Stefano Lazzeri

Google Adwords is a marketing tool that helps you reach your current and prospective customers and finding where they really are. It does that by data mining all of its information regarding what people search for in Google, and understanding relationships between different segments of people (demographic, geographic) and their similar types of researches. This causes Google to promote excellence in their advice as to where a certain companies` advertisements must be placed in order to minimize costs and maximize returns.

For this tool, the name of your company will appear in the sponsored links based on how much you pay and how specific are the keywords you have chosen for your link appearing when people search for it. You do not pay when people see your sponsored link, but only when they click. Although you have costs for every click, you can visualize your returns mathematically through Google ads, and see whether you are suffering from losses or returns from investing in the same tool. In other words, there is not much room for subjectivity in the measure of marketing success from this tool, or you are successful or they will prove it to you that they haven`t really been a very good tool for your to use for your company. This system, forces the company (Google) to continuously invest in data mining and new analysis programs in order to better target each of its customers` (companies) customers (consumers). This is measured by the click-through rate which is the number of times a user clicks on an ad and divides it by the number of times the ad appears in front of the user to see how well you have been marketing your brand in Google and if you have to change your Google Adwords strategy (change the keywords for example).

Do you want your company to succeed in internet marketing?

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US Worries over Nobel Pick`s Wife

The concern of the international community regarding Liu Xiaobo wife`s silence takes me back in time. It shows me Guttenberg’s invention of the printing press that profoundly changed the way people shared information and made it readily available. It reminds me of how dictatorships were destroyed indirectly by the power of information, and how democracy was slowly implemented as a consequence of the ideas that had been shared. But why did the world change so rapidly their political systems to a democracy in the last 200 years? The easy information flow along with the passionate pages that illuminism designed through our history about freedom caused the world to change dramatically. Now, on a “wwworld”, where information from all over the world is ubiquitous and everlasting, the lack of it is a state that scares many societies and threatens life. North Korea is a country which nobody knows nothing about since it has closed the doors from the world to it (physically and information wise), and from their citizens to the world. This lack of threatens the world, since there is a higher degree of uncertainty. Equally, people around the world are concerned with Liu Xiaobo wife since there is no more information coming from her regarding her life. Is she alive? That is the question that pops up in every single person`s mind when they read the news. Now imagine this happening 100 years ago, would somebody know what is happening in her life? Would they even care?
Society has advanced in such a way that the asymmetry of information between people all over the world is constantly decreasing. The one`s that are not keeping up with the trend, are staying behind with their sweep generalizations and their endless stereotypes. Despite this omnipresent truth, life is not only about acquiring information, but about how to market yourself as a user of it. It is not enough just to be, you have to show what you are.
How do companies use asymmetry of information to take advantage over consumers? How would minimizing the asymmetry of information between businesses and consumers be positive for society as a whole?

Although most of the professors around the most prestigious universities of the world continuously force incipiently knowledgeable economics students to learn the “common assumption” that goods and services have a demand curve that is sloped down*, the power of price as a strategic tool for communicating quality can completely change the way we think about price change effects on the willingness to buy of the consumers. In these particular cases, the benefits of communicating a powerful value such as luxury for a product by setting prices higher, outweighs the costs of having some price sensitive customers not buy anymore from the brand since the price is now higher. In other words, the increase of demand because of the luxury communicated by the increase in the price outweighs the decreases in demand because of the price sensitive buyers. Furthermore, the loyal and common customers of these markets generally are very price insensitive since their income levels are very high.

*as a price of a product decreases the consumer is more willing to buy it and vice-versa.

The Caribbean cruise market, jewelry market, and several other markets are mostly characterized by this exception of having the demand curve shaped in a way where as prices increase to a certain point, quantity demanded also increases.

Can you think about any other products that would also have the same demand curve shape or that would not be the conventional shape? What are the implications for pricing strategies for companies and for the society as a whole?

If you are interested in understanding more about this phenomena read about the Giffen Behaviour at Dani Rodrik`s Blog.

If you wish to read more about the downward sloping demand curve find some interesting insights at: Peter Coffee`s Blog

I was quite surprised when I searched for “best advertisements” and I found “funny advertisements” as the first option in the most well known video searching website. People rate everything that is best for them as the one`s that are appealing to positive emotions such as smiling, feeling the want to tell other people, laughing, and sometimes crying from excess of laughing. In other words, every advertisement that is funny is actually appealing to them.

Look at these for example:

Yeah yeah its funny… but why are they so appealing? Shouldn`t educational advertisements, and documentaries be more appealing considering that presidents all over the world are constantly emphasizing on the importance of education, and are always taken as role models by their people? Although the consistent effort by the society as a whole to neglect our physiological needs as the strongest source of happiness and understanding, marketing companies are more than aware that the advertisements that still appeal the most to people are those which involve sex, intimacy, violence and, external looks, or appealing to something that is normally socially unacceptable (to make it seem as if everything is possible). Although it is ranked last in Maslow`s hierarchy of needs, the physiological needs still are the most appealing towards human beings and are is the most used technique for convincing a consumer. Market you product, appeal to people`s instinctive repressed emotions and wants.

Watch this!

Why is it so appealing, and what is their objective with this advertisement? In this advertisements, Dove uses socially accepted as beautiful models with previously well treated hair and body (and later further enhanced by photoshop) to represent the quality and the effect of using their product. Furthermore, they make these models express their emotions before and after they use the product in order to show the consumer how they will feel after they use the product. By trying to convince their target market that the product actively repairs hair damage, Dove`s objective is to raise awareness of the brand and of the features offered to further increase their market share in the mature and competitive market that they already are part of.

Now, watch this!

How did you feel after watching this advertisement? Conscientious? Afraid? Amazed? Dove, through this advertisement and many others is trying to create a sustainable competitive advantage in that it compares itself to all of the other brands and implicitly explains the consumer that it is not as the other brands that advertise an unachievable beauty, but a brand that shows reality and strives to achieve a natural beauty. By doing this, Dove is able to increase their market share, and concomitantly decrease the competitor`s market share by making more and more women realize how they have always used several different personal care products, but have never actually achieved the sense of perfection that beauty brands try to address. It is also important to note that it diminishes the brands` image by using an advertisements that does not violate or disrespect any other company, but makes society aware of what they are choosing to use.

You would normally believe that this effect would minimize the ability of society to live a fulfilled, and happy life where people do not learn as much as they can, and they try their best to make society as efficient as possible. Contrary to popular belief, this effect is necessary because if the majority of the people actually had this ability to realize their mistakes, then they wouldn`t feel this illusory superiority, aend therefore the world would be even more full of violence and tragedy against those who are skilled and promising because of the reinforced feeling of enviousness coming from the intellectually inferior. But you can also see it in another way, humbleness comes from the ability of recognizing the things you are limited to, and therefore if people could recognize their mistakes, they would become more humble, and they would try to learn more from it leading to a more educated world. I guess it just depends on how people would react to the realization of their mistakes. So, how do people react? The people that constantly feel more certainty would be more active, taking them to learn more from their errors or to be more violent towards the skilled, therefore being more aggressive. On the other hand, the one’s with more doubt and indecision would take it more passively, not learning much from their mistakes, but at the same time not being violent towards the more intelligent men. This shows that the unrealistic optimal solution for society would be to maximize the amount of skilled and active citizens, and minimize the amount of active and unskilled people in order to reduce violence and maximize society’s intellectual capability. Although we don`t live in a perfect society, the passive people exist in order to balance out the clash between the two extremes of the actives, otherwise we would live in a less civilized and more primordial society. What category would you like to be part of? When you choose one, how are you going to brand yourself regarding those characteristics that these type of people hold and their role in society? Remember: The more you learn, the more you learn how little you know. -Socrates.

Being humble and understanding your binding rationalism is important in order to be successfully socially accepted and for branding yourself.

Interestingly enough and different from the popular knowledge the bank`s main asset is currency. Commercial banks, buy from a lower interest rate from the central bank paying low interest rates and sell`s its assets to firms and individuals with higher interest rates. Their profitability comes from the difference in the interest rates existent between the supplier of the currency and the demander of currency. Furthermore, inflation causes the central bank`s and the commercial banks`currently held currency to proportionally increase their values therefore, in theory, not affecting the profit of the commercial banks. In practice, when inflation happens, businesses lose confidence and individuals sell their investments and borrow less money. This would eventually cause a lower profit to the commercial banks because of the lower demand for currency.
How can marketing solve this problem? The more powerful and positive advertisement the government and private companies invest in to show how the country and the economy are doing well, the more minimized will be the effect of the inflation on the businesses` and peoples` confidence, and therefore minimizing the loss of profits for the commercial banks.

A simple idea that also is noteworthy is that when commercial banks lend money for buying houses the interest rates should be lower because land can easily turned into money and, unless the government takes the property, you have the certainty that that wealth will always be there. It is a less risky investment (the risk is only in the depreciation on the market value of the land, which generally does not happen, especially in developing countries). The exception of the rule! Contrastingly, lending to small businesses which rely in ideas, the interest rates for borrowing money must be higher for being a risky investment of the bank of maybe not receiving back their currency with the principal and the interest. Therefore, the reason why the demander demands must be considered before setting the price (interest rate) for which you will lend your money. How much can you trust your borrower?
That is where marketing comes in. The initial level of asymmetry of information between the borrower and how well how well the borrower will market itself from that point onwards will result in the level of trust that the lender will have. Considering that the bank assumes that It must know something before lending, if the borrower critically thinks about the information that It has about itself that will give him credibility, it can trick the lender in thinking that he is trustful and therefore get a lower interest rate when finalizing the borrowing contract.

An analysis of the Company http://www.babycarrots.com/:

Target Market:
*People that already eat a lot of junk food (age 14-28), and that just do it because there is not healthy fast food to replace it.
*People that look for healthy junk food in order to combine the healthiness to the fast food.
*Parents that are concerned about their young children`s healthiness, target as building long term relationships with them, considering that they will be introduced with the culture of eating carrots as junk food since they are really young.

4p`s? Marketing Mix?
Product- A crunchy and tasty Junk Food / Healthy Junk Food (differentiation)
Price- Reasonable
Place (distribution)- they are still developing their distribution and supply chain management techniques. For now they are focusing in the American market, since the added transportation and logistics cost will be lower for these areas. They are planning to expand, and are getting feedback for why customers from all over the world want/ would be interested on these products.
Promotion- promoting the coolness, healthiness, and creating value for introducing carrots as a commodity for the junk food industry. (Installing a new culture).

Sustainable competitive advantage:
Comparatively to subway, they are adding value to their brand/company by offering a healthy fast food item (product) considering that young people and mothers are more and more concerned (long term trend) for their own/children`s health, and by abiding to the society`s growing demand in regards to convenience. Even if there are other companies that enter the market to compete against the “baby carrots”, the demand is growing in such a fast pace for healthy food items and for fast food, that the company will never initially suffer from a lack of demand for their products in this market.