Godiva, known as luxury chocolate brand from Belgium is launching into cities of China to compete with existing competitors to share a sweet success of the market. As mentioned by the article, since the opening of its first Godiva store in Shanghai’s Grand Gateway Mall, the manufacturer plans to expand geographically into other places of Shanghai. The two new locations will be in the city’s Xintiandi area and at Shanghai International Financial Center (IFC).

Since Chinese people’s living standard continues to improve, they are looking for brands, especially brands from America or European countries. As mentioned further in the article, there is a report shows that China’s luxury goods sales saw 12 % growth in 2009, while the global market is experiencing an 8 % contraction. The total size of the chocolate market in China in 2009 is approximately 7 billion yuan and is expected to grow about 11% in 2011.

It is because of seeing the growth of Chinese demand for luxury products, the premier chocolate manufacturer Godiva also launching in more stores and expanding geographically to Beijing and Guangzhou. However, it is still a fresh entrant as compared to its competitors, therefore it has to create point of differences that will differentiate it from the others in order to experience continue success in the market.

Sources: http://www.chinadaily.com.cn/business/2010-01/30/content_9401690.htm

In Sandra’s blog, she talked about McDonald’s using social network to establish a platform that aims to debunk rumors about its food. As Sandra mentioned that McDonald’s launched in a website in June 2012, known as “Our Food. Your Questions.” Through this website, customers will ask their questions and get the answer back right away. In the past five months since the start of the website, it has hosted over two million interactions and over ten million video-response views as further mentioned in Sandra’s blog. These numbers indicate that using social media can help firms to interact with customers and response to customers’ concerns easily.

Example of questions asked by customers on the page ” Our Food. Your Questions.”

Example of answers right away from McDonald to a customer’s question.

I agree with Sandra’s idea that using social media can have both positive and negative effects. But, I personally think there will be more to the positive side than the negative side. The positive effect that Sandra already suggest is there exists an opportunity to stamp-out false rumors, which allows McDonald’s to regain some of its credibility and regain its reputation. Also, establishing a platform like “Our Food. Your Questions.” will attract customers to ask questions and raise their interest about McDonald’s, which can act as part of a marketing campaign. Furthermore, it ensures customer loyalty since customers get to know more about the brand. Finally, I agree with what Sandra’s brand positioning concept that once a company’s image is stored into a customer’s mind, it is hard to remove that image and redevelop reputation. Therefore, it is essential for McDonald’s to reply as fast as it can to a customer’s concern and create this point of difference that will set it apart from its competitors.

Sources: http://yourquestions.mcdonalds.ca

Photos taken from the “Our Food. Your Questions. ” website page.

The article in The Globe and Mail suggests that not only U.S. consumers prefer to buy local made products, but the research conducted show a rising trend that the Chinese are also willing to pay more for “Made in America” label.

Research show that nearly half of the 1000 people surveyed in China, 61% said they prefer U.S. made products to the ones made in local, and are willing to pay more for it. The actual shopping behaviour showed that 64% of the Chinese respondents said they have purchased U.S. products at least once a month. The highest product categories purchased are mainly baby food, and electronics. The reason behind is that U.S. made products is higher in quality and greener to the environment.

Since the milk scandal happened in 2008, Chinese consumers are now more careful in choosing baby food for their kids. They are willing to pay more to buy ” Made in America” baby milk powders as compared to the ones that are made in local, where toxic chemicals are added.

Although many U.S. firms have moved their factories from China back to the United States, the rise of Chinese consumers seeking for ” Made in America” label has created an incentive for the U.S. firms to increase their output and focus on quality for the Asia market.

Sources: http://www.theglobeandmail.com/report-on-business/industry-news/marketing/made-in-america-a-valuable-label-even-in-china/article5315663/

Wal-Mart, known as the world’s largest retailer announced a goal to reduce twenty million metric tons of greenhouse gas (GHG) emissions from its supply chains by the end of 2015. This is equivalent of removing more than 3.8 million cars from the road for a year.

Since 2005, Green House Gas (GHG) has brought out the issues of global warming and climate change, which made energy efficiency and carbon reduction became the central issue for the world today as said by Walmart president Mike Duke.

In pursuing its goal, Wal-Mart work together with Environmental Defense Fund (EDF), and other experts like Carbon Disclosure Project (CDP) to evaluate its supply chains on a global scale. In doing so, both the EDF and CDP will act as a team to help advise the suppliers, and measure reductions.

Wal-Mart also plans to achieve its goal by mainly targeting on popular product categories like milk, bread, meat, clothing, DVD, tooth paste, soap, beer, soda water etc. that contain highest embedded carbon. It does that by asking its suppliers to  rethink how they source, manufacture, transport, and examine the carbon lifecycle of their products. For example, in the past few years, Wal-Mart’s DVD supply chain reduces greenhouse gas emissions by eliminating the plastic knob in the centre of its CD cases. It then changed the labels on the clothing it sells to indicate that the product can be washed in cold water, which helped customers to lower their cost for electricity.

In doing these, Wal-Mart not only creates sustainability development to meet current needs, it also reduced costs because of increased energy efficiency of the supply chains. Therefore, it can be passed along to customers with products sold at lower prices, and help maintain Wal-Mart’s reputation as a destination for “rock-down prices.”

Sources: http://futurepredictions.com/wp-content/uploads/2012/07/FOG.jpg

http://www.ftlcomm.com/ensign/business/walmart/files/cover.jpg

http://news.walmart.com/news-archive/2010/02/25/walmart-announces-goal-to-eliminate-20-million-metric-tons-of-greenhouse-gas-emissions-from-global-supply-chain

http://www.nytimes.com/2010/02/26/business/energy-environment/26walmart.html

Mr. Mainwaring states in his blog that Skechers copied exactly from shoes to concept off TOMS by launching in a new line called BOBS. The shoe company has the same idea as TOMS where it states that “Buy a pair of BOBS, and Sketchers will donate a pair to a child in need.” Even the shoes’ design and name tag are the same. However, there are a distinction between the two, which Mr. Mainwaring raised the fact that some “do good because of the meaning behind it, while the others do it simply for marketing purpose.”

I agree with Mr. Mainwaring‘s view that Skechers’ approach appears to be “cynical”. Because TOMS has a social mission behind where its founder Blake Mycoskie found out that children have no shoes to protect their feet in Argentina, so he and his team took a risk by betting their business on an untested business model. On the other hand, Skechers just seeing what is successful out there and copied the whole model and shoe designs. It did not place a financial bet on their business.

Although Blake Mycoskie did states that he hoped others would copy his business model, Skechers should not copied exactly the same shoe design from TOMS. As Mr. Mainwaring said Skechers’ approach shows not only “a lack of creativity originality, but they left themselves wide open to accusation of disingenuous social concern.” Because customers knew brands well, so a new line BOBS already prove to customers that Skechers lack a point of difference. Even the price set by BOBS is only about $13 dollars cheaper, but the shoe sole and inside materials are all different. I have tried on one pair of BOBS in Shoe Warehouse, it feels completely different. BOBS used cheap synthetic material, while TOMS used a better quality to provide comfort to customers.

Same concept, Same shoe design

Therefore, I also agree with Mr. Mainwaring that Skechers will do a lot better if they launch in a new line by deriving TOMS’s “One for One” concept. Because it will attracts customers to connect with the brand, at the same time gaining “warranted admiration”.

Sources: http://simonmainwaring.com/brands/toms-vs-bobs-how-skeechers-shot-themselves-in-the-foot/

http://www.youngdigitallab.com/wp-content/uploads/toms-marketing2.png

http://www.polyvore.com/cgi/img-set/BQcDAAAAAwoDanBnAAAABC5vdXQKFmh1d0x1ckY1NEJHZ1EzMG9EU3Z1cFEAAAACaWQKAXgAAAAEc2l6ZQ.jpg

TOMS shoes is created by Blake Mycoskie in 2006 after his trip to Argentina, where he found out that children had no shoes to wear to protect their feet. Wanting to help, he created TOMS with a social mission known as the “One for One movement”. The movement stated “With every pair you purchase, TOMS will give a pair of new shoes to a child in need.” Within five years, they have donated over one million pairs of shoes to children around the world.

TOMS social misson

TOMS shoes’ founder Blake Mycoskie matched the term “Social entrepreneur” that we have covered in class. He recognizes a social problem where children had no shoes to wear by creating TOMS, and making a social change by giving away shoes. TOMS is a social enterprise that has both a private sector where they make a profit while having a public sector where they help the community.

One for One Movement

I bought my first pair of TOMS because of its popularity and comfy feature. I bought the second pair because of its social mission. Although there are many substitutes like BOBs, Aldo who offer similar styles with cheaper prices, TOMS’s social mission is what really inspired people including myself to become loyal customers. Also, it creates social events like “One day without shoes” to raise people’s awareness the impact of a pair of shoes to children.

–“Giving is what fuels us. Giving is our future”–Blake Mycoskie

Sources: http://www.toms.ca

 https://twimg0-a.akamaihd.net/profile_images/1105807567/LOGO.jpg

http://www.inhabitots.com/toms-wants-you-to-go-one-day-without-shoes-on- april-5/

Blackberry, a smart phone that was used to be on the top position in the smartphone industry had lost many of its customers to new rivalries like Apple and Android. Why would this be the case? Blackberry has been very popular before the iPhones have launched in. Even the U.S. president Barack Obama used Blackberry to send personal messages to his wife. The answers were explained in my friend Cathy Lee’s blog post.

President Barack Obama using his beloved Blackberry

In Cathy’s blog post, she has explained that Blackberry was lagging behind its competitor Apple with its new phone BB10 available one year behind the current new iPhone 5. Also, she has stated that Blackberry needs to evaluate its strengths and weaknesses in which I agree with her point. Although Blackberry has its main feature BBM, that would considered as a point of difference from rivalries. They are losing millions of loyal consumers to Apple, Android, and Samsung as what Cathy has talked about that the similar WhatsApp messenger is available.

BB10

This can be viewed as components in Porter’s five forces model in which increased rivalry and substitutes lead to unattractiveness. RIM has becoming more unattractive to customers because they can not provide what customers are looking for.

Picture reference: Google image bb10

Clothing retailer Gap Inc. has found out that one of its vendors in New Delhi India was using child labor in the process of making its clothing. The children employed were sold by their families. They had to work long hours without wages and their working place condition were worst that the hallways were filled with dirty sewage from flooded toilets. This might lead to disease and cause health concerns for the children, but the sweatshop did not care about this concern. The children  would got beaten with rubber pipes if they were working inefficiently. Also, these young children worked with their hands for long hours because of making hand stitched blouses that were going to sell in the western countries like the United States for a price of $40 dollars each.

The issue here is that Gap will lose its loyal customers after the news is out. No one would want to buy a sweater that was made in inhumanity ways. Thus, this would lead to both a decrease in sales and profit. Even Gap try to put a large budget to restore its image later, it would not help. Its reputation is damaged inside the mind of the customers.

Picture reference: Google image

Campbell‘s Soup Company known as the world’s largest soup maker is going to close two of its plants in the U.S. due to a change in consumer’s lifestyle. This is to say, they prefer fresh and organic products.

Campbell’s canned soup consumption has fallen to 13% when compared to a decade ago and also market shares have fallen from 67% to 53%. This is because of the rise of new technologies like pouches and tubs, and increased competitions  at supermarket shelves. In the 1970s there were only 5000 products but right now there are 50,000 similar products. So consumers have been given many other products to choose from besides Campbell’s.

This is very similar to the issue that we looked at in class the “Telus” case because the causes are the same for Campbell’s situation. Campbell’s is becoming more unattractive to consumers because of increased substitutes like fresh soups or pre-packaged soup ingredients which are easily found in supermarkets like T&T. Increased rivalries like Healthy Choice, Progresso,TrueSoups by Heinz in which these companies are also providing consumers with similar products. So, these are the reasons why Campbell’s is losing its attractiveness compared to the past.

Tainted bean-sprouts discovered in Liaoning province in Northeast China in 2011, three years after the milk scandal in 2008.

According to the Xinhua News, six people have been arrested and sentenced to jail after producing and selling tainted bean-sprouts. They produced these bean-sprouts by adding toxic fertilizers like urea(a toxic chemical)and enrofloxacin(an antibiotic)to maximize their productions. Since the two fertilizers  were toxic and could harm people, they were not allowed to be used in Chinese agriculture.

The business ethical issue behind this event is that these six people, which are the producers violate the business value basis of being a responsible citizen. They neglect the benefits of the society in which they only care about making more profit. They do not even consider the harmfulness of the toxic chemicals that will affect consumers. Also, they are acting against the law of China in which they use banned chemicals to produce agricultural products and violate the business ethic of acting and selling honestly to consumers.