Terence Chan's Blog

Wow.  That’s pretty much all I can say about the second semester. It feels this way every time a semester ends.  You just don’t realize how much time has passed by until you actually stop to think about it. From the beginning of Comm 296 where I had minimal interest in marketing to the end of Comm 296 where I’ve developed an interest so strong I’ve decided to take marketing as my second option.

This course also gave me an invaluable experience, the marketing plan group assignment. To be honest, ever since coming to University, I’ve found it quite difficult to both meet new people and retain contact with them after the semester is over. The marketing plan assignment gave me an opportunity to meet great people. Of course, the marketing plan was our first priority but because of the opportunity that were given to us to meet we were able to become great friends. Most of the time, after our 6 hour meetings on Sundays, we would go out and enjoy a meal together to commemorate our hard work for the day.

As for how we worked together, quite frankly we weren’t very efficient in getting work done. We would meet up and collaborate on the task at hand but we were not very efficient in splitting up the work. Aside from that however, we worked great as a team. We had very great discussions about the issue at hand, and we respected everyone’s opinion. Furthermore, everyone gave their all in completing this project and as a result, we became not only great team mates but great friends as well.

Overall, this opportunity to analyze Zara and create a marketing plan according to it’s pre-existing marketing mix gave me a valuable experience. Not only did it let me meet fellow Sauder comrades but it gave me an opportunity to indulge in marketing, and develop a sense of direction in my future career towards the marketing field

It’s time for a random thought of the day! Today, I had a glass of Coca-Cola and couldn’t help but think about the vast market share that coca cola has attained over the years. In fact, the brand is so reputable and well known that virtually everyone knows it. The question I pose today is, why do they continue to advertise? Coca-Cola spends billions of dollars each year on advertising when virtually the majority of individuals know of the brand and has tasted it before. Wouldn’t it be better for for Coca-Cola to use this money on R&D instead to develop better products? To be honest, this has puzzled me for a long time.

It took me a while to put my mind around this, but when I actually thought about it, it became painfully obvious. Imagine if Coca-Cola completely stopped advertising. No more Television commercials, no more sponsorships, nothing. Pepsi, its main competitor and sworn nemesis would take that opportunity and gain massive sales by continuing its advertising. In a sense, its a “prisoner’s dilemma”. Pepsi and Coca Cola would both earn more profit by not advertising then if they both advertise. However, if one party advertises and the other doesn’t, the party that does not advertise will incur substantial cost. Therefore, there is an incentive for both parties to invest in advertising.

Of course, there are obviously many more reasons that would give incentives for a firm to spend on advertising despite their reputation. However, this is the the simplest and to me, most realistic example of why.

Today, while surfing through the internet I came across the book “1984” by George Orwell which I’ve read years ago. I recalled the book dealing heavily with politics, freedom, and propaganda.  At that moment, something struck me. Most people connotate propaganda with tyranny, evil, or negative things in general.  However, is modern day marketing really that much different from propaganda? Can we argue that propaganda and marketing is essentially the same thing?

The more I think about it, the closer the two terms seem to coincide. As dictionary.com describes it, Propagnda is “information, ideas, or rumors deliberately spread widely to help or harm a person, group, movement, institution, nation, etc”. Reading this definition, I can’t seem to figure out the difference between modern day marketing and the propaganda used in the past. Modern day marketing involves using techniques in order to send a message to consumer base to influence their thinking. When I put the two definitions together, they seem awfully familiar. So why do people treat the two terms so differently? For example, if someone were to ask me on the spot to name things I associate with propaganda I would probably mention things such as communism, dictatorship, or conscription. On the other hand, I would associate shopping, commercials, or radio ads with marketing.

I guess this is just another case of people associating things to a word. Propaganda can be good or bad, depending on its uses. In a sense it’s like a gun. It can save lives or break families depending on its users intentions. Propagnda can be a good guy afterall!
 

Creating an effective commercial is the underlying target of many marketers.  It doesn’t matter how much you spend on an advertisement if it doesn’t appeal to the consumers.  In my opinion, I think the most general response to what is a good commercial is one that represents the company and instigates action. I agree that a good commercial must contain these elements.  However, I personally believe that is a huge difference between a good commercial and an amazing commercial.  What makes an amazing commercial then?  This is something I cannot answer you.  In my opinion, there is no set criteria that differentiates good commercials and amazing commercials. Different commercials appeal to different people, and thus it is up to an individual to gauge whether a commercial is good or amazing.  An amazing commercial is something a viewer will realize it’s greatness upon watching it. Let’s look at an example, shall we?

David Beckham, superstar midfielder and idol of many, appearing in front of his fans while all those priceless reactions are recoded on camera.

Frankly speaking, watching this video gave me goosebumps. It made me imagine how I would react if I was in their shoes and surprised by my favourite athlete.  As AdWeek writer, Emma Bazilian says it best

“Even if you’re not a sports fan, let alone a “teamGB” fan—the spot touts Adidas’s support of Great Britain’s athletes during the London Games—you’ve had that feeling of being so shocked and overcome that you can’t control yourself. It’s a rather heartwarming thing to be reminded, ahead of the 2012 Games, just how important athletes are in the lives of a great many people.”

I whole heartedly agree with just how heartwarming it was.  To me, this was an amazing commercial because it touched me emotionally.  Although the commercial did not make me immediately want to get up and go to Adidas to buy their products, I doubt that was the point of the commercial. Adidas released this commercial not only to show its support for Team Great Britain in the 2012 Olympics, but also to send a message.  They wanted consumers to know that Adidas isn’t just some corporate entity that’s fixated on on extracting money from consumers.  Instead, they pride themselves in bringing happiness to individuals.  This David Beckham commercial is extremely powerful because it helped Adidas build a positive identity  in consumers’ eyes.

Source: AdWeek

Throughout our lifetime, we see thousands and thousands of commercials on television and posters on billboards.  However, many people don’t realize exactly how much time, effort, and money is put into those.  I for one, did not realize the extraordinary expenditure a company must incur to use these marketing tactics. According to Evangeline, many companies spend around $4 million dollar for a mere 30 second advertisement. Many people cannot even think of earning $4 million in a life time, so when I read that, it literally made my jaw drop. Why would companies spend millions on something so intangible and perishes in less than a minute? Reading this post made me extremely curious about how much do these major corporate entities actually spend on advertising each year.

As shown above, the amount that Apple and Samsung amongst other companies spend on advertising is astounding.  In 2012, Samsung spent around $4,000 million. Although not crystal clear on the diagram, I estimate that Apple spends around $1,000 million on advertising each year.  Now things are starting to make sense.  For a measly $4 million dollars (yes I actually just described $4 million dollars as ‘measly’), these companies can capture ‘111 million spectators‘ attention and turn them into potential customers.

In response to the Oreo advertisement uploaded on Twitter, I just have to say, “well played Oreo, well played”. The creativity and timely response of the company is what I think is most important in marketing. By seizing this one-time opportunity with such a quick and creative response, the company can successfully appeal to its consumer base. As Evangeline said it best, “Although the profits associated with this particular move may not be measurable, the benefits brought to the brand and its image are undeniable.”

Here’s a totally irrelevant cute picture of a puppy to end us all off with a happy thought!

Sources:
Evangeline’s Blog
Samsung’s Advertisement Expenditure

Red Bull, the leading producer in energy drinks is currently being sued by Benjamin Careathers of New York.  The lawsuit against the defendant, Red Bull is for charging a premium price on a product that provides the same type of ‘mental boost’ as other alternatives such as coffee.

Essentially, the cause of this lawsuit is consumer perception. Red Bull has never stated that their product is superior to coffee. Their whole advertising campaign is based on their slogan “Red Bull Gives You Wings”, a metaphor for replenishing individuals. It gives you the temporary increase in mental capacity and helps revitalize their energy levels.

The so-called “premium price” that Red Bull charges is justifiable. The beverage is not a necessity to life and thus, it is price sensitive. If Red Bull decides to increases it’s price, it faces the trade off of increased profit per unit and decreased sales. In an economic perspective, the market drives the energy drink to it’s equilibrium price. The price of a Red Bull is higher than coffee because of the value it gives to customers. Some people do not like the bitter taste of coffee, and thus when they need that extra jolt of energy they rely on energy drinks such as Red Bull.

In my opinion, the lawsuit is a complete waste of the both the court’s time and the taxpayer’s money. If you personally deem that a product is overpriced compared to an alternative, you can simply refrain from purchasing the product. The fact that the company sold a total of 4.631 billion cans of Red Bull worldwide in 2011 is an obvious indicator that this product provides value to millions of customers.

In addition, I do not feel like Red Bull violated any ethics through their marketing practices. Their slogan “Red Bull Gives You Wings’ is simply a metaphor for helping consumers through daily events. The majority of consumers are WILLING to pay a ‘premium price’ in order to stay awake during a meeting, cram for a final exam amongst other activities.

source:  click here