MBA in a Nutshell #11 - Marketing : Marketing Mix - Product - Product Lifecycle

Like many living things, a product has a life cycle and evolves through multiple stages.

i) Introduction

At this stage, there is a lot of research and development. Sales and profits are low. A product at this stage his highly vulnerable and funds are needed to grow properly.

ii) Growth

At this stage, sales and profits are growing. A substantial amount of promotional effort is required to sustain this stage.

iii) Maturity

Sales and profits peak at this stage. Profits may diminish because competition is getting into this game.

iv) Saturation

Decreased profitability occurs here. Competitors are starting to get into the game.

v) Decline

Market share is slowly being eroded and cost cutting will occur at this stage.

vi) Abandonment

Production ends at this stage.

When you understand that everything has a beginning and an end, you begin to have less of an attachment to your product and more to the process of grandfathering a product through the various life cycles. Right now, I believe that my program, having only graduated 300+ students, is at a growth stage with maturity not too far away.

Of late, I noticed that mainstream media is starting to develop a bigger fascination with FIRE and FB groups are trying to establish some materials on to attain some limited version of financial independence. As of now, I believe that any attention given to the possibility for early retirement will strengthen my hand so I expect to put in more effort to ride on this interest from the general public.

Over time, I do expect more groups to want to muscle into financial education territory, as I am sitting on some capital and profits over the past year, I should have a few tricks up my sleeve to further differentiate my product from the rest of the pack.

Thinking at the margins.

One reason I would like Economics to be introduced to O level students despite only starting to study it serious at my Masters is its immense usefulness in daily life (as compared to that abomination English Literature). 

One really nifty concept in economics is marginal value, which is contrasted with average value. Marginal value is the value we give to one extra unit of an item. i.e. I'm going to eat lobster rolls with a friend next week and I bet we're both looking forward to it. This is a special event because neither of us eat lobster rolls on a regular basis. If my friend has already eaten three lobster rolls that morning, he probably would not be too excited to each his fourth lobster roll  with me that afternoon. 

Ergo, the marginal value of the fourth lobster roll is very small compared to the first. 

The crucial problem in education is the ability to translate a theoretical idea into everyday living. 

How can we think at the margins the same way economists are trained to do ?

Not all dividend dollars are equal. 

As we starting to get payouts from our investments, the dividends would not be worth very much. You might see a $50 payout in your bank account once every three months, hardly enough to pay for anything else. This can cause a lot of Millenials to give up on the dividends chase. 

The marginal value of a dividend payout happens when one quarter of dividends payments start to exceed three months of particular bill. Then you can at least say to yourself that in that payment category, the item will be free henceforth. If you spend $40 (or $120 per quarter) on a sim-only plan, the marginal value of the $121 dividends dollar that quarter will be very high because your data will be free moving forward.

The success of a dividends strategy, thus, relies on chaining your dopamine rush by being aware of your regular expenses. It's great to know the size of your smallest bill every month so that you will know the point that expense becomes free. In my opinion, a data plan is always the best place to start. 

For rookies, you might want to ask yourself at which stage of your portfolio development does your data plan becomes fully subsidized by dividends payouts ? 

I'm rapidly reaching a stage in my life whereby an added dollar of dividends in a quarter is not particularly valuable to me. My biggest expense every month is my mortgage and I have a leveraged account producing close to about 120% of my quarterly mortgage payments every three months.

At this stage, the magic of Economics 101 can be further applied when you have a steady flow of dividends coming into your bank account.

Capitalism ensures that there are millions of products that are designed and engineered to have a high marginal value to you. I got the latest Kindle Paperwhite with 8Gb and free data after stacking a round of discounts on Shopback and Amazon.sg. 

I also tried to do more shopping at Cold Storage to try out a better brand of butter. The marginal value of better butter is a little overrated, sadly. 

Why engineers and tech professionals hate immigration and what can be done about this ?

I will do a little bit of social-political blogging today.

A hot topic of the next elections is likely going to be about CECA because I suspect that Tan Cheng Bock will leverage on this issue as Heng Swee Keat is very possibly the architect of this agreement that grants free access to Indian tech professionals into our economy in return for granting Singapore banks full access to the Indian economy.

From the perspective of local engineer like myself, CECA is a game changer that kept my salary low and increased the competition and stress we have in local workplaces.  As I watched the movie Three Idiots lately, I was very impressed by India's almost divine reverence for their engineering talent. I asked myself how can our local  engineering degree holders who can get Bs or Cs for Physics / Maths A levels compete against a demigod-engineer from IIT?  The truth is they can't.

The quickest solution to the problem is to simply not be a plain engineer in Singapore.

The solution is to become an engineer-landlord.

Once I started investing, I can start to see how we can benefit directly from the flow of professionals into Singapore. As Singapore becomes more competitive, companies want to set up here, and Indian professionals also want to rent our spare homes and buy our goods. I daresay that my investment and rental gains, net-net, exceed my losses under the CECA arrangement. I even spent two happy years in Singapore Mercantile Exchange which was set up by an Indian billionaire.

But this leaves a serious problem in our society today.

Not everyone can become an engineer-landlord. There will be folks who are left behind and would want to punish whoever drafted the CECA with India.

So how can we solve the problem of allowing the man on the street to benefit directly from immigration so that we will not have a populist revolt ?

Radical Markets by Eric Posner is the first time I felt that there is some hope that a solution can be found. Here is how to adapt his ideas to Singapore :

First we have to identify a discriminated class in Singapore. To me, non-degree males are a discriminated class in Singapore. The GINI coefficient for males is much higher than females and non-degree males have a lower representation in Singapore Parliament than women or ethnic minorities.

( Only MP Charles Chong lack a degree )

I think the first solution is to align the needs of non-degree males with potential immigrants.

Suppose Beck Hock is a non-degree male working hard to raise a family in Yishun, very likely he will struggle to make his ends meet if Singapore goes full throttle into globalization.

What if we let Beng Hock sponsor Rancho, a Indian Engineer, to work for Google in Singapore ?

Beng Hock will have to interview Rancho to decide whether he will fit into Singapore society, buy insurance in case Rancho turns out to be unable to work, rent a room to him and vouch for him for a year so that Rancho can get a three year work permit.

Rancho has to pay Beng Hock a fee to work in Singapore and be his guide to local culture. From some economic surveys, Rancho will be willing to pay big money to Beng Hock for that privilege, sometimes as high as $9,000 to work here.  The process of setting a price can be an auction mechanism like COE.

A non-degree male can credibly sponsor one new immigrant every year boosting his salary by a decent $300-$500 a month, this can limit the effects of xenophobia drastically in our society. Also the vetting by heartlanders will account for things like cultural fit that cannot be reduced to a set of criteria by any government bureaucracy.

For sure, there will be problems if we implement this system in Singapore. But that's what our scholars are for.

If the government does not want immigration to smack them in next elections, finding way to allow ordinary Singaporeans to directly benefit from immigration is key to their political survival.

MBA in a Nutshell #10 - Marketing : Marketing Mix - Product - IP Protection

Beyond product design and differentiation IP protection is important to protect your product.

As I never really wanted to AVOID being stereotyped as an IP Lawyer (because a lot of engineers who become lawyers do end up in IP law), so I did not take the full complement of IP law modules so I can't really do a decent article on this topic.

The book distinguishes three forms of IP protection in its marketing chapter:

a) Trademark

Trademarks distinguishes your product and service from others. You can follow the steps to register a trademark here, otherwise you can seek a remedy under common law via the law of "passing off" to protect an unregistered trademark (The TM symbol).

Registering a trademark is useful to bar other players from using it and also allows you to gradually build better brand recognition. Our government also makes it a point to provide generous tax rebates to businesses trying to register their trademark.

Upon registration a trademark is valid for a decade.

b) Copyright

An author has automatic copyright over his work. For published works, the copyright lasts for 25 years in Singapore. If a third party infringes your work that puts you on a disadvantage, you can sue this third party but remember that ideas cannot be copyrighted, only expression of ideas in tangible form.

c) Patents

You can patent something if it is new, involves an inventive step, and it is capable of industrial application. Many different kinds of patents exist.

Generally speaking, a patent lasts 20 years and the process of getting one can be tedious and expensive. Worse, applying for a patent basically means sharing information on it to the world at large. However, during this 20 years, you can sue anyone who uses your invention without your permission.

Beyond the basic copyright that I am entitled too, I probably do not need better IP protection right now. Maybe in about a year's time, as I come up with newer product offerings, I will re-examine this matter.

Perhaps a graduate diploma in NUS on IP Law may be in the horizon.

Real issues in retirement and how to deal with them.

Most financial bloggers deal with only the financial aspects of retirement. Even my course, as it attempts to build a generation of early retirees to dot the commercial landscape in Singapore, requires a laser-like focus on personal finance so that a person can get out of the rat race which is going is still good in the workplace.

If you are an actual retiree, however, you will soon find that retirement is a game of multiple dimensions and you will to play all of these aspects of the life game well to enjoy a great life in your personal winter. The Psychology of Retirement by Rosenthal and Moore discusses all these issues in detail. 

Here's what missing from most articles on FIRE about Retirement :

a) You need to be healthy to retire well.

This can be so cliche but folks are surprised at how hard this is. Our Singaporean healthcare system has enabled citizens to live up to an average of 85 years but it has capped our Health Adjusted Life Expectancy to around 74 years. This means that 10 years of our lives are spent being ill before we pass away.

Making matters worse, when you read literature on nutrition and wellness, they are typically from the US and may be biased by commercial interests.  Even as I started on intermittent fasting, I am confused by so much conflicting advice - is coffee with butter cheating on your diet ? Governments do not have an incentive to cover this well so we're stuck with using our feelings to determine what keeps us healthy.

I've learnt that chiropractors can call themselves doctors in the US and spawn a new class of health advice that I prefer to verify with scientific evidence. Worse, in the US, scientific papers can also be sponsored by commercial interests.

Personally,  I think diabetics should avoid listening to anyone outside the formal medical fraternity unless it is endorsed by a specialist.

b) You need develop good social relationships to retire well

The scientific literature say that loneliness is a bigger killer than obesity for retirees so you need to find ways to improve social relationships post-work. The fact that many FIRE aspirants are introverts make things worse.

I am lucky that I have a family of my own. Imagine a large number of singles achieving FIRE and then realizing that they are mostly on their own during weekdays when their pals are at work. They can't even find others to holiday with them with all the money they have because so few succeed in FIRE in real life.

Even in the FIRE discussion I have on WhatsApp, the number of actual FIRERs are small and generally have yet to succeed in organizing an activity together.

I think we have to up our game because most of us are guys and guys generally only bond by taking part in common activities. As we get older, we lose touch because we become too old to participate in activities together.

c) You need to reinvent your personal identity to retire well

The worse way to retire is to do it involuntarily. Cold turkey does not buy time to figure out what role you need to play in society and this can be painful after the few weeks of honeymoon period.

A better way is to work part-time, maintain your connections and self-worth while figuring your life out. Once again, I am very lucky because I bought 4 years of time to retool myself as a lawyer before this amazing opportunity came to let me transform into an investment trainer.

Even today, I struggle to explain what I do to an layman audience.

• How can a guy retire at 39? 
• If he does, how is it even possible to teach it to others? 

An explanation is so complicated, sometimes I just say that I'm unemployed because it's easier to understand and salespeople avoid me upon hearing that.

If you get retrenched in your middle age, what you will experience will be even worse than what I had to go through because of the loss of self-esteem and the lack of time for you to retool how you see yourself. The lack of a middle-gear for careers that allow part-time work is strangely absent from our workplace,

Perhaps while many of you are actively trying to achieve FIRE, remember that you need a plan to maintain your health, relationships and personal identity while you are attaining your journey towards financial independence.

MBA in a Nutshell #9 - Marketing : Marketing Mix - Product - Differentiation

We're heading into the marketing mix taught to most MBAs which is the 4Ps of  Product, Price, Place and Promotion. Interestingly the author claims that in HK and Singapore, "people selling" and "physical evidence" would extend the marketing model into the 6Ps.

We will only be taking a short while to talk about product differentiation.

A great example of product differentiation in the book is Haagen-Daaz  that added more butterfat and pumped less air to build a new category called premium ice-cream. I was shocked to discover that Haagen Daaz actually came from New York, hardly the kind of place conjured by it's classy Swiss-like brand name.

Unfortunately for me, I entered an industry that isn't exactly a Blue Ocean zone. It is not difficult to find videos on various value investing or get rick quick courses on the Internet. Complicating matters are the really well-run Telegram groups that I am already part of that can provide real-time advice on reaching financial independence or REITs investing.

So this is what I did to differentiate my product from the rest in the industry :

• My course is driven by a life objective rather than an investing style. A retail investor is learning a framework on how to retire early and not a specific form of investing. So unlike other trainers, this gives me the freedom to pivot based on changes in the financial markets. Strategies do fall out of favor every now and then, so I am not locked down to any investing approach.
• I adopted a quantamental approach and then made it feasible for a retail investor to execute the investment strategy without too much analysis which tends to paralyze them under a different course provider. I know because I was the last batch of NUS Applied Finance masters, I spent years being paralyzed by the Equity Analysis framework taught by the CFA program.  This combination is unique and based on a blend of different academic papers published in journals. 
• My course covers leverage in greater detail and provides an option to boost returns if you are willing to take on a non-zero chance of margin call. Only a minority of students go on to apply leverage but many students are intellectually curious enough to want to learn more of how that works.
• Beyond the course, I built a walled-garden on FB consisting only of alumni of the program. This way we have a safe space for serious investors who are sick of getting "PM me pls" messages in the more open forums. This group also provides lifetime updates and support on the portfolios built by the latest batch of students.
• I am also building a coalition of partners who are willing to offer special rates for students of the program in exchange to getting access to them. So far students are pleased with the software tools and salary based FAs I can introduce to them. Naturally, I have a network of lawyers to help them with stickier issues they may face as part of their lives.
• Lastly, I am part of the product too. Not only have I gone through the process of attaining financial independence, I have over a decade of public speaking experience was spent one semester being bashed-up by seniors in the SMU International Moots Program. Most of the best investors I know are mainly introverts, may be socially awkward, and may not like being interrogated by a paying member of the class. This is a space I can play in. 

Beyond what the students get, my course is the only one where I actively take a leveraged bet on my student's investment choices using a significant part of my trainer fees. This ensures that I will work hard to improve my material over time because I face investment losses if my students make bad bets on the market. This is probably the hardest component to replicate because it almost means that any trainer willing to do this will have to forego a salary for a year after each course.

In summary, product differentiation is a marathon. 

Over time, I fully expect competitors to come into this space and I am ready to meet them in this field of battle-  so much so that I am willing to publish my play-book on this blog for them to review.

But rest assured, I am already working to develop my next innovation in the financial education space.

Next week I will talk about IP protection.

Personal Update

Right now, I'm blogging from Festive Hotel in Sentosa.

We decided that we needed a short break so my wife got us a 3D2N stay in Sentosa so that my mum can head to the Casino, my kids can get to Universal Studios, and I can get more work done in my hotel room. For the past few weeks, I am resolving my father's matters and have been shuttling to and fro my family lawyer's offices. When it comes to such matters, it's ok to be slow and steady but the most important thing is to be accurate so that the paperwork will be quick and painless.

a) Financial markets

Singapore miraculously avoided a technical recession in Q3 2019 !

Every workshop preview, I would conduct a poll on what my audience thinks about Q32019 but the polls consistently  vote a that technical recession will occur albeit with V shaped recovery thereafter. The only time I noticed an upturn was the last preview when the folks voting for a L shaped recovery suddenly disappeared. But this narrow escape has been hinted by government officials for some time so we're not seeing a vigorous response in SGX at the time of writing.

I believe that the longer direction for the economy is still down, as I was informed by a friend that MAS will be reducing the rate of the appreciation of the Singapore dollar. A sure sign of pessimism in the markets.

b)  Personal investments

Because I have been investing course proceeds regardless of market timing, my portfolio is experiencing a decent upsurge of late. This might even be sustained as Trump makes peace with China and focuses on impeachment proceedings.

I recently revised the process on how to open a brokerage and CDP account, as me and my mum just completed creating a joint account and made two buys just to test the GIRO and dividend payout capabilities.

( If you are curious I bought Netlink Trust and Keppel DC Reit. No back-testing required for this decision )

For my mum, everything has to be uncontroversial and a wee bit boring.

My next project is to start CFD investing in OTC bonds, which will be a very interesting endeavour that will keep readers excited for the next few months.

c) Books I am reading



NUS academics have published a really good read called "Hard at work - Life in Singapore". This is a politically neutral (generally speaking)  piece that gets 60 ordinary Singaporeans to just talk about their lives. I strongly recommend that investors spend time learning about our fellow Singaporeans - I've been stuck living in an EC for years, living on my dividends and I think it is humbling to read about other fellow citizens like the barista who makes $6 an hour and funeral director who shares some interesting observations on his industry.

I don't totally support what the authors have done, turning the MOE Scholar and Police Officer section into an LBGT advocacy piece, but for right-winged capitalists, this book is important to recognize that our society needs multiple perspectives in order not to fall into the trap that the Hong Kongers have fallen into.

If I have to redistribute my wealth to maintain social harmony in Singapore, I want the tissue paper seller, supermarket worker, and barista to get a decent part of it.

d) No, I did not get punished by Blizzard for my support of Hong Kong

By some twist of fate, I was informed that a professional e-sports gamer called Blitzchung is also called Ng Wai Chung. This made me a subject of teasing by many of my friends even though I actually see myself as being more sympathetic to China. (A side-effect of being more pro-Singapore than pro-Hong Kong)

I don't understand what HK Youths are trying to achieve when they do things that affect daily commerce of their city state. It is their parents who suffer when there is no money to be made.

They can learn to be more like us and vote with our feet. Hopefully this will bring a nice boost to property prices here.

e) Final lifestyle hack I picked up in Sentosa

On hindsight, it was really dumb of us to pay $1600 for a two night staycation.

I saw an old secondary school classmate and he told me that he could get a $200 per night stay from Carousell because hardcore gamblers are selling their free hotel stays online. Just now, I went to Carousell and there might even be opportunities to buy staycations at Marina Bay Sands.

Maybe one day, I'll be blogging next to the Infinity Pool.

Let me know if you have utilized this life hack.

Lessons from my Dad #1 : Never let anyone count your abacus ( 打算盘 )

Right now my biggest priority in my life is to resolve my father's probate matters so that me and mother can move on in our lives. Naturally, it is going to take me a while to unpack all the lessons my father has imparted to me from an investment perspective so over the next few weeks or even months, I will share whatever I can about my father's very large influence on me as an investor.

One of the lessons I learnt maybe even as a primary school kid is that my father hated folks who "beat his abacus". He used to say in Cantonese that you should never let someone 打你的算盘.

I was doing some research just now and it seems to be related to the idiom "to beat a small abacus" or 打小算盘 which has a totally different meaning which is to be very petty-minded about money.

To understand the context of my family growing up, I was influenced by largely by two polarizing forces. My mom's family was very poor and never found a proper way to manage money. My maternal grandmother engaged in an old practice called tontine - even today we suspected that she was some kind of tool used by her neighbors. An uncle recently commented that my mother's family lived on a perpetual system of deficit and lived largely on loans and only did OK because of the high inflation in Malaysia that actually made this a feasible way of life for the past 30-40 years - maternal family was living like US citizens ! My father was the opposite, his finances were like a black hole singularity, once money is made, it never goes out - he can earn money, but good luck convincing him to spend any part of it.

Like all couples, my parents fought about money because they have different financial values but nothing makes my dad's blood boil when some impecunious relatives and friends suggest to him what he does with his finances. Sometimes I imagine myself in my father's shoes, fiscally ultra-responsible, with better educated in-laws telling him what to do when he towers ahead of everybody else in net worth. It must have been really irritating for him so this was one of my earliest influences when it came to my own financial awakening years later.

The imprint on me was undeniable. I was very indignant growing up in an era when insurance agents retooled themselves into financial advisers and suddenly an entire industry wanted to beat my abacus. Naturally I went on to take on drastic steps to in-source financial expertise within my own family.

I was determined to ensure that no one beats my abacus.

Ironically, once I started getting really serious finance credentials on my resume, my father started to give me a fairly big influence over his investments. I rewired his portfolio to provide him dividends while he maintained his ability to day trade with an old school broker. As he got older, I established more control, reducing his trade frequencies so he could enjoy seeing his money trickle into his bank account. My father just wants to see dividends trickle into his bank account. He has no real material goals in life other than to clown with his grand-kids.

I guess you can never be too dogmatic about your principles about finance. My dad let no one beat his abacus, but eventually I became his only abacus, working with him to address complicated rights issues and cycling his money into better investment opportunities.

MBA in a Nutshell #8 - Marketing : Product Positioning

Product position can potentially be an offensive blog post, so I will not go all out to share my real thinking behind where I stand vis-a-vis my competitors. This is something between me an my business partners and can be work in progress as the competitive landscape in investment training changes.

To create a product positioning map, we will first need to build a 2 x 2 matrix. The axes are arbitrary but one common way to differentiate between different training providers is price.

I would not say that my program is expensive, but for the past two previews, customers are starting to remind me that I have a very close competitor who charges a mere fraction of what I charge. I do respect my competitor quite a bit, so I don't wish to talk about my competition since I am not a student of their program. I normally respond to clients by just saying that, in spite of my pricing, my course is getting a fair share of students and doing objectively rather well and let them infer the rest. So at least I know that, in the grander scheme of things, the perception is that my course is priced on the higher side.

There is considerably more leeway to determine what is the second axes to differentiate training programs. One possible axis is the "growth-dividend" axis - some training focus on growth stocks and capital gains while my course has a distinctive focus on dividend yields. Personally, I don't like this distinction because my course focuses on Early Retirement which means that my strategies can pivot away from dividends if a better retirement strategy comes along,

So perhaps I need a better axes to position the products available in the markets

Right now I am thinking of the "narrative-quantitative" as an axis that differentiates training programs in Singapore.

From what I do know, the value investing school has a strong narrative component where investors create a narrative around why a stock is a good investment. This may come from an intimate understanding of the history of a stock, the capabilities of management, and some idea of how they have a competitive advantage in the market place. You will know that a course is narrative when trainers invoke Warren Buffett's name a lot.

My course is actually quite averse to narratives. The name I invoke a lot is Clifford Asness - I've been invoking him long before The Economist made it cool to do so this week ! So I am a finance hipster, I was into Clifford Asness long before it was mainstream to do so.

My students do employ some qualitative criteria when investing but we emphasize the quantitative properties of a portfolio first and dip into the narrative second. Ideally, my students will process the news and raise an alarm when they see SPH in a screen and argue that SPH will be rejected because they are trying too hard in an area that they lack competence in. Another case is the repeated rejection of BHG REIT for the reason that analysts reports are strangely absent on the web for a REIT and it's focus on Chinese Retail. Whether they succeed in making a good judgment call is less important because the quantitative back-test results do most of the heavy lifting in my class.

Choosing a second axes is not enough. The final 2 x 2 matrix must be able to inform me whether I can get customers when I focus on one quadrant.

From the way I view the competitive landscape, the "narrative-low price" quadrant has decent customer demand so my competitors have been around much longer than I have been so this is a segment that I think folks can operate on. I think I can open up my own "quantitative-high price" quadrant and do fine for the medium term.

Gathering data on the availability of paying customers for each quadrant is currently not something I can do yet with total objectivity. Fortunately, Dr Wealth has an article pipeline that allows us to mine for ideas on what the investment community is most interested in.

Letter to Batch 8 of the Early Retirement Masterclass.

Dear Students of Batch 8,

It’s been a great honour and privilege to be able to conduct a 2-Day Early Retirement Workshop for you.

We’re seeing some really interesting twists and turns for this particular batch of students ever since I decided to make the course more democratic and gave students the chance to select the strategy to perform the screening on. The hallmark of a good DIY investor is autonomy – the ability to make your own decisions to invest in something regardless of what was taught.

In this batch, you were presented with two possible strategies for REIT investing – a “high dividend strategy” and a “strong sponsor strategy”. Students initially voted to select a strategy with good sponsors after reviewing the quantitative metrics but proceeded to reject 50% of REIT counters after one session of qualitative analysis (largely due to the fact that yields are so low). You then requested to review the high dividend strategy which was done and resulted in fewer rejected counters.

The net effect is that this batch has two REIT portfolios by the end of class. Combined with the blue-chip portfolio earlier, this class has created three portfolios in total and, upon further review, I have decided to invest my trainer fees into the blue-chip portfolio and dividend REIT portfolio.

I have also learnt a lot of new facts that I have to confirm with my usual circle of experts and blog readers. Primarily is the issue raised by a student – that if you go to higher class ward in a hospital such as Class A, you will not be allowed to downgrade your ward if you get re-hospitalised. I find this policy hard to believe given that our financial fortunes may change between hospitalisations and downgrading may sometimes need to be done because we have no choice. Nevertheless, it is good to raise controversial issues for discussion because this can help some readers of my blog.

Another really useful thing I learnt from a student concerns Islamic Finance which I have no real expertise in. The question is whether REITs violate some aspects of Islamic law and, if not, why does only Sabana REIT claim to be Shariah compliant but not the rest? I will be trying to find the answer to this question over the next few days.

[ Blog readers do chip in if you can. ]

Otherwise, this batch of inquisitive students have raised possible areas of improvement for my course. One area that demands a new write-up is what happens after holding onto a portfolio for a year - do you sell the portfolio to buy the latest round of stocks selected by the latest batch of student, re-run the stock screen last year, or cherry pick stocks not found in your portfolio?

This issue will definitely be addressed by the end of this week in the form of article I will add to my course materials.

Christopher Ng Wai Chung

MBA in a Nutshell #7 - Marketing : Market Strategy

From the last article, I have only advanced one page of text. Marketing strategies are surprisingly simple consisting only of three basic strategies which I share below :

a) Concentrated strategy

When you apply a concentrated strategy, you have an intimate understanding of the customer and can produce a product that caters only to this target market.

As trainers, we can do more of this and yet not fall into the trap of competing for every soul out there in the market. Sadly we don't do this well enough in this industry yet.

One example outside my expertise is a financial program tailored to employees of a particular company. Succeeding in one sale made to HR translates to many students in a program. What is stopping me right now is what kind of sane company will pay to have someone teach their employees to retire before their 40s. It might make sense before a major retrenchment exercise though...

Another possibility is a course on couple finances that allows dating or married couple to participate in planning their finances together. Again, this unlocks the possibility of working with SDN and gaining a captive audience. 

Oh, how much I would love a captive audience from my stand-point at the moment !

b) Differentiated Strategy

A differentiated strategy breaks the customer down into multiple segments and then attempts to come up with a product to target each segment. This is more common in my field because my partner Dr Wealth has different programs catering to different kinds of investors.

This is a practical strategy because different product lines can target complementary segments that expand the revenue broadly.

Personally, I believe that a profitable line targetting Millenials and Gen Z exists in this space right now but I think no one has yet to figure out how to create a useful program that fits within the price point most Millenials are willing to pay for.

The conventional train of thought is that Millenials are too poor to pay for an investment program. My train of thought is that Millenials are too poor NOT to pay for  a good investment program. That is because they have the longest time to compound any investment that they can get into.

c) Undifferentiated Strategy

The undifferentiated strategy creates a product that is not targeted at any segment much like products like Coke or Tide detergent.

I think a lot of training programs fall into this category because of general ignorance of the program developer. These guys are typically finance and not marketing people.

While trainers know quite a bit about value investing, for example. I believe that it's a mistake to think that it works for all segments of society. If someone's investing methodology does not enable dividends, for example, then it is best not to target senior citizens who need dividends to pay their regular bills. In similar vein, a heavily quantitative program has no choice but to sacrifice poets and humanities majors who balk at the lack of a good story behind every investment move they make and a different program will cater to them much better.

You can actually assess an investment training program based on how careful the provider is at who the program is meant to target. An inexperienced provider will always claim that their investment know-how works for everyone who can live and breathe but someone with some experience will be able to safely tell you who is program best designed for.

I don't believe in a one-size-fits-all strategy. An investment methodology that works for everyone, in essence, works for no one.