Monthly Newsletter Presentation

Monthly Newsletter Presentation Quick Links • Article Abstracts • Commercials • Videos December 2010/January 2011

Article Index • Facebook Retail(Chapter 1, 4, 6, 10, 12, 17) • Priming Amazon Customers(Chapter 9, 10, 11, 12, 16) • Creating an Automatic Consumption Culture (Chapter 2, 3, 4, 5, 12) • Branding Takes a New Turn on TV (Chapter 10, 11, 17, 18, 19) • Everyday is Like … Monday (Chapter 2, 4, 16, 17, 18) • She Tweeted Me to buy a Lexus (Chapter 3, 4, 5, 10, 17, 19) • LEED Grocer (Chapter 3, 4, 10, 11, 12, 15) • Silk Scarves Along the Silk Road (Chapter 2, 7, 8, 10, 13, 14, 16) • The Growing Organic Grocery (Chapter 2, 4, 12, 13, 15, 18) • Starbucks Grocery Distribution Ends (Chapter 2, 4, 10, 11, 12, 18) • Taming the Roar from Social Media (Chapter 2, 6, 17, 18) • I Do Want Fries with That! Wendy’s New Ad Campaign (Chapter 2, 7, 10, 17, 18) • Mobile Commerce (Chapter 2, 10, 17, 18) • Your Own Billboard on Times Square Just by Shopping! (Chapter 2, 10, 17, 18)

Video Index • Groupon(Chapters 14, 17) • Trends Online (Chapters 10, 17) • Bad Eating (Chapters 4, 5) • Counterfeits(Chapters 13, 14)

Commercials Index • Snickers(Chapter 10, 18) • Old Spice (Chapters 10, 17) • Sienna Toyota (Chapters 3, 5) • Baby Carrots (Chapters 8, 10, 11)

Facebook Retail • Companies are taking advantage of the crowds on Facebook to increase the number of their “fans.” • Facebook benefits retailers that want to excite their customers about new products, promotions, and events, as well as redirect fans to a Web site or retail option. • Pampers diapers, Proctor & Gamble has gotten a great response from its Facebook site, where it sells a 1000-pack of Pampers Cruisers with Dry Max in response to a comment on its fan page.

What Do You Think? • What is social shopping? • What do you think about Facebook stores?

Priming Amazon Customers • For $79 per year, Amazon Prime membership guarantees unlimited two-day shipping on all products purchased from Amazon. • Customers realize that they earn more from the program when they use it more, at no extra cost to them. • For example, 10 products purchased on Amazon with two-day shipping likely pays for the $79 membership. If they go on to buy 100 or 1000 products, still for just $79, customers feel like they have put one over on the company. • Several e-tailers have joined together in the ShopRunner program, which offers the same benefits as Amazon Prime but for a long list of retailers. Amazon.com

What Do You Think? • What is Amazon Prime? • Will ShopRunner develop customer loyalty the same way that Amazon Prime has?

Creating an Automatic Consumption Culture • Our favorite online Web sites, gadgets, and retailers hope we agree and appreciate their efforts to make consumption decisions that we used to make on our own: • Netflix suggests which movie we should watch, Pandora outlines the music we should listen to, and Amazon tells us what we should read. • The analytics involved in deciphering consumer preferences are complex to achieve good accuracy. But they are not perfect. • For example, GPS devices might lay out the map, but they also have been known to send people over cliffs, into ponds, and through construction sites.

What Do You Think? • Have you had problems with automatic technology that makes incorrect decisions for you? • List some concerns associated with automated options, as well as their benefits. Are they worthwhile?

Branding Takes a New Turn on TV • Bethenny Frankel always wanted to be an actress and managed to get onto The Apprentice: Martha Stewart, then attended culinary school with the intention of starting a natural foods business. When she was asked to be on the Real Housewives reality show, she grabbed it as her opportunity to begin marketing her own brand. • She now has many businesses including bethennybakes and Skinnygirl, and is the spokesperson for many brands including British Airways, Campbells Soup, skin care products, and shapewear. • The people appearing on television now have a chance to go from celebrity to expert, informing others about products they apparently should own.

What Do You Think? • Who is Bethenny Frankel? • Is this type of marketing considered product placement?

Every Day is Like … Monday? • Black Friday is the largest shopping day of the year, but the Monday following Black Friday (Cyber Monday), is the biggest online shopping day of the year. • Retailer ramp up their advertising spending especially for Google search words. Their conversion rates are yielding a high ROI. • Retailers realize the importance of online advertising and are increasing their spending throughout the year.

What Do You Think? • How do you shop online? Do you use a Google search or go directly to a retailer’s Web site? • Do the circumstances in which you choose these two paths differ?

She Tweeted Me to Buy a Lexus! • customers really want to hear from people like themselves, rather than a celebrity paid millions of dollars to promote a car. • Ford has recruited 100 people with strong online followings to test drive the Ford Focus and then talk about their experiences online. • Federal Trade Commission has created guidelines for blogging and tweeting, saying that consumer posters must disclose any compensation they may have received for talking about the product.

What Do You Think? • What is your opinion of online influencers who promote products?

LEED Grocer • Fred Meyer, a division of Kroger Co., remodeled its stores to make them more energy sustainable. For every dollar it spends on the remodeling, it predicts it will save $9 in the long run. • Fred Meyer stores feature heat recovery systems that take hot air from the refrigeration system to heat water for the building and thus avoid CFC-based refrigerant. Skylights let in plenty of daylight, and energy-efficient strip fluorescents come on only if needed. • The store environment also communicated the “greenness” of the store to customers with polished concrete floors instead of vinyl tile; large windows expose the exterior frame to display the high-tech construction. The outside of the building is orange and red, which gives the building symbolic energy. Kroger.com

What Do You Think? • Whom does LEED certification benefit?

Silk Scarves along the Silk Road • LVMH, one of the largest luxury goods conglomerates in the world, has always opened stores before the luxury market developed in the area. • For example, Louis Vuitton stores popped up in 1992 in China (where it now runs 35 stores) and in India before cars were widespread in that country. • Not including Japan, Asia accounts for 25 percent of Louis Vuitton’s revenues. Its stores in Europe and America tend to be more profitable than its Asian stores, but even with their weaker spending power, Asian consumers are more willing to spend their money on Louis Vuitton. • Consumers around the world still want luxury products, especially from the likes of Louis Vuitton, even if they have to scrimp and save to obtain them.

What Do You Think? • Why is LVMH opening Louis Vuitton stores in emerging markets?

The Growing Organic Grocery • 48 percent of consumers continue to buy the same amount or more organic food than they did before the recession. Retailers are making it easier to meet consumers’ needs for organic foods. • Sunflower Farmers Market offers the highest quality organic food for the lowest prices. Sunflower Farmers near other supermarkets like Kroger, or even by its close competitor Trader Joes. • Perhaps the reason is that Sunflower focuses on produce and meats, whereas other grocers tend to concentrate on nonperishable products. • Some modern retailers earn distinction by helping consumers lead healthier lifestyles, such as offering organic products, providing education about those products, and making them more affordable than they have been traditionally.

What Do You Think? • Why does Sunflower Farmers Market choose to locate near other supermarkets?

Starbucks Ends its Grocery Distribution • Starbucks partners with Kraft Foods, so consumers can buy bagged coffee at Starbucks retail stores or at supermarkets. • Starbucks wants to halt its grocery distribution and sell bagged coffee only through its retail stores. • The partnership earned $500 million in annual revenues and was valued at $1.5 billion. • Kraft believes that Starbucks wants exclusive distribution in its own stores to gain back control. Starbucks is saying that Kraft has diminished its brand image. Starbucks.com

What Do You Think? • Will Starbucks coffee drinkers make a separate stop for bagged coffee, or will they just choose a different brand on the supermarket shelf?

Taming the Roar from Social Media • Social media allows companies to communicate faster with customers, but they also lose control of most of these communications. • Corporate Twitter pages are managed by employees who post on behalf of the company and followed by many more people who respond to the postings. • Internally, companies need to monitor exactly what their employees say around the brand or promise to customers. • Dell encourages its employees to use social media extensively, even training them in how to use social media. • By educating employees in advance, rather than just tracking them after they post messages, Dell still might not be able to control all communications, but at least it can help move those communications in the direction it prefers.

What Do You Think? • Why is social media tracking important?

I Do Want Fries with That! Wendy’s New Ad Campaign • The new $25 million campaign promises “natural”: natural Russet Burbank potatoes, naturally cut, with natural sea salt. • The television spot shows a line of people waiting to try the new fries. The first sampler refuses to share them, running away with the fries down a beach in Los Angeles. • This “sharing” notion aligns with the social media elements of the campaign, for which Wendy’s created a “Fry for All” application that allows users to post a box of fries to their Facebook page and share it with friends. Wendys.com

What Do You Think? • Why is social media tracking important?

Mobile Commerce • By 2015, people will access the Web more often through smartphones than through laptops and desktops combined. The smart firms are going mobile with their customers. • For example, Kenneth Cole attracts 10 percent of its Web traffic from mobile devices, and 4 percent of its sales take place through a mobile device. • Another application might inform customers about the inventory available in stores, so they know if an item is in stock before they actually visit the store. • A mobile viewing interface generally is much smaller than a monitor or a laptop screen, so there needs to be less information that somehow conveys the same brand image.

What Do You Think? • Have you used a mobile device to access a Web site? Buy something? What was your experience with this process?

Your Own Billboard on Times Square – Just by Shopping! • The fashion retailer is using its Times Square store primarily to build its brand image, with the goal of making shoppers think of Aeropostale as a New York City icon. • The Manhattan store features a 700-square-foot balcony on which an estimated 2 million daily shoppers can dance with virtual Aeropostale models. • Recordings of their dance moves then get projected onto the exterior of the building—with a 20-minute delay so the dancers can rush outside to check their moves, broadcast all across the square. Aeropostale.com

What Do You Think? • What is your favorite store for shopping and for entertainment?

Video – Groupon • What is Groupon? • When would you purchase a “Groupon?” Video: Groupon

Video – Trends Online • What other online trends have you noticed? • Will customers switch to Verizon as a result? Video: Trends Online

Video – Bad Eating • What other correlations can you think of that may seem to be unrelated? Video: Bad Eating

Video – Counterfeits • Why are retailers endangered by counterfeiters? Video: Counterfeits

Commercial – Snickers • What is the purpose of this commercial? • Is it successful? Snickers commercial

Commercial – Old Spice • How did Old Spice reposition its brands? • Is this a good commercial? Old Spice Commercial

Commercial – Sienna Toyota • What is the purpose of this commercial? • Is the positioning of the Sienna minivan successful? Sienna Toyota commercial

Commercial – Baby Carrots • What is the purpose of this commercial? • What do you think of the positioning of this product? Baby Carrots commercial

Monthly Newsletter Presentation