Growth and Fall of companies, with the sudden Apple attack.

A few of these companies, we grew up with.

It is incredible to see the GLOBAL brands’ rise and fall throughout the  course of 13 years. The tech companies such as Microsoft and IBM have maintained a steady stream of success, whereas others such as Nokia and Intel have had more of a rocky road, with severe drops here and some massive increases there.

Then there’s Apple, who came out of nowhere in about 2010, finally establishing itself as a world class and prestige brand to consumers. I remember going to a marketing workshop at DDB, an ad agency. Its Marketing Director said to us a poignant statement about companies nowadays. “Apple sells dreams, and an image about WHY people should be purchasing their products, Microsoft simply tell people WHAT is so good about theirs.”

It’s true that Apple sells an image when customers use their products, because they focus on creativity and design, the core of human desire. It is what customers WANT because they would like to achieve that same factor of luxury. After analyzing Apple’s strategy, I really have come to respect Steve Job‘s vision for this world, because his way of thinking really marks the breakthrough to companies establishing themselves as a desirable good.

-Response to Bloomberg Business Marketing Blog

This is a response to Natasha Marzbani’s blog post about Tesla Motors.

Despite the name “Tesla” extremely similar to my name, that is about the closest I can get to the car. It is hot on the market for being a sustainable motor, and eco-friendly. Also, the hot price tag on the car makes it even more unreachable for most consumers.

Recently, during a test drive, the battery pack burst into flames after hitting a metal object in the middle of the road. Did anyone else immediate think about Ford Pinto’s case when it kept causing accidents to happen, and their decision strategy was to keep it hush hush?

Anyway, this accident with Tesla Motors have caused stocks to decrease, and I agree that the PR has the power to change this now ‘slightly negative’ image of Tesla right back around. Addressing the issue upfront and being honest with consumers is something that remains to be important. As a potential customer for an automobile myself, companies need to prove to me why I should still purchase their car even after a minor accident. By being transparent and using strategy to improve the brand image is what PR would be in charge of.

To think that after Mike Jeffries of Abercrombie & Fitch’s controversial comment, CEO’s of fitness companies would step up their game of producing better options for plus sized people. However, the founder of Lululemon (Vancouver’s sweetheart), Chip Wilson said “Quite frankly, some women’s bodies jut don’t work for it.. It’s really about the rubbing through the thighs, how much pressure is there over a period of time”.

Feminist outrage pursued on, and another online petition was created to criticize Chip Wilson’ insensitivity towards plus sized women, which ultimately led to the damage of his company, causing a decrease in sales by 5%.

It is shocking to hear Chip Wilson comment about plus sized women, because he lives in a city where its people are open-minded and take care about their health relatively well compared to other cities. However, the open judgment and criticism that he placed upon women was truly shocking, as he did not think about the impact it would have on his brand image.

Chip Wilson’s distasteful comment may have ruined the brand image, and I believe it ultimately will damage the value proposition of Lululemon. Their value proposition circles around unity among community, being sustainable and general being healthy in mind and body. One single comment has the potential to ruin a company.

You can find out more about the effect of Mike Jeffries and A&F here

During the summer time, Chipotle was the hot topic of foods that you had to try whenever you went down south for a road trip in the Statess. Now that it’s conveniently located in downtown Vancouver, it’s even better.

The lack of a menu and detailed descriptions, or new menu items doesn’t seem to faze customers at all. That is because this IS the marketing strategy of them, to go as simple as possible to showcase the local, natural ingredient that they use. Nothing more to be said, just simple and fresh.

I often used to think that marketing had to have a ‘wow’ factor, and sometimes forget that perhaps simplicity is best. “Honesty is the best policy”. Telling your customers what you have in your products, rather than throwing a billboard in their face is a more genuine way to market your product.

Chipotle’s stance against factory farms really took a toll on customers, causing an increase in sales. Although critics may beg to differ, Chipotle isn’t afraid to bare it all. Do you think this is an effective way of marketing your product to customers? Could too much transparency be the downfall of your business too?

“The fundamentals of buying and selling never change.” – Steve McKee, president of McKee Wallwork & Company

In Comm 101, it is easy to see how this world is becoming more digitized, and the traditional marketing strategies are slowly dying away, with more sophisticated ones to pick and choose from. However, the values behind the market, and the desires of consumers still remain the same, as described by McKee on his garage sale.

We have fancier technology nowadays to create amazing advertisements, but if the content lacks value to customers, it doesn’t matter how sophisticated the technology is, customers will not be drawn towards the product. Businesses are able to predict the flow of customers to an extent, but advertising is KEY to getting the word out.

Using McKee’s garage sale, he cannot simply expect cars to drive up to his house with customers that just happened to have time to shop. He needs to spread the word using online tools (Craigslist, Facebook, etc) and direct advertisement (flyers, newspapers, etc).

“Commerce has always been built upon trust, and the profit of deceit is never worth the price.” – McKee

I found the above statement to be true, because being honest with customers play a major role in business ethics, CSR, and even molding the organizational culture. Not only will customers walk away feeling satisfied, but businesses will have a feel-good factor contributing to the economy and the market.

Words can have a psychological impact on consumers, not just pricing.

This is quite evident in fast food businesses, where “low sodium” correlates with “less flavour”. Although this is not necessarily true, customers will still associate the two factors together. Fast food restaurants are planning to go “healthier”, which follows business ethics as they are more aware of the public’s need to be healthy.

Companies such as Subway, McDonald’s, and Dunkin’ Donuts are decreasing their sodium levels of their food, as medicinal institutions (Institute of Medicine) are becoming more strict on setting regulations and advice for health issues.

Obesity has increased drastically in areas where fast food is easily accessible, causing a change in consumer culture. Fast food restaurants may have to re-think about their brand positioning and value proposition. Subway has cut down on their sodium for various meats and sauces, allowing them to stray away from the “unhealthy” fast food chain and allowing new customers to experience a “healthier” Subway. 

As huge corporations such as Dunkin’ Donuts and Subway, with thousands of stores in the international realm, focusing on one specific market will not allow for the business to yield the greatest success. Original business practices may have to be changed in order to cater for a wider range of audience, ultimately tweaking their brand positioning and marketing strategy.

Safeway’s Just for U program brings a competitive advantage against US competitors such as Target.

Safeway’s Just for U program could really be a new marketing strategy that is taking supermarkets by storm. It is a Safeway app designed to personalize each customers’ needs, and the app would provide various discounts and offers.

Imagine if you had a strict diet to follow, and scanning down the aisle is too time consuming. This app is the perfect strategy to attract customers that are detail oriented in their grocery shopping, allowing them to have an incentive to stay with Safeway. The US retailers Target and Walmart are slowly creeping their way into the Canadian market, and with the specialized app, it provides Safeway with first mover advantage, increasing the barriers of entry and competition for the US competitors.

Amazon.com sifts through product recommendations based on “Previously viewed products” by the consumer, and mails them paper coupons. With Safeway’s app, it is digitized which provides easier access to consumers. With the amount that consumers save, their trip to the grocer could mean increased spendings on other products, as their incentives to purchase increases.

Candy Crush allow users to access the game in different platforms.

The world has been swept off its feet by Candy Crush, and Facebook invitations have increased exponentially for Candy Crush lives. It is the top grossing app for both Google and Apple’s Stores, with over 500 million downloads by mobile devices and/or Facebook.

Candy Crush has 6.6 million daily users , and brings in a whopping $633,000 per day. The publisher of Candy Crush, King (UK) has thought about filing for an IPO, much like following Twitter’s footsteps. However, Candy Crush has a solid business model that thrives on mobile devices/Facebook where users paying for them through app stores , rather than the uncertain impact of advertisements on revenue.Candy Crush got rid of advertisements for the game, and customers can just buy add-ons, boosters and various services for the game

Innovation plays a huge role in the development of Candy Crush, because Candy Crush needed a point of differentiation from competitors, as there are millions of mobile games in the market. The key to Candy Crush is that it is a bright, eye-catching object (candy) that is easily related by the audience. The MIS behind Candy Crush allows for users to play the game on different platforms, effectively connecting their current game when they are either on their mobile devices, or on Facebook.

Twitter’s anticipated IPO filing may prove to be a disappointment for investors.

On Thursday, Nov 7 2013, Twitter began their IPO at $45.10 per share, initiating their start as a publicly traded company with Goldman Sachs as their lead underwriter.

Twitter is starting off conservative, as they do not want to make the same mistakes that fellow consumer internet companies such as Facebook and LinkedIn did by marking its their stocks too high. One thing that allowed Twitter to have a competitive advantage over Facebook’s IPO is that Twitter did not wait too long to go public, causing the value and share price to increase significantly, which may cause tech companies to become laggards after the 3 month mark. Twitter users have grown approximately 40% from 2012 to 2013, and its main revenue come from advertisements sales (90% of it!).

Despite Twitter’s wish to have a humble beginning, their IPO filing does not know any quantitative measures of their company’s strategy. There are only positive contributions to the 120,000 word document about the user growth of Twitter, instead of the effectiveness of advertisements. This is due to Twitter’s lack of a sturdy business model that acts as a guide for the company, since Twitter started off as a social media platform used to share daily life tidbits. There is no transparency for Twitter’s IPO filing, which could be risky for investors as there are no buyer/seller reports to base their investments off of.

Abercrombie & Fitch models are used as a tool to appear “cool” to target markets.

Business ethics is a fundamental segment in ensuring business sustainability. It applies to every aspect of a business organization, because it influences its workers and ultimately, the culture. The public is becoming more aware of business and their ethical behaviours, and businesses are concerned withcreating shared value.

Abercrombie & Fitch has completely ruined this notion of business ethics, when its CEO Mike Jeffries said “It’s almost everything. That’s why we hire good-looking people in our stores. Because good-looking people attract other good-looking people, and we want to market to cool, good-looking people. We don’t market to anyone other than that,”. This has caused a huge stir and controversy among consumers and potential consumers. It is well known that Abercrombie & Fitch does not carry sizes bigger than L for women’s, because of their horrendous value proposition. This sends a public message that teenage girls need to be a specific shape/size in order to be “cool” and “popular”.

This has caused A&F shares to drop 10.4% to $34.55 on November 6, 2013. After much backlash from customers online and even a petition from Change.org with over 77,000 signatures, Abercrombie & Fitch is finally releasing plus sized apparel for the audience. The lack of morals from the CEO has caused the all-American clothing company to suffer from decreased sales as customers begin to boycott the clothing brand. This shows that consumers these days are becoming more aware of the ‘message’/value proposition offered by companies.