Can I Get Another Venti?

As we enter the last month of the semester coffee is what has been fueling my eyes to stay awake and brain to keep on working. So it is fitting that this weeks blog post concerns Starbucks!

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Starbucks is an international brand that has over 18,066 stores, 18% of those is Asia and 16% in Europe, the MIddle East and Africa. They target men and women ages 18-40 and utilize the following channels: retail stores, online, grocery outlets and connivence stores.

 

Starbucks sources their raw materials from over 19 different countries and 70,000 outbound deliveries a week. Sourcing from many different countries helps Starbucks keep costs low and ingredients superior. Once the raw materials are harvested they are sent to one of six manufacturing plants.

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Starbucks opens approximately 10 stores every day and has 137,000 employees. These physical stores serve approximately 40 million customers a week.

The retail and online stores are similar channels in that the flow of materials is the same.  The flow of the materials goes from the farm to the roaster to the retail store or online store then direct to the customer.  Items sold through these channels are: custom drinks (coffee & tea), food items, mugs, coffee equipment and Starbucks branded merchandise.

Their grocery and convenience store locations also have similar flow of materials. The materials go from the farmer to roaster to the bottler, in this case PepsiCo, to the distribution center to the store then finally to the customer. Grocery and convenience stores sell ground coffee, instant coffee (Via), and “ready to drink” Frappuccino and double shot espresso drinks.

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By expanding the channels in which they sell their products Starbucks can make sure they are part of their customers life at home and at work.

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Top Five Most Innovative Global Companies

Fast Company named Apple the most innovate company of 2012. Apple has been able to come out with products and services that consumers never even though would have existed and these products have changed the world we live in. Number 2 on the list is Facebook, followed by Google, Amazon and Square Inc. to round out the top 5. What do these companies have in common? And why are they so wildly successful?

Not only are these companies brands that are recognized world wide but they are all companies that have unique and relevant strategies. Each company has developed a winning strategy to complete globally for not only our wallets but also our loyalty. Apple has changed the way the world communicates, Facebook has changed the way the world stays connected, Google has been able to deliver fast efficient information (faster than ever before), Amazon has brought world sellers and buyers together 24 hours a day and Square has revolutionized how we pay for things.

Each company has specific goals that they set out to achieve internally and externally. While the goals these companies work towards may not have been the initial goal or first idea that the company began to operate on, innovation is what drives these companies towards the future. These companies have stayed relevant for years, and in some cases decades by being innovators in their respected industries. And those innovations have made them global leaders in their respective industries.

While these companies have more wins than losses another important aspect to innovation is failure. Here are a few examples of Apple and Googles biggest product failures:

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By encouraging creative thinking failure is inevitable and there would be no great product with out a few duds.

Freedom is another great way to encourage innovation. By letting individuals or teams have the freedom to explore and test out their ideas new, even better ideas emerge (some even better that the original). Freedom will help encourage risk taking that may be otherwise discouraged.

B2B Marketing in 6 easy Steps

This week Nicole & I tackle B2B Marketing Strategies and Mid Terms, dun dun dun! Hence the short, yet informative blog post :)

Stressed Out

As we have learned this semester your message in one country will need to be altered based on each country you enter because os social and cultural differences. This idea is the same for Business to Business (B2B) customers as well.

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The major difference is that a B2B customers are looking to maximize their shareholder wealth and maximize their profits not just buy your product because you have an amazing marketing campaign.

Here are our tips on doing B2B right:

  1. Have a good website: your domain name should have the suffix (e.g. .co.uk, .be, .fr, .it…)
  2. Make that website localized: build off the home site to make country specific pages that relate to the countries national and regional search engines look for. Each country has a different search engine of preference.                                   search                                                                                                                                                          For example, China’s top five search engines are:  Baidu.comGoogleSOSOSougou and MSN/Bing (http://chineseseoshifu.com/blog/top-5-chinese-search-engines.html )                                                                                  While the United States top five search engines are: Google, Bing, Yahoo!, Ask and AOL (http://www.ebizmba.com/articles/search-engines.html) 
  3. Make your content relevant to local culture: Here are a few questions you might want to answer: is your content easy to find? Does the country in question use pay-per-click advertising? Do you have a local phone number for companies to call to reach you?
  4. Get local content: make sure content is divers and widely used in the country you are trying to target: Videos, webinars, blogs
  5. Not everyone speaks your language: have brochures and speakers that are in multiple languages so you can reach multiple countries and customers
  6. Get some local experts on board: contact journalists, local bloggers, PR agencies and make sure they know you from the beginning of you B2B campaign

Disney’s Menus Around the World

Walt Disney Parks & Resorts is the largest amusement park in the world with over  126 million visitors in 2012 alone, see chart below. Disney has locations in California, Florida, Paris, Hong Kong, Japan and Shanghai (coming soon in 2015).

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When broken down by  individual resorts Disney holds 10 of the top 20 spots in attendance.

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To be the largest in the world Disney has to adapt to each country they enter. Unique offerings and cultural nuances are important to making each park successful. The menu offerings at each  park location have to be unique to that country and much research must be done by Disney to pick the right mix of menu offerings to be successful.

Disney has the Business Intelligence, meaning they have all the internal skills, technologies and practices to  make good decisions, but need to survey the external environment through Market Intelligence to get a complete picture of what is going on externally at each of their locations worldwide. This market intelligence helps them gain insight in to the opportunity for each location, the entry method for each location and develop metrics to measure their performance in a given country.

For example, every international market has different views of American cuisines.  Some enjoy it, others not so much.  These dissimilar pallets compel Disney, and its management, to utilized their market intelligence at hand and adapt to the cultural aspects their external environments encompass.  Those adaptations change the menu choices at each park.

Disney Anaheim has a very different menu than Disney Paris, Hong Kong or Japan.

anaheim_produce_menu_2013Disney Anaheim (above)

DSCN1874Disney Paris (above)

gedcarpizo-IMG_8971-2-1128113Disney Hong Kong (above)

japanquick7Disney Japan (above)

Each menu above has ties to the culture the park is in. By adapting their menus Disney has done their homework, so to speak, and made sure that each park offers local cuisine to appease their external customers.

Furthermore, Disney appeasing their local customers helps the parks in attendance and revenues as well.  Disney management has worked hard to integrate local cultural aspects into each of their parks, not only in their food, but physically as well.  It is their goal to make every individual feel at home and respected, as well as deter any negative views of the parks.  Most importantly it is part of the Disney traditions that they make all visitors feel like Walt did, home.

“To all who come to this happy place; welcome.”

-Walt Disney

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Global Branding (and Some Epic Misses)

Building a global brand is more than just a fancy website and humorous advertising. Global companies have to think about cultural norms and social implications for each market they decide to enter. This semester Nicole Knicker and I (Elizabeth Jebejian) will be exploring Global Branding and the good, the bad, and the in between of our current marketplace.

This week we wanted to discuss implications of branding gone wrong. Marketing is all about creating a buzz around your product, getting consumers to talk about it and becoming a leader in the marketplace. The response all marketing campaigns are looking for are increases in sales, brand awareness,  marketshare, volume and velocity. These marketeers are looking for  increased demand for their products (almost to the point where they can’t keep their product on the shelves).

We all remember the Tickle Me Elmo epidemic of 1996. Parents in the US were literally fighting other parents in the isles of toy stores to get this doll. This limited supply of dolls, due to unprecedented demand, lead to increased price of the dolls. The price during the Christmas Holiday started at $28.99 up to a staggering $2,500.00 per doll.

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The company that produced the dolls, Tyco Preschool a division of Tyco Toys, could not have anticipated such a high demand for this doll. Although the company did nothing wrong, the “must have” reaction by consumers left a lasting impression, clouded by the thoughts of grown adults ripping this toy out of each others baskets (or even each others hands). This craze blew over after the 1996 holiday season but  the long term impression of how consumers took an innocent children’s toy and turned it into negative noise in the marketplace lingers on.

Although the above example details how consumers can turn a companies products into negative branding then next video we present discusses how huge companies like McDonalds, Facebook and Coke can launch huge marketing campaigns gone really REALLY wrong.

So you just saw the top 10 Marketing Failures… Let’s dig a little deeper into the lesions we can all learn from. By the way most of these companies recovered just fine!

#10 McDonald’s 1984 Olympic Campaign: If you can’t control the campaign don’t do it. How could McDonald’s allocate enough funding to this campaign not knowing how the US medal count would eventually turn out? By leaving this up to chance McDonald’s rolled the dice and took a major financial hit for this mistake.

#9 Facebook’s Beacon Application: Keep your customers in mind. The beacon application shared users private information with advertisers worldwide. By assuming the role of puppet master, Facebook orchestrated giving this information away with out getting the buy in of their users.

#8 Burger King’s Creepy Character: Don’t cross the line between funny and frightening. Burger King’s advertisements featuring “The King” became a viral sensation mostly because they were more disturbing than playful. What’s better getting customers to remember your commercial because they want to try your product or because it terrified them?

#7 Snickers ad with Mr. T: Don’t segment your consumers. By paring up Mr. T a testosterone driven, macho man with a scrawny, speed walking “girly man” Snickers made the mistake of counting out a segment of their male consumers. Gay rights groups were in uproar and Snickers paid for this bad PR mistake.

#6 Skittle’s Touch the Rainbow Campaign: Be memorable, not a memory. By alluding to the fact that the man in the commercial turns everything into Skittles, even humans, casts a dark shadow over a seemingly clever ad campaign.

#5 AYDS Diet Candy from the 1970’s: Expect the unexpected. Even the best marketing team can not foresee worldwide disasters. This company had the unfortunate luck of coming out with a product that had the same name as a disease that became an epidemic a few years later.

#4 Honda Asimo: Practice, practice, practice. Plain and simple, before you make a worldwide debut make sure your product does what it says its going to do.

#3 Netflix Qwikster Fail: Stick to what you’re good at. By trying to stray from what customers knew them for, Netflix lost customers and profits. If they had just had a little faith that they were the best at what they set out to do they would have never tried to expand in to digital downloads.

#2 The Ford Edsel: Don’t under deliver. When you get your consumers interested in your newest product you better exceed their expectations. Ford ended up over selling this model and customers were at best underwhelmed.

#1 New Coke: If it ain’t broke don’t fix it. Why change something your consumers love? Why spend the time, money and recourses to replace a product that is doing well? My answer boredom… How bored must your marketing and R&D teams be to try and reinvent something that is working?

Stay tuned for our blog next week about good marketing strategy and what brands have done right.

Nicole & Elizabeth