Month: October 2010

Last year, Apple came out with a “tablet PC” called Ipad. It can be used to watch movies and read books in a bigger screen. Other than that, the Ipad is nothing else but a huge Ipod.  In doing so, Apple has developed a competitive advantage as no one in the industry has ever manufactured such products.  The IPad (9.56X7.47X0.5 inch) has a 1GHz Apple processor, several sensors (light and speed), built-in speakers, microphone, and up to 64 GB of flash drive memory.  It can be used to read ibooks, watch movies, play games, listen to music, or surf on internet.

Blackberry is soon launching its own version of the tablet: the Playbook. The Playbook is slightly smaller and lighter (7.6X5.1X0.4 inches). The Playbook is slightly better in terms of technology with its 2 integrated cameras and internal RAM. It, however, lacks a main component that customers are looking for: the giant pool of applications that Apple possesses.

Samsung also came out with its own version of tablet: the Galaxy Tab or the APad (Android Pad). This Galaxy Tab is almost similar to Blackberry’s Playbook and Apple’s Ipad. The only main hardware/software differences is that it has a GPS, Swype (typing without lifting fingers”  and use an android operating system. Another important factor that consumer look at before buying the Galaxy Tab is its price. The little device costs $100, which is relatively cheap compared to Apple’s Ipad ($499) and Blackberry’s Playbook (NA).

All those companies seem to target the same market segment by creating those products: people who find it convenient to have a gadget lighter and better looking than a laptop which would facilitate its transportation to/from school/work. Because of all its limitations, I find it less practical than a regular laptop. Its virtual keyboard considerably lowers productivity as it will be slower to type on a touchscreen.  Microsoft word/ excel documents or internet articles that require adobe flash cannot be opened.

What do they have in common? … They are all VERY expensive!!

Is it because the cost of manufacturing those products are high?

No, it is simply because their internal values are worth this price. Those companies have been able to create value related to their products.

This is rather interesting: the higher the price of those goods, the more consumers are willing to purchase them. If Louis Vouiton was to decrease the selling price of its handbags, its yearly revenue will drastically decrease because of a decrease in sales. In normal situation, one would expect that a decrease in price will lead to an increase in sales. In this particular case, customers are only willing to buy an expensive product. Why? Because they directly associate value with price. Owning a Gucci differentiates them from the rest of the population because not everyone is able to purchase such luxury goods. The product has given them a status difference in society.

I personally think that this type of marketing strategy is excellent to target higher class consumers. With all lower needs satisfied, rich consumers will naturally seek to boost their self esteem and conspicuous consumption can help them.

Several centuries ago, a lot of people would have said “How can we survive without food?”

Several decades ago, a lot of people would have said “How can we survive without electricity?”

Today, a lot of people would say “How can we survive without INTERNET?”

What is online? …

A better question would be: What is NOT online?

DVDs and CDs that we used to buy 10 years ago are now available online

Newspapers are posted online everyday

All songs (or most of them) can be found online; one of the most popular video site being YOUTUBE

Talking to friends can be done with MSN messenger

Articles and published work are located in online databases

Many companies provide online billing

The list goes on…

As our marketing teacher Tamar has added: the advantage of viewing all those online is that “… IT’S FREE!”

Many employers noticed the increasing trend of individuals using the internet and, as a result, taken advantage of it by recruiting online. Consequently, job sites such as monster.ca or craigslist.com have emerged facilitating both the employer and the employee. As opposed to the old days when people still looked for employment opportunities in the newspaper, most of today’s employees now look for jobs online. In addition to specific sites, many employers also tried to advertise and recruit via social networking sites such as FACEBOOK. Those social networking sites are sites that are the most daily visited sites and with the number of people using it, an ad posted for an hour on FACEBOOK can be very effective.

I recently read a blog in which the author posted some statistics. These stats revealed that more than half of the U.S. population use internet, or more specifically watch videos. I don’t know how reliable those stats are but they don’t surprise me at all.

The Following video has more than 300 million views:

Posting ads online can be useful to target younger consumers and those who are familiar with technology. More and more companies are aware of that and adjusting to it by creating company websites or posting commercials online (eg. YOUTUBE). This can, however, be a not a very effective strategy for companies selling products to seniors, who might not know how to use a computer.

Whether this commercial is ethical or not, it has certainly made a lot of people laugh. I personally think that abnormal and original commercials are the most effective. As depicted in the video above, a couple desperately tries to kill each other for a common purpose: drive the TOYOTA to work. This is rather humorous because, realistically, no one will ever try to assassinate his/her partner for the simple pleasure of driving a RAV4. The message that the car company is trying to get across is that people are willing to do anything to drive a Toyota, or more specifically, a RAV4. Toyota is trying to build a brand and differentiate itself from other car company (points of differentiation).

Unfortunately, Toyota has experienced many safety issues during past years. The commercial above can no longer be used because, according to the Maslow’s hierarchy of needs, customers/consumers will not care about the options that the car offers or its appearance (esteem) if they do not feel safe while driving the car (safety). The safety need is not satisfied; consumers will choose another car company that offers both safety and esteem. After problems started to appear, Toyota, however, completely changed its marketing strategy by focusing on safety.

As seen in recent Toyota commercials, the company is trying to change customers’ attitudes towards this product by using statistics or videos demonstrating various safety measures. Multiple simulations were posted online and shown to public. In doing so, Toyota wishes to restore its previous reputation as a car company and, more importantly, regain its customers’ trust.