TV vs. Internet - Opportunities For Producers

As a result of its widespread global use, the TV is better suited for global business than the PC. Producers/innovators have the opportunity to create/prduce products that can be used alongside television sets; like entertainment centers, video-game consoles, DVD-players, etc. Modern TV-sets even have imputs for digital cameras! Furthermore, electronic On-Screen Notepad and Calendar provides onscreen message reminder that can be programmed for a specific time or when the TV is powered on.

For a global marketer, producing gadgets/electronic devices that plug in to PCs will be a big gamble and internet marketing will be a risky game. Examine the following staements by Dr. Sam Vaknin of PeaceJournalism.com:

"Societies in the countries in transition are inert (and most of them, conservative or traditionalist) - following years of central mis-planning. The Internet (and computers) are perceived by many as threatening - mainly because they are part of a technological upheaval which makes people redundant. E-commerce is the natural culmination of a process. You need to have a rich computer infrastructure, a functioning telecommunications network, cheap access to the Internet, computer literacy, inability to postpone gratification, a philosophy of consumerism and, finally, a modicum of trust between the players in the economy.
The countries in transition lack all of the above. Most of them are not even aware that the Internet exists and what it can do for them. Penetration rates, number of computers per household, number of phone lines per household, the reliability of the telecommunications infrastructure and the number of Internet users at home (and at work)- are all dismally low." (Vaknin, 1)

The truth is that TV infrastructure have been developed in these countries. Consequently, to reach the majority of the world's developing population, global marketers will have to focus on "the big box".

Sources: Vaknin, Sam. "The Internet In Countries In Triansition". http://www.peacejournalism.com. August 5, 2005.

TV vs. Internet - TV Is About Successful Business Modeling - QVC's Success

"QVC is earning a place in the pantheon of the world's most successful innovative retailers. Last year QVC rang up $5.7 billion in sales and $760 million in operating profit, making the liberty media subsidiary nearly as big and twice as profitable as Amazon.com. Its 13% operating margin beats those of brick-and-mortar heavyweights such as Federate Department Stores, Target, and Wal-Mart." Also "QVC now reaches 90 million of America's 92 million households with pay TV". No internet company has developed a business model that achieves nearly as much market penetration! "Live broadcasts also allow the company to respond quickly to sales trends to stoke demand." Here, "producers tracks calls, orders, and inventories, tweaking programs in real time to boost sales." The internet models used by industry leaders like Amazon.com and Ebay, on the other hand feature dormant, non-live, untweakable feeds and un-performing products. QVC also employs the product placement strategy. Its products are marketed by stars - who claim to use the products and sometimes use them on sets. This strategy will help marketers reach their target markets by "placing" products on the sets of their favorite TV shows.

QVC's business model exemplifies one of TV's successful business models. This model, along with other TV-based models that produce amazing results, can help global marketers penetrate markets in multiple countries.

Source: Elizabeth Esfahani. "A Sales Channel They Can't Resist". BUSINESS 2.0. September 2005.

TV vs. Internet - Challenge: Reaching Over 5 billion People

This picture shows the number of IP addresses per 10,000 residents. To be an effective global marketer, one would need to rely on more than the internet.

In contrast, TV stations have been established throughout the world - with reception in even the most remote regions. TV ads also provide the kind of product access consumers prefer. According to the Logistics Concept* "consumers prefer short order cycles to long order cycles; they prefer a product immediately to any order at all".

• More Stats
  98.2% of US households have TV.
• Also, Americans watch about 535 million hours of TV per day compared to 85 million hours on the internet.
• Among the top 6 Global Media Giants (based on sales) are TV networks - Time Warner, Disney, Viacomm, NBC, News Corp., and Sony.

Sources:

Lottson, Anders. "Tomorrow: A Sneak Preview". BUSINESS 2.0 August 2005: page 84.

Herman, Edward S."The Global Media Giants:firms that dominate the world". Educate Magazine October to December 2001.

*On "Six Drivers of Fulfillment Excellence" handout.

Marketing Efforts vs. Cost Reduction - Focus On GM

Marketing, according to the American Marketing Association, is "the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives." So, the underlying objective of marketing - to any for-profit company - is to maximize revenues. Other objectives include building brand loyalty, increasing market share, product positioning, and building customer awareness. With GM's recent slump, these objectives have become most important in achieving "The Underlying Objective". These posts will feature proof that marketing efforts are most important to GM on the global frontier.

Marketing Efforts vs. Cost Reduction - Promo Wins For GM

Problem? "Of course, GM has long been desperate to sell cars. But last spring it was really desperate. The company had lost big money in the previous quarter, and its vehicles weren't moving off lots fast enough to make room for next year's models."(Schubert, 62)

Remedy? "We need an aggressive clean-up program" says Steve Hill, GM director of marketing.

Implementation? GM made employee pricing its nationwide clean-up program.

Results? "The most successful promotion in automotive industry history"! "Sales increased in June by 41 percent and in July by 20 percent... By mid-August, GM had reduced its inventory from 700,000--32 percent below the company's five-year historical average and the lowest level since July 1998...." Furthermore, "Hill believes that the employee discount campaign will have long-lasting branding benefits" (62).

Notes: The success of GM's employee discount promotion will definitely build some brand loyalty. Also, since they can trade-in their cars for newer models (for a price), GM stands to gain a few repeat customers. For the global marketer, the branding strategy beats any cost-cutting, sell-it-cheap strategy; afterall, once we customers get hooked, we'll buy it at any price!

On the other hand GM can cut costs but if people don,t know its products, they won't sell anything. Companies cut costs at the expense of employee benefits(healthcare), employee jobs(through outsourcing and production cutbacks), employee motivation(and consequently productivity) and employee loyalty. Instead, GM should focus its efforts on building its image as a company that promotes efficiency and reliability alongside its reputation for marketing unplain, stylish, and exciting cars. In short, cutting costs does not promote sales.

Source: Schubert, Siri. "How GM Made Us All Feel Like Family." BUSINESS 2.0 October 2005: page 62.

Marketing Efforts vs. Cost Reduction - GM BuildsBrand Equity

Through its Environmental Performance programs GM is expanding its customer base. GM "assesses and reports its global environmental performance where possible."

Environmental Policy (http://www.gm.com/company/gmability/sustainability/reports)

The GM Environmental Principles form the bedrock for all individual facility environmental policies around the world. The environmental policy acts as the driving force for implementing and improving a facility's environmental management system.

Each GM plant has a set of environmental guidelines that:

• are appropriate to the nature, scale and environmental impacts of the organization's activities, products or service
  
• include a commitment to continual improvement and prevention of pollution
  
  
• include a commitment to comply with relevant environmental legislation and regulations and with other environmental requirements
  
  
• provide the framework for setting and reviewing environmental objectives and targets
  
  
• are documented, implemented and maintained and communicated to all employees
  are available to the public.

By showing that it cares about the health and environments of the countries in which it operates, GM adds value to its cars. GM has invested in building more environmentally friendly cars(hybrids), focused on setting environmental policy, promoted human rights, enhanced employee satisfaction, and implemented diversification policies.

Source: GM. "Corporate Responsibility Report: Social Responsibility." 2005. <http://www.gm.com/company/gmability/sustainability/reports/05/700_social/index.html>

Marketing Efforts vs. Cost Reduction - GM Diversifies Products

GM diversifies its prodcut lines to broaden its market. SUVs appeal to the athletes, minivans to the soccer moms and sports cars to the young-at-heart. On another spectrum, Cadillacs appeal to the status-cautious, Chevrolet to common folk , and Hummers to the daring.