Kevin Leung's Blog

As demonstrated by the various presentations that we saw in Comm 101, social media is without a doubt a useful tool for marketing a business, but too many people see social media as something which will magically bring new customers to a company.  That is simply far from the truth.

Mashable.com acknowledges this error in thinking by posting an article which speaks about four common misconceptions about social media:

1. Small Businesses Must be on Social Media
2. Set It and Forget It
3. Word of Mouth Presence Isn’t There
4. Social Media is Only for Broadcasting Messages

In summary, this websites tells the reader that social media should not be the one and only tool that small businesses should use in attempts to gain customers as there are still many people who do not use social media.  It also reminds the reader that an entrepreneur or marketer cannot simply set up pages on social media sites and assume that people will automatically visit them.

Overall, I agree with the fact that social media has become a great tool for businesses to gain brand awareness, but it is only useful to those who spend time to use it properly.

No matter what she is doing, from school teacher, to stay-at home mom, and finally, to entrepreneur, Julie Clark focuses her work on children.  She used her love of infants to start up the Baby Einstein Company in 1996.

With an initial investment of a mere $18,000, she created a company which is now worth more than $400 million in sales.  What Julie Clark did is quite remarkable.  Her Baby Einstein DVDs were initially just a small project which was marketed by word-of-mouth by mothers who loved the product.  Now, it’s internationally known.

Julie Clark’s success as an entrepreneur was recognized in 2009 when she was named Entrepreneur of the Year for her product, but she did more than just create a product.  She had successfully made a new market for baby videos.

Julie Clark is simply the definition of an entrepreneur.

Halls®, a subsection of Cadbury, is widely known for its cough drops, but in May 2009, the company launched a new product, Halls Refresh.  This product seemed interesting when they first advertised it on television, but after a period of time, the product seemed to be forgotten.  Recently, though, I once again found advertisements for this product which had an image of Halls Refresh placed beside an image of Halls cough drops, and it explained how Halls cough drops are used to relieve one’s throat whereas Halls Refresh is more comparable to a treat.  I quickly realized that Halls was using this ad to save themselves from the “Free-Ride Trap” as described by Ries and Trout, authors of the book Positioning. As explained by these two individuals, companies choose to launch a new product with an existing brand name in order to not have to build a new brand, but this is unwise as consumers already have the brand name positioned in their mind.  In this scenario, consumers think of cough drops when they see Halls, thus the company is attempting to differentiate Halls from Halls Refresh.  Overall, a separate brand name would have prevented all the trouble.    

http://www.quickmba.com/marketing/ries-trout/positioning/

In September of 2009, Sony released the PS3 Slim.  As the name implies, this improved PS3 is smaller than it predecessor, but it is also remarkably more energy efficient.  With these new features, one would think that Sony would raise the price of the console or at least keep the price as is, but instead, the company decided to drop the price.  Why would Sony do this?

Prior to September 2009, the least expensive PS3 was priced at $399 which was $100 more expensive than its competitors, Xbox and Wii.  Similar to the Lieber Light case, Sony had to decrease its price in order to retain market share.  No longer can Sony sell their product at premium prices as the quality of other consoles have reached parity with the PS3.  In order for the company to stay competitive, they must have competitive prices.

http://www.theglobeandmail.com/news/technology/personal-tech/controller-freak/ps3-goes-on-diet-costs-less/article1256143/

http://www.theglobeandmail.com/news/technology/sony-to-cut-price-for-ps3/article1256192/

During the last two decades, it was reasonable to assume that foreign automobiles have a higher quality than American vehicles, but more recently, their image has ameliorated.  This improved image is due to their perseverance and effectiveness in taking action.  For example, General Motors has paid off 8.4 billion dollars of government loans five years early which certainly improved consumer confidence in their company.  Also, as shown by a study from J.D. Power and Associates, American vehicles ranked higher in durability and reliability than Japanese vehicles due in large part to the major product recall from Toyota.  This certainly demonstrates that the position of a company can improve from the betterment of the strengths of a company, but also the addition of weaknesses of competitors; therefore, in order to accurately predict whether or not a company can be successful in the future, we must not only look at a business’ own SWOT analysis, but also the SWOT analysis of competitors.        

http://www.businessweek.com/autos/autobeat/archives/2010/04/detroits_opportune_moment_american_cars_are_better_than_asian_cars_americans_say.html

http://www.huffingtonpost.com/2010/06/17/american-car-quality-tops_n_616592.html

Bulgaria, one of the poorest nations in the European Union is finding difficulty in recovering from the recession.  Their government, though, is knowledgeable of the fact that a majority of their citizens are regular smokers, thus they plan on increasing national revenue by placing excise taxes on cigarettes.  This sudden rise in price has outraged citizens and has led them to the black market in order to more affordably manage their nicotine addictions.  More importantly, it has effectively decreased the revenue of the government.  Certainly, this proves that their government should simply let the “invisible hand” guide their economy out of the recession as their efforts have only placed another threat to legitimate cigarette distributors.  It also seems unethical that the Bulgarian government is taking advantage of an addiction.  It is reasonable to put excise taxes on cigarettes for the purpose of creating an incentive for citizens to stop smoking (similar to how Russia placed excise taxes on alcohol to decrease alcoholism), but Bulgaria’s increase in cigarette costs are simply due to a desire for attaining more revenue.

http://www.theglobeandmail.com/news/world/europe/balkan-smugglers-ramp-up-as-residents-dodge-cigarette-tax-hikes/article1687290/

Ryanair’s questionable business model which  goes a great length to minimize costs reminded me of a news segment which I saw years ago.  In 2005, W-FIVE of CTV news investigated the safety of U-Haul vehicles, and they found that many of them did not meet provincial safety standards.  During roadside safety checks made by the Ontario Provincial Police between the years 2002 and 2004, almost half of the U-Haul vehicles which were examined failed the inspection.  According to CTV news, there has been at least one incident where the back tires of a U-Haul vehicle came “flying off” when the vehicle was traveling at a speed of 100 km/h.  Certainly, it is important for a company to minimize costs, but at what point does it become unethical?  I believe that the well-being of customers should be valued more than profits, thus U-Haul is wrong for providing unsafe vehicles.  They are simply violating the trust which their patrons have given to them.  U-Haul must make a greater effort in maintaining their vehicles because the lives of their customers are worth much more than $19.95.

http://www.ctv.ca/CTVNews/WFive/20051021/wfive_uhaul_051021/