For the bargain prize of 117 millions pounds, Microsoft bought a 1.6% stake of Facebook. Other companies such as Yahoo or Google also wanted to invest in one of the most popular social networking websites but Facebook declined their offer.
The aim of this partnership is simply to increase profits through advertising on both sides.
Microsoft VS Google
The Facebook deal is Microsoft's answer in its battle with Google. Looking one year back in October 2006, Google beat Microsoft with the 1.65bn dollar acquisition of online video sharing website YouTube.
Common Benefit For Microsoft and Facebook
Microsoft will sell internet ads for Facebook outside the US. The company already had an agreement with Facebook to provide banner advertising and links to the US version of the social networking site. This was the part of the deal discussed during several weeks.
With this acquisition, Microsoft will become the exclusive third party seller of overseas advertising outside the US on Facebook. Knowing that the social networking site currently has 49 millions users, this could be a huge financial opportunity for Microsoft.
With this partnership Facebook is looking to increase its current audience of nearly 50 million active users by becoming a real magnet for advertiser and also to compete fiercely with its rival MySpace which currently has 100 million users. Facebook also wants to take advantage of existing Microsoft skills.
According to Charlene Li, an analyst at Forrester Research, the software group knew better -in comparison to Google- how to work with program developers and build computing environments. She said that "Microsoft is a company that knows how to build platforms, knows how to develop relationships with developers. The social networking site is hoping with Microsoft 's collaboration to struggle less to reach leader position."
Tuesday, November 24, 2009
All Marketers Are Liars?
It's propounded all over the internet that in order to be a good marketer, well let's just put it this way, one has to be less than honest. 'All Marketers Are Liars' is a famous book by Seth Gordin which raises a big question mark on the ethical responibility of Businesses. Is marketing merely fabrication of things or based facts?
Common Eithical Dilemmas Related to Marketing !!!
Good ethics really affect an organization's success !! Marketing departments face their own particular set of uncertain problems pertaining to product development, pricing policy, distribution activities and promotion. Here are given the dilemmas and some areas where business ethics must be employed in order to controvert the common ethical ethical dilemmas prevalent over there.
Misleading advertising is a common ethical dilemma.
The ethics related to direct marketing is another concern of marketing departments.Customers may feel invaded by direct mail or telemarketing. The use of these promotion avenues should be governed by sound ethical principles.
Another dilemma is the marketing of harmful products-for example, tobacco
Marketers should attend to pricing ethics. Predatory pricing, the practice of setting prices to drive out competition, can be harmful to consumers so marketers must tread carefully. Policy designed to foster a healthy marketing environment must be balanced against profit requirements.
Marketing departments responsible for the relationship with a cause must manage it openly and honestly.
How their product affects the environment is of increasing concern to marketing departments.Marketers may be challenged by the costs of some environmentally-friendly choices but must consider their responsibility to society.
How clearly and in what way consumers are informed of price or size changes must be weighed against costs.
Marketing departments of resellers must consider the ethics behind their mark-up policies.
Distribution issues include quality of transport
Ultimately, ethics relates to organizational performance in generating goodwill for a particular company. This goodwill should translate into sales. Ethical behaviour by the marketing department will make the department and even the company a more attractive place to work as the company's good reputation will transfer to its employees. Motivated, proud employees will improve performance. Bad marketing ethics will destroy a good reputations which is arguably much harder to build than sales numbers.
Misleading advertising is a common ethical dilemma.
The ethics related to direct marketing is another concern of marketing departments.Customers may feel invaded by direct mail or telemarketing. The use of these promotion avenues should be governed by sound ethical principles.
Another dilemma is the marketing of harmful products-for example, tobacco
Marketers should attend to pricing ethics. Predatory pricing, the practice of setting prices to drive out competition, can be harmful to consumers so marketers must tread carefully. Policy designed to foster a healthy marketing environment must be balanced against profit requirements.
Marketing departments responsible for the relationship with a cause must manage it openly and honestly.
How their product affects the environment is of increasing concern to marketing departments.Marketers may be challenged by the costs of some environmentally-friendly choices but must consider their responsibility to society.
How clearly and in what way consumers are informed of price or size changes must be weighed against costs.
Marketing departments of resellers must consider the ethics behind their mark-up policies.
Distribution issues include quality of transport
Ultimately, ethics relates to organizational performance in generating goodwill for a particular company. This goodwill should translate into sales. Ethical behaviour by the marketing department will make the department and even the company a more attractive place to work as the company's good reputation will transfer to its employees. Motivated, proud employees will improve performance. Bad marketing ethics will destroy a good reputations which is arguably much harder to build than sales numbers.
Ten Rules of Radical Marketing
1. The CEO must own the marketing function Radical marketing requires that the top individual in the organization be intimately involved in the marketing function, and in fact, drive the marketing approach of the organization. This ensures that everyone in the organization has a strong focus on the interaction with the market, because the CEO demands and expects it.
2. Make sure the marketing department starts small and flat and stays small and flat The key point here is that the marketing function must not get so large that it starts to become bloated with bureaucracy and protocol, but rather is small and flexible enough to respond to new trends to stay in touch with the market, and to try out 'outrageous' new approaches.
3. Get out of the office and face-to-face with the people that matter most the customers Hardly a radical idea, but surely a sensible one.
4. Use market research cautiously Related, this point relates to the propensity for CEOs to 'go with their gut' on key marketing decisions, rather then rely upon focus groups or in-depth market surveys. Because of their close connection to their customers, such marketing decisions often turn out to be right.
5. Hire only passionate missionaries Radical companies hire what the authors call 'passionate missionaries' for senior positions. These are individuals who believe in the product and the customer base as strongly as does the CEO.
6. Love and respect your customers Unlike 'mainstream' companies, senior people in radical marketing companies do not see their customers only as target market segments, defined by demographic or psychographic characteristics. Rather, they think of their customers as being like themselves, passionate and proud to be associated with the product. In this sense, the authors describe the senior managements of 'radical' companies as 'loving and respecting' their customers.
7. Create a community of customers One very striking aspect of certain of the radical marketing companies discussed in the book is their ability to create an extremely dedicated and loyal community of customers, who will even go to the extent of having their bodies tattooed with the brand they identify with (e.g. Harley-Davidson, the Grateful Dead).
8. Rethink the marketing mix "Radical marketers market continuously and devote huge amounts of money, effort and time to communicating with their customers. However, they seldom have huge advertising budgets. In fact, some, like Providian, don't even have marketing budgets, reasoning that such budgets act as "entitlements" and encourage spending when none is needed or, conversely, as ceilings, discouraging marketers from spending more when they see an opportunity... When radical marketers use advertising, they tend to do so in short, sharp bursts, what we have called "surgical strike advertising".... Radical marketers tend to use more one-to-one or targeted communications tools, ranging from direct mail to Web pages to local advertising to sponsoring neighborhood basketball tournaments.
9. Celebrate uncommon sense Radical marketers break the rules. For example, rather than try to maximize distribution of product to place as much as possible in the market, they may tend to limit availability to create pent-up demand, and thus foster loyalty and commitment among their distributors.
10. Be true to the brand "Radical marketers are obsessive about brand integrity, and they are fixated on quality."
2. Make sure the marketing department starts small and flat and stays small and flat The key point here is that the marketing function must not get so large that it starts to become bloated with bureaucracy and protocol, but rather is small and flexible enough to respond to new trends to stay in touch with the market, and to try out 'outrageous' new approaches.
3. Get out of the office and face-to-face with the people that matter most the customers Hardly a radical idea, but surely a sensible one.
4. Use market research cautiously Related, this point relates to the propensity for CEOs to 'go with their gut' on key marketing decisions, rather then rely upon focus groups or in-depth market surveys. Because of their close connection to their customers, such marketing decisions often turn out to be right.
5. Hire only passionate missionaries Radical companies hire what the authors call 'passionate missionaries' for senior positions. These are individuals who believe in the product and the customer base as strongly as does the CEO.
6. Love and respect your customers Unlike 'mainstream' companies, senior people in radical marketing companies do not see their customers only as target market segments, defined by demographic or psychographic characteristics. Rather, they think of their customers as being like themselves, passionate and proud to be associated with the product. In this sense, the authors describe the senior managements of 'radical' companies as 'loving and respecting' their customers.
7. Create a community of customers One very striking aspect of certain of the radical marketing companies discussed in the book is their ability to create an extremely dedicated and loyal community of customers, who will even go to the extent of having their bodies tattooed with the brand they identify with (e.g. Harley-Davidson, the Grateful Dead).
8. Rethink the marketing mix "Radical marketers market continuously and devote huge amounts of money, effort and time to communicating with their customers. However, they seldom have huge advertising budgets. In fact, some, like Providian, don't even have marketing budgets, reasoning that such budgets act as "entitlements" and encourage spending when none is needed or, conversely, as ceilings, discouraging marketers from spending more when they see an opportunity... When radical marketers use advertising, they tend to do so in short, sharp bursts, what we have called "surgical strike advertising".... Radical marketers tend to use more one-to-one or targeted communications tools, ranging from direct mail to Web pages to local advertising to sponsoring neighborhood basketball tournaments.
9. Celebrate uncommon sense Radical marketers break the rules. For example, rather than try to maximize distribution of product to place as much as possible in the market, they may tend to limit availability to create pent-up demand, and thus foster loyalty and commitment among their distributors.
10. Be true to the brand "Radical marketers are obsessive about brand integrity, and they are fixated on quality."
Disadvantages of Email Marketing
Many companies use e-mail marketing to communicate with existing customers, but many other companies send unsolicited bulk e-mail, also known as spam.
Internet system administrators have always considered themselves responsible for dealing with "abuse of the net", but not "abuse on the net". That is, they will act quite vigorously against spam, but will leave issues such as libel or trademark infringement to the legal system. Most administrators possess a passionate dislike for spam, which they define as any unsolicited e-mail. Draconian measures—such as taking down a corporate website, with or without warning—are entirely normal responses to spamming. Typically, the terms of service in Internet companies' contracts permit such actions; therefore, the spammer often has no recourse.
Illicit e-mail marketing predates legitimate e-mail marketing. On the early Internet (i.e., Arpanet), it was not permitted to use the medium for commercial purposes. As a result, marketers attempting to establish themselves as legitimate businesses in e-mail marketing have had an uphill battle, hampered also by criminal spam operations billing themselves as legitimate ones.
It is frequently difficult for observers to distinguish between legitimate and spam e-mail marketing. First, spammers attempt to represent themselves as legitimate operators. Second, direct-marketing political groups such as the United States Direct Marketing Association (DMA) have pressured legislatures to legalize activities that some Internet operators consider to be spamming, such as the sending of "opt-out" unsolicited commercial e-mail. Third, the sheer volume of spam has led some users to mistake legitimate commercial e-mail for spam. This situation arises when a user receives e-mail from a mailing list to which he/she subscribes. Additional confusion arises when both legitimate and spam messages have a similar appearance, as when messages include HTML and graphics.
One effective technique used by established email marketing companies is to require what is known as the "double opt-in" method of requiring a potential recipient to manually confirm their request for information by clicking a unique link which includes a unique identification code to confirm that the owner of the recipient email address has indeed requested the information. Responsible e-mail marketing and autoresponder companies use this double opt-in method to confirm each request before any information is sent out.
A report issued by the e-mail services company Return Path, as of mid-2008 e-mail deliverability is still an issue for legitimate marketers. According to the report, legitimate e-mail servers averaged a delivery rate of 56%; twenty percent of the messages were rejected, and eight percent were filtered.[5]
Due to the volume of spam e-mail on the Internet, spam filters are essential to most users. Some marketers report that legitimate commercial e-mail messages frequently get caught and hidden by filters; however, it is somewhat less common for e-mail users to complain that spam filters block legitimate mail.
Companies considering the use of an e-mail marketing program must make sure that their program does not violate spam laws such as the United States' Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM),[6] the European Privacy and Electronic Communications Regulations 2003, or their Internet service provider's acceptable use policy. Even if a company adheres to the applicable laws, it can be blacklisted (e.g., on SPEWS) if Internet e-mail administrators determine that the company is sending spam.
Internet system administrators have always considered themselves responsible for dealing with "abuse of the net", but not "abuse on the net". That is, they will act quite vigorously against spam, but will leave issues such as libel or trademark infringement to the legal system. Most administrators possess a passionate dislike for spam, which they define as any unsolicited e-mail. Draconian measures—such as taking down a corporate website, with or without warning—are entirely normal responses to spamming. Typically, the terms of service in Internet companies' contracts permit such actions; therefore, the spammer often has no recourse.
Illicit e-mail marketing predates legitimate e-mail marketing. On the early Internet (i.e., Arpanet), it was not permitted to use the medium for commercial purposes. As a result, marketers attempting to establish themselves as legitimate businesses in e-mail marketing have had an uphill battle, hampered also by criminal spam operations billing themselves as legitimate ones.
It is frequently difficult for observers to distinguish between legitimate and spam e-mail marketing. First, spammers attempt to represent themselves as legitimate operators. Second, direct-marketing political groups such as the United States Direct Marketing Association (DMA) have pressured legislatures to legalize activities that some Internet operators consider to be spamming, such as the sending of "opt-out" unsolicited commercial e-mail. Third, the sheer volume of spam has led some users to mistake legitimate commercial e-mail for spam. This situation arises when a user receives e-mail from a mailing list to which he/she subscribes. Additional confusion arises when both legitimate and spam messages have a similar appearance, as when messages include HTML and graphics.
One effective technique used by established email marketing companies is to require what is known as the "double opt-in" method of requiring a potential recipient to manually confirm their request for information by clicking a unique link which includes a unique identification code to confirm that the owner of the recipient email address has indeed requested the information. Responsible e-mail marketing and autoresponder companies use this double opt-in method to confirm each request before any information is sent out.
A report issued by the e-mail services company Return Path, as of mid-2008 e-mail deliverability is still an issue for legitimate marketers. According to the report, legitimate e-mail servers averaged a delivery rate of 56%; twenty percent of the messages were rejected, and eight percent were filtered.[5]
Due to the volume of spam e-mail on the Internet, spam filters are essential to most users. Some marketers report that legitimate commercial e-mail messages frequently get caught and hidden by filters; however, it is somewhat less common for e-mail users to complain that spam filters block legitimate mail.
Companies considering the use of an e-mail marketing program must make sure that their program does not violate spam laws such as the United States' Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM),[6] the European Privacy and Electronic Communications Regulations 2003, or their Internet service provider's acceptable use policy. Even if a company adheres to the applicable laws, it can be blacklisted (e.g., on SPEWS) if Internet e-mail administrators determine that the company is sending spam.
Monday, November 23, 2009
Secrets of good ads
A good ad has three characteristics:
- It is simple. It lets pictures not words tell the story.Ofcourse, all ads need some words but a good ad has a powerful headline and only a small amount of text.
- It is directed to a particular group of consumers.For instance, ads for face creams are for older women and ads for motorcycles are for unmarried young men.
- A good ad appeal to emotions and sentiments. Women in the 30-50 age group, for instance want to look and feel younger, so face cream ad tells them that women who use XYZ cream will look like the 20 year old models pictured in the ad.Teenagers want to feel popular, so ads directed at teens often show a happy, confident-looking group of young people using the product in the ad. Teenagers have a surprising amount of money to spend, so advertisers research teenage ads and fashions.
In conclusion, the more simple and precise the ad will be, the most and greater impact it will have on the people.
DESIGN THINKING:
- Design thinking is basically creativity (think beyond sth).Innovation is a by-product of design thinking.If we focus or target on certain groups then we cannot innovate.Innovation basically occurs by considering the needs, demands, and problems of each and every individual.
- Following are the startups to innovate sth which are think of cases or stories, brain storm, encourage cross functional training,understand and define problems, create a design friendly environment, discourage rigid roles,think visually.
- Following are the attributes within design thinkers that are given as we move forward.Observation, sense of wonder, questioning mind, willingness to experiment, passion for collaboration and empathy for people.
- We should be holistic, customer centered (understand the demands of the customers), outcome oriented, insightful (deep thinking), iterative (keep on repeating and changing and improving ideas and experiments for favourable outcomes though u fail because failure is good.It motivates u towards progress and success by repeating a certain process.
Operating Cycle of a Merchandising firm
The operating cycle of a merchandising firm describes all the activities which are required by the firm to produce and sell goods to its customers. Value chain is also a good term to describe the activities undertaken by a firm to produce and market products for its customers. However, operating cycle is an accounting term which I read about in my accounting book. There are usually three activities which are undertaken by a merchandising firm. They are purchasing, sales and collection activity.
Purchasing Activity: Purchasing activity is carried out by the firm to purchase raw materials and other supplies in order to start the production process. Sometimes the firm may simply purchase finished goods in order to sell them at a profit.
Sales Activity: After the goods are produces by the firm, they are sold by the firm to its customers. The firm can sell its goods on cash or on credit. If the goods are sold on credit, then the operating cycle ends here. However, if the goods are sold on credit, then there is a further activity to be carried out by the firm.
Collection Activity: In this activity, the firm collects cash from all those customers which purchased goods on credit from the firm. Sometimes the customer may fail to pay the amount possibly due to cash flow problems or in some cases due to bankruptcy. Then, our firm will have to record the amount due as a bad debt expense.
So, this is the operating cycle of a merchandising firm. So, do you guys think that it resembles the value chain of a business?
Purchasing Activity: Purchasing activity is carried out by the firm to purchase raw materials and other supplies in order to start the production process. Sometimes the firm may simply purchase finished goods in order to sell them at a profit.
Sales Activity: After the goods are produces by the firm, they are sold by the firm to its customers. The firm can sell its goods on cash or on credit. If the goods are sold on credit, then the operating cycle ends here. However, if the goods are sold on credit, then there is a further activity to be carried out by the firm.
Collection Activity: In this activity, the firm collects cash from all those customers which purchased goods on credit from the firm. Sometimes the customer may fail to pay the amount possibly due to cash flow problems or in some cases due to bankruptcy. Then, our firm will have to record the amount due as a bad debt expense.
So, this is the operating cycle of a merchandising firm. So, do you guys think that it resembles the value chain of a business?
Different types of Consumer and Industrial Products:
Consumer products are those products which are purchased by the final consumers for consumption. The different types of consumer products are convenience, shopping, specialty and unsought products.
Convenience Products: These products are those which are purchased by the consumers frequently and which require minimum purchasing effort by the consumer. Products like candy and newspapers are the best examples of convenience products.
Shopping Products: These products are those which are purchased by the consumers infrequently and which require the consumer to make a lot of comparisons between different shopping products. Products like used cars and electrical appliances are examples of shopping products.
Specialty Products: These products are those which have unique characteristics or brand identification and which require the consumer to make an extremely special purchasing effort. Products like sports cars are a good example of specialty products.
Unsought Products: These products are those which are not sought by the consumers or the consumers are not aware about the product's existence. Blood donations are the best example of unsought products.
Industrial or producer products aid the producer in his or her production process. The different types of industrial products are materials and parts, capital items and supplies and services.
Materials and Parts: These include products which are used in the production process as inputs. The best examples are raw materials and purchased inputs.
Capital Items: These products are not consumed in the production process, but are used repeatedly in the production process. Examples are machinery and buildings.
Supplies and Services: Supplies are those items which are not directly used in the production process but which are still required if the production has to take place such as lubricating oil and brooms to clean the factory floor.
These are the different types of consumer and industrial products.
Convenience Products: These products are those which are purchased by the consumers frequently and which require minimum purchasing effort by the consumer. Products like candy and newspapers are the best examples of convenience products.
Shopping Products: These products are those which are purchased by the consumers infrequently and which require the consumer to make a lot of comparisons between different shopping products. Products like used cars and electrical appliances are examples of shopping products.
Specialty Products: These products are those which have unique characteristics or brand identification and which require the consumer to make an extremely special purchasing effort. Products like sports cars are a good example of specialty products.
Unsought Products: These products are those which are not sought by the consumers or the consumers are not aware about the product's existence. Blood donations are the best example of unsought products.
Industrial or producer products aid the producer in his or her production process. The different types of industrial products are materials and parts, capital items and supplies and services.
Materials and Parts: These include products which are used in the production process as inputs. The best examples are raw materials and purchased inputs.
Capital Items: These products are not consumed in the production process, but are used repeatedly in the production process. Examples are machinery and buildings.
Supplies and Services: Supplies are those items which are not directly used in the production process but which are still required if the production has to take place such as lubricating oil and brooms to clean the factory floor.
These are the different types of consumer and industrial products.
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