Julie Buiza's blog

A blog entry from the businessethicsblog by Chris MacDonald, “Ethics of Shoe Shine Pricing” commented on the $6.75 price of a shoe shine, and how that encouraged customers to give $10 and leave the rest as tip. Considering that is nearly a 50% tip, Chris wonders whether the price was set with the amount of tips in mind. He mentions that surely, if the price was $4.50, people would pay $5 and leave 50 cents as tip, a decent 10% tip.

In our marketing class today, it was pointed out that pricing is one of the most visible marketing components, resulting in instant backlash in case consumers feel that pricing strategy is unethical. So is setting the price to encourage people to tip an unethical marketing strategy?

This is a grey area in marketing, with no right or wrong answer. In my opinion, I do not believe it is unethical since it appears that the people who set the price have no actual intent to harm customers. They still have the choice on how much money to give as tip, and they are not coerced to give a certain amount of money. Of course, it is more convenient to say “Just keep the change”, but that is ultimately up to the consumer.

Well, given the size of this gigantic car, you can’t really hide a Hummer. However, what I’m referring to is the hidden (or not so hidden) agenda of placing Hummers in movies or television shows in order to promote their product and brand. For example, in CSI:Miami, the lead character Horatio Caine could be seen driving a Hummer. Sure, you could think that it is fitting to have a tough car like a Hummer in CSI since it could probably provide protection that the detectives need from bullets, but more likely, Hummer paid or provided the car so that it could appear in the television show and market their product to consumers.

There are numerous examples of product placements around, such as from this aptly named blog, The Product Placement Blog. Personally, I don’t mind having product placement in these movies and television shows as it creates familiarity and makes it feel more as if it was happening in everyday real life. However, I hear complaints about how product placements turns these programs into commercials.

The way I see it, if they can place the products in such a way that viewers can’t really notice it, so that it does not detract away from the story or scene in any way, then I don’t see a problem. But if it becomes too obvious, such as “These (insert brand name) are so great, everyone should buy them!”, then I too would be annoyed.

My friend, Jeannie, recently gave me with an Ugly Doll action figure. Surprised, I asked her what the occasion was, and she said there was no reason, other than that the box caught her eye while browsing through Chapters bookstore. The package was just so cute, she had to buy it!

http://www.parrygamepreserve.com/

The marketers at the Ugly Doll company must really know what they were doing, to be able to draw consumers in to buy these action figures from the packaging alone. I was surprised to find out that they sell for about $8, especially since the box is not see through, and so consumers do not even know which action figure they are getting. Perhaps that is part of their marketing strategy, getting consumers to buy many boxes in order to be able to collect them all.

http://www.myplasticheart.com/

The packaging is, admittedly, cute and sarcastic. Other than displaying information on the packaging, it also serves to protect the product from damage and dirt during transportation. However, by the looks of the Ugly Doll product line, it looks like these action figures have had some distortion already done to them! Nonetheless, the Ugly Doll has proved itself successful since its beginning in 2001. In 2006, Ugly Doll was even awarded the Specialty Toy of the Year award by the Toy Industry of America. Yet again, this is further proof that marketers can add value to anything, even ‘ugly’ dolls, which in fact can be perceived as cute!

As a barista working at a local Vancouver coffee company, I am still often surprised at how much people are willing to spend on coffee. I get customers paying $4 for a medium vanilla latte, and often, they come back in the same day to get another one.

Why are people willing to pay so much for their cup of coffee? I certainly wouldn’t pay $4 for a latte, but I admit that I am a bit biased. Despite working in a coffee shop, I prefer tea and therefore do not understand the “I need my caffeine” antics of these latte lovers.

Perhaps it is for status, and the image they want to be perceived. Holding a cup of coffee in one hand from a local coffee shop instead of Starbucks maybe gives off the image of being different, not being part of mass consumerism.

Maybe it is for the experience of watching talented barista (ahem, like me) make their lattes, customized to their preferences and served with a friendly smile. Recently, I finally learned how to make latte art, and watching the customer’s reactions when they see a leaf or a heart on their lattes definitely shows they are happy to get value from their purchase.

Each customer is different, but sure enough, they are paying the price that they perceive is the value they are getting back in exchange. It does not matter that they could brew their own coffee for less than a dollar a day and get the same amount of caffeine. They believe the $4 lattes are worth it, and that’s what keeps them coming back for more.

Michelle Wan’s post, Branding of Photography, discusses the research she made in looking for the best prices for a camera lens and the factors which influenced her purchasing decision, such as celebrity endorsements.

http://www.dslrphoto.com

Her entry made me think about my own research I made last year, when I had my eye on the Nikon D90, a DSLR camera which cost about $1300 at that time. I spent hours doing research, going online and comparing prices in different camera stores such as big-box stores such as Best Buy, and smaller specialty camera stores such as Broadway Camera. I even looked into Craigslist, and found one selling for as low as $800… in San Francisco.

Seeing all the available lower-price alternatives made me more aware of the choices I had, and in fact, increased my price sensitivity. I wasn’t willing to buy the camera until the price decreased from $1300. Looking back, I realized how affordable DSLR cameras have become over the past couple of decades. What used to cost upwards of $3000 can now be bought for less than half the price. Technology, I’m sure, is a big factor in the reduced prices, but I believe that the Internet as well as the growing amount of consumers who cross-shop, those who are willing to pay a high price some products while also patronizing low-priced merchandise.

Sure enough, as with all electrical equipments, the price decreased, and after four months of visiting the camera store on a weekly basis to hold the camera in my hands (don’t judge), I was able to bring a Nikon D90 home and call it my own.

Jeannie Tse recently posted an entry, “The Purpose of Car Ads?”, discussing how car companies ensure that their image and brand are highlighted in their commercials in order to differentiate themselves from other competitors. She included a youtube video of a car advertisement for Chrysler, which I too found very intriguing.

The first thoughts which came to mind after watching this video were the amount of affective components used to influence the audience. Although I am not from Detroit, I felt the national pride they were attempting to build, in order to gain support from Americans to buy American made cars. In addition, by having Detroit-born rapper Eminem in the video, it further engrains the idea that Chrysler is “imported from Detroit”.

However, I question the idea of emphasizing “imported from Detroit”. Jeannie mentions that “it was an ad that was targeted towards Americans, and specifically citizens from Detroit”. The advertisement starts off by asking, “What does this city know about luxury?”, highlighting the history and “know-how” of the city of Detroit in relation to the brand. What does this exactly say about the car, though? And how will they expand this idea to Canadians?

Groupon, a popular website which offers daily deals to major geographic markets all over the world, has struck up a controversy due to its Super Bowl Ad, which spotlights Tibet’s social problems in a serious manner, and then dismissing the problem by saying how beneficial it is that they received a deal from Groupon which gets them Tibetan food for half the price.

A blog entry on Socialnomics phrased it well when it said that “a social media company [Groupon] didn’t understand the social media backlash it could receive by running a culturally insensitive advertisement during the Super Bowl”. Despite a letter from Groupon CEO explaining the reasons for running this commercial, claiming that “they would bring more funding and support to the highlighted causes” by raising awareness, numerous people upset by the trivial nature of the commercial continue to voice their complaints on twitter, facebook, and other means of social media.

As a regular Groupon customer, I was shocked to see the commercial and simply could not understand why they had to make the ad in that fashion. Who was their target market, and why did they think that poking fun at Tibet’s problems would entice them to buy from Groupon?

Word of mouth is a powerful social influence, which can be a good or a bad thing. Sure, perhaps the commercial was a spoof which should be taken light-heartedly, but was it worth the risk for Groupon to potentially gain a bad reputation? I don’t think so.

It amazes me to see just how much marketing affects our everyday actions. From deciding between choosing which alternative brands or stores to purchase from, to the different factors which affect the consumer decision process.

Here’s a quick example, in everyday language terms:

Today, I had a sudden craving to eat fries.  As I headed to the food court with a friend, I ran through a list of fast-food places to grab fries: McDonald’s, Wendy’s, Burger King, or New York Fries. Immediately, I crossed off Wendy’s and Burger King due to unsatisfying past experiences eating there. So, I was left with McDonald’s or New York Fries.

strategyonline.ca

At that point, I really just wanted to eat something and was about to head to McDonald’s since it was cheaper, but as I passed by New York Fries, one of their promotions caught my eye and stopped me in my tracks. They were advertising one of their new products, butter chicken poutine! “A bit odd,” I thought, “but I wonder how that tastes like?”. As I stood there reading their menu, the woman at the cash register greeted me hello with a big smile. Taken by such a friendly person, then and there I decided to buy fries from, well, New York Fries.

accesswinnipeg.com

Now in marketing terms:

I had a need, and I had to satisfy it (and fast!). Going through my retrieval set, which were the stores I could purchase fries from that I could bring from memory, I focused only on my evoked set, which were the subset of stores which I would consider buying fries from.

The promotion at New York Fries then caught my eye, and in addition to the cashier offering friendly customer service, influenced my decision process. Hook, line, and sinker.

Every new year, I aim to become more fit as my New Years’ Resolution. And every new year, I buy items such as running gloves or headbands from LuluLemon. Sounds like a trend.

So, how exactly does LuluLemon help me to become fit?

It begins with the image that LuluLemon conveys. To extend beyond being just a clothing store which sells mainly yoga or exercise wear, LuluLemon creates value for consumers by conveying a healthy lifestyle and a community leader. Acting as a sort of health guru, they instill this idea by delivering uplifting messages to consumers by printing them on the bags and water bottles that they sell. They promote sustainability, creativity, and self-confidence.

With the goal of affecting consumers’ affective behaviour, their advertisements portray images of smiling, happy, and fit people in order to cause consumers to feel motivated and encouraged to aim for a healthier lifestyle, in order to become that same happy person on their ads. Essentially, by giving advice through their advertisements or goods, they make consumers feel good when they buy LuluLemon products because wearing them shows that they have made a commitment to living a balanced lifestyle.

So, they don’t necessarily help me to lose pounds, per say, but I like to think that whenever I wear LuluLemon clothing, I’m getting closer to reaching my goal of having a healthy and fit lifestyle. It motivates me by making me think, hey, if other regular people on these advertisements can do it, so can I!

However, after a couple of months, they end up collecting dust in the bottom of my closet. Yet I find myself coming back for more, and I have LuluLemon’s strong brand image to blame.

Picture from technorati.com

A recent entry on Duct Tape Marketing blog recently asked the question, Could You Sell Your Tweets? I know what you’re thinking, and no, it isn’t talking about getting paid $200 to tweet about how much you love a certain brand. Instead, it describes how to find ways to make your Twitter activity and tweets more valuable. By using tools such as Twitalyzer, Twitter users can get a sense of how much impact you and your tweets have based on about 20 metrics. According to Twitalyzer, impact is defined by a combination of the following factors:

• The number of followers a user has
• The number of unique references and citations of the user in Twitter
• The frequency at which the user is uniquely retweeted
• The frequency at which the user is uniquely retweeting other people
• The relative frequency at which the user posts updates

These factors, in essence, describe how good of a relationship that Twitter user (or business) has with their follower (or consumer). In this value-based era, creating long-term relationships is important in order to turn new customers into advocates. Signing up to create a Twitter account, following a couple of people, and making a Tweet once in a while will not cut it. As more and more businesses turn to Twitter as a tool to reach out to consumers, they need to engage consumers in order to create interest in what they have to offer. By being an active user on Twitter, they are not only creating an online presence, they are creating value for their consumers by having a relationship with them.