Monthly Archives: October 2014

RE: Marketing in Digital Age by Stella Cho

Stella has successfully analyses in her blog post how marketing has become an integral part in social media during this digital age. Brand has been benefited by information and technology in terms of marketing. Social networking sites (SNS) has provided access for company to understand the market demand as well as getting closer to the customer in general. This post interests me because I can directly relate to my personal experience; there are multiple times that I remember of wanting to buy beauty products after I watched make-up tutorial in YouTube.

In YouTube videos, twitter or even Instagram post, I often notice how the person who post the feed oftenly being endorsed by certain brands. For instance, Bethany Motha,a young youtuber has been maintaining partnership with Target. In the beginning of her video, she often announces the giving away deal for the week, for watchers who comment or re-tweeet her post, they will have a chance to own the product.

Betahany giving away Target lunch bags from Target

Another example, in Jaclyn Hill‘s channel I constantly noticed how she promotes and give recommendation to products that she uses on her beauty tutorial. In addition, she also inform watchers the detail of the product( including the brand, the type even serial number). Even though the purpose of the tutorial is essentially to explain how to apply make up, in a way these channels also provides watchers or customer about product reviews or product recommendations.

Jaclyn Hill explains how to use the beauty product while also giving recommendations

Through these examples, I conclude that company’s should take more advantage on the benefit of social media especially YouTube as mouth-to-mouth( direct) advertising in fact is more effective and targeted more than large billboards or expensive TV commercials. We also see how company’s who partner up with these individuals understand how important it is to market their brand to consumers, through consumers.

One sold, one give

Image source: http://www.trendhunter.com/trends/blake-mycoskie

TOMS is a new social business which take pride on their ultimate policy; for each shoes purchased,customers are helping to donate a pair for children who doesn’t have shoes. TOMS trademark product is standard,light weight slipped on shoes in varieties of colour. This article, examines of how TOMS has successfully captured market attention by their value. In the first three months of their operation, TOMS sold 10,000 pairs and their product ended up being sold in Nordstorm, one of America’s biggest department store.

TOMS is a epitome of business which is created shared value to the market. Blake Mycoskie, the founder of TOMS was well aware of how innovation and business could help and create bigger impact to the society, not only by gaining profit or simply giving out charity Mycoskie built supportive industry cluster through the promotion itself, we can see how TOMS expand the total pool of economic and social value for world community.

Personally, I see TOMS’ product is not appealing; the model is very simple, casual and it does not have any special features. However, it is interesting how customers buying decision are more driven by the value and not the product itself.We can see value that TOMS offers make it very popular and stands out among other more established shoes line.

It dramatically heightened my awareness. Yes, I knew somewhere in the back of my mind that poor children around the world often went barefoot, but now, for the first time, I saw the real effects of being shoeless: the blisters, the sores, the infections- Blake Mycoskie

Through the quote, we see how Myscoskie focused on what the society needs instead of focusing on creating a business which could make profit. In the end, Mycoskie not only creating a profitable business but also sustain the health of the children of the world in the long term.

H&M collaboration projects

Image source: http://www.thesun.co.uk/sol/homepage/news/3943479/Donatella-Versace-launches-new-collection-at-HM.html

As one of world leading multinational retail clothing company, H&M has successfully maintained its sales and performance through out the years of operation.H&M is well known for its fast updated design for men, woman, as well as kids. What makes H&M highly demanded by the society is their relative low price, modernize style which satisfied the needs and wants of the targeted market.

What differs H&M from its competitor such as ZARA and Gap is they have seasonal guest designer collaborations. Each year, H&M managed to collaborate with high-end designers such as Karl Lagerfeld, Versace,Lanvin, Alexander Wang, and many more.In this partnership, the designers will release their design which manufactured by H&M themselves. The products ranging from hand bags, to coat. The price will be higher than usual H&M product, but a lot more cheaper than the original price of the brand itself. However, through out the years, collaborations product has been highly demanded by the market, often customers used to line up outside the stores on the day that product is released.

As a H&M consumer, I think the collaboration not only add value to H&M but also helps customer to purchase high end branded product with lower price And for H&M, a good number of customers benefit from buying high-end design at a reasonable price, also, creating this kind of excitement to customers greatly boosts the sales and profit for H&M. Highly-brand conscious customer will tend to expect more and more designer product and therefore helps H&M to keep their sales high. Since the number of each item in this collection is limited that makes this product line also be valuable, precious and collectable.

First Nation issues- Free Port Indonesia

It was until the end of todays class, I couldn’t come up with first nation issues on my own. But when Mr. Jackes mentions about how first nations issue reminds me of home, I suddenly remember about the Freeport mining and decided to create a post regarding this issue.

Image source: http://www.tribunnews.com/bisnis/2014/10/08/banyak-faktor-kecelakaan-pt-freeport-indonesia-tak-dapat-penghargaan

Freeport-McMoRan Copper & Gold Inc is one of biggest gold producer in a world. This US company has one of its branch located in Papua,Jaya Pura, Indonesia. This Company exploited Gold, Coper, Nickel, and Uranium in the High Mountain of Cartenz. The product of the mining is transported around the world.

Since the company was first operated in 1967, there has been massive issues regarding environmental,cultural and sustainability in surroundings mining area. In addition, recently, there has been rumour saying that Freeport wants to extend their contract for another 20 years after the 40 years of operation in Indonesia. Even though the deal between Indonesian government and the Free port management has not been resolved, a lot of controversy has been going on especially in social media such as twitter.

One of the biggest issue that considered is the quality of life of the worker; several local news recorded, there has been numerous deadly accident. Not only this year, in May 2013 another accident killed 28 employees all at once. Most of the accident caused by the burial of workers in the construction sites due to the collapsed of underground mine . In addition,this mining site is well known as one of the hardest mining operation in the world. Even from the building process of the construction site itself, Free port has to exploit large part of mangrove forests around Cartenz mountain.

Looking from financial point of view, Freeport has been successful and prosperous. In 2013, the company sold 4 billion pounds of copper at an average realized price of about $3.28 per pound. It generated $13.4 billion in revenues from the sale of copper, over $1.5 billion from gold mining and nearly $1.2 billion from its molybdenum operations. Forbes added “It holds a 90.64% interest in these mining operations with the balance held by the Indonesian government” This means, Indonesia government only owns less then 10% from the total revenue of the production in the country. This amount remain questionable and unaccepted by Indonesians since the operation itself has brought damages on the environment and the threat the availability of natural resources for the future generation.

Even though The Freeport has paid 20 million us dollars during 1998-2004 to secure the reserve, the amount of externalities of this operations is far beyond what the company paid.I have question the business ethics of a large company such as Freeport and consider their responsibility of operating in other country. First, the mining site is located in Papua, one of biggest island in Indonesia that still populated with 255 indigenous tribe who still live under the old tradition system. Secondly, there has been massive environmental destruction and ecosystem in the surrounding areas. In this case,I believe not extending the partnership with Free Port is the best choice. In short term, government will be able to at least try to evaluate and recover the damages after years of operation. In long term, this will allows the local tribe to maximize their natural resources,maintain environment sustainability and therefore have better quality of life for the future generations .

Site C project, is it worth it?

Site C Clean Energy Project is a long term construction project by Canadian government to build dam on the Peace river,BC. The dam is expected to be a source of electrical power which would generate more than 400,000 homes. Purposely, this project was launched in order to satisfy growing energy demand in the future, according to what has been projected by the BC hydro Forecast.Nonetheless, this project has brought several controversy as the project will not only effect the natural ecosystem and biodiversity, but also the culture and practices of the residential area.

Even though the project will helps to manage sustainable energy in the future, the building process of the dam will create externalities to the surrounding area.The construction process of the project will result in the flooding over 100 kilometres of the river valley, which included wild life habitats, heritages sites and agricultural lands.. During that certain period, the project construction will exterminate all economics activity such as;farming, fishing and hunting. In the short run, this negative externalities of production of the Dam should be considered since this will effect directly to the populations day to day living. I strongly urge, the Site C project and estimate the total lost created by this event, and therefore further steps of this project could be considered closely as this will impact a lot of stakeholders in the same time- for long term.

In other hand, this project will also create several advantages. Vancouver sun quoted”Site C represents a significant economic boost for B.C. Construction would contribute $3.2 billion to our GDP and generate about 33,000 jobs.”Even though this might not create advantages for the infected area, this will help the general economical performance of BC and therefore, it actually creating benefits for BC in the long run. This advantages should again be take in consideration to determine whether this project should be launched in upcoming 2015.

Looking at the disadvantages and advantages, I encourage the C plan to further work with the BC government to accurately measure and estimate the total loss of this project. In addition, this estimation could be exposed to media in order for surrounding population to recognize the pros and cons of this issue. Both short and long term should be considered closely, since both will affect the quality of life, economical, and cultural life of population of BC.

References

http://www.cbc.ca/news/canada/british-columbia/site-c-or-lng-pick-one-say-b-c-first-nations-1.2776481

https://www.bchydro.com/energy-in-bc/projects/site_c.html

Burger King and Tim Hortons agreed to merge

Burger King and Tim Hortons have reached an agreement of merging the company, creating the “world third largest quick restaurant company”. Tim Hortons has agreed to buy the American burger company in order to make a new-merge restaurant without changing the speciality from each one, this is done for expansion purpose.Burger King has been in breakfast business for 30 years but still hasn’t made a significant growth when its compared with larger player especially McDonalds and Starbucks . While Tim Hortons, also been struggling to growth the US, primarily through unit expansion; but still not significant change visible in the market .

The merging agreements will include sharing of retail space and and management corporation. This means, the two company will soon announce a new company name. This merging has bring contradiction, since Burger King will move its headquarters to Canada. This means the move will cause shrink payment to US company taxes, many has question if this is one of Burger King’s strategy to lower their tax bill.

Marc Caira, the CEO of Tim Hortons stated ” We will be in a better position to take our brand quickly and efficiently to a global customer base”. For the customer segment, we should consider how the new business will affect the demand of both products. For instance, if the new company will be launch in Vancouver, would it attract consumer more than Tim Hortons attract customer before? How would the market interest increase if the two company don’t offer a new product and promote Point of differentiation? Especially for city like Vancouver,majority of population are highly concerned about health and food quality, and with, the merging of the two company ; its safe to say that the products they offer wouldn’t improve the growth of sales by much .Indeed, as a new company they will want to find the segment which is most profitable to use, most suited for the product that being offered.

I believe, Tim Hortons and Burger King would need to improve their strategy to capture market attention by their decision to merge. By both established brand names the companies already owned, this event should be treat as an opportunity to enhance and promote both companies even more in the mind of global customer.

Image source: http://www.cbc.ca/news/business/tim-hortons-burger-king-reaction-u-s-cracks-down-on-tax-inversions-1.2774913

Work Cited

Janus, Andrea. “Done Deal: Tim Hortons Agrees to Takeover by Burger King.” CTVNews. N.p., 26 Aug. 2014. Web. 05 Oct. 2014