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Archive for the ‘international markets’ Category

The credit and economic risks

19 Dec

A synthetic CDO is an investment in which the underlying collateral is a portfolio of CDS. The issuer does not own the underlying assets but retains the credit and economic risks. The recent CDOs make use of “unfunded” senior tranches. The super senior investor will enter into a CDS with the SPV. The super senior is typically unfunded, matching the unfunded nature of CDS. The super senior tranche provides second-loss credit protection. As in cash CDOs, the rated note and equity pieces are generally funded. Synthetic deals can have a final maturity of 5–7 years.

Example: Collateral pool No of reference entities: 100 Notional amount of CDS: Euro 5 million Total size: Euro 500 million The example details a possible tranching of a 500 million portfolio into four tranches. Losses in the portfolio up to 5 percent (Euro 25 million of losses in total) would result in a complete write-down of the equity tranche. Further losses in the portfolio in excess of 5 percent and up to 9.5 percent (losses of Euro 47.5 million in total) would then result in a write-down of principal in the mezzanine tranche. If each credit had a 50 percent recovery rate, each default in the underlying portfolio would result in a loss of Euro 2.5 million. Therefore, it would take 10 defaults to write-down the equity tranche.

 
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Posted in business competition, credit, international markets, money guide, money issues, personal finances

 

Targeting, attracting and retaining credit

27 Oct

It was during the 1950s and 1960s that marketing first came to real prominence. In the 1970s, the focus shifted to techniques for mass marketing within an industry, highlighting techniques or reaching customers on a broad scale. In the 1980s and throughout the 1990s, the focus moved on to market segmentation, improving the way that customers in specific markets were identified and reached.

Now the focus has narrowed even further, with technology offering businesses the opportunity for mass personalisation. This is the ability to reach individual customers – targeting the right customers and then fulfilling their market needs – on a massive scale.

 
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Posted in business, cash reserves, finances, international markets, merger, money issues, money tips, revenue, shares

 

Have confidence to develop a credit

25 Oct

If these new products do not exist, you can have the confidence to develop them.

Another way in which customer loyalty drives profitability is through the ability to increase prices to loyal customers, because, of all the possible purchasers, they are the ones best placed to understand the value of your products. Loyal customers do not typically require discounts or product add-ons to stay with you. If they are happy with the product or service they are buying and if it is competitive, they will not normally be tempted away. Clearly, this depends on variables such as the nature of the market, but there is an element of inertia in most markets.

Loyal customers can also be used to help with market testing of new products. This not only saves money in testing through other means, but it is also often much more effective.

 
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Posted in bonds, business, credit, credit cards, international markets, loans guide, personal finances, pricing policy, shares

 

Developing a credit’s lifetime value

23 Oct

The concept of customer lifetime value is not new, but it is worth considering how customer loyalty and repeat business develop profitability.

Most obviously, the longer customers stay with the business the more they will spend over time. This is profitable because having sold once, there is likely to be less need to market or sell to them to attract them back; the only requirement is to focus on the quality of the value proposition. Loyal customers also provide a base on which to build market share, which in turn provides a platform from which to develop new commercial opportunities. For example, it can be used to attract advertisers or to entrench the business’s position in the market.

Repeat business often leads to referral revenue. If customers are pleased with the service they will tell others, and they can be offered incentives to do so. Satisfied customers may be receptive to new products as well as (or instead of) their original purchase. By clearly understanding what the customer wants, you can cross-sell other products.

 
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Posted in income, international markets, loans guide, personal finances, pricing policy, revenue, shareholders, shares

 

Credit that grants satisfaction

18 Oct

The effect of these measures was monitored through customer-satisfaction surveys placed in each truck. As well as checking that customers were satisfied, the surveys also served to highlight Ryder’s renewed commitment to service, enhancing future sales prospects. Other measures helped to establish credibility with customers and improved the image that the business projected. For example, testimonials were featured in marketing literature, and each outlet was inspected monthly rather than quarterly to ensure that literature, banners and signage were appealing. This approach turned Ryder’s business round during a recession, returning the company to the number one position in its industry.

 
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Posted in international markets, loans guide, making money, merger, money guide, money issues, money management

 

The road to success: credit to buy

15 Oct

In the early 1990s, Ryder, the largest truck-leasing company in the world, suffered a steady decline in sales as competitors eroded its business. The company’s main response was to use information more effectively to benefit customers. Its approach had three elements:

To help customers buy. Ryder made it as easy as possible for customers to buy its services. For example, it produced a brochure explaining why customers should buy its damage insurance, and another offering other supplies and accessories. It also recognised that customers would want to make comparisons among competitors (they were doing this anyway), so it produced a truck comparison chart, highlighting its competitiveness and reassuring potential customers.

To help customers use the service. Ryder provided a free guide to moving, The Mover’s Advantage, in Spanish and English, to every current and potential customer. It understood why customers used its trucks and saw the advantage in helping them.

To help customers adapt their usage. As well as ensuring that each outlet displayed a strong commitment to customer service and corporate identity, Ryder offered new products and services from its outlets. This included information about the advantages of using Ryder’s towing equipment and longer-term discount rates for returning customers.

 
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Posted in credit cards, credit score, economy, finances, get out of debt, income, international markets

 

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