Blog 5: Viral Marketing

  

     ‘Buzz Marketing’ is one of Word-of-Marketing, and it is effective marketing that one person who already has used a product recommends the product to his friends, families, or neighbors. As Information Technology is developing, the way of Buzz Marketing became various. Nowadays the most popular way of ‘Buzz Marketing’ is using Social Network Services, and it is called ‘Viral Marketing’. Its purpose is to try to produce increases in brand awareness or to achieve other marketing objectives like profits. ‘Viral’ is derived from the spread of viruses or computer viruses. And also ‘Viral Marketing’ is different from the existing online marketing. The existing online marketing did not have their target, and they just do marketing randomly. However, Viral Marketing has its target market, so it is more effective than the existing online marketing. There are some examples of success by using Viral Marketing.

    McDonald’s Big Mac Song Campaign is one of examples. It already operated in USA, 1970s, but in 2011, it got big succeed in Korea, over 4,000 videos were uploaded for a month. McDonald gave the Big Mac free coupon to everyone who uploaded their Big Mac song videos, and someone who ranked the first won the prize, ₩5,000,000(about $5,000) and McDonald used his video as an advertisement. Over 3 million people visited McDonalds’ website to vote, and through this event McDonalds’ revenue was increased by 36.5% compared to last month. The first reason that they could get big succeed in Korea is that they chose right target market. Korean is very interested in music, songs and dance, and all music programs got succeed at that time. The second reason is that IT technology developed surprisingly, so it was so easy to attract Korean’s interest. McDonalds got not only financial benefits but also positive impression, high credibility and loyal customers.

#1 Famous Comedians : https://www.youtube.com/watch?v=u9cqBsWhPVg

#2 Real McDonald's TV Advertisement : https://www.youtube.com/watch?v=zfYzB66dT5s&list=UUh-PIUDPlZkXnwU5zgX_oAw&index=99

    Red bull is the highest company which spends money to do marketing. Its slogan is “Red bull gives you wings”, and it really fell down from sky. It dropped down from sky at sudden, and people were surprised. People were curious that, and after that they posted in their twitter or Facebook, ‘Today I got FREE DRINKS for sky!’ Red bull applied their energetic impression to their viral marketing method, so they designed Red bull fell down unspecific places at a sudden. Their purposes were not only to test sample drinks but also to use word-of-marketing. Finally over 8 million people could get know about that, and 1 million people posted in Red bull Facebook page. The first reason that they got succeed is that they applied their products’ energetic image to their promotion event. Second is that they could attract people’s interest by creative idea which drinks fell down from sky at a sudden and free drinks.

    Not only Facebook, Twitter, also blog is effective viral marketing. Even a new word came out; ‘Power Blogger’ is the blogger who has the most impact on other consumers. Usually power blogger gather people’s interests by great contents and speedily updating. However, there are some examples that abuse their impact. There are some ‘black consumer’ and ‘black blogger’, and they post negative opinion about a product calculatedly or they threaten companies by their power in online. There are some side-effects of viral marketing, but there is nothing effective marketing as much as viral marketing. So it is expected that viral marketing must be popular to companies as the most effective marketing method. 

Photos from: http://blog.naver.com/PostView.nhn?blogId=blogphoenix&logNo=220069018519&parentCategoryNo=&categoryNo=&viewDate=&isShowPopularPosts=false&from=postView

                  http://blog.naver.com/joappp/220111904891

Blog 4: The importance of Localization

‘Walmart’ is one of high revenue companies, it was $469,162,000,000. There are many Walmart store in USA, Canada, Argentina, Brazil, Chile, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, China, India, Japan, Mexico, the UK and Africa. Walmart became the largest company in part of retail store. However, there are two countries where Walmart failed, Korea and Germany. Especially in Korea, some foreign retail stores wanted to get succeed, but almost every company failed.

                  Walmart entered the Korean market in 1998, when Korea went through the monetary crisis (IMF crisis in 1997). There are three types of Walmart retail stores; discount stores, supercenters, neighborhood markets and other small store formats. Walmart chose ‘supercenters’ in Korea and it was declaration to domestic retail stores. But Walmart left Korea in 2006, and they agreed M&A to ‘EMART’, Korean domestic retail store. Experts pointed out that the biggest reason of Walmart failure was ‘failure of localization’. First problem was that Walmart decreased the number of workers and the quality of service instead of low cost. On the other hand, Korean customers wanted not only low cost but also same quality of service as a department store. And also Walmart overlooked the fact which Korean wanted ‘one-stop service’; shopping, eating, entertaining with their families in one place.

                  Second problem was that accessibility to products and preference to fresh food. While people in foreign countries buy food for one to two weeks and keep this in a freezer, Korean buy small amount of food at many times and they cook soon. So this eating pattern made Korean to prefer retail stores which they can buy fresh food and they can go easily. For example, ‘EMART’ is rare case in the world, it harmonized western retail shop with traditional market in Korea. In Walmart, many items were displayed in high shelves, so housewives had to call clerks every time when they wanted to get their items. Korean neglected Walmart which adhered to layout of stores for western people.

                  Third problem was low brand awareness of ‘Walmart’ in Korea. All Walmart stores in Korea were only 16. Walmart hesitated to invest in Korea, so they could get only 16 stores because of low investment. It shows how making quick decision is so important in administering investment. Besides, some people thought that this came from some prominent companies’ domination. Wall Street Journal said “Walmart exits conglomerate-dominated Korea.” It pointed out that some prominent companies dominated market in Korea so it was so hard for foreign companies to get there.

                  However there is one example of successful foreign retail store in Korea. ‘Costco’ is very popular in Korea, and even Costco in Yangjae(One of Costco in Korea) ranked the highest revenue among all Costco in the world. There are two secret of Costco; does not have much margin, and annual fee& refund policy& PB products (Private Brand products). They stick to the fixed margin rate; the margin rate of general products is 14%, the margin rate of KIRKLAND’s products (PB products) is 15%. Customers paid their annual fee gladly. That is because they satisfy with refund policy and Private Brand products. They can get refund any time (only computers have limit), and the quality of PB products is very good even though the price of these is cheaper than others. Through examples of Walmart and Costco, we can learn that researching and adapting to culture decide company’s fate. 

Pictures from : http://blog.naver.com/jmk654/220137712767

       http://news.naver.com/main/read.nhn?Code=LSD&mid=sec&sid1=101&oid=001&aid=0001433262

       http://terms.naver.com/entry.nhn?docId=1115031

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