In response to my friend Judith Yeo’s post on Airbnb, I think that the company presents interesting value propositions yet uncertainties in the consistency of the product may lead to consumers staying away. One of Airbnb’s strengths is that it provides customers with a cost-efficient alternative to staying at a hotel. However, there is no way to know what kind of state the apartment or home will be in, creating uncertainty in the mind of the consumer as to how comfortable they will be, especially if they are in a foreign country. There is also the added risk of safety, given that the client is in another person’s home that they don’t know.

Overall, the value propositions that hotels provide will ultimately lead to long-term stability over a company like Airbnb. Hotels such as Hilton and Intercontinental create a customer relationship whereby the customer can expect to receive consistent cleanliness, safety, comfort, service and all the other aspects that hotels provide. A company such as Airbnb, although offering lower costs, cannot ensure consistency across these key aspects of hospitality, making their future uncertain.

Posted is the Hilton website where they list their worldwide locations. My point is to demonstrate how Hilton, as a global brand, creates value by ensuring consistency across their vast portfolio of hotels.

Hilton Locations

Recently, the company Snapchat has grown to immense popularity and it has been reported that it received offers from Facebook and Google for $3 billion and $4 billion respectively.

Snapchat as a company does not have advertising. Unlike Facebook, Twitter and even Instagram, its platform is very simple, with no place for advertisers to post material. This leads to the question, “Why would Google and Facebook offer so much for a company that isn’t making much money?”

My analysis of this question is simple. Snapchat is seen as an opportunity precisely because of its simplicity. One of its value propositions is that it creates a very simple and easy way of messaging friends that is not permanent. Youth are interested in it because unlike Facebook and Twitter where posted material can result in embarrassment, controversy and even bullying, Snapchat creates a fun, non-threatening way to communicate. Snapchat also has the added value proposition of not having advertising, eliminating the messages that constantly bombard other social media platforms.

Facebook and Google see this simplicity as an opportunity. They understand that preferences amongst social media users are always changing and that consumers always have the option to spurn one platform for another. Clearly Snapchat, through its product differentiation and simplicity has become a platform that people both now and in the future could prefer over giants like Facebook and Twitter. Perhaps that is why it has become the $3 billion happy ghost logo.

Here is a great article on this current topic: http://www.forbes.com/sites/davidwismer/2013/11/17/snapchat-how-to-make-3-billion-or-was-it-4-billion-disappear-and-other-quotes-of-the-week/

Netflix is a company that has unique value propositions which allow customers to view TV shows conveniently for a monthly rate. But a common question is how exactly Netflix decides which shows to include in their monthly program set. In his business blog for Maclean’s magazine, Nick Taylor-Vaisey reveals how Netflix collects data from file-sharing websites to determine what people are watching, therefore allowing them to purchase the most popular shows for their customers.

Although seemingly untraditional, this method is indicative of a management information system (MIS). By using a measurement strategy to gauge customer interest in a competing sector, in this case pirated television shows, Netflix is able to gather information and make a decision based on the data. This strategy is especially effective because Netflix is looking at websites where potential customers are going to watch a specific show. The data collected by this system is accurate because instead of gauging consumer interest through experiments or surveys, it looks at what people are actually looking for online.

The case shows that this strategy opens up new channels in which Netflix can reach its customer segment, which are people who want to watch television shows on their own time. It opens channels because Netflix can reach customers who might otherwise watch their favourite shows via file-sharing websites, enticing them to use Netflix instead and possibly become interested in other shows that Netflix offers.

Although strong company culture is an ideal that is always good to strive for, isn’t it best when this culture translates into a more successful business? A company that has done this successfully is Aldo shoes. Aldo is a good example of how company culture creates success through these three steps:

1) Providing tools and resources for their employees – Aldo has wellness programs to keep their employees healthy and happy. They also host annual social events to demonstrate their appreciation for their staff.

2) Using these tools and employment incentives to retain staff – Aldo has created a system whereby employees have chances for advancement. This reduces employee turnover and absenteeism. It also creates a system where senior management is comprised of people who have moved up in Aldo.

3) Using employees as recruiters for future employees – Generating word of mouth referrals shows that people are happy working at Aldo and want to recommend it to the people that they know. It also brings people into the company that recruiting employees think will be a good fit and engage well with the present culture.

Now how do things relate to a successful business? Well Aldo is in a people-oriented business and hence the employee is a large part of the customer experience. By creating a positive employee environment, Aldo motivates their staff to do perform their job at full effort and treat their customers well. Just like they’ve been treated.

Check out this Financial Post article for a full description of Aldo’s culture: http://business.financialpost.com/2013/02/04/aldo-stays-true-to-the-values-of-compassion-ethics-and-social-responsibility/

Although we sometimes take it for granted, in countries where water is scarce, it can sometimes be difficult to have enough to properly bathe oneself. Ludwick Marishane a recent commerce graduate at the University of Cape Town in South Africa came up with a solution.

He created a product called DryBath, a moisturizing gel that is applied to the skin and cleans 99.9% of germs without the alcoholic smell of hand sanitizers. This form of social entrepreneurship started as way for Marishane to avoid the hassle of taking a bath, but has turned into a company with a strong social objective. Although Marishane charges for sachets of DryBath and sells to corporations, airlines and hotels, he has also has benefitted those in his country who have limited access to clean water. Through using DryBath, people are able to maintain proper hygiene and save precious water for other purposes, preventing disease and preserving time spent fetching water.

Social entrepreneurship strives to make a profit while being committed to a social cause. DryBath has effectively done that by selling a product that can be effective for corporations needing it for convenience, but also incredibly crucial to poor communities in need of alternative methods of bathing. As it continues to make a profit and grow, look for DryGel to continue to positively affect people in need not only in South Africa, but in places all over the world where water is scarce.

Here is a short TED talk about DryGel:

And an article outlining its basic principles:
http://www.southafrica.info/business/trends/innovations/drybath-100113.htm#.Uom7ZxaE7ww

I recently read my friend Angelli Dimatulac’s blog post about an ad created by Chipotle Mexican Grill. I agree with her that the ad lost me at points, but primarily because of its complexity rather than its content.

At times, I found the ad veered away from its central purpose, which was to promote Chipotle’s commitment to natural foods. The inclusion of the scarecrow, although endearing and fun, make the message more complex than it should be and at times I wasn’t even sure what the ad was for. The customer segment that this ad is targeted for are fast food consumers who are tired of heavily processed foods that are normally associated with companies like McDonald’s and Taco Bell. This ad serves to introduce Chipotle’s value proposition of providing a more natural alternative to traditional fast food and is indicative of their strategy for differentiation. However, the length and complexity of the the ad serve as more of a distraction in the minds of the audience.

An alternative strategy in marketing that I argue is more effective is Minute Maid’s Simply Orange ad. These ads are similarly targeted at a customer segment looking for healthy, natural foods for which they know the ingredients. Minute Maid does this by emphasizing that their Simply Orange juice has nothing else but oranges, reassuring customers through a very simple ad that the product contains no modifications. This strategy of advertising a value proposition is, I argue, a more effective way of differentiating the product in the mind of the customer and keeping them focused on why they should purchase it.

Here’s the Simply Orange ad: