White Blogs

Extra Credit Post #2 - Comment/Expansion on Classmate's Post

2005-06-24T12:16:00.000-04:00

Please see my June 3 post, "Walmart Sponsors Reality Show!" This makes a reference and has a link to Alex Husted's June 1 post on Robert Greenwald taking on Walmart.

Comments on Classmates Blogs

2005-06-24T11:03:00.000-04:00

For the record, I commented on these posts:

Tammy Gowans

Xinkai Kong

Annamarie Horan

Melody Lai

Jenny Castellano

Sheharyar Shaikh

Andre Grachev

Team Post #2 - P&G is on Annamarie's Blog

2005-06-23T16:31:00.000-04:00

Topic Post #3 - Franchising Around the Globe

2005-06-22T11:53:00.000-04:00

Kotler and Armstrong discuss the franchise organization in Chapter 13 (p.406). Franchises have gone global! Here is an interesting article that I found through The Global Small Business Blog that details how prospective franchisees are training for business ownership. What's notable about this article is that US franchisees are traveling abroad to hook up to franchise scenes in countries like Australia, Canada, and Japan. There's been a flood of foreign franchise concepts into the US, including refilling ink-jet and laser cartridges, exotic food restaurants, and pet training and grooming services.

You probably know that franchising is a US tradition, with its roots in the 1860s and the Singer Sewing Machine Co. It really took off as a business concept in the early 1900s with GM franchised dealerships. Soft drink bottlers, and the auto and gasoline industries were big franchisers by the 1930s. Now we've got franchises for dozens of concepts including day spas, pet grooming services, and realty companies (I just discovered Wal-Mart Realty).

This articles discusses the franchise market and the challenge of going global. Some of the trouble seems to come with adapting the company's product, as well as unfamiliarity with brand names and products. We talked a lot about these issues as we explored global marketing in class. Some of the foreign franchises will have to change their methods and menus (although the chicken sounds delicious), deal with territory issues, and business registrations and legal fees, but there can be a lucrative payoff. Check out the last paragraph of the article.

If you feel that franchising is your true calling and you enjoy travel, see these websites: Pollo Campero, Kumon Math, or Koya Japan.

Extra Credit - Where Is Linda's Blog?

2005-06-21T16:13:00.000-04:00

Everywhere! Check me out on:

http://www.technorati.com/search/whiteblogs.blogspot.com
http://www.google.com/search?biw=789&hl=en&q=whiteblogs.blogspot.com
http://feedfinder.feedster.com/search.php?db=feeds&sort=relevance&q=whiteblogs.blogspot.com&fromsearch=true

Response to the Other Alex - Chery Autos

2005-06-21T16:06:00.000-04:00

Response to the other Alex -- Too bad they didn't have that promotion when I was in college. Cheap, unreliable cars were all the rage (Chevy Vega, Ford Pinto, anything from AMC), and we would have been all over that.

Response to Andre's Comments on Chery Cars

2005-06-21T14:43:00.000-04:00

I completely agree on the safety vs affordability issue. I would add that Americans are becoming increasingly concerned about gas mileage although gas prices here are far cheaper than they are in other parts of the world. Price is not an issue. There are so many ways of financing auto purchases these days! Plus, one point that I did not have an opportunity to mention during the presentation - anyone who wants the luxury of a BMW will pay for the BMW because being able to show your friends and co-workers that you can afford the BMW is part of the allure.

Response to Daniel's 6/20/05 Comments

2005-06-20T16:28:00.000-04:00

Thanks Daniel.
This is a fascinating story, and one that seems to change weekly. Your comments shed a little more light on the Chinese market for cars.
I do believe that China can overcome the American perceptions of inferior quality, but I am very interested in finding out more about how American auto workers feel about China's plans. On Visionary Vehicles' website, under FAQs, the issue of American jobs is addressed -- briefly. This issue could pose another challenge for them, but Chery has an answer for that, and has posted its plans to add hundreds of thousands of jobs once they open auto plants in the US.

Topic Post #2 - Global Marketing - Chery Automobile Company

2005-06-17T11:15:00.000-04:00

Have you ever heard of the Chery Automobile Company? If not, chances are you will soon. This little known eight year old Chinese auto manufacturer has ambitious plans to enter the US auto market within the next two years. I learned about this company and its plans from an article from feedster and was intriqued enough to learn more about it. Plus, I'm in the market for an inexpensive new car.

Chery is based in Wuhu, China in the Anhui province. Its name translates into "Qi Rui" which means "unusually lucky" in Chinese. It produced its first automobile five years ago, and only produced 80,000 cars in all of 2004. This is one of the reasons why its plans to enter the US market are so fascinating.

Chery plans to manufacture and ship 250,000 low-cost, feature packed sedans and SUVs that look and perform like high-end European and Japanese luxury vehicles to the US by 2007, and one million within another five years. Four of the five models are priced below $20,000. Chery will enter the US through a joint venture (Kotler and Armstrong p.610) with Visionary Vehicles.

Malcolm Bricklin, head of Visionary Vehicles, is recognized as one of the automobile industry's leading entrepreneurs and one of the most experienced automotive importers and brand builders in the industry. He founded Subaru of America in the late 1960s, but he is probably best known for bringing the Yugo to America. He is very bullish on the Chery, and has built a team of international experts to ensure its success. For example, he has partnered with Italian coach builders Bertone and Pininfarina to design luxurious interiors, and with Japanese and with AVL List GmbH Austria to develop powerful engines. Some of his other team members include Allen & Company LLC, investment bankers, who will act as financial advisors; John Cavanagh, former Vice Chairman of AMEC Construction Management, Inc., whose projects include the Sears Tower, the NY Stock Exchange, and Terminals One and Four of JFK Airport.

Chery faces a number of challenges in its plan to enter the US auto market, the first of which is American consumer reluctance to buy Chinese cards from an unfamiliar company. Business Week online states that locally sold QQs have 374 problems per 100 vehicles vs the '04 US average of 118 problems per 100. Conventional wisdom says that low quality is a factor that will keep Chinese auto exports to the US and Europe in the novelty category for a few years. Remember the early days of the Hyundai?

Their next challenge is a $10 million lawsuit filed against them by GM's South Korean unit accusing them of ripping off the design for its best selling QQ minicar. Chery denies the allegations and the case is unresolved.

Chery also has to search for US dealerships. According to Driving Today, the company is planning to develop a consumer friendly self-standing dealership, and has engaged an international architectual firm, Swanke, Hayden, Connell Ltd to design the model for the dealerships. Check out the model dealership on Visionary Vehicles' website. Bricklin has high aspirations for the Chery dealers; his plan calls for each dealer to invest at least $15 million in what he describes as "destination dealerships."

Another challenge is meeting US safety and emissions standards without a global partner who is experienced in meeting US standards. According to theautochannel Visionary Vehicles has partnered with Detroit-based emissions and safety certification experts Pilot Systems LLC to meet this challenge. Pilot Systems will handle all aspects of safety engineering for and approval of vehicles entering the US market. They will also develop a working team of scientists, technology experts and environmental professionals to assist.

High component costs are another stumbling block and a huge challenge for their supply chain. China remains a huge importer of auto components, especially high end parts such as engines and transmissions. Tariffs on these parts can be as high as 20%, in addition to shipping costs. Kotler and Armstrong define a tariff in Chapter 19 as "a tax levied by a government against certain imported products." (p.598) Volkswagen Group China notes that while labor only accounts for 6% of production costs, materials gobble up 85%. Potential kinks in the supply chain -- definitely.

Although I could not find a plan for Chery to address the tariff issue, there are folks in the automotive industry who feel that this is only a small bump in the road. Jack Perkowski, CEO of ASMICO Technologies, which owns 13 parts factories in China, figures that the tariffs will change once the domestic market gets closer to 10 million units per year.

Chery has near-zero brand recognition outside of China. Visionary Vehicles recently launched a website, but designs for four of the five cars it plans to introduce have been kept a secret.

I believe that Chery has an outstanding opportunity in the US market, and I admire their ability to think big. The company's plans to enter the US market stem from slowing growth in the Chinese market, and with two and three car families being the norm in the US, there is great potential for Chery's success. Malcolm Bricklin may be a visionary, but he could be a liability. Between the failure of the Yugo and his less than stellar performance in launching his own sports car, he doesn't inspire confidence. Chery has a lot of challenges, and my casual conversations with friends lead me to believe that these autos will be a tough sell, primarily because of perceived product inferiority.

Will they make it? Are they next Toyota or are they the next Pinto?

To ensure its success Visionary Vehicles should put together a marketing team which engages all parties in the current supply chain, and begin to develop a marketing strategy for their strategic plan. Although there is no product yet, it's not too soon.

Team Post #1 P&G India - Social Responsibility in the Global Marketplace

2005-06-15T09:48:00.000-04:00

P&G is firmly committed to global social responsibility, and shares two strong examples in its company literature. One of P&G’s tenets is that they are good corporate citizens; their global cause credo is “P&G Live, Learn & Thrive.” P&G India has launched many initiatives to develop its communities. One is Project Shiksha, an education initiative that has been launched across the country. According to the P&G India website, that country has the largest number of children without access to education; two-thirds of them are girls. For Project Shiksha P&G partnered with Sony Television to appeal to its consumers and viewers to support the cause. All an individual has to do is to buy a package of Tide, Ariel, Pantene, Head & Shoulders, Rejoice, Vicks VapoRub or Pampers during April, May and June and that purchase will help support one day’s education for one child per pack purchased. Shiksha is being supported by some of India’s leading actors such as Kajol, Mandira Bedi, and Revathy, as well as singer Sonu Nigam and tennis prodigy Sania Mirza.

In its latest Annual Report, P&G India describes the work it’s done with village Satlapur Panchyat, where one of their plants is located. They’ve expanded the local school, secured donations of books and computers, and donated hand pumps for drinking water. The company statement from the 2004 Annual Report, “We believe we have made a meaningful difference to the lives [of the villagers] and will continue to demonstrate our commitment to the community not just through the quality of our products and services, but also through socially responsible initiatives that improve their lives” (p9 – P&G Hygiene and Health Care Limited Annual Report 2003-2004).

Some of their past initiatives have included Peace – an environmental program, Future Focus – a career guidance service, and Project Poshan – with UNICEF to combat malnutrition. P&G India has received numerous awards for its humanitarian work, and is consistently voted among India’s Best Employers.

Another quote from their website summarizes their strategy for social responsibility. They "believe in building the community in which we live and operate by supporting its ongoing development." After the events of Bhopal (Union Carbide) of 20 years ago, and the ongoing controversy over the remaining pollution and welfare of the survivors in that village and the constant feed of news stories about corporate accountability around the globe, it is clear that some companies value place and community and can see the connection between corporate care and corporate profits.

"Culture Wars" and Social Advertising Campaigns

2005-06-14T14:33:00.000-04:00

Kotler and Armstrong discuss social advertising campaigns in Chapter 9, and on p.282 define social marketing as “the design, implementation, and control of programs seeking to increase the acceptability of a social idea, cause, or practice among a target group.”

Back in the day, social advertising campaigns were relatively tame and nonpolitical. Remember Smokey Bear and only you can prevent forest fires? How about a mind is a terrible thing to waste, or friends don’t let friends drive drunk? These were issues that everyone could agree on, and there was little room for debate.

In 2005 we are in an era of debate that some have dubbed “culture wars.” Many hot-button issues shape our political and sociological landscape, and advocacy groups, political consultants and others who once avoided the creative Madison Avenue approach are getting together with mainstream agencies to develop campaigns on controversial issues. In a June 6, 2005 Adweek article, Wendy Melillo outlines the media plans of the Human Rights Campaign regarding a campaign to defeat an amendment to the California constitution that would restrict the rights of same-sex couples. She also lists the Swift Boat Veterans for Truth and MoveOn.org as groups that have spent tens of millions of dollars on campaigns for their cause. Although a number of agencies still shy away from political hot potatoes, these offbeat partnerships are growing.

Although there have been many good campaigns that have tackled issues such as drug use, youth violence, and teen families, there are lots of other causes that need memorable slogans and television spots. What about women's organizations, arts organizations, or mental health support and advocacy groups that have worthwhile messages but smaller budgets? Are these groups shut out of the national media? Even with vocal constituencies and strong track records of acheivement they may not have access to the creative talent at ad agencies.

Traditionally, social advertising has been linked to a socially-minded retailer or manufacturer such as Avon (breast cancer) or Ryka (violence against women) whose focus was to remedy the problem. It will be interesting to follow the new social awareness campaigns as they churn out of Madison Avenue. Perhaps smaller grassroots, community-based organizations should form a new coalition, unite behind a common, urgent message, and hijack a taxi to the nearest downtown ad agency. Otherwise, when they speak, our response will still be, "Huh? What was that you said? I'm sorry, but I was watching the new ad for Bud Lite."

My Comments on Annamarie Horan's June 6 Post

2005-06-13T13:39:00.000-04:00

As I read Annamarie's post, I thought about my office's approach to hiring, firing, and managing employees' careers. Traditionally we have had a very hands-on method for bringing people on board, with an extensive interview process that often included a minimum of three other staff members. Our former director brought in an Human Resources specialist to teach us about behavior based interviewing, and we shared feedback on the candidates with each our director.

"Being a good fit" for our office was a big factor, and we had success with hires because we handled the process ourselves -- from initial resume screening to the job offer. We had an unbeatable team that was whip-smart, worked hard and enjoyed working together.

Anyone who works for Penn or any other very large organization knows how dealing with the bureaucracy can slow the hiring process to a crawl, but, like Annamarie, I don't think that using an end-to-end to end firm is the answer. Most of us like to know what we're getting when bringing in a new person, and organization leaders revel in training or "grooming" staff members as they move through the organization.

I would like to read Trout on Strategy to see what other gems of marketing wisdom he's produced.

My Comments on Xankai Kong's May 31 Post

2005-06-13T09:30:00.000-04:00

I read quite a bit about permission marketing after reading Xinkai’s post. A perfect illustration of this concept can be found in Kotler and Armstrong Chapter 3, "Marketing in the Digital Age: Making New Customer Connections." They give an example of permission based e-mail on Pages 95-97.

As a consumer who will change a radio or TV station immediately when a screeching adman begins his pitch for the Toyotathon, Taco Bell’s latest offering, or new waterslides at Dorney Park, I want to be one step ahead in the game of Avoidance. Here’s what I learned: in the words of Seth Godin, coiner and popularizer of the term, permission marketing is about “turning strangers into friends and friends into customers.” Permission marketing has been hailed as a way for marketers to succeed in a world increasingly cluttered with marketing messages. This would dovetail nicely with P&G Global Marketing Officer Jim Stengel’s plan to build close relationships with more partners in order to make marketing pitches more appealing to consumers. The concept involves helping people make purchasing decisions, supplying information when they request it, and entertaining their customers. It’s all built around contests, games, and sweepstakes. Godin’s wisdom is, “Consumers will grant a company permission to communicate only if they know what’s in it for them.”

Xinkai describes a sweepstakes that Tide Deep Clean has been running, and it’s a fine example of permission marketing. The sweepstakes entry form is designed to gather data from those who give their contact information. Respondents want to maintain contact with the company, get the Tide newsletter, tips on new products and their use, and find out about other housework timesavers. They’ll also get coupons, samples, special offers, and “solutions to simplify life at home.” Information about the potential for viral marketing is gathered by questions about the number of people respondents talk to in a day and the number of organizations they are involved in. To coax you back to the website, Tide posts the names of sweepstakes winners there.

In today's world of constant interruptions, permission marketing sounds like a welcome, civilized pursuit.

This Bud's Not For You

2005-06-09T11:44:00.000-04:00

After recovering from the mid-term, I casually scanned the marketing headlines and found that Ageless Marketing had commented on an Advertising Age article that expands on a point from Jenny's presentation on Anheuser-Busch. I think that Andre noted that there has been a shift in alcohol preferences from beer to wine and other spirits, and that has cut into the beer market.

I talked to a few of my harder drinking, twenty-something colleagues who shared their insights as to why wine and spirits is eating into the beer market. One frequent imbiber said, "My friends have real jobs and we can afford to drink cocktails." Several bar hoppers suggested that wine and spirits provide more options to women drinkers who don't like beer, and the advent of beverages like Bacardi Silver, Hard Cola, and Mike's Hard Lemonade present drink options that don't require a Ph.D. in Mixology.

What are you drinking tonight?

When In Rome . . .

2005-06-06T14:56:00.000-04:00

Today while researching information on laundry detergents, I came across this article that shows how important it is to understand how culture affects consumer reactions in the global marketplace. This article is a little old, but still relevant. Some of these items will bring a smile to your face.

Wal-Mart Sponsors Reality Show!

2005-06-03T09:08:00.000-04:00

In today's New York Times, I found a story on Wal-Mart's upcoming sponsorship of an ABC-TV reality show -- "The Scholar." This show is to be centered on a competition among 10 high school seniors from across the country, and "from every walk of life." The high schoolers will compete in academic, creative and social tasks for a grand prize of a $250,000 full college scholarship which covers tuition and expenses.

Prizes are being given away like candy, including $2,000 gift cards to outfit dorm rooms and scholarships for runners-up. Of course, there will be commercials promoting Wal-Mart's and Sam's Club's long-running program offering scholarships.

As we know, Wal-Mart has been embroiled in some controversial battles lately, and this is an attempt to polish their image. It's an great way to generate good will and to possibly subdue their critics. They were inspired by Sears's sponsorship of "Extreme Makeover: Home Edition," and decided to pursue a similar path with a "feel-good" reality show. Alex mentioned in his June 1 post that Robert Greenwald is going after Wal-Mart with both barrels smoking; maybe he should just check out an episode of "The Scholar."

Topic Post #1 - Wal-Mart in Mexico

2005-06-01T14:34:00.000-04:00

Last September, James C. McKinley, Jr. reported in the New York Times that Bodega Aurrera -- a Wal-Mart subsidiary -- had arrived at Teotihuacan, a small, ancient town 32 miles north of Mexico City, where merchants have sold clothing, food and household goods for centuries. Wal-Mart built its 72,000 square foot store less than a mile from the ruins of the Pyramids of the Sun and Moon.

How did Wal-Mart got permission to build on land that had been protected by Mexican law? No one knows for sure, but corruption at City Hall is suspected. Those opposed to the building claim that Wal-Mart is trampling their heritage and destroying irreplaceable relics. The townspeople are deeply connected to the ruins and fear that their displacement would hurt their culture. Every winter solstice, tens of thousands of people, including tourists, climb to the top of the pyramids to rejuvenate for the coming year.

State and local officials approved the project without public hearings. The mayor of the town minimized the number of opponents to the store and dismisses them as malcontent merchants who would lose business. Officials also say that the artifacts, including an altar, arrows and pottery shards have been recovered.

In his article Wal-Mart Invades Mexico, John Ross details the civic outrage and protests by the locals against the "invasion" of the superstore. Hunger strikes and street fights between opposing sides escalated as the construction continued and outrage grew. Citizens talked extensively about the "desecration" of their land.

Riot police were on hand for opening day, but by all accounts, Bodega Aurrera has done very well in Teotihuacan. This example provides two thought-provoking lessons: (1) the importance of understanding international cultures, and (2) Wal-Mart succeeded, in spite of its clumsy entry into the market and the resulting bad publicity.

Kotler and Armstrong discuss the importance of understanding cultural differences and their impact on marketing in Chapter 19, "The Global Marketplace." For another interesting article on understanding cultural differences, check out How Cultural Differences Affect Your Marketing Message.

The Price is Right

2005-05-26T11:52:00.000-04:00

Commerce takes many forms. What type of market research do you think these New York vendors conducted before they set up shop? How did they conduct their research?

So -- Why Am I Here?

2005-05-25T10:37:00.000-04:00

My assignment is to become an expert on either market segmentation or the global marketplace. My current understanding of market segmentation is that it allows a company or organization to focus on a customer that is most likely to purchase or use your product. The global marketplace involves taking your product or service worldwide to build lasting customer relationships. Both are interesting topics, but I find the controversy around global marketing much more interesting than market segmentation. I'm looking forward to digging in.

Marketing 411 requires blogging as a communication tool. Learning to use blogs successfully will allow us to communicate with our classmates and teammates, and connect to the hottest information on marketing coming from the Internet. Blogging has become a powerful marketing tool over the past couple of years. It is a unique way for customers to communicate with one another, for marketers to reach consumers, and for customers to communicate with a business or service provider.

As we move through the market segmentation lessons, I wonder if companies are strategizing to meet the needs of consumers who don't fit neatly into one category. For example, I live in a solid middle-class community with a very high rate of homeownership and college educated professionals. However, this community is tucked into a section of Philadelphia that is considered poor and sometimes dangerous. Homes in my neighborhood are getting very expensive (latest neighborhood sale $635,000), but I bought when it was still a buyer's market and got an exceptional price.

We have very few local amenities (sit-down restaurants, nice stores, Starbucks). Our local library has been closed for nine months with no re-opening date in sight.

I am an ummarried boomer with an advanced degree but work as support staff in my organization and my partner (another college grad) is a van driver. There's very little debt, but not tons of disposable income. We are an interracial household, we listen to NPR, watch little TV, attend cultural events, clip coupons, shun dollar stores, but always look for bargains. There are no children. How will a savvy marketer reach us?

Stay tuned -- there will be more "missed marketing opportunities."

This Is Linda White

2005-05-19T17:59:00.000-04:00

I work at the University of Pennsylvania, in Center for Technology Transfer.
I enrolled in the Wharton Marketing Certificate Program because of an ongoing interest in communications and its impact on our lives.

A Washington DC native, I've lived in Philadelphia for almost 20 years (I still miss the Metro subway system). I have an extensive background in nonprofit work -- primarily with teenagers and in education advocacy. I studied a smidgen of marketing for nonprofits while in grad school, but I want to broaden my knowledge and perhaps chart a new career path.

Wish me luck!