Keith Lui's Blog

A while back I read an unfortunate story about a mother killing her 3 month old son for interrupting her Farmville game.

This tragic story made me wonder how something as simple as Farmville could have such a strong influence on people.

Until recently, I was playing a Facebook game called Tycoons. Every day, I would buy raw materials at low prices and sell finished goods at high prices, with the sole objective of amassing as much wealth as possible. After a few months, however, I realized that the game has lost its fun – it was more of a routine than a game that was true to its name. In no way did it resemble the path to becoming a Tycoon. I have blocked the application since and have never looked back.

Yet Farmville continues to remain popular, surpassing 80 million users in February 2011. Why? I’ve identified several reasons:

1) Some people who like the idea of farming find a (farming) simulation fun.
2) Farmville is free and easily accessible (anyone with a Facebook account).
3) “Farmers” are able to interact and help each other out.
4) With the game going viral, more and more people start each day, hoping to compete with their friends. (I admit that I often try out new applications after seeing them on my news feed.)
5) Most importantly, it’s a combination of all of the above.

As the Facebook Apps Product Life Cycle nears maturity, and as App developers are offering more and more new ideas, apps like Farmville will need to continue updating their products to retain their fans and players alike.

I came across an interesting article while surfing PSFK.com.   Kyana Gordon discusses a new venture, known as eDealdujour (literally translating to e-deal of the day): by Lawrence and Krystal Leurquin Ouaki.  This concept, not unlike sites such as Groupon and Living Social, is quite simple:  each day, a single man is highlighted and appears on the front page of the website.   Women are then given time to respond, or to take advantage of this “offer”. 

The idea came from Chris O’Donnell, a young billionaire from New York city who decided to purchase the front page of a newspaper to let the world know that he was single.   In eDealdujour, a single man submits a photo, a biography, and states the type of partner he is interested in.   Their profile stays on the front page for 24 hours, with a timer on the site, like Groupon, that lets viewers know when the offer expires.   Currently, the site is accessible and usable by anyone, free of cost, but those who desire to may pay a fee to have their profiles archived. 

I’m not sure these sites provide much more than dating sites being currently used (not that I know from experience).  I feel that the power in such dating sites derives from the ability to chat in real-time, and from being able to talk to many people at once.  How will eDealdujour be able to sustain this concept if the user base grows?  Will they charge people for putting them on the front page?  How will they accommodate everyone?  Will many interested viewers essentially be ‘competing’ for the man of the day?  And how will eDealdujour be able to validate the submissions/profiles?  These are some challenges that they will need to address effectively before they can succeed like Groupon. 

The website can be viewed here: http://www.edealdujour.com/

Ah, where would the world be without cars?  To fortunate, wealthy individuals, cars are highly relevant, exciting topics to discuss.  To the rest of us average university students, a car is but a foreign concept that will only be realized years into our careers.  

Yet how has a product that was originally intended to provide a convenient, time-efficient means of transportation branched out so much?  It’s amazing to see how much the car has evolved.  Not only does it look so much different (and better, in my opinion) today, but technology has also allowed it to exponentially improve its performance specifications. 

We have sedans, hatchbacks, convertibles, minivans, pickup trucks, crossovers, and SUVS.  We have Audi, Mercedes Benz, BMW, Ford, Chrysler, Toyota, Honda, and Nissan, amongst other leading brands.  We often hear discussions about European cars, North American cars, and Japanese cars. 

What exactly fuels these discussions? 

I find that car companies have done an excellent job of differentiating their cars and meeting the needs of their customers. 

Japanese car companies like Toyota and Honda have excelled by promoting safety and reliability in their products.  It has come to the point where many driving instructors use Toyotas and Hondas, thereby promoting, through word of mouth, to a potentially enormous market in new drivers.  These cars are especially suitable for the busy, high-traffic Japanese roads.

European cars, on the other-hand are extremely performance-driven.  Many of the German cars are extremely expensive, and many feature a well-engineered balance of performance and luxury.  With the Autobahn in German globally-renowned, these fast and beautiful cars extremely attractive to the population.

North American car companies such as Ford, sell vehicles such as pick-up trucks and SUV’s like the Jeep, good for consumers looking to traverse the North American terrain.

One brand that particularly stands out to me, and was mentioned in the textbook, is the Mercedes- Benz.  It is so much more than just a car.  It is a symbol of status and success.  The brand has become so strong that professionals purchase Mercedes just to signal success (known as conspicuous consumption).  It doesn’t matter what series or what type of Mercedes you have, there will always be an assumption on someone’s wealth just by seeing his or her Mercedes.

Here is one of Mercede’s ads, and an example of its excellent branding strategy

Gordon’s Blog talks about how companies (water-bottling companies in particular) manage to differentiate products that are essentially commodities.   I have been wondering about this myself for quite a while now.  How are brands such as Evian, Aquafina, and Dasani able to sell bottles of water for two dollars a piece when water costs virtually nothing from the tap?  After reading Gordon’s blog, I think there are some things to consider:

1.  Convenience:  Bottled water are sold refrigerated at vending machines, fast food chains, and even supermarkets and dollar stores.  For some people, it is just worth it to pay $2 for a bottle of water and avoid all the hassle with boiling your water at home and then bringing your bottle with you wherever you go.

2.  Health concerns:  Some people believe that tap water contains harmful or unwanted chemicals.  They believe that bottled water has gone through a careful distillation process and that it is safe to drink, even though research has shown that little difference between branded bottled water and tap water.

3.  Branding/advertising:  Undoubtedly, producers of bottled water do an excellent job of advertising their products.  They essentially have to, in order to get consumers to choose their product in a sector of largely undifferentiated goods.  Logos including pictures of glaciers, polar bears, and fresh mountains also create a positive impact on the consumer’s perception of taste.

These factors play an essential role in consumers choosing bottled water.  Once the habit begins, it is hard for them to switch over to tap.  This leads me to Gordon’s question:  whether these companies fabricate news stories just to get consumers to fear tap water and switch over.

We know from economics that people’s beliefs and attitudes towards certain things affect their buying habits.  While unethical, this could potentially be exploited by companies trying to sell products that don’t really offer large noticeable benefits.

Angela Wong discusses Puma’s new initiative, the “Puma Social” in a recent blog post.

Puma Social is a strategy being employed by Puma to change its brand and to increase its market share.   It targets what Puma calls the “after-hours athlete”, people who like to have fun with activities other than the traditional competitive sports.  Also a part of this campaign is a chain of “Puma Social Clubs”, night events that enable Puma supporters to get together and have a good time.  To date, have taken place in major cities such as Hong Kong, Toronto, and Los Angeles.

I agree with Angela in that this is a good marketing move and that it could really pay dividends for Puma.  The sports gear category, which is currently in mature stage, has its major players such as Nike, Adidas, and Reebok looking to sell their largely undifferentiated products by making use of advertisements involving high-profile celebrities.   Reebok has signed Sidney Crosby to the richest endorsement deal in NHL history.

I believe that this will be a very effective move for two reasons:  Puma, Nike, and Reebok gear and accessories are already being used for casual wear, yet no one has really tried to market it as such.  In addition, by targeting this specific segment, Puma is giving consumers a very clear reason as to why to choose its products.

If companies can successfully differentiate eggs, so can Puma.  I believe that Puma will succeed and that this will be another step for companies to realize the importance of branding and differentiation, and to devote energy and resources to creating just that.

Angela’s blog can be found here:  http://xsimply-me-myself-and-i.blogspot.com/

The Internet has become an irreplaceable part of our lives.   It is a platform for people to communicate with one another, share ideas and thoughts and to expand their knowledge and develop new interests.  It is also a common destination for entrepreneurs looking to start up a business.

While the impact the internet has made on us and on society has long been discussed, some of the most wonderful things made possible by the Internet have been overlooked.   One example is professional competitive gaming (otherwise known as e-sports).

A large portion of the E Sport industry is based on real time strategy games.  At any point in time, Battle.net (Blizzard’s gaming network for their popular Warcraft and Starcraft titles) has an average of 1,000,000 users playing.   This is a significant amount, considering that gamers playing these titles represent only a fraction of gamers worldwide (albeit Blizzard titles are generally always amongst the most popular and most played).

What is the secret to Blizzard’s success?  Blizzard has a great understanding of what gamers look for, and have implemented their strategy perfectly.  Apart from the excellent graphics, countless units, characters, items, buildings, strategies, and abilities, Blizzard is able to keep players hooked to their games.  I am one of those players addicted to Starcraft II.

Blizzard.net works like this:  the player logs on, presses “search for match” and shortly after, is presented an opponent who is similar in skill level.  After each game, ranking points will be gained (or lost) depending on the results.  These points accumulate and put players in “leagues” that are appropriate for their skill level.

Apart from the immense fun provided by the game, there are other incentives for players to want to play games like Starcraft II.  Many tournaments and leagues, with huge fan followings and cash prizes are offered around the world.   Major League Gaming dominates professional gaming in the U.S., while in South Korea, teams backed by sponsors actually have contracts signed with their players.  Top players in South Korea are essentially celebrities.

Players realize that only the best of the best have a chance at this fame and glory.   Yet using technology such as Youtube and live streaming sites , lesser players are given ample opportunity to improve their skills.  In addition, tournaments aimed towards players of all skill levels are being sponsored by companies looking to do a little cheap advertising.

With technology further advancing, I think that professional gaming will continue to grow, that more companies will take advantage of  esports and sponsor league, tournaments and teams, and that the esports fan base will continue to grow.

Here is a replay of one of the most exciting games ever played in Starcraft 2:

The Nintendo 3DS is slated to release in North America on March 27^th, with an initial retail price of $249.99 USD.   Compared with older generation Nintendo game consoles, which simply sold themselves due to Nintendo’s iconic characters and games, the 3DS marks the beginning of a new generation of 3D gaming.

The Nintendo 3DS offers the following features:

• 3D gaming.  By using a process called autostereoscopy, the 3DS will allow gamers to play in 3D without the need of special glasses.  Though the concept of using 3D entertainment is ancient, this will be the first time that a portable gaming console offers glasses-free 3D capabilities, marking the beginning of a new generation of gaming.
• 3D pictures can be taken with built-in 3D cameras.
• Compatibility with Nintendo DS and DSi games.

Here is a look at the ever-important marketing mix of the new 3DS:

• Price – With the Sony Next Generation Portable scheduled to release in the fourth quarter of 2011, the 3DS would, for the next few months, be leading the portable consoles market.   The North American retail price of 249.99 USD would be, on average, 100 dollars more than the current consoles, such as the PSP and Nintendo’s own DS.  Nintendo believes that it can attract gamers with its new features.
• Product – As explained above, the 3DS is a new, innovative approach to portable gaming that will be leading this particular market for the next few months.  It seems as though Nintendo is broadening their market; the 3DS has a powerful processer that would be able to produce graphics like the Xbox 360 and the PS3.  This addresses the needs of hardcore gamers.
• Place – Nintendo plans to ship 4 million units worldwide by the end of March, with 1.5 million in Japan.  Just as soon as pre-orders were available in Japanese retailers, they came to an end.  Nintendo is careful to maintain the exclusivity of these consoles while selling as many units as possible.
• Promotion – The 3DS was initially revealed in June 2010.  Since then, Nintendo has had conferences and events promoting the 3DS in cities such as Amsterdam, New York City, and London.

One possible concern, however, is that playing for extended periods of time could be damaging to your vision, and perhaps cause nausea and dizziness.  Nintendo has already publicly stated that children under 6 should not play the 3DS.

In the end, how successful will the 3DS be?  Knowing Nintendo, it will probably be as good as anything that comes out in the new generation of gaming.

Here is a promotional video of the 3DS:

Over the past decade, the NHL has experienced enormous growth in revenue and profits.  While Gary Bettman, the league’s commissioner, has received much criticism from fans, there is no doubt that the league, as a business, has made great strides during his tenure.

Bettman was initially appointed as the NHL’s first commissioner in 1993 to achieve several major objectives. This included resolving the labour unrest present at the time.  To make things short, the league had two lockouts due to labour disagreements, but ultimately, owners and business-minded people alike praised Bettman for creating a reduction in salaries and imposing a salary cap, helping small-market teams remain competitive.

Another major objective for Bettman was to expand to Southern U.S.  To start the 1993 season, there were 24 teams, 8 of them Canadian, and 16 American.  As of now, there are now 30 teams, 6 Canadian and 24 American. Although the relocation of Canadian teams has angered many Canadian fans, Bettman’s attempt to expand and market to the U.S. has had great contributions to the league and to the sport.

I will now analyze the league’s marketing strategy and success using the marketing mix.

Price:  Ticket prices for NHL games are set by each individual team.  The Toronto Maple Leafs for example, a team that has not seen playoff success in seasons, has the highest average ticket price at $114.  On the other hand, the Detroit Red Wings, a team known to succeed year after year, has an average ticket price of $46 (no doubt, the recession has had lasting impact on the economic state of Motor City).  No doubt, teams set prices in consideration of their fanbase and supply and demand.

Product:  The NHL’s expansion to the U.S. has greatly improved the product.  More and more American kids are taking up hockey rather than the predominant baseball, basketball, or football.  The American National Men’s Hockey team has vastly improved:  with home-grown stars like Patrick Kane and Ryan Kesler taking the lead.  It also doesn’t hurt to have phenoms like Crosby, Ovechkin, and Stamkos playing in U.S. markets to promote the sport, and be plastered in every form of media you see.

Place:  Considerable thought is placed before choosing a market expansion, but there seems to be one trend:  If the team performs well, attendance will rise, and if it doesn’t, buildings will become empty.  Unless you are the Toronto Maple Leafs.  Even the Canucks had poor attendance in the 90’s when they were a mediocre team.

Promotions:  For the most part, teams have their own promotions.  Teams like the Canucks don’t have to do much advertising; fans purchase jerseys and that alone greatly helps promote the team.  Teams like the Phoenix Coyotes have given away tickets with the purchase of a particular brand of Vodka at a supermarket.  Other teams offer free food, free parking with the purchase of tickets or when a player achieves a certain feat (curly fries whenever a Detroit player scores a hattrick).  Even some successful teams like the Sharks and the Bruins resort to creative, funny ads.

It is evident that the NHL has chosen its marketing mix carefully.  I would like to end on this note and show some of the funny, creative, Sharks and Bruins ads.

The National Hockey League was officially organized in 1917, making it almost a century old.  Originally founded in Montreal, it has penetrated into many American markets.  Now, only 6 of the 30 teams in the league are located in Canada.

During its 94 years of existence, many events have challenged the NHL’s position in the market.  Powerful substitutes have appeared in the professional sports scene (the NFL in 1920, and the NBA in 1946.)  Furthermore, hockey leagues such as the World Hockey Association (which featured stars like Wayne Gretzky, Gordie Howe, and Bobby Hull) have formed to compete for a share of the hockey fan base.

Yet the NHL, to this day, is still by far the most successful, as evidenced by two very important facts.

• The NHL has a team salary cap of approximately $60 million, while the next highest-salaried league, the KHL, has a cap of $17.4 million.  This indicates that the NHL generates much higher fan revenue.
• Many skilled European players prefer to play in the NHL.

Success starts with a very important aspect of marketing:  the product itself.  As the oldest hockey league, the NHL has been able to continue attracting some of the best hockey players, creating a chain effect.  Young hockey fans idolizing their hockey heroes on TV often create a lifelong dream of winning the Stanley Cup.  Some fortunate, hard-working individuals are able to realize this dream, and this in turn continues the chain effect.

But a good product that is poorly marketed will ultimately fail.  Needless to say, with the exception of franchises such as Phoenix and the New York Islanders, the NHL and its teams do a phenomenal job of marketing.

Furthermore, although essentially a separate entity, the NHL has been able to negotiate deals with the IIHF to host tournaments such as the World Junior Championships and of course the Olympic Games.  In these heavily-promoted tournaments, fans are able to show their patriotism and cheer for their national teams.  Many fans tend to follow certain players after the tournaments after watching them play on their national team, creating long-term fandom and ultimately revenue for the league.

Successful marketing initiatives from the NHL could fill an entire book.  To conclude this post, I would like to illustrate the effect the NHL has had on fans, by sharing this fan-made ad inspired by the NHL’s series of “History Will Be Made” advertisements:

I graduated high school with every intention of enrolling in the Sauder School of Business, where I would pursue my CA designation.

Fast forwarding to this day, I’ve learned much more about accounting, about dealing with professionals, and about business in general.   I very much enjoyed the two accounting courses I’ve taken, the same two courses that were endless months of torture for students less inclined towards accounting.  My desire to be a chartered accountant has grown even stronger.

But should my passion for accounting confine me to the realm of journal entries, financial statements, and hand-shaking?  The answer is an obvious no.  In fact, I don’t think it is even possible to practice accounting without a good understanding of other fields in business.   This is where marketing comes in.  Marketing is absolutely everywhere.  It’s present in this computer that I’m typing on.  It really is like Big Brother.  Marketing follows people wherever they go, and for some, brainwashes them into doing or buying certain things.

For some people, “marketing” is synonymous with “salespeople who pressure you to buy things.” Fortunately, I’ve learned of the strategic importance of marketing.  The bottom line is that a good product is nothing without good marketing.  The IPod does not sell itself.  Any successful business innovation in the future will have to be successfully marketed.

As a consumer, I definitely do not go on shopping sprees.  This could either be a reflection on my character as someone who isn’t easily influenced or convinced, or a reflection on the emptiness of my wallet.

To conclude my preliminary thoughts on Comm 296, I look forward to studying marketing in a strategic business perspective.  I look forward to paving my road to success with marketing.