Today, there are many companies that are finding new ways of leveraging their brands by "moving the brand down" as some experts like to say. More and more buyers are turning from high end luxury brands and finding other, good quality and better value products as a replacement. This is largely due to technology as it has allowed commerce to reach unprecedented levels through ecommerce. From a company's perspective however, they have to find new ways of reaching more customers with an abundance of options by leveraging their brand and selling other less expensive products.
A good example of this is found in the computer industry. Netbooks have surfaced the market in just the last couple of years. Companies have found a product that will sell for nearly a 1/4 of the price using software technology that was available almost a decade ago. They have basically come up with a new way to market an old product. In fact, these computers have less storage, performance, and capacity.
One of the reasons that companies have increased their sensitivity to quality and price is that markets have reached overcapacity in both new competitors and also because of fairly static markets. The problem however, is that brand loyalty can erode and customers focus on features and price instead of quality. Their more concerned with paying more for quality and as a result market share starts falling. As mentioned earlier, another huge reason driving this type of leveraging is technological change. Technology can influence the cost structure because brands are becoming cheaper and simpler and therefore creating new price points for companies. With all these changes going on in the market, companies are having to adjust to new and dynamic ways of marketing their products. They need to adjust to these pivotal changes otherwise they will just have to accept to a declining share of the market and similarly, significant loss in revenues.
http://groups.haas.berkeley.edu/marketing/PAPERS/AAKER/BOOKS/BUILDING/moving.html
Wednesday, May 26, 2010
The dark side of social networking
While we have heard an abundance of great things relating to the growth, benefits, and uses of social networking, many people don't really know the negative consequences found between the lines. Like many companies on the internet today, social networking sites use your personal information to know everything they can about you. What your favorite movies are, the places you go, the things you do etc. They basically provide anyone with your identify.
What most people don't know is that Social Networking sites package your personal data into trends and patterns. This data has become a huge commodity between these websites and marketers around the world. Knowing your hometown, your favorite TV Show, or your political preferences is where the real money is. The problem is that, once you post that information on social networking sites, you automatically grant the company the exclusive right to do whatever they want with this data. An irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license. In fact, that's the exact legal jargon you accept by joining facebook.
Our personal information is a goldmine for political interest groups, or potential employers. What does this mean? How about more catalogs on your doorstep, more mail in your inbox, even more questions on your next job interview.
This week, facebook's CEO Mark Zuckerberg had to apologize for "missing the mark" when it comes to privacy controls when his company was discovered to have been passing along user name and IDs to advertisers (including Google's DoubleClick and Yahoo!'s own Right Media) without users' consent. This issue is not anything new and has been surfacing the news for quite some time. In fact, just a few years ago when Zuckerberg was in Harvard, he was coined to have said "People just submitted it, I don't know why. They 'trust me. Dumb ..."
To say the least, this has been a huge bombshell for the company and it now finds itself backpedaling to convince its members that it is taking the right approach in correcting the situation. For starters, if they really want to do the right thing, they should give its users the right to grant them privacy rights or not. Otherwise, they will start having some serious problems on their hands in the near future.
http://www.facebook.com/privacyfeedback
What most people don't know is that Social Networking sites package your personal data into trends and patterns. This data has become a huge commodity between these websites and marketers around the world. Knowing your hometown, your favorite TV Show, or your political preferences is where the real money is. The problem is that, once you post that information on social networking sites, you automatically grant the company the exclusive right to do whatever they want with this data. An irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license. In fact, that's the exact legal jargon you accept by joining facebook.
Our personal information is a goldmine for political interest groups, or potential employers. What does this mean? How about more catalogs on your doorstep, more mail in your inbox, even more questions on your next job interview.
This week, facebook's CEO Mark Zuckerberg had to apologize for "missing the mark" when it comes to privacy controls when his company was discovered to have been passing along user name and IDs to advertisers (including Google's DoubleClick and Yahoo!'s own Right Media) without users' consent. This issue is not anything new and has been surfacing the news for quite some time. In fact, just a few years ago when Zuckerberg was in Harvard, he was coined to have said "People just submitted it, I don't know why. They 'trust me. Dumb ..."
To say the least, this has been a huge bombshell for the company and it now finds itself backpedaling to convince its members that it is taking the right approach in correcting the situation. For starters, if they really want to do the right thing, they should give its users the right to grant them privacy rights or not. Otherwise, they will start having some serious problems on their hands in the near future.
http://www.facebook.com/privacyfeedback
Wednesday, May 19, 2010
Paying online for news
As I mentioned in my last blog, the newspaper industry is currently in a delicate and precarious situation due to its plummeting ad revenues and swiftly evaporating classifieds market. Since the 1990s when the internet grew in popularity, people chose to get their news information free by just visiting any website to enjoy good quality material. As a result, most of the newspaper companies saw significant drops in most of their advertising revenues because marketing companies did not want to invest in a forum that few people were not reading. Coupled with a near extinction of the classifieds section when craigslist become offered to the public for free, most of the industry's companies became crippled by debt payments.
The move towards a subscription based pay-per-read method to generate revenues for newspaper companies is nothing new. In fact, a partnership called the New Century Network was formed in the late 1990s in order to gather the cooperation from many publishers but unfortunately fell apart after the parties could not agree on almost anything.
The model has worked for a small number of newspapers, most notably New Corp's Wall Street Journal. This works quite well for them considering they are the nation's most prestige and reliable source of news. Charging a small fee to many fortune 500 companies and other powerful businesses in our country in order to gain valuable information about the country's economy was not difficult by any standard. Similarly, companies like the WSJ are making their news accessible through mobile phones and are also starting to charge a small monthly subscription fee to gain access to their content.
To add fuel to the fire, Google's Ad Sense has also collaborated to decimate the revenues which newspaper companies have relied on traditionally. Let's say you search for a the latest advancement on the Health Care Bill, your most likely going to use Google to find your article. If you find the article in a small newspaper and coincidentally click on an advertisement while being on that website, that revenue goes to Google, not the newspaper.
On other example I want to mention is something I personally saw in the Miami Hearld a few days ago. They are now offering a subscription based, $1.99/month to access premium digital content. The Miami Herald Digital Newspaper is the easiest and most convenient way to read the print edition of The Miami Herald on your computer. It allows you to change the size of the page, the font, zoom in and out, and have the ability to search through their vast database. Being a huge advocate of convenience and technology, this business model provides a great value for any reader in the world.
Whatever business model they decide to pursue, newspaper companies need to come up with complete solutions urgently. The future is looking bleak for the newspaper industry as their revenues are plummeting and their debt structure remains the same. Trying to charge subscription fees when the information has been free for years will prove extremely challenging for most companies. Moreover, these subscription fees will probably not resolve all of their issues. I think these times call for drastic measures, particularly for the small to medium companies that will most likely need to merge together to remain afloat similar to what the television industry went through with the period of mergers and acquisitions.
The move towards a subscription based pay-per-read method to generate revenues for newspaper companies is nothing new. In fact, a partnership called the New Century Network was formed in the late 1990s in order to gather the cooperation from many publishers but unfortunately fell apart after the parties could not agree on almost anything.
The model has worked for a small number of newspapers, most notably New Corp's Wall Street Journal. This works quite well for them considering they are the nation's most prestige and reliable source of news. Charging a small fee to many fortune 500 companies and other powerful businesses in our country in order to gain valuable information about the country's economy was not difficult by any standard. Similarly, companies like the WSJ are making their news accessible through mobile phones and are also starting to charge a small monthly subscription fee to gain access to their content.
To add fuel to the fire, Google's Ad Sense has also collaborated to decimate the revenues which newspaper companies have relied on traditionally. Let's say you search for a the latest advancement on the Health Care Bill, your most likely going to use Google to find your article. If you find the article in a small newspaper and coincidentally click on an advertisement while being on that website, that revenue goes to Google, not the newspaper.
On other example I want to mention is something I personally saw in the Miami Hearld a few days ago. They are now offering a subscription based, $1.99/month to access premium digital content. The Miami Herald Digital Newspaper is the easiest and most convenient way to read the print edition of The Miami Herald on your computer. It allows you to change the size of the page, the font, zoom in and out, and have the ability to search through their vast database. Being a huge advocate of convenience and technology, this business model provides a great value for any reader in the world.
Whatever business model they decide to pursue, newspaper companies need to come up with complete solutions urgently. The future is looking bleak for the newspaper industry as their revenues are plummeting and their debt structure remains the same. Trying to charge subscription fees when the information has been free for years will prove extremely challenging for most companies. Moreover, these subscription fees will probably not resolve all of their issues. I think these times call for drastic measures, particularly for the small to medium companies that will most likely need to merge together to remain afloat similar to what the television industry went through with the period of mergers and acquisitions.
Wednesday, May 12, 2010
the future of the newspaper industry
Marketing has been around since the day humans first started bartering goods by using stories to convince other humans to trade. The methods and principles of marketing have changed and considerably improved as we've become more efficient at telling our stories and getting our marketing messages out there. The internet and eMarketing have practically revolutionized the way we do business, socialize, and enjoy just about everything in our daily lives. To be a little more specific, eMarketing is the process of marketing a brand by using the internet. It includes both direct response marketing and indirect marketing elements an duses a range of technologies to help connect business to their customers.
Although these technological advances have improved the lives of people all over the world, it has also adversely affected some other industries as well. Throughout the past couple of years, the newspaper industry has taken a serious toll on its advertising campaign because of how the economic environment has changed through the evolution of the internet. Traditionally, newspaper companies were huge corporations that made a substantial amount of money through advertising and classifieds. They would also make a good portion of their income through subscription fees. As the internet technology expanded around the world, it gave anyone the benefit of reading their news on any computer or cell phone for free. As this was happening, newspaper companies who were competing agaisnt one another started losing market share and advertising revenues because people were just not reading the old fashioned, and inefficient paper copy. Then a website called craigslist came to the scene, and essentially decimated the classified revenues these companies relied on. Little by little, the newspaper industry started to collapse and now find themselves in a pivotal time where they must act quickly if they want to survive this revolution.
So what is the future of newspapers? What do these companies need to do to survive? Is this a lost industry? These are questions that newspaper companies are examining daily all over the world. Whether it is La Nacion in Costa Rica, The New York Times, or Chicago Tribune, they need to seriously revamp their strategies to still be around in the next 10 years. Technology is only getting better and becoming more accessible to anyone for a relatively inexpensive price. Thus, internet newspapers will continue to grow and traditional newspaper companies need to consolidate, reorganize, or find new ways of staying alive.
Although these technological advances have improved the lives of people all over the world, it has also adversely affected some other industries as well. Throughout the past couple of years, the newspaper industry has taken a serious toll on its advertising campaign because of how the economic environment has changed through the evolution of the internet. Traditionally, newspaper companies were huge corporations that made a substantial amount of money through advertising and classifieds. They would also make a good portion of their income through subscription fees. As the internet technology expanded around the world, it gave anyone the benefit of reading their news on any computer or cell phone for free. As this was happening, newspaper companies who were competing agaisnt one another started losing market share and advertising revenues because people were just not reading the old fashioned, and inefficient paper copy. Then a website called craigslist came to the scene, and essentially decimated the classified revenues these companies relied on. Little by little, the newspaper industry started to collapse and now find themselves in a pivotal time where they must act quickly if they want to survive this revolution.
So what is the future of newspapers? What do these companies need to do to survive? Is this a lost industry? These are questions that newspaper companies are examining daily all over the world. Whether it is La Nacion in Costa Rica, The New York Times, or Chicago Tribune, they need to seriously revamp their strategies to still be around in the next 10 years. Technology is only getting better and becoming more accessible to anyone for a relatively inexpensive price. Thus, internet newspapers will continue to grow and traditional newspaper companies need to consolidate, reorganize, or find new ways of staying alive.
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