CURRENT EVENT - HOLIDAY DISCOUNTS: Strategy How To Boost Sales In The Peak Season of The Year?

As usual, every year, before Thanksgiving Day until Christmas Day, it is the most convenient period for retailers to collect money from shoppers. The discount strategy of every brand store has been set clearly how to seduce customers to spend much money on its product because the managers realize that here comes the time the revenue generation can reach peak in the entire year. It is easily to understand why people become more incentive to shop during this time. Some people buy gifts for relatives, friends and colleagues in special events while others think this occasion is the best time of the year to stock up new stuffs and new clothes for their warehouses and closets with variety promotions from retailers. Shoppers love discount and every merchant tries to meet their satisfaction. Thus, when needs and demands are reaching at one point, which foremost strategy is best for a business to obtain its goal effectively and efficiently.

Up to now, promotion is used as one of the most effective weapons for advertisement campaign to attract customers’ glances to the products and then buy them as in need. Most of the managers, nevertheless, don’t spend much time on building discount tactics. They find it so mundane and routine. Discount method, especially in the holiday season, is a crucial method for retailers to generate revenues; it is, however, also a weapon to ruin the brand easily without cautions. As a manger, you should discover which promotion is suitably applied for characteristic of your business for the best outcome. Thus, promoters make sure that your brand is distinguished from others in the strategic promotion, for example, an inspired idea for holiday promotion. Importantly, the program brings benefits to not only the customers but also the business. Therefore, it should also help reduce expenses on operating cost and tempt the customers to buy more to increase revenues. For example, customers are motivated to buy 2 to get 1 free instead to buy 1, or better deals online than the ones in store induces customers to buy online instead of in store to reduce operating cost. Promotional calendar should be set cohesive and announced to teams in the marketing department so that the strategy works effectively regard on their connections. The managers have to keep track the affectation of the promotion on products in the market, and then learn from these experiences for the next programs. In order to make a good impression on customers, promotional strategists try to help the customers feel convenient as shopping. Gift sets are ready for customers to select when customers usually run out of time during the holidays. Coupons, circulations, and catalogs for sale preview have been sent via mails or e-mails one or two weeks or even a month in advance before holiday season comes. The website should be updated with all the events, special discounts, offers and recommendations. Thus, the customers are at ease to prepare a checklist what and where they want to buy for as gifts on their tight budgets and time constraint. You can use social media as the means talking to customers, doing surveys, and doing corporate responsibility for society. These actions can help attract customers’ attentions when people usually want to contribute to charity to help the poor and unlucky people especially in the holiday season.

Discount method will make a big difference for the merchants with the suitable strategies when all shoppers desire to save as much money as possible, especially in holidays. Of course, the sellers should catch these opportunities as the most advantage on their sides in competition. Along with the promotional programs, the assistance for customers via social media also creates a good image of the brand in heart of the customers. That's the reason why most of the business retailers consider holiday season is the best chance in the year to competitively boost their revenues and images in the market.

Reference:
http://blogs.hbr.org/cs/2012/11/the_seven_sins_of_holiday_pric.html
http://smallbiztrends.com/2012/11/social-media-holiday-marketing-strategy.html
http://www.trimarksolutions.com/inside/internet-marketing/online-holiday-strategy-for-small-businesses/
http://multichannelmerchant.com/crosschannel/news/0728-four-tips-for-holiday-strategy/

Applied Strategy- Current Events- Margins in the tablets industry

All recent technology articles are seemingly focused on Apple and its success at creating both software and hardware products based on existing products but slightly modified to make demand for like products seem endless.  Microsoft, long known as a giant in the software industry, recently released its new Surface tablet which might become its first big device and service provider success, outside of the Xbox.  Profit margin is a good measure of success in the computer industry where manufacturing typically takes place in low cost countries and with products then imported to the US for sale.  This article is based on a breakdown by IHS iSuppli, who stripped down a Surface tablet and found Microsoft can earn even bigger margins on the Surface tablet based on current retail prices than the lowest cost/highest margin iPad offered by rival Apple.  A margin of almost 53% compared to a margin of 44% for the new iPad.  The margin estimates are only based on manufacturing costs and don’t include items like marketing, distribution, and other costs.

According to the article, the key to the Surface’s success appears to be the addition of a keyboard to the tablet.  In comparison to the iPad, which does not offer a keyboard as part of the tablet, Microsoft is gaining margin and defining the product through this keyboard, which doesn’t cost Microsoft much to include.  The keyboard also acts as a screen guard- another option not included with the basic iPad but available as an additional purchase.  The result is a blurring of lines between what is considered a tablet and what is considered a laptop PC.  What Microsoft and Apple are currently doing runs counter to what is happening in the broader tablet market.  Amazon and Google, makers of the Kindle and Nexus tablets respectively, use a strategy which attempts to get consumers to purchase their products, even if it means a very low margin, with the belief they will make profits off the content consumers purchase from them afterward. 

The outcome isn’t clear to date, as Microsoft only released the Surface at the end of October.  If successful, however, the implication for managers isn’t a complex lesson to learn.   If you can receive a greater margin over your competitors and differentiate your product enough to increase market share or successfully enter a new market in your competitors’ territory, you’ve positioned yourself well.  Also important to remember is low cost / high margin isn’t the only factor going into a successful product launch in the technology industry; differentiating yourself from your competitors is equally important.

Source: Microsoft's Surface a bigger moneymaker than Apple's iPad?

Author: Dara Keer

References:

1. http://www.computerworld.com/s/article/9233310/Surface_s_high_profit_margin_reveals_Microsoft_s_ape_Apple_strategy
2. http://www.eweek.com/mobile/microsofts-surface-brings-in-more-dollars-than-ipad-does-for-apple/
3. http://www.eweek.com/mobile/early-surface-store-sales-validate-microsofts-strategy-analyst/

Applied Strategy: Current Event – Japan’s Consumer Electronics Companies

For past several decades, Japan has been famous for its consumer electronics. Nikon, JVC, NEC, Casio, Nintendo, and Sony, just to name a few, are all big brands not only in the Asian market but also in the global one. Japan’s robust economic power also arouse scholars’ interests in investigating its key success factors. A great amount of academic writings and books related to Japan were published, such as Journal of Japanese Studies, Social Science Japan Journal, The Lone Samurai (William Scott Wilson, 2004), and Japan as Number One (Ezra Vogel, 1979). However, since 2008, started with the impact of global financial crisis, Japan has suffered from a series of difficulties. It would be interesting to update our knowledge of the current status of Japan’s economy and specifically to watch over the performance of Japanese consumer electronics companies.

The article took Sharp and Panasonic as the examples of Japanese consumer electronics companies. Recognized by the article, these companies are now facing several challenges: (1) the high technology does not translate into high price/profit, (2) companies from other countries successfully use low-price started to defeat their market share, (3) companies from other countries have also developed competitive technologies, (4) the continued appreciation of Yen, and (5) the weaknesses in product design and marketing. In short, the issues discussed are: (1) R&D investment, (2) marketing and pricing strategy, (3) currency policy, and (4) product design. The consumption of consumer electronics is tied to people’s salaries; meanwhile, people’s salaries are tied to the development of economy. That is to say, to figure out the future market capacity, we first have to precisely forecast whether it will be a bull market or a bear one. Consider the likely economic growth in the future two years (announced by Fed officials), it is quite possible that consumers can accept high-price consumer electronics. Thus, Sharp and Panasonic may keep developing their high technology and charging higher prices. In addition, due to the death of Steve Jobs, Apple’s design and marketing capability has now aroused some analysts’ doubt. I believe that in future three to five years, Apple will not be as prosperous as when Jobs was alive. And these future three years may give them a great chance to catch up their design and marketing capability. I also believe that the low-price strategy adopted by Chinese companies, Taiwanese ones, and Korean ones will keep working in future years -- since they do not possess that high-level technology as Japanese companies do, low pricing is their only exit. All Japanese companies have to do to compete with Chinese companies, Taiwanese ones, and Korean ones is to establish a reasonable price-quality set that the market can accept.

Consider all of the factors above, the practicing managers of Japanese consumer electrics companies still have to do the thorough market research to know what the market expect the quality should be and how it expect the reasonable prices will be before conducting technology development and setting prices. In addition, it would be wise to take advantage of their high technology to produce quality products and to differentiate them from the low-price competitors.

Source: Sharp, Panasonic Continue to Show Weakness

Author: Jeff Uscher

Reference:

1. http://news.cnet.com/8301-1001_3-57547921-92/the-era-of-japanese-consumer-electronics-giants-is-dead/

2. http://www.businessweek.com/articles/2012-11-08/sharps-profits-on-lcd-panels-worse-than-flat

3. http://www.guardian.co.uk/business/2012/nov/11/japan-electronic-money-short-circuits-economy

4. http://www.bloomberg.com/news/2012-11-09/sharp-says-foxconn-talks-could-continue-beyond-march-deadline.html

5. http://www.businessinsider.com/japanese-gadget-makers-need-a-miracle-2012-11