In class, we’ve talked about brand positioning and product differentiation as strategies behind successful marketing. What we haven’t explored yet that blogger Danny Brown writes about, is the effectiveness of brand storytelling.

Brand storytelling is about “making the business human through stories.” I think it’s a subtle form of advertising, and that’s what makes it brilliant. It incorporates aspects of brand positioning and product differentiation without explicitly making the viewer aware of it.

Brown reviews Duracell Canada’s “Moments of Warmth” commercial, in which they build a bus shelter with heaters powered through a human connection.

Duracell’s “Moments of Warmth” Campaign. Source: Creative Guerilla Marketing

What I noticed:
The overarching theme isn’t even about Duracell. It’s about the power of the human connection, and how Duracell is – on the sidelines – supporting this relationship. Duracell doesn’t once “brag” about its features like portability or long-lasting battery life. However, Duracell is able to differentiate itself in my mind because it has successfully humanized itself. Its slogan, “Trusted Everywhere”, is never mentioned, but I’m already thinking about it since the commercial shows strangers relying on each other and Duracell to stay warm.

I believe because we’re humans, we appreciate the materialistic items we’ve attached a sentimental feeling to most. Brands who utilize brand storytelling understand this. Their advertisements are one step ahead; instead of waiting for consumers to purchase their products and grow attached, they form the connection before the product has even been bought.

Storytelling transforms marketing into something real. And that makes it really powerful.

References:

Danny Brown’s External Blog Post: http://dannybrown.me/2014/03/27/this-is-how-you-do-brand-storytelling/

Duracell Canada’s “Moments of Warmth” commercial:https://www.youtube.com/watch?v=-mQZqKLiMIg

Image Source: http://cdn.creativeguerrillamarketing.com/wp-content/uploads/2014/03/Duracell-Bus-Shelter-Warmer-1-640×340.png

Sally Osberg of the Skoll Foundation said, “Social entrepreneurs … see opportunities where other people see hopeless failures.” I think she’s absolutely right. This viewpoint differentiates social entrepreneurs and organizations like the ARC Initiative from ordinary relief workers.

Sarvajal, a social enterprise  maintained by communities in Rajasthan. (Further reading below) Source: Imagination for People

Social entrepreneurs see social problems as an outlet for change. I’d argue though, successful social entrepreneurs are not necessarily the ones changing the landscape. Instead, they’re providing the locals with the skills to invoke or sustain change how they want it. The ARC Initiative demonstrates this by training local business owners in poorer nations. They’re essentially saying, “Here’s a toolkit. Use this and build your business and community how you want it to be built.”

I’m not undermining the United Nations however. They have great incentives in place like the United Nations Development Programme (UNDP), which is striving for sustainable change. What the United Nations lack, however, is innovation. It doesn’t matter if the United Nations is fully funded. The organization is too structured, change is too slow, and decisions are too dependent on the wealthier countries. Individuals aren’t given enough power to enact unconventional change, which is what social entrepreneurs do. Unusual but strategic ideas are what it’s going to take to break cycles and solve societal issues.

“Graduates” of UNDP’s Entrepreneurship Development Programme. Source: UNDP

In my opinion, the UNDP has immense potential IF it partners with social entrepreneurs. These ambitious, results-driven individuals are the ones who will create and follow-through with original solutions that can be sustained in the long run by those directly affected.

References:

Sources/Text Hyperlinks: http://skollworldforum.org/about/what-is-social-entrepreneurship/

http://www.sauder.ubc.ca/Global_Reach/ARC_Initiative

http://www.undp.org/content/undp/en/home.html

Further reading (about social enterprises): Grameeen Bank, Sarvajal

Image Sources: http://imaginationforpeople.org/en/project/sarvajal/

http://www.undp.org/content/undp/en/home/ourwork/
povertyreduction/overview.html

My classmate, Philip Monagan, wrote a blog post about how Bain Capital has invested in and acquired 50% of Toms Shoes. Philip explores how this move can be viewed in two ways: Bain Capital is either trying to become more socially responsible, or it’s using Toms Shoes to give it the appearance of being socially responsible.

In my opinion, it doesn’t have to be either-or. Toms Shoes’ one-for-one value proposition is an example of shared value. Through giving shoes to impoverished children, Toms Shoes is helping society battle poverty. Meanwhile, their proposition also allows them to charge a premium price which maximizes profits.

Toms Shoes. Source: Eco Bravo

I believe companies that are creating shared value are the future of business. Giving back should not be a side project any longer, but an integral part of the business model. Bain Capital is driving this notion forward through its decision to aid Toms Shoes in global expansion. So, while Bain Capital’s image may be boosted by this partnership, I think the main point to focus on is that Bain Capital has demonstrated how investment firms can play a role in the creation of shared value.

If investment firms support businesses that create economic value through implementing social values, everyone will benefit. Those businesses will grow quicker, investment firms will profit, and society will reap the benefits of a business world that doesn’t operate at the community’s expense.

The takeaway: By investing in Toms Shoes, Bain Capital is investing in the creation of shared value.

References:

Philip’s Original Blog Post: https://blogs.ubc.ca/philipmonagan/2014/09/09/blog1/

Source: http://www.waterhealth.com/sites/default/files/
Harvard_Buiness_Review_Shared_Value.pdf

Image Source: http://www.eco-bravo.ca/wp-content/uploads/2013/05/toms-shoes-600-1.jpg

Kimberly Lin recently wrote a blog post about Red Bull and how it is being sued for its misleading but catchy slogan, “Red Bull Gives You Wings”. Everyone knows Red Bull can’t literally give you wings, but even so, the implication of the statement was enough for  Red Bull to settle the lawsuit out of court for $13 million, $6.5 million of which will be refunded to consumers. Kim talks about how foolish Red Bull was for using a deceptive slogan, but I disagree:

Red Bull Gives You Wings. Source: Kiss 92.5

Through this slogan, Red Bull has been able to position itself as the leading energy drink. “Red Bull Gives You Wings” has differentiated the brand from other energy drinks like Monster (Unleash the Beast) and Rockstar (Party Like A Rockstar). The latter two taglines aren’t unique to the brands – they’re clichés and old song titles – while Red Bull’s slogan is exclusive and memorable.

Red Bull alongside its competitors. Source: Cubic Lane

In my opinion, the lawsuit isn’t particularly defamatory. Consumers will still buy Red Bull because they knew from the beginning that they wouldn’t have grown wings anyway. Nothing has changed in the ingredients either, which is a more immediate concern. I think consumers will take this lawsuit as a comedic “scandal”, and use those few extra refunded dollars to buy another can of Red Bull.

As for Red Bull’s losses, $13 million is only 0.17% of Red Bull’s net worth ($7.5 billion). That’s a small price to pay for successful brand positioning that has seated them at the #1 spot.

References:

Kim’s Original Blog Post: https://blogs.ubc.ca/kimlin/2014/11/08/if-you-dont-have-wings-red-bull-owes-you-10/

Sources/Text Hyperlinks: http://www.forbes.com/companies/red-bull/

https://plus.google.com/+MonsterEnergy/about

http://www.bevnet.com/reviews/rockstar

http://www.statista.com/statistics/304949/global-leading-energy-brands-based-on-sales/

Image Sources: http://www.kiss925.com/files/red-bull-gives-you-wings2.jpg

http://www.cubiclane.com/wp-content/uploads/2014/10/EffectsofEnergyDrinks.jpg

Gretchen Selfridge – Chipotle’s Chief Operating Officer. Source: Business Insider

COO Gretchen Selfridge is Chipotle’s top female executive, but she wasn’t poached from another fast-food chain. Lidia Castillo, a Chipotle restaurateur making $99,000/year, wasn’t recruited from outside either. In fact, Selfridge started as a manager, while Castillo began in an entry-level position.

Chipotle’s restaurateur program emphasizes internal promotion. Other companies base promotions/raises on sales, but Chipotle measures how effective one is at mentoring colleagues.

I think this is a prime example of a productive incentive. Employees help grow corporate culture because they’re rewarded for it. Promotion makes them feel valued, and their new position gives them the incentive and  influence they need to continue mentoring others.

In my opinion, professionals seeking executive positions at new firms often feel like they’ve already gained everything they could from their past job. They’re choosing to jump ship to help themselves. “Me” matters more than “The Company”.

Maybe it’s a far stretch, but I think Chipotle’s successful promotion system mirrors the military. Generals start out as cadets. These soldiers are promoted based on how well they lead others, not on how many men they kill. And it’s easy to see why generals aren’t recruited from other nations’ armies – there’s no loyalty.

Connecting back to business, I know I’d work harder for a company where there’s room to grow. Raises are a bonus, but the focus would be to help grow the company that helped me grow.

References:

Article/Text Hyperlinks: http://www.businessinsider.com/from-chipotle-manager-to-executive-2014-11

http://www.businessinsider.com/chipotle-internal-promotion-program-2014-4

Image Source: http://static1.businessinsider.com/image/545909d4ecad04f6288b4570-480/gretchen-selfridge-chipotle.jpg

The relationship between businesses, First Nations, and the government is a broken one. This has recently come to light again as Site C – a proposed hydroelectricity station/dam on Peace River – is triggering discontent. The poor relationship between the groups likely comes from not understanding each others’ values:

Protests Against Site C. Image Source: Aboriginal Multi-Media Society

All businesses, including BC Hydro, aim to maximize profits. By building Site C, they are capitalizing on demands for hydroelectricity.

The First Nations communities see the dam as a threat disturbing fishing practises and leading to environmental degradation. For the Aboriginals, community comes first. They aren’t against economic development, but it CANNOT happen unless they benefit from job creation and the environment remains unharmed.

The government wants to fulfill promises of these energy megaprojects, but its method of paying off Aboriginals isn’t working because that’s not what they value. Disturbing Aboriginal way of life will only add to existing friction and create barriers for businesses in these areas of a PESTLE:

• Political/Legal: Supreme Court enacted laws and regulations barring projects
• Social: Detrimental media attention/social attitudes; Canadians sympathize with First Nations
• Environmental: First Nations are STRONGLY committed to protecting the environment

The only way for businesses like BC Hydro to be able to go forward with their Site C Project and to win against external threats is for all three parties to mutually benefit. It’s hard to do that though when they all have varying definitions of “benefit”.

References:

Articles/Text Hyperlinks: http://www.vancouversun.com/news/
First+Nation+chiefs+stage+Site+showdown/10215965/story.html

http://www.theprovince.com/news/
Smyth+First+Nations+play+role+resource+development/10232740/story.html

http://www.kelownadailycourier.ca/opinion/columnists/article_b4461ee6-4b5b-11e4-8ebf-0017a43b2370.html

Image Source: http://www.ammsa.com/sites/default/files/articles/article-photos/p5-site_c.jpg?1387472840

7-Eleven has a clear cost leadership strategy. Known for being quick and accessible, 7-Eleven is open when others are closed, and most products can be bought with spare change.

Products 7-Eleven is famous for. Image Source: 7-Eleven Official Facebook Page

Now, 7-Eleven wants to do more.

Consumer preferences have shifted towards wholesome eating, and while positive adjectives like “fast” and “convenient” are associated with 7-Eleven, “healthy” isn’t one of them. Its new partnership with Tony Horton Kitchen in its Los Angeles stores though, has produced “fresh on the go” choices like quinoa salad and cold-pressed juice. Sound like something from Whole Foods? Perhaps, but at half the cost.

Although 7-Eleven is capitalizing on the healthy eating market trend, it isn’t compromising cost leadership. These items are being sold for under $7 so it can stick to its value proposition of low cost while expanding customer segments.

It’s a smart move, as supermarkets like Safeway and Wal-mart are offering healthier options too. Organic is the new point of parity in the supermarket industry.

The new Tony Horton Kitchen products at 7-Eleven. Image Source: Los Angeles Register

It’s also a risky move though. 7-Eleven may find changing its image so radically could be difficult. When one mentions 7-Eleven, the candy lined racks, Slurpees, and taquitos come to mind. Its move towards “healthy” might leave 7-Eleven’s current customers thinking it’s “selling out”, while the new market of wholesome eaters 7-Eleven is targeting might not take it seriously.

Whatever the case, I’ll be excited to try these products if they come to Canada.

References:

Article: http://www.ibtimes.com/7-eleven-teams-p90x-creator-offer-healthy-food-options-1697849

Text Hyperlinks: https://www.7-eleven.com/

http://corp.7-eleven.com/news/09-30-2014-7-eleven-powers-up-its-fresh-foods-menu-as-first-retailer-to-offer-tony-horton-kitchen-foods

 Image Sources: https://www.facebook.com/7Eleven

http://www.losangelesregister.com/articles/eleven-605498-foods-horton.html

Location, location, location.

Real estate agents know the importance of this, but operations managers need to too. When you think of athletic apparel, you’d likely think of Nike and Adidas. My high school track team loved debating over the superiority of the two brands. Somehow, Nike always emerged victorious.

Adidas’s Headquarters in Herzogenaurach. Image Source: Gear Junkie

The article suggests this is because of their headquarter locations. Nike is situated in trendy Portland, Oregon, while Adidas is by rural Herzogenaurach, Germany. Adidas needs fresh talent in the design, marketing, and digital departments, but who wants to move to the middle of nowhere? Because it can’t hire new innovators, Adidas has failed to join marketing trends, causing them to fall to No. 3 behind Nike and Under Armour.

Image Source: CNJTC

Operations managers oversee and design a company’s production processes, so their job also consists of deciding where to place distribution centres.  Adidas seems to understand this now, as it is updating its Herzo “World of Sports” campus and establishing a creative studio in New York.

This likely isn’t enough, though. Adidas must incorporate its brand into an up-and-coming city, like how Nike infiltrated Portland and Eugene (Track Town USA) by partnering with the University of Oregon. Evidently, Adidas shouldn’t try dethroning Nike on the track and field ladder. Instead, they could secure the top spot on another ladder like soccer, by investing in studios and distribution centres built in the heart of the world’s greatest soccer towns.

References:

Article: http://www.businessinsider.com/r-adidas-fights-to-draw-top-talent-to-hq-in-sleepy-bavarian-town-2014-9

Text Hyperlink: http://shop.goducks.com/

Image Sources: http://gearjunkie.com/images/7212.jpg

http://cnjtc.com/wp-content/uploads/2013/04/adidas-soccer-shoe-1080p-hd-sports-wallpaper-.jpg

Facebook has over one billion users, and a large number of them are likely wary of Facebook’s privacy policy; I know I am.

That’s where Ello comes in.

Ello, a new social media platform, offers a unique value proposition or “manifesto”; it won’t collect users’ personal data nor generate advertisement revenue. Instead, it will profit by offering add-ons at an additional fee, like a “freemium”.

Although Ello is invite-only, it has been rapidly gaining signups thanks to a flaw in Facebook’s business model. Not only does Facebook track and sell users’ online activity to third parties, its policy requiring users signup with real identities has left users (especially musicians, artists, and LGBTQ community) feeling exposed.

Image Source: CBS 99.7

Ello isn’t the first social network to protect user privacy from advertisers, but it’s one of the first to  brand and position themselves as such. Their logo – a black circle with a white smile – seems welcoming yet protected. Consequently, Ello has created a  niche in the social media market where they dominate – a niche  Facebook cannot penetrate unless they restructure their business model and revenue streams.

However, this doesn’t mean  I’ll be moving over to Ello now. It simply isn’t established enough yet. But, Ello does give users a glimpse at where social media is headed. Privacy protection is a point of difference Ello holds now, but it may be a direction other social networks follow suit in soon.

References:

Article: http://www.cbc.ca/news/business/ello-social-network-making-waves-as-facebook-twitter-alternative-1.2777640

Text Hyperlink: http://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/

Image Source: http://cbs997now.files.wordpress.com/2014/09/ello.jpg?w=620&h=349&crop=1

Milton Friedman argued business managers should not focus on corporate social responsibility, because that detracts from the ultimate goal of a business – to maximize profits. Well, with all due respect to the late Mr. Friedman, I’d say his theory no longer applies.

Times have changed.

To maximize profits, products must be engineered towards consumer preferences. These days, consumer preferences are leaning towards transparent and ethical companies. According to an International Business Times article, even big food firms are aiming to become more socially responsible. The article cites an example from NPR, which had reported on Nestle’s new rules concerning treatment of animals. The article also mentioned a  Reuters piece which had covered Kellogg’s Co.’s promises of reducing greenhouse gas emissions.

Image Source: Natural Food Finder

Edward Freeman’s stakeholder theory says all internal and external stakeholders must work together to prevent a business from declining. Consequently, consumers (external stakeholders), are now getting a say in company operations. They want companies with good business ethics, and if shareholders don’t listen, even if they are industry leaders (like Nestle and Kellogg’s), they’ll find themselves in decline.

Perhaps the shift these companies have made towards corporate social responsibility is less about morals and more about marketing a brand image. But if this change maximizes profits, helps the environment and community, and leaves consumers happy, then it could be considered a win-win situation.

References:

Article: http://www.ibtimes.com/big-food-must-invest-social-responsibility-thrive-experts-say-16719

Image Source: http://www.naturalfoodfinder.co.uk/sites/default/files/images/kelloggs2.jpg