Is Black Friday good or you? or good for the retailers?

Did you go for any Black Friday sales? Another question is, did you overspend your budget?

 

Black Friday sales sounds like a great news to every shopper because they could find some killer bargains and spend their money for some new stuffs in pleasure. However, this is not always the case.

“Dr. Laurence Ashworth calls Black Friday a “perfect storm” of a handful of psychological mechanisms. For starters, consumers already have a visceral response to seeing a deal. We see the actual price, then we see the price it’s being sold at on this one day only.

That limited time offer is paired with a limited quantity of items in a crowded store.

This implies the principle  of scarcity. The limited time offer urges customers to make a purchasing decision faster with more impulsion. Somebody enjoys shopping and they call it retail therapy. It’s a rush of dopamine when shoppers see some good deals and they eventually spend lavishly without conscious. Be a smart consumer and control yourself.

There are the links of some very interesting articles that talking about the Black Friday’s deals:

http://globalnews.ca/news/999195/the-psychology-behind-why-we-overspend-on-black-friday/

http://ivn.us/2013/11/29/why-black-friday-deals-arent-worth-the-stress/

Response to Khabibah Munir’s The Book Revolution

I am a vivid reader and I am having cognitive dissonance with the ebook revolution. I definitely agree with Khabibah that I would still continue to purchase paper book instead of an ebook even though a paper book can be more expensive and heavier to bring around. An ebook does not have the texture, the smell of papers and thus, lacks the reading emotion that I would appreciate. Furthermore, I have been facing my laptop’s screen for more than 7 hours per day and I do not want to read book on digital screen again (it hurts my eyes!).

However, I really have to say that ebook is our future and paper book might eventually become obsolete. First, producing an ebook costs much less than a paper book. Also, producing books using paper is not environmental friendly after all. By holding an ebook reader, you can easily switch to any book you want to read instantly and it is very convenient to bring around.

In ancient time, people wrote things on tree, animal skin or stone until a Chinese invented paper. Now, technology has become so advanced that words can be displayed on digital screen. People will eventually switch from reading paper books to reading ebooks. Remember that marketers always try to create values and sell them to customers. I may argue that the marketers is simply making up the benefits of an ebook-reader. They are changing the way we read and the way we live.

Reflection on Group Project (Comm 296 section 101)

First of all, I am actually very surprised that I would have the option to choose my own teammate for the group assignments (I am being assigned into a team in other courses). Therefore, due to the “liking principle”, I chose to team up with the other three Malaysian friends, plus, I am really glad to have Eric and Agape in our team. I am really impressed with the efficiency of the team because we usually set a meeting time, sit together to start doing the assignment and we only leave after we finished everything in several hours. 🙂

In the course, we have chosen Amazon.com as the company for the marketing plan assignments. Many people might think that Amazon.com is just a big online retailer. This is very wrong. Amazon.com is somehow like a hidden empire. It owns Zappos.com, IMDb, woot! and so on. Besides, it is also an IT solution provider in providing cloud computing service, or they so-called the Amazon Web Service (AWS).

The founder of Amazon.com, Jeff Bezos has set a very clear value proposition for his company that is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” He hires many Walmart logistics executive in improving their supply chain management by adopting digital-driven supply chain; he bets on leveraging technology advantage to improve customer service by using CRM. Basically, Amazon,com is an A++ company that is doing so good in almost every aspect of its business model. In other words, it is very challenging to detect problems in their marketing strategy.

As the competition is becoming more intense, Bezos is very ambitious that he wants to create a Kindle ecosystem to foster the bond between Amazon.com and its customers.

He wants people to buy Kindle tablet/ebook reader so that they purchase products from Amazon.com (Kindle has a built-in Amazon App which is very easy to use). However, here is where the problem comes. There is a standard gap between what Amazon.com wants to achieve and what it really achieved. The fact is that Kindle tablet is not as compelling as other tablets such as the iPad or Asus Transfomer.  Moreover, Kindle’s Appstore lacks of useful apps that can attract people to buy it. In this context, we think that the idea of a Kindle ecosystem is excellent but Amazon still has to work on producing a  more compelling device that customers would choose to buy.

Take Google as an example, Google is a search engine company yet it has built the most popular smartphone operation system, Android and has successfully produced many great devices like the Nexus 5 smartphone and Nexus 10 tablet. They will be launching Google Glass and Google Coin very soon, too. The key is that how you can make your customers cant live without your products. 

Fashion Philosophy meets Food Recipe

In my previous blogpost, I discussed about how Uniqlo emerged as one of the most competitive apparel retailers in the global market. Only a few days after I published my blogpost, I found something on the Apple iTunes that really gives me a jolt- an Uniqlo recipe App. My first thought was “What?! When does Uniqlo sell food?!”.

The Uniqlo Recipe is a free App that you could download on Apple’s AppStore. It provides 24 original recipes that are easy to be prepared at home. It features 6 emerging chefs, namely Jamie Malone, Josef Centeno, Kim Alter, Kuniko Yagi, Thomas Mcnaughton and Brian Leth. The Japanese retailer styles each of the chefs and creates original music using their cooking sounds. Also, the App’s interface is beautiful, clean and user-friendly.

The Objective

Why Uniqlo does that?

Uniqlo has been keen to enter the US market for years under their business expansion plan. Now, they publish an App on the iTunes to increase the brand awareness/recognition among the young working males and females, age between 20 and 29. The App is basically a marketing channel to advertise the brand to the potential customers in North America. Some young working males and females cook simple dishes at home and they then need a recipe book. Uniqlo realized this situation and they have decided to build a recipe App so that those targeted customers could simply refer to their recipe App by using their iPhone or iPad. As marketing is not just about making commercial, it can be much more interesting for example like this case. Are you interested to download the App?

A Focus on Galaxy Gear’s Failure

Portable IT devices like smartphone, tablet and ultrabook are extremely popular nowadays simply because the people are so into Internet and social media. That’s also why many IT companies are competing to roll out the next “wow” IT product to impress the consumers. When Google is still working on the much anticipated Google Glass, Samsung has managed to launch its so-called “first smartwatch” on 4th September 2013. The Galaxy Gear is a $299 Android-based smartphone that can connect to Samsung Galaxy device. It has many features such as, Smart Relay, S Voice, Memographer, Voice Memo, Auto Lock, Find My Device, Media Controller, Pedometer, Stopwatch and Timer.

It’s not hard to tell that what Samsung is trying to do is to create the first-mover advantage in this new-created market so that it can easily claim the throne even when many followers enter the market. Do they really succeed?

According to Reuters, Samsung announced that they have been selling 800000 Galaxy Gear watches since its debut. This number is not really impressive. Moreover, a source claims that there is a return rate of 30% at Best Buy. The Galaxy Gear simply failed because there is a knowledge gap between what the customers expect to get and what the Galaxy Gear actually delivers.

Rachel Metz of Technology Review writes: “After trying some smart watches, I’ve determined that a good one will need to be more than just reliable and simple to use — it will have to learn when and how to bother me.” Simply migrating your smartphone’s interruptions to a your wrist doesn’t add much value. It’s the same annoyances on a 

smaller screen.”

 

It seems like the Galaxy Gear is a noble attempt at innovation. However, what the customers want is not just a piece of smaller screen device with the same features as a smartphone because they could just use a smartphone instead. The smartwatch is incompatible with non-Samsung smartphones and it has really bad battery life. Most of the part, it is just an unnecessary luxury.

People will only be interested with the smartwatch when it is faster and more advanced than a smartphone and can genuinely improve their lives. This is what Samsung needs to think about when they work on improving the Galaxy Gear as the iWatch might be coming very soon.

If the Galaxy Gear is something as shown in the above, with a foldable screen and long battery life then it will definitely “wow” the world!

 

7 Principles of Influence

1)Commitment

Once people establish a commitment, they are more likely to continue the transaction. When a Toyota salesperson grabbed a potential customer and explained the details of the car the customer is interested with, there is a high possibility that the customer will buy the car instead of looking to other places.

2)Consistency

If 10000 people are using Beats Audio headphone and they make excellent comments, then, it is likely that the 10001th customer will like a Beats Audio headphone too.

3)Liking

People like to be liked. Also, they are easily persuaded by the person they like compared to the person they are not familiar with. For example, companies use sales agents from within the community employ this principle.

4)Authority

People tend to obey to legitimacy. In, 1960s, a famous experiment called Milgram experiment was being conducted, showing that people are likely to obey to professional’s command even they feel bad for shocking other people. In real life, marketers often use professionals to prove the superiority of their products.

5)Scarcity

Scarcity generates extra value in the eyes of consumers. In other words, scarcity can generate instant demands. Marketers often use “Limited Time Only” to create a sense of scarcity in order to encourage customers to buy more.

6)Social Validation

People tend to do what they see the others are doing. For example, if a person sees everybody is using Apple product, it is very likely that the person will purchase an Apple product as well.

7)Reciprocity

People tend to give return to somebody who has helped them before. For instance, you signed an insurance contract with a very good friend (an insurance agent) who helped you a lot before.

In a commercial, there could be 4-5 principles working together to promote sales.

Video Link: http://www.youtube.com/watch?v=_4ZcStMsss8

Uniqlo: It’s Your Style

Under the leadership of CEO Tadashi Yanai, Uniqlo has grown rapidly from a small Japanese clothes manufacturer into the largest apparel chain in Asia. Moreover, it has many global flagship stores set up in major cities around the world, like New York, Toronto, Shanghai and Kuala Lumpur. The successful story of Uniqlo is not a coincident.

Wearing Your Own Style

You may wonder why a fashion store that sells only basic items such as hoodie, fleece, jackets and denim, becomes so sought-after. The recipe of Uniqlo’s success remains its sharp focus on customers’ need. The brand believes that customers care more about quality and value than about a quick response to changing fashion trend. Yanai identifies several apparel categories that won’t quickly become obsolete, differentiates them, and then builds a supply chain that delivers these apparels to the consumer. “It’s your style” is Uniqlo’s mantra. The brand focuses on producing good-looking and high-quality apparels that the customers is the ones who can choose their own wearing style according to their taste and preference.

Customer Feedback and Technology

The UNIQLO Customer Center receives roughly 70,000 feedbacks from its customers every year. They investigate on those comments and strive to deliver more values to the customers by fulfilling their extra needs. The HEATTECH series sold by Uniqlo is actually the product developed response to customer’s demand for functional innerwear which is soft, warm, anti-perspiration and heat-retention.

On the other hand, Uniqlo has also implemented a strategy used by the technology industry, known as “planned obsolescence.” Yanai hopes more technological features can be added onto Uniqlo’s apparels to drive consumers to update their wardrobes.

http://www.forbes.com/sites/gregpetro/2012/10/23/the-future-of-fashion-retailing-part-1-uniqlo/

http://www.fastretailing.com/eng/group/strategy/uniqlobusiness.html

Marketing Ethics Issue: Food Advertising to Children

Marketing is the key in establishing a good brand reputation and boosting sales. However, marketing sometimes can cause some ethics issues.

As far as we concerned, childhood obesity is highly related to the high number of food advertising targeted at children. As children’s economic influence increases, food marketers see children as a lucrative market to be tapped and tend to advertise more at children. With minimal government regulation, children are being bombarded by food advertisements through television like never before. Statistics shows that children in US viewed an average of 6,000 food advertisements on television a year during the 1970s, but this number rising to 9,000 a year during the 1980s, and finally to more than 12,000 a year during the 1990s. This indicates that there are more and more children being brainwashed by the food commercials.

Result of analysis shows that exposure to advertisements that promote energy-dense nutrient-poor foods can stimulate excessive energy intake and exaggerating unhealthy choices among foods such as junk food and fast food. Besides, from a psychological perspective, children are more defenceless to the influencing nature of advertising than the adults. Based on Piaget’s work on children’s cognitive development, children under the age of eight are especially vulnerable simply because they lack the cognitive skills to comprehend commercial messages compared to teenagers and adults.

We all know that McDonald’s is bad for your waistline and for your health, but what the McDonald’s commercial tells us is contrast with the facts. McDonald’s commercial always portrays that McDonald’s restaurant is a fun place for kids where they can enjoy both playing and eating. The commercials tell us that McDonald’s restaurant is the perfect place for family to eat out because of its affordable price, food quality and uncompromising hygiene. Sometimes, they also release Happy Meal toys to attract kids. They have never mentioned that their food is excessive in salt and fat which contribute to obesity.

Provided that most countries are implementing self-regulating system in advertising industry, food companies have their own power in disseminating their consumerist ideology to children through advertisements on television. It is clear that advertising to children is unethical, but should it be set as illegal as well? Sauder School of Business professor, Tirtha Dhar suggests that an advertising ban can be an effective approach to battle childhood obesity. What do you think?

 

Help the Society by Staying Some Nights at YWCA Hotel

A social enterprise is a business that applies commercial strategies that not only achieve sustainable profit but also maximize improvements in human and environmental well-being.

YWCA Hotel is one of the real life examples of a social enterprise. Ideally located in downtown Vancouver, the YWCA Hotel provides cosy and economical accommodation for all types of travellers. The daily rates begin as low as $65 per night during the winter months.

A Social Enterprise Hotel

Different from other commercial hotels, YWCA is a registered charity, providing a variety of integrated services for women and their families, and those seeking to improve life’s quality. YWCA aims generating revenue that sustains YWCA Metro Vancouver community service work to improve housing, health and fitness and employment services of the community. “Each year, more than 50,000 lives were touched by the YWCA.”

YWCA Mission:

“Our mission is to touch lives and build better futures for women and their families through advocacy and integrated services that foster economic independence, wellness and equal opportunities.”

What you contribute by staying at YWCA:

  • You create an opportunity for the YWCA Single Mothers’ Support Services program participant to attend a workshop that will help them to achieve personal and economic independence.
  • You provide up to 15 meals to women and children in Vancouver’s Downtown Eastside. Each year, more than 28,000 plates of hot food are served to YWCA Crabtree program participants and their children.

Besides YWCA, there are many social enterprises exist in the market. For example, Fifteen, Amul and SEKEM. Social enterprise is a very good form of business as it helps society to achieve better sustainability.

Click on the link if you are interested in how to build your own social enterprise : http://www.enterprisingnonprofits.ca/enp-events-and-grants/workshops

YWCA video’s Youtube link: http://www.youtube.com/watch?v=EJKRR0onfIQ

BMW’s Hot Management Theory

The big size of a company is no longer the ticket to success; nowadays, is the ability to shift and adjust as circumstances in the market change ensures a company to be unbeaten.

In order to stay innovative and competitive, BMW has forgone the old slow-moving bureaucratic system and started to establish networks within each level of the organization.

Cross-functional Team

According to James M.Manyika, a partner at McKinsey & Co. in San Francisco who has studied the effectiveness of such networks, “Cross-functional teams look messy and inefficient, but they are more effective at problem solving.” By organizing cross-functional teams, BMW leverage workers’ tacit knowledge, making them more progressive and productive. This makes BMW stands up among its competitors. BMW encourages workers to build a web of personal ties to speed up the process of problem-solving and innovation, be it in production, design, marketing or R&D.

Discipline V.S. Creativity

To emphasize on creativity, BMW even allows workers to forget about formal meetings, hierarchy, and stamps of approval, when they are pushing on a fresh idea. Besides, unlike Toyota’s standardized lines, BMW empowers its workers to make changes on production when it is necessary. Similar to Dell Computer (DELL), BMW provides the customization option to customers. Hence, each auto moving down the production line is different.

Only change is constant. As the market keeps changing every day, a company should never be satisfied with its current status and management strategy. Being innovative and creative is the only way to be successful.

The article that I have referred to : “Online Extra: The Secret of BMW’s Success