take the product home.

The article says, Hacker has always had the support of management, but changing the company's approach to design hasn't been easy. "We're bringing a problem-solving process to our marketing partners that they aren't used to," he says of his centralized approach. "It's been a challenge."

Hacker also hopes to change the way designers and corporations think about sustainability. "Everything we do is as sustainable as we can make it," he says. "It's part of the process, but it's not the definition. We're designing to create positive consumer experience, and while we do that—by the way—we're also making it sustainable. I'm on a mission to tell designers that sustainability has got to be a part of what they do."

Opinions

The whole point of the design-driven marketing and design that truely meat customers need is to produce sustainable advantages and competitiveness. As we learned in the class, design of the products and the packages of them are becoming one of the best promotion that can improve the perceived value. It is worth noting the importance of the design one more.

Reference:
Johnson & Johnson's Big Design Challenge by Mark Lamster , May 21, 2008, Business Week

20501034 Entry 11

American Idol's Ads Infinitum

Original Article

May 22, 2008
by Ronald Grover from Businessweek

Summary

Seven years into a monster ratings run, Fox Entertainment’s American Idol has become as much a marketing showcase as musical slugfest. Many prestigious companies like Apple, AT&T, Coke put huge amount of money for product placement in American Idol. This year advertising agencies figuring out which age group is watching the show and the age group was proved as a mom. So, American Idol added Apple considering their purchasing pattern.


My opinion

PPL(Product Placement) became very effective method in advertising. The first time I realized Product Placement for the first time when I was watching the movie “ Shiri”. It was very nice movie, but sometimes the movie directors too much emphasize on particular brand name. So it wasn’t easy to just concentrate on the movie.

To maximize the profit, for the advertisement agency, their best interest is to show their product as frequently as possible. However, lots of product placements on the show discourage people to watch the show because no one would want to see commercial through the show. The relationship between the number of commercials which placed on the show and the number of audience could be regarded as an inverse proportion. If we put the number of commercials on x axis and put the number of audiences on y axis, it is vital to find the point or spot on this inverse proportion that maximize the square. In this point, audience not only enjoy the show but also tolerate many commercials.

20501034 Entry 10

Choice Between Market Share and Brand

Original Article

For Sony TVs, a New Downscale Front

by Kenji Hall who is BusinessWeek's technology correspondent in Tokyo on May 15th, 2008

Owing to economic downturn and stiff competition in their industry, Sony has begun to selling its models through US mass merchandise chain Wal-Mart, and electronic-specialty stores like Best Buy and Circuit City. Just a few years ago, Sony avoided selling their products at a discount stores or Wal-Mart. As a result, Sony lost out to Samsung, LG and Philips. The product line also became entry level model from premium model. Market researchers expect that in the long term those movements will hurt Sony’s premium image.

Due to all its effort, the volume Sony sold rose 8.7%. Despite of its sales growth, the revenues they made was proved flat. It reflects a harsh reality in the TV business.


My opinion

I agree on how Sony executives decided. These days, the competition occurring in TV industry is far beyond the description. Not only domestic competitors, Sharp, Panasonic but also global competitors like Samsung, LG, Philips are struggling to win the competition. To play in this environment, Sony didn’t have many options but joining the bargaining race.

One interesting thing about this article is that author contrasted Sony’s strategy with Toyota’s premium line, Lexus. However, I wish he brought better model to contrast. TV and automobile is too different things to directly contrast. TV is something to put in our house and enjoy using for customers by themselves while the car is something shown to other people and often people judge people by their car. If they have to choose one of items that they have to cut their budget, it would be the TV. In other words, people seem to be sensitive about price for a TV. Therefore in this economic downturn, people who are involved in TV industry should catch consumer’s purchasing capability faster and react faster than the people who work in car industry do.

In addition, the portion that TV takes in our life is also decreasing because of excessive use of internet and widespread TV’s alternatives like PMP (Portable Multimedia Player), DMB (Digital Media Broadcasting). However, car business is still firmly secured. Alternatives of car like private aircraft, motorbike or just bicycle are too much different means of transportation from what people used to. Car is relatively very safe from those substitutes.

20501005 - Entry 10

LG ties up with Benz for marketing

LG Electronics Inc. has partnered with German carmaker Mercedes-Benz and plans to hold joint marketing events in China and other Asian countries, the Korean company said yesterday."The joint marketing with Benz is part of LG`s efforts to target the premium market in Asia," said Nam K. Yoo, head of LG Electronics China. Benz`s luxury automobile brand, which combines advanced technology and classic designs, suits LG`s Art home appliance series well, he said.LG`s refrigerators, air conditioners, washing machines and other home appliances will be displayed in Mercedes-Benz showrooms in 14 major cities in China. Buyers of the latest models of Benz cars until June 21 will be given a free LG refrigerator.The Korean firm said it will expand the joint marketing campaign to Hong Kong, Singapore, Thailand and the rest of Asia.In a similar joint marketing campaign, Samsung Electronics Co.`s SCH-W350 cell phone will be included in the BMW 3 series basic package, Samsung said.

My Opinion

Both LG and Mercedes-Benz are my favorite companies. As you probably know, Mercedes-Benz is one of the best car companies in the world. I think LG made a great decision that LG has partnered with Benz. It will also benefit for Benz to joint Asia marketing campaign with LG which is a famous company in Asia.

According to the article, LG`s refrigerators, air conditioners, washing machines and other home appliances will be displayed in Mercedes-Benz showrooms in 14 major cities in China.

Although, China is not a rich countury, there are a lot of rich people in major cities.

They might like Benz which is luxurious car brand. Because of the high level of awareness of Benz, those people will be considered LG as luxurious brand.

It seems that Both LG and Benz made a great decision.

Annotation : The Korea Herald / Lee Sun-young(milaya@heraldm.com) / May 16

Entry-10 20820014

New Sites Make Shopping a Game
Are you willing to give up the hands-on service of a bricks-and-mortar luxury retail store? limited-time-only access of Internet luxury shopping???

/ summary /

This article is about a number of members only websites have been launched to sell luxury goods at really high discounts by using marketing techniques. Here time plays very important role by providing limited time “ flash sales” offer a new element, turn online shopping into online gaming. Sales like, Kuwait diamonds! Available for 36 hours only, while supplies last!
And yet the sites are pitched as members-only exclusive, and the inspirational products, such as Nina Ricci sunglasses, are aimed at all demographics. The idea is pure wish fulfillment: The purchase buttons to buy goods on Ideeli.com read, "I WANT IT!"
Moreover, Ideeli.com provides special opportunity through the access of its “ private sale game”. Sellers give original handbags sweepstakes-style and sells premium access to "First Row" members who pay $100 a year to get early access to sales via their cell phones.
As well as the brands themselves benefit from the discretion of a private sale. The goods are largely items from the end of the current spring season that companies need to get rid of as they prepare to ship their fall collections. For this reason, Gilt, which has a partnership with the industry's Council of Fashion Designers of America, carefully keeps its goods from showing up high on Google searches. The sites are exposed videos, celebrity images, and links to brands` home sites.
My opinion
I have gained lot of ideas about online promotion and marketing strategy for attracting potential consumers by offering inspirational and appealing words or tactics. Beside this great discounts, there`s a nice opportunity to sell unsold products or inventory.
Actually, luxury brands largely missed the Internet revolution. But recent studies suggest that the wealthy are shopping online these days. A survey by American Express Publishing and Harrison Group found that 99% of wealthy consumers shop online, expecting goods to be discounted at least 30% from store prices.
In the marketing attracting consumers by visual images like show celebrity with that brand apparel or some deceptive words like “ I want it” are very effective.
reference: http://online.wsj.com/article/SB120960195112257963.html?mod=SmallBusinessBuildingAwareness_RelatedStories
may 16, by CHRISTINA BINKLEY

20820007 Entry - 10

Build the Brand Friendship

To create a truly powerful brand, you need to establish a sense of belonging, friendship, and dependability between product and customers.

By Steve McKee

/Summary/
We are living in society and influencing each other. We continuously evolving stable of relationships and some of them last forever. This human dynamic is root of brand loyalty. Our relationship with brands also shares some same characteristics as our relationships with others. To have powerful brand assets we need to create a sense of belongings, friendship and dependability between our brand and customers.
Belongings
We are all members of different clubs. Our family, church, work place is all chosen clubs by ourselves. We always belong to something. Auto brands like BMW, Volkswagen and Saturn generate a strong sense of belongings around their brand. They could attract their loyalists by their unique culture and world class standard. Bloomberg does too. It means something to people who are working in the financial- service industry to be part of the Bloomberg Club. So most important factor in branding is relevance.
Friendship
Kerry Livgren said simply “The only way to be friend is to be one”. The great brands understand this. For example for many people Starbucks is like visiting an old friend every day. It is comfortable and familiar. Our chosen brand consistently gives us sense of trust that we are not trying to find another one. We can not force friendship but we can take steps to initiate friendship and show that we are doing our part.
Dependability
Friendships have ups and downs but true friend is someone we can count on. Brand is the same they prove themselves over time and takes time just as our relationships. For dependability know companies like American Express, Honda, and Toyota…
Awareness
If we do not continue to communicate with our new friends they will forget you. It is also same in branding. We should focus on what is our brand to whom it is meaningful then give our consistent attention in order to stay in customer’s top of mind. Think about Apple and eBay, they understood what are belonging, relationship and dependability and they threat them accordingly.

My Opinion

When we think about any brand we think about high value and high standard which makes sense of belonging, friendship and dependability- primary things described in the article. We do not choose everyone to be our friends and with brand is same as well. If brand is not relevant, consumers will not consider about it. Any famous successful brands are creating high values like high quality, unique service and etc. to satisfy customer’s needs and proving that over again they are doing their part well and staying long in top of mind. So I understood that it is very important to be relevant in branding because if we make particular product and services that not makes any sense it will probably fail.

It is impossible to forget true friends.

Reference: www.businessweek.com

20400442-ENTRY 10

Sniff the Breeze!!

Last wendesday, we had a special lecture about the critical importance of reading the current tendency of business and consumers' preferences. The lecture was very very helpful to have such perspectives that successful marketers are to be fluctuate and fast to look forward to changes.

The article collapses with the lecture. The journal is talking about that he world's most influential headhunters have a particularly acute sense for the business trends that may already be shifting the strategy and management demands for their myriad corporate clients. What follows are just some of the perspectives they've shared about the single global business trend that will most influence corporate performance in the future.

Industry leaders will need to embrace the moral and economic principles of sustainable business to remain competitive and build successful companies, experts say. And the sustainable business and competitiveness are the ability to insight into emerging business trends.

Opinion

Coca-cola was pushed away from the first place of best recognition by the world. Now, the first place is taken by the Google. IBM is no longer the world's best computer maker. Daum, Korean portal site was pushed far down by the Cyworld and Naver. These are all because previous leader companies didn't read the trend and went too long with their current marketing mix.
I think how to perform is very important, as we study in the class. However, deciding what to perform to deliver the value to the customers from the beginning is also very critical.

Reference:
Scouting Emerging Business Trends; Besiness Week, by Joseph Daniel McCool, May 7, 2008

20820007 Entry-9

Foreign Hotels Raise Bar in Japan

Customer service is a Japanese specialty, but when it comes to high-end hotels, it's the outsiders that earn most of the highest marks

by Ian Rowley

/Article summary/

Japan is famous about its beautiful temples, fantastic food and culture. Besides these things it attracts first time visitors by its unique services. It is not surprising 8 million visitors every year wondering about services in Japan when they go home and can not find same services in their own country. Whether it is convenience store, gas station, ticket collector they threat them like a king. Even when it comes to high class foreign managed hotel it is same as well and higher. Customer survey in January found that Ritz Carlton is most popular hotel in Tokyo and Osaka which owned by foreigners. Oriental is most expensive six star hotel which opened in 2005 with rooms starting at $780 per night. Other recent hotels are Conrad Tokyo with 314 rooms and Shangri – La in Tokyo.
It is noticeable that Ritz Carlton hotel located in the area of a huge shopping and art complex and Tokyo’s tallest building. Staffs are polite and attentive as you expect in Japan and trained to be more different than traditional Japanese hotels. Also it offers excellent food. Its Dutch general manger Ricco DeBlank always checks all details before the hotel starts because 70% of Japanese customers appreciate small details and send dozens of letters even some of them 14 pages long with photos.

As competition is rising newcomers have to work harder to please customers because some initial new openings die down. At the Peninsula visitors appreciate the new technology the hotel has added to its rooms: including humidifier installed in the air conditioning system, portable phone and nail- polish dryer. Despite new rivals local hotels don’t appear suffered. Imperial Hotel, Hotel Okura and the New Otani Hotel have seen increase of room rates.

Foreigner owned hotels creating a lot of media attention because they focus on small group of wealthy clients but some of them consider wide range of customers. Those hotels have 800 to 1500 rooms each for conference guests or large weddings. At the Imperial guests can choose from 7 types of pillows and air purifiers will be offered which churning out negative ions.


Opinion

From this article I understood why those foreign managed and owned companies are successful and earning more. In my opinion the reason is they rightly captured motives that are making target to choose services they offer. Their main target is not wide range of people but little group of wealthy people who always want to experience, taste and see different things so those hotels differentiated their services from traditional Japanese hotels by using advanced technology, offering unique food, training educating their employees and choosing most suitable locations in the shopping and art complex area which gives opportunity to customers approach places easily and save time. Therefore they understood customer’s attitude. If see statistics 70% of Japanese customers take note of everything even details so hotels are considering also every details of their services before everyday to open. It is becoming more competitive to please customers to new comers in hotel industry and to attract loyal customers of those hotels.

Customers are kings.

Reference:

http://www.businessweek.com/globalbiz/content/apr2008/gb20080418_590120.htm?chan=top+news_top+news+index_global+business

20820014 Entry-9

Product Shift Keeps Mortgage Firm Afloat
At the start of last year, LoanWell Financial Corp. faced two big problems. The company was nearly out of cash. And it sold mortgages -- not exactly the type of business banks were enthused about lending to.
/summary/
The situation: LoanWell Financial had eaten through $1 million in seed money. And the mortgage company couldn't get a bank loan -- especially since it's based in a part of Florida where the housing-market meltdown was hitting hard. Therefore no bank wants to borrow money for firm.
The Fix: Instead of continuing its marketing traditional mortgage , the firm decided to shift to a product line completely with more growth potential -- reverse mortgages ,which is available generally to people age 62 or older. Reverse mortgage allows older people to use the equity in their homes to receive monthly payments from a bank. CEO Michael Banner thought his company could take advantage of their well position in Florida because here retirement-aged population rise and a prime in Florida as a growing potential market..
First, they needed more cash. Since any bank didn’t give loan they seek investors finally, could find partnerships. The partners set a plan together with demographic data and statistics showing why reverse mortgages were poised to grow in Florida. And LoanWell created a convertible note that pays investors regular interest for now and converts to equity when company hits a certain profitability level.
Next they needed customers who own their homes and need cash. Reverse mortgage has a mixed reputation, with the perception that fees are high and residents could lose their homes.
The company created and mailed out brochures and advertisements, spending about $15,000 each month buying names and addresses from marketing companies. It also designed seminars for seniors, paying about $8,000 per month for mailings, room rentals and food.
Mr. Banner cultivated relationships with financial planners and insurance brokers with a mostly older clientele -- such as long-term care insurers.
LoanWell also uses its small size as a selling point, paying the personal attention clients would get -- something older people appreciate. The company is expanding in New Jersey and is applying for licenses in five other states.
The Risks: Changing a core business means having to market to a whole new customers. And it could dilute the company's established brand.
My opinion
A drastic change when company getting close to bankrupt could survive company. As i studied in class one of the growth strategies is diversification. For this company they used unrelated diversification, the new business lacks any common elements with the previous business. The things that i studied from this article:
Marketers must can find advantage of the situation even the company gets in trouble. Mr.Banner could see its advantage of well position for growing market- senior citizens.
Shifting to new market is easier for smaller firms, which are generally more nimble and have fewer bureaucratic and management hurdles. Also, employees at smaller companies adapt to change more easily than larger ones. Morever, they could make a proper business contract with partners as pay regular interest now and then share equity by explaining real situation. Still, shifting to the new product line is not easy, it may causes alienate its loyal customers and dilute brand.
Annotation:Product Shift Keeps Mortgage Firm Afloat by Simona Covel, may 11,
http://online.wsj.com/article/SB120959122980357471.html?mod=SmallBusinessSmallBusinessLink_feature_articles

20400442-Entry 9

Research efforts go more commercially relevant!

Banerjee, HP's new lab director is overhauling HP's research slate. The labs' $150 million annual budget will remain the same, but he'll group the most promising related projects while dropping those with little shot at a profitable payoff. "Just because it's scientifically interesting won't do it," Banerjee says. "We need to create whole new business opportunities for HP."

This statement made by the director is well explained with how investment on HP's research is made unveiled. In the past, HP Labs relied too much on personal relationships among its 600 scientists when giving projects a go-ahead, says Banerjee. Researchers were subject to few formal milestone reviews. Projects often dragged on, making it tough to staff new ones. "Things were a bit territorial," says Jaap Suermondt, who heads an HP data analysis lab. And coordinating scientists' work with headquarters could be a struggle. "Convincing the business units took almost as much energy as the idea itself," says Ajay Gupta, director of HP's India lab.

Opinion.

In the class, we learned about problem solving; how we should first determind what the problem is, and to set conditions to effectively solve the problem.
Well, reading the article how HP has been spending anormous amount of money on research, ("relied too much on personal relationships among its 600 scientists when giving projects a go-ahead") I could assumed that amensive amount of money might have been spent on ineconomic scale, or un-business related activities; not so wasteful of resources in scienticif view, but certainly a waste in "Profit-focused" perspective.


Annotation: Aaron Ricadela , HP Labs' Latest Experiment: Itself, Business Week, May 1. Reference

20501034 - entry 9

'Why Samsung and LG Scare Motorola'
by Moon, BusinessWeek's Seoul bureau chief.
BusinessWeek(http://www.businessweek.com/globalbiz/content/apr2008/gb20080430_178487_page_2.htm) 2008. 5. 1

Summary

Last year, Samsung Electronics passed Motolola to become the world's No. 2 player in the cell phone industry. Now Motorola is in real danger of being overtaken" by LG Electronics. Samsung and LG are accounts for 44% of cell phone sales.

One of the reasons that Samsung and LG is dominating the markting is the Korean’s capability to bring out bunch of stylish products incorporating new technologies. As an example, Samsung brought 30 new multimedia models in the 2nd quarter of this year.

Another reason Samsung and LG being so successful is iPhone. Samsung and LG’s star product, touch screen interface and multimedia device, was basically shown in the iPhone. While iPhone took 0.6~0.7% share of market due to expensive price, Samsung and LG imitated very fast and manufactured touch screen interface phone with cheap price.

My opinion

First of all, I have to say Samsung and LG read latest trend well. In the book, ‘Microtrend’, the author Pinn pointed that in our age, there are many different kinds of demands which should be satisfied. Just 10 years ago, we are very used to hear mega bit hit product. Whole people in nation were excited in just one product. (ex. Ice cream, bag, song and etc) In that age, people have similar tastes and they faithfully followed the what others do or buy. However, in out age, everybody wants to be treated differently. They even hate to wear same cloth with other people. They want to be distinguished from anonymous people. So I can say what they value is more like individual characteristic now.
In this sense, Samsung seemed to find various kinds of customer’s needs. According to customer’s needs, Samsung made 30 different kinds of cell phone and satisfy each demographics.

I think what Samsung and LG did better than others is they radically reduced the time which is consumed to absorb newest technologies from pioneer company, Apple. Apple suggested touch screen style cell phone with iPhone. Samsung and LG realized that it would be the next trend of cell phone. They moved very fast quickly adopted it. In this way, Samsung and LG could minimized the R&D cost in comparison with Apple and even beat the Apple. It will be key factor how Samsung and LG keep reducing the time to absorb new technology from competitors and have their own competitive edge which is hard to get by other companies.

20500356 entry9

Dell spreads out its selling channel

By Byung-jun Kang
델, 新유통 모델 "아직은 현재진행형
Electronic news, (http://www.etnews.co.kr/news/detail.html?id=200804160065)
2008/04/17

Dell computer is known as the successful model of computer-product market by its innovative selling strategy. Michel Dell, the founder of the company, started the company without strong capital asset, but by the strategy He did success.

The core of this success is their direct selling strategy. That is, not buyer’s contact to the market or store, but the seller’s visit to the buyer directly, which did a great work for Dell. The result was not only for customers – comfort, low price, match to their needs, but also for dell itself; they reduced the cost revolutionary, controlled the inventory successfully. They grew to the major computer-product company in the market. In addition, with the growth of internet, their direct-selling model became huge; the selling amount at their website is as twice as the whole computer market size in Korea.

But now, Dell has been taking a change of their direct selling model. According to the article, dell has started to diversify their distribution channel. They entered the retailing store like Hi-Mart and took an agreement with distributers

I guess that it is because of the reduction at the sale, profit, and market share. Dell has been taken over their 1st degree of PC sales; their brand of notebook is still week. Michal dell, who has just came back to the CEO, performs that with the cut of the 8000 of labors.

The superficial result is shown as the growth of sales, but, the article says that it is not yet success. Their brand is no more perception and trust than that of Samsung or HP. The result will be figured by the effect of enlarged channel.

Overall Opinion
There was a concept about direct selling and indirect selling in the last class. Dell, the manufacturer of its computer product wanted to be direct seller. It’s because they wanted to demonstrate their goods, and the margin is high when they role as wholesalers and retailers also. But they changed their strategy for use of the strong retailing channel, and for establishing their brand image strongly into the channel. I’ve found that the importance of determining the selling-strategy for maximize the profit.