Dell Team Post #2

The final post for the team project is on Maggie Jordan's Blog. Click here for the permalink!

Product Post #3: Google to offer online payment service

An article featured on Business Week Online entitled PayPal: One Tough Nut for Google discusses Google's plans to introduce its own online payment system. According to the article, this is a risky step for Google, who will be competing with Ebay's PayPal - the indisputable leader in online payments.

A product mix "consists of all the product lines and items that a particular seller offers for sale" (Kotler 290). Currently, Google's product mix includes its search engine, the Gmail email service, as well as several other websites like Froogle, the comparison website for online shoppers. Google's decision to offer its own online payment service is definately risky. Brand extension, or "the use of a successful brand name to launch new or modified products in a new category" (Kotler 296), "gives a new product instant recognition and faster acceptance" (Kotler297). Despite Google's strong brand name and success in other areas, the online payment category is successfully dominated by PayPal. The article asserts that Google "would have to offer something unique or face a punishing fight against an established, fast-growing leader with 72 million accounts worldwide and payment volume that's growing 44% annually."

I think it will be an uphill battle for Google. PayPal currently holds the competative advantage. With a proven, reliable system, and early market penetration, PayPal holds almost all of the cards (and customers!). I guess we will have to see how Google can differentiate its service and position it in the market.

4th Ref Post: Answers to questions about blogs

Since I started taking this class I have had to answer a lot of questions about blogs from people that I work with, as well as friends. The Diva Marketing Blog has a great post called Cheat Sheet on Blogs. It contains a link to a Q&A written by a web developer that answers questions about blogs. Maybe this will be helpful to some of you who have friends/coworkers who are also new to blogging!!

Extra Credit: Expanding on Sheharyar's Post on McDonalds

Like many companies, McDonalds is always looking for new ideas and concepts that will help to increase sales and keep their brand competative in the future. Sheharyar blogged about McDonalds in his first topic post, discussing McDonalds' promotion and its global marketing initiatives. Faced with declining sales, McDonalds has started to position a new healthier image. To follow up on this post, Sheharyar added a new post citing an article announcing McDonalds' plans to enter the health/fitness arena by offering new some new products: skateboards and bikes.

Interestingly, these are not the only ways in which McDonalds is looking to change and keep up with the needs and wants of its customers. An article on cnn.com today described McDonalds' new plans for using technology in its restaurants, as well as plans for new more upscale coffee offerings. The article states that along with its new healthy initiatives, which include extending the menu to include salads and all-white-meat options (and soon bikes and fitness equipment!!), McDonalds has set up a test location in Oak Brook, Illinois that features hightech equipment. The facility is equipped with technology that allows customers to make cds, print digital photos, or just surf the web. Other test ideas being tried at this McDonalds include a new line of gourmet coffee and double-lane drive through capabilities.

The article explains that the new initiatives are aimed at attracting one of McDonalds' most important target audiences, men ages 18-24. Here is an interesting excerpt from the article:

"Morningstar Inc. analyst Carl Sibilski said all the new concepts reflect McDonald's stepped-up effort to please young adults particularly 18- to 24-year-old men, the demographic "gold mine" for fast-food purveyors.
"If you want to drive same-store sales you have to target your message to your most profitable customers," Sibilski said. "That explains the TV screens ... and the hipper advertising. They've made it OK (for young adults) to go to McDonald's again. It's not just someplace they went as a child."

The Oak brook site is just a test center, and it seems that it may not be profitable to turn every McDonalds into a high-tech wonderland. Yet, McDonalds is definately looking toward the future, seeking ways to maintain and grow its share of the most profitable customers.

Extra Credit: blog in search engine

When i did a few searches in technorati, I found my blog in the search results.

Comments on Classmates Blogs

Since I was having a hard time keeping track of the comments I was making on other people's blogs, I though I would set up this post to help stay organized!

1. Walmart Censors America (Alex Husted)
My Comment
2. Yet another follow up to my second class posting (Brandon)
My Comment
3. Online shoppers not as sophisticated as believed (Rachel B.)
My Comment
4. McDonald's sells skateboards and other goods (Sheharyar)
My Comment
5. Sir Bob to the Rescue - live 8 concert (Emil)
My Comment
6. Howard Stern and the Satellite Wars (Maggie)
My Comment
7. Extending Discussion on Lizzie Hepp: Dell on Products (Daniel Huang)
My Comment
8.Pennsylvania Roadtrippers (David Gong)
My Comment

Update on VHS post

Just an hour after I read the article on Wal-Mart's decision to stop carrying VHS, cnn.com posted a follow-up article entitled Wal-Mart: Hey, we're still selling VHS. Apparently, the first story was unsubstantiated. Wal-Mart responded with the announcement that it would continue to sell VHS due to the fact that many of its customers still have VCRs. Despite this development, I still feel that VHS is on its way out. In my opinion, it is only a matter of time before DVDs replace VHS entirely.

Product Post #2: VHS and product life cycle

An article on cnn.com today revealed that Wal-Mart will soon stop carrying VHS in its stores. The plan is to phase out VHS by 2006 in order to make room for DVDs. Wal-Mart is not the first retailer to make this decision, Best Buy and Circuit City have already stopped carrying VHS and Target will follow suit by this September.

As a product, VHS had been the standard for years. With the advent of DVDs and their increasing popularity, demand for VHS has declined. This relates to the topic of product life cycles that is discussed in our textbook (p328 - 336). Product life cycle (PLC) is defined as "the course of a product's sales and profits over its lifetime. It involves five distinct stages: product development, introduction, growth, maturity, and decline" (Kotler 330). For many years, VHS was the standard, or the fashion. The book defines a fashion as "a currently accepted or popular style in a given field" (331). In the 1990s DVDs were introduced on a large scale and quickly gained popularity. Since then, VHS has entered a decline stage - "the product life-cycle stage in which a product's sales decline" (335). The decline stage can be brought on by technological advances, shifts in consumer tastes, and increased competition(335); in the case of VHS, DVDs caused all three of these things to occur. Clearly, the decision of many retailers to discontinue stocking and selling VHS is a clear indication that the product is in the very last stage of its life-cycle and is on its way to becoming obsolete.

Team Posting #1: Dell on Products

From the start, Dell was an innovative and successful company. It's unique value proposition, built-to-order products and direct to customer business approach, allowed Dell to sell its products for much less than its competitors while still providing great value. Today, Dell continues to be successful. Considered an industry leader, Dell's products are at the heart of the company's success. A deeper look into Dell's current product offerings, as well as its philosophies and strategies for the future, reveals why Dell is and will remain an industry leader.

Dell's products and services run the gammet, including: servers, storage, printing and imaging systems, workstations, desktop computers, notebook computers, networking products, software and peripheral products (i.e. plasma televisions, mp3 players, etc.), managed services, professional services, deployment services, support services, and training and certification services. These varied products and services are targeted at different groups and the main webpage includes links for: home and home office, small business, medium & large business, government, education, and healthcare, as well as customer service and support. Uniquely, Dell offers customers the ability to create their own computers and packages based on their own personal needs. This level of individualism allows customers to feel connected and personally cared for, despite the fact that Dell does not have the traditional contact (i.e. through a brick and mortar location or face-to-face sales staff interaction) with its customers. By cutting out the middle-men, Dell has been able to provide customers personalized products at very competative prices.

Dell has a policy of Open Innovation and Effective R&D. Dell is "customer driven" and its innovation begins with its customers: the requirements that drive Dell technology initiatives, innovations, and product directions are gathered "directly through tens of thousands of customer interactions daily, organized events, and customer panels." Dell's website goes on to state, " Dell products may be developed in house or by working closely with strategic partners. Customer feedback throughout this cycle reinforces Dell's focus on relevant technologies that address real customer requirements." Dell boasts that its' "Thousands of design engineers are focused on technology leadership and have a track record of innovative product and technology solutions, many of which were first-to-market." Color correction technology, ink/toner "gas guage," and image commonality are just a few of the products/technologies that Dell has been first to market with. Click here to find out more about Dell's global product development.

Now a quick look at some recent news and what Dell consumers are blogging about. Dell's products and services have done very well (click here for a timeline with the history of Dell), but as technology and the market changes, Dell must also adapt and avoid the marketing myopia that sometimes comes with an overfocused business plan. A blog that appeared on a feedster search addressed how Dell will be soon be stretching its product line upward in order to keep up with the competition. The new products will be a higher quality and are meant to compete with some of the higher end products that other companies (MAC, for example) are already offering. By stretching their product line, Dell hopes to fill a gap in its product line and grab some of the market for more expensive computer and electronic products.

All together, Dell's policy of innovation, combined with its direct to customer strategy, has allowed Dell to keep up on cutting edge technology and products while still allowing them to provide these products and services at lower prices than many of its competitors. Perhaps this is why "[n]early one out of every five standards-based computer system sold in the world today is a Dell."

**UPDATE**
In his blog, Daniel Huang further discusses Dell's products and strategies. His post includes links to several interesting articles that provide great insight into what Dell is doing and what it's plans are for the future. Daniel stresses the importance of Dell's commitment to Standards Based Solustions and how this has helped them keep costs low, while still satisfying customers.

Blog Ref Post 3: Fun Fact

The Scobleizer is on vacation... imagine that. He brought up a funny point on his blog: we say "oof" to mean "out of office" instead of "ooo." Why is that? Click here to find out why!