On-line Music Piracy

Music theft has been around for many years.  Record companies have been trying to fight this increasing problem for many years, but with fast pace advancements in technology and the global reach of the internet, it seems record companies and regulators are fighting are endless round.

In the last several years, major file sharing servers, such as Napster and more recently Limewire have been shut-down, however when one free on-line music source is forced to shut down, other will take place. With servers in China, Nigeria or Iran, it gets even harder for regulators enforce the law. In today’s global economy, with the fast spread of information, social media and viral forms of communication, I think hard to believe that governments and record companies can successfully abolish piracy worldwide. It may be diminished but not eliminated.

In my opinion, the money and energy towards anti-piracy solutions are going towards the wrong direction in many corporations. Instead of pursuing pirates I believe companies can achieve better outcomes with investments in R & D. For example, Sony was able to stop its games from being pirated on the video game console Playstation 3. In the previous version of the console, Playstation 2, piracy was a major issue, but now the problem has been solved with new technology. Only new anti-piracy technology can fully abolish piracy.

http://www.riaa.com/physicalpiracy.php

Groupon, cash cow or white elephant?

Groupon, that’s the new WWW sensation. Most internet savvy people either heard about it or shopped for a deal in there. It’s a quite simple concept, a website that offers incredible discounts for local businesses on your city. Great, I can get a $100 dinner on my local favorite restaurant for $50, that’s sound a great deal isn’t it. Well, in theory it’s an amazing deal, for customers at least.

Groupon alleged has monthly traffic of 3 million users, moreover it is believed that the firm’s revenue was $500 million dollars in the last fiscal year, quite impressive for a 2-year Chicago based start-up. Groupon numbers and growth are without doubt off the chart, however until when this business model can be sustained?

In reality many businesses are using Groupon to gain brand visibility. Groupon is a “cheap” way to advertise. A small biz owner that sells $100 deal for $50, have to give 50% of its sales to Groupon, so in fact in $100 deal the business owner gets only $25. One may think it is worth because hundreds of thousands of locals will be seeing your ad. Yet most of small businesses in the US have profits margin between 10% and 15%. So how can a small business stay in business offering such low prices? The answer is, they can’t! It’s actually a mix between long term marketing strategy along with a dumping strategy, where a business sell below its cost expecting to increase business visibility and customer base to later sell at full prices. Plant the seed now to collect the crop in the future.

Great!! However, many businesses are realizing  that Groupon actually are hurting their businesses. Current customers are using Groupon to get a deal. Therefore, the current customers that before were willing to spend full price, now are actually bringing only 25% in revenues. In the long term, I believe, small business owners will realize that Groupon is not such a good deal.

If one is opening a new business or wants to increase its business visibility Groupon is a great and cost effective advertising channel, nonetheless I believe that small business owners can’t survive using this business model and eventually, once they grow their customer base, or when they are selling at capacity (i.e. summer time for restaurants) they will stop using the website, hence Groupon will face a challenge not only to grow revenues but to sustain it to the current levels.

Source:


http://blogs.reuters.com/mediafile/2010/12/01/is-google-overpaying-for-groupon/

http://www.retaildoc.com/blog/groupon-worst-marketing-business/

Inbound Social Media

     When one thinks about social media the first thing that comes on mind is Facebook. The communication power of Facebook, twitter and others social media networks are extraordinary. A single gossip/lie (a Photoshop picture of Megan Fox and I kissing) post on my Facebook wall can be seen by three hundred of my friends. If I tag ten of my friends on a gossip, the exposure can be 10X300(assuming they have around 300 friends). Now imagine if I tag all three hundred, and my friends tag their friends, the gossip spread grows exponentially and maybe for some "facebookers" the gossip will become true. For this exposure power and the speed you can spread information social media have become powerful marketing tool for small and large businesses.

From mom and pop restaurants to large corporations such as Microsoft and Coca-Cola, all have a Facebook page or a twitter mini blog. Social Media is a cheap yet efficient way of communicating with customers.  You can run on-line marketing campaigns, promotions and coupons all in a turn of a dime.

Nonetheless, few companies began using social media with a different strategy, they are not focusing so much on how they communicate with customers, instead, they are focusing a how customers can communicate with them using social media. Procter and Gamble for example, uses Facebook, Twitter and Blogs to gather customer opinions and feedback about its products. It’s pure proactively on-line marketing research. Social Media have been helped Procter and Gamble to better understand customer needs, and backed up with other research methods, design new products that better serve customer needs, therefore new products that will sell.

In summary, as a new trend of social media is creating a two-way road media. Companies have to capture the opportunity not only to communicate with customers but also let customers communicate with them, doing so companies can gain invaluable insights of customer’s perception of their products and brand.

Source:

Marketing an Introduction - Armstrong, Kotler
Wall Street Journal
sosmarketing.com http://www.sosemarketing.com/2010/04/09/social-network-marketing-is-informal-conversation-on-a-public-platform

Introduction to neuromarketing

Every year a trillion dollars is spent on attempt to persuade the human brain, nonetheless very few understand how the brain really works and what's attractive to it, how it decides what it likes and doesn't like, and how it chooses to buy or not buy the endless range of products and services.

Due to the need to better understand consumer behavior and the mysteries of the human brain, many marketing professionals are adopting neuroscience techniques to try to comprehend the relationship between subconscious and brand. This new marketing trend has been called “neuromarketing”.

Basically neuromarketing applies tools of modern brain science, such as magnetic resonance imaging (MRI), and applies them to likes and dislikes of customer decision-making. Interpreting brain signals scientists can determine the brain response to a certain brand or ad.

Companies around the world are increasingly turning to neuromarketing because it offers far more accurate and reliable results than conventional market research methods such as surveys and focus groups.

In the other hand, neuromarketing is still a very expensive marketing tool and may take a while for it to replace focus group and surveys. Nonetheless neuromarketing is getting adept in product development departments, where it is important to know if a new product or a new concept will be accepted in the market before its mass production.

Sources:


http://proquest.umi.com.ezproxy.fiu.edu/pqdweb?index=66&did=1624590811&SrchMode=1&sid=7&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1290382371&clientId=20175


http://proquest.umi.com.ezproxy.fiu.edu/pqdweb?index=1&did=2187930441&SrchMode=2&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1290379257&clientId=20175


http://proquest.umi.com.ezproxy.fiu.edu/pqdweb?index=28&did=2007095121&SrchMode=1&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1290379698&clientId=20175