e-marketing: e-competition

 

e-Monopoly vs e-Competition

 

e-Competition

 

The 1st step to create true e-competition is to recognise the existence of e-monopoly as it’s not always as obvious as traditional monopoly.

MySpace is not actually a competition to Facebook despite we group them as “online social network” for convinces. If they were, you should be able to substitute one with another without losing the core benefits. In other words, you should be able to migrate your social network to another service provider if you choose to leave Facebook or Facebook close your account. Currently, this option is blocked by Facebook.

For example, getting your qualification is a core benefit of going to college, that’s not what you should lose when you leave one college to join another in a educational industrial with competition. You may have new campus, new teaching staff or new way of learning, but not losing the qualification you developed and finally achieved from your previous college.

Imaging applying the Facebook-MySpace model for competition in the educational industry. You still have more than one university, they may all offer degrees, except, they are different degrees in different universities. When you leave the Melbourne University and go to the Sydney University, people in Sydney tell you that your qualification in Marine Biology is different from your Marine Biology degree. So you have these “choices”,

1. Forget about your previous study and develop your study on Marine Biology in Sydney from scratch to get your degree in Sydney’s style
2. Stay in Melburne University
3. Study something else from scratch

Do you still think there is competition in the educational industry?

If you think this is ridiculous, wait until you see this.

Luckily, Sydney people is super nice (Yes, we are . So you were told that, we are so nice that we are going to recognise your previous study and your degree in Marine Biology. But just before you kick off your celebration party, you get a message from your old uni saying that your degree is not an open one, they are going keep (retrieve) it for you. So after all, you don’t have a degree unless you stay in Melbourne.

Well, there are still more than one institutions under the umbrella of “university”, they all offer education and degree, but how’s competition going? do you think it truly exits?

Definitely not from a consumer choice point of view. It’s a new form of monopoly with multiple leads, which is why it’s harder to spot compared to traditional single-lead monopoly. The multi-lead characteristics create an illusion that there is competition even though there are clearly no viable options for consumers to choose without losing core benefits.

Although in theory multi-lead monopoly can happen in both the real world and the online world, it does tend to happen in the online world much more often than in the real world. Part of the reason can be the ease of the control in online business. A close source software is difficulty to copy, but there are little secret you can keep when you run a shop in the real world.

The current law also lags behind the development of the online business environment. It tends to protect multi-lead monopoly. There is no law to protect competition by requiring software based services to ensure customers can take the core benefits with them when they choose to leave the service.

Multi-lead monopoly was once seen in the telecommunication industry in Australia. Many people may still remember the traumatic experience of being trapped in the dilemma of having to choose tween staying with a service that didn’t suit them or spend days, months or even years to rebuild their personal contacts. You change service provider, you have to change your phone number, a core benefit of a telephone service.

Fortunately, the multi-lead monopoly environment in Australia’s telecommunication industry has changed for good. Consumers no longer have to tight their phone numbers with a company just because you started with it.

Another obstacle on the road to true competition in the online space is the perception that free services like Facebook and MySpace can bypass some well established principles. The “lures and traps” tactics are regarded as unfair business dealing, which are made illegal in most part of the developed world. This applies to both paid and free services. If a company give you free drink with the purpose of developing addition, it’s a unfair dealing regardless the drinks were free.

Further more, Facebook and MySpace rely on users’ participation to increase their popularity to secure sponsorship and advertising revenue. It’s clearly an exchange of benefits, not a charity service.

So what can be done to facilitate true e-competition.

Porting - Social network sites has the responsibility to ensure that users’ social connections are not detained or have to be rebuilt just because their choose to leave one service. Just like when you change to a new mobile phone company, you should be able to keep the same phone number and your phone book is not detained by the old phone company, so you connections with friends and family is not interrupted.

The connections you develop with your friends and associates belong to you. When a user’s association with Facebook discontinues, regardless if the user chooses to leave the service or Facebook decided to close the account, Facebook has the responsibility to ensure he/she can migrate his/her social network to another service without interruption.

Refer to the previous chapter “e-Monopoly” to find out more solutions to ensure e-competition.

It’s about time that choices are given back to the consumers.

It’s about time to have a consumer choice based definition of “competition” to incorporate the arrival of e-competition.

e-Monopoly vs e-Competition

e-marketing: e-ambush marketing

This post is open up for discussion on ambush marketing in the e-business environment. But a bit of introduction on ambush marketing may help to kick start the discussion.

Ambush Marketing

Despite fairness concerns, ambush marketing exists and it’s not more legal or illegal than other forms of marketing. Ambush marketing strategy has not only been used by market followers, it has also been used by market leaders to maximize the effectiveness of their marketing dollars.

Ambush marketing is not just for the amateurs, it’s also adopted by professional marketers. Even some market leaders have crafted million dollar marketing campaigns based purely on ambush marketing strategy or combining it with other marketing activities.

To find out how ambush marketing works, you need to look no further than the Olympic Games, which is known as a field day among elite ambush marketing specialists. Olympic ambush marketing has become such a phenomenon that many companies think it is really not worthwhile to become official sponsors of the games. Why pay millions of dollars when you can achieve very similar result at a fraction of the costs?

This has apparently raised serious concerns for the organiser of the games. They have to think serious on what they can do to deliver substantial benefits to sponsors.

Ambush marketing is also an attractive field for elite marketers as it’s a highly creative area of marketing. The problem for those who dislike ambush marketing is that, the phenomenon would always exist. It’s also increasingly creative and upgraded at a pace faster than traditional marketing.

So is it the end of the world for traditional marketing?

This reminded me the panicking state the world was in when Microsoft first offered Internet Explorer for free by bundling it with the windows system. A lot of people think, oh no, Internet Explorer is going to kill our beloved Netscape Navigator and the internet will be taken over by Microsoft. Instead of thinking the positive side of it, hatred was developed against Microsoft and anti-trust lawsuit against Microsoft dominated the media.

What actually happen is unexpected. Microsoft continue to offer Internet Explorer for free and people started to like the idea. And yes, Netscape Navigator died, but it didn’t take too long for it to be born again. It has never been better looking, million times more powerful and unstoppable as it’s being continuously developed by not one person, one company, not even a group of companies, but by millions of keen contributors around the world as a open source software. Its functionality has gone far beyond what a browser was originally intended for. You can check multiple email accounts in one go within the browser, get your life or work organised, listen to music, download things you can do with normal browsers, conduct research like a professor with a loyal and efficient assistant, talking to people reading the same page from other parts of the world, know what your friends are doing without entering Facebook, bid much better on ebay and develop your own website easily etc. It even has a new catchy name – Firefox.

A lesson to learn here is that Ambush marketing is not the end of the world for traditional marketing. It would make marketing even more interesting. It’s time to look at ambush marketing as one of the mix in your overall marketing strategy. It would be more rewarding to work with it rather than working blindly against it.

For event organisers, it would be more productive to think about building a frame work to coordinate ambush marketing just like developing strategies to secure sponsorship. The objective is to lead at least part of or even the entire ambush marketing movement from the wildness into activities that can be beneficial to the organisers and even the official sponsors.

So what’s the key element that marketers can leverage to achieve the desired positive result? Choice, an attraction that consumers can not resist. And the clear differentiation between sponsor company’s offers and ambush marketing company’s offers. More often then not, ambush marketing does help to bring attention to the events. If guided appropriately, it can act as a self funded publicity campaign for the event concerned.

I am not suggesting this lightly.  I have been researching and studying the pros and cons of ambush marketing for years while many other marketers simply resent it or being shy to talk about it.

So what’s the distinctive characteristics of e-ambush marketing?

For one, it’s even more unavoidable due to the convenience made available by the electronic media and the flatter structure of social networks that bring power to individuals and smaller organisations. So it’s not a choice to avoid or just resent it.

e-marketing: e-monopoly

 

e-Monopoly vs e-Competition

 

e-Monopoly

Is Facebook monopoly?

A good way to make a judgment on monopoly is to see if the power is in the users’ hand or in the seller’s hand.

If you don’t buy ice cream from one shop, you can buy one from another one. Does the same apply to social network website service. Not really. Say if you have been using facebook to socialise with your friends and associates.

One day, you account is not there. Can you say, “oh well I can always use myspace”? Obviously not, there is no option for you to migrate you social network from facebook to myspace, meaning you lose everything valuable in facebook. So clearly, they have the monopoly power although this new e-monopoly is presented in a different way form monopoly in traditional business environment.

If there is a anti-trust case against e-monopoly, what would be the solution?

1. Porting. There is not yet any protocol to connect Facebook with other social network websites, so if you leave one you lose all your social networks in that service. You should have the option to migrate your social network from one service to another without interruption. This should be legally guaranteed regardless if the service providers like it or not.
2. Open source. Some may have mistaken Facebook as an open environment. It’s not. There are part of it open only for third party company to develop plugins. Social network service should be required to open at least part of its source codes to ensure porting. In addiction to this minimum requirement, service providers should be encouraged to have a bigger part or the entire source code open, so they can focus on providing better service rather than taking advantage users’ fear that they have to rebuild their social network if they leave one service provider for another.
3. Legal protection for users. The only reason that “The end justifies the means” policy works for Facebook is that there is no effective regulation to prevent its use.

The first two can lead to e-competition instead of e-monopoly. If the social networks in facebook are interconnected with myspace and other social network sites, or competing sites are allowed to develop to share the same social network in facebook (with the users’ permission), then users would have the choice to pick a service they like without losing their social network. In other words, the power is returned to users’ hand.That’s the future of the network society.

As long as e-monopoly exists, online social network is still in its infancy regardless how popular one or two particular services providers may seem.

The third one is only a temporary solution. It merely limit the impact of e-monopoly power on users, not a real solution. The solution is to build an open environment to encourage e-competition.

e-Monopoly vs e-Competition

e-marketing: ebay

ebay has also adopted a counter marketing strategy similar to facebook

see also e-monopoly

e-marketing: facebook

I did a comprehensive study on facebook and wrote a thesis on it last year, so I collected quite of a lot of primary data from a group of facebook users. It’s interesting to look at the study again from an e-marketing prospective.

Facebook was initially marketed to students before opening up to the public and it’s also been marketed to businesses and investors. So there are currently three segments in their target market.

1. End users
2. Investors
3. Advertisers

Word of Mouth is the main way that facebook is marketed. This is mainly done online, like you can enter your friend’s email and invite them to join.

Facebook got a lot of free publicity due to it’s popularity. This applies to all groups.

A seldom known aspect of facebook’s marketing is its counter marketing practice, which I think is the most interesting one of all.

Counter Marketing

We all know that in marketing we must get the product, price, place and promotion (4p) right.

Facebook doesn’t charge users, so the price is right for most people, but not all. Some people would only use facebook if they are paid to do so, some others won’t even use it for money. So the price is not right for everybody.

Put the price issue aside, does Facebook want everybody? Interestingly, no, or at least that’s what appears to be the case.

Facebook has an surprisingly aggressive approach to retrieve its service with no meaningful explanation. That means, after getting everything right in marketing, facebook is happy to allow everything to drop dead just like that.

Imaging applying this to a real estate agent. After doing all the marketing to sell a house, you suddenly give up the sale and refund the customer with no meaningful reason. You also take one step further and decide this customer can never buy from you again.

A bit odd? That’s just what facebook does online. Facebook has a high rate of discontinued accounts, not because users left, but because the company has been systematically closing accounts as a way of manipulating the portfolio of their target users.

When you see a friend turned into a question mark, it’s often not because your friend removed his/her profile photos. The most likely scenario is facebook suddenly removed the account without even telling your friend. There are a large number of people I interviewed have question mark friends in their facebook. It’s reported that facebook did not give explanation to users affected. If there were any explanation at all, it would be the “The end justifies the means” policy that facebook has. What the company did was basically saying, look, your account is closed, so you much have done something wrong, just go to check our TOS (Terms of Services) to find out yourself. Occasionally, an affected user may not buy this, then facebook would make an effort to send out a copy of the TOS. But that’s about it.

When this were translated into real estate business, it would be like saying, well, since we are not selling you the house, you must have done something wrong, just go check the real estate journal and all the law and regulations, to find out what you did wrong. If the customer were foolish enough to do that, it’s very likely he/she would lose interests half way doing it.

This “The end justifies the means” policy offers the service provider or seller more flexibility in modifying their user portfolio with less possibility to be accused for being unfair. It’s reported that facebook has successfully used the policy to filter out some older folks and people with special interests, so they can create what they think is the ideal environment for facebook without being protested by users affected. Anyone read Facebook’s TOS would notice the company is making extraordinary efforts to internalise their ideology to their users: if we close your account, you must have done something wrong, end of the story.

This way of modifying user portfolio has a strong e-business imprint, partly because taking back service is a lot easier in the e-business environment than in the off-line environment. Take real estate business as an example again, it’s not always easy to take the product back as if you leave it too late, the buyer would have signed a bunch of legal documents and possibly already moved into the house. But on facebook, the service can be retrieved any time not matter how long you have been using the service. There is no law suggesting that you are more protected for being a loyal user.

So why companies do counter marketing?

1. Some companies are running on certain ideology which may at time override their financial objective.
2. Modifying customer portfolio is a way of maximizing market reach although there are fairness concerns.
3. A company in monopoly position can use it as a way to modify customer behaviours to better serve the company’s needs rather than the reverse way commonly seen in traditional business environment.

see also e-monopoly

Wealth: Passive Income

I was discussing with a friend last night on what could be the ways to earn passive income, meaning that you get paid even when you are no longer working. Here are a few,

1. Create something the earn you commission, like a music album, a book, so as long as they sell, you would get paid.
2. Invent something and earn a percentage on each product sold.
3. Own property

Can you think of more?

Passive Income strategy

The thing is, if you do not have a Passive Income strategy in your life, you are not planning to enjoy your life to the full extend. You may do a lot of trading, ebaying and have a little office etc, but once you stop working, you have no income, so what’s so good about your busy schedule except surviving. If a good life has to be meaningful in addition to surviving, even inheriting a large fortune would not give you immunity from being called a bored. So start thinking about it

e-marketing: e-business models

How to make money from open source software, something everyone can copy and distribute?

There are a few ways you can do it.

1. charge service fee for things like training, maintenance and trouble shooting etc.
2. develop customized extension for the open source software and charge for the customization. A company did that and they released the extension as open source after a while. The they develop new extension or customization and charge for it.

Can you think of any other way?

Check out freedom or free beer here too.

That’s what we have been talking about? How a business actually makes its money – business model, the unofficial definition.

Be aware of the differences

These are not business models, they are just a bunch of people looking at you laughing.

X

This is inspiring, but no

X

This one is a business model

V

These are also business models

V

e-marketing: Scarlett Johanssson

Update: This is the official result. The Scarlett Auction ended 14:00:00 AEDST, 13-Mar-08. The winning bid is US $40,100.00 (approximately AU $43,016.52), the winner is from the UK, apparently male. The winning bidder loves to have his or someone else’s hair straighten. He bought at least 3 different brands of hair straighteners this year alone.

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This is an interesting one. Anyone can have a date with Scarlett. But it would cost you around…US $38,100.00 and counting, there are currently 160 bids, and still 3 days and 15 hours to go, so you do have competition in addition to your willingness to invest in an opportunity like this.Actually, when they said anyone, they didn’t mean just anybody. Somehow, the marketing guy organising this decided to do some scheming to let only people they like to bid. The criteria is part of a secret process for unknown reason. Well they did say it’s a way to filter out those who are not serious bidders. It sounded ok at first except they forgot to define who are considered not serious. Those pay too little? or those who are not paying in US dollars? or something else.The auction is for charity and that’s also the reason Scarlett is doing it. There are a few other female stars doing it, but no male so far. You can argue this is not business marketing as it’s for charity. But as far as I am concerned, if you put something up for sale, that is business. The difference is what you use the money for after the sale.Another interesting point is the role of new media. Auctions like this could be done before the internet was invented. So why it wasn’t done before.

• Has the internet got much to do in making the auction a reality. Maybe the internet makes auctions more popular in general? or
• maybe the internet has brought so much social change to the society, auctioning a date has become a lot more acceptable than before? or
• maybe it’s about time something like this would happen with or without the internet?

What do you think?

e-marketing: Wiki

A few of us asked about how to do the wiki thing, here is some info to help you get started

After you login U-online, activate “My e-Portfolio” before you enter the subject area.

Step 1: To activate “My e-Portfolio“, you click on the “Modify Content” button on the up right corner, it will then give you a bunch of choices, tick everything above “News”, you should be fine to start your Wiki.

Step 2: To start your wiki or blog, click on the “my u-online” tab on the top of the page. You would see “My e-Portfolio Site, View and manage my personal e-portfolio site “. Click on it, the rest would be straight forward.

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Joey recommended a video tutorial on wiki, which is also pretty good. Click here to check it out.

e-marketing: Speed

Do we need speed? definitely. But the cost of speed is high for a big country with a small population. The issue is quite different from those in highly populated cities like Seoul, Hong Kong and Tokyo etc. So cost is a central issue in determining what technology to invest in to achieve the desired speed.

Fibre or Copper? The choice between Fibre Optics and Copper Wires is a difficult one as we have to rely on future technologies to make the judgment. The problem of future technologies are they are not here and when they become available, they could be quite different from our prediction, so it’s more of a gamble, or an educated guess. Adding the national significance to the issue, it’s not surprising that it became a little political.

Base of Educated Guess:

Fibre has proven ability to deliver the desired speed, but it costs a lot as it’s not an existing network.
Copper network is here, but it’s ability to deliver the desired speed is yet to be proven although promising.

So what do you think?

e-marketing: Cyber Identity (w2)

It’s interesting to look back how the internet started, and compare to what we have today. Steve Jobs’ up and down is also a fascinating story.

Second Life was well discussed, but here is something even more stimulating. Have you heard of Cyber

Twin? When I first told people about this about a year ago, they all thought it’s was really odd and foreign. It’s actually created by a Sydney company, a lot more closer to home than you think.

Click to go to MyCyberTwin

You CyberTwin is not you, rather, it’s someone you want it to be. You train your twin, it would then have a life of its own. Well, you can always do the training again in case your twin gets out control. Now that’s something scaring, or exciting, depending on how up-to-date you are in dealing with cyber identity I guess. Just like you, your CyerTwin can live and breath in Second Life too.