Annie Lee's Blog

Going green is an initiative that most businesses are trying to achieve as there is a market segmentation and trend for green products and services. However, attempting to be sustainable and maximizing profits is a difficult balance. Hence businesses have resorted to “greenwashing” unfortunately. According to Sins of Greenwashing, greenwashing is “the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.” In Metro’s article, “95.6% of all “green” consumer products make at least one dubious claim about their environmental purity.” This means that 4.4% of the other products that are labelled “green” are genuinely green. The majority of those products are just plastered with a fake label that embellishes green.

Businesses who resort to greenwashing are participating in unethical activities. Not only is it unethical in terms of pulling a hoax on consumers, it also promotes other businesses to engage in these unprincipled activities. Businesses who are struggling to add some eco-friendliness to their product may be influenced by these businesses who took the easy, but fictitious way of being green. As consumers, we have to be careful in choosing green products as only 4.4% of them are truly reliable.

Sources:
Sins of Greenwashing
Vancouver Metro: Dirty Business of “Greenwashing” (Wednesday, October 27, 2010)

McDonald’s has recently added a new item to their menu that claims to provide forever lasting love: a McWedding. As the name hints, it’s a wedding service. How this peculiar, yet innovative idea came about was that people have said that they’ve met at McDonalds, dated there, and now they want to get married there. Hence McDonald’s took advantage of this business opportunity and launched this service. The McWedding is, however, only available at three restaurants in Hong Kong. It will begin next year and reservations have already been accepted commencing last week.

McDonald’s proposal of a “McWedding” is clearly a strategy rather than a tactic. It holds an effective stance in expanding its current business by branching out to services. I believe McDonalds chose a strategic market to offer this service. For many young couples in Hong Kong, weddings are a financial burden to them as traditional Chinese weddings are very expensive. Thus, this provides a more affordable option for many couples. McDonald’s strategy is heading onto a bright expansion. Although the service begins next year, people have already begun making reservations. It is pretty clear that the McWedding may successfully go global in the long term.

Source:
The Vancouver Sun: McDonald’s to host “McWeddings” in Hong Kong

“Canadian” Target

VS.

“American” Target

If you thought this was the “American” Target department store expanding its chain in Canada, it’s actually not; rather it’s a “Canadian” Target that sells discounted apparel. Recently, a Target has established a store in Nanaimo, BC and is scheduled to open another store in Sudbury, Ontario and then in Surrey, BC. Apparently, Isaac Benitah, Toronto fashion merchant, has owned the rights to the name “Target” in Canada for almost 10 years. However, US Target has challenged Mr. Benitah with the law. After five years of defying and taking the case to the Federal Court of Appeal, the results were in Mr. Benitah’s favour. This summer, the determined US company has reasoned with a Canadian trademark office that Mr. Benitah hadn’t used the name for three years. Thus, it has the right to be dissolved under domestic trademark laws.

This relates to the concept of intangible asset. The only way to define the borders of who owns the rights is by taking it to the law. I believe the Mr. Benitah has its rights to the name Target because he has owned it for almost a decade. Although he hasn’t used the name for three years, it’s still his. If someone purchased a house 10 years ago, didn’t live in it for three years, and now decides to use it, it’s still theirs. But I also understand US Target’s standpoint because if the name “Target” already exists in Canada, it wouldn’t be able to expand its chain of stores to Canada which will hinder its growth and success. From the state of the current situation, US Target appears to be very firm and affluent as it’ll continue to challenge Mr. Benitah until things are in their favour. We’ll have to wait for the war to end to see whose intangible asset it really is.

Source:
The Globe and Mail: Target has a problem. Its name is Target

Numerous Japanese technologies rely on rare-earth elements and other minerals that are supplied by China, the global leader in rare earth mining. However, recent problems with China’s supply of rare earths have caused Japan to instigate a new allocation of resources. This new source of gold comes from used electronics like computers, cell phones, and TVs. These used electronics, however, merely account for an estimated 300,000 tons of rare earths. This amount is miniscule compared to the reserves in China. Hence resources are scarce and must be allocated wisely.

Japan’s new allocation of resources from used electronics is a great step towards sustainability. The feature is that used electronics can be turned into rare-earth elements and minerals and the benefit is that it increases sustainability and creates a greener environment. This additional discovery presents a virtuous example for industries and companies to try and be sustainable with resources. Although this resource is scarce, it is still a great, discovered opportunity. Less is more. With a limited supply of resources, manufacturers will actually produce better products. In contrast, if there was an abundant supply of resources available, numerous products would be manufactured without carefully considering quality, utility, use of resources, etc…

Source:
New York Times: Japan Recycles Minerals From Used Electronics

Back in grade six, a fellow classmate of mine asked me what my favourite dream car was. I spontaneously replied “BMW.” My classmate then chuckled because “BMW” isn’t a specific type of car; it’s merely a name of a brand. A more relevant response would be a convertible, van, sports car, or jeep. I still get teased occasionally for my silly answer, but perhaps this may explain why I’m in Sauder studying the reasoning behind this.

Positioning is an extremely powerful technique that inconspicuously alters our perception to a certain way. Once successful, it’s potent and we don’t realize its dominance. What’s your favourite drink? What kind of camera do you use? The answers would probably be akin to Coke and Sony. We don’t realize we’re replying with brand names unless we’re confronted about it; it’s very interesting. Going back to my example, I only knew “BMW” because it was a simple three letter brand for a twelve-year-old to remember and the car itself looked very luxurious and nice. BMW positioned and marketed itself well with its brand and features making it easy for consumers to identify. So back when I was twelve, BMW was my perceived notion of a dream car instead of a convertible.

Due to problems with the brakes, BMW is recalling approximately 350,000 cars worldwide. In North America, about 198,000 cars are recalled. Nonetheless, BMW explains that the vehicles are still safe even though there are complications with the brakes. Mechanical braking could be used to stop the cars if problems with the brakes arise.

BMW’s brake recall is very similar to the brake recall of Toyota’s. But I believe the resulting effects are different for the two companies. Toyota has experienced quite an impact on its reputation. Their reputation loss due to the recent recalls with brakes and positioning of carpets has most likely resulted with decreased sales. BMW, on the other hand, will probably experience a temporary, insignificant impact. Consumers will continue to purchase their cars because of the luxury and prestige that BMW holds. Toyota, on the other hand, can be seen as a “weaker” brand and isn’t as strongly established as BMW. BMW, as the world’s leading premium automobile manufacturer, has already positioned and established itself well. Hence a brake recall that most automobile manufacturers experience won’t easily affect their reputation and sales. As a few weeks go by, this issue will be brushed off consumer’s minds.

Source:
24 Hours Vancouver: BMW recalls 350,000 luxury cars

How To Build Your Brand on a Small Budget – Click here to see video clip
(Note: Video clip begins after brief ad)

In one of our classes, we discussed the importance of “Product vs. Brand.” Companies aim to have consumers refer to their product by the brand rather than the actual product itself. Kleenex is a successive example as we frequently use the term “Kleenex” instead of facial tissue. In this clip, Steve Abrams, Co-Founder of Mill Street Brewery, shares tips on how small businesses can build on their brand. Abrams suggests taking it slowly so consumers can familiarize themselves with the brand. A good start would be radio ads or trade shows. He advises not to start big with billboards and commercials. The key is legwork and this will be a continuous step throughout the brand building.

Abrams’s advice is very practical. People seem to postulate that if they plaster their brand all over the market, it would be widely known. Paradoxically, when this is done, it’s actually difficult for consumers to suddenly adjust to the new brand. Marketing slowly provides more time for consumers to be aware of the brand. Legwork is also definitely important. Research should be conducted continuously because market situations change habitually. It’s useful to recognize your competitors and the current needs and wants, so you can market accordingly.

Source:
The Globe and Mail: How to build your brand on a small budget
(Video)

A video.. just for fun!

 In an effort to entice the children’s market, Kellogg has featured a “Spidey-Signal” wristwatch-shaped toy in their cereals. This promotional product, however, contains a mercury-powered battery.  Mercury is not only a health concern, but also an environmental hazard. Children like placing objects into their mouths and consumptions of mercury could cause human neurological damage. Furthermore, batteries disposed improperly could release mercury when it gets incinerated or reaches a landfill. This could harm animals, people, and the environment. After some awareness has been raised, Kellogg has announced that it’ll no longer use mercury batteries in promotional products.

Kellogg has only focused on the short-term results and neglected the long-term effects. This is similar to the notion of legacy costs. In short term, Kellogg has earned profits from its sales. This is the economic decision (profits) settled at the time. However, environmental concerns and health hazards will be addressed later when the mercury batteries are mismanaged and children unintentionally consume the toy. This is the liability (environmental and health responsibility) for the future. Kellogg should’ve thoroughly examined the effects rather than focus on income. Nonetheless, Kellogg is turning away from their bad ethics as they will not use mercury batteries in future promotional items.

 Sources:
CBC: Kellogg’s to drop mercury-battery toys after Spider-Man promotion

Vimeo: Kelloggs “Spidey Signal”