• Recently Written

  • Four Heads Are Better Than One
  • Customers as Logistics Agents: Walmart’s New Idea
  • Buick Shifts Gears
  • Despite Decline, LEGO Rebuilds
  • Hocus Pocus Focus Groups
  • Lose Weight Without Exercising Ethics!
  • Response to “Beating a Dead Horse” by Conrad
  • Response to “Money Killed the Electric Car” by Curtis
  • Money Can Buy You Class
  • Chevy Volt Supply Chain Needs a Jolt

• Categories

  • Business & Government
  • Business Ethics
  • Financial
  • Marketing
  • Technology
  • Uncategorized

• Archives

  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • November 2011
  • October 2011
  • September 2011

• Blogroll

• Admin

  • Register
  • Log in
  • Wordpress
  • XHTML

  Search

As I retire from Tamar’s Marketing Firm, I would like to compliment my classmates and the boss herself for a great semester.

In all seriousness, 296 really did emulate teamwork in the corporate world. Groups were pre-selected and had to work on several assignments together as opposed to just one. This required patience and flexibility and the ability to get along well. In the end, my group was able to produce work of such high quality that it even met TMF’s standards. That being said, we could have benefited from more collaboration and less rigid division of tasks. The course material stresses the importance of all corporate departments working together, and this proved to be very true.

For this reason, one cannot call one area of business less important than another. What good is an accounting department if all it sees is red? How effective can a marketing division be if the logistics people cannot deliver the product in time? How can a company prosper if it’s financiers suggest projects that aren’t compatible with its culture or vision?

This course has made me realize how important the job of a marketer is. Major successes aren’t possible without creativity and/or amazing luck. In the business world, marketers have the most of the former. I like to think I will have a lot of the latter.

 

 

It’s no secret that Walmart saves its shoppers lots of money, but according to Dale Buss’ brandchannel post, the retailer may also start paying them for making deliveries.

Currently, Wally World’s online orders are filled at the nearest store, and then delivered by FedEx to the customer’s address. Under the proposed supply chain, those deliveries would instead be made by fellow Walmart shoppers who would volunteer their time and gas in exchange for store credit.

The idea would certainly “save money”, both the company’s and shoppers’, but will customers “live better”?

Buss warns of problems that could arise and is not sure if “crowdsourced” delivery is the best solution for the innovative retailer, and I agree with him, but not for the same reasons. He names sticky fingered drivers and customers’ unreliable cars as the main pitfalls, failing to realize the take-out food business has proven that, by and large, amateurs being paid next to nothing can be trusted with small deliveries.

However, while theft and untimeliness can be reported and dealt with through measures such as charging a penalty to the deliverer’s credit card, what cannot be remedied is the inconsistent service online shoppers would receive. This is in conflict with the strong corporate culture Walmart instills in all of its employees. Moreover, one must remember that online shopping is done not only by lazy young people, but also by the elderly and infirm who cannot leave home, and by those who live in remote locations. The former may feel especially vulnerable and would not appreciate having un-uniformed strangers showing up at the door, while the latter would probably have to wait a long time for someone willing to deliver to their address.

Walmart’s delivery idea would only stand a chance if measures were put in place to assure at least some consistency. While they’re at it, why not let customers volunteer to staff a few cash registers on busy days.

Daniel Barends’ blog entry about Blackberry’s brand repositioning attempts made me think of an even older brand currently reinventing itself. In both cases the idea is to attract new consumer segments, but can these brands really become everything to everyone, or will they end up meaning nothing to no one?

Not so long ago, the thought of driving a Buick would make many non-elderly people say “B-ew! ick!”. While I have always had a thing for large sedans (preferably with a vinyl roof and whitewall tires) General Motors agreed with those who saw a problem with the car division’s brand image. For the past few years, GM has used the 4Ps to reposition the conservative, affordable luxury Buick brand into a more youthful and up-market one.

Product

Recent additions like the Enclave, the new Regal, and the Verano are more compact and style-oriented than their predecessors.

Price

The use of price incentives has been much lower with Buick than with the other GM brands. In addition, low-price fleet sales to car rental companies have been greatly reduced in order to improve resale value and shed the “rental car” image.

Place

In 2012 Buick introduced new design and amenity standards for its dealerships. Over the next few years, it hopes to have most of its 1,900 Buick/GMC dealerships renovated.

Promotion

No expense has been spared in communicating Buick’s new image. Famous middle-aged people like Shaquille O’Neal and supermodel Marissa Miller have been featured in advertisements, all of which stress the innovative features and stylishness of the new models.

So far the repositioning has slightly reduced Buick’s average buyer age and has increased retail sales by 80% since 2010. As for those of us who miss the old Buick, there is still hope that vinyl tops will make a comeback.

For many companies in a declining product segment, simply staying in business is an accomplishment.

As physical toys are being replaced (like so many other things) by computer/tablet/cell phone screens, toy makers like Hasbro and Mattel are facing challenges. Americans per capita are spending 30% less on traditional toys/games than they did in 1998. To make matters worse, the new digital games market has proven to be much less profitable. Barbie must be losing her head.

But the news is not all bad. Proving that niche companies fare well in shrinking segments, children’s building block maker LEGO saw a 25% increase in revenue last year, thanks to a successful product line expansion. Furthermore, while several brands of dolls and action figures crowd store shelves, LEGO maintains an 85% share in the building block market. As a company with a highly unique product and strong brand, it has a better chance of surviving the segment shake up.

Meanwhile with brands like Parker Brothers and Milton Bradley, its a roll of the dice.

 

Millions of dollars spent on market research in the early 80s had the team at Coca-Cola convinced: people, especially the younger demographic, preferred the sweeter taste of Pepsi.

In fears of losing even more market share to its younger competitor, the beverage maker developed a new Cola that beat Pepsi in taste tests. The positive response from focus groups convinced Coca-Cola to abandon its original product in favor of the newly formulated “New Coke” in April 1985.

Unfortunately, as Coke turned sweeter, loyal drinkers turned bitter. Customers responded with angry phone calls and protests. Pepsi celebrated the move and ran advertisements claiming victory in the “cola wars” and ushering in “the Pepsi generation”.

 

 

 

 

 

 

 

 

 

By July, Coca-Cola had realized the inaccuracy of its market research and brought back the original formula.

So why was The New Coke a favorite in blind taste tests but not among real consumers? Firstly, they tested for only one variable: taste, while ignoring factors like strong sentimental value that contributed to sales. Also, taste testers only tried sips of each drink, which is not a realistic simulation of how the product is actually used. Lastly, the research did not differentiate between the more important opinions of loyal customers and those of occasional cola drinkers.

Marketers must make sure that their information truly is “The Real Thing”.

Second only to an interview with Lance Armstrong, the next least believable thing on TV are weight loss commercials. Manipulated before/after shots, exaggerated or false claims, and unrealistic promises have been used by diet marketers for years, but these advertisements can also be considered unethical for what they leave out. In the case of Jessica Simpson and Weight Watchers, it was her entire body minus her face.

In her September 2012 spot entitled Choices made 4 months after starting the program, Simpson, a singer who in recent years has filmed more informercials than she has music videos, announces “it’s working”. However her words are no more convincing than her sister Ashlee‘s lip synching, because she makes the claims without showing the world the evidence that lay just below her neck.

https://www.youtube.com/watch?v=gjIZPftTjbg

What was she hiding? Perhaps showing the new mother’s figure would have shown viewers that, as is the case with regular dieting, Weight Watchers may not be effective for everyone.

Another ethical issue comes to mind when one sees Jessica’s next commercial, in which she announces she has lost 50 pounds. While this may be the case, what isn’t mentioned is that Simpson was helped by high-dollar fitness trainers and nutritionists, something the average consumer does not have access to. In the ad, the former Pizza Hut and Proactiv spokeswoman also announces that she is pregnant, making her endorsement even less relevant since, according to the fine print, pregnant women are not eligible to join.

https://www.youtube.com/watch?feature=player_embedded&v=UxbTnr1Fw0k

Jessica Simpson’s Weight Watchers experience may not be a big fat lie, but one must cut through some fat to get the whole truth.

Conrad Wasalski’s post about the new warning labels that take up 75% of cigarette packages raises a valid point about the fairness of the policy. There are many unhealthy products, in fact, too much of anything can harm someone. So why are cigarette packages the only ones with these large and sometimes disturbing labels on them? Shouldn’t the government take up atleast 20% of soda cans to warn us of the potential for tooth decay? What about spinach, shouldn’t the public be warned of the risk of painful kidney stones? It has become common knowledge that smoking tobacco is unhealthy. To some regular smokers however, the benefits outweigh the risks.

Government propaganda is alive and well when it comes to the campaign against tobacco. A June 21st article in the Washington Times revealed that some the horrific images that companies were supposed to start placing on their own packages are fake. A US federal judge has since blocked the requirement on grounds that it may violate free speech.

All of this madness alone could make one need a smoke.

In his blog post, insightful business blogger Curtis Valentine comments on the failure of the EV1, General Motors’ first electric car. The futuristic two-seater inspired a cult-like following among the 1,100 EV1 lessees, who protested when, in 2002, they were not allowed to buy their vehicles out and were ordered to return them to be crushed. Curtis advances the theory that oil companies were behind the move, however there are other possible reasons. While the role of oil companies remains a conspiracy theory, the decision can be justified in other ways.

According to then-CEO Rick Wagoner, the demand still wasn’t high enough to make it profitable. While it was originally valued at just over $30,000 by GM, some estimates reported the cost of producing each vehicle to be between $80,000-$100,000. When all other relevant costs were added, such as the production of replacement parts for 15 years as mandated by the government, the viability of the innovative product was likely put in question. Nonetheless, the EV1 case resulted in negative publicity for GM.

It can be argued that it was in fact a LACK of money that killed the electric car. Unfortunately for GM, the investment may have been paying off about now, with oil prices finally high enough for many consumers to consider an electric vehicle.

Bread, water, air, and now it seems a college education are something people can’t live without. Despite rapidly rising tuitions, a record number of Americans have decided to enroll in higher education this year. In doing so, they have amassed a record amount of debt: over $1 trillion in federal student loans remain unpaid. In an attempt to address the issue while reigniting waning support among young voters, President Obama has announced a few modifications to save graduates a few bucks, literally.

Under the plan

• – Monthly repayments will be capped at 10% of income as opposed to the current 15%
• – Student loans will be forgiven after 20 years as opposed to 25
• – Graduates with several different government loans will be able to consolidate their debt

The plan is being dismissed by some as ineffective, but is raising concern among economists who are afraid of the government moving on to forgiveness of all student debt, which would send the student loan market into chaos.

While the oil, casino, and drug industries among others are often labeled “greedy” for the profits they make, rising tuitions at both public and private institutions are rarely questioned. Whether wastefulness, slow productivity growth, or rising costs  are to blame, the choice of some to college should be reevaluated as it obviously does not pay for itself a lot of the time.

General Motors’ “green” automobile is not bringing in much green.

Since before it was unveiled, industry experts questioned whether the plug-in electric Chevy could compete against popular hybrids with its $40,000 asking price. According to GM, the reception so far has been good. The Volt has managed to attract high income customers, 80% of whom are first-time Chevrolet customers.

So why is GM falling short of its goal of 10,000 sales in the first year?

One big reason is a slow supply chain. Hamtramck Assembly, the factory where Volts are assembled, only started to work at full capacity last month after being closed for four weeks for retooling. At the moment, over two thousand dealerships are still waiting for demo units to be able to begin selling the new car. With the one year anniversary of Volt sales just weeks away and sales at around 4500 units at the end of last month, GM will probably not reach its sales goal. The automaker is betting on the new technology however, and plans to produce 60,000 plug-ins in the next year when the Volt will be sold worldwide.

keep looking »