What makes a company successful?...


... delivering products and services that are relevant and create impact among consumers.

I combine my expertise as a Marketing executive in a Fortune 500 company and my passion as an investor to find the Companies that I think have "cracked the code" with consumers. Advertising does work. When I see a new product that fits relevant consumer trends, and that is supported with a campaign that I find particularly shrewd and innovative, I know that Company is potentially a great investment.

One of the great investors of all times, Peter Lynch, recommends to "buy what you know". You watch TV, go to the supermarket and walk around everyday. Observe... look around: what you see can make you money in the stock market. Now, let's be clear: a Company is not good just because it advertises. What we have to look for is great products supported with -and enhanced by- great advertising. The principle is simple: if something is good enough to draw your interest, it will be of interest to millions of persons just like you.

It is my goal to share with the reader my findings in the world of marketing which I think will turn into great returns for investors. Profit from it!


Monday, June 2, 2008

Signs of life at Motorola?


Last week I saw a TV ad that caught my attention. The ad was for Motorola ’s (MOT) player in the smartphone category: the Q. Even better, the commercial was supporting the Q 9c, their latest product in this competitive field.


The ad caught my attention because I had not seen Motorola supporting one of its products on TV in a long time. I think the last TV commercial I remember was for the launch of their PEBL model, which failed to create any ripples in the market. Not only that: the ad was quite refreshing, light-hearted and, in my view, quite successful in creating rapport with the audience. The ad shows a dude that hits his head and gets amnesia. In an entertaining way, the ad shows how this guy relies on the Q 9c’s advanced features to function throughout the day.

In a category where most of the advertising is directed to the enterprise market, and therefore very business oriented, Motorola retakes the past glories of its “Hello Moto” campaign -a hip, sound take on Motorola that, along with the launch of the RAZR, took the company to a leading position in the cell phone market several years ago-, and uses the platform to position the Q 9c as the smartphone to help the everyday crowd manage their life. To reinforce the cool, casual character of this model, it is referred to, in the best “Hello Moto” fashion, as the Moto Q 9c. Promising!

The same night I saw the Motorola TV commercial, I also caught a Verizon ad featuring the Q 9c as well. I found that encouraging. It seems that Motorola is launching an integrated effort behind this model, and was able to enlist the carriers to support the initiative, which is critical if they're to achieve any success.
The support behind the Moto Q 9c is certainly a step in the right direction for Motorola. If the company is to ever compete again in the mobile market, smartphones is the right place to focus the effort. Smartphones are where the market is going. They are the future of wireless communication. Conventional cell phones are quickly becoming a thing of the past.
Yet, I’d need to see more from Motorola in order to consider the company an investment worth the risk. Motorola’s execution has been extremely disappointing in the last couple of years, and consequently the stock has lost two-thirds of its value in the same timeframe. The share price closed today at $9.13, basically sitting where it was five years ago. These are very good reasons to be skeptical. Motorola still needs to prove that they can pull it off. And they are facing some formidable competition in this segment: Research in Motion’s (RIMM) Blackberry, and the hottest gadget in recent history, the ultra-cool Apple (AAPL) iPhone. Very tough nuts to crack! Nonetheless, it is encouraging to see Moto trying to get its mojo back. Keep an eye on the company. This might be the beginning of the long awaited turnaround for this stock.
Disclosure: I own shares of MOT

1 comment:

Alisa said...

Nice Blog. I just recently started My Journey into the Stock Market:

http://www.ourstockmarketjourney.blogspot.com/

and I have learned so much.

Investing by advertising is a very interesting perspective that I did't even think about. It raises important questions like: how successful are the advertising campaigns of the businesses I want to invest in? How do the campaigns compare to that of their competitors? How much money is spent in advertising and does it help to increase the earning power of the business? Are their increases in sales/revenues as a result of advertising? How effective is advertising in both the domestic and international markets.

I will surely have to keep these questions in mind.

Thank you and be well.