Monthly Archives: October 2016

The first impression when someone mentions keywords like “business”, “corporation”, or “marketing” might be an image of a stereotypical group of snakes-oil businessmen gathered at a meeting, discussing ways in which they can trick the money out of the customers’ pockets. Whether or not that is your current impression, there always seemed to be an air of unethical behavior that surrounds the idea of capital markets and business, due to its prioritization of generating profit.

And businesses are entirely aware of this situation.

That is why companies, such as TOMS, that generate revenue streams from social responsibility are successful. Reading my peer, Sofia Martinez’s blog post on TOMS induced a curiosity in the emerging ethical businesses, which claim to be brands for humanity, evident in Sofia’s comment that TOMS’ business model of ‘one for one’ accounted for the majority of its popularity. A particularly applicable phrase was, “[TOMS] has appealed to a new market where ethically responsible consumers choose these … shoes because they feel like they are being part of this social cause.” The subtlety behind the words “feel like,” foreshadows the cons of these businesses that capitalize on consumers’ desire to feel justified in their purchases. TOMS Shoes make it easy for the customer to forget that they are a business, and perceive them as a fundraising company dependent on charity―an intelligent way to position themselves compared to other shoe companies.

Businesses are quick to move as they notice a new way of marketing, in which philanthropy can be capitalized upon. What happens when other businesses are a carbon copy of your own? Harvard Business Review’s Umair Haque’s post on this exact situation introduces Pepsi Co. as an example. He proposed the idea of businesses moving from “great” to “good” due to this concern of duplication in markets. Pepsi Co. is a “great” company in aspects of generating revenue, and scale of operation, so why should it go from “great” to mediocre? You might have guessed, “good” means something else. It embodies social responsibility, and humanitarian causes; intangibles that many consumers are far more concerned of than before. There are many companies selling sugar water out there, and most of them more or less taste the same. Instead, businesses must be the ones to give consumers a reason to purchase.

Pepsi Co. employees volunteer around the world. Source

Does business smudge the line of real altruistic behavior? There is no definite answer. Being “good” is the new rule to survival. It is imperative for businesses to understand that customers no longer choose them solely for their products and services, but for their values. Personally, I don’t see harm in practicing ethical businesses if consumers’ money is going towards the cause the business claims it to be.

Word Count: 450

Sources:

Haque, U. (2010, February 03). The Great to Good Manifesto. Retrieved October 30, 2016, from https://hbr.org/2010/02/great-to-good

Kate. (2012, April 16). TOMS Shoes: Doing More Harm than Good? Retrieved October 31, 2016, from https://bizgovsociii.wordpress.com/2012/04/16/toms-shoes-doing-more-harm-than-good/

In high school, I found myself asking the same question as my peer, Prakruti, why is Starbucks so successful? The drinks were delightful, but product simply isn’t enough for any business to expand to this size.

My curiosity ultimately led me to submit a resume to a local Starbucks store, and though I was only a barista, I had a peak into the organizational structure of Starbucks that was systematic and efficient. Management goes from a shift supervisor making sure a barista performs cycle tasks on time, to a district manager, coming in to inspect for cleanliness. And while I strongly agree with Prakruti that employees are highly valued in Starbucks (there were additional benefits, such as a free pound of coffee a week), the company’s ability to retain and grow customer loyalty is its most critical feature in distinguishing itself from other coffee chains–its points of difference. The idea that the “customer is god” deeply rooted in Starbucks culture. However, this slogan only sets the bottom line for how customers should be treated. It’s not just about customers being right. Greeting consistent customers by their name, learning names of new customers, having small talks, or even just simple grin and a “thank you, have a great day,” are encouraged to manifest a sense of attachment in the customer. Starbucks keeps their source of profit close to them.

source

The Starbucks’ Star Rewards program sends emails about promotions to members to help them earn stars faster, which means shorter time to a free food or drink once they collect 125 stars. And though Starbucks could profit from higher traffic if they were to lower the price of their drinks, Starbucks chooses to uphold its own reputation and “treat” their customers to free drinks. This concept of “free” is much more powerful in the mind of a customer than say, a cheaper cup of coffee.

The company also stays in check with its customers’ experience at Starbucks stores. A survey will automatically be emailed to the customer’s registered email if they paid with an activated Starbucks card. The survey is like Starbucks’ own primary market research, in which they ask customers to rate their experience at Starbucks from a scale of 1 to 10. Upon completion of the survey, Starbucks awards the survey taker with bonus stars, a token of gratitude for the customer’s time.

source

And while other coffee stores around have been copying this form of operation that Starbucks practices, I do find myself biasing Starbucks more, because Starbucks was indeed the first coffee company that implemented such a sophisticated, well thought out loyalty program, and gained widespread popularity. Because they are first in the mind of many customers, Starbucks is irreplaceable.

Word count: 449

Five years ago, when the iPad 2 just came out I remember seeing long lines outside of every Apple location in my home city, Calgary. A few years later, the iPhone 7 is released and there are long lines outside of Apple stores again. What changed? Definitely not the long lines, but do the lines represent the same thing they did five years ago?

Before I continue, imagine grade seven me in the back of the car, holding a packaged iPad 2, brain buzzing with the thought of simply having an iPad. Though unable to pinpoint the exact source of excitement, I nonetheless knew that this excitement would not be so augmented if I was bringing home some other device from another company. For Apple, the purchasing experience, the packaging, the product, fit together seamlessly. Waiting in the line, I saw others just as excited for the new launch, and unwrapping raised goosebumps because it was just so fresh. Operating the iPad was dream-like. Unfortunately, these days are no more for Apple fans like me after Jobs’ passing. Apple’s lifetime can be clearly divided into “Jobs-days” and “no-Jobs-days.” If I could characterize each ‘era’, then I would note that “Jobs-days” constantly kept consumers feeling as if they themselves, were at the very edge of technological innovation. In the beginning of “no-Jobs-days,” people were quite forgiving when the iPhone 5 looked and operated borderline exactly the same as the iPhone 4S. A few years later, we would think that Apple has recovered from its shock, but as former The Wall Street Journal reporter Yukari Kane puts it, “the well for ingenuity has run dry.”

iPhone models list.

We start to see Apple being unable to live up to its own hype that it has accumulated for itself during the “Jobs-days,” and this is certainly obvious in the consumer response for the iPhone 7. The iPhone 7’s dual-camera, which was advertised as one of its top selling points, was merely dismissed as being ‘good’, as there are other smartphones in the market with comparably better cameras. So to answer the question, what are these long lines now, if before they represented an eagerness for innovation? To me, customers want to believe that Apple is just as inventive as before, so they purchase the product anyway. But this expectation is often unmet, the latest example being the iPhone 7, and consumers just treat it as any other old product they buy. Though Apple’s revenues have risen since Timothy Cook became CEO, the company is in danger of losing their reputation for being innovative if they fail to once again lead technology advancement. Apple used to be very distinguishable from other smartphone makers. Compared to before, Apple is now settling for less.

Word Count: 449

Resources:

Spence, E. (2016, September 30). Apple Loop: New iPhone 8 Leaks, iPhone 7 Plus Camera Defeated, Fixing Your Broken iPhone 7. Retrieved October 02, 2016 

Manjoo, F. (2014, March 20). Apple After Jobs: Pretty Much the Same as Ever. Retrieved October 02, 2016