Saturday, December 14, 2013

Smiley Facing the Giant

I have been watching Shark Tank for more than three years. This American reality TV show offers hundreds of entrepreneurs the opportunities to seek investment or strategic partners for their business and products from “Sharks”, who are self-made billionaires or millionaires. In last Season – Season 4, a product called “Scrub Daddy” smiley-faced yellow sponge, highly impressed me due to the fact that the owner, Aaron Krause, was able to think outside the box making a very creative sponge. This sponge also has more advanced features comparing with traditional sponges. Eventually, Lori Greiner, the Queen of QVC made the deal for $200k and 20% of the Scrub Daddy Enterprise.

One year later, an article on The Wall Street Journal named Sponge Makers Try to Woo Skeptics attracted my attention. The key word in this article is Scrub Daddy!! I was surprised how fast this company has grown, even though I believed this product will undoubtedly have a promising future the first time when I saw it on Shark Tank.

According to Information Resources Inc, around 67% of U.S. households have dishwashers; however, lots of pots, pans and delicate items are still washed by hand. As of November 2013, Americans spent $415 million on sponges. The research also shows that the U.S. sponge market is growing slowly with just 2.4% this year. The reason behind this is obvious – sponges hold bacteria.

For most people who use sponges will have the same experience – sponges hold cheese or eggs. Many people believe that sponges tend to be the most germ-laden item in the house. There is definitely a huge potential market for sponge products; however, consumers seem not very satisfied with sponges. Therefore, in U.S. market, 3M Co, the world’s largest maker of branded sponges, is planning to provide a million samples of its new Stay Clean sponge to the market; in European market, Jarden Corp is offering sponges with scrub pads “reinforced” with tiny bits of pumice; Scrub Daddy, this rising star company, is considering as a tiny rival by giant player in the market. The company is promoting a smiley-faced yellow sponge made of "highly engineered" polymer. This product is supposed to cleans better and sheds bacteria more than traditional ones.

The market is changing all the time, since consumers are always looking for better products with affordable price. Again, this case is another perfect example of how a small company can successfully get its market share while competing with giant players. With creative ideas and new tech, a small business one day will lead the industry. 

Friday, December 13, 2013

Beyoncé Releases Latest Album-Quietly

Zalc
“Beyoncé Releases Latest Album-Quietly”
 http://online.wsj.com/news/articles/SB10001424052702304202204579256591030008758
December 13, 2013

            On the night of December 12, 2013, internationally known artists Beyoncé released her fifth album without any prior noticed. This is a completely different approach than is usually seen by the music industry. Most artists use the corporate-sponsored music-marketing campaigns that sometimes fall apart or can catapult an album, but Beyoncé did not. Her self-titled album appeared in iTunes without any fanfare.
           
    “I did not want to release my music the way I’ve done it… I am bored with that,” said Beyoncé. Her album that had little to no prior notice except to her 8 million Instagram followers via a 15-second video trailer that ended with “available now,” sold more than 80,000 copies in the first three hours. The price listed in iTunes was set for $15.99 for the album, which includes a video for each of the 14 songs. Unlike her husband Jay Z who heavily marketed his latest record, Beyoncé decided to take it to the completely opposite route. And it worked.


            Very few artists would be able to accomplish what Beyoncé was able to do with her silent advertisement, which in retrospect only created more news and advertisement for the album. Beyoncé was able to create more hype about her album by not creating any. Internationally, this will only increase Beyoncé’s image and desirability as the artist that was able to sell 80,000 copies in the first three hours. Not only is this a new form of marketing, it is a new form of quiet advertisement that may begin to be used nationally and globally. I believe that many companies and artists alike can learn from Beyoncé’s bold statement. A statement that says her product is good enough to not need large amounts of advertisement to get noticed. A change in the way we see advertising? Possibly.

Oculus Raises More Money but 3D Gaming Is Still a Challenge

Zalc
“Oculus Raises More Money but 3D Gaming Is Still a Challenge ”
 http://blogs.wsj.com/digits/2013/12/13/oculus-raises-more-money-but-3d-gaming-is-still-a-challenge/
December 13, 2013

            We all remember when the gaming industry was (and appernetly still is) trying to make 3D gaming happen. Nintendo tried twenty years ago with a virtual-reality headset called “Virtual Boy.”  Although they were the pioneers for their time, the sales were so poor that it forced Nintendo to discontinue the gaming device within the year. In 2011 Nintendo tried again with its 3DS that was handheld and did not need the huge goggles that the Virtual Boy required.  Consumers were not too interested in the 3DS and its sales also plummeted.  It was only when the 3DS decreased its price by 40% that it was able to gain some attention.
            
       All hope is not lost for gamers in dreams of playing in a 3D atmosphere. Oculus VR of Irvine, California has been working on a 3D virtual-reality technology for gamers. Oculus has said to have raised $75 million in its second major funding with the efforts of the venture firm Andreessen Horwitz. In creating this 3D virtual-reality, the company is creating headsets for the gamers, but has not stated when it will be released. Oculus recently developed a prototype with a current design that has been sold to developers. This prototype includes a box like screen in front of the customers head that is held on with a strap. Brendan Iribe, chief executive at Oculus said that he is confident that this is all the money that they will need to get the first vision to the consumers at a high volume. The cost of building each device is between $100-200, Oculus has sold 40,000 prototypes to developers for a year now.


            “We want to do this on our own…We want to get the consumer market the way we believe it needs to happen,” Iribe said and may be it is for the better. As is with all products, the visual appearance of the product and the functionality of the product has a huge effect on its success. With a strap holding this very expensive screen, will gamers be able to play comfortably? Or will they enjoy it so much that they will be sucked into this digital 3D world of Oculus? At either rate, the development of this 3D gaming device seems to be expensive and at risk of falling once more. As is with many products, the overall hope for Oculus is to be able to export the product internationally, which may cause problems entering international markets. In some markets it may have a positive response, however in other markets it could have a very negative response. An additional question would be how healthy is it for gamers to be so close to a 3D screen for long periods of time? More importantly, why is Oculus testing this product only in the United States and not in other countries where gaming is more prevalent? An additional concern will be the international laws and barriers to entry for those products on a technology that has failed numerous times.

Sponge Makers Try to Woo Skeptics

Zalc
“Sponge Makers Try to Woo Skeptics ”
 http://online.wsj.com/news/articles/SB10001424052702304281004579219992616379048
December 13, 2013

            Sponges are one of the most disgusting parts of a person’s kitchen, which an excessive amount of bacteria and unpleasing smell. The sponge industry is on a mission to create the best sponge in the world without the large amounts of bacteria and odors. Two companies 3M Co. and Scrub Daddy believe that they have found the best sponges in the world.
            
             3M Co., the largest sponge maker in the world is promoting their Stay Clean sponge that will not get “gunked up” by eggs or cheese and therefore reducing the odors by giving away one million samples. Scrub Daddy, a much smaller rival has introduced a smiley-faced yellow sponge that is “highly engineered” with polymer that cleans better and sheds bacteria more easily than the competing products. Research shows that these two companies are in a perfect market since Americans have spent more than $415 million on sponges and scouring sponges in the 52 weeks ending on November 3rd.  The larger company, 3M offers a large variety of sponges for the consumer’s needs and even some organic sponges for the all green families. Scrub Daddy on the other hand does not have such a large variety, but rather focuses on the accidental invention that is in Mr. Krause’s invention. “The best dish-washing sponge in the world,” in the eyes of Scrub Daddy is created out of synthetic material produced by a German company. This scrub has been featured on the hit TV show “Shark Tank” and has received a lot of popularity, but the reality is that a sponge will get dirty and fill with bacteria.

            
           Both 3M and Scrub Daddy are not able to completely eliminate the bacteria and the odors that come with the sponges in our homes. They are attempting to create better, more durable sponges, however they are not 100% there yet. The millions of bacteria that are found in sponges should push them to become obsolete, but we have yet to find a better replacement for them. Internationally, the article states that 3M has attempted to bridge the gap between the American form of cleaning and that of the Chinese form of cleaning. It has yet to be achieved because the Chinese do not use sponges to clean. In order for companies such as Sponge Daddy and 3M to grow in international markets, they most focus on the techniques used in cleaning dishes and possibly alter their product for the culture. In other international countries such as Latin America, sponges are used rather frequently, however these companies need to provide a cleaner solution. In third world countries, there is more risk of diseases and bacteria that can come from the sponges used than that in the United States. 3M and Scrub Daddy would be stronger if they could develop, promote, market and alter their sponges for the international communities

Wireless Carriers to Help Consumers Unlock Phones

Zalc
“Wireless Carriers to Help Consumers Unlock Phones”
 http://online.wsj.com/news/articles/SB10001424052702303293604579254501070648942
December 12, 2013

             A huge step away from federal regulations has been noticed from major wireless carriers who are now allowing consumers to keep their cellphones after switching providers. Companeis such as AT&T Inc. Sprint Corp., T-Mobile USA Inc., U.S. Cellular Corp. and Verizon Wireless have agreed to unlock cellphones or ask the manufacturers to do so two days after costumer’s requests. The main ideology is that customers should not be forced or “locked into” using their phone with a single provider.
           
          Although the idea and the thought behind this agreement is good, many customers are still unable to use their phones after switching providers because they may not be necessarily compatible with other carriers networks or data services.  “Today’s commitment by wireless providers will provide consumers with more information about when, and how, to move their devices from one network to another compatible network, should they chose to do so,” said Tom Wheeler, chairman of the FCC, who also backed the agreement. The new agreement is not without benefits for the providers, however. Carriers will charge a fee for unlocking the cellphone of noncustomers, but they will make sure that the prices will not be too high to scare away customers from unlocking their phone. Many large companies believe that this new agreement will increase the competition between the carriers.


            This agreement seems to me to be a bit too slow for the modern world of cellphones. In Mexico for example, children of all ages know how to unlock their cellphones to be able to use the American phone with Mexican providers. Why do they unlock their phones, because it is much cheaper for them to buy an iPhone or a Samsung Galaxy in the United States than it is for them to buy it in Mexico. Therefore they buy the American phone in the US and use it in Mexico. Such is the case for many international customers. The large providers in the United States may benefit form this agreement, however the international consumer does not. They are already paying for the cellphone that is expensive for them and they are able to unlock it on their own. Why would they then pay more for a provider to unlock it for them? Additionally for the local customer, many already know or could find someone to unlock their phone for them, will charging to unlock their phone help them switch to a new provider more frequently? I do not think that this agreement has been created at its fullest potential, although it is a closer move to the right path.