Author Archives: kynang

P&G’s Swift Market Research Studies

Procter & Gamble conducts primary qualitative online market research to aid its product decision-making process.

Related article : http://www.informationweek.com/news/development/tools/showArticle.jhtml?articleID=6507502

Video of how P&G created beinggirl.com as a community for girls, to help their customers — a marketing method four times as effective per dollar as advertising. This online primary qualitative market research study spiked demand for its tampons.

Main Article: http://hbswk.hbs.edu/archive/1476.html

I will use the Market Research framework (Class 15) to analyse P&G’s market research method.

1.  Define problem/hypothesis

Senior executives could not answer simple questions about  product functions -> P&G remained ignorant of how basic elements of its products were used/what aspects to capitalize

2.  Determine research design

The Market Research Department was implemented. A vast team of researchers implemented primary qualitative research by asking detailed questions, focus-group-style.

Another unique strategy was assembling well-attired, natural door-to-door female interviewers to gain candid responses. They covered entire neighborhoods, and asked comprehensive questions about household products.

3.  Identify data types and sources

Leader of MR campaign could give precise statistics about other companies.

4.  Design data collection

Data collections improved in tande with improvement in communications technology.

5.  Determine sample plan and size

Sample plans and sizes collected were similar throughout P&G’s history.

6.  Collect data

Door-to-door interviewers collated specific data, even total recall in most cases.

7.  Analyze

Detailed surveys distributed to focus groups allowed P&G to grasp product functions, competitor products and customer preferences.

8.  Prepare report

Extensive reports adapted products/commercial messages to customers’ changing needs.

Meticulous attention to brand expectations, packaging, testing environment have resulted in highly satisfied customers.

Wal-Mart’s Wise Value-Adding Strategy

this shows how wal-mart plans to add value to its products to ensure its international sustainability. from http://walmartstores.com/sites/sustainabilityreport/2009/s_rs_newGoals.html

negative side of wal-marhttp://www.chaosscenario.com/main/2006/12/walmart_blows_i.htmlt's extensive cost-cutting: poor employee benefits from

*Brief note : In Class 13, we discussed Dell’s innovative value-adding strategies. In this post, I’ll do a mini Wal-mart (again) case study.

Article taken from: http://mohanchandran.files.wordpress.com/2008/01/wal-mart.pdf pages 3-8

Like Dell (class reading #13), Wal-Mart bypasses dealer channels to eliminate costs and risks. It follows the compact model : suppliers -> manufacturer -> customer. It also has faster inventory replenishment and lower shipping costs.

Wal-mart practises ‘cross-docking’ which challenges the notion of supply chain, focusing instead on the demand chain aspect. This reminds me of the Economics principle of the Invisible Hand, espoused by Adam Smith. Customers determine exchange of goods as it is based on their demand. The value chain, composed of staff, manufacturers and suppliers (not supply chain like Dell) is tightly coordinated.

Wal-Mart places an emphasis on maintaining good relationships with its suppliers, compared to Dell which focuses on assessing real consumer demand and segmenting consumers to service their needs. Similar to Dell, Wal-mart implements sophisticated technology to track inventory and sales levels and has quick inventory velocity (decreased inventory, increased speed).

However, this article presents Wal-mart in a positive light. While its strategies add value, employee welfare is an area of concern — low wages. Also, Wal-Mart poses a threat to its competitors due to competitive pricing, its flip-side is predatory pricing – deliberately pricing goods below market price to drive out rivals.

Wal-Mart and Porter’s 5 Forces

I chose this article because a lot of concepts are applicable to the Porter’s 5 Forces reading we did in class. due to the word limit, i covered more applicable forces like seller’s power, degree of rivalry and barriers to entry.

http://www.nytimes.com/2010/06/05/business/05walmart.html?ref=wal_mart_stores_inc

TITLE: WITH BACKDROP OF GLAMOUR, WAL-MART STRESSES GLOBAL GROWTH

walmart store locations from http://grannygeek.us/?m=200704

Porter's 5 Forces Diagram taken from http://www.justice.gov/atr/public/hearings/single_firm/docs/219395.htm

The article discuss how Wal-Mart focuses more on increasing international demand due to slow domestic demand.

Some challenges would be decreasing consumer demand. This is due to careful budgeting and less trips to Wal-Mart because of lower consumer incomes and high costs of traveling to stores (higher fuel prices).  This affects the supermarket industry, as slow market growth causes firms to fight for market share.

Wal-mart is trying to reduce rivalry by seeking competitive advantages in lower prices  “lost some of the wealthier customers it gained during the recession as those customers returned to higher-price stores.” It has also recognized that its larger stores served as one-stop places, but other smaller supermarket chains would pose a threat of substitutes, rendering demand for its products more price-elastic. By improving its technology – productivity and price transparency, the degree of rivalry between Wal-mart and its competitors will be lower. It poses high barriers to entry to supermarket chains who want to enter the industry, due to its variety of stores.

Wal-mart has a reasonably high degree of seller power due to its relationship with suppliers. It plans to leverage on this by offering lower prices, which is yet another ideal competitive strategy.

Is social software really useful?

types of social software taken from http://oedb.org/blogs/ilibrarian/2007/acrl-ny-social-software-in-academic-libraries/

*i picked this article as the HBR is a really reputable source with innovative, applicable articles and the idea of social software is related to Class 8 readings on social media.

from : http://blogs.hbr.org/bigshift/2010/09/social-software.html

Critics of social software feel that fostering interpersonal relationships decreases productivity. I think this is false as good relations, even on a formal level, can be established in a slightly informal context.

Cross-referencing to Community Relations 2.0, which discusses social media, I think that software would help if it is authentic and users are savvy. Individuals must be computer literate in these software. It would be better if there were a team of specialists (members of the PR and HR departments) to leverage on it, as they would have the technical expertise to ensure that the employment of social software meets the company’s aims.

The framework of Access (wide outreach these media platforms offer), Attract (relevant people and resources) and Achieve (securely creating strong collaborations) is solid. However, the examples given are too vague and should be related to specific types of software and how they are used.

It is necessary to “target implementations against very specific operating performance levers.” Certainly, a main challenge to social software is more convenient and accessible forms of social media. These would probably lend a better level of engagement to users who would more likely be more familiar with social media than social software.

related links:

this website provides more specific instructions on how to leverage on social software.

http://www.socialtext.com/blog/2006/03/070/

Starbucks’ leveraging on points of parity/differences

I chose this article because it ties in with Class 6 Instructions on marketing and points of parity/difference.

Making Starbucks recession proof from http://www.financialpost.com/executive/story.html?id=1047518

different cup sizes for starbucks coffee taken from http://www.geekosystem.com/

Canadian coffee shops market share occupy a small market share compared to larger rivals like Tim Horton's taken from : http://zincresearch.wordpress.com/

The demand for Starbucks coffees seems to be decreasing, due to higher prices (with 12% HST, the price is even steeper).

Starbucks’ marketing campaign does not seem to be effective. Its market share is eroded due to consumers’ preferences for indie, hip coffeeshops. Starbucks is an established, strong brand name, and one of the top coffee players but it is capitalizing on not-as-desirable aspects like “authenticity”. This might work against it; proliferation of Starbucks stores does mean that it is becoming more commercialized.

As a brand leader, Starbucks should focus on associations that may not be unique to its brand – its points of parity. These include “great-tasting coffee, reliability, speed, convenience, and cleanliness for the customers’ dollars.” These are  common to most coffeehouses, but allow Starbucks to cement its brand position. This prevents it from being blindsided by its rivals – Tim Horton’s, Blenz Coffee. It can then emphasise its major point of difference – “consistency of quality” throughout Starbucks stores which practise rigorous quality control.

Not-so-blue Skies Ahead for Air Canada

http://www.canadianbusiness.com/managing/strategy/article.jsp?content=20090330_10023_10023&page=1

THE GOOD, THE BAD AND THE UGLY (AIR CANADA)

*i chose this article because Air Canada’s pricing strategy was mentioned during class*

Blue skies ahead for Air Canada?

taken from : http://www.globalgiants.com/archives/fotos/AirCanadaBoeing0407.jpg

“Stock of low-cost rival WestJet, which was one of the few North American airlines to remain profitable through the recession, is largely unchanged since the start of the year.”

taken from : http://ca.reuters.com/article/businessNews/idCATRE68C3XW20100913

The article discusses the dire economic situation of Air Canada (AC) and its huge debt.  Key contributors are high costs of production, decrease in consumer demand and pension payouts.

“Extraordinarily high fuel costs” mean higher costs of production which result in subnormal profits. Even though oil prices have since gone down, AC purchases $99/barrel oil supplies. Coupled with decrease in consumer demand, the profit margins are further squeezed. Pension payouts are also losing value in accordance with the stock market bust.

Possible outcomes would be a government bailout, as suggested in the article. I don’t think this is ideal.  Certainly, it would prevent the loss of employees and avoid “restructuring, and the disruption it causes”. Also, the issue seems to be tied largely to the “stock market slide” which seems to be looking up. However, Air Canada’s market share has been rapidly decreasing. Credit card partners lose revenue when they have to refund customer fares. Plus, there are more efficient competitors which are establishing brand names and consumer loyalty.

Air Canada’s attempts to mitigate its situation by reducing capacity (supply) are weak at best.

The Ethics Side of Business

To visualise the extent of damage of the BP oil spill : http://www.ifitweremyhome.com/disasters/bp

picture taken from : http://www.adannews.com/wp-content/uploads/2010/08/BP-oil-spill1.jpg

BP’s logo. The green and yellow colours and solar design highlight BP’s self-proclaimed duty to the environment

picture taken from : http://www.kolibriexpeditions.com/birdingperu/blog/index.php/bp-and-bird-conservation/

Greenpeace’s designed logo in response to BP’s oil spill

picture taken from : http://www.geeza.com.au/2010/06/redesign-bps-logo-with-greenpeace/

article taken from : http://blogs.forbes.com/csr/2010/06/15/bp-under-fire-profit-versus-responsibility/

Title of Article : BP Under Fire : Profit Versus Responsibility

Being socially responsible means keeping global socioeconomic standards, respecting globalization, reducing global inequity and degradation.

The writer mentions that “It is possible to earn a profit and be responsible, but it is nearly impossible to do both perfectly.” However, BP shunned its responsibility by prioritizing its profit-seeking motive way above its social responsibility. Although it is natural for BP to prioritise profit-maximisation, it shirked its corporate (ethical) responsibility. With its previously strong international reputation and position, it could have implemented better safety protocol and avoided a poor safety track record.

This article does not give a comprehensive analysis, but other literature has shown up BP’s faults in light of being a global citizen. Reverse multiplier economic effects, massive unemployment in related industries and environmental destruction are severe implications. BP has also been hypocritical about its corporate values.

It is unfair to solely blame BP. Non-governmental organisations and governmental watchdogs should monitor multinational companies. However, most of the blame should still be attributed to BP considering its sheer size and power that it could have better utilised. Financial compensation is unlikely to alleviate the sheer extent of the destruction caused.