Internet Marketing

Alright, I’m finally up to date with this blog.  Today (well it’s actually yesterday because it’s almost 5am but for the sake of easiness I’ll call it today)  Professor Wymbs discussed with the class several business models.  We started the discussion about Zara’s value proposition: bring trendy merchandise in an expeditious manner.

Zara store in Barcelona Spain

Zara is a clothing company from Spain that unlike many other clothing companies manufactures its line of clothing in Europe.  Not necessarily due to protectionism but mostly for fast response to changes in taste in the market because being able to make the products locally makes production faster.  The fashion industry unlike other industries, is a “touchy” “feely” process in which everyone has a saying.  Zara has taken advantage of that by making the end users the experts in fashion.  Zara has accomplished that by systematically deploying a real time customer and supply feedback system that responds and adapts to taste changes.  From blogs posted on their consumer website to salespeople with their PDA’s in the stores surveying customers for suggestions in color changes in their production facilities in Europe, Zara has created a business model that creates customer loyalty (customers feel empowered because they are treated as fashion experts) and brand differentiation by simply giving customers what they want.

Then we went on to discuss the iPod business model and what it offers to consumers: reliable flash memory, trendy product, high value, friendly user interface, consistency, good customer service, and their valuation of customer input.  We also discussed Apple’s main target college students.

We also discussed the Dell business model and how different it is from Zara’s.  Zara internalizes the operation for speed vs Dell that has a different supply chain model; Dell uses just-in-time processes.  Dell besides customizing PCs and laptops they do not hold much inventory.  For every order they get they immediately order the parts from their supplier so that they do not overstock on one particular model.  Dell believes that cost control creates customer value.

Last but not the least Professor Wymbs discussed the potential of RFID in the market. According to Wikipedia, RFID is an automatic ID method, relying on storing and remotely retrieving data using devices called RFID tags or transponders.  This makes taking inventory very easy for large retailers and warehouses because with a simple scan you can tell how many items and what kind of items there are in a palette.  Currently Wal-mart is leading in the use of this technology among large retailers.  In fact they are forcing all their suppliers to apply it to all their products at least at the palette level for now.  This technology has another 2 to 3 years to develop before it gets to the product level in which in real-time users will be able to tell how many, and, with the combination of GPS, where it exactly is or was moved to at any point in time.

RFID tag shown

In reference to class held on Monday 09/03/08.  During this class we had the visit of Lucas Waltzer, I did not quite get what his title was but it seemed like he was a big shot in the IT Dept. of Baruch College.  Anyhow, he was kind enough to take the time to explain how to setup the blog account for this class.  Actually I am quite impressed with the easiness and versatility of this blog.  I have tried other blogs and they are usually cumbersome and not as user friendly as this one, so I must thank Prof. Wymbs, Luke, and everyone else at Baruch that made the use of this blog possible.

On another note, after Luke left, Prof. Wymbs discussed the Internet value chain.  He briefly explained terms like acquisition (obtaining new customers), conversion (making a prospect buy), retention (keeping customers from buying from someone else), and customer value (the worth of a single customer to the company).  The value chain concept was explained as follows SUPPLY CHAIN – - MANUFACTURER – - CHANNEL OF DISTRIBUTION — END USER.

The Value Chain Model

In reference to class held on Wednesday 09/03/08 (sorry for the delay but I was just finally

Larry Arias

able to activate my blog!).  Well today Professor Wymbs had a general discussion about the Internet and the direction that is taking.  How Internet access has evolved from exclusively for information to many other transactions and applications from anywhere in the world.  Also we discussed the infinite possibilities that Internet offers to marketeers.  The ability to reach individuals regardless of location and the easiness to apply the four marketing P’s through this medium has spawned thousands of job opportunities and entrepreneurs everyday.  Professor Wymbs also explained how the Internet is packet based.  In other words, one terminal sends information over the Internet, then the network transforms this info into raw data packets (for faster transportation) that are read through a standard global language TCP/IP, this data gets to the other end and it is put together again in order to be in the original state it was sent.  We briefly discussed the web 2.0 and how is helping more and more to create and sustain online communities where people not only buy/sale/trade/advertise/etc. products but also socialize and mingle with other individuals regardless of location in the world.

[youtube http://www.youtube.com/watch?v=lXWq3f01e...[/youtube]