Malaysia IPO is makin’ it rain on dem otha countries
There’s an Asian country that’s on track to becoming a major economic power. People were astounded when they first heard that the amount of this nation’s initial public offerings (IPO) were growing, and some are wondering how their sudden rise to power will affect international economics.
The Asian country that’s gaining major economic clout isn’t China, Japan, or any other country people realistically thought was on their way to becoming an economic super power. Malaysia has a population of a little over 28 million people and around 127,355 square miles of land. Those statistics aren’t exactly impressive, which is why people were shocked when Malaysia earned the honor of becoming the world’s 4th largest market for IPOs in 2012.
Malaysia’s current IPO stance is anything but expected. Malaysia has the 9th largest economy in Asia and hasn’t exactly been a major player in the world economics seen in the past. Only the US, China, and Japan were about to outpace the country’s IPO gains for 2012. Despite having an economy six times bigger than Malaysia, Canada and other economic heavyweights like the UK, Singapore, and Hong Kong were unable to outpace the small Asian nation. Along with their IPO gain, the FTSE Bursa Malaysia KLCI Index rose by 14% (in US dollar terms) and their economy is expected to grow by 5%.
Many people believe that Malaysia’s astounding jump from 12th place to 4th place in a single year was caused by the current state of the global economy. Despite financial scares in the US and European Union, Malaysia came out of 2012 relatively unscathed from the poor global economic situation. It looks like 2013 is going to be a very good year economically for a certain small Asian nation (HINT: Malaysia).
Poor K-mart, nothing has been going right the world’s third largest retail chain for past 20 years. Retailers have had a difficult time competing with online venders, but Kmart seems to be cursed with some anti-profit spell. After their 100+ store shut down in 1994 the company thought they had prevented an economic disaster, but in 2002 the company was forced to file for Chapter 11 bankruptcy. After some allegations about misleading investors, the company chairman Chuck Conaway was forced to step down. When all was said and done 300 stores permanently shut their doors and 34,000 people lost their jobs. People were hopeful and convinced that a Kmart comeback was due after they merged with Sears in 2005, but despite numerous in-store redesigns and marketing campaigns the store never got back its old glory days.
After last year’s December holidays past Kmart saw dismal earnings over the holiday season and announced that 100-120 of their Sears/Kmart stores would be closing. You didn’t have to be psychic to see that 2012 wasn’t going to be a good year for the retailer. In 2012 there were a little over 1,300 Kmarts open in the U.S. and abroad, 800 fewer than just ten years ago when the store first declared bankruptcy. This past February Kmart posted its biggest quarterly loss in nine years, and it managed to lose $132 million in July’s quarter.
Some people blame Kmart’s decline on the emergence of online retailers, but that would be a rather simplified view of the situation. Ebay and Amazon have hurt retailers across the board, but the top two brick and mortar retailers have something very important that Kmart doesn’t have: a diverse product selection. Kmart has a major electronics problem, they don’t sell any whatsoever. Lacking LCD TVs, video games, cell phones, and other hot electronic products has made the store almost obsolete in the eyes of consumers, especially since its main competitors WalMart and Target offer such a wide electronics selection. Kmart also doesn’t have a grocery store section, something that has helped make Target and WalMart even more popular and profitable.
It’s latest earnings report is due out today, and financial forecasters are expecting another dismal loss. Investors are praying for a Christmas miracle and hoping that their profits will surge when people start shopping for the holidays, but since the store doesn’t carry popular presents (any kind of electronics because it’s 2012) it’s looking grim.
UPDATE: Wow, a net loss of $500 million. Kmart you gotta get it together
There are two things that every true American loves: freedom and sweet shopping deals. The past few years have seen a noticeable trend in the popularity of sales and discounts. Websites like Groupon and LivingSocial bring unbelievable deals to the in-boxes of millions of people each day, and people can’t get enough of them. Heck we even have a show that’s devoted to people who obsessively snip coupons to ensure that they get extreme deals. This consumer paradise seems like it has no possible downsides, businesses get more customers and consumers in a brutal economy can still maintain their standard of living with insane deals.
JCPenny’s Just Say No to the Status Quo marketing campaign may have been a bit of a flop, but its message is still rather topical. We’ve been buried in a never end avalanche of door buster sales, 75% off coupons, and unbelievably low prices for quite some time now. There’s only so much money people can spend on these goods and products and services companies can give discounts on. A few well-placed fantastic sales can do a business a lot of good, but an over saturation of 50%-90% deals can eventually exhaust a business.
Some people believe that extreme deals can only benefit businesses because of the amount of customers they attract, but others aren’t so sure. Utpal Dholakia, a marketing professor at Rice University, was interested in the affect our deal crazy society has had on businesses, and how much these deals are really benefiting them. Dholakia surveyed 150 small businesses who ran Groupon promotions from June 2009 to August 2010. Even though the promotions were profitable for 66% of the businesses surveyed, 32% of the businesses surveyed didn’t see any profit to speak of. Out of the 150 businesses surveyed, 40% said that they weren’t going to run an extreme deal promotion again.
A recent Manta survey asked 1,087 small businesses if they were participating in any daily deal promotions this holiday season, and a whopping 82% responded that they weren’t planning on it. Only 3% of those surveys said that past extreme deal campaigns attracted repeat customers, and an equal amount said that they actually lost money from them. It isn’t exactly shocking news that small businesses don’t benefit as much from daily deal promotions, but the affect they’re having is still important. If you want to help your favorite small businesses this holiday season, cancel your Groupon subscription and pay full price the next time you shop.
If financial terms were like a family, stocks would be the wildly unpredictable teenager, and bonds would be stocks’ surprisingly well behaved twin brother. People who wanted to make money without having to take a lot of risks would put their money in bonds. They would put money into a bond (usually issued by the government, even though there are other institutions that issue bonds), let it gather interest over a few decades, and eventually they would cash them in.
The interest gathered in bonds is the only feature of the financial note that could be considered risky. Even though you never know what state the economy will be in when you decide to cash them in, most bonds will have a considerable amount of interest gathered to make a good enough profit. After millions of people lost thousands from their retirement funds after the 2008 financial crisis, people were scrambling to get their money out of the stock market and into bonds and bond funds. In the short term it seemed like the only way to keep their money safe, but now the current state of the market could have made that bond move a big mistake.
Some of the people who moved their money from stocks to bonds may have been kicking themselves after they got a look at the S&P last week. As of October 16th the S&P stock index gained a whopping 115% since March of 2009, and if some people chose to keep their money in the market they could have seen some substantial returns. Unfortunately the stock market isn’t the only think threatening bond holders. Many people don’t truly understand the risks that come along with putting money into bonds, the interest rate on your bond could end up losing you a lot of money. Usually if people hold bonds until the mature they don’t lose money unless the issuer decides to default, but if the issuer decides to raise interest rates the bond prices go up and the bond profits go down.
Explaining in-depth the risks behind bonds and bond funds is complicated, but this website does a very good job of accurately summing up the problems that come along with putting all your eggs into the bond basket. Some people (the author included) are still very wary of putting any money into the stock market, but if you want to have a better chance of having a comfortable retirement it may be time to look to Wall Street.
Marketing is such an essential and simple tool in the business world. A corporate rebranding effort has the ability to completely alter the public’s perception of a company. If they’re done correctly business could see a substantial increase in profits, but if they aren’t handled well they could lead to disaster. If there’s one think we like at ROIZone, it’s the mistakes of others. Lets take some time today to look at some of the latest branding fiascoes
The SciFi Channel STD
The SciFi Channel wasn’t exactly a major player in the cable network business, but it still has a decent sized and loyal fan base. The company wanted to make their network appeal to the “texting generation” so they changed their name from SciFi to SyFy. It would be an understatement to say that fans weren’t happy. They thought that the spelling looked very awkward and didn’t see the point in changing the name of a channel without truly changing the name. This fan backlash may have blown over if it wasn’t for a rather unfortunate coincidence. The innovation consultants over at Syfy obviously weren’t familiar with slang, because if they were they would have known that syfy is a pretty well-known nickname for syphilis. It’s almost tragically ironic that a channel changed its name to a slang term for STDs in order to appeal to more people. Most people don’t like watching or buying things associated with disease, so it’s safe to say that this rebranding effort crashed and burned.
The Gap Logo that Ousted the Company CEO
Corporate logos are some of the most recognizable symbols in the world. People in China, Nigeria, and France may not all speak the same language, but you can bet that thousands of people there would recognize McDonald’s golden arches. In 2010 The Gap decided to change its logo with little fanfare from the company, but consumers made themselves known when the logo made its debut. The iconic white letters on a blue background was scrapped in favor of a “cleaner” looking design, but customers thought the logo looked “ugly” “sparse” and “wrong”. The terrible consumer response has made the GAP rebranding effort synonymous with terrible brand consulting and poor planning. The customer response was so overwhelmingly negative that executives decided to change the logo back after only a week after its launch, and mere weeks after the rebranding disaster the company President Marka Hansen resigned.
Comcast Confuses and Infuriates Customers with Xfinity
Quick question: how many of you reading this article thought that Xfinity was Comcast’s name for special high speed services? Xfinity is the name Comcast gave its cable, phone, and internet services in the beginning of 2010, but the business still chose to keep the company name as Comcast. This bizarre name change confused customers and investors, and soon the company was flooded with complaints and questions about their new “services”. Some people believe that Comcast changed the name of their services in hopes of slowing down the negative publicity the company was receiving. If that belief is true the Comcast name change would be the epitome of irony; some customers were so angry and confused about the change that they stopped using Comcast’s services all together.
Who said that democracy and politics doesn’t pay off anymore? The 2012 election is going to be one for the history books (and will be the most important election of your life, just like the last one. and the next one.), and some businesses are doing their best to cash in on the election hype. 7-11 has been making money off the democratic process since 2000. Their 7-Election marketing campaign encourages customers to buy either red or blue coffee cups to show which candidate they’re backing. Their “Every Cup Counts” campaign has been eerily accurate since its debut, their end cup tallies almost always predict who America’s next president will be.
The convenience store chain is launching another presidential marketing campaign that utilizes social media. Their “Mobile Oval” bus (that is a pretty spot-on replica of the Oval Office) will roam the country in hopes that people will snap photos and share them on major social media platforms. The chain claims that it’s a unique way to get young voters excited about the upcoming election, but it’s also a pretty great “hidden” marketing campaign.
If you think 7-11′s election oriented marketing campaign is pretty intense, just wait until you hear what JetBlue is doing to promote their company with the 2012 election. They’ve decided to make leaving the country easier for the obnoxious and vocal group of people who always threaten to leave the country if their candidate doesn’t get elected. Their “Election Protection” campaign will provide 1,006 people (which would produce 2,012 flight legs) with free round-trip tickets to leave the country and most likely annoy or fit in with the ex-pat crowd in their country of choice.
The campaign is ingenious because the company didn’t really have to do much to promote it. So many people threaten to leave the country after elections, and almost every American knows somebody who’s made that threat. People can vote for the worthy 1,006 through Facebook, and after Election Day the company will choose the winners. Hopefully their campaign will be as successful as their “Carmageddon” marketing campaign in California last year. JetBlue offered $4 flights between Burbank and Long Beach on the day that the 405 freeway was closed. The marketing campaign only cost the company around $10,000, but in generated a whopping $9 million- $12 million worth of media attention.
So far it looks like Romney supporters are planning to escape to the Bahamas, and Obama backers will flee to Costa Rica. We may not know who will win the presidency in 2012, but we know that these companies will be making big bucks regardless of which candidate comes out on top.