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Subway vs McDonald’s

It does not come as a surprise that we consume more calories than we think when we eat so-called “healthier” options. In particular, Subway markets themselves as a healthier option of fast-food by offering different types of bread and low-calorie sandwiches. However, the biggest underestimates of calories are also at Subway with a  20-25% discrepancy, and for teens, an underestimation averaging 500 calories. This proves that Subway’s marketing of healthy sandwiches is working, even though a study shows that the calorie difference between McDonald’s and Subway is quite small. Subway has positioned themselves in consumer minds as a way to eat healthier but still be satisfied, so consumers unknowingly order many toppings or larger amounts that add calories. In that case, there is a possibility of consuming more calories at Subway than McDonald’s, depending on what you order.

What works to Subway’s advantage is that consumers hardly change their behaviours even after seeing the calories on nutrition labels on menus. Instead, using pictures or other marketing tactics to let consumers know which options have fewer calories than the rest works better. Can it be considered unethical? I would say that it is the responsibility of consumers to pay attention to their health and deceptive marketing, though most (like me) probably prefer stimulating their taste buds.

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ShoeMe: The Canadian Zappos

E-commerce is becoming quite the trend these days; another competitor has entered the Canadian market recently: ShoeMe. ShoeMe is a online retailer of shoes in partnership with ClearlyContacts to deliver convenience and fashion, similar to Zappos in the United States. It actually started due to Zappos shutting down shipping to the Canadian market due to difficulties of keeping its standards for fast and free return shipping, one of its major differentiating factors. ShoeMe’s founder, Sean Clark, questioned why there was no online shoe player in Canada, an entrepreneurial idea, which led Clark to utilize his networks and enter the relatively empty online shoe retail market.

Compared to Zappos, they do not have a unique corporate culture, perhaps due to it being new and the owner is not as wealthy as Tony Hsieh, CEO of Zappos. However, they do follow a 100-day free return policy, which is not as competitive as Zappo’s 365-day free return policy, but is enough to draw in domestic customers. As the first solely online shoe retailer in the less competitive domestic market, where “Canadians ordered $18.9-billion worth of goods and services online” in 2012, there is a bright future ahead of them.

 

More about Zappos’ interesting corporate culture: http://www.newyorker.com/reporting/2009/09/14/090914fa_fact_jacobs

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comm101

Why Google is Succeeding over Facebook

I came across this article when I was researching on Facebook’s value proposition for my previous post, and it showed me an interesting perspective of why Facebook’s revenue growth is declining. In the article, Scott Karp compares and contrasts Google’s and Facebook’s value propositions, and shows the reason Google succeeds in generating revenue: their value to users matches the value to advertisers. Advertisers may have difficulty finding value in advertising over Facebook when it depends on forcing their way into user feeds, while Google advertisements are catered to what users are searching for. It seems less like an advertisement, so users are more inclined to click them and not feel annoyed.

It seems that Facebook will need to develop its value proposition further in regards to attracting advertisers, one of their main customer segments, without losing their other customer segment, its users. Facebook is finding that they are losing their teen users, and it is a difficult problem but is necessary to tackle as Facebook’s revenue growth is declining even as they push their mobile platform and try to acquire popular apps to reach teens.

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comm101

Facebook’s Clever, but Rejected, Proposal

The hot news of Snapchat declining Facebook’s acquisition offer of $3 billion has been circulating. Was it a smart or foolish decision? It reminds many of Facebook’s buy out of Instagram last year. Many say that it was a poor decision made by Instagram’s founders since the app is probably worth around $5 billion today and still has room to grow.

Similarly, Snapchat is one of the most popular apps today and although Yan Rong’s blog notes that people believe Facebook is losing customers to Snapchat, I do not believe that they are parallel. Snapchat is completely mobile, based on sharing short, moments with friends that cannot be saved or revisited. Facebook offers more; you can share different sides of yourself, message people you may be too shy to talk in person with, and catch up with friends. It offers a different value to customers, so contrary to Yan Rong’s comment, it cannot be considered a reason for Facebook’s decreasing shares.

Therefore, while Facebook may be reaching out to popular apps to expand its revenue stream, it is not necessarily an act of desperation, and Snapchat may not be foolish, as the acquisition of Instagram proves.

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comm101

Innovate with Technology

Technology’s influence is huge in our daily lives, to the point where we depend on it. As Erik Brynjolfsson says in the TED Talk video “The key to growth? Race with the machines”, the future is working together with technology, not racing against it. In Daniel Duncombe’s post Amazon is an example of that concept; they are entering a different market with the help of technology.

I agree with his point that online shopping is growing rapidly and businesses must react to this change in order to keep operating. However, it may be that the e-commerce market is less saturated than physical retail stores, but the online network is so full of different information and services that it is difficult to expand in that market, including tough competition against companies such as Dell and many large clothing stores. Therefore, it is easier said than done and will require careful management of marketing and operations to enter this market. However, it does not mean to ignore this appealing opportunity either, as businesses can still work with technology to innovate and create new products and services more efficiently, and to share insight with customers to build better consumer relationships.

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