Christopher Hunter's Blog

I had a lot of fun working with my team throughout the year. For our final project, we were assigned to create a video that summarized everything we’ve learned about our chosen company. The group that I have been working with chose Abercrombie & Fitch. This was an interesting company to research, mostly because of some questionable things that CEO Mike Jeffries has said about their products and who their target audience is, as well as some of the controversial marketing tactics the company has used.

I’m fortunate to have gotten along with my team members. Although coming into this project we (and by we I mostly mean me) were kind of technologically inept, we seem to have overcome our struggles and it has been overwhelmingly satisfying watching our video come together. In addition, the challenge that this video has presented to our group has actually been pretty fun and has left me with a few new friends.

Through the process of editing this video, my team has been taught invaluable technological skills that will surely be of use to us later in life. Although it may have been frustrating at times, being done with this project and seeing the final product has been a great way to end this class.

Social media has without a doubt changed the way companies market their products. In his blog, Graham Kingma explains how social media, and the internet in general, has made transparency a vital factor for companies to consider when marketing their products. Essentially, advertisers recognize that the very structure of social media — free, cheap, available to all — has created a world that is more interconnected than ever. Consequently, people around the world are sharing their opinions about everything, including marketing. Companies must be more respectful and transparent to their consumers, or else they run the risk of experiencing backlash spreading online.

Kingma noted a situation in which Samsung paid people to write bad reviews for their competitor’s devices as an example of how a lack of transparency can prove to have a negative impact on a company. He states that while the fine that was levied to Samsung was insignificant for an organization of their size, “the damage to Samsung’s trust and transparency will likely be the greater impact.”

Although social media can be seen as a threat to some organizations, it can also be used as an effective tool. Companies can use social media as a cheap way to spread information. For example, Coca-Cola recently announced that it will refrain from spending any money on advertising, and that rather it will use its budget to help fund relief efforts for Typhoon Haiyan in the Philippines. Social media has helped Coke draw a lot of attention to itself as word spreads its philanthropic efforts.

Immediately upon reading Joey Luo’s blog, I developed a curiosity as to how Zara became one of the world’s leading fashion retailers despite only allocating 0.3 percent of revenue from sales to marketing. With 5,618 stores operating in 85 countries, Zara has experienced extraordinary growth over the past decade (there were only 1,000 stores operating in 2010). Additionally, Zara has consistently overshot analysts expectations. For example, between March and May of this year, they posted a profit of 432 million euros, which is a 31 percent increase compared to the same time last year.

The fashion powerhouse strictly adheres to its fast-fashion model, which means that they have a very high turnover rate and basically no inventory. This allows the company to react to the changing trends of the fashion industry more quickly than their competitors. Further, it makes their product highly differentiable; new items appear in Zara’s stores twice a week, and because Zara doesn’t carry very much inventory, these items do not return to Zara’s stores after they sell out. This also allows Zara to capture impulse buyers who are aware that items of interest may not be available the next time they return to the store.

Given Zara’s enormous success by using a rather unconventional business model, it’s no wonder that they aren’t spending any money to advertise their products. At the end of her blog post, Joey suggests that Zara should allocate more of their budget towards marketing, especially if they want to further expand. While I agree that it is useful for many companies to advertise their products while trying to expand, I think that in Zara’s case, their success using their existing business model and their commendable growth proves that an  ad campaign would be futile.

Sources:

http://leadingcompany.smartcompany.com.au/big-ideas/no-advertising-no-outsourcing-why-zara-is-beating-expectations-despite-a-languishing-economy/201206151434

http://www.forbes.com/sites/lydiadishman/2012/03/23/the-strategic-retail-genius-behind-zara/

Since Vancouver’s city council unanimously approved zoning changes that allow small craft breweries to add a lounge area where patrons can drink on site this past July, there has been an increasing trend in micro-breweries opening in concentrated areas around the city. In a way, these distilleries (maybe unintentionally) use the marketing mix to find ways to differentiate their product. I’m going to use this tool to analyze why micro-breweries are increasing in popularity, specifically looking at how they use a good quality product and  strategically place their breweries/bars to create successful businesses in a fairly new industry.

Product:

Owners of micro-breweries tend to be adamant in creating the best quality beer they can. David Bowkett, owner of, Powell Street Brewery, describes the job to the Globe and Mail as “a labour of love”. He adds, “people are just more willing to support the small guys now”. In other words, people are inclined to visit these breweries because their very nature facilitates top quality products. The small size of micro-breweries allows the people who are brewing it to pay more attention to the actual product, which differentiates them from their larger counterparts (i.e. Molson, Coors, etc.)

Place:

Several lounges have been opening up within walking distance from each other in two parts of the city. Just this year, 9 new breweries have opened in Vancouver, with four of them situated between First and Broadway on Main Street. The others are mostly around Commercial Drive and East Hastings, which is home to establishments such as Parallel 49 and the aforementioned Powell Street Brewery. Because they’re located in such close proximity from one another, people are inclined to participate in bar crawls, where they visit more than one of these distilleries in one trip. In this way, these micro-breweries have created a mutually beneficial relationship with each other because of their strategic placing.

The new spokesman for the Dodge Durango is none other than Anchoman’s Ron Burgandy, a slightly conceited news anchor created by comedian Will Ferrell. With the release of Anchorman’s sequel, Anchorman 2: The Legend Continues, fast approaching, it isn’t surprising that Chrysler, the company that owns and manufactures Dodge, has decided to team up with Anchorman in order to co-promote both the movie and auto manufacturer’s SUV. Needless to say, these ads are hilarious and have gained a lot of attention online.

According to the Globe and Mail, 70 shorts featuring Ron Burgandy have been made, and Dodge will be posting them over a lengthy period of time, presumably until the movie has been released. Among the ads that have already been released, Will Ferrell has been seen praising the car’s roomy glove box, and comparing the car’s horse power to an actual horse, followed by a tense staring contest which is obviously won by Ron Burgandy.

By promoting both the new Dodge Durango and the upcoming Anchorman movie, Chrysler and Anchorman have created a mutually beneficial relationship. People are becoming aware of the new movie and are remembering these new and unique advertisements released by Dodge. Perhaps there will be a trend in the future of companies using co-promotion in order to spark awareness for multiple products through the same marketing campaign.

An important aspect of marketing is to get a product to stick into the consumer’s mind. Axe, a brand of male grooming products, has taken an unconventional approach in achieving this goal by creating advertisements that are deliberately sexual, and in some cases misogynistic. In addition, much of the controversy from these ads stems from the sexual themes which can easily reach a younger audience than the brand’s intended demographic.

Axe’s controversial ad campaigns bring up an interesting question: when should marketers draw the line when it comes to sexually explicit content? Axe is one of the best selling deodorants in the world. They’ve successfully reached their target market through their ad campaigns and have climbed their way to the top of the food chain in the men’s toiletries industry. In his article, Ben Berkon suggests that Axe’s main selling point is the fact that it delivers self-confidence through its product. He says, “with Axe, you get what you want in life — which is, of course, hot chicks.” On the other hand, Axe has infuriated many men and women alike. Margaret Hartmann, for example, described Axe on her blog as “the cheap toiletry equivalent of the He-Man Woman Haters Club”. Hopefully, in the future, Axe will be able to find a balance in their ads that will appease both their consumers and the general public.

Original article from the online blog, BCBusiness

Recently, Canada has been becoming increasingly entrepreneurial and B.C. is leading the charge. According to a study released by CIBC, nearly 500,000 Canadians released a new business in June alone. This is approximately 15 per cent of Canada’s labour force.

Not surprisingly, a big chunk of that lies in British Columbia. As well, many of these businesses in B.C. are smaller micro-businesses, meaning they have fewer than 4 employees, and 57 per cent of those micro-businesses are self-employed, or soloist. The B.C. government’s resource site says that as of 2011, there were 84.2 micro-businesses per 1,000 people. This works out to be the highest ratio in the country. So why are there so many micro-businesses in British Colombia?

While reading blog posted on BCBusiness, I could immediately tell that the writer’s opinions were congruent with mine. In B.C., we don’t have very many big businesses to employ a large amount of people. This causes people who are moving from out East to build a business according to their area of expertise. Once they get used to living a kind of lifestyle where they’re their own boss, they are less inclined to go back to the workforce unless it’s interesting enough to lead them away from their current lifestyle.

Sources:

http://www.bcbusinessonline.ca/small-business/canada-be-your-own-boss-country

With Hostess planning to stop operations, what happens to its mix of famous brands — most notably the twinkie — is still unsure. The Irving, Texas based company says that it will seek bankruptcy-court permission to shut down and sell all of their assets, including 36 plants and brands like Wonder Bread, Nature’s Pride, and Ding Dongs.

All of this was sparked by a nation-wide strike by its second largest union. This strike “crippled the company’s ability to produce and deliver products”, Hostess said. The company warned that they’d be forced to shut down if a settlement wasn’t reached by late Thursday. Besides poor labour relations, Hostess has also been struggling to keep up with the consumer’s shift to healthier eating habits and high raw material costs.

This situation is a testament on the importance of keeping up a good relationship with employees. Besides decreasing employee turnover rates, a good relationship with labourers can allow companies to avoid potentially detrimental situations. In this situation, the Bakery, Tobacco Workers and Grain Millers International Union went on strike because they weren’t satisfied with what they were getting from Hostess. The resulting events prompted the loss of an incredibly influential brand and caused more than 18,500 employees to be thrown out of work.

Sources:

http://www.theglobeandmail.com/globe-investor/as-hostess-winds-up-who-will-bite-on-twinkies/article5365001/

http://hostessbrands.info/ceo-letter

Jeremy’s post addresses an interesting issue: should whistleblowers be compensated or punished? Jeremy refers to an article in the Washington Post about ex-UBS banker Bradley Birkenfeld who helped uncover a large Swiss banking scheme that helped Americans evade taxes. For this, he was awarded $104 million and sentenced to 40 months in prison.

Birkenfeld knowingly came out to the IRS about his bank’s actions, claiming that “he should not have to fear prosecution for turning over evidence”. While he was awarded considerably, he was still sentenced to more than three years in jail. The whole system is incredibly oxymoronic. I think that we should provide more security for whistleblowers; the threat of going to jail doesn’t provide much of an incentive to reveal any evidence. Additionally, I think that an award system is crucial as it provides further incentive to go forward. There needs to be a more direct system in place that encourages whistleblowers to go forward with useful evidence.

Picture Source:

http://online.wsj.com/article/SB10000872396390444017504577645412614237708.html

After listening to Janice Cheam’s presentation on the development of Energy Aware (a product that measures your energy consumption), I couldn’t help but wonder if the long hours that she put into this product was worth it. Although Janice spoke of the satisfaction that came from seeing her product come to life, she juxtaposed this with sleepless nights and financial struggles. Her company could have easily failed and everything that she put into it would have been worthless.

This caused me to start thinking about whether Janice really cared about the energy that she put into her product. In other words, I believe that her passion carried her through what would have otherwise been an overwhelmingly strenuous time. Successful entrepreneurs should be passionate; if not, they would not have the drive to continue. The long hours that Janice put into her company were not because the prospect of being wealthy, and obviously not because of securing a job that will insure long-term stability, but rather because she wanted to get her product out to the public. It is her hope that this, will in turn change the lives of others.

Picture source:

2006 Competitor Energy Aware on cover of BC Business magazine