Tuesday, December 31, 2013

Big Company, Big Marketing, Big Disappointment

The new generation has their blinders on when it comes to big name branding. In fact some people such as myself are starting to avoid using name brand companies as much as possible. If your company has been established for at least two years and you still depend on spending marketing money to keep the leads coming in, you're doing it wrong.

Wal-Mart, eBay, and Google.

Wal-Mart started out small, offering to beat anyone's price even if its one Penney. All customers get greeted at the door, this separated them from the rest. When I worked their as a teenager, I was proud to work for such a great company. Now they are owned by a corporation, they advertise like crazy, they deliver the cheapest product regardless of its quality. The experience of shopping at a Wal-Mart store today is so poor that people only go their if they cant afford to go anywhere else. Its no longer a place you want to go, it's a place you try to avoid. Wal-Mart spent 2.5 billion last year in marketing, I am disappointed in their service.

eBay started out small and was a place just about anyone with a PC could list junk laying around the home and find a buyer somewhere else in the world that would pay more than what you would get in a garage sale. If a seller did not send the product to the buyer, eBay protected its buyers threw a Pay Pal system. It was a great way to score an amazing deal. The fees for eBay and PayPal were so low you would profit off your sale enough to make it worth your while. eBay had to start out marketing and should have not needed it after a few years because the word was out, however they kept spending more and more in marketing and the fees went up, up and up. Now if you don't sell tons on eBay, you pay much higher fees than the person selling a few items a month. Making it so it was cheaper to buy new junk from china than used junk form USA. If you sell something for about 100.00, you pay about 30.00 in fees. Now all you get is poor products that don't last long if at all and can kill you. eBay spent 871 Million last year in marketing I am disappointed in their pricing.

Google started out as a free search engine that was just that, a search engine. No advertisements, no personal widgets all over the screen. When first started few if anyone was paying for AdWords. As a result when you searched for something, you would get good relevant results even if it was for something free. Now you get whatever the people who have the largest marketing budget results unless you go to page one or two. When Google started, I like many others used Yahoo.com to search and sometimes even msn.com. I would have trouble finding what I was looking for and remembered my friends telling me in 2002 that if you typed "weapons of mass destruction" into google.com you would get a page that said "No weapons of mass destruction were found". So I tried looking on google. To my surprise I found exactly what I was looking for as the top results. After this happened several times I switched to using only google. Now they are so saturated with marketing that you will most likely never find what you're really looking for. Only what the companies with large marketing budgets want you to find. If you create a site with your first, middle, and last name in the META TAG, which is what search engines use to match searches to your page, put your name on the page 20 times. Go to google and manually force their spider bots to crawl your page wait a couple months and then search your first, middle, and last name. Here is what you will get, pages and pages of non-relevant information, probably even lots of listings for people's names that don't even match. This makes it so the price of the product you are buying must cost more to pay for marketing and or the service will be less than par because the seller is paying their workers less to pay for marketing. Google spends the least when it comes to marketing vs other large disappointing companies and I would also say they are the least disappointing. I am still a Google supporter when it comes to Google for Business Apps, Gmail, Android and Chrome, however I am on the lookout for a new search engine. Google spent 188 Million last year, I am disappointed in their results.

2014 consumers should use their social media to find recommended products and services. I recommend Facebook and here is why.

If you purchase from newegg.com and you like it, you can hit the like button in an email they send you. A simple way to say, I like this company. The difference between liking a company and reviewing a company is that reviews just stay online likes only stay if you still like them. I liked Wal-Mart, I don't anymore, if I left them a review, you would see online Michael Hansen says good things about this company. However since I liked them instead, when they gave me poor service, but not poor enough for me to complain, I was able to unlike them.

Here is the fun twist, some people are good at finding the right company to use, if you know your mom is good at choosing the best companies, you would be inclined to look at Moms likes on Facebook before making a choice on your own. If you find that Moms likes are working out well for you, you may want to spread the word. Now here opinion matters. Her marketing budget last year was $0.00. I am highly satisfied.

Prediction for Starbucks

Currently Starbucks sells their coffee at a premium price, however the value is still there. The service is reliably good every time, the product is reliably good all the time. Starbucks only spent 95 million last year in marketing. Less than all the other names we are all familiar with and yet they are just about the last standing on great terms with me. I predict that if marketing expenses increase significantly we will equally see the service diminish followed by the product not holding its value compared to the current competition.


 

Written By Michael Hansen


 


 


 

Tuesday, December 3, 2013

How Do I Figure Out What My DTI Is?

In order to prevent homebuyers from getting into a home they cannot afford, FHA, Fannie Mae and Freddie Mac requirements and guidelines have been set in place requiring borrowers and/or their spouse to qualify according to set debt to income ratios. These ratios are used to calculate whether or not the potential borrower is in a financial position that would allow them to meet the demands that are often included in owning a home. The two ratios are as follows:

1) MORTGAGE PAYMENT EXPENSE TO EFFECTIVE INCOME

Add up the total mortgage payment (principal and interest, escrow deposits for taxes, hazard insurance, mortgage insurance premium, homeowners' dues, etc.). Then, take that amount and divide it by the gross monthly income. The maximum ratio to qualify for FHA is 31%. See the following example:
 Total amount of new house payment:$750
Borrower's gross monthly income (including spouse, if married):$2,850
Divide total house payment by gross monthly income:$750/$2,850
Debt to income ratio:26.32%

2) TOTAL FIXED PAYMENT TO EFFECTIVE INCOME

Add up the total mortgage payment (principal and interest, escrow deposits for taxes, hazard insurance, mortgage insurance premium, homeowners' dues, etc.) and all recurring monthly revolving and installment debt (car loans, personal loans, student loans, credit cards, etc.). Then, take that amount and divide it by the gross monthly income. The maximum ratio to qualify for FHA is 43%. See the following example:
 Total amount of new house payment:$750
 Total amount of monthly recurring debt:$400
 Total amount of monthly debt:$1,150
Borrower's gross monthly income (including spouse, if married):$2,850
Divide total monthly debt by gross monthly income:$1,150/$2,850
Debt to income ratio:40.35%

Please note that the above indicators do not exclusively determine whether or not a candidate will qualify for an FHA loan. Other factors will be considered, including credit history and job stability.