Min Soo Yoo's Blog

Today in class we talked about how Nestle is destroying Orang-utan’s habitat for Kit Kat’s ingredients.  So I researched and looked what other people thought about it. I found interesting article in Emmadando23’s Blog. She wrote “Update on Nestle Kit Kat Vs Greenpeace Orang-utan campaign” and “Can I eat a Nestle Kit-Kat now,without killing an Orang-utan?!”. She thought there is no justification for Nestle’s deforestation and she has been boycotting Nestle’s product over a year. Nestle is using palm oil for a lot of their product especially for Kit Kat so palm oil’s demand rose dramatically. In order to meet these demand, the Indonesian supplying companies started to destroy rainforest to make enough oil. The serious problem about destroying the forest is it also reduces clean oxygen and makes a lot of CO2.  Therefore, Nestle’s action is unethically involved not only with orang-utan’s habitat but also the people in the world, air, ozone and more. I think it is a serious unethical problem and totally understand why the blog poster is boycotting the product. However, when I think about this problem, I kept thinking about intention. As we learned in today’s class ethical/unethical always go back to the intention and motivation. In my opinion, at first Nestle did not realize they were actually involved in deforestation, meaning it was not their intention to harm forest. I think the company that was trying to meet demand started to deforestation without letting Nestle know about it. Therefore, I think Nestle was ethical since it was not their motivation even though they should have check up on it. However, this situation is unethical and Nestle should find alternative as soon as possible and let people know how they handled it. I think it is a non-sense that Nestle should just shut down a plant because than they have to cut down many people’s job. In the end, I believe Nestle’s action was ethical but the problem is seriously unethical so the best action for Nestle is to find an alternative as soon as possible so they can keep their employee and save forest.  

Here is the advertisement protesting to KitKat.

I just found a really interesting blog post, Mercedes-Benz Makes a Safe Bet on Teens. Mercedes-Benz is now launching teen-driving schools in United States. I really think it is an interesting b rand extension. The blogger said it would not attract the American teen but would be welcomed by parents. However, I think teens will be also interested.

In my opinion, both, parents and teens, will be attracted to the school more than other competitors. First, Mercedes-Benz is already known brand. They have brand association of safety and luxury. These brand association will influence teen-driving schools. Teen-driving schools by Benz will be more aware and gain image of safety and luxury even before they launched the school. Benz’s driving school will be differentiated from other normal driving school. So both teen and parents will trust the school more and will be popular as it was successful in U.K.

The only problem that I had while I was reading was Benz might get brand dilution. If student from Benz’s driving school have an accident or does not drive safely, it can negatively affect consumer’s perception about already existing brand, BENZ!

On the other hand, I think this brand extension can also strengthen Benz’s image ONLY if students from the driving school drive safely and have lower accident rate than from other driving school. However, it is difficult to do it since there will be a lot of teens attending Benz’s driving school.

In the end, I think Mercedes-Benz driving school will be profitable and popular but Benz should be careful not to brand dilute by educating the teens really well.

Here is the Benz’s safety commercial.

I was going over the blogs and find out some interesting post about American Idol, “The One and Only Simon Cowell” I completely agree with what Ofumi said about Simon. I definitely believe Simon is the American Idol’s sustainable competitive advantage. However, I think Simon was more than sustainable competitive advantage.

 For myself, when I was young I also used to watch American Idol but now I don’t even know the judges because they have kept changing and it is just completely out of my interest. So after reading Ofumi’s blogs, I thought of why I stopped watching American Idol and it was because of Simon Cowell. After Simon Cowell left, I stopped watching it. I loved Simon because even though he was giving out very harsh comments to the participants, what he said was right. If Simon was giving awful comment which did not even make sense, people would not have enjoyed or watched American Idol. Even though Simon’s comments are harsh, it was honest, and thoughtful. In my opinion, this differentiated Simon Cowell from others and lead to American Idol different from other competitor’s shows. Therefore, from my perspective, he was more than sustainable competitive advantage because he contributed a lot for American Idol’s image and brand. For example, when people thought of American Idol, they automatically thought of Simon Cowell. It is almost parallel to a brand association. Also, he made so many people loyal to American Idol (with Simon) like me and Ofumi. For me, Simon Cowell was the “brand equity” that added value to American Idol.

Here is Simon giving comments to the participants.

I was wondering around the blogs and saw Claudia’s blog mentioning about Anya Hindmarch launching the “I Am Not a Plastic Bag” line. I have read this article before and when I was reading it I thought Anya’s objective which was to bring the idea of being “eco-friendly” to people/world failed because people are more interested in this limited bag than the idea. As Claudia mentioned, I also thought people are more interested in this simple and plain bag because it was made by Anya Hindmarch.  

She also said that “Consumers do not mind that other people are carrying around the EXACT same bag” because it is a brand-named bag. However, I think of it differently; I think there is more reason why people buy the bag. I think people are buying it because it is exclusive. Anya Hindmarch has been building its image through exclusive distribution. Also, the bag is limited which makes the bag more attractive for people. Therefore, people want to feel that they have bought the SPECIAL bag. So for example, the bag was $15 at first when it came out but later it ranged from $700 to $2,000. People are willing to pay high price for it since they believe it is worth it.

So I think consumers are buying exact same limited bags to get the feeling of exclusiveness which Anya Hindmarch brand name provides.

At last, as I mentioned above people have forgotten the intention of this bag. So I really hope some Anya Hindmarch’s fan or other people actually noticed Anya HIndmarch’s intention of being eco-friendly rather than focusing on LIMITED edition bag.

Here is the picture of I’m Not a Plastic Bag worn by celebrities.

What’s hot news in fashion industry right now is about John Galliano getting fired. Few days ago, he lost his job at Dior for making anti-Semetic and racist remarks. While I was reading over the article, I was thinking if it is worth it to fire him. Yes, morally, indeed, he should get fired. However, in business point of view, I thought it might not worth it because he still has a lot of fans around the world and right now it is not sure that if he actually made an anti-Semetic comment. People love him and follow him because he is “who he is”. For example, Kate Moss, she has been addicted to drugs but people still loved her and she is still in the industry. Then as I scroll down, I see the comment from Sidney Toledano, Dior’s president and chief executive officer saying, “I unequivocally condemn the statements made by John Galliano, which are in total contradiction to the longstanding core values of Christian Dior,”. As soon as I read this one sentence, I totally agreed on Dior’s decision and they needed to fire him for Dior’s future. People buy Dior because of the image and lifestyles of sophisticated woman that Dior provides. The design and quality is higher than other product but people are mostly buying the lifestyle that Dior have built over the years and people are desiring to have self-concept of these elegant women. In the end, what I concluded was that even though, John Galliano can be a social reference group acting as aspirational group, Dior must consider their psychographic segmentation consumers.

Here is picture of John Galliano.

I am totally in love with Coca Cola and not in favor of Pepsi. I always thought Pepsi is too sweet and Coke is the best. Coke is in my refrigerator almost 24/7. So during the weekend, I was chilling at my house as usual, surfing the internet. As I skim through the internet news…… I saw COKE CAUSING CANCER! I clicked on it to read full text. When I finished reading, I slowly stared at the cup of Coke I was holding. Then I thought ‘okay…… this is the last cup of Coke I will ever have in my life…….’ So I drank whole thing and stopped drinking since then because I want to live long.

I had a long day on last Tuesday. I was tired, hungry and grumpy. I went to the store and before I realize I was naturally standing in front of COKE section. Then it reminded me of habitual decision making in marketing. Purchasing a coke did not even require a thought. Unconsciously, I was automatically in front of Coke thinking I need a Coke. Then, I also thought how I was being so loyal to Coca Cola. I did not even consider alternative brands or other alternative drinks but just needed Coke to relieve. Then, I understood why companies are trying hard to retain their loyal customers.   

In the end, I did not buy Coke. But indeed, I was standing in front of it for five minutes to whether I should buy it or not.

Just an update now, Coke is getting sued for having a cancer causing chemicals.

http://www.cbc.ca/news/story/2006/08/25/benzene-beverages.html

I am a huge fan of soccer. I always surf internet related to soccer. So today, I was looking though as usual and saw how Nike turned French soccer team uniform in fashionable way. Then, I thought hmm…… France then Paris, one of the biggest fashion cities, then how can soccer uniform be fashionable? So I clicked on it just to see its new look. The uniform actually did not look like a soccer uniform at all. It was more of day-to-day wearable shirt. People could wear it with jeans and jacket and it would look fine. I got interest and start to actually read the article. Nike had “designed new uniform radically different from the previous generation of jerseys” to target the new segment market.

Soccer uniform is around $100 and higher which is expensive relative to other day to day wearable shirt. The uniform is unfashionable and can’t be worn casually which makes it impractical. So it is usually bought by people who are really into soccer. In order to overcome these and appeal to more people, Nike is promoting how the new uniform is fashionable and how it provides unique personality to each individual. The new uniform can be customized to suit the wearer by using collar and sleeves. This uniform now has collar so people can either button, unbutton, up or down. Also, people can leave the sleeves as roll down to show blue (understated effect) or they can roll up to show bright red. Lastly, they took inspiration from techniques by top French fashion houses to make uniform longer and close-fitting with narrower waist.

Nike is using differentiated segmentation strategy to target people who are looking for more practical uniform/shirt that gives individual’s own distinctive style and personality. By adding more features Nike is providing benefit and these new benefits are targeting the new segment. I think it is a great strategy that covers up the traditional uniform’s weakness. But I wonder how much this will increase Nike’s profit.

Here is youtube video about new uniform.

While I was reading Consumer Decision Process for marketing midterm, it reminded me of decision process that I go through when I buy my make up! One day, I realized I was out one of my foundation and went to Mac to buy it. But, in Mac, they said my foundation line does not exist anymore and moreover they told me that they STOPPED producing it. I freaked out! The instant moment when I realized they no longer produce my foundation was the “Need Recognition” step. So I had to go home and do research to replace this foundation, which was “Information Search” step. Many factors affected my search process such as benefit of searching for new foundation outweighed  cost of searching (my time and effort), internal locus of control since I believed doing research can actually result a better outcome, and performance risk of foundation performing poorly on my skin made me to actually go and test before buying it. Then I found few foundations that I liked and started to evaluate which was the “Alternative Evaluation” step. I use non-compensatory decision rule in my evaluation. I was looking for foundation that is moist and little bit shiny when you put on. Then I began cutting down one by one and figured out the best one for me. Then I physically went to buy it which was the “Purchase” step. For the last step, “Postpurchase”, I have been using it since then and I like it so much that I would buy it next time if it still exists. So I had to postpurchase dissonance.

Here are the new foundatio that I am using.

It was just an ordinary day, I was home during weekend and I was watching television. I got hungry so I got up and grabbed some Korean snack which is called choco-pie. First of all, choco-pie is similar to wagon wheel with lots of marshmallow and there is about 24 wrapped snacks inside the big package. So, I sat down and tried to open the snack and realized they wrote something new on the choco-pie’s wrap. It was about the facts saying how good their product was. But one of the quotes that caught me was the marshmallow quote. Well, just a year ago, there was a rumor about how marshmallow was 100% purely fat and most of this choco-pie is marshmallow. So people started to say, they should not eat choco-pie and choco-pie’s revenue dropped.

(the pink part is the marshmallow quote)

 In the quote, it said marshmallow is 0% of fat. Also, it stated that choco-pie has 0mg of cholesterol, and 0g of trans fat.  This snack’s company, Orion, is providing the facts and new information to correct the people’s negative view on the snack. So Orion is using cognitive component to change people’s attitude.  I thought it was interesting and started to look at the other wrapper. I found out that there are three different quotes. One was the marshmallow and the other one was saying about how safely they wrapped and packed the snack which is another cognitive component. The last one was about how they are being green. They are using different plastic type for wrapping the snack to stay green. Right away, I thought this is using affective part of attitude. Orion is making emotional connection through being green. Also, people feel great about themselves because they feel like they are involved in this ‘being green’ project. I thought it was amazing how marketing is everywhere. I always thought marketing has to be fancy advertisement but marketing is everywhere, even on the snack wrapper.

This summer while I was in Korea, I was surfing internet to buy new shoes and found out about TOMS. At first, I did not even know it was a shoe brand but many of my friends knew about TOMS already. Moreover, TOMS was popular in Korea. I saw many people wearing it. Then, I wondered how TOMS became so popular suddenly when shoe industry is so competitive and dominated by Reebok and Nike.

TOMS was established in 2006 not long ago but they used the idea of “adding value” to attract the customers. TOMS is known for “One for One” which is giving a pair of new shoes to a child in need with every pair of shoes customer purchase. TOMS added the value to each shoes the customer buy and that was the reason TOMS could not only survive but also became successful in the shoe industry.  Also, they are building a long term relationship with their customer by showing the video of delivering the shoes to the children and they even hand place the shoes to every child. There are a lot of loyal customer and advocators wearing only TOMS.

First, I thought the value they added was not a sustainable competitive advantage so other companies can easily copy. But I realized now “One of One” became the trademark for TOMS and people know “One for One” is originally from TOMS so no one can copy it. For example, Ralph Lauren sold co-branded Polo Rugby TOMS, giving a matched pair with every pair sold and Element Skateboards has issued limited edition TOMS + Element shoes as well as a One for One skateboard.

Here is some history about TOMS and their shoe.

https://www.youtube.com/watch?v=zrKYUf5mNhA

https://www.youtube.com/watch?v=PTQsQUu1Ho8&feature=related

So would you like to be involved in One for One?