Author Archives: Lucien Lu

Fellow COMM101 student Alexander Qu quoted a fundamental axiom in one of his recent blog posts on BTM in social networking: “one of the axioms of social media has been: ‘If you aren’t paying for the product, you are the product.'”

Source: http://siliconangle.com/files/2013/10/Facebook-Tracking.jpg

But of course there was a catch. If I ran the business technology management (BTM) over at Facebook I’d do the same. With ‘leading competitor’ Google using Google Ads and Adsense, a lot of big data can be collected from the billions of personal computers surfing the web, making decisions. This overwhelmingly large amount of data can be used by firms for market analysis and to know more about consumer preferences, but the amount of uncertainty may be just as overwhelmingly large. Facebook’s new BTM strategy to track mouse movements should also consider these implications of uncertainty. The benefits from tracking mouse movements could provide insight into online consumer choices, methods of effective advertising, or many more quantifiable variables, but to sort out and control these variables will be difficult considering the equal or greater amount of uncertainty associated with each variable.

Source: http://vimeo.com/43038579

I totally agree with Torchinsky: we may be looking at a new pair of successful entrepreneur millionaires. Unsatisfied consumer needs and problems are waiting for revolutionary products, but there are several implications to consider.

A common issue (at least among the relatively affluent) is the cost of looking fashionable for safety: wearing a bicycle helmet. The Hövding helmet resembles a scarf, cleverly disguised into the wearer’s outfit that deploys an airbag when the device detects a rider’s falling action. There are several implications for consumers and investors to consider with the arrival of this new product.

The Hövding has the advantage of the first-mover effect: the product is new and an attractive solution for a large audience of fashion-conscious bikers. Since production has not yet been scaled, the resulting price is a high 399 GBP. There’s still room for expansion, so why aren’t investors rushing to bring this revolutionary product to the Americas? Asia? The international market?

New things may come with attractive solutions, but like the majority of new technology, the product may require extensive long periods of research and development to discover and fix bugs and potential flaws, especially when the safety of the consumer’s brain is at stake.

Check out Torchinsky’s blog here.

Torchinsky, Jason. “Swedes Develop Invisible Bike Helmet.” Web blog post. Jalopnik. N.p., 7 Nov. 2013. Web. 8 Nov. 2013. <http://jalopnik.com/swedes-develop-invisible-bike-helmet-1460189477/>.

Source: http://wpmedia.o.canada.com/2013/11/free.jpg?w=612&h=330&crop=1

Recently I stumbled upon a steal of a deal: Best Buy and Future Shop offered 3 new current-gen console video game titles for free if consumers traded in any current-gen title. This seemed too good to be true, considering anyone could trade in used titles of $5-10 values for new titles valued at $60. To my surprise, the only catch in fine print was the limit of one customer per exchange (and the impending Boxing Day-long lines outside Best Buy/Future Shop).

Source: http://www.ecanadanow.com/wp-content/uploads/2013/11/free-games-futureshop.jpg

So why is Best Buy (well, and Future Shop which Best Buy acquired a while ago) offering this deal?

It’s all about inventory. These new titles that Best Buy is trading away are caught in a transition period: they will be available for current-gen and next-gen consoles. With the upcoming release of next-gen consoles (Playstation 4 and Xbox One), consumers upgrading their consoles will want to play these new titles on their new next-gen consoles rather than on current-gen consoles.

As a result of predicted decline in demand for these new titles on current-gen consoles, Best Buy has most likely offered this promotion to reduce inventory in order to better position games for their appropriate console generation. Currently, the incentive for consumers to trade in their used games cannot get better than this.

Check out the article here.

“Future Shop Offering New Call of Duty, Assassin’s Creed and Battlefield Titles for Free with Single Trade in.” Financial Post. Web. 13 Nov. 2013.<http://business.financialpost.com/2013/11/08/future-shop-offering-new-call-of-duty-assassins-creed-and-battlefield-titles-for-free-with-single-trade-in/>.

Coke and Pepsi reminds us of their classic rivalry with some Halloween themed advertising: Source: http://3.bp.blogspot.com/-8KU–iR3CLY/UnU3tPZjQlI/AAAAAAAAMNQ/a3B7tiAsh8Y/s1600/Pepsi+vs+Coca-Cola.jpg

Although sources for these images aren’t entirely verified to be from Pepsi or Coke, the promotion of both popular brands is achieved. Pepsi and Coca Cola’s rivalry seems like they are aggressively trying to capture a larger share of the soft-drink market, but their rivalry can be mutually beneficial in marketing marketing both brands. This is perhaps why CEO of Pepsico, Indra Nooyi, invites Coca Cola’s rivalry to India with open arms.

In a recent TV interview, Nooyi suggests that we ask ourselves, “isn’t it great that two US-based multinationals, truly global companies, are showing their confidence in India?” Pepsico and Coca Cola will collectively invest a total of around 10 billion dollars in India. I agree with Nooyi in choosing to invest in India’s large and rapidly growing population. Both companies can contribute to providing employment for the developing country’s labour market while strengthening each of their supply chains. Improvements in infrastructure such as roads and highways to aid distribution are also one of the many advantages Pepsi and Coca Cola could bring to India.

Check out the article here.

Bouckley, Ben. “Indra Nooyi Laughs off ‘irrelevant’ Pepsi v Coke Competition Talk.” Beverage Daily. Web. 13 Nov. 2013. <http://www.beveragedaily.com/Manufacturers/Indra-Nooyi-laughs-off-irrelevant-Pepsi-v-Coke-competition-talk>

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

Virgin America approaches the conventional airline safety video with a fresh musical twist. I’d say Virgin’s latest production is a marketing success for a few reasons. One of Virgin America’s guiding principles is its association and appeal towards music. Music is an effective way to overcome language barriers and appeal to different cultures through genres, thus expanding the target audience Virgin reaches out to.

Also, other airlines in the past have tried to reach out to their market audience by making safety procedures entertaining, namely New Zealand Air. Virgin meets its competitors on this point of parity, but establishes a point of difference in the amount of production effort put in.

Finally, Virgin targeted its young adult audience well. I could not watch this just once. The fact that I would and could watch this more than once is because Virgin uploaded this video to Youtube: one of the many video-sharing social networking platforms where a majority of young adults spend their time. I’d doubt that a broadcast on TV would have been as effective as using Youtube, given that young adults are spending more and more time on the internet for entertainment. Bravo, Virgin America.

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>.

Source: http://intercontinentalcry.org/wp-content/uploads/candian-oil-sands-615.jpg

Canadian artist Neil Young recently spoke out against the Canadian oil sands operation involving the new Keystone XL pipeline, saying companies call Canadian oil “ethical oil because it’s not from Saudi Arabia or some other country…at war with us,” (The Globe and Mail). Young’s involvement raised awareness, exposing unethical business behaviour.

Businesses in the oil industry struggle with ethical consideration for their environmental and public health impacts. To push for the pipeline and maintain public image, I feel that companies are demonstrating ethical consideration for foreign stakeholders, but not for domestic stakeholders. They stress their ethical considerations for exploitation of poor unskilled workers in OPEC countries, but not for stripping habitats into “wastelands” and threatening the public health of our First Nations community. I feel that companies should value these consequences above the benefits of politically stable oil and lower cost of transport.

With the increasing amount of power that firms now have today, an increasing amount of responsibility lies in ethical consideration for those affected by their business. As the cost of oil increases to the point that it’s economically unfeasible, investment into alternative energy sources can be both profitable and ethical, hopefully satisfying all sides of the issue.

You can read the full article here (The Globe and Mail)

“Neil Young on Oil Sands: ‘Fort McMurray Looks like Hiroshima’.” The Globe and Mail. Web. 12 Sep. 2013. <http://www.theglobeandmail.com/report-on-business/top-business-stories/neil-young-on-oil-sands-fort-mcmurray-looks-like-hiroshima/article14213233/>.