Month: October 2013

This is an opinion piece on a class debate/discussion about Netflix.

Source: http://icdn2.digitaltrends.com/image/netflix-8-288×300-c.png

Netflix’s growth has escalated in recent times as it continues to stream accessible content over the internet to millions of customers. To help maintain this growth at the present time, students of COMM101 104 were given 4 recommendations in class to choose from:

Recommendation 1 Buy Content (obtain ownership/rights to stream content)

Recommendation 2 Make Content (produce and stream original shows)

Recommendation 3 Partner with Google and Youtube

Recommendation 4 Partner with NBC

A partnership with NBC opens access to NBC shows and content, which partially accomplishes the goal of obtaining rights to stream content (Recommendation 1). NBC content also consists of top stories and news as well as sports, all of which are major points of differences that would give Netflix a competitive advantage over other content-streaming services such as Amazon Prime. This increased diversity of content appeals to a wider amount of consumer tastes, allowing NBC and Netflix to grow their target audiences. I would advise against Recommendation 1 and 2 due to their costly nature. I would also advise against a partnership with Google/Youtube (Recommendation 3) because the majority of their target audience demands “free” content subsidized by ads. The Youtube community is very outspoken when it comes to changes, and especially advertisements that delay their entertainment. Imagine how they’d react if they had to pay. Not so well.

Check out Vivienne Shi‘s opinion suggesting Netflix to take Recommendation 2: produce and stream original shows.

Perhaps this issue is hyped up more than it really is. The recent US government shutdown has sent many non-essential government employees home including “3,000 aviation safety inspectors, employees charged with making sure that aircraft operate safely and according to regulations” (Forbes).

The real focus should be the threat to safety, not the loss in revenue. I can see that the suspension of airline safety checks could deter potential tourists visiting the US, thus harming businesses in the US tourism sector, but the autumn season isn’t a peak tourist season. The loss of potential tourists in the short-term now would not be as large a loss as the upcoming winter season. If the government shutdown were to prolong, then perhaps there might be a larger need for worry.

Airline safety checks are also rather infrequent and “mostly random” anyway. Sure, tourists already travelling within the US might not be able to visit their favourite museums and attractions, but tourists will most likely continue to board  their planes to get from point A to B. Above all, the tourism industry should be concerned with the safety of consumers to reduce the risk of ethical considerations and massive PR issues.

Check out the article here.

Image sources:

http://sharing.abc15.com/sharewfts//photo/2011/04/08/Government_Shutdown_Hub_Generic_640x480_20110408203856_320_240.JPG

http://i.slimg.com/sc/sl/photo/a/ai/airfare-safetycheck-def.jpg

Bender, Andrew. “Government Shutdown Means Airplane Safety Checks Are Suspended.” Forbes. Forbes Magazine, 02 Oct. 2013. Web. 07 Oct. 2013.

Source: http://irishcareerman.files.wordpress.com/2013/06/checkout.jpg

According to a Columbia Business School study, the more spendthrift a consumer is, the less likely the consumer is willing to wait in line. This may seem like common sense, but can be crucial information for firms who want to raise their profit margins. Spendthrift customers increase the profit margin. If businesses raised prices at peak times, reduced demand from relatively frugal customers leave emptier lines that will attract relatively impatient spendthrift customers.

I agree that this idea works for the sandwich business example that the article suggests where there are regular peak times, but perhaps not all businesses can benefit as much in this way. An example where a business might not benefit as much as the sandwich example might be if Samsung releases a new smartphone. If Samsung charges more for its smartphone at a higher price in the first two weeks, demand is so high that peak lines can be expected for spendthrift or frugal consumers alike. Perhaps businesses like Samsung could charge a premium at a VIP line and benefit from more of its spendthrift consumers.

Read about the article here.

Stock, Kyle. “Are You Too Rich to Wait in Line?” Bloomberg Business Week. 7 Oct. 2013. Web. 7 Oct. 2013.

Source: https://www.youtube.com/watch?v=CcZZwhr7eFI

Now here’s a relevant real-world case of brand positioning. In 2011, home improvement retail company Lowe’s changed its tagline from “Let’s build something together” to “Never stop improving.” According to Lowe’s senior VP marketing Tom Lamb on The Business Wire, the new tag line is intended to “make Lowe’s customers feel motivated, inspired, confident, and energized” and “it reflects [Lowe’s] customer’s mindset about their homes and their lives” (The Business Wire).

I agree with this change. “Let’s build something together” may not appeal to non-DIY customers. “Never stop improving” targets a wider audience because everyone could use some improvement – change is a constant. Lowe’s brand promise is innovation. “Never stop improving” reflects Lowe’s innovation in products and services, as well as motivation for customers.

Lowe’s new tagline also pushes for brand loyalty. The commercial ad video shows a progression in time as a couple evolves into a family amidst a constantly improving home, establishing Lowe’s brand loyalty as it intends to be the life-partner home improvement store for families. Lowe’s new tagline makes itself relevant to the customer in trying to develop a long-term close relationship, but Lowe’s is still second to Home Depot. Home Depot’s tagline, “More saving. More doing.” (Corporate Eye), appeals to financially concerned customers. Perhaps what’s actually relevant right now in this recession is frugality – improving only necessary repairs, not starting new projects.

Read the full article here (The Business Wire).

“Home Depot Gets a Slogan Makeover.” Corporate Eye. Web. 06 Oct. 2013. <http://www.corporate-eye.com/main/home-depot-gets-a-slogan-makeover/>.

“Lowe’s Announces New Brand Positioning: Never Stop Improving.” The Business Wire. Web. 06 Oct. 2013. <http://www.businesswire.com/news/home/20110919006130/en/Lowe’s-Announces-Brand-Positioning-Stop-Improving>.