Michael Kors Launches Facebook Campaign

Michael Kors is a high-end brand known for producing and designing luxury accessories and clothing. They are particularly distinguishable by their popular hand-bags. Recognize?

On Saturday, November 26 2011, Michael Kors launched a new Facebook campaign called Bag Alert! Established street-style bloggers are asked to photograph real women they see carrying Michael Kors bags. As mentioned in Wright’s blog, the campaign was driven by an effort to engage and interact with their Facebook community, as well as to increase digital presence.

This campaign was a huge step outside of Michael Kors’ typically limited marketing strategy; however I think it was a risk worth taking that will see large returns both financially and in terms of building long-term customer relationships.

Nevertheless, with every new venture, there are potential risks. It is plausible that some consumers may perceive this campaign as a negative in that it detracts from the company’s image of being high-end. Interacting with customers via social networking sites, however, has become such a norm that it is unlikely that it will do so.

If you think of Michael Kors’ and its main competitors – Burberry and Armani, even other high-priced brands like Louis Voutton – they all have traditional touch points consisting of print ads in fashion magazines, fashion shows, and designer ‘look-books,’ but rarely anything that allows for interactions with customers. Thus, with the launch of this campaign, Michael Kors is setting itself apart.

Coming across this campaign, I was really excited! I am a huge fan of MK and I love that they are trying to connect with consumers on a more personal level. It is incredible to see the influx of brands capitalizing on online direct marketing strategies to pull in their customers!

Michael Kors stated that “social media is now part of the brand’s DNA.”



ZARA, A Temporary Satisfaction?

Clothing retailer, ZARA is known for its fast-fashion; new styles, new designs, new colours – every week. As mentioned in Conrad Chan’s blog – this strategy is successful in that it keeps customers coming back! My question is: for how long? This is an innovative strategy, but I don’t think it is enough to capture and build long-term, profitable customer relationships.

The amount of clothing ZARA has is overwhelming and the store is often very untidy which makes it difficult to find what you’re looking for. In addition, the sales staff barely give you a minute of their time before they have to rush off to the next customer.

They offer value through variety and cheap prices. BCBG offers value through high prices and an ultimate shopping experience with exceptional service. Sacrifices have to be made in order to have a competitive advantage in a certain area. Especially, when it comes to shopping, there needs to be a balance. However, a large part of shopping is all about the experience and the service.

 At the end of the day, customers want products that are going to be reliable. Especially, at the end of a bad day – they want to shop at stores where they feel welcomed and noticed – somewhere that gives them value not only with their purchase but also with their experience. Isn’t that why we all want to go shopping when we feel down?

In the short run it may be profitable but in the long run if a new competitor enters the market with low prices along with a real, personalized shopping experience – ZARA would have a difficult time maintaining their market share. Providing good service is a way to add value for the long run, and should not be sacrificed for potentially higher short run profits through low prices.








TOMS Shoes

Capitalism has and always will be present, however with the sudden rise of social entrepreneurship it is apparent that companies have begun to place a smaller focus on it. They have realized that giving back can have a surprisingly large return, both financially and morally.

As mentioned in Angela Qin’s blog, there is a lot of hype about TOMS shoes – a for-profit company but with giving as its core focus. I definitely agree with her in that what truly sets TOMS apart from other organizations like themselves, is that they are truly helping out.

TOMS  has achieved world wide recognition by making an impact on consumers with their genuineness and support of a good cause.

TOMS strategy about giving back contributes to their competitive advantage, but I think it goes beyond that. Any company can choose to give back, but its TOMS’ genuineness that really leaves an impression on consumers. People are able to recognize genuine intentions from deception. After watching this video and learning about their goals and other involvements, such as campus programs, TOMS is a genuine company that has recognized a need and is acting on it in a powerful and life-changing way.

The video gave me chills – it hit an emotional chord which is one way I recognized their bona fide intentions. As mentioned in class, if a company is able to hit that emotional chord or heart string they have ultimately won their marketing challenge.
I recommend that if it is within budget, they air the video on TV – to further increase consumers awareness about the good cause that they support (the video only has 180,895 views on YouTube). Had I have seen the video earlier, I would have already bought a pair of TOMS.

TOMS focus of helping others has hit strong with consumers. Whether you help a friend or a stranger, everyone, generally feels good after. Thus, “killing two birds with one stone,” as Angela said, by satisfying a want and helping a child in need is extremely satisfying from a consumers perspective. Ethical consumerism is a growing trend in today’s society. With TOMS “one for one” campaign they have engaged and captured many consumers, just by supporting a good cause. This poses a threat to other shoe companies that make similar products. A for-profit company that supports a good cause is likely to receive a lot higher return than other for-profit companies that simply exploits consumers to maximize profit.

TOMS is a company that exemplifies exceptional leadership and have influenced the entire consumer market.

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Using Celebrities in Ads is Not fulfilling Expected Return

Celebrity ads just aren’t cutting it anymore!

Popular wisdom claims that getting a celebrity endorsement is key to maximizing marketing effectiveness. This may have been true at one point, but in today’s fickle and highly opinionated society, I do not believe that it is an effective marketing strategy. It is a pricy option and is limited in terms of adding value to the product and ultimately winning over the consumer.

Consumers are not what they were five years ago. I feel that we are more influenced by people in our own network than those in the media; we are not so easily won over by a famous face. For example, today’s generation is more likely to buy something knowing that their best friend has it, than if a celebrity allegedly uses it. Celebrities offer no validity to a product, and the more commercials, magazine and bus ads I see, the more phony they seem. Besides, what are the chances of a celebrity using an $8.00 drugstore product.

I saw a Vanessa Hudgens ad on TV the other day for Neutrogena and was completely unaffected; I felt no incentive to purchase that product based on the fact that she – a celebrity – uses it. At first I thought that it was because I wasn’t a fan of Hudgens, but when I asked my room mates’ opinion, she was also unaffected even though she is a fan.  I will admit that being a huge fan of a celebrity does affect ones opinion, but only to a degree. I feel that good ads are good ads, and are capable of being effective without a celebrity endorsement.

I think that brands don’t need to spend their entire budget on a celebrity endorsement, rather they should put it towards creating a strong, creative, and memorable message, as well as having a good marketing intermediary.

Legally Blonde the Musical!

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I am a huge fan of Legally Blonde! I even performed a stage solo to the song above last year and rather than watching the blurred clips on you-tube, I get to see it LIVE on March 5, 2011!!

While singing along to the songs in my car, I started wondering how do they market for musicals? Because the only avenues I have heard of them is through my dad and by attending other musicals. 

Musicals are advertised on the theatre websites (QE theatre), in program guides (when attending a musical), on posters located downtown, and emails are sent to those who are members of Broadway across Canada, and who are season ticket holders of the Vancouver Canucks; their marketing campaigns are fairly narrow. Musicals have a strategic marketing strategy where the advertising starts off very ‘low key,’ targeting the “cream of the crop” people who’s reservation prices are very high. Once the prime seats are sold, they increase their advertising, informing those whose reservation prices are lower. This way they satisfy all customers by coinciding with their respective reservation prices.   

 Although this has proven to be a successful strategy, with shows always being a “sell out”, they should widen their avenues of marketing because if it wasn’t for my dad being a season ticket holder I would not have heard about any musicals! Those in charge of marketing should look to target teens like me who are equally passionate about musicals, by increasing visibility in IT, i.e. twitter and facebook.

There are many more effective marketing strategies, however because accountants want to make sure they receive a positive return on production, marketing and accountants must agree on a fixed value to be spent on advertising in order to achieve this.




Rise of Social Entrepreneurship

One third of Canada’s social enterprises were started within the last 2 years – this points out the significant growth in business efforts to address community and environmental issues. Social enterprises will continue to evolve because people are realizing now that having a social purpose can have a positive effect on the bottom line. 
With the majority of people supporting the betterment of social issues and a minority of those that don’t, it makes sense that when choosing between two companies of the same product (say Earls, and Dining in the Dark where all proceeds go to support the blind), majority will choose the brand (or go to the restaurant) that supports a social cause. Therefore this outlines the potential success for social enterprises and the loss incurred by traditional enterprises.    

Social entrepreneurship provides many opportunities for individuals:

1. Be your own boss
2. Help improve your community or environment
3. A chance to work with people who are equally passionate about the social issue you are addressing    
4. Provides work for everyone; there are no limits when it comes to hiring, (for ex: those with disabilities & homeless)
5. Comfortable living style

Social vs. Traditional Entrepreneurship

Social: Does not seek $ for self, but rather for a social purpose and therefore will have a very different accounting structure because profit is not the main goal; more lenient accounting structure.
Traditional: Seeks to earn $ for company; strict accounting structure. 

The main characteristic that both entrepreneurships seek is CHANGE.

Whether it’s seeking change for a social outcome or seeking to change ways of living, with advancements in new technology they both seek change.

However, with the increasing severity of social issues, such as poverty, global warming, and sickness a social enterprise will seek change that really matters at the end of the day, giving these enterprises significant value and importance in today’s society.


Stone Oak Sports Bar & Grille, an Entrepreneurial Business

Stone Oak Sports Bar & Grille located in Boerne, Michigan is an exemplary example of an entrepreneurial business. The construction of Stone Oak was stimulated out of the need to fill a niche in Boerne. There are only three bars in the area, all of which do not have a food service, are located in undesirable locations, and appeal to a narrow range of people with themes such as biker/rocker and country western. The community of Boerne is rapidly flourishing, and therefore the demand for restaurant services is also rapidly flourishing. The entrepreneurs of Stone Oak, Henry DiMuzio and Nick Sturgeon perceived an opportunity to make profit and seized it. With the potential risks in mind – the business flopping because the citizens of Boerne indeed liked going to the other bars in town (which they have become accustomed to), or the business only being successful in the shortcoming because new competition arose stealing its dominance and consequently resulting in an economic loss – these entrepreneurs rose to the challenge. Stone Oak will appeal to a wide range of customers with the notion of welcoming all. Their innovative sides prevailed by introducing new high definition technology in their restaurant, and by also serving food! Their gross profit from FY 1 – FY 5 increases fairly quickly from $758,259 to $957,285 with a net profit increasing from $199,233 to $321,400; the speed and amount of wealth is evident. Stone Oak Sports Bar & Grille exhibits the main features of an entrepreneurial business.

Empire Theatres’ Appealing to Businesses!

Last weekend I saw the “Facebook” movie at Empire Theatres, Guildford, and while impatiently waiting for the boring and mundane advertisement’s to stop, one actually caught my eye. It was promoting the recently adopted strategy of providing services for businesses – “putting your business on the big screen.” Businesses can rent out a single theatre to display their presentations on the big screen, and in return get to watch a movie of their choice for no cost!

Empire Theatres has stepped away from conventions and has come up with an effective strategy to bring in some extra profit. This service will not incur any extra costs for it will not cost them any more for the lighting or the space. They will not be losing profit by allowing the businesses to watch a free movie because they would not have acquired these people in the first place. 

Meetings are often during the day, and theatres slowest hours are during the day. ET noticed where they needed to improve performance and came up with an innovative way to not only widen the range of customers but to increase their productivity during the day.

This strategy would be effective for businesses when doing presentations for a large number of people; where the board room office is too small, for presenting significant material, and for celebratory presentations.  This is very risky, as with all new implementations and the business personnel’s will either love it or hate it.

Love it:
Large venue = more available positions for people to attend
– Comfortable seating
– Everyone can easily see the information
– Reasonable cost
– Free movie

Hate it:
– It may detract from the dignity of the presentations by being held at a “movie theatre”
–  Employees may not be as engaged in such a large venue, and may be distracted by the mouth watering aroma of the popcorn or the free movie they get to see afterwards
– Costs $$; whereas if just used own boardroom they wouldn’t be incurring any costs
– May create employee conflicts; differing opinions
– It doesn’t coincide with the ‘business image’; arriving at a movie theatre dressed in Jimmy Choos and a Yves Saint Laurent suit attending an important meeting regarding the merger of Vogue and Elle doesn’t have a sophisticated ring to it. 

The weight is heavily leaning more towards “hate it”, however the true test will be after their financial statements come out.

Making sure they market this new feature is key to its success – a few ideas are:

1. Flyers sent to all local businesses
2. Newspaper and business magazine (Bloomberg’s) ads
3. Having info available on their website & allowing booking online
4. Commercials

“Uh Oh, When Will These Hit Our Walmart?!”

A new trend in the world of fashion has rapidly diffused across the Japanese society, and they are known as Japanese knickers.

These are not see-through skirts, but rather prints on the skirt to give the allusion that the panties are visible.

These pieces of clothing are even being worn in the workplace, which points out that their idea of what is appropriate for a work environment is far different than here. Here, a grocery store clerk would not be allowed to wear a skirt that ‘pretends’ to show her panties to her customers and co-workers. That would be unacceptable and if someone came to work wearing that they would probably be fired! This  enlightened me to the fact that every culture is different – and in business it is especially important to understand this. Failure to regard differing cultures will potentially result in dissatisfied employees, because they recieve punishment for things that were acceptable in their culture as well as immense communication problems:

1. Words mean different things to different people (efficiency & free market have no direct translation in Russian)
2.  Barriers caused by word connotations (the Japanese word hai translates as “yes”, but its connotation may be “yes, I am listening,” rather than “yes, I agree.”
3. Barriers caused by tone difference
4. Barriers caused by differences in perception 

Bottom line is that our culture may not be as accepting to this fashion trend as the Japanese are and understanding cultural differences is important in a companies success.

I look forward to North Americans’ reaction when these hit home!


“Chapter 11 for Blockbuster and Increasing threats of Substitutes”

With the movie market being bombarded with more convenient, cheaper and even free ways to watch movies, it is no wonder that the well established company, Blockbuster has filed for bankruptcy. There are “video vending machines” at grocery stores, like Safeway, that allow you to rent a movie for less than at a video store.  It targets/appeals to those rushing home on a Friday night reluctant to stop for groceries, and a movie; making a convenient one stop shop.

Shaw on demand allows you to purchase movies without leaving your pajamas!  Applying the cost-benefit principle, a rational person would purchase the movie off Shaw and demand, even though the prices are higher than at a video store. Why? Because the costs – time it takes to drive there and back, $$ spent on gas, and the purchase of the movie itself, exceeds the benefits.

With the rising internet capabilities, one can download movies off the internet for free!

Blockbuster needs to, get out of debt, and come up with a new strategy that will steal back its customers and market share. One recommendation is they could team up with a delivery service organization, say Pizza Hut, delivering pizza and/or a movie, which would likely increase both organizations profits!