20500356-entry 5

How could E-mart merge Wal-mart in Korea?

2 years ago, there was a shocking event in distribution market. Wal-mart, the largest distribution company of the world has sold their whole business to E-mart and withdrawn from Korean market.
Wal-mart, which started their business 30 years ago, had ruled as a leader of retailing market by ‘every product, by everyday low price’. It was supported by innovative supply chain and generalization policy, and then wal-mart could continuously rule. They’d become the largest distribution company, and they tried to enter Korean market by 2nd time in Asia. However, during they were running business in Korea, wal-mart had taken inferior market-share continuously, and then finally wal-mart had to quit from Korea. I want to see the reason which made wal-mart fail in the market of Korea.

First, there already were other discount stores, which were leading the market. 5 years before wal-mart entered to korea, e-mart had been established as the1st discount store, and other following stores had been also. , they had been grown up by selling ‘every product, by everyday low price’ which was advantages of walmart. Wal-mart’s distinguishable point was no longer distinguishable in korea, so they couldn’t help entering as following compony, not leading one. I think that, Korean companies could defend on wal-mart’s low price attack, and that they did. When wal-mart entered, e-mart performed progressive marketing ‘guarantee of lowest price’ and took their poser away. In addition, wal-mart’s position made somewhat premium as foreign company, and that bothered their lowest-price-image.

Second, they should have enlarged their market share by maximizing their distinguishable advantage, but they failed. They adjusted their generalization policy, which was their way to success, to korea. I think they should have done their policy in dimension of korea, and Korean market should have been specialized differently to other markets. Wal-mart set up their every thing, from product to height of board, but Korean consumers didn’t want that. Rather Korean store reacted to their needs. E-mart recognized that the patterns of Korean customers were about food product leaded by housekeepers, so they did, and it worked. Korean wanted the atmosphere of market to be loud like traditional market, so Korean stores put the selling agents to make that and succeed, but wal-mart failed, because they made the atmosphere like department store. I have been both wal-mart and e-mart, and I could feel the different mood of two stores.

Retailers should deliver what customers want, because they contact with them directly. The failure of wal-mart shows that very well. I’ve learned how to do if I get a job related to retailing.

http://news.naver.com/tv/read.php?mode=LSS2D&section_id=115&section_id2=292&office_id=055&article_id=0000071053&menu_id=115

http://h21.hani.co.kr/section-021003000/2006/06/021003000200606220615013.html

20501005 - Entry 5

Building a Better Brand

Giant companies know their brands are worth a fortune. The key to marketing your business is finding a timeless position and staying focused

original article

To sum up the article, there are three important things to build a better brand in the article.

1. Keeping focus

As you evaluate your own brand's positioning, don't focus on features that will soon be co-opted by your competitors. Consider the primary benefits your brand provides and what they really add up to. Then examine the extent to which your positioning passes six key tests: relevance, simplicity, differentiation, believability, credibility, and defensibility.

2. Adding value

Most brands are a long way from being worth $21 billion. But all of them are worth something, and the better the branding efforts the more value a brand can add to the products and services to which it's attached.

3. Taking your positions positioning is not really a difficult concept: At root, it's simply the rational and emotional benefits people associate with a brand.

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.In the article, there is an example of global brand, Coca-Cola. The Coca-Cola brand is so well established in our minds that we could work backwards from it and come to essentially the same place. As Prof.Lee emphasizes in marketing class, building a nice brand is very important.In practice, it may be more difficult! but we should try to make our brand well.That's why I tried so hard to make my business card well, which expresses my brand. We should know that the importance of brand name. Just think of us, we like Northface ,but we might dislike Redface which seems like a fake. So, I think we as well as Korea should have a brand power! and when

we do real business, we should be aware of it!

20501034 -Entry 5

Original Article

World renowned company,
Nestle defeated in Korea


My opinion
The first moment that I read this article, I thought it would be great marketing plan. While all the companies were trying to convince that their products were better than any other products, Nestle differentiated the marketing plan. Nestle emphasized on not their product but excellence of breast milk. However, Nestle seemed to lag behind catching current trend.
When Nestle launched into Korean powdered milk market, Korea has transition era which more and more traditional home mom is becoming modern and career women. They were not as much dedicated as traditional mom. They were more concerning about their figure and beauty and have a purchase power. Generally speaking, these new generation mom chose buy the best or upper-intermediate level of powdered milk rather than give children their breast mile which is recognized bad for figure of breast. In this way, Nestle couldn’t really appeal to new generation mom who became the biggest target in powdered milk market and World renowned food company, Nestle was kicked out of market 2 years after they launched.

In this way, marketing plan should be premised on having a good grasp of current trend and proper analysis about main target. Otherwise, it’s matter of time to be kicked out.

20820007 Entry - 5

Asian Inflation Begins to Sting U.S. Shoppers

This article is about how inflation is affecting American customers. Inflation usually defined in economics as “increasing prices of set of goods and services.” Asian developing countries like China, Vietnam, and India where labor cost was low, are producing almost half of American imports. As consequences of inflation during last years in these countries is affecting American consumers hardly making they to pay more for goods they demand. In Vietnam price rose 19.4% from March 2007 to March 2008 because of inflation. In Foshan, China price also was raised by 10% from where bathroom fixtures are imported to North America. As a price of goods is increasing workers are also asking for higher wages which means that customers will also cover this additional cost. At the same time in Philippines and India inflation is keeping rising. According to government’s Consumer Price Index the prices of goods were increased by 4 % in United Sates. Additionally it is urgent to slow down inflation in order to take pressure of inflation from customers.

solutions:

There is much kind of methods to control inflation. Vietnam’s central bank had ordered to commercial bank to resume buying dollars within the tight range of exchange rate. Also to decline the inflation many banks refusing to accept dollars in large amounts and dollars are no longer mighty because of America trade deficit which itself causes inflation in developing countries. I saw that in Korea also exchange rate of dollar is so low. China and India decreasing inflation by combination of price control and subsidies even Vietnam has imposed price control on transportation and gasoline. I understand that customers are main carrier of inflation causes and to protect and keep our customers we should carefully make decisions as a manager that are less harmful to them because there was a situation when businessmen making fake inflation by raising commodity price beyond government control and washing black money.

Reference:http://www.nytimes.com/

20820014 Entry-5

Europe’s New Herd Mentality

European farmers used to fight globalization. Now they are embracing it.
( summary of the article)

Not long ago, powerful farm lobbies-backed by the government of France –fought EU reforms designed to open up Europe’s regimented agricultural sector to greater market forces. Now, europe’s farmers see the rising profit, many of the same agro activists are getting richer as a result.
“European 50-year-old subsidy system and market forces were very perverse’ says Luc Morelon spokesman for Brittany based- Lactalis, europe’s biggest cheese and dairy product. As a result of this subsidy and protection european countries had tremendous excess production and they had sold at far below price on the world market.
In order to prevent this wasteful subsidies, politicsdid agreement among member states that total EU budget should not exceed 1% of the bloc’s total GDP.
The result of this entrepreneur decision european farmers are seeking out new international markets for their product. The farmers have an incentive to grow only what’s most profitable in other words they are shifting into areas where they can get the highest returns on the world market. As a result, EU exports are dropping rapidly in sugar, poultry, cereals and other raw goods but rising finished products like sausage and ham have helped Europe to become the biggest agricultural exporter. Now european milk is made into higher value cheese, a booming global market now that the growing middle classes of Asia, Russia and middle East. With its strong brands and efficiency supply chains, europe has expanded its share of the global cheese trade from 35-42% since 1999.
Of all the major agricultural powers – including the U.S and Brazil- the EU has become the least dependent on the sale bulk commodities.

Opinion

The first thought that came in my mind is I wonder why north east asia has no commision or union.Why not north east asian countries make an broad agreement not only for politic but also for international commerce like NAFTA or EU. Perhaps it,s because of two large countries’ beneficial aspects: China and Japan ? …
For mongolia , we have specialized much more in herding livestocks and making dairy products than any other business or industries. As well as our major export products are beef, cashmere, camel and sheep wool things like that almost all are belong to agricultural sector.
Also, our total import products are 48% from china, 20% from russia, 4 %from japan and 3% from korea, according to the statistic of the national trade commission.
Therefore I am reflecting is it possible for mongolia to create new strong agricultural brand with neighbor countries? …

Reference;
Business week magazine, 28 th of march, 2008

20400442-Entry 5

One of the features of Amazon.com that led it to such a success is cutomers' information gathered and classified by the data base. Here is a another product that was rather unpredictable using customers' information about preferences.

TiVo is a video recorder. However, it is very much different with video recorders that we know. It doesn't need tapes to put in. Two or more programs can be recorded at same time. It is linked to lagular cable TVs and can search for desired program using a system called Universal Swivel Search scaning hundreds of cable channels and the Web. It is designed in a way that it cannot find pay-to-view programs by satellite providers.

The most outstanding feature about the product is that, like the system of Amazon and so many other successful businesses, it remembers what a particular user watched previously! It seldomly informs the list of programs of preference to the watcher.

TiVo is a solution to the problem of audiences with watching TV. It was hard to know what kind of program is on air at what time, and if one missed the time, couldn't return the time and watch the program he wanted. Furthermore, even if he decided to record a program, it needed tons of time and effort (at least he might feel this way) just to watch one program which most of the time is not worthed. Considering TiVo is able to free customers from these problems, the product delivers a big value to them.

The marketer should have gone through a reasonable brain storm that he reached to such a good solution!

Reference