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.

20500356-entry8

The importance of customers

by Lee Hyunggyu
Company 고객아이디어로 대박 터뜨린 기업들
Economic Review(http://news.naver.com/main/read.nhnmode=LSD&mid=sec&sid1=101&oid=093&aid=0000005291)
07-06-28

Marketing is the study which deals with the ‘value’. That is, marketing is to creat the value(product), evaluate it(price), and deliver it(place) to customers(promotion). Normally, the ‘value’ is produced by companies and consumers are just delivered the value. However, there is companies who enparticipate the customers to the process of creating the value, and had a great effect.


Summary

LG electrics called for the ‘cyon prosumers’ by internet and gathered the idea needed for the development of cell phone. The company applied their ideas and produced the Chocolate phone, which was sold over 10 million. In the next project Shine phone, they called the prosumers again, and succeeded again.

Mando map&soft, the navigation tool company of korea, has opened the website of their product, Mappee, and has applied the customers’ opinion to the product. It reduced the R&D cost about half times, and at the same time, it lead the promotion effect. Consequently, the company has been growing over twice at each year.

“it can reduce the development cost and risk, to apply the consumer’s opinion actively to the development and produce; it also makes consumers active to the promotion of the product, so companies can take two merits both by development and by marketing


Opinion

The examples show the importance of finding the customer’s needs. The core of marketing is to give what customers want. Applying the opinion of customers has more power of evoking Action than putting ads to make them have Attention, Interesting, and Desire. I’ve learned that to fulfill the needs of the customers is more important than just making high-quality goods, in persuasive the customers to open their wallet.

20500356-entry 7

Korea: as a brand

by Shin Chiyoung, Park Yong,
[대한민국 2008 +10 & -10]<6·끝>국가 브랜드가치 높이기

Dong-a Ilbo(http://www.donga.com/fbin/output?n=200801110070)

08.1.11

Summary

The article emphasizes the influence of nation’s brand by the result of a research. In the research, the brand-power of korea is 14th of the world, one third of japan’s, and half of china’s. and the article refers a comment of Philip Kotler, “the image of the product be different by the image of the nation”, “so the marketing strategy should be considered by nationally.”

If the nation’s brand marketing give good influence to the company, then the company’s improved competitive power and image influences to the nations; it becomes good circulations. A good example is Nokia’s. now, Nokia has the 30percent of the whole export of Finland. it is true that the perception and image for Finland is influenced by Nokia.

Opinion

Professor said several times in the class; Korea needs something that can improve the brand Korea. Brand power need to be considered and developed by nations, as well as by companies. It gives good effect to both sides; nations can improve its economy by inviting the foreign capital and investment by its nation-brand-power, companies can make its brand-power stronger by the nation-brand, like Japan. In the class, I was seriously thinking about the national brand of Korea doing the project of Hanbok. Now I found that the image of nation directly have impact to the competitive power of companies.

20501005 - Entry 9

LG beefs up design investment
By Ko Kyoung-tae (kkt@heraldm.com) - The Korea Herald

Summary
LG Group said yesterday it will invest 100 billion won ($100 million) in the product design this year, up 14 percent from a year ago. The Seoul-based conglomerate said it also plans to hire about 60 designers to expand the number of design staff to 700 this year. LG's affiliates have long been producing reliable mass-market electronics and consumer products, which have helped the firm establish a global sales network in a short period of time. The group now looks to set consumer trends by more aggressively marketing innovative products. Koo stressed that the affiliates can secure a larger customer base by offering more creative and differentiated designs. "Design will be the biggest competitive edge to spearhead the transition in the future. We should create innovative designs to tap latent consumer demand and guide their lifestyles," he said during a meeting with group executives last year. The company also diversified the design tasks into its overseas design staff, aiming to better meet local demands in the global market. LG Group won a total of 80 design awards at home and abroad last year alone.

My Opinion

I agree with Koo's idea, the CEO of LG Corp,. As Prof. Lee always stresses in the class, design is very important part of promotion. We have designed several stuffs throughout this semester. When I design something, I can feel that I am living. It gives me lots of pleasure.


For few weeks, I have prepared for the LG global challenger competition. While I was preparing the competition, I focused on not only contents but also design. So we used Adobe Illustration for designing the report. I learned how to use Illustration from one of my team member. It was great opportuny to learn that kind of fancy tool! Anyway, thesedays the importance of design is increasing! There are many products which were successful because of beautiful design such as LG CYON Chocolete phone , etc. As a savvy marketer! we should realize the importance of design when we market something.

20400442-Entry 8

Nokia-Users' Driven Tech

Nokia researchers didn't quite know what to expect when, in March, 2007, they posted a mobile phone application called Sports Tracker on a company Web site that is open to the public. The program, still a work in progress, was designed to let runners and cyclists take advantage of the global positioning capability included in some Nokia models. Users can record workout data such as speed and distance, and can plot routes.

You've heard of user-generated content? Sports Tracker is an example of how Nokia has begun experimenting with user-generated innovation. That's the premise behind Nokia Beta Labs, a Web site where the Finnish handset maker lets users test the latest smartphone software. Instead of people recording silly Web cam videos for YouTube or inventing frivolous advocacy groups on Facebook, they can help make the mobile Internet more useful.

The researchers said, "Our fear was people would come up with ideas that already existed, like a phone with a camera. But people's suggestions were much more creative."

Opinion

We learned about how important it is to build a relationship and relevence with customers for a business. Nokia is now running the website(Nokia Beta Labs) and a field research to suit personal needs and wants that eventually will build the value to the products. To balance to satisfy niche markets and mass population is left as the homework for Nokia. However, considering negligible cost of such marketing and the huge effect that it will bring, Nokia is bringing an exemplary marketing strategy to the customers and business.

Reference. How Nokia Users Drive Innovation