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Promoting Products April 30, 2007

Posted by Stephanie in advertising, brand, Consumers.
7 comments

The effort companies go through to advertise in both subtle and obvious ways on television is remarkable.  Characters in movies and television shows are often depicted with very specific brands of beverages, clothes and other products.  Products are strategically placed in the background of scenes, carefully positioned to subconsciously attract a viewer’s attention.  Another strategy is through the endorsements of talk show hosts.  Oprah has her “Favorite Things” episode about once a year which hopefully stemmed from her actual favorite finds.  Now however, hosts like Oprah and Martha Stewart look to make some extra money (as if either needed it) by promoting products on their shows. 

 
30-second spot on The Martha Stewart Show = $10,000

One-time in-show oral mention with product close-up = $100,000

Two-minute-plus branded segment, with two or three talking points = $250,000 +

 (Data: Martha Stewart Living Omnimedia Inc., BusinessWeek)

  In some cases Martha has never even used the product herself and yet she boosts of how phenomenal it is.  Even worse, in the case of the Scotch-Brite toilet scrubber segment, Martha doesn’t even like the fact that the product is used once and then wastefully thrown away.  This reminds me of hair product commercials featuring celebrities.  Do any of those women actually dye their hair from a box?  I highly doubt so. 

 Is this the same as false advertising? It seems quite deceitful.  Yet thousand, maybe millions of viewers take the advice of the “Queen of the Product Pitch.”  On whose recommendation would you purchase a new product?  Do they have to be an “expert” in their field? Is a simple commercial not enough anymore?

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Being Rich is Not An Easy Goal April 17, 2007

Posted by Elaine in Consumers, Finances, Public Interest.
8 comments

I have heard once that the majority of adolescents had said that their ultimate goal is to become rich in life. So many people have the same goal, yet only a certain percentage are ever able to achieve this. I came across an interesting article that features a young couple, both earning a combined six-digit income. They want the typical American lifestyle, get married, buy a house, and put money away for their kids’ education. These hard-working Americans however, only have a few hundred dollars in their savings account and approximately $40,000 in debt.

This is the normal trend for people these days. With the ability to “buy now, pay later,” credit accumulates tremendously. Everyone wants the American life with their own house early on in their lives, and hence, they spend and buy things on credit.

CNN money gives us advice on how to prevent this crisis. Start saving early. It seems like common sense, but it is actually much harder than it sounds. Most people spend their money on things, and leave their “leftovers” in their savings account. This is apparently the wrong way to go about it. We should put a set percentage in our savings account, and then pay off other things. If we invest $10,000 at age 30, it will grow to $100,000 by retirement. If we waited to invest this $10,000 at age 40, it will only grow to about half of that.

This article makes me think that it is never too early to start saving. It sounds like a foolproof plan, but do we have the discipline as American consumers to do so?

Forces of change for strip clubs April 10, 2007

Posted by Lady in Business-Society Issues, Consumers, Employees, Government, Organizational Environment.
9 comments

I read an article from The Enquirer entitled, “New rules for strip clubs?: Tough new laws could go on Ohio’s ballot.” Basically the article discusses how a group called Citizens for Community Values is putting pressure on Ohio state legislators to pass a Community Defense act which would put restrictions on how strip clubs run their organization. Nude dancing would be banned after midnight and before 6 a.m. In addition, customers would not be allowed to get within six feet of a dancer. Violation of these laws would lead to $1,000 fine and jail time.  

Supporters of the enactment of this law are seeking legislator’s approval because it makes the petition process go a lot faster. However, some people, such as strip club owners, are not in favor of this legislation. So I’d like to post my blog on how strip clubs function as organizations and how forces of change might affect their business. So I was able to point out social forces such as demands from some citizens to tighten their rules in the strip clubs. These citizens feel as though strip clubs have negative effects on the community, such as promoting prostitution and lowering property values.

 

Another social concern that I thought of was the fact that many of the dancers who work in the strip clubs end up living a corrupted life. In a sense, strip clubs ruin some girls’ lives by promoting promiscuous behaviors. Might some political forces of change also be involved with this situation since legislation is involved? Brian Rothenberg, executive director of a liberal activist group called ProgressOhio, said it is possible that the decision on the legislation could get pushed to 2008 “to drive up turnout for the presidential election.”

What do you guys think of this issue? Should this legislation be passed? Do these strip clubs have a moral obligation to consider to effects that they have on the community including the dancers who work in the strip clubs? Or should the government stay out of this issue because the strip clubs are just providing a service which is highly demanded and helps to also create jobs for these dancers? Do you think that strip clubs will be able to resistance these forces of change?

Everyone loves GE April 2, 2007

Posted by Brian Mulligan in Consumers, Decline and Death, Growth.
5 comments

I remember us talking in class about GE and the numerous business sectors that they’re involved in, so i decided to do a little research about the company. It just intrigued me that the company could still function in some many different industries. I came across this article from CNN Money. It’s named “What makes GE great?” and it explains why GE has been the most admired company for the sixth time in the past decade.

GE has been not a specialist in each sector, but has been the best at creating the best management and strongest organization in the world. Since it’s inception over a 100 years ago, it hasn’t focused on a certain product such as insurance or light bulbs, but fosters strong managerial talent. As time passed the company was at the forefront of corporate policy making, this can been seen with the first corporate R&D lab established and groundbreaking work with labor relations. They battled the creation of labor unions by creating pension plans and profit based bonuses.

They also made the famous “blue books”, which contain detailed guidelines for managers at GE. As the company neared the end of the 20th century they focused on leadership development and strategic planning. It almost makes sense to development strong management when you’re involved in so many different fields of business.

Also, the company is ever-changing and always seems to be one step ahead of its competitors. As we read in class, the addition of the emerging product lines and find what is going to be new hot product has become integral part of the business strategy for GE. Additionally, if something doesn’t work, then GE phases it out immediately and business focus changes with each CEO that comes to company.

“Most people inside GE learn from the past but have a healthy disrespect for history,” says CEO Jeff Immelt. “They have an ability to live in the moment and not be burdened by the past, which is extremely important.”

Trying to stay current learning from their mistakes has made a very dynamic company that is ever-changing. Lastly, GE handles their employees very differently from other companies. They develop them, evaluate them and then act on the results and this has created a very demanding environment. GE give the pink-slip to over 10% of the bottom rung employees each year. You may see this a blunt and heartless, but other companies are jealous of GE’s ability to recognize trouble employees and get rid of them.

I think GE has a very strong coporate structure with perfect management and business ethics. They seem to have it right and do what is necessary to keep this behemoth of a company running smoothly, but it does raise some interesting questions.

Does it make sense to invest money in training and developing of employees and then 10% of your work force? What happens when a CEO pursues a dead end business? Can it potentially destroy the company?

A Saab’s Story March 27, 2007

Posted by Kira in Auto's, brand, Consumers, Marketing, Organizational Environment, outsourcing, Retail.
4 comments

Saab was faced with the challenge of expanding its market to mid-size sports wagon drivers in the U.K. To accomplish this, Saab had to overcome two major disadvantages. Not only was their marketing budget smaller than their competitors but, their brand recognition and reputation was smaller as well. To promote the 9-3 SportWagon, Saab created a two-part campaign that combined direct mail and the internet. The campaign was a game called “The Race Against Time.” This campaign included a 100-page “choose your own adventure” book that was mailed to people who inquired about the car. The book put its readers in a Saab 9-3 and dared them to see if they could reach a weekend destination without falling into trouble. The story moved forward by choosing from optional actions listed on each page which all led to a different set of circumstances. The game was also offered online- so people could sign up for the game and for additional information about Saab. By playing online, the players could e-mail their results to a friend and challenge them to beat their time. Participants could also record their personal progress. As an incentive, participants who won the challenges were eligible to win a Saab 9-3 Aero V6 SportWagon and Saab-branded sports merchandise. Although Saab officials assumed that no more than 5,000 people would participate in the campaign, more than 29,000 people signed up to play online with 40% also signing up to receive electronic news updates from Saab. The game was also placed on other websites and on blogs (go figure!). Sales for the 9-3 rose in Great Britain from 2,000 cars sold in 2005 to more than 6,000 in 2006.

“We got a set of people who never would have considered Saab,” says Ed Birth, the Saab account manager for Draftfcb (Draftfcb created the campaign)

Saab’s campaign is an example of a recent trend in which marketers are targeting consumers enticing them to play games and activities in order to get them to spend more time with the brands. The longer the time spent with the product the more likely the brand will come to mind when making a future purchase.

Last class we were discussing survival strategies. I would say that Saab is a k-specialist- they had to break into an established market for sport wagons. Some of the reasons that Saab was probably successful as a k-specialist were because they already knew that a market for sport wagons in the U.K. existed and that games and activities were a marketing success. They were able to see trends in the existing companies in the sport wagon market that they could “mimic” and allowed them to see the correct way they could compete.

By using direct mail, online websites, and blogs, Saab was able to reach different potential consumers. The use of online websites allowed Saab to capture younger consumers while also capturing the names and e-mail addresses of potential consumers who registered. This could allow Saab to generate a database for future marketing tactics. Also, the game was a great way to tap into consumers’ emotions- I know it made me reminisce about the “Choose Your Own Adventure” book that I had when I was younger!

 

I think the game can still be played online- check it out for yourself!

Holy Spirit Hospital’s “religious” organizational culture March 27, 2007

Posted by Lady in civil society, Consumers, Customer Service, Employees, Organizational Culture, religious organizations.
3 comments

So I happened to go home this weekend (Harrisburg) and found my idea for this week’s blog in the local newspaper, The Patriot News. The article was titled,Better bedside MANNER: Holy Spirit Hospital aims to cure ill will” and showed that since December, Holy Spirit Hospital has been sending walk-in patients directly to a bed instead of having them sit in the waiting area on those terribly uncomfortable benches. This is the first hospital that I have ever known to have such a generous policy. Personally, I am pleased with such a policy. I chose this article because a couple of weeks ago I read Holy Spirit’s mission and vision statement which is as follows:

Our Mission

Holy Spirit Health System is a community Catholic health system sponsored by the Sisters of Christian Charity to carry out the healing ministry of Jesus Christ to all in need. We provide high quality, cost-effective health services to develop healthy communities in the greater
Harrisburg area and South Central Pennsylvania.

Our Vision

Holy Spirit Health system will exemplify God’s love through our service and Spirit of Caring.

Over the next three years, we will focus on achieving exemplary performance in service to our community, including:

  • Superior clinical outcomes.
  • Outstanding customer satisfaction.
  • Strong financial results.

So after taking a look at Holy Spirit Hospital as an organization, it led me to ponder some questions about their organizational culture. For starters, I wonder if their policy of sending patients straight to a hospital bed has to do with the religious culture that they seem to have instilled in their organization. Or might the policy just be in response to gaining a competitive advantage? Cheri Rinehart of the Hospital & Healthsystem Association of Pennsylvania said that it is uncommon practice to send patients directly to a bed, but that there is a trend of “looking at patient satisfaction and what the major dissatisfiers are”.

So is it culture or competition that most led Holy Spirit Hospital to act in this manner and treat their customers in this special way? In my opinion, I think that it is naturally part of Holy Spirit Hospital’s culture to act in this way. I honestly think that the culture of their organization is one that is filled with the “Holy Spirit” literally and this drives them to go beyond the call of duty for their patients. Now, I have never really been a patient there but I wonder what it would be like to be one of their patients. Being a Christian myself and having such a strong faith in God, I can imagine the type of organizational culture that Holy Spirit Hospital may have. Can you?

In general, do you think that an organization that has a highly religious climate can affect their organizational culture? Does that particular religion then define the culture of the organization? How might a religious culture be bad for an organization? How might it be bad for individual employees or patients?

Walmart vs. Weis March 21, 2007

Posted by Janine in Consumers, Organizational Environment, Retail.
7 comments

As many of you now know, the new Walmart supercenter has opened. While I have not yet gone there to check it out, I have heard a lot about it. Many that I have talked to do not seem to be that impressed with its layout, while some are marveling at its wide and cheap selection. You can literally go there for just about anything, from food, to clothes, to electronics. It is one-stop shopping at its finest.

This got me thinking: what is the Walmart’s opening going to do for other local businesses? Weis markets will be taking a huge loss with the giant’s cheaper food and beverage selection. Also, with the new garden center, places like Loews and small, privately-owned businesses are sure to feel the effects of Walmart’s persuasive low prices.

Some I have talked to have said that they are going to remain loyal to the businesses such as Weis. Those people have told me that they just “don’t feel right buying produce and fruits from a store like Walmart.” I see their point. Will quality be jeopardized for the sake of low costs?

Now, I have never really been to a Walmart superstore, but I can imagine the satisfaction one can get knowing that they only have to stop one place to get their groceries and misc items. But, what about the others. This means that businesses like Weis, Ards, Giant, etc. will have to reorganize, regroup, and devise ways to react to this environmental change. The environment surrounding these businesses has changed, and I am very curious to see how each one of them responds.

I have heard talk that Weis owns the lot that the old Walmart was on, and the company plans to expand the current Weis. That could be in the future. I think the smart way for a place like Weis to react to this opening is for them to go above and beyond their competitor; they should open a more extensive organic and health food section, bring in other services, such as a drycleaners. The possibilities are there, so in the next few months or years, I look forward to seeing what develops.

Whirlpool’s Maytag, Samsung Recall Washing Machines for Fire Hazard March 21, 2007

Posted by silviamocanu07 in Business-Society Issues, Consumers, Stakeholder management.
4 comments

I found this article in the Wall Street Journal (Link: http://online.wsj.com/article/SB117448544919944057.html?mod=us_business_whats_news) about the recall of 270,000 washing machines sold in the US, as they are thought to be a fire hazard. Maytag and Samsung also guarantee free repairs for these machines.

Despite the fact that Samsung only received one customer complaint, while Maytag received five, with no actual injuries reported, the companies took a proactive approach and decided to recall the appliances. This shows a responsible approach of dealing with the problem by admitting that the machines had a manufacturing flaw and addressing the problem, instead of shying away from it.

This issue I believe relates perfectly to one of our previous class discussions on corporate responsibility and the impact of the external environment on organizational operations and internal decision-making in times of a potential crisis. The case illustrated by the article shows a positive reaction from the companies involved. It is a case that also shows that corporations are greatly influenced by consumer demands, as well as by the potential threats posed by their products to the consumers, be it because of ethical reasons or because of negative legal implications.

Attention Shoppers: Carbon Offsets in Aisle 6 March 19, 2007

Posted by Kira in Business-Society Issues, Consumers, environment.
3 comments

As I write this blog, I am looking out onto the beautiful Atlantic Ocean and I can’t help but think about businesses that disrespect the earth and the effect that has on the environment.  I have written a few posts on business and the environment because it is of interest to me.  On Wednesday, March 7th the New York Times published a special section called “The Business of Green.”  I found the article titled “Attention Shoppers: Carbon Offsets in Aisle 6” of interest because some of the companies mentioned were discussed in our class. 

            Many companies have spent millions of dollars putting their money where their consumers’ mouths are and are taking pride in their environmental changes, but have consumers put their own money where their mouths are?  Consumers want businesses to go green, yet they are not going green themselves.  How much responsibility should be split between the corporation and the consumer?

            Companies such as Whole Foods and Travelocity are charging more money and are giving that money to places such as the Renewable Choice Energy or to the Conservation Fund.  The idea is that the mark-up that consumers are paying goes to offset their share of carbon emissions.  Companies have taken responsibility for the design, manufacturing, and disposal of their products and are offering consumers a convenient way to offset the climate implications of their usage.  However, is this too easy for consumers?  Is simply writing a check enough?   Doe this assuage their guilt for not changing their behaviors such as turning down the thermostat, car pooling, or weatherproofing their homes?  

            Dell, a company we have been discussing over the course of the semester, has been buying renewable energy and offering free recycling of computers.  Soon Dell will have a program whereby customers can pay an extra $2 for a notebook or $6 for a desktop that will be given to the Conservation Fund and the Carbonfund.  These organizations will use the funds to plant trees that absorb carbon dioxide and offset the emissions that their computers are generating.  Will paying an extra few dollars create consumers becoming lax about cutting real carbon reductions like driving and flying?  

I think that charging extra for products in order to offset emissions is both good and bad.  It is good because the majority of people find change difficult or are simply too lazy to abide by the changes that will reduce emissions, so this is better than nothing at all.  On the other hand, it will also enable consumers not to make other reductions that will help the environment substantially more than just offsetting the emissions.  However, this may show Congress that people care enough and that they will pay extra for “green” and that might speed up the development of alternate energy sources.  It is definitely a tough call.

I think the bottom line is if consumers really cared about the environment they would be switching to florescent light bulbs and hybrid cars.  Consumers need to take responsibility for the emissions they create and take action.  I am impressed with corporations that are going beyond their design, manufacturing, and disposal responsibilities to help consumers help the environment.  It is a two way street between the corporation and the consumer- the corporations have done their part of going green but the consumers really haven’t. 

These types of programs may become a huge competitive advantage for companies like Dell.  Consumers may feel better buying products knowing that they are helping the environment in some way.  I am interested to see how Dell and other companies will go about implementing and marketing this kind of program in the near future.     

Walmart An Environmentalist? March 19, 2007

Posted by Elaine in Business-Society Issues, Consumers, environment, monopoly, Public Interest.
3 comments

This is actually dated two months back, but it’s relatively new news to me. Apparently Walmart is trying to clean their image up as a unmitigated, corporate evil into.. an environmentalist leader. In the works are the plans to become the largest user of solar energy. More than a year ago, Mr. Scott, the company’s chief executive, began reaching out to some of environmental groups, telling them that Wal-Mart, long regarded as an environmental offender,

Wanted to become a leader on issues like fuel efficiency and greenhouse gas emissions.

Walmart is trying to put energy efficient light bulbs into 100 million homes. These bulbs use 75 percent less electricity, lasts 10 times longer, produces 450 pounds fewer greenhouse gases from power plants, and saves consumers $30 over the life of each bulb. The only problem is that these bulbs are eight times as expensive as a regular light bulb, and it also gives off a harsher light. As of today, only six percent of American households use these energy efficient bulbs.

Walmart is such a powerful company that it has a lot of say in what it wants to happen. General Electric expressed their concern regarding these light bulbs and told Walmart to take this revolution slowly. Walmart’s buyer responded, “We are going there. You decide if you are coming with us.” Not a lot of companies can get away with being so snippy to General Electric, the second largest company, but Walmart got its way and are now a strong advocate of these energy efficient bulbs. It is even working with Yahoo and Google to see how they can help promote these bulbs.

How do you feel about this situation? Is this an effort to improve Wal-Mart’s appeal to the more affluent consumers the chain must win over to keep growing in the United States or is this a genuine attempt to help our environment?

I believe Walmart is trying to promote its image, but at the same time helping out our ecosystem. They cannot possibly be making much profit off these energy efficient bulbs, but they are pushing for its success anyways. It is their first step in taking a positive direction.