...Cyworld Marketing Fundamentals (18-7-2012) ------------------------------------------------------------------------------------------------------------------------------------ 1. Problem Statement In mid 2007, Cyworld had increased to more than 21 million users from its 2.5 million in 2003. By the end of 2007, SK Communications had $197 million revenues and an operating loss of $0.35 million due to the acquisition of Empas. Cyworld accounted for 50% of total revenues and majority of operating profits. Almost 70% of Cyworld’s revenues were coming from selling virtual items to decorate user’s home pages but this source of revenue was starting to become exhausted so new revenue streams were needed. 2. Situation Analysis Company. Cyworld began as a simple social networking platform when it started in 1999. It initially provided a service that allowed users to build a social network of friends and not much more. The company’s goal was to offer users a “small, clean community,” which meant limited ads and an exclusive focus on social networking. However, as time passed, Cyworld eventually lost its original value proposition. By 2006, the company had become an open community, providing its users with a variety of services. Cyworld was no longer just focused on social networking, it had become a site based on personal media (concept of a user creating a “minihompy” and Home2) and a media platform (open platform for media sharing). Customer. Cyworld target users...
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...Cyworld: User Segmentation and Targeting TMBA BBUS 506 A Michael Cavelero, Joel Engstrom, Nesreen Zadah, David Tobey 4/19/2010 Introduction Smoke signals, telegraphs and telephones: communication in the modern world evolves quickly. The 21st century has been no exception. The rise of the internet heralded the growth of so called “online social networks” or simply “social networks” – websites where individual users carved out their own niche. Many of these networks have become household names to Americans: MySpace, Facebook, Linkedin and more. For many Koreans between the ages of ten and thirty, social networking has meant one thing: Cyworld. Cyworld, a small social networking company, was founded in 1999 by a group of MBA students in South Korea. The network was revolutionary, pioneering user experiences, such as community gifting and public threads, that other networks would adapt years later. Cyworld underwent rapid growth, and in 2003, was acquired by SK Telecom, a billion dollar Korean mobile communications enterprise. Cyworld employed a relatively unique revenue model of selling virtual items (“microtransactions”) to over twenty million users. However, by 2006, the social networking market was changing rapidly. Surveys and forecasts reflected declining activity and loyalty among current users. Additionally, an increasing percentage of users simply took advantage of the free services that were offered. Hyung-Chul Joo, as newly appointed CEO of SK Comms (the online...
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...Cyworld Case Analysis Market Segmentation Cyworld’s market can be segmented many different ways using various factors to create the segments. Cyworld can demographically segment its market using statistics such as age, sex, and country. This can be done by breaking down Cyworld’s users based on male/female, current country of residence, and then further grouping the users into age categories of 13-18 years old, 19-29 years old, 30-39 years old, etc. Cyworld can gain information on its market by further segmenting its users based on specific aspects of the website, such as activity level, purchases, and the amount of connections. For activity level segmentation, Cyworld would categorize users based on the amount of times he/she signs into the website per week, or the amount of time he/she spends on the website, and grouping them into high activity, medium activity, or low activity. Segmenting Cyworld’s market by purchases would consist of the same process of grouping users into a high, medium, or low category based on the amount of money each user has spent in the last four months buying virtual items. Segmenting Cyworld’s market by the amount of connections groups users into high, medium, and low category based on the amount of relationships (friends/ties) each user has. Cutoff criteria for segmenting users based on connections, as well as purchases, should be set so that approximately 1/3 of users fall into each category. Target Segment The main segment that Cyworld...
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...ccccdd grupo sd Caso Cyworld Grupo B – GMBAW 13 ddd Sonia Riveiro Sara Cristóbal Christian Martín Lucía Rodríguez Miguel Ángel Paz Pablo Villar Ramón Guerra GMBAW13 - GrupoB DEFINICIÓN DEL PROBLEMA Cyworld se enfrenta a un mercado maduro. Su cuenta de resultados se ha estancado, y se dan los suficientes factores como para augurar una futura reducción de los márgenes operativos. Este problema tiene dos aspectos a destacar: 1. Ha alcanzado el límite de su base de usuarios 2. El modelo de negocio está obsoleto La primera causa solo puede resolverse a través de la escalabilidad del negocio a otras áreas geográficas. La segunda a través de un cambio/ajuste del modelo actual. Dicho cambio iría de la mano de un análisis de la situación actual y una evaluación de alternativas; en definitiva, si es necesario reposicionarse o, por el contrario, incidir en el posicionamiento actual. Solucionar el segundo problema llevaría a incrementar el valor de la base de clientes y posibilitaría el crecimiento de la cuenta de resultados a través de un crecimiento en el margen operativo. ANALISIS DE LA SITUACIÓN [Compañía] Cyworld se posiciona en el mercado como una comunidad limpia y libre, donde los usuarios usan sus nombres verdaderos, casi exclusivamente dedicada a las redes sociales y con poca publicidad. El modelo de negocio se basa en el concepto de minihompy. Una pequeña página inicial personal que los usuarios pueden utilizar a modo de diario y para comunicarse con sus...
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...Cyworld: User Segmentation and Targeting TMBA BBUS 506 A Michael Cavelero, Joel Engstrom, Nesreen Zadah, David Tobey 4/19/2010 Introduction Smoke signals, telegraphs and telephones: communication in the modern world evolves quickly. The 21st century has been no exception. The rise of the internet heralded the growth of so called “online social networks” or simply “social networks” – websites where individual users carved out their own niche. Many of these networks have become household names to Americans: MySpace, Facebook, Linkedin and more. For many Koreans between the ages of ten and thirty, social networking has meant one thing: Cyworld. Cyworld, a small social networking company, was founded in 1999 by a group of MBA students in South Korea. The network was revolutionary, pioneering user experiences, such as community gifting and public threads, that other networks would adapt years later. Cyworld underwent rapid growth, and in 2003, was acquired by SK Telecom, a billion dollar Korean mobile communications enterprise. Cyworld employed a relatively unique revenue model of selling virtual items (“microtransactions”) to over twenty million users. However, by 2006, the social networking market was changing rapidly. Surveys and forecasts reflected declining activity and loyalty among current users. Additionally, an increasing percentage of users simply took advantage of the free services that were offered. Hyung-Chul Joo, as newly appointed CEO of SK Comms (the online...
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...Cyworld Introduction The U.S. social networking market is a huge technology sector that has been booming for many years. In 2006, a South Korean company called Cyworld decided they wanted to try to enter this industry that at the time, was dominated by MySpace and Facebook. According to the case study, “Cyworld is no small fry. It is the number one social network site in the Internet-savvy South Korea, where 90% of the population under the age of 20 and 25% of the total population are reportedly Cyworld’s registered users” (Peng, 2011, p. 147). There is no doubt that Cyworld was popular and successful in South Korea, however, for the company to break into the U.S. market they somehow needed to overcome the challenge of translating their home country success overseas. Because the U.S. and South Korea are so culturally different, this would not be an easy task. “Literally translated, “Cy” can mean “cyber,” but it is also a play on the Korean word for relationship, so “Cyworld” can also mean “relationship world.” (Peng, 2011, p.147). Cyworld started their concept in 1999, and allows for users to form on- and off-line relationships by forming buddy relationships through users homepages. In the U.S. version, this included a photo gallery, a message board, a guest book, and a personal bulletin board. Users then link their homepage to another users to form the relationship. Social Network Competition The social network industry is an oligopoly meaning there are a few...
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...various forms. The case study also suggests that people use social media as an archive for photos, videos etc. b. How can you segment Cyworld’s users? Which segments should Cyworld target? How can it create value for users in these segments? Cyworld segments their users according to “ABC segmentation” in the case study, which is Active users, Buyers and Connectors. As is shown by research, Korean and USA social networking users “clearly differed in the way they thought about and preferred to interact” (Shin, 2010:489). I therefore recommend that Cyworld further segment according to geographical location. Shin further points out “Korean users use Cyworld because of the involvement / participation … while the US users use synchronous communication services more frequently”. In terms of the ABC segmentation, Cyworld should target the Active Users with a lot of connectors, as well as the Buyers. Buyers should be encouraged to engage more with their connectors, and active users should be encouraged to become buyers as well. Cyworld can create value by developing algorithms to monitor the behaviour of their various segments on a continuous basis. With this information they can tailor their services to the various segments that they have identified. In terms of location, Cyworlds main focus should be on the existing market, Korea, and keeping the existing clients. Growth strategies can be formed for the USA, however value will need to be...
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...far as Cyworld dealt in the United States, it was subject to the laws and rules of the country that regulate online activities. These included the protection of privacy and provision of security to the consumers and provision of quality services. Cyworld can be described as role model when it comes to issues like privacy protection and data security. Therefore, formal institutions were low constraining Cyworld’s expansion and the US market is a highly regulated market. Informal institutions, however, had a major impact on Cyworld and the culture could be the main constrains. The widely accepted work of Geert Hofstede suggests that people from different groups, such as nations, can be very distinct from members of another group due to culture differences. According to Hofstede the American culture is different to the Korean culture in many ways, which is the domestic market of Cyworld; thus, the Americans are more individual focused, while Koreans make greater emphasis on the collective and people around. In conclusion, Cyworld is failed in US market. There had three reasons. • Firstly, when it entered the USA, MySpace has already dominated the market. Therefore, a foreign brand had barriers already from the early beginning. • Secondly, Cyworld is a famous brand in South Korea. Most users in USA are American-Koreans or Korean overseas students. The strong preferences for Korean culture limited the growth of Cyworld in US. • And the finally reason is Cyworld do not provide...
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...OPENING CASE STUDY: WHAT’S REPLACING THE DAY AFTER THANKSGIVING FOR SHOPPING SALES? You’ve heard that the most profitable retail shopping day before Christmas is the Friday after Thanksgiving. It’s often called Black Friday, because it’s the day retailers move out of the red and into the black on their income statements. But not anymore . . . Cyber Monday is quickly replacing Black Friday as the big shopping day. Cyber Monday occurs on the Monday after Black Friday weekend. Cyber Monday is the day when consumers go back to work and shop on the Internet for products they found on Black Friday on retail shelves. Almost 80 percent of online retailers state that sales significantly increased on Cyber Monday last year. And, yes, we are talking about people being at work and shopping for Christmas gifts. According to a BIG research/shop.org survey of 7,200 consumers, 37 percent stated that they have used or will use the Internet at work to shop for gifts online. While that creates a problem for productivity in the workplace, online retailers are redefining their business models to take advantage of Cyber Monday. Ice.com, an online jewelry retailer, sees this as a new business dimension, so much so that it’s offering free shipping and a gift-with-purchase promotion for everyone ordering products on Cyber Monday. According to Pinny Ginwisch, Ice.com founder and executive vice president of marketing, “The results are unbelievable.” Ice.com expects 400,000 to 600...
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...Group F & G Be prepared for the presentation & Discussion! (15/04/2014) CASE: Cyworld Creating and Capturing Value in a Social Network Gupta, Sunil, and Sangman Han. "Cyworld: Creating and Capturing Value in a Social Network." Harvard Business School Case 509-012, November 2008. (Revised November 2008.) Assignment/Discussion Questions 1. Why do people use social networks? 2. How can you segment Cyworld’s users? Which segments should Cyworld target? How can it create value for users in these segments? 3. Which is most valuable to Cyworld-an active user, a user who spends a lot of money with Cyworld or a user with a lot of connections? 4. How is Cyworld different from Facebook and Myspace? How are these social networking sites different from other large websites such as Amazon, Yahoo, or You Tube? 5. What should be Cyworld’s business model-paid items, mobile networking, or advertising? General Guide to Analysing the Case * Prepare an oral presentation about the case (use PowerPoint), including: * An overview of the case * Topic issues of analysis and debate * Answers of questions given by the instructor about the case. * Conclusion * Recommendation * Get ready for other case related questions that will arise in class. CASE PRESENTITION GRADING SYSTEM **** Higher points will be given to those presentations that are prepared effectively. Distinction Grade--------------A------------------ “Distinction Descriptors” ...
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...Background of the Study Basically the Internet was an emergency military communication system operated by the Department of Defense's advanced Research Project Agency (ARPA). The whole operation was referred to as ARPANET. The speed of Internet has changed the way people receive the information. It combines the immediacy of broadcast with the in-depth coverage of newspapers making it perfect sources for news and weather information. Even with the multimedia excitement of the web, Electronic mail (email) is the most frequently used application of the Internet. Many people, who have access to the Internet at school, home and at work place use the Internet for no other purpose than to send and to receive the mail. It's not just friends and co-workers that are receiving email. Wherever you look, the web is providing email addresses. This has made communication between the strangers easier than ever. Chatting is one of the more popular activities on the Internet- people can talk to anyone across the world. Introduction of social online networking sites has facilitated communication. These are web-sites where users can create a profile and connect that profile to others to form an explicit personal network. They are web-based services that allow individuals to: (1) Construct a public or semi-public profile within a bounded system (2) Articulate a list of other users with whom they share a connection and (3) View and traverse their list of connections and those made by...
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...Business and Innovation in Networked Economy Course Background and Introduction The dynamic of our society, and particularly our new economy, is increasingly obeying the logic of networks. Understanding how networks work will be the key to understanding how the economy works. We are connecting everything to everything. Businesses and governments that are able to effectively employ information and communication technologies find more sophisticated and efficient ways of managing their external relationships and communications. This growing ICT usage helps form the critical mass of electronic transactions which supports a networked economy, both in terms of the network size and the demand for associated goods, services, labor and policy reform. The critical characteristic of the networked economy is a radical decentralization of physical capital necessary for the production, storage, distribution, and processing of information, knowledge, and culture. This decentralization has caused a radical distribution of the practical capability to act in these areas, creating new levels of efficacy for individuals, who increasingly shift from being consumers to being users and producers. Individuals have now become capable of doing much more for themselves and for others, both alone and in vastly more effective loose collaborations with others. In the industrial economy, hobbyists, no matter how committed, could not come together on the weekend and compete with the General Motors of...
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...Social network sites (SNSs) are increasingly attracting the attention of academic and industry researchers intrigued by their affordances and reach. This special theme section of theJournal of Computer-Mediated Communication brings together scholarship on these emergent phenomena. In this introductory article, we describe features of SNSs and propose a comprehensive definition. We then present one perspective on the history of such sites, discussing key changes and developments. After briefly summarizing existing scholarship concerning SNSs, we discuss the articles in this special section and conclude with considerations for future research. Introduction Since their introduction, social network sites (SNSs) such as MySpace, Facebook, Cyworld, and Bebo have attracted millions of users, many of whom have integrated these sites into their daily practices. As of this writing, there are hundreds of SNSs, with various technological affordances, supporting a wide range of interests and practices. While their key technological features are fairly consistent, the cultures that emerge around SNSs are varied. Most sites support the maintenance of pre-existing social networks, but others help strangers connect based on shared interests, political views, or activities. Some sites cater to diverse audiences, while others attract people based on common language or shared racial, sexual, religious, or nationality-based identities. Sites also vary in the extent to which they incorporate new...
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...A social networking service is a platform to build social networks or social relations among people who, for example, share interests, activities, backgrounds or real-life connections. A social network service consists of a representation of each user (often a profile), his social links, and a variety of additional services. Social networking is web-based services that allow individuals to create a public profile, to create a list of users with whom to share connection, and view and cross the connections within the system.[1] Most social network services are web-based and provide means for users to interact over the Internet, such as e-mail and instant messaging.Social network sites are varied and they incorporate new information and communication tools such as, mobile connectivity, photo/video/sharing and blogging.[1] Online community services are sometimes considered as a social network service, though in a broader sense, social network service usually means an individual-centered service whereas online community services are group-centered. Social networking sites allow users to share ideas, pictures, posts, activities, events, and interests with people in their network. The main types of social networking services are those that contain category places (such as former school year or classmates), means to connect with friends (usually with self-description pages), and a recommendation system linked to trust. Popular methods now combine many of these, with American-based...
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...changing generation, the youth is now more demanding in acquiring technologies that will suit to their needs, especially in when it is applied to their studies. Certainly, the access in Internet or in the World Wide Web is easy and there are many benefits can be gained. The use of this accessibility is applied mostly on the professionals such as medical practitioners, business tycoons, and even government officials. The purpose of their usage the Internet is different in terms of their needs and various marketers also applied their expertise on it. Apparently, the growing numbers of users are members of different social networking sites and most of them are students. Social Networking Social networking such as Cyworld in Korea, Facebook one of the largest social networking sites in the U.S., Myspace, and many others has been plagued the websites of the Internet accessibility. Many individuals, mostly students and their friends are engaged in social networking. Social networks are made to entertain and to interact with the other people even if they are miles away. There are many various styles used by the social networks to accommodate their visitors like enabling the host to create his or her mini-homepages and considered as a way to express their own ideas. Part of creating their own world through the web is decorating them with vivid colors, wallpapers, characters, and even music and videos ( 2009). Due to the continuous change...
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