Category: COMM 101

What exactly is a true social entrepreneurship? In class, we looked at a few examples, like Jamie Oliver’s restaurant ’15’ run by 15 young people who wouldn’t otherwise have the skill to work in the industry. When we tried to pin down exactly what it is, we tried identifying what is not.

A social entrepreneurship is NOT:

• A charity
• A formal (governmental) social service
• A business motivated only by profit

Thus, a social entrepreneurship is a business that is operated to both affect change and create monetary gain.

At least, that is what I thought it was until a very interesting discussion with a classmate. He thought that that social entrepreneurship was another way to market a business, a buzzword to entice customers by pulling on their heart-strings. I disagreed until I realized that our perceptions of the motivations of the social entrepreneurs was the basis for our disagreement. After this, I tried to explain that a social entrepreneurship is simply a business that considers both the inputs and outputs of their company to maximize both the market value of the product and the value created in the community, which is not only shrewd business sense, but making also difference in our world.

We came to an agreement: a properly-run social enterprise is actually disguised as an extremely efficient business by considering the inputs and/or creating opportunity (ethically-sourced material, volunteers etc.) to deliver the community not only a functional product or service, but also considers how it affects others.

Here’s a link to a local social enterprise I found out about- Soup Sisters hold a social event which includes cooking classes, and use the fee per participant to pay for the ingredients, then the food is given to those who need it: http://www.soupsisters.org/

Sara Blakley, creator of SPANX, is the definition of a true entrepreneur. According to spanx.com, she was working as a sales rep by day and comedian by night, when she had an idea for footless pantyhose. With only $5000 dollars in the bank, she worked tirelessly to develop a prototype and even used herself as the before and after model in the original marketing . Ten years have passed, and now she finds herself in control of a multi-million dollar business. Let’s review the definition of an entrepreneur checklist:

Risk? YES- new product, had to convince patent office, had to work a deal to make a prototype, time, money, considerable amount of energy invested…

Innovation? YES- SPANX redefined ‘shapewear’ by not showing any visible pantylines and by cutting off the feet so the hoisery wasn’t visible. She obtained a patent in 2000, and in 2007, patented a the manufacturing process of a new type of bra.

Wealth Creation? YES, global retail sales exceeded $750 million in 2008

Indeed, Sara Blakely is the epitome of an entrepreneur.

Before our class on the financial crisis, I had been wondering how it is that the financial crisis became so widespread so quickly. After starting from the beginning- the sub-prime mortgages, the lack of financial literacy, the leveraging, the Structured Investment Vehicles, the CDO’s, CDO’s squared, cubed, the madness, the fear, the consequences, the global economy; I began to see that it was in fact the INTERRELATEDNESS of all those affected- homeowners, banks, bigger banks, Wall street, other countries- which helped the spread of the crisis. As well, it is possible that everyone involved at each level of the crisis should take some blame. Whoever came up with the idea of sub-prime mortgages, the homeowners who thought that paying for something with money you don’t actually have, and the people who bought the packages of high-risk mortgages, they all share blame.

But really there is no use playing the blame game, because it is a downward-spiral, a conversation that leads nowhere. As much as I want to know how, at any level, someone didn’t stop and say ‘hey, this whole idea is based on the assumption that house prices don’t decrease’, what we really need to be talking about is increasing public financial literacy, so that everyone can understand the interrelatedness of the components of the economy.

Here’s an example of interrelatedness (in a humourous context) of the economy, the job market, home loss, health care, government, illegal activity

Does what you buy define you or do you define what you buy?

I’ve realized that the answer to this probably shapes your consumer behaviour.

In our market research class, we learned that consumer behaviour is affected by three factors

Culture————–Social——————-Personal

In trying to identify my own consumer behaviours, I reviewed what what I have bought, and why. It seems to be a combination of what my family has bought, feedback (positive or negative), culture, my own personal perception of value, taste, media, social groups (i.e. soccer team, student), and perception of necessity. Here is a list of things and my rationale behind my consumer behaviours:

-Food: I buy lots of food- I buy lots of fruit, mostly local except bananas and pomegranates, but not so much organic unless there’s little price difference. I also buy lots of vegetables, interestingly inversely related to the vegetables I used to eat at my parent’s house, hence I choose broccoli instead of brussel sprouts. I also try to buy bulk to reduce packaging, and I won’t buy something if there’s too much plastic, or if its too expensive.

-Clothes: difficult to analyze, but I would say that my choice of clothes is affected by price, weather, comfort, durability, colour, feedback, and social groups.

-Objects: perception of necessity dictates the buying of school supplies, toiletries, kitchen utensils and pots and pans etc.

According to the Government of Canada’s website (http://www.international.gc.ca/trade-agreements-accords-commerciaux/ds/csr.aspx) Corporate Social Responsibility (CSR) is defined as the way companies integrate social, environmental, and economic concerns into their values and operations in a transparent and accountable manner.

However, what is the economic incentive for businesses to incorporate CSR into everyday business practices? Interestingly, the economic incentive is quite large, which has contributed to what is known as “Cause-Marketing” which pairs the credibility and business resources of a ‘for-profit’ business to help promote the mission of a non-profit business. (According to http://www.gtms-inc.com/tip_causemarketing.htm) a 2007 survey of American consumers indicated 95% of consumers would change brands of the same product if the other brand is associated with a good cause. HOWEVER, and this is a big ‘however’, simply picking a good cause and contributing is not necessarily good business. Why? Well, I believe that effective alignment depends on some variables:

• CONSUMER preferences for ‘worthy causes’
• cost difference between same product
• How the cause is marketed (petition, action, celebrity endorsement) and the channels of distribution
• Where the cause is promoted
• If there is a logical connection between the marketer and the cause

Examples-

In class 6, we were introduced to the idea that perception is key when it comes to marketing a product. We know that businesses pay dearly to ingrain their intended imagery into the minds of the consumers.

Case in point: Dog Food. What is the first dog food brand that pops into your head? Most likely, its Purina, Beneful, Pedigree, Iams, or Cesar, for the simple fact that those companies are currently running television ads. This is an interesting example, because dog food sales have nothing to do with taste, and everything to do with how the product is presented to you, and which brand you feel ‘suits your dog’s needs’. Does your dog want meat, vegetables, or how about healthy teeth?

However, with such a large market, it is difficult to find points of difference when advertising dog food. Thus, when a new trend in dog food marketing comes along (ex. environmentally-friendly dog food), many companies advertise a point of parity. Why? We learned that it was product differentiation that accounts for a successful marketing strategy.

In an interesting twist, one simply has to look at the structure of the market to understand the marketing strategy. The majority of dog food sales come from the top 5 producers, among them, corporate giant Nestle. Nestle just bought out Waggin Tails, Sept 10.(http://www.reuters.com/article/idUSLDE6891RA20100910), which earned 200 million last year. With high barriers to enter the pet food market, it may seem like there is lots of competition looking at the shelves in the supermarket, but the giants have simply bought out their competitors, making it much easier to dictate their position to consumers. The pet food industry’s marketing and positioning strategy is not as complex after all.

In class, we were asked to brainstorm ideas for incorporating management information systems into Mountain Equipment Co-op’s brand. What we realized very quickly is that there is great potential for the use of social media, and the creation of different distribution channels. I believe that MIS has applications in almost every aspect of business, and in marketing and R&D for MEC:

Marketing is most likely the aspect which stands to gain the most from incorporating technology.
Firstly, MEC already has an email list in place, and is currently offering incentives in the form of a contest as well as discounts and promotions to gain subscribers. However, the customers who would sign up for the list would be people who are already familiar with their company.
To gain more first-time buyers, MEC should turn to social media. For example, they could offer guided hikes or equipment demonstrations and advertise these events via Facebook, or in the local paper. As well, they may stand to profit from creating their own form of social media, by providing a way for adventurers to share their stories, their reviews of equipment, and their photos (perhaps through Flickr). Because their business philosophy deals with interaction with others and the environment, MEC could benefit greatly by fostering interaction with new customers, and maintaining the loyalty (and good word-of-mouth) of old customers. As well, Research and Development already works with frequent customers to develop better quality products. There is potential for MEC to develop a feedback system, which  may further their R&D, as well as generate more sales, as the products are better suited to their customers.

In a recent article in the Globe and Mail, (http://www.theglobeandmail.com/news/arts/david-suzuki-looks-back-with-a-hint-of-regret/article1623210/), David Suzuki looks back on his legacy as a scientist and environmental activist. Though his is proud of his organizations efforts, he knows all too well that more has to be done, especially in the business world, in order to protect our planet.

When speaking of his approach, he mentions that he started his career as a scientist. He then began working in television, in an effort to use broadcast media to inform the public about the status of the environment. What I found very interesting is when he spoke of his regrets, especially when he mentions that he wishes his initial perspective had been broadened, meaning, instead of focusing solely on the science, looking at the environment from a business perspective; perhaps if he approached environmentalism with a greater understanding of business, his message would have been more successful. When it all comes down to it, business is at the core of interaction.

“I have been told over and over again by business people and politicians, ‘You environmentalists should understand that we can’t afford to do the things you want us to do if we don’t have a strong, growing economy, because the economy is the bottom line.’ ”

If sustainability could be tied to the economy and to business, we would be successful in our efforts to protect our shared planet. Because the economy is tied to the limited availability of resources, it is inevitable that our approach must change before our lack of resources deprive us of a liveable environment. The question that remains in my mind, however, is what will it take for the economy to change? The incorporation of social media into environmentalism? Having monetary incentives to opt for sustainable business? A realization that we have minimal potable water, and a lack of clean air?

Technology is constantly evolving- in fact, tech advances can be tracked along a logarithmic curve, meaning that the pace of evolution of the tech industry is exponential. Though from a business viewpoint, the scientific innovations are not useful unless the consumers believe that the neew technology is actually better, or worth upgrading for.

As the race to find the next big marketable tech idea continues, Pranav Mistry of MIT has a goal of bridging the gap between the physical and digital world. Here is a clip of what he has been working on. If nothing else, watch from 10:17-10:50, where he demonstrates the applicability of to everyday tasks:

http://www.ted.com/talks/pranav_mistry_the_thrilling_potential_of_sixthsense_technology.html

In this case, he and his team have managed to identify everyday problems, and work from a consumer standpoint to find technological solutions. In contrast, most app developers are using apps for marketing purpose, but their actual applicability to everyday tasks are quite frankly, trivial. It will be very interesting to see when, and how, this technology will be able to translate into a business.

We all know that competition sparks innovation, but does innovation necessarily result in profit? Businesses need to keep the novelty they seek in check with consumer demands.