Shelley's summary

Q1. What explains PayPal’s early success?

The rise of PayPal was not an accident. Followed three-phase strategy, PayPal quickly earned lots of share in the marketplace and had gain revenues in a stable increase.

PayPal serves as a platform between two customer groups, one is cardholder and the other is merchants. PayPal has to rely on both sides to survive and gain profits. As long as one of the two vanishes, the platform will be unable to work. Through discovering the needs of both sides and the careful pricing method, PayPal builds its awareness from offering free charge on the beginning stage. As the first-mover, PayPal took huge risks but also reaped most of the benefits. At the first phrase, PayPal smartly cooperate with eBay to expand its user’s base. This strategy is pretty much like Microsoft’s one, which achieved success on the basis of the wide uses of IBM computers. On the other hand, PayPal expanded its target customers toward eBay’s international sites and thus swiftly opened its international markets.

Although eBay acts as the largest auction sites in the world and it brings traffics and large amounts of visitors and buyers, PayPal found out its brand was easily associated with eBay’s “online-flea-market-roots” impression. To set up an independent image, PayPal must start the business off eBay. Even PayPal met challenges afterwards; it had strengthened its profit model and the relationships with merchants early in the market.

See through PayPal’s strategies, we could find out sighs directly leading to its early success. First, PayPal discover the needs before competitors came in the market. First-mover takes all at that time. Second, PayPal seized the appropriate entry time. Not too fast or too slow. If PayPal entered the market too early, people probably not used to purchase online; and if it came in too slow, there might be several company competed for the market. Third, PayPal provided easy access and a safe payment method then. That was important when starting a new online business which builds trust with customers. This is three factors that PayPal made early successes.

Q2. Does Google represent a serious threat to PayPal? What strategy for payments would you recommend for Google? For eBay/PayPal in defending against Google’s attack?

Google does pose a threat to PayPal despite Google’s CEO denied. The problem is to find out how big the threat is. Google serves as the biggest search engine in the world and takes advantages as a leader in the market. However, it didn’t mean Google can absolutely replace PayPal in many ways. The influence of Google’s payment service toward PayPal is limited.
As Google CEO put it “It makes no sense to compete with what others are doing well….eBay and PayPal are very good partners to us.” It shows the new payment method that Google focused was only on online advertising.

For Google, it obtains advantages as the largest portal but not in payment service field. There are three advantages for Google to start up online payment service. Firstly, Google has much more resources to support the service. Those resources not only tangible, such as technical support and staffing but also intangible, like brand name effect. As a household brand name, people trust Google and it could alleviate the feeling of uncertainty when approaching its new services. Secondly, those who had Google’s account might get more easy access to its payment service. Most of people in the world have Google’s account or at least YouTube one. This will accelerate the growth of users and will be more likely to get in touch with its payment service. Thirdly, Google’s payment service is free to buyers and it costs less to sellers. The pricing creates more bargaining power comparing to PayPal.

On the other hand, Google has disadvantages which are exactly PayPal’s advantages. PayPal is an independent company focusing on payment method services while Base is one of the services under Google. That is, the relationship between Base and Google is inseparable; it makes it impossible for Base to compete with PayPal if Google collapsed (Just in that case, it might not happen). As the first-mover, once consumers get used to the services, it’s hard to change the behavior if incentives were not strong enough. Obviously, PayPal is more efficient and faster than the Google one. That makes it harder to compete.

If Google does want to share the market, it should firstly expand the users especially those merchants to have its account. To increase the incentives, Google could provide bonuses for new users and strengthen the links with its other services. Most importantly, Google should improve its quality in itself to follow up PayPal and continue to provide lower prices to attract new merchants and consumers.

For PayPal, it should target on both existing and new users’ segments in the same time but put more resources on new market. As a platform, the more people involved will attract lot more users. Also, PayPal should continuously improve its services to fight against Google. The bar for Google to surpass PayPal is still high.

PayPal

Q1. What explains PayPal’s early success?

One can see PayPal’s early success from 3 different angles:
1. The entry time: As the transaction quantity and amount of e-tailing increased during early Y2K (year two thousand), incumbent methods of money transferring (checks and money orders; even eBay was fuelled by payments made by regular land mail) were being outdated. Whoever introduced secure, fast, easy funds exchange model on the internet was going to hit the jackpot big time. Although there were some participants in the internet money transfer sector, trouble was that people did not trust these payment systems because they were new and were flawed because they were not trusted as real currencies. PayPal had a few vital differences: 1. It used the dollar as its medium of exchange, rather than trying to create a new currency for online payments, 2. It used email for faster, less troublesome communications; and 3.It used the existing bank networks for making the payment, guaranteeing less fraud, more safety.

2. The viral or network effect of PayPal: As you gain new user, each user becomes a viral marketer for PayPal. To increase their customer base, PayPal began aggressively marketing the firm through special promotions, such as offering $10 to new sign-ups for PayPal accounts. The result was that PayPal surged from just 12,000 accounts in January 2000 to over 2.7 million by August 2000.

3. Minimization of the cost of transactions and authentication: They paid close attention and to the existing credit, debit card payment system and found out a meticulous way of keeping transaction cost to the minimal point. On the other hand, they enabled smaller scale merchants to accept credit card payments made from buyers to the merchants’ accounts through PayPal system. Buyers, on the other hand, were relatively safe to do business online owing to the fact that PayPal payments didn’t show private information (card number, credit history…) to merchants. The bonds created between buyers and PayPal, sellers and PayPal ultimately meant the ever increasing online purchases.

The result of being based upon banking services and offering the lowest cost per transaction through e-mailed payments established PayPal's business model. The promotion, marketing and 'network effect' then turbo-charged PayPal to become the de factor standard for online payments.

Q2. Does Google represent a serious threat to PayPal? What strategy for payments would you recommend for Google? For eBay/PayPal in defending against Google’s attack?

Although PayPal, along with eBay, has become the main method of online shopping, and platform, Google is a large threat to PayPal. 70% of all e-commerce is initiated through web search, and Google is the largest search engine. What’s more, as Google is targeting customers through keyword advertising, content network advertising (needless to mention that YouTube and other most visited sites on the internet are of Google’s).

For Google to succeed, it should first acquire large enough customer base that use Google IDs. Although Google search engine is the most used engine, e-mail accounts base is not one of its core competencies. The current 2% of the sales amount and 20 cents on each transaction is a bit more expensive than that of PayPal’s, but compared to direct credit card sales, that is cheap. Trust is another thing that is hard to establish between two parties. At the moment, Google is allowing only those who have credit or debit cards. Those who don’t hold any of the two cards (bank account holders) should be enabled to connect their accounts to the Google account. As for the merchant base, Google, perhaps, could initiate the same promotional tactics of free money transfers up to 10$ for a limited amount of time just to increase the base. After the amount of merchants that have account on Google is large enough compared to PayPal’s, the rest will be history.

The only way for PayPal to stay on the same business would be increase the amount on sites that allow PayPal transactions. Already they have expanded through different modes of transactions – mobile… If that doesn’t work, perhaps it is time for PayPal to invest in new technology, rather than in new business. They might work on RFID + online payment model. Cell-phones fitted with RFID chips are increasing in number. Why can’t PayPal come up with a system that combines the internet payment with daily cash payments? That way, PayPal might become the universal currency of tomorrow.

Deniz's Input or PayPal case

Question 1) What explains PayPal’s early success?PayPal which was founded in 1998 allowed its costumers to use their own e mail address, credit card or bank account to send or receive online payments. PayPal expanded its service among US and as well as this , in almost 14 countries , PayPal also highly used among the EBay users too. SO PayPal became an important part of eBay s growth and revenue. For the international growth which offered local services and seven currencies. Besides the costumers they also increased their partnership networks which enriched their both quality and potential revenue. PayPal accounts were also easy to set up “five minutes “ (as mentioned in the case pg 2)which sounds user friendly. After all, they also formed auction market place. This was also attractive for the small businesses or even individuals who can not use credit cards . Moreover than this PayPal offered for the auction sellers a better service for receiving the payments. (a quicker and convenient service by which the sellers do not have to wait before they ship the goods)SO basically the reason for Pay Pal costumer-centered business model, which was developed to focus on any consumer problem or need to make their life easier .
Question 2) Does Google represent a serious threat to PayPal? What strategy for payments would you recommend for Google? For eBay/PayPal in defending against Google’s attack?
It seems Google is not just a threat to web sites like PayPal or e Bay , the aggressive enlargement of Google is going to be a threat for every single business model on internet. Google has strengths for so many reasons: like the brand, service quality, the potential of users, search engine advantage and of course the technical experience and excellence.
What Google doing now is a result of their aggressive enlargement, some how all the web sites in the cyber world is related to Google. SO Google is using this advantage now. Google s way is offering more convenient way for the users that they do not have web sites are also enjoying the Google advantage . Google can offer all these service for free of charge and by the time they can be charged through advertisements. Or maybe they can charge the costumers as soon as they can sell their products through Google. This will be the efficient way for both Google and the online sellers. Because it is clear tat besides earning money and increasing revenue the main competition is for the number of costumers which is an important factor to generate revenue from advertisements.
For PayPal and eBay it is really a big threat which may decrease their revenue by avoiding the web users to buy the products through Google Base while they are searching, which is minimizing the role of Pay Pal or EBay. For both of these web sites, they should be more innovative and maybe they can company with Yahoo or MSN even maybe change the way they are working . Another way is to increase their consumer range . (both sellers and buyers)They can do this by decreasing the per cost for transaction or maybe if this increases the traffic on the web site they can use this data base for some different aims. (like advertising)

more keywords

Taiwan yogurt 台湾酸奶
Tapei Yogurt 台北酸奶
Taiwan desserts 台湾点心
Asian yogurt 亞洲酸奶

Google Adwords update

Thurs. Dec. 18th

I made some changes to our campaign and also came up w/ more keywords.
Amraa what does "" mean again and was "expense ticket" "消費券" a negative keyword?

創業 =undertaking 6 clicks, 462 impressions, CTR= 1.3%
雪 = snow 2 clicks, 1405 impressions, CTR= .14%
禮品 present, 3 clicks, but only .45%CTR, QS 4/10
優格 superior standard QS 7/10, 2 clicks, low CPC $8.51,



Total cost= $111, I think we can increase our
I increased daily spending to $140
I added a negative keyword; artificial flavor
I deleted “Expense Ticket”pore score 2/10 .23% CTR
I added keyword Christmas Dessert
I added yogurt online
I added food gifts 食物禮物
Christmas Present 聖誕禮物 (results below), I deleted it b/c only got 2 clicks buy had 370 imp at high cost
Bid $44.71 Clicks 2 Imp 370 CTR 0.54% AVG CPC $28.68 Cost $57.36

Negative words
人为味道 artificial flavor
玉米糖浆 corn syrup

Keywords
在网上健康酸奶 healthy yogurt online
命令酸奶 order yogurt
圣诞节点心 Christmas desserts
聖誕節假日 Christmas Holiday
在網上酸奶 online yogurt
食物禮物 food gifts
2nd campaign
清淡的酸奶 light yogurt

"消費券" Expense ticket Why do we have this keyword, it has a very poor score?

Andrea's PayPal input

What explains PayPal’s early success?
The payment method for Paypal was very attractive to consumers and auction sellers. For consumers they could choose the funding source from credit card, bank or Paypal account. Recipients of the funds had an option of where they could transfer their funds. For sellers they didn’t have to have a credit card, which was appealing to those who didn’t have credit history or couldn’t pay the fixed fees. Sellers could also send out the sold product without having to wait in the mail for the payment. It was a fast and efficient payment method.
Paypal’s marketing campaign brought in many new users due to the attractive award given as well as to existing members who referred.
Does Google represent a serious threat to PayPal? What strategy for payments would you recommend for Google? For eBay/PayPal in defending against Google’s attack?
I definitely think Google is a threat to PayPal because of its long existing brand awareness and high market search share. Since they already have a huge user base and are very credible existing users will easily accept their new payment offering. If users are already happy with Google’s service and perceive it as being secure they will most likely use it.
Google has found a way a unique business model to offer users and merchants added value. For users it is a type of 1-way shopping. After searching they don’t have to leave Google’s site to purchase. This business model also opens opportunity for sellers who don’t have a website. Google also uses its existing strengths for instance by matching knowing which keywords generate leads for an advertiser to how search drives sales. They could now offer advertisers more advice on ways to increase sells.
A reason they would be competing with PayPal is that through Base consumers don’t have to go to the marketer’s site where the payment may be done through PayPal. This would take away PayPal’s business when the consumer purchased through Base.
For Google I think its existing payment method with Base would work but they could also add it a payment method on the merchant’s site. But since Eric Schmidt stated they aren’t competing with PayPal this would go against what he said.
For ebay/PayPal to defend against Google they need to come up with an innovative service different from any others or be the best in the online payment industry. They need to have attractive prices to merchants and provide a very secure site. I believe PayPal is already currently doing the things I mentioned, therefore if they keep this outstanding service they should succeed.

An idea

Why not also put NTUmarketing account in the blog? Then we can directly record what we've changed after changing something on google campaign!

Last Case Question

Q1. What explains PayPal’s early success?

Q2. Does Google represent a serious threat to PayPal? What strategy for payments would you recommend for Google? For eBay/PayPal in defending against Google’s attack?

Questions for PayPal case next week

1. What explains PayPal’s early success?

2. Does Google represent a serious threat to PayPal?
What strategy for payments would you recommend for Google?
For eBay/PayPal in defending against Google’s attack?

Adwords Payment Information

I paid NT 2000 at 12/11 12:44 pm.

On the receipt it says we can track our payment by contacting: adwords711@google.com

Yannick

Yannick's marketing manager says their division will come up with available time during
weekdays so that we could go meet them.

Actually, I've directly contacted with their manager so we don't need to submit any
proposal now.

:)

Mary Kay Case Write-up

Q: Should it embark on new strategy or stick on to the original plan? What approach should it pursue?

Health/beauty products are experience goods, yet most of the time, they are bought on impulse. It is said that cosmetics makers sell “the hope of becoming beautiful” not the beauty itself. Compared to the era of Mary Kay and its competitors Avon, Oriflame’s rise, average consumers of cosmetics are well educated and well informed of which ones are better choices. Excluding the last fact and considering that the product itself is not a need-based commodity, but rather want-driven product, Mary Kay’s sales require active involvement and close interaction with existing and potential customers. This very attribute of the sales method created the so called network marketing organization (NMO), which is highly dependent on real time, viral sales carried out by consumers themselves. For Mary Kay, besides the products, its sales force is the main business driver and key component of its success. Although switching to internet based sales will enable the company to vertically integrate the value chain, hence maximize efficiency, and increase sales revenue, but doing so will have cannibalization effect on consultants’ businesses. The speed and the reach of internet will arm those neglected consultants with deadly weapon called – WOM over the internet.

Although the rationale of sticking on to its original plan seems to be the obvious plan, but the demographic change of customers has already been projected as declining sales figure of Mary Kay. Technological laggardness (phone, mail based order, non-relational database) combined with new-generation female salespeople have produced increasing backorders, unmet sales orders, inaccurate forecast, inefficient inventory control, decreasing retention rate. Considering the emerging problems of the old way of conducting business, I believe that Mary Kay will still have to switch on to e-commerce mode.

Management of the company should refer to e-commerce as a leverage point, or a booster for independent consultants. Since maintaining healthy relationship with sales force is so vital for the existence of the whole organization, Mary Kay should direct sales leads generated online to independent consultants. The company’s main website should serve as a navy aircraft carrier. Main products are rocket missiles. The fighter jets are independent consultants. The carrier ship attracts millions of villains to itself (the customers), yet missiles are carried and dropped by independent jets. General information of new arrivals, new research results, company history, membership procedures etc will be put on the main website. Orders will be made, and recorded online. This coupled with relational database management will enable the company to accurately forecast demand, better plan production, precisely control inventory, decrease stock out and backorder, increase transaction efficiency/customer satisfaction, and reinvigorate sales figures. Owing to the online democracy, consultants should be allowed to run their businesses online. To better monitor demand, consultants’ websites should be connected to Mary Kay’s mainframe. If consultants receive sales leads from the main website, then the company can charge a miniature percentage off the sales.

Deniz's Input MARY KAY

Q1.)Was embarking on a totally new, unproven strategy the answer, or should the company stick to what had always worked in the past?
It is obvious that Mary Kay has to do something to catch up the competitors. But I do not think it can be a good idea for the company to embark on a totally new strategy. This is why; the very core of the company is built up on direct selling model. And for such companies like Mary Kay the pricing strategy is an important issue .However if they start online sales, pricing will be transparent and will destroy the business model of the company. (Because the consumers of the company are also the sales personnel of the company for the end users of the Mary Kay products)As explained in the case, all these sales personal has developed the business model by socialization or on relationship bases. However internet or e-commerce is “high-tech” not “high-touch” way of selling, so it will completely destroy all the image of the company and trust .
Besides, as mentioned in the case , although the executives in the company believes that it is not easy to adapt these sales people to technology(because most of them are housewives or over middle-aged )in pg9, at the end of the fist paragraph, it says: “ sales force was finding the ne technology valuable” I believe that, if the company can increase the sales and revenue, since these people are also have interest they will also push themselves to adapt to new technology. By saying this , I do not mean the online sales or so but it is obvious in the case that the company is missing a lot business opportunity and even current consumers by its poor organization and communication. (Which can be solved easily by current IT)SO I think the company should stick to its business model but with few developments.
Q.2) what approach should it pursue?
Mary Kay can spent more on R&D and can enlarge their product quality and range. (On pg23 exhibit 8 for Avon)this can be helpful for the company to increase their sales/revenue. Besides this, they can still concentrate on more IT to develop their operation quality. (to decrease the delays or wrong orders) They should keep their business model but can also adapt themselves to the current changes in the society. (since the company’s goal in the very beginning was to increase the quality of the lives so they should stick to this idea by adapting themselves to changing needs)Maybe another Tupperware sample can be settled to secure the rights of the sales consultants.
Whatever they choose as a target strategy they should still keep the idea of direct selling. It is clear that internet is almost whole parts of our lives however , it is also clear that in postmodernist era people are trying to keep in touch with other people for socialization. And definitely direct selling is the way people can achieve this goal. Maybe Mary Kay can develop a blog (a social network area )also as an alternative to keep in touch with the costumers too. (actually they are doing something similar to this one on their web site)

AdWords translation

So far we have come up with 3 ad groups. The corresponding themes are: Winter/Christmas, Beauty/Health, New business/Entrepreneurship. The three text ads with their corresponding keywords are as follows:
(Keep in mind that although Google adwords allow you to write 35 characters per line, but when it becomes Chinese characters, 2 character spaces are devoted to one Chinese character. Therefore, 17 character spaces for Chinese, 35 character spaces for English.)

1. 雪坊優格　冬季最美的甜點
Snow Factory Yogurt – Most delicious dessert of the winter season
　　100%林鳳營鮮乳製造雪白優格，搭配繽
Snow white yogurt made of Lin Feng Ying 100% pure milk, packed with
　　紛的天然果醬，最時尚的聖誕禮物。
Numerous (in color and taste) natural fruit jam, most appropriate Christmas gift
(Keywords: 布丁-pudding, 甜食-sweets or dessert, 下午茶 – afternoon tea, 聖誕節 Christmas, 冬天-winter, 冬季-winter season, 雪-snow, 爬山-climbing mountain (the only place people can go to sea snow in Taiwan is to climb up Yu Shan – the Jade Mountain, or Ali Shan – Ali Mountain), 鮮奶 – pure milk or cow milk, 鮮乳 – another way of saying pure milk, 甜點 dessert, 果醬 fruit jam, 天然 natural, 時尚 in fashion or contemporary, 禮物 gift, 優格 yogurt, 優酪乳 drinkable yogurt or milk yogurt, 奶酪 a type of cottage cheese, 乳製品 dairy product, 林鳳營 Lin Feng Ying – the name of the milk producer, 果粒 fruit pieces , 果肉 fruit tissue or fruit meat is the literal translation of fruit pieces, Christmas, x-mas, winter, )

2. 雪坊優格　時尚美容聖品
Snow Factory Yogurt – Most fashionable (up to date) sacred beauty product
　　純手工優格，100%天然食材，僅市售1/2
All hand-made yogurt, 100% natural ingredients, contains only half
　　的卡路里，享瘦同時，美麗加分。
The calories of the same products sold on the market, lose weight and beauty up simultaneously.
(Keywords: 手工 hand-made, 天然 natural, 食材 ingredients, 卡路里 calories, 熱量 calorific capacity, 瘦身 lose weight or become thin, 瑜珈 yoga, 美容 beauty, 美白 skin whitening, 曬黑 sun tan or become dark of tanning , 肌膚 skin, 減肥 lose fat, 發酵 to ferment or the process of milk turning into yogurt, 代餐 food substitute, 消化 digestion, 零食 snacks, 美女 pretty girls, 鮮奶 pure milk, 鮮乳 pure milk, 莎拉奶奶 Granny Sarah- the competitor of Snow Factory, 植物的優 – Zhi Wu no You – the name of the most famous 7-11 yogurt, 林志玲 – Lin Chiling – the endorser of Zhi Wu no You who is also the most famous model of TW, 楊丞琳 – Yang Cheng Lin the second endorser of the Zhi Wu no You, 優沛蕾 –You Shi Lei – another famous yogurt brand, 大滿足 great satisfaction – advertisement line from You Shi Lei, 才不會忘記你呢 – won’t forget you – famous advertisement line from Zhi Wu no You, Christmas, x-mas, winter, )

3. 雪坊優格　研究生創業夢想
Snow Factory – Graduate Student’s dream of starting an enterprise
　　三位台大商研所學生，製作香滑細緻的優
Three NTU MBA students, made smooth and delicate yogurt,
　　格，一同來感受細心與耐心的創業故事。
a story of business based on attention to detail (or circumspect) and patience.
(Keywords: 商研所 MBA, 台大 NTU, 台灣大學 NTU, EMBA, 大學生了沒 Student yet? – name of a celebrity show that endorsed Snow Factory, 大學生 – college student , 研究生 graduate student, 蘇立文 Su Li Wen , 黎懿慧 Li Yi Hui, 周慶麟 Zhou Qing Lin – names of the Snow Factory founders, 創業 – pioneering a business, 創新 innovating, 微型企業 small business, 創意 - originality, 中小企業 small-mid size business, 白手起家 – from rags to riches, 政大法律系 – Cheng Chi university Dept of Law , 故事 story, 感人 touching (story), Made in Taiwan, Taiwan)
Negative Matches: 鬼 – ghost (due to story), 吃到飽 – all you can eat, 樹 tree (Christmas tree), 公公 Grandfather (Santa Clause is usually referred to as Christmas Grandfather), 聖誕帽 Christmas Hat, 舞會 Party, A片 – Adult Video (due to pretty girls), 肥皂 soap (due to beauty product), 資源 resources (due to natural), 石材 minerals (due to natural),

Also, here is the ID, and Password to our AdWords account on google:

GMail Acc:
ID: ntumarketing
PW: networkmarketing

Q: What's the name of the class?
A: networkmarketing

Midterm Project- Pre-Campaign

TUESDAY, 18 NOVEMBER 2008

Mid-Term project - Google AdWords
Client Overview:
Client Profile:
http://snowfactory.pixnet.net/blog; http://liyihui.myweb.hinet.net/newstore2.html; Yahoo.tw bid ID: snowfactory100

Snow Factory is a homemade yogurt producer located in downtown Taipei, Taiwan. It was founded in July 2007 by Li Yi-Hui and Su Li-Wen with joint investment of 300,000NT$. Three employees, including the founders, make hand-made yogurt and chewable fruit jam in a working environment much like one’s home. The inspiration of the business came from Li Yi-Hui’s participation in a yoga class taught by an Indian instructor. According to Su: “I couldn’t find a home made, chemical free, not sour yogurt in my local market, so I decided to make one for myself”. Snow factory offers both on/offline purchases. Online marketing and promotion are done through bid.yahoo.tw, personal blog of Li Yi-Hui’s, and a webpage on hinet.net. At the moment, Snow Factory is not using Google AdWords. Their on/offline combined monthly sales revenue averages around 400,000NT$.

Marketing Analysis:
Product, Price
Snow Factory defines its core product as “scoopable”, least sour, artificial chemical free yogurt. The company ensures quality in their products by not using milk powder and artificial additives. Taiwan’s most famous milk brand-Lin Feng Ying’s full-fat, pure cow milk is chosen as the main ingredient. The product is packaged in 168+-5% gram cups and placed in a dozen cup boxes. Each 168g cup of Snow Factory yogurt is priced at 36NT$. To add more flavors to the original taste of sugar-free yogurt, Snow Factory made chewable jams (with fruit flesh) of several flavors (Da Hu strawberry, apple, Tao Yuan mulberry, mango, papaya, litchi-honey, apple + passion fruit, pineapple) are offered. A cup of yogurt with a scoop of home-made jam is 45NT$.
Place, Promotion
Considering the size and scope of the organization, Snow Factory doesn’t offer shop display sales, and takes advantage of “free” marketing channels to promote its product. W.O.M is spread around through social-networking tools like famous local blogs. Yahoo bidding is chosen over other channels due to its reach on the local market. The main webpage is placed on webspace provided by hinet.net. Transaction is made through ATM transfer and land parcel delivery. Customers can receive the yogurt in person at Taipei Gu-Ting MRT station with prior contact.
Competition
We define Snow Factory’s industry as “fresh” food - dessert industry. Under this broad classification, all dessert and yogurt producers, Uni-President being the largest, would be its competitors, but Snow Factory is serving a niche market of home-made yogurt. At the moment, the competitors of the niche are Granny Sara, Osiana, Asenka, and Yoplait. They all make spoonable, home-made yogurt of different taste and package offered in-store. Considering the number of competitors, and their respective market share, this home-made yogurt niche has large segment to be conquered by the incumbents and new entrants, hence the market is competitive, and it is in its early majority position of the S-Curve.

Customers
According to the managers, the original target customers were 20-30 year old, health conscious office females, but along the journey, they observed that mid-age house wives were the largest buyers, and young teenagers through their mothers’ recommendations. We believe that the potential customers will still remain to be adult females, and teenagers, because men who don’t like sour are very common in Taiwan. Among the potential customers, environmentalists (one can get 10NT$ refund on reuse of a Snow Factory yogurt box), vegetarians, alternative therapy supporters (yogurt helps digestion), naturalists (the yogurt can be used as a natural skin whitener) might make up majority of the target segment.

Current Marketing:
Snow Factory’s main online content, all in Traditional Chinese, is placed on Li Yi Hui’s personal blog, a single web-page on hinet’s myweb, and on yahoo bidding platform. The whole information about the business inspiration, the product, complementary fruit jams, links to customers’ comments on different blogs, news reports about the business, product pricing, ordering method, preservation and use of the product are knitted on a single page.
One should download an order form (.xl file), fill it, and send it back to the company’s e-mail address along with money transfer over ATMs. Besides internet communication, telephone orders, fax orders are also acceptable. It's been noted that most of the repeat buyers were 30 years of age, economically stable, married females, who relied less on internet to buy yogurt. Hence, unless Snow Factory offer special and unique content that not only adds to the original value proposed, but also requires only internet to be access, offline promotion and sales seem to be generating most of the profit.

An online marketing for such a young company should focus both on increasing brand awareness and ROI. Snow Factory’s same information is scattered around several platforms (BBS, blogs, its webpage on hinet). From a strategic point of view, information with same images, similar slogans, long web-pages with ordering information on the lower part might serve as solid brand awareness builder, but it may come at higher risk of pushing away customers due to dullness, or “overcrowdedness” of information. We believe that Snow Factory’s web-page contains too much information on a single page (too many words). One should look over everything before reaching the ordering section. Also, payments are made over ATM transfers; hence it is difficult to measure sales dollars made “online”. On the other hand, the page contains several sections that tell the quality certification, comparison of the product to incumbents on several factors, refrigeration, different uses of yogurt, and clear photos of the product with whitish tone that have artistic, sanitary feel to it. Should Snow Factory change their webpage, we have already thought of several key measures to be addressed on the new site.
Incumbents of the niche mentioned above use local celebrities to endorse their products to the mass, but Snow Factory hasn’t engaged in any “real” advertisement campaigns yet. Their brand awareness has been established through PR. The page has several links to news reports about Snow Factory. Bloggers serve as the most effective, free advertisers for their product.
Because Snow Factory is mentioned on so many blogs, only the two Chinese characters for Snow Factory typed on Google search engine brings about 210,000 web results.

Conclusion
Our goal in this project is to increase sales dollars through more sales leads sent from Google AdWords. The timing of the project has aligned with a recent incidence of poisonous (tainted, melamine) milk powder sent all over Asia from mainland China, which pushed lots of customers away from dairy products in Taiwan. We will turn this threat into an opportunity by emphasizing the use of Taiwan produced pure cow milk, and all hand-made complementary jams. Also, as December approaches, we will utilize the name of the brand – “Snow” Factory in ads related with seasonal themes such as winter, snow, Christmas… In Taiwan, the top three portal sites are Yahoo.tw, Wretch.com, and Google.tw. Studies show that when Taiwanese people search for information on Google, they refer to the search results with informatory, academic, news report seeking mindsets that automatically block advertisements shown around the organic result. Ad agencies believe that banner ads work better than keyword text ads. Therefore, in order to attract more potential customers to the site, we will not only use keywords, but content network tied with most visited Taiwan sites (YouTube, Wretch…). Since customers refer to Google as a serious (academic) search engine, so we’ll focus on the “news worthiness” of our text messages.

Proposed AdWords Strategy
The ad copies will be written in Chinese, but will be connected with few English keywords to increase impressions. Because Snow Factory doesn’t own a store display, hence Geo-targeting ads coupled with Google Maps will not work.
Considering the current trend of the business, the target audience is still all females, and those health conscious males who don’t mind a little sourness in yogurt. The coverage area is all Taiwan.
So far we have come up with 3 ad groups. The corresponding themes are: Winter/Christmas, Beauty/Health, New business/Entrepreneurship. The three text ads with their corresponding keywords are as follows:
1. 雪坊優格　冬季最美的甜點
　　100%林鳳營鮮乳製造雪白優格，搭配繽
　　紛的天然果醬，最時尚的聖誕禮物。
(Keywords: 布丁, 甜食, 下午茶, 聖誕節, 冬天, 冬季, 雪, 爬山, 鮮奶, 鮮乳, 甜點, 果醬, 天然, 時尚, 禮物, 優格, 優酪乳, 奶酪, 乳製品, 林鳳營, 果粒, 果肉,Christmas, x-mas, winter, )
2. 雪坊優格　時尚美容聖品
　　純手工優格，100%天然食材，僅市售1/2
　　的卡路里，享瘦同時，美麗加分。
(Keywords: 手工, 天然, 食材, 卡路里, 熱量, 瘦身, 瑜珈, 美容, 美白, 曬黑, 肌膚, 減肥, 發酵, 代餐, 消化, 零食, 美女, 鮮奶, 鮮乳, 莎拉奶奶, 植物的優, 林志玲, 楊丞琳, 優沛蕾, 大滿足, 才不會忘記你呢, Christmas, x-mas, winter, )
3. 雪坊優格　研究生創業夢想
　　三位台大商研所學生，製作香滑細緻的優
　　格，一同來感受細心與耐心的創業故事。
(Keywords: 商研所, 台大, 台灣大學, EMBA, 大學生了沒, 大學生, 研究生, 蘇立文, 黎懿慧, 周慶麟, 創業, 創新, 微型企業, 創意, 中小企業, 白手起家, 政大法律系, 故事, 感人, Made in Taiwan, Taiwan)
Negative Matches: 鬼, 吃到飽, 樹, 公公, 聖誕帽, 舞會, A片, 肥皂, 資源, 石材,
Although Wretch, the second most visited site in Taiwan, is not listed among Google content network list, but based on our budget performance, we’ll use content network from time to time.
Our three week 2000NTD budget will be distributed as 650NTD, 350NTD, and 1000NTD respectively. After checking each keyword on keywords ideas by Google, we have found out that the keywords we have selected cost around 2NTD per click (dieting, and loosing-weight are around 15NTD). Daily budget will be allocated as 2/3 of the weekly budget over Monday to Friday, and remaining 1/3 over Saturday and Sunday.
Our goal is to increase Snow Factory’s sales and brand awareness by burning all of the 2000NTD over the whole project period. Considering average CPC as 2,5NTD, our projected clicks are 800 clicks. Projected impression is around one million eyeballs.
Keyword advertising is a trial-and-error business. Therefore, we’ll adjust our bidding, and budget maximum daily to filter out the most suitable keywords for the most suitable time.
Because, Snow Factory’s online contents do not offer direct sales online (online credit card payment e.g. PayPal), it is difficult to measure more conversion rate accurately. We’ll take each download (click on .xl file) of the order form of Snow Factory as real buyer, and each clicker on our ad as potential customer.

Google campaign

Yes, as Shelley mentioned we need to run the campaign starting Dec. 4th, that is this week. So we had better discuss it in class on Tuesday.

MySpace

I am sorry for my late post on the case review. Have been, actually am, sick with high temperature over the weekend.

For questions 1,2: I think Facebook has been posing threat on MySpace from the first day it entered the competition battleground of social networking. Although MySpace was the spearhead in this area, or the first mover by establishing its brand awareness among users, but it failed to preserve its fame on several aspects:
The user ID trustworthiness. Although MySpace users have reached to almost 100 million users worldwide, but only 45% of the IDs are reported active within a month. One user, on average, owns 3 IDs on MySpace. The filtering process of adults from teenagers is weak, which has lead to several incidences of sex-maniacs' attack on youngsters. Facebook on the other hand has built its reputation by clever choice of audience - first Ivy League colleges in the U.S, then regular colleges, which attracted many "on campus" (the most creative and active demographics on the internet in terms of content creativity and speed)students who had access to the internet. Parents of those cyberbully victims favored to facebook as it is the role model accumulation of schools they would like to send their kids to. Facebook guaranteed their user identity by adding features like identifying a person on photos spread over different profile photo folders.
Content layout: unlike MySpace, facebook uses easily recognizable, "eye friendly", standard profile layout without customization option of the profile cosmetics. MySpace attracted yougsters throught the ability of high cusomization of the profile interface. Since facebook was in business of more "mature" social gathering, google like interface attracted majority of the internet surfers.
API-proprietory add-ons: Facebook attracted users through attractive applications written by those who are interested in software development, but lack large audience with standard platform for the application to be tested. Easy entry, exit, all you can eat application revenue generation through ads, sponsorships, or even selling merchandise, quick response rate, feedbacks enabled by up to date metrics by facebook attracted more and more developers. Users on the other hand, spread those application virally thanks to News feed feature on facebook profiles. MySpace users had to enter one's profile to see what's been added. Utilizing first mover's advantage, facebook has built up its empire of free applications, and strong-bond social groups before MySpace.

Although MySpace could come up with, or even join Google on open-source applications the train has left already. It is mentioned in the case that developing its own proprietary software platform would enable MySpace to differentiate itself from competing websites like Hi5, Friendster... as they use OpenSocial, homogeneity will prevail. But developing a software platfomr is too costly. Even if it did develop its own software platfrom, the value proposition for developers should be sweeter to facebook's. Facebook on the other hand has much larger collection of the real "face-applications",and tie with "face-sites" like flickr... The inertia of Facebook can be raised passed only by those who offer completely different value creation, and proposition on social networking. MySpace, the largest victim of its laggardness to new possiblities, should redefine its position, get out of the red and sink into blue ocean by establishing demand, not looking for one, and perhaps rename itself before challenging facebook on the new arena of social-networking.

Deniz's Input for Myspace

1. Does Facebook pose a substantial threat to MySpace?


Exactly. Facebook is increasing its audiences dramatically. Actually the threat from facebook is not just related to numbers. Moreover the quality of the web site is also another threat for Myspace. Since the early stages of Myspace, the security / privacy concerns of the audiences were not guaranteed by Myspace. However for the Facebook , the core of all web site was built up on the privacy of the costumers. For the security and privacy issues, facebook is offering the site users some options to choose out of some security concerns to keep their personal info(even e mail and cell phone ) or page out of the people who they do not know(or who are not in his/her network). For Myspace, for a certain level, the site is encouraging people to enlarge their networks which is decreasing the safety of the people.
Incidentally, another ‘quality’ issue is related to the ‘education level’ of the web site users. For Facebook which took its roots in Harvard University, the membership requirement is based on the large university/college/faulty web and even sometimes to join a network, the auditors have been asked for their faculty e mail addresses. As mentioned in the case, this application has certainly increased the quality of the auditors. On the other hand, Myspace aimed to increase the network of the people, by enriching it upto the teenagers and even to the kids.
Besides all there are some other reasons that Facebook is challenging Myspace. This can be clearly understood by the outbreak of Facebook in whole the world in recent years. So Facebook is and will be a threat for Myspace definitely.
2. Should MySpace join OpenSocial or invest in its own developer platform? It sounds me better for Myspace to develop its own developer platform. It seems that Myspac has already its back ground and name. Although it has a severe competitor like Facebook, Myspace has still better situation in terms of quantity which the recent surveys showed. (however it is certain that facebook will catch up soon if Myspace does not take any action) Myspace , may develop its service quality by this way and can differentiate itself still. By doing so thay can also plese their current users too, hence they have a considerable numbers of members in hand, already. Moreover Google s opensocial is on developpng process and nobody can guarantee the success of this participation..

Launch time

I think the time suitable for us to start running adword is around Dec. 4 because of using Christmas terms. And assume that we will run the adword for three weeks.

How do you guys think? :)

MySpace case (Shelley)

1. Does Facebook pose a substantial threat to MySpace?

“Unique visitor” is a metric to measure no matter how many times people visit a site in a given month that only count once. From the latest profile we could see that the growth for both Facebook and MySpace are stable while unique visitors of YouTube almost double at a very short time. Today, MySpace still has twice of Facebook unique visitors in the U.S. and the interfaces between these two are similar. However, Facebook does pose a threat to MySpace due to following reasons:

A) Facebook unique visitors overwhelm MySpace
Despite unique visitors grow stably in the U.S., the amount highly increase when measuring on a world basis. Actually, Facebook caught up MySpace in April 2008 in terms of unique monthly worldwide visitors. (Graph on right hand side is statistics from October, 2007 to October, 2008)

B) Facebook innovates more rapidly
MySpace founded a year earlier than Facebook but lack of innovation makes it change from a market leader to a market follower. Facebook dedicated to build multiple foreign languages to launch in more countries while MySpace tended to act in more traditional way.

C) Difference among functions and applications serving the customers:

a) Definition of “friends”: On Facebook the friends you add are usually your real friends in reality. On MySpace, people be friends even if they don’t know each other.

b) Privacy: Facebook set more limitations on providing a safer platform for people to keep their information in secret. MySpace has privacy but in relatively inferior.

c) “What’s new”: Facebook has two feeds rather than one. On Facebook you’ll know what’s new with you and what’s up with your friend but MySpace has former feed only.

April 19, 2008 was a historical moment that Facebook overtook MySpace as a social networking site leader. And Facebook now ranks number five, being ahead of MySpace, which ranks number six. Overall, Facebook not only pose threats to MySpace but successfully overpass. (See the pictures on the right.)

2. Should MySpace join operations or invest in its own developer platform?

Although join Google’s developer platform, OpenSocial, may bring more traffic and match Facebook functions quickly without investing in more resources. However, the disadvantages of using the platform are obvious – it may also accept competitors at the same time. However, comparing to loss of independence and lack of ability to fight back on its own, develops MySpace own platform will be a wiser choice. Although invest in own developer platform will make two sites look too alike as well as hard to differentiate their services, the steadily growth of unique visitors on Facebook shown that those applications are what customers really need. What’s more urgent for MySpace was keeping up with Facebook and expand its market by contracting with more websites for services. Additionally, MySpace can highlight its personalized interface and try to make its customers happier.