20700457_DongSoo Joseph Rhee_Entry 14

Good-bye, FedEx Kinko's. Hello, FedEx Office.

History







Do you know FedEx ?, what about Kinko's? I am sure that you've heard about at least one of those two brands. FedEx is a well-known company for shipping services, they don't mind the international shipping too. Kinko is a well-known company for offering wide range office, and Print Services. It is hard to imagine this two companies into one place. Indeed, it happened. In 2004, FedEx acquired Printing chains, Kinko's, for $2.4 billion. They started to open a chain named FedEx Kinko's. When FedEx acquired printing chain Kinko's the air-cargo shipper's grand plan was to integrate the 1,200 stores into its business-services offerings. The goal was a digitally linked network of one-stop stores for customers to make, print, pack, and ship anything. A new logo and name was designed by Landor Associates, added two identities into one name, and made a logo adding various colors.

However after four years, FedEx is ditching Kinko's brand for further business plan.

New Start

"Kinko's is a wonderful brand, and it's nostalgic," admits Gayle Christensen, director of global brand management for FedEx. However, it is limmiting at the same time. Because Kinko's name is too much associated with printings, so there was a difficulty to move on, and offer more services. FedEx wants to expand their business to digital printing services, direct mail, and more creative jobs like signs and banners. By ditching the Kinko's brand, FedEx will be able to do this. After shed the brand Kinko's, they are approaching customers with a new name, "Fedex Office."

Of course, it is not easy to change the name into "FedEx Office". Memphis-based FedEx said it would record a charge of $891 million in its fiscal fourth quarter, in order to shed the Kinko's brand.

However, they don't believe that the name Kinko's will disappear. "Maybe we could use it in a minor way somewhere in the store," Christiansen muses, noting that the company still owns the name. "Perhaps we could label the copiers Kinko Copiers."

Opinion

I believe that they made the right choice. According to the report, FedEx did not separate Kinko's unit financially, but kinko's was having a financial difficulties. Company announced a fall in profit for the second straight quarter due to rising fuel costs and the economic slowdown, which had reduced demand. Also, time has changed, and there was a definite need for change and innovation. World is getting smaller and smaller, and people are getting busy and busy. People need to get their work done in one place. Kinko's name was unappropreate to expand the business further more. Even though it will cost a significant amount of loss to change the name and the style of the stores, it will benefit the company in a long term.


Annotation: A journal from Business Week. "FedEx Ditches Kinko's" written in June 9, 2008, 4:06PM EST. Written by Ernest Beck. Url:http://www.businessweek.com/print/innovate/content/jun2008/id2008069_075908.htm

Entry_14 20500687

Indie Filmmakers Hit Their Target
Taking cues from musicians’ Internet business models, filmmakers are transforming the movie biz by handling marketing, distribution, and DVD sales

Summary
The reason why I chose this article is that it implies several important marketing strategies at one place. Indie filmmakers hit their target audience without any paid advertising or reviews. How can it happen? Consumers are usually attracted by fancy advertising delivered on TV or at least Internet reviews scored high and positive opinions. The documentary “What’s Your Point, Honey?” sold out this 160-seat theater in Manhattan is successful without any paid advertising. The audience of this movie are part of the transformation of the film industry. They are targeted by the filmmakers who produce the documentaries with certain intention of targeting certain group of people such as young women interested in politics.

Opting out of the festival circuit
In reality, few people get rich making documantaries. According to Peter Broderick, a Santa Monica consultant to independent filmmakers, filmmakers who take control of their marketing and distribution can expand their audience and increase their chances of turning a profit. They should be as creative about their distribution as they are about their production.

Closer to the CORE audience
What independent filmmakers do as part of their marketing strategies is targeting the core audience that they are looking for based on the topic or interest about their movie. They build an e-mail list of people who care about the topic. Then, they send an e-mail with the information of their movie to invite the core audience.

Generating more buzz and profits
Since independent filmmakers do not go through many distribution channels, it generates more profits in terms of saving money for the distributors. Besides, it can create the effect of buzz marketing easily due to the core audience compared to the one using distributors.

Opinion
Reading the article, I got a reminder of the P&G case that we discussed during the class. Like the startup company Dr. John's SpinBrush which they don't have any paid advertising but still very successful, indie filmmakers also use this reverse marketing strategy. Just like Dr. John's SpinBrush captured the new segment of customers where the word of mouth effect has created among the users, indie filmmakers target the core audience of their movies who are interested in their topic. I think this is very convenient while very strategic to generate more profits saving the money for the movie distributors. Advertising is a good way of marketing to capture the customer's attention and to deliver information easily. However, targeting certain group of people like many indie filmmakers do thesedays is as important as capturing the whole audience. In addition, this strategy might be a part of customization which companies should understand people's interests fully before giving out random advertisement.

Annotation
John Tozzi, Indie Filmmakers Hit Their Target, BusinessWeek Journal, June 5, 2008
http://www.businessweek.com/smallbiz/content/jun2008/sb2008065_226261.htm

entry14_20400495

The Power of positioning
How to distinguish yourself from the competition to be sure you have a preferred place in your target customer’s mind.

Summary
Positioning is the process of distinguishing yourself from competitors in specific ways in order to be the preferred provider for certain market segments. It is making a unique perception to the customers mind. If you don’t make a differentiated perception to the customers, the customers don’t know whether to buy from you, whether you have the knowhow it seeks, or whether you’ll follow through and meet its needs. Knowing who yourself is important, however in marketing, letting the customers know who you are is more essential. Here are the five steps to improving your company’s positioning.

1. Assess where you are right now
It is important to assess your own company but that isn’t enough. You should ask customer, competitors and journalist for the three adjectives they would use to describe your company, products and overall image.

2. Determine how you want to be perceived
Because when you made up your decisions and begin to take action, it will be too late and cost much to change the direction. You need to determine the specific position you want to take , and what kind product marketing messages and image you want to convey and reinforce.

3. Select your target customers.
In this step you need think about the following questions. ‘Will you benefit from making your image more exclusive and inaccessible of more of a commodity and more accessible? How does your target market define value? How do those people choose among vendors?’

4. Factor in current trends.
There is a well-known expression in this field. “If you want to be a market leader, find a parade and jump in front of it.” If you want to jump in front of a current trend parade, you need to know the trend first. These days numerous companies are jumping in front of the environmental movement with “green: products and service

5. Formulate your four levels
Your business objective drives your business strategy which drives your market strategy which drives your positioning strategy.

Opinion
In class, we learned about the STP strategy which stands for, Segmentation, Targeting and Positioning. Though this article out a lot of stress on Positioning, you need to go through two steps before you actually take the positioning step. Though the three steps are inseparable, we can explain separately. In segmentation, you need to check the strategy and goal of the company first and think about the possible segment. In targeting, you should evaluate the attractiveness of each segment and based on this evaluation, you should choose a sement. And at last, like in this article, considering the five steps that the article is providing, you can position your company.

Annotation :Christine Comaford-Lynch, ‘The power of positioning’, businessweek, June 2, 2008URL http://www.businessweek.com/smallbiz/content/jun2008/sb2008062_723641.htm

# 14 Entry_ 20500297

Facebook's Big Facelift

"The social networking site's coming redesign will be

marked by a cleaner, more organizaed look

to appeal to its vastly bigger, more diverse user base"

Fancy vs. Simplicity*

If there's Cyworld in Korea, there's Facebook for all over the world. Cyworld is quite fancy, providing lots of options and choices with multiple colors. Sometimes I don't even know what to do with new functions they daily upate. On the other hand, Facebook has been focusing on simplicity, meaning that it has been praised for being clean and tidy. However, now Facebook is trying to redesign its web site and I wondered why.

Facebook's problem*

There will be 70 million worldside users in the next few weeks. As the number of users is increasing, designers of Facebook decided to represent a major simplification. - Facebook's trial to differentiate itself from other web sites. Editor in chief of Mashable. com said that "people are starting to feel that Facebook is quickly becoming like Myspace." Myspace has allowed its 100 million users to create wildly different looking pages, which makes its web site look more complicated and messy. Because of this problem, Facebook is trying to find new ways to arrange lots of information users upload. They will give users more options without radically altering the look and feel of the site so that users can feel fresh and well-organized.

Personal opinions*

Because updating is quite different from 'redegning', Facebook's change is a hugh thing to consider. In my opinion, what Facebook needs to focus on what users really want. They need to listen to users and follow what they need, not make user follow what they have already created. What people want from Facebook is probably fun, the way they can express themselves and having a "connection" with other people. Sometimes providing customers' basic needs can catch their minds toward your products or service. Also, Facebook should remember that redesigning would never satisfy each of 70 million users. Some would like it while others wouldn't. Facebook would have to take critics as precious advice from its users and seek what they really want from Facebook. One of my team members mentioned about lify cycle in her journal. Without a doubt, Facebook has been doing great and it is obvious that they are in mature stage and it's the right time for them to think about differentiation and innovation. - which will make them able to 'maintain' its position.

Annotation: Matt Vella, Facebook's Big Facelift, BusinessWeek Journal, May 14 2008

LAST entry (#14) by 20500297

20700443: Entry-14

The Starbucks Effect

Starbucks Corporation is an international coffee and coffeehouse chain primarily based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 15,011 stores in 44 countries. Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, snacks and items such as mugs and coffee beans.

Summary:

Daniel McGinn, the author of the article, basically tells how certain retail chains like Home Depot and Starbucks can effect on the value of the rental property. It seems that both chains represent leading indicators for local real estate purchases, though they both have been in struggle recently. Starbucks due to difficulties with operating conditions in the US, and Home Depot - ongoing housing crisis.
When George Vaughan, an advertising salesman in Portland, heard about plans of Home Depot to build new stores in nearby, he bought several houses in that area. Some times later when that place had Home Depot and Starbucks George could charge prices higher for his houses.

Opinion:

Starbucks is the association of something fascinating among young generation who's following all these brand stuff. Some people are even proud of just holding the pack with Starbucks label.
Is it all about brand awareness? When a customer is loyal only to that product and do not see other options, can wait patiently even for several weeks to get a brand new product form that line.
Nowadays people are ready to pay prices higher for the places where certain famous brand chains are going to build their new stores, and everything is only because these LOUD names: Starbucks or Home Depot...


Daniel McGinn, The Starbucks Effect, newsweek, June 3, 2008
http://www.newsweek.com/id/139886/page/1

Entry 14_20700347

A Chain That Pigs Would Die For

Have you ever heard about the company “Chipotle"? This restaurant is Mexican brand and grows rapidly. To tell the truth, when people think about the fast-food, they think that most fast-foods are junk foods and have a low quality. However, this brand has a great quality.
SUMMARY
According to this article, Steve Ells, CEO of the fast-food chain Chipotle Mexican Grill, buy pork which is used for their products from Kremer’s farm. That pork is not just a pork, but organic pork, so it is good for health. In addition, Ells decided that he use healthful and organic ingredients for Chipotle’s foods, so Chipotle uses few USDA-certified organic products and instead follows its own, sometimes less stringent, protocol. Chipotle's revenues have grown tenfold to reach $1.1 billion. Moreover, its stock price has more than doubled since January 2006, when the company went public, to $100 a share. It now operates more then 700 restaurants around the country and expects to open an additional 130 to 140 before the year-end.
OPINION
Like most people, I thought that fast-food restaurant uses junk ingredients which has low quality. However, this brand makes a new and innovative fast-food. Many people like fast-food because of convenience and portability, so t usually hey don’t mind food’s quality. However, society becomes more aware of healthy eating. Therefore, Chipotle can appeal to many consumers. Actually, in my opinion, Mcdonald’s is the biggest competitor to Chipotle. Although Chipotle’s stock price has increased, and this brand is well-known than before, Chipotle can not ignore the competitor, Mcdonald’s. Mcdonald’s already has high market share and brand name, but it has some weaknesses. One of the weaknesses of the Mcdonald’s is that it does not use fresh ingredients. To take advantage of this point, Chipotle can give a good image to many customers. Compared to many other fast-food brands, Chipotle is in Growth stage of Product life cycle. In this stage, company should reach new customers by studying customers’ preferences and producing different product variations. I think that Chipotle need to advertise actively and throw into relief its foods. Specially, Chipotle sells burritos, so I think that this food could be a star product of this brand.

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Annotation :
Anna Kuchment, ‘A Chain That Pigs Would Die For’, Newsweek, May12, 2008
URL à http://www.newsweek.com/id/135376

Entry13_20400495

iPhone 2.0 Takes on the World

Apple could launch its new iPhone in 64 more countries by yearend, deepening the electronics giant's reach in international markets
As Apple announced to unveil the next version of its iPhone, the fans are expecting a lot of progress from the earlier version. But the main focus to this event is, actually how well iPhone will do in the international market. The new version of the iPhone will do more than perhaps any other device in history to fuel Apple’s ability to reach international markets.

Bigger Seller than BlackBerry?
Until now Apple has only launched the iPhone in six countries, but they recently agreed to release to more than 70 countries by the end of the year with wireless carriers. Until Apple decided to go for the international market its sales were way below compared to the sales of Blackberry. However if Apply is able to accomplish the goals it has announced, it will able to lead the so-called smartphone market.

Ready market Worldwide
Though the little recognition outside of U.S. is a big obstacle that Apple has to overcome, there are some optimistic points. Unlocked iPhones have been spotted in nearly every country in the world. Although the definite number is hard to come by, Apple estimates that gray market dealers in China may have sold as many as half a million iPhones there. This could make Apple to permeate the international market more easily.

More Flexibility with Carriers
There are more reason for Apple being so confident in infiltrating the world market. The company has shown itself willing to break with established practice of signing up only one wireless carrier per country, as it did in the U.S, Britain, France and Germany.

China Toehold
To Apple, China is the ‘Big Kahuna’ according to Needhan & Co analyst Charles Wolf. This is because China Mobile which is the largest mobile company in China has more than 400 million subscriber which is also the world’s largest. But the things between this giant mobile company and Apple didn’t go well. Talk between these two companies collapsed in January over Apple’s share of service revenue. Once Apple gets a toehold in China, there will be no stopping the iPhone engine. Therefore the experts are advising for Apple to first satisfy the demand of China Mobile to get into the market.

Opinion
Once the company establishes a star product and the star product is successful enough to have a cash flow, the company starts to expand. In this case the iPhone in U.S. did pretty well and made Apple to turn its attention to the international world. But when a company is expands to the international market, it always faces communication gap. Back to the case, though iPhone is highly recognize inside U.S. and neighboring countries, there are only small perceptions about iPhone in other countries. To overcome this gap I think Apple needs to promote using there former product brand such as i-pod and Mac computer. Compared to iphone, the two products is widely known because they already done a lot of promotion.

AnnotationArik Hesseldahl and Jennifer L. Schenker, iPhone 2.0 takes on the world, BusinessWeek, June 6, 2008http://www.businessweek.com/technology/content/jun2008/tc2008065_290813.htm

20700457_DongSoo Joseph Rhee_Entry 13

Apple, driving digital lifestyle on a global scale

Since now, apple was the well-known company for personal computers, mp3 player (IPOD) and some accessories. However Apple is also well known for its innovative design. Honestly design of Apple's product was one of the most powerful advantages they had above others. However
Apple is saying that is not good enough.

















Summary
Apple: More Than a Pretty Face

According to the National Retail Federation (National Retail Federation Inc. is a trade association that caters to the needs of the retail industry.), consumer spending on Black Friday dropped 3.5% comparing with 2006. Also, a Master Card Spending Pulse reported that sales of electronics rose just 2.7% from Thanksgiving to Dec. 24, 2007 than the same period a year earlier. Compared to that, Apple anticipates holiday-quarter sales of 9.2 billion dollars, a 29% increase over 2006.

Design alone isn't enough.

Then, what is the main reason for this huge success of Apple, while other consumer electronics companies are relatively failing. A lot of companies tried to copy Apple. A good example is mp3 player industry. Creative Technology, Microsoft and other companies developed a mp3 players similar to IPOD; attractive design, cool behaving features and fine accessories. But most of them failed badly.


















Various models of IPOD(latest version, Iphone)


What is it that these companies need?
It can be simply described as a one sentence, "More Than a Pretty Face". People now want more than just innovative design, and cool behaving feature. Ecosystem is the solution that Apple suggests. Having fine design and cool feature is not enough. They have to have the right ecosystem to back it up. They should have the ecosystem which is backing up the products, such as; content and services, software and interfaces, retail experience, Web site experience, and an army of accessories. Many of consumers Electronics Company do not have this.

Apple got a net margin of nearly 15% at the end of year 2007. To succeed like Apple, other companies need to deeply understand the customer, and their characteristics. They might need to admit that they cannot have everyone as their customers, and concentrate on the specific segment, which have to be the center people who can influence others in some ways. And target them specifically.






Macbook air, one of the latest product of apple, cool design (thickest part the laptop is lesson than a 1cm, and supported by powerful softwares, which are enough too draw attention from customers.


Opinion.
I strongly agree with Apple. Technology has been developed so and even too rapidly, that people can't even follow the speed of it's development, and design of the products are being more and more attractive. Now, these companies have to admit that cool design and features are not enough. Those things became so basic to succeed. Just like mentioned on the article, ecosystem is being important. Things that can guide people to experience buy and use their products more easily, usefully and conveniently. I analyzed Apple's access with AIDA model.

Attention: They draw attention in many ways. One of their most influencing method is their logo itself. Apple's logo is so distinct from others and easy to remember at the same time. People recognize its logo immediately after two or three times of encounter. Because it is simple and attractive, people get attractive with almost everything that has their logo. Also the design of the products did the huge contribution to it.

Interest: Apple draws interest simply with the word "different". Apple always come up with something new, something different and something unique. People get interested in their uniqueness. 92% of personal computer market is distributed by IBM compatible computers. Apple only takes 8%. However it is growing rapidly. IPOD is so unique and distinct from other mp3 players. By the differentiated feature and design, Apple pull the customer's interest.

Desire: Apple make desire to purchase their product with unique features. Apple computer uses different Operating system. There are some special programs that only run on the Mac. IPOD used to have so unique feature which is touch screen, and IPOD has more than 3000 accessories. All these uniqueness creates desire to use their product.

Action: Apple offers many service plan to the customer. Fast delivery, tremendous numbers of Apple store all over the world, convenient website, and service plans. Also they post the price of the product on the web, and all the country sell their product according to the price on the web. It can build a trust between customer and the company, by giving them an impression of safeness, makes them feel they are buying the product with the right price, they are not being fraud.

And the ecosystem comes next. Drawing a new customer is easy, because they are blinded. They don't know about the product well, and they haven't experienced them yet. However, maintaining the old customer is the hard part. They know the product, because they used it before. They are informed about the advantage and disadvantage of the products and the company. Having a right ecosystem in the place, is the incredibly efficient way to maintain the old customers. Provide a good user interface, right contents for the products, well-written instruction and online help desk, soft wares and accessories. Those are the things that help the companies to maintain the old customers, and make them to spread good words for the product and the company. In other words, use the buzz marketing.

Apple is leading the industry with innovation and creativeness. They don't just tend to enlarge the company, and expand the product line. They know that it is important to understand the customer, and understand them deeply. Apple understands: It's not about market share. It's about mind share.










Apple's logo, symbolizing the variation that can be applied to a variety of customers.







Annotation: Written by Sohrab Vossoughi, posted on Businessweek, article title: Apple: More Than a Pretty Face. URL http://www.businessweek.com/innovate/content/jan2008/id2008014_858681.htm

Entry_13 #20500687 :)

Motivate Your Employees Like Jack Welch
-Follow the former GE CEO’s advice and energize your staff by helping them believe in the mission and understand how to achieve it

Why this article?
The idea of motivating employees of company has been such an important part of company management. Besides, it holds the keys to be a successful company. Among many critical issues that company’s CEOs have to take care of, motivating the employees perhaps is the most fundamental step to build a strong company.



Summary
Carmine Gallo introduces this article with Jack Welch’s management skill. Gallo mentions the statement that motivation starts with employee engagement, and engagement begins with effective communication skills.
Jack Welch says, “No company, large or small, can succeed over the long run without energized employees who believe in the mission and understand how to achieve it.”
This quotation implies the three secrets to motivate employees; “energized,” “believe,” and “understand.”

Believing in your mission
Companies put great effort in team-building event such as a whitewater rafting trip. Sometimes they reward employees with high performance all-expense-paid trip abroad to praise their accomplishment. What employees really want is compliment. Psychologically people desire public recognition in front of peer workers and there is no exception. As employees have not doubt to believe in company’s mission, it is up to them from now on.

Reinforce the core mission
Domino Pizza in India has a strong mission that is simple enough to understand for all 4,000 employees. Gallo provides some tips for how to manage later communication reinforcing the core mission statement to the employees. Companies can reinforce the core mission through weekly emails to all staffs, monthly brown-bag lunches with lively discussion, and quarterly visiting the global offices.

Opinion
I think the employees in the company are the most important element in management. This article actually draws two issues, the significance of motivating employees and of establishing the company mission. Top managers should recognize the significance both and design the most effective plans to put it into an action. As Jack Welch mentions about how to motivate employees, I totally agree with his point as if I were an employee of some company in near future. The company wants “energized” employees desperately since this is the key to success I believe. Companies have to know the employees’ job satisfaction including working environment, payment, and treatment. Rewarding system is highly recommended as well as team-building events to encourage employees. In sum, it is not difficult to catch what employees really want but to put it in to action is indeed difficult. This might distinguish whether the company is on the way of success or not.

Annotation
Carmine Gallo, Motivate Your Employees Like Jack Welch, BusinessWeek, May 23, 2008

http://www.businessweek.com/smallbiz/content/may2008/sb20080523_761806.htm?chan=search

Entry 13_20700347

Bottling Your Own Personal Smell

Just few days ago, many young people who are 20 years old received rose, perfume, and something like that for ‘Coming-of-Age Day.’ So a lot of perfumes are sold. Do you have your own perfume? If you have, what is your own personal smell? Recently, many luxury brands which make perfume are great on bespoke perfumery.
SUMMARY
These days, fragrance market is taking a turn for the better. Therefore, some large enterprises such as Jean Patou and Guerlain and small businesses are concentrating their attention on perfumery. For example, Cartier, who started its bespoke scent creation in 2005, meets customer first for making customer’s own perfume. Cartier grasps customer’s personality and flavor through small talking. The process can take up to 10 meetings, resulting in the creation of a final perfume over several months. It has a quite time making bespoke perfume, and perfume’s price is very high. However, despite these factors, the number of the customers who are seeking this unique perfume is increasing.
OPINION
I think that luxury industry will not fold. According to the article, perfume industry is appeal to the many people.
Segmentation - Market segmentation is segmentation of custom’s needs. In this case, customs’ desire is to distinguish themselves and wear a unique scent. Actually, there are some value propositions including symbolic value, self-expressive value, and sensual value. For these value propositions, many customers want to buy a bespoke perfume which has brand name.
Targeting - This market is niche market. Frankly speaking, key customers are interested in themselves. They might like differentiation. I think that this products’ target age is 20 ~ 40, because they choose perfume with great interest specially. Therefore, this bespoke perfumery could be a mass market and include main stream.
Positioning – When I hear the word ‘bespoke perfume,’ the word ‘Identification’ flashed through my mind. Because bespoke perfume make people more attractive and special. Even though the perfume’s price is so high, perfume industry still strong thanks to such image.
In this generation, individual’s personality is very important to all of us. Therefore, they use their character with peculiar perfume in the whole world. If many large enterprises who make perfume advertise their products effectively, there will be a lot of new customers in this industry.

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Annotation : Amber Haq, ‘Bottling your own personal smell’, May 26, 2008, Newsweek

URL -> http://www.newsweek.com/id/137482

20700443: Entry-13

Wal-Mart's Empire Expands, Again

Everyone knows Wal-Mart with its discount department stores. According to the 2008 Fortune Global 500, it is the world's largest public corporation by revenue.

Summary:

Wal-Mart Stores Inc. recently introduced a free internet classified service: Walmart.com Classifieds that runs through classified web site Oodle.com. Now it's selling its own offerings on the Web by posting the products, pets, and paraphernalia of virtually anyone who wants to list, and it carries now 30 million items. It is accessible through Walmart.com where they sell their own products, and it's not chargeable for both buyers or sellers.
Wal-Mart. com Classifieds has positive prediction of reaching more than five million consumers each month through a network of sites, including newspapers, portals such as Lycos and online communities.

Opinion:

In spite of the fact that Wal-Mart is already a huge corporation with million customers who like discount products, it continues to attract the attention and loyalty of their customers. Now Wal-Mart decides to expand through offerings that anyone can list on the web site. It also might be a positive influence on customers who are differently experienced in something new that Wal-Mart provides.
However, not all people think the same way, as many consumers have negative responses about their expansion. For example, some of them predict that it could shut down in several years, or while Wal-mart is doing good other small businesses don't have opportunities to disclose.

Wendy Bounds, Wal-Mart's Empire Expands, Again, The Wall Street Journal, June 3, 2008
http://blogs.wsj.com/independentstreet/2008/06/03/wal-marts-empire-expands-again/?mod=rss_WSJBlog

Entry #13_ St.ID: 20500297

Nissan,

Toyota Focus on Graying Drivers

Faced with slumping sales at home, Japan's carmakers are testing

new technologies to help the elderly stay safely on the roads.

Design for the elderly)
As technology develops, population of older people is increasing. In Japan, since about 20% of the population is over 65 years old, targeting older people with specific model is becoming a popular business and it's not an exception for business about car driving. It's not just because the Japanese elderly population is gradually growing, but because of a lack of interest in car buying among younger drivers, 20s to 30s. Let's look at what Nissan did to do a business with older customers.

Summary of this article)
* Designer Suits
Nissan believed that those engineers making car for older customers need to 'feel' that what aging is like. Therefore, now it has engineers donning special suits that simulate the physical effects of aging. 'The suits give engineers the feeling of poor balance through a raised front-tor design; they include goggles that imitate failing eyesight and color blindness; and special casts mimic arthritic pain by making it difficult to raise arms and legs.' (quoted) With the same feeling of the elderly, car makers would fully understand what older customers really want and need.

* Special developments for older customer
Like these unique designer suits, Japan has been doing a lot of research about aging. Toyota approached Ryuta Kawashima, a professor at Tohoko University to develop a car of the future. The idea of Toyota is that this car is able to recognize how the driver 'normally' drives and if the speed of driving changes significantly, the car could automatically slow itself. Another thing is from Kawashima, known for being featured in Nintendo's Brain Age video game. He said that 'he would develop a system that monitors driver's brain patterns and, if problems are detected, notifies the driver or slows the car.' (quoted)

Personal Opinions)
Nissan's trial of feeling how older people feel for doing a business with older customers is pretty impressive. Without knowing what customers really want and need, such a business can never be successful. Targeting older customers was also a good choice because they are probably the ones who would be more impressed than any other kinds of customers when they feel that they are thought of and cared for. The important thing Nissan still needs to work on is how to attract these older customers to buy their cars. They might use AIDA model to set their strategy.

Attention: Since older people watch TV less than younger customers, TV commercials would not be effective. And actually older people drive less and even if they drive, they do not go far. To get their attention, Nissan has to find certain places that older people usually gather together. Opening a special even in those places can make older customers pay attention.
Interest: Once they pay attention, it is important to make them interested in cars. Either providing some products that older people need in their daily lives or introducing benefits of driving cars might be working in this step.
Desire: In order to make them want to buy that car, Nissan may think of the benefits that older customers not only need but desperately want. Most of the older people want convenient, safe, and affordable type of cars. As Nissan develps a special designer suit, they may need work on designing special cars providing new functions especially designed for the older people having difficulty with driving.
Action: In this step, Nissan needs to make older customers feel safe and easy in driving. With purchasing their cars, Nissan may provide driving education course.

No matter how old they are, every single human being wants to have their own portion in a certain place. Older customers are a good target in that kind of psychological sense. Acknowledging the fact that older customers have potential power would be Nissan's competitive advantage some day.

Annotation*: Ian Rowley, Nissan, Toyota Focus on Graying Drivers, Journal. May 6, 2008_ http://www.businessweek.com/globalbiz/content/may2008/gb2008056_154197.htm?chan=innovation_auto+design_design+strategy

13th Entry by 20500297 :)

20700457_DongSoo Joseph Rhee_Entry 12

Coffee ? Burger ? McDonald !

What comes into your mind, when you think about coffee? Probably answers would be latte, cappuccino, frappuccino and so on. Then what about the shops that serves coffee? What comes into your mind ? I have no doubt that franchises like Starbucks, CoffeeBean or some other coffee shops. However now McDonald serves their own coffee, and they have no doubt that they are ready.

Summary
Thirty years ago Janice L. Fields who was a brand new crew member of McDonald in Dayton, Ohio. Now she is a cheif operating officer of McDonal USA. She is responsible for for 13,800 restaurants, 700,000 employees, and $7.9 billion in annual revenue. After she was promoted to COO in 2006, selling of Bigmac raised rapidly, and still rising ever since.

Objectives
As an Chief officer who has done incredible job, she is now confronting huge challange, breakfast market. In order to do so, McDonald is now adding specialty McCafe coffees, such as cappuccinos and lattes. They see this will bring the breakfast market back to them.

Risks
However they have some risks too. In order to server these coffee, they have to install a brand new coffee machine to all the franchises. On top of that, serving various kinds of coffee, it might slow down the serving rotation and the waiting time for the customer. When think about the most advantage they have, which is hot food in short period of time, this could risk their business.

Opportunity
After years of test period, Fields say they are ready. To reduce the delay time, most of the processes has been automated. Crewmembers ? all they have to do is push a button and serve them to the right person at a right time. Also detailed instructions are written on the paper, such as how many times they have to stir for the specific coffee, and so on. They think it will be successful.

Opinion
I personally think this is a wonderful idea. I like McMorning meal very much, but I and my friends always complained about Mcdonald having only one kind of coffee. Therefore I foresee this event as a huge opportunity for McDonald.

However as it was mentioned above, I see some problems too. A lot of people comes to McDonald at morning. And huge percentage of them are customers for drive-thru, which means they are fairly busy customers. If the process gets slowed down even few minutes, it will be tremendous of damage to them. Also the quality of the coffee would be the problem too. When people start to look for a specific coffee, that means they are looking forward for the quality too. However I doubt that McDonald's Coffee is more delicious than the one in the proffessional coffee shops.

I suggest some solutions. Just like on the article, the serving process cannot be slowed down, never ever. This will require more seviere training for the crew members. On top of that they would have to improve their quality of coffee, or develop a special coffee that goes well with their food. Afterall, people are comming to get food, not only for the coffee.

I think through this project, McDonald will have incredible change and take the breakfast market fast.

Annotation : Written by Michael Arndt on Businessweek journal "McDonald's Specialty Coffee Kick". URL: http://www.businessweek.com/print/bwdaily/dnflash/content/may2008/db20080514_138620.htm

Entry12_20400495

How to Build Brand Friendship

Like the interaction among human being, it is essential for the brands to have interactive relationship with the customers. This article introduces four essential elements for building relationship with the customers.


Belonging

How can you make the customers feel belonged when they use your brand? The most important factor in branding is relevance. Brands that generate the strongest sense of tribal identity are so relevant to the wants and needs of their customers that they generate a natural gravitational pull.

Friendship

To build friendship with the customers, you need to have consistency. As with human friends, the brands we adopt give us a sense of comfort and familiarity. Our chosen brands have earned our trust through another essential aspect of branding which is consistency.

Dependability

To acquire dependability from customers, it requires time. Just as it does with human relationships, it takes time for brands to develop strong bonds with their customers. Infatuation is , but infatuation never lasts. It turns into either ambivalence or attachment depending upon how well the brand promise is delivered.

Awareness

Brand relationships, just like human relationships, need consistent attention and upkeep in order to stay fresh and top of mind.

Think about the strongest brands out there: Southwest Airlines, Apple, eBay, even Caterpillar. They understand the principles of belonging, friendship, and dependability, and they treat their customers accordingly. They know what they stand for and refrain from chasing business that would compromise their hard-won loyalty

Comments

The article is emphasizing on belonging, friendship and dependability in creating relationship with customers in branding. In class, we learned that most of the Korean brands don’t seem to have a friendly image. Instead of a friendly image, they are more authoritarian and have a stiff brand image. The article quoted Kerry Livgren, a famous rock star in Kansas. He said that “The only way to have a friend is to be one." The Korean companies should keep this word in mind all the time.

Annotation Steave Mckee, ‘How to Build Brand Friendship’Businessweek, May 9, 2008URL -> http://www.businessweek.com/

20700443: Entry-12

McDonald's Loses Its Trans Fats

Summary:

McDonald's is the world's largest restaurant chain, recently decided to cook their products without trans fat. The company's goal is to avoid trans fat from most of their cookies, sandwiches, pies by the end of the year. However, some products are already prepared free of trans fat. McDonald's didn't remove trans fat for a long time, as they didn't want to spoil the taste of their product, especially French Fries.
As one of the McDonald's executives said that their company instead of putting the highest cost on product they share expenditures with customers, so they don't need to pay much money. In addition, nowadays McDonald's sales growth rate decreased as consumers become more cautious. However, executives of that company are optimistic about sales of the rest for the year.
Moreover, McDonald's is not going to remove Dollar Menu, though many franchises complain of their non profitability.

Opinion:

It's often difficult for especially big companies to change its products or target of their consumers, because there's uncertainty of expectations. Each small change can have a great influence on sales, products, employees. Therefore, many companies slow the time of changeover; why do they need to change in general? Some do it because current product doesn't bring profits, some - health pressure. And it's efficient if the company cares about its consumers, their purpose is not just to sell the product, but also to be sure that it won't damage their health. This is all about customer relationship.

Janet Adamy, McDonald's loses its trans fat, The Wall Street Journal, May, 2008
http://online.wsj.com/article/SB121151133018416567.html?mod=SmallBusinessFranchising_RelatedStories

Entry12_20700347

Making Airline Travel Feel Less Like Torture

Have you ever gotten abroad a plane? If you have, which airline did you use? Did you have a good time in that airplane and feel comfort? These days, there are keen competitions among many airlines because of the airplane seat.
SUMMARY
According to this article, many airlines care about a quality of an airplane seat. Usually, passengers feel inconvenience because they should stay in a narrow and incommodious place during flight time. However, Glenn Johnson, who is the chief designer at B/E Aerospace, thought that airplane seat can be a work of art. Airlines are installing new generation airplane seats in first class. In addition, some airlines install such seats in economy class. Therefore, a lot of passengers feel satisfaction, and recently, suppliers who offer such seats are busy due to the high demands of those seats.
OPINION
Because of the globalization, the number of airline users is becoming large. I think that airplane seat’s innovation is very nice news to many people who often use airlines. There is no precedent case, so if people who work at airline care of this point, airplane would be more convenient transportation.
Attention – Through the advertisement and the news, many people can hear about new and comfortable seat. Airlines can attract various kinds of customers.
Interest - New generation seats are lighter and more comfortable than ever before, so people who heard about such airplane seats, they would wonder about that. Later, passenger would like to use the seat which is very attractive. Specially, regular customers of airlines may be great on this amazing news.
Desire – If customer uses an existing seat of airplane, he or she might feel inconvenience and want to use better facilities. I think that such seats which have good quality can appeal to certain customers who have to have nice condition for many reasons. For instance, to athletes, politicians, and other certain jobs, this news is very attractive specially.
Action – To tell the truth, comfortable seats are installed at first class in most airlines till now. But if many airlines install more nice seats at their airplane, more customers could use good facilities and also, airlines could save some money because they can save some cost of fuel by light seats.
This is a globalized world. People use airlines when they go abroad. However, the number of customers who use domestic air service is increased. Airlines that offer more convenient seats to passengers could increase their market share and give good image to customers. Therefore, airlines need to improve their facilities’ quality.

20700347

Annotation

Daniel McGinn, ‘Making Airline Travel Feel Less Like Torture', NEWSWEEK, Mar 24, 2008
URL -> http://www.newsweek.com/id/123470

Entry_12 20500687

Advertisers to Consumers:
We’ll Text You
Cell phone Messages Find a Mobile Niche; Customers Ask for It

Prologue
Are you aware of mobile advertising? Is it too broad to identify? Then, think about text-message advertising that we daily receive through our cell phone. This article captured my mind since feel more familiar with text-message advertising. This is an effective way of advertisement over many other types of ads such as web banner ads and e-mail ads.

Summary
This article is about mobile advertising specifically using text-message. Emily Steel analyzes how effective this text-message advertising is and current trends associated with mobile advertising. Steel mentions that companies spend on mobile-message advertising now about 88% of the total $1.7 billion spent on mobile ads. According to Matt Jones, a director of mobile strategy for Gannett, the text message approaches to customers to develop interaction between companies and customers. Through this analysis, I could draw a simple conclusion which text message is such an effective tool to create personal relationship as if this is one part of customer relationship management (CRM) by companies.

My Analysis & Opinion & Suggestion
Based on Steel’s ideas about mobile advertising, I, as a business student, I want to add SWOT analysis from my view point of mobile marketing.

Strength: 1) compared to other sources of mobile advertising, text-message advertisement carries newness of advertising, 2) it is easy to approach to almost every potential customers who has cell phones, 3) text-message ads are easier to measure the result than mobile web ads, 4) it is personal though it is sent as a group text-message.
Weakness: mobile advertising has a challenge toward limited spaces for advertising in which only 160 characters are available to deliver ads.
Opportunity: find a mobile niche effective way to deliver mobile ads. Focusing on simplicity, clarity, attention getting, and interesting, text-message advertising creates higher opportunity to be the number one.

Threat: perhaps it delivers too much unnecessary information and it is also too commercialized. It becomes annoying if its target is wrong so delivering unnecessary ads and avoidable contents.

Suggestion
I think companies should consider individual’s personal interest more thoroughly. For me, I am interested in cosmetic brands and its new products as well as special sales. My reaction to text-message ads such as coming-up sports games, I get annoyed by this ad and I will also complain about the way of sending the ad through text-message. As Steel introduces Yahoo with 4INFO, one of the most-active players in text-message advertising, 4INFo provides the technology for Yahoo to publish its content, such as news updates, horoscopes, sports scores and weather forecasts, via text message. I think partnership is another key factor to achieve the goal of penetrating mobile advertising. In addition, as I mentioned in SWOT analysis, opportunity should content customers’ interest the most, which are anything that pulls customers’ mind out. Therefore, identifying customers’ interests, wants, and needs is crucial to determine accurate target segments and manage efficient customer relationship.

Annotation
Emily Steel, Advertisers to Consumers: We’ll Text You, The Wall Street Journal, May 27, 2008 http://online.wsj.com/public/article/SB121185056833021519.html?mod=2_1567_leftbox