Thinking Out Loud

Rebecca Black. No explanation needed. But what is the background story behind her success/failure (however you want to look at it)? The Answer is the Ark Music Factoryand their business plan is definitely unique for the Hollywood music industry.

Most big name record labels focus on quality over quantity; finding that one shining star with raw, unique talent that will stand out above all other artists in such a saturated industry. They pour a huge amount of funds and resources into launching their career and in the hopes of cashing out big time when the records go platinum.

The Ark Music Factory has decided to turn it around, focusing on quantity over quality. A recent Gizmodo article describes the business as “a production company of sorts that finds wannabe singers, mostly teen girls, and writes them a quickie pop song, slaps together a video, and sends it out onto the internet.” The hope is that one of those many terrible videos catches on, goes viral and ends up making them mad profits.

It doesn’t get much more viral than 86,348,287 views on Rebecca Black’s Friday music video. But with the fame escalating from how terrible the song and video are, did their plan actually work?  Yes, all of North America wakes up every Friday morning singing a particularly annoying song but according to a slate article, Rebecca Black has only earned about $40,000 and Ark Music Factory a portion of that. So unless Rebecca proves she can actually sing and becomes the next Justin Bieber, Ark Music Factory needs to rethink its business plan.

I guess it now all depends what Rebecca Black decides to do next. Saturday?

We are all familiar with the term “marketing is everywhere”, and while we understand the exaggeration of this statement, it is becoming increasingly and scarily accurate. As marketers desperately search for new ways to “get to us”, we find it harder and harder to avoid their advertisements and commercials.

Remember the days when you could go into a public washroom and stare at the back of a blank door? When you didn’t have to close 7 pop up ads to view a web page? Promotional materials and tactics are undoubtedly developing at a rapid rate but when have they gone too far?

AT&T have recently announced a service called ShopAlerts in which subscribers can receive text ads and promotions for certain companies based on their location. AT&T can tell your close to KMart? Expect a text with KMart’s latest offer.

This could prove very beneficial to KMart customers if they were indeed planning on doing some shopping at KMart that day. Only problem is the location technology that AT&T is using isn’t that smart. You could just be driving past KMart on your way to work and your phone will start beeping.  Then what if you drive past another participating store just seconds later? Beep beep beep. AT&T claims that at present subscribers will receive a maximum of 4 texts a week, but when participating companies load on the pressure, chances are AT&T will increase this number.

Many of us try hard to avoid advertising; downloading TV shows online or not signing up for promotion emails. I find it hard to believe this service will be successful until AT&T can improve the technology and better target the text recipients.

I am not usually one to increase purchasing because of large promotions, but there is something about this year’s Roll Up the Rim to Win (RUTR) promotion at Tim Hortons that really grabs me. I have never been into it in the past, so why now?

This year it is more than just buying a usual cup of coffee with the thought process of “it would be nice if I won something”, it is a competition among my friends that ironically started by negative word of mouth!

My friend Elisha Allen started complaining that she had bought 8 cups of coffee and hadn’t won anything, when the chances are 1/6. Her facebook, twitter and word of mouth was all about how angry she was at Tim Hortons; Starbucks was better. I didn’t think anything of this until I bought my first RUTR coffee and won another coffee…first try 🙂 I then followed to win a donut from that prize coffee.

I updated my facebook status to make sure Elisha and the world knew about my 2/2 success, and that is when it all took off. The war was on! Now all of our friends are buying more Tim Horton’s than usual, and updating their facebook status’ when they win, just to compete with each other and annoy Elisha …who, determined to get one win, is now at 0/11.

Tim Horton’s sales increased within my group of friends as a result of negative word of mouth!

Promotions such as this one can be a huge success, but they need something extra to really take off, something so organic that it cannot possibly be incorporated into a marketing plan. Customers need a motivation more powerful and intrinsic than winning a prize. It just happens and the corporation must RRROLL with it.

Ali Birston, among many others, jumped on the train of uproar over the new Starbucks logo in her January blog post titled “The Evolution of the Starbucks Siren”.  Her post explains the reasoning behind the alteration to the logo and the negative reactions from many loyal customers. Nevertheless, she still considers it a smart strategic move.

Only problem is…where is this logo? As I got off the bus this afternoon in the cold and rain, trudging through the slush the snow became, I couldn’t help but venture in to starbucks for a cup of hot, sweet goodness to cheer me up. I sit here now with cup in hand, still staring at the traditional logo 3 months after the announcement was made. Even when I google “Starbucks Logo” the new logo cannot be found in the top results.

Nigel Hollis writes in a blog for the Harvard Business Review, that the new logo’d cups and merchandise will begin distribution this spring but this poses the question: is such a lengthy gap between the announcement and execution such a strategic move?

I understand the need to deplete existing inventory before introducing new items and on one side of the argument, making the announcement so early allows time for the public to accept and expect the change. But Starbucks faced such an uproar from loyal customers back in January, now that everything has settled down should they expect another spout of negative publicity once this logo is actually in customer’s hands come Spring? Would it not have been more strategic to announce and execute, power through the negative reactions or embrace the positives, then let the dust settle for good?

Just like you can’t judge a book by its cover, you can’t judge a coffee by its mug…I won’t be giving up my cup of hot, sweet goodness anytime soon!

Marketing is often perceived as a clever way of manipulating consumers to buy a product and ultimately increase a company’s profit. As a socially aware student intending to pursue a marketing degree I feel it my duty to defend this common accusation.

Marketing is finding out what consumers want or need, and giving it to them.

Many corporations and entrepreneurs make the mistake of creating a product then using marketing to try and convince consumers of its value. Marketing needs to be the first step, not just the last! What if those corporations focused their marketing resources on finding out what consumers want…then creating a product to satisfy that need. The level of persuasion and manipulation in marketing strategies would be far less and companies would have a higher focus on making a difference in the lives of consumers, instead of just making profit.

This is why I consider market research to be one of the most important aspects of marketing. It’s hard, it’s complicated, it’s costly and it’s time consuming…but it’s very important. Afterall, isn’t it more complicated, expensive, and time consuming to try selling a product that no-one wants?

Seth Godin explains this concept perfectly in his very short but to the point blog post titled “Date Certain”. He states that FedEx‘s success is down to the fact that it really understands what its customers are looking for in a delivery service. While competitors believe customers want the fastest delivery possible, FedEx has clearly completed extensive market research to discover that customers would much prefer an exact delivery date, even if it takes longer.

It’s not hard to sell a product or service, as long as it is something consumers want. Take the time to find out that information.

I do not like Christmas shopping.

I wanted to get my family the most heartfelt yet hilarious, unique and memorable gifts but did not have the time, desire or money to shop for them. Somewhat of a small dilemma.

Then I discovered Groupon and it was as if Santa Claus came early. I could buy my parents unique and expensive gifts at huge discounts all by checking my emails in the morning.

But how does the traditional consumer decision process play a role in Groupon’s incredibly unique shopping experience?

1) Need recognition – I needed Christmas presents for my family (may not have received any of my own otherwise).

2/3)  Search for information/Evaluation of options – I really didn’t. The structure of Groupon’s ” daily discount” philosophy meant that I couldn’t compare my options. I had to decide each day “yes or no” and there was no going back if yesterday’s turned out to be better. I had to be ruthless.

There was a great deal of psychological risk involved in my purchases. Will they like it? Will I be excited to watch them open this?  I also had an evaluative criteria: I wanted an ‘experience’ not a ‘good’ and something that my parents have never done before. Of course a reasonable price was important too.

4) Purchase – so easy!!! click.

5) Post purchase – no regrets! They loved their presents and I was more excited for them to unwrap their gifts than I was to unwrap my own! Dad got 4 minutes in a skydiving wind tunnel and Mom got 2 tickets to an 80s prom themed party.

So it seems that Groupon purchases follow a very similar consumer decision process but without the ability to easily compare options. What a smart marketing plan! They get the consumers to commit to the purchase by applying a disguised “now or never” pressure.

Thanks Groupon for saving Christmas!

In marketing, the point of sale, the actual transaction of goods for money, may be the hardest thing to achieve. This is especially true for Gold’s Gym in the Village, selling memberships for over $500/year when the Birdcoop next door has it for $50. So how did they get me to buy a membership?

I was stopped in the street by a Gold’s employee offering a free pass. He called me the next day saying my name was put into a draw and I won the second prize of a 30-day membership. I went in to the gym to set up my 30-day pass, expecting that they would try selling me a full membership so ready to stand my ground and say no.

The same guy that stopped me in the street showed me around the gym, discussed my fitness goals and of course, pulled out the membership binder. I knew this was coming. He told me that if I bought a full year membership:

• I could get 2 months free (instead of the 1 that I won)
• He could call his manager to try and get a discount on the other 10 months
• He would wave the $199 initiation fee
• I could put my membership on hold if I am not here over the summer
• I can resell my membership on craigslist if I can’t commit to the full year

I FELL FOR IT!!!

Walking away after signing on the dotted line I felt terrible because I started seeing ALL the red flags

• He probably called everyone who signed up for the free pass, telling them they won a 30-day pass
• When he went into his office to “call his manager” he was out again in 30 seconds…no phone call took place
• NO ONE PAYS THE INITIATION FEE!
• The contract said it would cost me $65 to put my membership on hold over the summer
• The fine print clearly says that no selling of the membership is allowed under any circumstances.

It was clever. As a marketing student I can admire the creativity and execution of that sale but as a customer, I know he did it all wrong. Value based marketing of this era is about creating a trusting relationship with your customers and ensuring they have confidence in your business. It’s about creating long-term relationships  with customers that are satisfied with the services and want to keep coming back.

After all the scams and tricks Gold’s played on me I have no faith or trust in that gym, to the point where I will be cancelling my membership and receiving a full refund. They had me as a new customer but with the lack of trust I will not become a regular purchaser, let alone a loyal customer or an advocate.

Gold’s taught me how not to sell a product or service.

Entrepreneurship. The end vision of being your own boss and earning millions looks fantastic, but the getting there….not so much. Those who aren’t put off by the ‘getting there’ then hit a dilemma. They are either someone with a great idea and no experience to push it forward, or someone with the business skill set  searching for the next new thing to back. So for the latter, where is that idea going to come from?

Kids.

I have just completed a four week program with SIFE Bizkit, a volunteer organization that teaches the basic skills of business to elementary school kids. The first two weeks were teaching money management, ethics, economics and marketing and while the concepts came naturally to some, to others, they didn’t. But then came week three when they could put everything into practice and create their own product. That’s when the fun started.

These kids were not limited by costs and profits, feasibility and whether or not it was realistic. I witnessed creativity at its finest. And of course we had the shoes that can make you fly and the computer that does all of your homework for you, but for the most part the ideas were phenomenal.

Cocoa Alien – a hollow alien shape made out of chocolate and filled with chocolate milkshake. Drink the milkshake through the antennae straws and then eat the chocolate (OK maybe I was a little bias because of the free samples)

Acai Berry Sunscreen – sunscreen made out of acai berries so it is good for getting rid of acne. Will sell it at dermatologist offices (Marketing genius’ in the making)

Sea Monsta – An energy drink sold with a workout DVD and equipment so that you have energy to work out and lose weight.

And my favourite – the IToilet – “bringing enjoyment to the bathroom”. A toilet with speakers and itunes connection so that you can listen to music while you ‘do your business’. Their sales pitch had me in hysterics. They had a celebrity endorsing the product with her remake of the song ‘please don’t flush the music’ with a music video to match.

These kids weren’t concerned at whether their product would be feasible, realistic or profitable and thats when the creativity came out and good ideas were generated…ideas that really do have potential.

So for those who have the business experience and are looking for that great idea, look down.

According the to goBEYOND carbon footprint calendar, I am responsible for emitting 6.64 tons of carbon dioxide per year.

Living in residence has a huge effect on this amount because I do not emit any CO2 for my daily commute and only 1.2% of my emissions are from my accomodation. I feel that number is inaccurate though as I had to answer ‘I don’t know’ to a lot of the questions regarding heating, water etc. If I was living in my own place I would have control over my utilities and would be able to give more precise answers.

The same ‘I don’t know’ principle applies to my food. 43.3% of my emissions is due to my diet and although I know that my diet is very meat heavy, I once again had to select ‘I don’t know’ regarding where the food came from.

The most astonishing figure for me, however, is that 55% of my CO2 emissions is from long distance travelling. Living on campus I take the bus a short distance maybe once or twice a week, drive my little Yaris when I go home on occasional weekends, and take approximately one vacation to England a year…and that amounts to 3.5 tons of CO2? Wow.

I  would like it if the website gave me some numbers to compare mine too because I have no idea if 6.64 is good or bad. Knowing what a ‘good’ number is would give me something to work towards.

I know that living in residence there is not much that I can do right now to change my footprint as I am not in control of my food or utilities, but once I move into my own place in September, I will retake this test and then begin my mission to reduce it.

In class today we discussed the impacts of the Social Enterprises and of course the classic answers came up of enriching people’s lives, giving back to the community, creating a positive example etc. But there was one big impact, completely surrounding all of us, that no student seemed to pick up on.

Social Entrepreneurs are positive role models for business students like us.

Social enterprises show us that there are uses for our BComs other than making companies (that are already worth billions of dollars) even more money. Everyone tells us to follow our passion but unless your passion is money (and thankfully for our generation who are aware of social issues, it rarely is) it is pretty touch to find a passion in the traditional sense of business. Social Enterprises have proven that it is possible to use our business skills acquired at Sauder to do good in this world and improve those issues of poverty, homelessness and discrimination.

Of course this planet still needs the investment bankers and top executives, but with our generation becoming so aware of and touched by humanitarian issues, I have a feeling that we will see a huge rise in social enterprises in the future.