IB Business: The Four P's

1,2 )Product & Price

: Launch of Nokia’s $20 phone begs question: Is one mobile enough?
http://edition.cnn.com/2013/02/25/tech/nokia-budget-phone-elop/index.html?iref=allsearch

-Unveiling its cheapest ever mobile phone, a $20 handset with a 35-hour battery, Nokia said the device's extraordinary staying power could make it popular as a backup for when our main handsets run out of juice or prove too bulky to carry around. They suggested that although this device offers none of the internet connectivity of most modern phones, it will be able to sit on standby for more than a month between charges. Also, the handset, which also features a dust and splash-proof keypad and an FM radio, has been primarily launched as a low-end phone that would appeal to customers in the developing world who may have infrequent access to electricity.
-This article is related to product and price of P’s, because this new product targets people who need to use phone every time or consumers in developing world with the cheapest price $20. Due to its long battery and cheap price, it can survive among others.
-Lots of smart phones with high technology are produced today, which causes an increase in competition between companies, for example, apple and Samsung. Nokia thinks starting new strategy with different purposes in contrast with other companies are better way to survive in electronic commerce from fierce competition.
-It is the better way to target only customers in the developing world, because there are low possibilities to use two phones for one person today.

3. Place

:Fashion trucks bring style to you

http://edition.cnn.com/2013/03/06/living/mobile-retail-boutiques/index.html?iref=allsearch

-Aspiring entrepreneur Abigail Franklin began selling clothes from a truck because she was looking for a way to stay in one place. Drawn to the opportunity to keep start up costs low, they decided to take a chance on mobile retail, which was catching on in Nashville after starting a few years earlier on the West Coast. They can bring their products to consumer instead of waiting for them to come. People follow the Trunk’s movements on Twitter and on its website. On any given day, it could be a music festival, a tailgate, a restaurant parking lot or outside a Bon Jovi concert when the band plays in Nashville.

-It is a place of 4p’s, because as they can move with truck it gives convenience to consumers. Consumers can buy and use their product in the place where they want. They offers convenient purchase environment.

-Operating it in large cities mostly.

4.Promotion

:With Hilarious 2-Minute Super Bowl Ad, Samsung Steals Cool Factor From Apple

http://www.forbes.com/sites/jasonevangelho/2013/02/03/with-hilarious-2-minute-super-bowl-ad-samsung-officially-steals-cool-factor-from-apple/

-Samsung’s 2 minute, $15million Super Bowl advertisement establishes both Samsung and its Galaxy brand. They are using witty banter between Paul Rudd and Seth Rogen who create humor in ad. This casting seems to mirror the crowd Samsung wants to capture: everyone. It’s a brilliant and entertaining ad, driving home several features of the Galaxy S III without being blatant. The ad even draws inspiration from Mel Brooks, breaking down the 4th wall with the Lebron James cameo. Most importantly, it’s a commercial I guarantee people will voluntarily watch again for the rapid-fire dialogue between Rudd and Rogen.

-This article is related to promotion as Samsung uses celebrities in their ad, which is one of the strategies in marketing. As they use celebrities, they can give more trust an demand would increase.

-It is a definitely a good commercial as far as entertainment value is concerned; however it really does not say that much about their product. They need to put more information about Galaxy in ad.

Stakeholder Conflict and TESCO

- conflict between employees (the drivers) , employers and internal stakeholder.

- According to the plan that drivers heard, their jobs are not safe anymore from transferring location from Wincanton to other place.

- boycotting which can give bad influence to the supplies from TESCO

- give some guarantees to them

Culture and International Business

1. Power Distance : This refers to how a society handles inequalities and the extent to which the less powerful members of organizations and institutions (like family) accept and expect that power is distributed unequally. ex1) In the United States, for example, the power distance index score is 40, while in the Czech Republic it is 57. The higher the distance between normal folk and the upper classes, and in fact, the more that division is respected by the average citizen.

ex2) http://www.youtube.com/watch v=JZqX0z3g5bE&lr=1&feature=mhsn

2. Uncertainty Avoidance : This refers to the level of need for structure. Cultures with low uncertainty avoidance tend to accept risk and change and prefer implicit or flexible rules and guidelines. ex)  According the Hofstede's research, Greece is the most risk-averse culture-Generally older countries/cultures with a long history, the population is more ethnically homogeneous, Low tolerance for innovation, prefer to stick to traditional routines, Citizens are often critical of their own nation, People tend to be more superstitious, and Singapore the least- The population tends to be ethnically diverse, Frequent innovations, Citizens are proud of nation, Foreigners or minorities are encouraged to assimilate. 

3. Individualism versus collectivism : Behavior towards community. The degree to which individuals are integrated into groups or are expected to look after themselves and self-actualize. ex) USA (Individualism)-Promotes individual goals, initiative and achievement, Rules attempt to ensure self-importance and individualism, Relying or being dependent on others is frequently seen as shameful;Russia (collectivism)-Each person is encouraged to be an active player in society, to do what is best for society as a whole rather than themselves, Rules promote unity, brotherhood, and selflessness, The rights of families, communities, and the collective supersede those of the individual.

4.  Masculinity versus Femininity : Masculine cultures’ values are competitiveness, assertiveness, materialism, ambition and power, whereas feminine cultures place more value on relationships and quality of life. In masculine cultures, the differences between gender roles are more dramatic and less fluid than in feminine cultures where men and women have the same values emphasizing modesty and caring. ex) UK (Masculine culture country) strives for a performance society; Sweden (feminine country) for a welfare society.

5. Long Term versus Short Term Orientation : How much society values long-standing, as opposed to short term, traditions and values. Cultures with high long-term orientation place strong importance on family, discipline and social obligations. ex) China(LTO)-persistence, thrift, ordering relationships by status, having a sense of shame; USA(Short)-personal steadiness and stability, reciprocation of greetings, favors, and gifts.

ex2) http://www.youtube.com/watch?v=zeZHyFxlrFQ&lr=1&feature=mhsn

6. Indulgence versus Restraint : Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun.  Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms. ex) Pakistan, which scored a zero, and Venezuela– a 100 http://www.youtube.com/watch?v=PVbkjobD8ao&lr=1&feature=mhsn

One Ethical Issue

Marketing to Children: Accepting Responsibility by Gael O’Brien

McDonald’s Happy Meals for children with toys has come under attack, because selling toys with fast food for children exceed certain levels of salt, fat, calories and sugar. McDonald’s was accused of deceptive marketing practices to children, because they advertise using toys as an inducement to buy Happy Meals even though it can raise the rate of obesity in children. Also, burgers contain high sodium. Corporate Accountability International started a campaign to fire Ronald McDonald, the clown mascot for a long time, and encourage headquarters to stop marketing to children. In addition, a letter signed by 600 health professionals and organizations, critical of the link between fast food and obesity, was read at the shareholder meeting. Most people tended to oppose advertising to children, especially as related to the rate of obesity in children. For example, Susan Linn, director and co-founder of a national coalition of health care professionals, educators, parents and others called the Campaign for a Commercial-Free Childhood, said that marketing to children, whether the subject is food, toys, clothes or anything else raises enormous concerns. “There is no ethical, moral, social, or spiritual justification for targeting children in advertising and marketing, said Linn recently at a Conscious Capitalism Conference. Linn, who also teaches psychiatry at Harvard Medical School, cited obesity and a number of other issues impacting children and society that stem from targeting kids, including youth violence, sexualization, underage drinking and smoking, excessive materialism and the erosion of creativity. In this case, there should be no advertisement to children using toys as an inducement. It doesn't mean that targeting children in advertisement is not appropriate, but in here, according to health problem, especially obesity, child-directed advertising of unhealthful food to children has to be abated by law, because it can trigger the higher rate of diseases or death for children for future.

Market Research Company

Roy Morgan Research is an Australian market research company headquartered in Melbourne. It was founded in 1941 by Roy Morgan. Roy Morgan Research is a truly international market research company and the provider of the world’s most extensive and only true single source survey. Today annual turnover is more than $60 million, with offices in four mainland Australian States, Auckland, London, USA and Indonesia. The Australian Market Research Industry now comprises mainly overseas-owned market research companies with Roy Morgan Research being the main exception.  A proliferation of small local market research companies conducts mostly qualitative research. Roy Morgan is Australia’s best known public opinion and political polling organisation. The Morgan Poll is Australia’s only independent poll; i.e. not owned by a media. The results are published on their website and by newspapers, magazines, television, the Internet and radio. Because of the wide range of services offered, Roy Morgan Research is able to employ the most appropriate methodology to meet the requirements of each study, which in many cases, involves the use of a combination of research techniques. Roy Morgan Research is one of the few market research companies in the world who owns their own analysis software used for delivering survey data to clients and enabling clients to perform their own 'in-house' analysis.

Their services- customized research, online research, customer satisfaction surveys, communications and advertising research etc.

The Promotional Mix vs Product Life cycle

Promotional Mix: the combination of promotional techniques that a firm uses to communicate the benefits of its product to consumers.

8 stages in deciding on a promotional mix
1. Decide on the image of the product
2. Develop a profile of the target market
3. Decide on the messages to communicate
4. Set an appropriate budget
5. Decide on how the messages should be communicated
6. Establish how the success of the promotional mix is to be assessed
7. Undertake the promotional plan and the mix elements
8. Measure its success

Product life cycle: the stages through which a product or its category bypass.

4 stages to the product life cycle -> How would the promotional mix change at different stages of the product life cycle?

1. Introduction: This is the stage where a product is conceptualized and first brought to market. The goal of any new product introduction is to meet consumers' needs with a quality product at the lowest possible cost in order to return the highest level of profit. In this phase, sales may be slow as the company builds awareness of its product among potential customers while advertising is crucial, so the marketing budget is often substantial. 
2. Growth: At this stage, a company can decide if it wants to go for increased market share or increased profitability. The goal for any company is to stay in this phase as long as possible, because this is the boom time for any product. Production increases, leading to lower unit costs. Sales momentum builds as advertising campaigns target mass media audiences instead of specialized markets (if the product merits this). Competition grows as awareness of the product builds. 
3. Maturity: At this stage, sales growth has started to slow and is approaching the point where the inevitable decline will begin. Defending market share becomes the chief concern, as marketing staffs have to spend more and more on promotion to entice customers to buy the product. More competitors have stepped forward to challenge the product, some of which may offer a higher-quality version of the product at a lower price. This can touch off price wars, and lower prices mean lower profits, which will cause some companies to drop out of the market for that product altogether. The maturity stage is usually the longest of the four life cycle stages, and it is not uncommon for a product to be in the mature stage for several decades.
4. Decline: This occurs when the product peaks in the maturity stage and then begins a downward slide in sales. Eventually, revenues will drop to the point where it is no longer economically feasible to continue making the product. Investment is minimized. The product can simply be discontinued, or it can be sold to another company.

Ethics and Marketing

What does ethics mean in relation to business?
-Business ethics is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.

Why is it important to a business?
-attract customers to the firm's products, thereby boosting sales and profits

-make employees want to stay with the business, reduce labor turnover and therefore increase productivity

-attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees

-attract investors and keep the company's share price high, thereby protecting the business from takeover.

What is the issue in the article?

-decisions of Lance Armstrong and Nike for their  images

Why did Livestrong and Nike take the action they did?

-Since cancer-fighting charity became negative to people from illegal drugs, Lance Armstrong is seen in a negative light and thus Nike stopped sponsoring Lance Armstrong for brand image.

How do they hope this action will be beneficial to their business?
-People would become more positive about them