Alvin Koo's Blog

When you travel to Alberta you think of the Rocky Mountains, the wild prairies and cowboys but have you thought of the oil sands? And those tailing ponds as disgusting as BP’s oil spill? That was Corporate Ethics International’s (CEI) seemingly defamatory message placed on their billboards and online ads last summer. After reading Jocelyn Lam’s Blog on ethical advertising I was inspired to elaborate on this topic. In her blog, Jocelyn discusses ads by a company named Sisley which communicates overly explicit sexual content to their audience and is just downright inappropriate for targeting young teens and adults. However, in CEI’s campaign against oil sands it is much harder to establish whether CEI have crossed the line for ethical advertising.
In opposition to the campaign, I believe that it is unjust for CEI to target the Albertan tourism industry for an issue clearly out of their responsibilities. By suggesting tourists not to go to Alberta the blow will be dealt directly to those businesses in the accommodation, entertainment and foods industries. Yet the oil industry itself would hardly be affected. This type of advertising is ineffective because their objective, to dissuade travelers from going to Alberta, is irrelevant to actually pressuring oil sand conglomerates to reduce their pollution; it is also unethical as the campaign makes the tourism industry suffer for something they are not responsible for.
However some people do support the ads in the sense that they put the Albertan government under pressure and might as a result, help with lobbying for stricter pollution controls. Furthermore it generates consumer awareness and concern over a subject matter that may have received little attention in the past.
In conclusion ethics in advertising can be gray, but the marketer’s promotional objectives may tell whether it’s for good or bad.

Information was taken from CBC’s article “Anti-oilsands ads target Alberta tourism”

For a product to catch a customer’s attention from out of a crowded retail stock shelf takes a lot of creativity in packaging and design, but also an astounding product name like Holy Crap. While I was strolling down a London Drug aisle in search for cereal, I came across the little green package with a name that first struck me as provocative but then hit the mark in terms of capturing my “selective attention”. The aisle was cluttered with different brands of cereal, most of which were in the typical cardboard box packaging except for Holy Crap plus a few others who were in these plastic, re-sealable bags. Furthermore, Holy Crap did not have the traditional picture of a bowl of cereal on its front but rather an informative yet persuasive description of what benefits that little bag contained.

After seeing Mom’s Healthy Secret video and reflecting on the difficulties faced with getting a new product off the shelf I made a few quick comparisons between the two products. Similarities were plentiful in that both products targeted health-conscious consumers and were both packaged in plastic bags instead of boxes. It was branding that made all the difference in determining which product I would remember as a consumer. Mom’s Healthy Secret didn’t stick simply because the name was non-distinctive and stereotypical. For instance, I’m aware of many existing products that already use family-related brand names such as Dad’s cookies or Grandma’s Jam House. On the other hand, Holy Crap generates an emotional excitement; a curiosity that leads the consumer to investigate further into what this unusually-sounding product really is. Later on I found out that Holy Crap was featured in one of CBC’s Dragon’s Den episodes. Take note of the level of enthusiasm incited when the product name was announced.

Upon crossing Kajsa Gatenbeck’s Blog about what determines a commercial’s success I began going through a list of commercials in my head that I could clearly recall. Surprisingly the first commercial I thought of was actually a whole string of commercials by Ally Bank. Their success in capturing my attention lies in two marketing factors.

First of all, from my perspective, these commercials did a great job targeting the economical factor of a consumer’s demographic. Ever since the global recession, consumers are becoming ever more sensitive to non-value added expenditures. They do not want to be hassled by their banks with service charges or strict requirements on minimum deposits and this list can surely go on and on. Ally Bank is positioning itself as the place people want to go to for honest and reliable financial services.

Secondly, the commercials really poked fun at the unethical behaviours and banking practices which we see as problems with the banking industry. To the people who lost life savings to the sub-prime mortgage crisis, unethical behaviour and corporate greed was surely to be blamed. The commercial made a satirical comparison that consumers are those vulnerable children whom the greedy banker preyed upon. It establishes a sense of commonality that consumers can relate to using their own experiences. I believe almost everyone had had their own experiences dealing with fine print or ridiculous restrictions, regardless of whether it happened in a bank or out in the supermarkets.

I would like to comment on a downfall of the commercials. The skit definitely “stole the show”, but it might have taken away too much of the viewer’s focus on Ally and their offerings. I also realized that the brand was only introduced in the last 5 seconds of the commercial. Entertaining? Yes. Effective? I don’t know.

One of the concepts learned from reading Ch.1 of our marketing textbook revealed that customer relationships can be grouped into 4 categories consisting of Butterflies, True Friends, Strangers and Barnacles. In particular I found it interesting that certain companies would choose to fire “barnacle” customers, those that are loyal but not profitable. Coming to a real life example, Apple Inc. appears to be using a similar strategy as described by Rohit Bhargava on his Influential Marketing Blog. Bhargava comments on 4 points that led to Apples’ success, yet I would beg to differ on his third point of forgetting the low-end. Bhargava says that Apple is set on creating high-end quality products and thus “rightfully charges a premium for these products”. This strategy only applies in the micro-environment, given that there’s a healthy and strong macro-environment to back it up. Yet if you look at the macro-environment today I believe that that strategy would be a recipe for disaster. With the global economy in turmoil consumers are becoming more frugal. As a student, burdened with tuitions, I would not be spending a thousand dollars on a MacBook Air. Simply put customers do want high quality, but need affordability. Also not to forget is the trend of rising wealth-poverty gap and that the mass of consumers lie in the low-income sector, thus choosing an orientation diverted away from serving the masses may be detrimental in terms of volume of sales.

To sum up, I would like to share a video of one of my favourite reality shows, The Apprentice. This video describes two teams selling products on QVC and how price was the determining factor that lead to one team losing due to too high of a premium they set for their product in a rough economic time.

Comm 299 had served as a great tool kit for me as I work towards achieving my career. Fresh from high school I had no idea that my resume, cover letter and job seeking approach was backward. Comm 299 presented a whole new method of landing a job, one which demanded me to be more proactive and competitive.

Reflecting on my past experiences in job seeking I realized my approach was ineffective. My resume and cover letter was unpolished, I waited for employers to contact me and I had no clue what job I really wanted. The summer before I entered UBC I was frustrated with my job search and wasted most of my summer being unemployed.

Now that I have taken Comm 299, there was finally an explanation to why I couldn’t land a job. I simply needed to walk away from traditional job search methods and be much more aggressive and take initiations. I had to be less shy and more willing to go out there and build relations with others. The thought of spending another summer unemployed frightens me, but also gives me the determination to carry out the changes that Comm 299 has suggested. This experience has really uncovered the weaknesses in my reserved attitude in the past and will definitely help with my future career plans.

After the class on the Balanced Score Card (BSC), I have wondered is there anyone else that’s aware conventional employee performance metrics needs changes? Homeloan Management Ltd. (HML) seemed to be aware of it.

Firstly, HML abolished their previous methods of evaluating employees based on the time worked in the company and technical expertise. Employees may end up keeping information to themselves rather than sharing it with colleagues to get high individual rankings in technical expertise. On the other hand, new recruits will most likely be discouraged due to their short period of time worked at HML. All those previous metrics lend a hand to “the folly of rewarding A but hoping for B.”

Hereafter, HML must establish a new metric for evaluating employee performance. They are intent in focussing on goal-setting and progressive feedback to evaluate their employees. Employees are empowered to learn and grow by themselves through the assistance of progress reports, goal resolutions and self-evaluation of own performances. This method suggests that the employer truly care about talent and rewards talent.

In conclusion, I have realized that a well-designed employee performance metric, which rewards for intrinsic qualities, can have very positive effects on employee productivity and growth.

http://web.ebscohost.com.ezproxy.library.ubc.ca/ehost/pdfviewer/pdfviewer?hid=11&sid=aa6d502e-1535-4657-9bb0-f273af218c0e%40sessionmgr13&vid=4

The 2008 financial crisis is at risk of repeating itself when government-sponsored mortgages issued by Fannie Mae retraces the steps of unrestricted lending practices. Accordingly, under a government-imposed lending program, Fannie Mae is lending out mortgages to people for very low down payments once again. In the lecture on the financial crisis with Murray Carlson I have learned that highly leveraged mortgages and sequential defaults resulted in failures of small investment banks and hedge funds. Fannie Mae’s “no money down” policy definitely reproduces high leverages and could potentially lead to defaults on payments.

Furthermore, on the borrower’s side they still assume very minimal responsibilities. The government’s intention in funding these mortgages is to allow better terms for borrowers so that the housing market could get moving again. However, in doing so, the government has given more reasons for borrowers to default on payments if the “housing bubble” was to collapse again. Borrowers expect the loss to be absorbed by the government, which makes defaults practically guilt-free.

Although we expect lessons to be learned from the recent financial crisis, there still exist bullies who take advantages of others but leaves without consequences. These bullies are not the bankers, but the borrowers.

http://www.cnbc.com/id/39097637/Fannie_Mae_Sponsoring_No_Money_Down_Mortgages_Again

After learning about Zara International’s new logistics management strategy the major takeaway was that products should be delivered “fresh.” Waiting time, as we learned, results in opportunity costs and products becoming obsolete. To press for an improved and effective supply chain, many firms nowadays are adopting the Just-In Time logistics strategy (JIT). Just-In Time logistics work by having specific parts or materials delivered to the manufacturer at the time they are needed for assembly. Or in retail, this means having the products delivered on the specific day the intended sales will take place. This reduces the amount of warehousing expenses as well as being able to eliminate the amount of time products spend sitting in warehouses. This is particularly true for automobile manufacturers. In the last Automotive Logistics Conference, the JIT logistics system was widely promoted to automakers in India. Since then, many automakers followed suit and are adopting this system to better assist in supply chain management.

JIT is just one of many new innovations in the field of logistics and supply chain management. Despite not being directly related to revenue, I realized that efficient logistics could actually help firms cut costs and deliver products to customers very efficiently.

http://web.ebscohost.com.ezproxy.library.ubc.ca/ehost/pdfviewer/pdfviewer?vid=4&hid=14&sid=f3f3a325-a11b-4e5c-a9ce-deae0c644607%40sessionmgr4 

http://logistics.about.com/od/supplychainglossary/g/JustInTime.htm

Following up on the case of Google’s planned acquisition of Groupon; the results of the negotiations have recently been out. Groupon has turned down Google’s $6 billion offer, in consideration of its own plans to go public next year.

The lecture on brand valuation and goodwill becomes relevant in this context, particularly in the perspectives of the two different parties of the negotiation. Although Google saw $6 billion as a very generous offer, Groupon saw a prospect much greater in the future if they remain autonomous rather than to receive the short-term gain that Google offered. The goodwill of Groupon highly-marked up based on the company’s 35 million users at present, offers great confidence that Groupon will grow to exceed $6billion in the future.

Despite Groupon’s aggressiveness over its valuation, they seem to neglect that there are many competitors out there that could bring down their valuation. Their choice to operate by themselves may be more risky than acquisition.

In conclusion I have come to realize goodwill valuations can be extremely subjective. This may introduce risk to both parties as subjectivity often neglects certain aspects of reality. Only end results will show the reliability of Groupon’s goodwill-based forecasts.

http://www.bloomberg.com/news/2010-12-04/google-bid-to-buy-groupon-site-is-said-to-be-rejected-update1-.html