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There should be a considerable amount of competition in the retail banking industry. The big 6 (TD, BMO, CIBC, Royal, National, Scotia) in Canada, plus others (such as HSBC and credit unions) offer very similar services. The Canadian Marketing Blog goes into some detail on how Banks should use marketing.

Angel Chan’s blog talks about how TD has extended hours. This strategy helps TD target the working class segment. This could be their target market. When working class people get off work, some of the banks are already closed. TD is open later, so those customers that need to do their banking are more likely to choose TD. For us UBC students, TD has a green machine outside Angus, and in the basement of the sub. TD seems to focus on convenience for their target market. People running their own businesses might find TD’s weekend hours to be better for them too, since they might not have time to go run around during the week. Yes, this only looks at the retail banking side, but TD Waterhouse seems to be just as good, if not better, than the other big banks discount brokerages.
Something like Coast Capital will say that they give everyone their best rate without hassles and bargaining, but the issue is that they don’t have the network that the big banks have. They have less locations. Their debit system is less usable. TD usually gives better rates to their good customers. BMO actually gave my dad a better rate than me for the same amount (GIC). Once they found out I was the son of my dad, they offered me a slightly better rate. This probably makes the customer feel more special, unlike at Coast Capital where everyone is treated the same. Coast Capital’s target market probably includes those that are looking at posted rates and trying to get the best posted rates. Yes, they have a free account, but the convenience of other banks is not comparable to Coast Capital unless you happen to work around the corner from one of their locations.

Lululemon Blog

Juanita Ng’s Blog

These blogs brought up an interesting thought. Tamar said something about getting the baby shoes on Oprah, but not being mentioned. Lululemon is probably going to have a massive spike in sales over the next few weeks, especially leading up to Christmas. Oprah has so much marketing power. People listen to her advice. But why? In general, some people are just listened to. Some people are generally ignored. I’m not really sure what differentiates the two, but Oprah has become one of the most influential people in the world. Yes, some things that she mentions are probably good products, but the costs of these products are pretty high (ie the $50 candle). Will Lululemon exceed expectations this quarter because of the Oprah effect? Good chance if you ask me. Our marketing group is doing Lululemon, and we realized Lululemon relies on word-of-mouth advertising and doesn’t really run commercials or the typical advertising. Oprah talking about your product as one of her favorite things is word-of-mouth advertising on steroids.

The power of Oprah

I read another comm 296 blog and felt I needed to respond to a few things

Erick’s Blog

Cars are really just a mode of transportation. However, the consumer could look at it as buying status or “looks”. As a mode of transportation, Hyundai probably provides pretty good value. The new Sonata looks pretty good. Analysts argue that the Genesis is comparable to some of the luxury German models.

So why do some people have to spend, as Erick puts it, $200 000 – $400 000 on a Aston Martin or Lamborghini? Could be someone trying to show off their new found wealth. Humble people won’t usually do that though. A while back I read that some Chinese billionaire said that she didn’t even know what model car she was driving, and that she wouldn’t pay more for first class airfare compared to business class because business class was good enough. So, there are different types of consumers. Some people want to show off their wealth by buying the most expensive goods available. Modest, humble people will stop at a certain point, even though they could easily afford more. I think Warren Buffet still lives in Omaha. I read that people who need to buy expensive, black cars tend to have lower confidence. Is buying confidence worth (valued at) $200 000- $400 000? To some people it might be.  Not that all Aston Martin owners are buying confidence. Is it still buying status if all of your neighbours have similar cars? Erick says that BMWs are common in the Vancouver area. True, in some parts. If all of the neighbours have the same car, does that give you “status”? I argue that it doesn’t.

If everyone has the same product, none of them are buying status over their neighbours. If you buy a BMW and live in a suburb of Prince George, that BMW might be the only one for miles. Then, in my opinion, that would be buying status. Some people are naturally confident, and status is earned, not bought. Buffet might be an example of that. Yes, safety and such matters when car shopping, but going over the top really isn’t needed. Remember, the best things in life are free (well, in monetary terms, not including time and energy).

Erick’s comments on the Service industry are also interesting.

Yes, the  service sector provides the most jobs. Yes, nothing tangible is exchanged. But almost everything these days isn’t tangible. E-books are not physical products. Using Netflix doesn’t give you anything tangible. Itunes doesn’t sell tangible products. I would argue that people will still leave their houses to buy products. Yes, HMV is being phased out, just like Blockbusters.

Nobody wants to stay home everyday, all day. Who buys their food online? Can you convince your hair cutter to come to your house to cut your hair? People will still go out to buy and consume. People still like to have the experience of going out and doing things. If you go bowling, I would consider that to be a service, since you don’t leave with anything physical. So, I disagree with the idea of people being reluctant to leave their homes. People want to go out, maybe try on their clothes before they buy it.

I read a great article in the Vancouver Sun this past week. I immediately clipped it for my Comm 296 blog, but I lost it somewhere. Probably got recycled with all the other papers this week. Luckily, I found it on their site.

http://www.vancouversun.com/Companies+making+products+smaller+their+prices/3791708/story.html

This is really a good way to lower production costs and not make demand fall off a cliff.  By not increasing prices, consumers do not think that they are over paying for the product. The perceived value is the same as it was before. The product is basically marketed and advertised the same way as before.  However, the actual value that the consumer gets is lower. If I pay $5 for 500 grams of cereal, then it switches and I pay $5 for 450 grams of cereal, I am getting less “value”. But really, the companies need to lower costs to make similar margins that they made before. Maybe this means that food price inflation is appearing to be lower than it actually is. Some people will say this is sneaky marketing, but really, most people are probably better off with this pricing system. Is more chocolate, candy, bacon, other high fructose/high saturated/trans fats better “value” for you? I guess it depends on how you look at it.

Also wanted to point out that Geothermal stocks are finally starting to show some life, if you remember my “Green Energy” blog entry. It turns out someone actually read my blog and left a comment there, probably dealing with the electric cars. Pretty cool. I really didn’t think people outside of comm 296 would come across my blog, so this was a welcome surprise.

Gordon Campbell is stepping down. The way that the Liberals implemented the HST led to people hating Gordon Campbell. I have to say, I did not follow all of the political stuff in the past. I do remember his drunk driving thing in Hawaii though. Marketing for political reasons is all about how people (voters) view politicians. What do people remember? Everything bad. The drunk driving, the sale of BC Rail, and HST. Buyer’s (Voter’s) remorse. It’s funny how things work. All of those signs out there supporting politicians…the commercials…the attack ads… If you think about it, building party support is really building a brand. But the Liberals are more than just a brand. People may vote as if political parties are brands, but there are consequences when people vote without knowing anything other than seeing some attack ads and a couple of signs. Gateman was right: Not everyone’s vote should be equal. HST looks bad up front, but when you look at the long term, broad overview, HST isn’t so bad. Yes, some sectors (restaurants and legal services for example) are hurt. But when you compare these additional costs to the consumer with the various tax rebates and lower income tax, HST isn’t nearly as bad as Carole James and the NDP are saying it is. (By the way, did Carole James pass Econ? Raising minimum wage = higher unemployment, price floors). Then she says something about “what about the environment?”, yet she attacks the carbon tax as if the Liberals banned cars. I don’t think politicians are in the value-based marketing phase yet. What value can the NDP actually offer?  Such a joke, I hope the Liberals stay in power, or even the Green party. NDP might (meaning likely will) run us into the ground. But, due to recent marketing of the HST and the negative media towards the Liberals, there is a good chance that people will base their decisions on the latest ad or the last thing they remember about politics. Few will remember that Campbell actually improved the economy compared to the NDP.

With the relatively sudden realization that traditional carbon energy sources such as oil and coal are contributing to global warming, green energy has been entering the minds of the population. Some people are willing to pay more for their electricity if it comes from a renewable resource. Most people have heard of wind power. Most people know of solar power. In BC, we are very familiar with hydro power. Very few have an idea of what Geothermal power is. Here is a quick explaination.

Geothermal resources are harder to find than solar or wind (since these are above ground), but are able to run about 95% of the time. Solar struggles at night. Wind doesn’t always blow. Geothermal is also more economic to produce than solar. On top of all this, Geothermal is not new technology. They have been doing this for a long time. So why is the exposure for Geothermal so low? We all love the idea of “going green” (which spurs Green Marketing), but if we don’t have renewable electricity, the value of electric cars to the “green consumer” isn’t as high as they perceive it to be. If I use coal to produce the electricity that you put into your new Chevy Volt or Nissan Leaf, is the environment that much better off? Yes, it is probably better, but can be improved.

Personally have to say that the Volt looks 5x better than the leaf. Either way, Green Marketing will benefit greatly from these new technologies. I expect that when celebrities start driving around in their electric cars, followers will catch up quickly.

First off, that 296 midterm was tough for me. Guess I won’t be the recruit from Accounting/Finance!

I recently realized that many mining companies could almost be considered to be in different marketing eras, in current day. Production, sales, market and value-based. A mining company in the production stage is basically saying that their properties are good enough on their own to attract investors by itself. Sales-oriented is more like those junior mining companies that should really be worth zero (like a pump and dump type of company) that manage to attract investment. Some “CEO” probably hires some “newsletter writer” to do the advertising and personal selling for them. Market oriented mining companies would be most like some sort of mining conference where investors have the ability to compare companies all under one roof “the buyer is king”. What do the customers want? A return on investment. Value-based marketing would be mining companies with good assets, good management, and a low market cap.  Sounds pretty good to me! So the real question, which companies fit under each market-era?

Nearly all consumer-discretionary spending is made to satisfy psychological needs. Yes, some things are purchases for their functional needs, but consumers will often upgrade their purchase of  a functional good into a psychological one. In the example of Goretex given in the textbook, there is more than one provider of goretex clothing, but consumers will still factor in brands, color, and general look. Maybe some celebrity wore a particular style. I want to walk through my “consumer decision process on a few things I bought in the past year.

1. Laptop-Yes, I recognized a need (was using an old Toshiba laptop that was roughly 5 or 6 years old…it was pretty heavy, especially dragging it out from Ladner everyday). Functionally, my new laptop is much faster and looks considerably better. I consider myself to be a relatively practical person. Unlike some people I know, I don’t buy things for just  for fun (when I say for fun, I don’t actually mean for fun, but more like for no apparent reason). I had decided to buy what I considered to be a reasonable model (another Toshiba) on boxing day. Functionally, it was all I needed, and should have been relatively dependable. Yeah, it didn’t have a built in mic or anything, but it would work “for school” purposes. I had to meet my psychological needs in this case too. There is no way I wanted to be seen using an Acer, HP, or Gateway. It seems to send the wrong message, for whatever reason. Macbook Pro’s look good, but the price is too high for what I use it for, plus I’d have an adjustment period switching.

My internal search for information? Well I really only knew of some brands and that Intel has 90 something percent market share in the chip market. There are some star ratings on these chips too. AMD is the other portion. Brands? Toshiba, Sony, HP, Dell, Acer, Gateway, Leveno (or something), Asus…

External? Checked consumer reports, but most of the models in Canada have slightly different product numbers than in the States where most of these reviews are. Other people? Well, my parents have always been Sony people.

Cost/Benefit? I saw the time put into researching as worth it, a few hours here in there is worthwhile for purchases of this size in my books. Risk? Well, I wanted a dependable reputation in the brand. That would be performance risk. Could also be financial risk too. I consider this to be a shopping good.

The Evoked set? A Toshiba and a Sony. I actually bought the Toshiba, but my dad brought home a Sony with 1 touch web access and Blu-ray. Really didn’t need blu-ray and HDMI, but I kept the Sony. Both alternatives had the same Intel duo core 2 chip and Windows 7, but the Sony cost more.

Didn’t see that in the text (ie someone buys product for you and convinces you to keep it)

We’ve all seen them. Telus has bunnies, exotic birds, hippos, little pigs, etc. Rogers uses a continuation of the wrong guy on the wrong network vs some other guy on the Rogers network. Most of us pay attention to these because of the continued storyline, animals or music associated with these commercials. Bell doesn’t have any particular commercials that stick out in my head. Does this put Bell behind the other 2 in  terms of competitiveness of or brand awareness? I don’t think so. Even carriers new to the scene such as WIND mobile will become competitive without television commercials. Most people will shop around for the best deal before deciding on a carrier. Running expensive commercials is not the way to go. How many people will be swayed by a commercial these days? Many people just record shows and fast forward through the commercials. Only live events (sports, news, etc.) have commercials that are actually being watched by the majority of viewers. Yes, business users are more likely to be with Rogers (usually a company plan, not due to consumer choice), but the average person really doesn’t have a reason to sign a 3 year term with Rogers. Yes, you get a free phone or whatever the promotion is, but per month value usually isn’t quite as good as others. Isn’t that what it’s all about? Creating value for consumers?

Sidenote: If Google can find a way to make their online phoning thing on Gmail work with devices like the iPod touch or Samsung’s version of the iPad (the name doesn’t ring a bell right now, not a good sign if they want to avoid being in the forgotten category), competition will be even more fierce. Does this create more value for consumers? I think so.

Telus Bunnies

On an unrelated note, I just wanted to point out how the Canucks as a business really don’t have to advertise. Fans do it for them. newspapers do it for them. The news does it for them. The radio does it for them. Demand for merchandise and tickets skyrockets. Sounds a great business to own? Phoenix Coyotes anyone? I really don’t understand why the coyotes don’t move from Phoenix (in a busniess perspective). Why advertise and give out free tickets in Phoenix when people in Vancouver would be willing to go to Seattle just to see the same event? I know it’s more complex, but losing money in Phoenix really doesn’t make much sense at this point

I finally caught up on the readings from the textbook (much easier to read than HR). I noticed the “Got Milk?” campaign on a page and decided to make my second blog post about it. If you think about it, the idea is somewhat similar to the “Baby Carrots” campaign. Both are taking on the huge unhealthy markets in their categories. The carrot farmers are taking on the junk food industry while the dairy farmers are taking on the soft drink industry. This person wrote an entire analysis of the “Got Milk?” campaign. http://marketing-case-studies.blogspot.com/2008/04/got-milk-campaign.html An interesting point in their case study is that “According to the U.S. Newswire, 9 out of 10 Americans could identify the [Got Milk?] phrase in 2003”. I guess the “milk” part kind of gives it away, but that is still a pretty high percentage. The campaign uses celebrities, athletes, and well known animated characters in their ads. Other companies also use celebrities in their ads. Razors (Roger Federer, Tiger Woods), makeup stuff (probably way too many to list), Clearly Contacts (Trevor Linden), etc. The difference here is that the consumer feels better about following a celebrity’s good-for-you lifestyle rather than using the same razor as Tiger Woods (Well, some people might still look up to him). This approach pretty much hits all of the target groups. I think that many of those under the age of 13 (well, you could probably raise this age a bit) look up to someone from the mentioned groups. If marketers grab customers when they’re young and they stay lifetime customers, it is worthwhile for the dairy producers. In this case, most people already drink some milk. The campaign seems to be encouraging people to drink more milk and to substitute away from other alternatives. When you’re at home and milk is in the fridge, you might chose to drink it. Fair enough. But when you go out to eat or just need to buy a drink on the run, milk usually isn’t the first choice. Something to consider next time you buy lunch. I guess the biggest problem with milk outside the home is the fact that it needs to be drunken relatively fast compared to other drinks (perishable).  The nutrition facts are very good. Even chocolate milk is better than most of the alternatives. The list of well known endorsers of the campaign is huge. http://en.wikipedia.org/wiki/Got_Milk%3F. If I was well known, you could add me to that list.

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