Diep on Business

Checking my hotmail inbox, I received an e-mail from Investopedia, an online encyclopedia endowed with an abundance of definitions and resources regarding investment jargons. I just remembered that not too long ago, I subscribed to one of their daily e-mail-outs which provide me with the “Investment term of the Day” – ie: accelerated option, mortgage, consumer spending, etc… It’s actually nice to read about a new word of the day. Now the reason why I chose to write about Investopedia in this week’s post is because I noticed a trend with regard to these e-mails – that is, the “term of the day” is linked to an article, which is then linked to advertisements pertaining to the respective term. Quite genius, indeed.

Let us delve in to what I mean.

Today’s term of the day is “Mortgages”. But it actually showed 7 articles with regard to Mortgages – ie: 5 steps to attain a mortgage, Insider Door busters, etc… When I click the first article, “5 steps to attain a mortgage”, a new browser opens up and goes into an interactive browser where we can click through the five steps. If I want to delve deeper into a step, for example, “pre-approval”, it directs me to an article written by a mortage professional and alongside the right of the page, there are a series of ads — mortgage brokers, online fast and easy loans, credit checkers, etc…

It is quite interesting how a company like Investopedia, who is perceived as a non-profit organization, utilizes its benefits to attract customers like me to surf their pages. Then, outta no, they can offer me further information pertaining to the topic of interest. This is truly value-based marketing in action.

So this week in light of Black Friday, I decided to touch upon Mc Donald’s promotion, FREE COFFEE, in this week’s post. I think, honest to God, this has to be my favourite promotion of all time. I mean, who doesn’t like a free thing or two -especially, this one, if you are in fact a coffee addict (as i am!). But what is so striking about this promo is not that it’s free for all, but rather, the marketing behind these efforts.

Mc Donald’s, in a majority of people’s eyes, has the inherent impression of being a greasy, fast food chain that is cheap. Therefore, we associate those traits while we buy coffee and muffins. You may think Mc Donald’s is operating at a huge loss with this promo, but I beg to differ. Instead, I think they are racking in a ton-a-revenues. If you really think about it, when one goes to Mc Donalds to redeem a free coffee, in a majority of cases, the consumer is compelled to purchase an additional item or two, so as to not be perceived as “cheap”. As I drive along the streets or bus to and fro UBC, I can see indeed this trend is apparent. I see men and women carrying their “free” coffee in one hand and a bag of fries/muffins/burgers in the other.  I, myself, am guilty for doing this – I redeemed a free coffee and also bought some fries and an apple pie for 5$. 🙁

It is clear that Mc Donald’s is using this promotional tool as a “loss leader” to reel current/new customers into the store with an incentive, and hoping that they will without a doubt purchase an item or two – which will, in essence, spur their revenue.

The promotion ends on November 29 2010, get your’s today!

A couple days ago, I went to Staples to inquire about printers when I stumbled upon something pretty cool – a ATM-shaped computer box with a touch screen interface. It is a custom-design machine, so it underscores the notion of value co-creation, and helps customers design what they want and how they want. Now what you do is simple, you go up to the machine and press “connect” with your finger and you wait to be connected directly with a Designer on the other end who can assist you in creating what you envisioned — business cards, posters, cards, etc…

The reason why I brought this little encounter up is because when we refer to the term marketing, we simply think it is all about communication and getting the customer to buy our respective product. That is only half the picture. What this experience underscores is the fact that marketing is about creating value for the customer – in this case, value co creation: creating a product where the customer dictates the process.

Now is this gadget of Staples a sustainable competitive advantage?

In my personal opinion, I think in the short-run, this serves as a mean to differentiate its service and deliver a measure of value to its customers. By having a combination of workers and machines providing service, customers have multiple channels of communication and can thus create value in that sense. For example, if the store’s employees are all preoccupied with other customers, a customer can resort to the machine to handle their propositions. As compared to Grand & Toy and Fed Ex Kinkos, we can see that they have not adopted it yet; but it is without a doubt that they can within a slight measure of time. Therefore, this technology is not a sustainable competitive advantage. In the long-run, if this machine serves to be profitable, other organizations will for sure adopt it.

In Metrotown, one of the most sought-after stores for girls is Aritzia. They feature brand name clothing such as Wilfred, TNA, Community, R&R, True Religion, etc… and charge a high price. What really motivated to write this post is the fact that my sister and my girlfriend are compulsive spenders at this store and spend a fortune on such merchandise. Every once in a while, they will receive a hand-written post-card from the nearby store manager thanking them for being such an awesome customer, informing them of upcoming promotions and sales and cordially inviting them to exclusive sales for VIP customers.

Aritzia is able to fully utilize the information collected from their sales transactions to their advantage. From this, they are able to view an entire customer’s sales history, purchase patterns, brand preference, etc… and are able to formulate a personalized post card to a specific individual, and thus adding value to the customer experience. Indeed, this is highly effective, as my sister can attest to this. She absolutely loves going to these VIP events and spending 500$ on two items! Aritzia is to be commended on their ability to build value and identify and retain long-term value customers.

Hello there. This week I got a daunting call from TD VISA claiming that my current VISA card got compromised and they have deactivated it. Apparently, they suspect a third party has gained access to my information and have the potential to commit fraudulent acts. As well, I came across an outside blog (ChrisKwan) regarding TD’s VISA and the costs and benefits of using it. Hence, this is what really inspired me to write about marketing and CR cards in this week’s blog post.

Picking up my new, uncompromised VISA at the nearby TD branch made me so happy. I don’t know about you, but I feel so much safer and more secure having a credit card with me at all times! As I opened the envelope and picked out my card, a small yellow sticker was attached to it and stated that in order for me to use the card, I had to call and activate it via phone. And so I did – thinking that this was a trivial task that must be done. As I got connected to the customer service representative, the friendly rep was sincere, friendly and verified my information to ensure I was the correct cardholder. Afterwards, she immediately recommended for me to take part in this LIABILITY FREE promotion in that if I lost my job, and/or could not pay my bills, TD would cover it for me. In essence, it is like purchasing insurance for my VISA. I decisively declined as I could not care less, for my limit is only $500, but the representative used every trick in her manual to try and make me reconsider. She would giggle, explain and re-explain to me the profound benefits of the promo and how it is so dangerous not to have it. Though she was VERY convincing, I said, “Nawww dont worry bout it… im good” and hung up. At that moment, I realized what she – the VISA corp. – was doing. They were soliciting a promo to an already established customer. In other words, they were using this “activation” process as a mean to market a new promotion to gain so extra cash from my pocket. I could really tell how much research was put in with these sales pitch and training with regard to these Customer service Reps, for the girl was outstanding. I am almost certain she was able to convince hundreds of new cardholders to take part in the promotion.. but not me! I don’t know about you but I hate paying extra bills.

I came across a very interesting post called Where’s Waldo? by a fellow COMM 296 student, Lily Sui. Her post examined the intricacies of a COACH product and how it dictates wealth, status and class. This post really inspired me to write this week’s blog post on COACH.

I must admit, I, too, love purchasing conspicuous goods. In fact, I have purchased a COACH money clip, which has been with me for 4 years. I did not purchase it for the status or the class attached within the product. Rather, I purchased it because of the trust and quality embedded within the BRAND of Coach. Four years ago, after I got my big fat wallet stolen, I was in search of something more convenient and not so bulky. I researched on the internet and looked for prospective wallets in stores, but none could suit my need. My sister told me how moneyclips were the soon-to-be fad, and I should consider purchasing one. And so I went on a search to find the right one, that suits me. Indeed, I could have purchased a FOSSIL clip, or a Diesel clip, but it is the word-of-mouth from my friends about the brand: COACH which really made me so compelled to buy that rather that the rest.

I was fortunate enough to go along with my sister to the US (Seattle), to a COACH outlet. I found the money featured on the left, for 25$, where retail sells it for 50$. I got a great bargain! To this day, I have no regrets with this purchase. The quality, the resilience and the cool brand really does it for me! Go get one!

This weekend, I went to Riverport’s Famous Players to watch RED which really compelled me to write this passage about them and how they utilize the functions of marketing to drive their business. More specifically, my interest is primarily with their SCENE cards.

As you may or may not have known, Famous Player’s SCENE cards offer customers the incentive to watch FREE movies, earn POINTS for watching movies, and 10% DISCOUNTS on concession.  The catch is, as a customer, you must present the card to the attendant and have them swipe it at purchase -be it paying for a movie and/or buying a large poutine or popcorn. Though it seems great that it benefits the customer in all sorts of ways, what is interesting is the fact that this intermediary unit between the customer and the vendor, is powerful in nature.

Whenever you buy something, you swipe your SCENE card along with it. In essence, the card captures your consumer behavior purchasing patterns and provides timely information to the fat cats in the boardroom. This allows the executives to make decisions with respect to the information at hand — on what you seem to purchase every time you go, when do you usually go to the theatres, what kind of movies do you watch, do you buy concession as a complement, which theatre are you usually at, etc… This list goes on. Truly, this gives them the ability to create VALUE in their service (ie: facilitate movie watching and fun) by tailoring their advertisements to you and making you a loyal customer with the incentives offered.

For example, when I applied for my SCENE card, I gave them my information (ie: e-mail, ph number, address, etc…). I used the card every time I went to the theatres and typically watch action, scary, and funny movies + a regular popcorn. With that kind of information, they sent me e-mails every month notfiying me of new MOVIE + FOOD combos, promotions, new scary, funny, and action movies and new DVD release that could be purchased from THEIR online store. While for another SCENE member, the directed advertisement is slightly different.

What’s funny is that I asked the concessions attendant if he knew what was the point of the SCENE card, and he had not a clue…

With respect to today’s BLOG ACTION DAY and it’s theme of WATER, I’ve decided to show you guys a video that really opened my eye – they truth behind bottled water. After watching this video by Annie Leonard, I was utterly shocked of what the notion of profits can really drive people to do. That is, in capitalizing on an essential resource that should be free and accessible to all. Even though it is an eight minute video, it is worth it! Now to tie in why this video has anything to do with marketing, it does! In this segment, the big POP corporations utilize the forces of marketing to indoctrinate the masses with the slander that “tap water is dirty and unclean”. When in truth, tap water (in majority of regions) beats out bottled water in taste tests and cleanliness.

Check it out and stop the consumption of bottled water.

If you found this video really interesting, I highly recommend you to check some of her other videos on her website:
http://www.storyofstuff.com/

“Advertising is a bit like playing make-believe.”
-Hartman Jule

This quote, though simply stated, is profound in nature. If you look at the most effective advertisements today, you will notice that it is in fact the erratic, most unconventional ones which stick to your memory. Indeed, advertisers seem to utilize these methods to really induce thought provoking ideas about what an individual has seen or heard. By exposing the individual to the projected advertisement and having them experience it full-on via questions or emotions (ie: What the heck was that? That was random. That was hilarious…), they are forced to think about it and thus, allows the advertisement to linger in their mind for easy remembrance.
With this being said, it is without a doubt that advertisements must eradicate that slander which says ads must comply to a set of standards which convey a message about a product or service or company. Because frankly, it is not limited to just that. It is through fresh-new thinking, distortion through creative and imaginative means which makes or breaks the feasibility of an advertisement. “Think outside the box” is the new motto in the 21st century.

Here’s some food for though – check this article out:

http://www.suite101.com/content/unconventional-advertisements-a47312