The Adage from the Oracle...

"It's only when the tide goes out that you learn who's been swimming naked."
- Almost every investment bank
- Every other financial services firm
- The auto industry
- Iceland, the country
- Bernie Madoff
- Ramalinga Raju

and now, Allan Stanford.

Warren Buffett is a genius :).

Awards for the best swimmers in each category here:
http://www.economist.com/business/displaystory.cfm?story_id=12796770

Marketing 3.0

Marketing, recently got a lot easier, all you need to have is an internet connection and a little creativity and you can expect to market almost anything. You could upload video demonstrations of your product on Youtube, create Facebook and MySpace communities around your product, create snazzy viral marketing campaigns that almost cost nothing.

TV Radio and the Internet:

However, Marketing also just got a helluva lot harder than ever before! Rewind 15 years, all you had was TV and radio advertising. If you were a large corporation, you had to create kick-ass commercials and you could get noticed. Otherwise you had the option of Direct Marketing, where you could mail out solicited/unsolicited advertisements to a large population and reap rewards (a response rate of 3% is considered exceedingly good in direct marketing). People even got a little smarter and started targeting their marketing efforts, by figuring out the demographics of consumers, by analyzing their buying patterns and so on. 

Even 5 years back, when the Internet era dawned, all companies had to worry about was how to add this new marketing channel to the existing portfolio, how much to allocate to it and where to advertise. It was still all about advertisements. 

Forward to 2008: 

Then suddenly something happened in the websphere, sites like Youtube became a craze, social networking became a simple way of life for a majority of the population. Web communities became a powerful driving force in many product categories (remember Jeff Jarvis's blog entries on bad Dell customer service that brought the company to its knees forcing them to act).

This is a new era of Marketing, and Marketers used to the old ways of life are not going to be successful here. Again, as is the case with any systemic change, this is also an opportunity. Companies that re-learn their basics and re-invent themselves will survive while others will perish. Here is a fantastic article that talks about the changes and how companies can do well in the new environment:  

http://online.wsj.com/article/SB122792310060465901.html

The key takeaways from the article:

1. Consumer attention is the most valuable resource in marketing today, get creative in ways to get their attention and utilize it to the fullest for the fleeeting moment when you have it.

2. Do not fear the "cloud" or online communities, instead getting involved with them and even nurturing them can lead to better product design, quicker customer feedback and in the end, much better customer loyalty. Some companies are directly leveraging such communities in product design, market research and in user-generated advertising content!  

3. Pay special attention to niche communities related to your product categories. "When they're efficiently targeted, they can be highly responsive, lucrative and loyal".

4. The days of insanely successful memes are almost over, instead create intelligent "bemes" that customers will readily accept and share with others. "The best online marketing now takes place among people who know and trust each other".

5. Finally, stop thinking about Internet as an extension to your brick-and-morter operations. Instead think of the online and offline shopping experience as part of the same consumer experience continuum. Rethink the synergies between the two. Build a complete shopping experience, not just a website and a store.

Let's Give Free Markets a Fair Chance

The second largest electronics retailer Circuit City files for bankruptcy. General Motors is on the verge of a collapse with its stock getting to the lowest point in 60 years, DHL shuts down domestic operations cutting close to 10,000 jobs. Starbucks's earnings fall 97% despite valiant efforts from Howard Schultz. IT companies are feeling the pinch in India cutting jobs, freezing recruitment.

These are just a small sample of the news that we have been hearing over the past few weeks. Can't imagine a worse time for a new President (or for a new MBA for that matter).

The dangerous off-shoot of this is the fact that Communism seems to be raising its ugly head. Here is an interesting article from WSJ talking about how this is playing out in India: http://online.wsj.com/article/SB122628672919612761.html

For 43 years since Independence till the point where the Indian economy almost collapsed, we have tried communism. And FAILED miserably, we have created a few really wealthy politicians in the process for sure, but the common man has seen no progress, and that was until IT came in which was for some reason untouchable by communists and politicians and it has been successful for that one reason. Now, capitalism will have its share of failures no doubt-and we have to live through it. That definitely does not mean we get into the regressive politics of communists as a reprieve, that will only take us back to a time that we definitely don't want to go back to.

Let's give capitalism and free markets a fair chance in India-let us learn the lessons from them as global citizens, and then may be we stand a chance of becoming the power that we deserve to be.

"As long as there is a Left in India, India has no future left."-Cho Ramaswamy.

Complicating the Web Space..

How would you like it if all your favorite websites had different top level domain names, that is to say, if instead of www.chase.com you could have www.chase.bank or www.walmart.shop or even top level domains referring to brand names themselves like www.laundry.whirlpool or www.laundry.maytag? You could argue both ways-that it could lead to more creative ways for consumers to remember websites or that it would result in more confusion (I subscribe to the latter view).

Whatever your point of view is, apparently the change is coming (a weak pun intended:)). WSJ has covered the issue here and here is an old article announcing the move. And since it needs a membership to read the whole article, I will take the liberty of providing my interpretation of what it says:

1. Costs for companies to maintain top level domain names will go up. For instance, if you are Apple, what domains do you purchase-.apple .mac .ipod .itunes .iphone? What about .music or .cool or .notebook or even .jobs? What if another company took these domain names?

2. Already companies spend an enormous amount to maintain their web domain names, this move multiplies the costs of doing business.

3. The number of fraudsters might go up. What if I purchase .bank and create a site called jpchase.bank that looks exactly like chase.com and fool people into giving their account details? That again means the monitoring costs just went up.

4. What happens if I buy .life and do a bidding between insurance companies, lifestyle product companies, hospitals and sell it to the highest bidder?

5. Finally, it already takes so much effort for companies to make people remember websites, this will complicate that attempt even further.

On the other side, the justification for the move is that there are just not enough domain names for everyone-instead of exhausting the domain names, opening up the top level domain names provides an almost infinite supply of unique domain names (the names are provided by a non-profit organization remember-they are apparently not trying to make more money out of this though they definitely will).

I personally feel, it is time to make things simpler and not more complicated. We are all so used to .com .edu and other domain names and Google search is the way we find 95% of what we need; so why go through this hassle of multiple top level domains and inflate the costs of companies at a time when they definitely cannot afford any slack?