Recommendations (updated 21/8/10)
We propose several recommendations to build L77. Through our recommendations, we expect L77 to be able to: 1) build its brand and established itself as a first mover in using digital media in the business, 2) enjoy more free time by distributing his work load on the digital platform by using tools, 3) increase switching cost, attract, and retain more customers with a mobile application that can communicate and update promotions and new services to the phone that was purchase only at L77 store, 4) enjoy advertising revenue on its website through renovation.
L77 is doing everything by himself. Since the brand is already established, we propose that L77 can now let other people do the digital updates on the social media platform. This way, L77 can expect more free time and also train his workers to become more digitally skilled. Twitter tools now enable multiple usage of the same Twitter account on different computers, so L77 can tweet and reply on more technical questions and let his worker tweet price updates.
L77 brand is well known in the digital mobile phone market. We propose that he can extend his business to sell other digital equipments such as computer and cameras. We do not recommend him to stock up inventories; however he can be the middle man and provide the equipment as ordered by his customers. L77 must update himself on other devices other than mobile phones or hire experts in other fields to assist him and use his brand.
Since the barrier to entry into using the digital marketing platform is quite low, we recommend L77 to take this opportunity to increase his followers. With a large amount of followers, new entrants may find it difficult to compete with L77 and give up in their initial stages.
To boost up the number of his followers and create more brand awareness of L77, we suggest him to exploit viral and buzz marketing by providing customers an option to promote his brand in order to exchange with price discounts. Initially, customers will get % discount, which depends on product margin, for the products they would like to buy plus other free application programs if they agree to participate in the campaign that request them to express their good feeling experience about either L77’s products or services with a short, funny, and emotional sentence. Moreover, we would like to ask for allowance those participants to record their VDO clips and post them on L77’s website and YouTude. We believe that after publishing in online, those VDO clips would effectively attract L77’s and non L77‘s customers and fashion awareness of L77 especially in digital platforms. We foresee that this method would lead to a bunch of comments and page views on L77’s clips in YouTude, increasing traffic on L77’s website, and discussion topics about L77’s promotion in blogs as well as widespread world of mouths about L77 in Google when typing key words such as “MBK mobile phone shop”. In sum, admittedly, L77 would suffer from decrease in merchandize margin. However, he will eventually gain more and be compensated with increase in sales attributed to widespread recognition among potential consumers.
Our primary proposal is for L77 to establish himself as the first mover in adopting digital media in his mobile phone selling business. To do this, a simple mobile phone application must be made that will enable L77 to communicate with customers that bought his phone. Every phone that he sell, this applications supposedly name “L77” or “Blink” will be installed and will act as a simple channel for L77 to send updates on new services and news that can be useful to that customer. Customers that buy from L77 and find that this application useful will be attracted to L77 services and L77 can enjoy a higher customer retention rate and revenue. This is possible because, customers that have this unique application are likely to be up to date with the latest mobile trends, they can boast about it with their friends and spread useful information in their networks. Furthermore, because it is a new idea, we believe it will make a buzz and people will talk about it in digital channels and through physical networks. Customers who are interested in the deals from L77 via the application are most likely return to the store and spend money. On the other hand, customers that find the program not relevant can simply delete this extra service. Ultimately the primary objective of the program is to make L77 customer experience a higher switching cost, create a buzz and build brand awareness, and establish himself as the first mover in adopting digital media.
L77 website can be improved to make it more professional looking. L77 says that he doesn't have time to manage his website, so we propose that with a small investment, he can hire a web hosting company to professionally design his website. Since his brand is already well known, he can also use it to make money from online advertisements.
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