Planned Obsolescence Fuels Consumerism.

Firstly, what do we understand by, “Planned Obsolescence”, and “Consumerism”, as there are differences in definitions and interpretations.

In simple words, planned obsolescence also known as built in obsolescence, is engineering products so that they fail to perform satisfactorily after a given amount of usage or time prompting consumers to replace them with the latest one, as in the case of laptops, TV.s or cell phones to name a few. With critics implying that the products are being made redundant deliberately much earlier and could have had a far longer useful life.

Another aspect is that of perceived  obsolescence where the products are still functioning perfectly usefully but are perceived by the consumer as being out of style as newer fashions and designs emerge to make the current one not look that good anymore aesthetically, as with clothing and fashion accessories.

Consumerism on the other hand is a tendency for an ever increasing consumption of goods and services which is seen as economically and socially desirable for a better quality of living leading to a consumption oriented society.

Now are the two ideas independent of each other or are they linked and feed of each other. A bit of both and some more i would say, akin to the idea of, “Did the chicken come first or the egg.”

Lets take a look at some examples and see how they fuel or feed of each other:

Gillette first introduced a two blade razor in 1971 and every few years have upgraded thru the Mach-3, Quattro with 4 blades and then the sensor and finally now evolving versions of Fusion with 5 and even an added 6th blade on the flip side for edging sideburns. Is it the end of the road or will we see more blades thinner and sharper added on, barring production constraints probably not.

In improving product quality thru innovation is Gillette furthering planned obsolescence and fueling consumerism. according to Philip Kotler a renowned marketing professor  and author: “Much so called planned obsolescence is the working of the competitive and technological forces in a free society, that lead to ever improving goods and services”. Some may however not entirely agree with the learned professor’s viewpoint.

More recently Apple has been accused of the practice and a petition signed by over 300,000 petitioners urges the tech giant to extend the lifespan of their phones. The concern raised by the launch of the iphone 7 which follows a new release every year since the initial version in 2007. Product cycles are becoming shorter being sabotaged by software upgrades slowing down current models and pushing consumers to  go for the new look faster and improved devices.

Professor Kotlers  viewpoint is true to a certain extent as goods and services need to be churned out, purchased and consumed and the factors of production to be utilized at near capacity, with sustained employment and incomes. Food does need to be put on the table and households need members to stay employed in factories and offices. Corporations have little choice than to bring out the latest models of cars, computers and mobile phones with added features that might add little value to the users in terms of money spent.

 

However a strategy of bringing out new versions too frequently can backfire with consumer resistance setting in as little added value is perceived, as seen from time to time with the failure of products in the computer software, television and gaming industry.

With no real functional improvements showing up in new models lately customers are beginning to feel they are being almost forced to upgrade to devices that offer little improvement over the current version. With little regulation of the tech industry responsibility falls on governments to step in and at least ensure that there are some checks and balances in place even if it means the corporations continue self regulation by far and large.

In conclusion, consumerism is needed to fuel consumption thus leading organizations to achieve that objective through building in obsolescence in their products via engineering and styling changes that encourage potential customers to simply go out and buy what they see advertised and marketed so glamorously around them.

 

 

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The Case Study Method in Teaching Business.

CASE REPORT FORMAT

  1.  Define the main problem.
  2.  Key issues — List and elaborate in order of importance.
  3.  Environmental analysis — Economic, Political & legal, Demographic, Competitive,       Technological, Ecological, Social and Cultural. (Applicable one’s only)
  4.  S.W.O.T. Analysis — Based on company’s micro and macro environment.
  5.  Alternatives –Generate and list available alternatives to address main problem and   issues.
  6.  Analyze and evaluate selected alternatives.
  7.  Recommendation and decision — Based on preferred alternatives.
  8.  Implementation schedule with specific timelines.

The above is a suggested case analysis structure or format to be used in a comprehensive business case study and can be adjusted for mini cases whose objective might be the application of a few concepts in business from a particular chapter. The format may also be done away with when the case study has specific questions at the end to answer the various issues involved in the case. The above format is highly recommended for a case study course in a BBA or MBA program at the 2nd year and above level, and is being used at Kwantlen University for the Marketing Management course MRKT2333.

A good approach for students to start preparing for  a case assignment due for discussion in class is to:

  1.  Give the case a quick reading to get a general overview, also advisable to read the opening and last paragraph or two with care to get an idea of the decisions and issues at stake.
  2.  Next you could give the case a slower thoughtful reading highlighting key facts that you think might be important in later analysis. It is important to distinguish between opinions that can be challenged and  relevant facts that are set in stone and can be readily used in the analysis.
  3.  When trying to identify the problem and issues in the case it is important to distinguish between problems and symptoms, as symptoms may mistakenly be taken by students to be the problem. A common symptom could be declining  company sales which may be stated by the student as a problem, whereas the problem may lie in identifying the sequence of events relating to the decline and then possibly identifying the problem.
  4.  There will always be “Red Herrings” in a case, these are simply facts or information that have no relevance to the analysis or are meant to mislead the analyst. For example sales data for a competitor way outside the company’s geographical target market.
  5.  There are normally no right or wrong answers in a case study analysis, unless it is a tightly structured case with the protagonist provided with concrete numbers and specific boundaries within which to operate in reaching a decision. In the majority of case studies a good answer depends on a logical and sensible approach by the student based on the theory taught in class, data provided in the case and it’s application to the problems and issues at hand facing the protagonist.
  6.  The above “Case Report Format” is a great structure in analyzing a case study in-depth. Please do remember that each case is unique and case analysis is not an exact science, the goal should be to learn to reason effectively with the available information and data.
  7.  Also keep in mind, there would be multiple issues in a business case, the key is for students to identify the main problem and prioritize the issues keeping within the resources that are available to the company.

Hope you enjoy this case course as an active participant in our class discussions and do feel free to comment or ask me any questions on the above post that I would be recommending you use for your case analysis and reports. Have a great semester!

 

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Retail Challenges and Trends.

Right now retail is being challenged on many fronts not only from emerging technologies but also uncertain economic times and changing consumer trends and perceptions towards what constitutes a well spent day at the store.

With Nordstrom the high end Seattle retailer opening shop in the stagnant Granville downtown core in Fall 2015 to huge fanfare, you might tend to question them taking a high risk gamble or having seen the light others have been blind to these past few damaging years when many a giant have fallen. Nordsrtom could not have asked for better timing given the larger investment needed crossing the border and the US dollar stronger at $1.32 Canadian, Target did not get that advantage when they first came in against a stronger Canadian dollar, possible had they weathered the storm for another year and closed down only their worst performing stores only they could have made it work, they did seem in a hurry to leave.

The announcements by Target, Mexx, Sony Corp Canada in early 2015 besides a spate of other store closures sent shock waves through the economy and the retail sector.Varied opinions exist but Targets closure was not only surprising but shocking  as their enormous investment 133 stores costing $1.5 billion hardly lasted two years. Target definitely underestimated Canadian buying behaviour and did not come up to shoppers expectations of what should have been a better organized and run retail operation with shelves well stocked with appealing and competitively priced products. Opening 124 stores and revving up to 133 by the end of 2014 may have spelled undue exuberance and a total lack of research on Canadian consumer behaviour, doing business in a far smaller market than the uS, with a weakening Canadian dollar was going to be a huge challenge. The closures of Sony stores are better understood  as consumers got exposed over the past decade to good brands like Samsung and LG at better prices, the stores were mainly used by consumers to browse Sony brands which were now losing their luster and appeal they had in the 80’s and 90’s. Electronics clients were also better served by the big box retailers like Future shop and best buy to make comparisons between competing brands.

A growing concern to retailers especially electronic stores is the practice now known as,”showrooming” wherein a customer visits the brick and mortar store to look at products and decide what they like, while researching on their mobile devices where they may buy the same product cheaper online and then return home to make the purchase online, thus using the store services while denying them the sale. Stores do have face up to the reality of growing e-commerce sales and have to adapt and also join forces if they are to remain a living entity.

There are several ways in which stores are responding with varying degrees of success:

1. Stores are not only matching online prices but are also pressuring their suppliers and        manufacturers to impose minimum advertised price etailers charge insuring a                       minimum floor price for off and online sales.

2. Stores can develop the expertise in the area of business as Wayfair a  furniture store became a Wikipedia of everything furniture for it’s customers. Thus providing a high level of service that could not be matched online.

3.  Stores are also being credited for online sales that may have been caused by                     “showrooming” customers that have gone back home and made the purchase online as long as they are within a certain radius of the store, so in essence they are being rewarded for providing service to customers who eventually buy from the store website.

4, In-store Beacons are being utilized by retailers who have location sensitive devices spread across the store sending out notifications about special deals and coupons to customers who have downloaded the mobile app. Also allowing the store to capture key consumer information and buying habits, this capability is being used by Walgreens and Hudson’s Bay within their stores.

5. Above all the brick and mortar store have the distinct advantage of providing an enhanced unique shopping experience which the e-tailer will find hard pressed to match. Like for instance the recent launch of Nordstrom in downtown Vancouver to huge crowds lining up in the thousands to get in the store to enjoy that thrill of shopping in a fantasy environment being pampered by a staff of over 100 beauty advisers and personal groomers, not to forget a full bar and restaurant to relax and possibly spend a few hours in-store.

So in conclusion, all is not lost for the traditional brick and mortar store, it is all about adapting to the challenges with retailers pairing the convenience of both online and off line shopping. Providing a unique shopping experience tailored to the shoppers needs making them want to return over and over again.

 

 

 

 

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“Don’t You Forget about Me.”

In response to The Daily Post’s writing prompt: “Don’t You Forget About Me.”

Would love a legacy of students remembering their teacher contributing in some way to them achieving their goals and ambitions in life and making them unselfish citizens of the world. Imbibing in them a sense of responsibility towards society and the planet to make it ever sustainable for future generations.

To my students, “I hope i have not failed you.”

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Starbucks and IKEA in India and China

MRKT4177 Contemporary issues in marketing.

Entering global markets can be quite rewarding as well as risky for companies looking to expand and increase their market share in the face of shrinking domestic markets especially in the food, beverages and tobacco industries to name a few. While many entrants overseas have met with phenomenal success a fair number have failed to come to terms with the vagaries of operating in a foreign culture.

For one companies are wary of over adapting their strategy to an extent where they lose their originality and identity as a global brand, and on the other forcing their brand upon the local populace without considering local tastes and cultural context. In many cases a  balanced path  of glocalization is much better suited to their success overseas.

Focusing on two well known companies Starbucks and IKEA that have gone the global route, it is beneficial  to learn from the experience they faced contemplating the Indian and Chinese market with product, location and pricing decisions. Firms can learn lessons on how they may overcome these dilemmas and challenges while seeking to enter overseas markets.

It is important to know the background and history of hot beverage drinking in India, which has historically been known as a tea drinking nation dating back to British colonization being preceded by the entry of the East India Company in the mid 18th century. The British introduced tea agriculture leading to  mass consumption after a successful advertising campaign by the tea board in the 1920’s.

After six years of researching the Indian market, Starbucks opened their first store in October, 2012 in an upscale area of downtown Mumbai. Howard Schultz commenting , “It is perhaps the most elegant, beautiful, dynamic store we have opened in our history.”

A great advantage to Starbucks was their carefully selected partnership with  the Tata Group a giant Indian conglomerate and one of the largest coffee producers in Asia. This partnership provided them with some of the most valuable and prime locations to set shop in Mumbai and Delhi with the Elphinstone Building and the Taj Mahal hotel sites getting them off to a great start. Menu featuring a blend of local and western in the shape of mouth watering murg(chicken) tikka panini and tandoori paneer(cheese) rolls.

In comparison in China Starbucks went with the Chinese need to relax in more spacious surroundings, building bigger stores 3,800 sq. ft. and upward. Menu items include chines teas and moon cakes.

A Frappuccino is priced to a growing middle class in India at $3.35 compared to products being priced 20% higher in China than other markets.

Starbucks went with a glocalization  strategy (a combination of a global and local strategy) to succeed in both India and China, adapting the product catering to local tastes at the same time maintaining its Western image globally thru offering its original service and product concepts as well.

IKEA’s entry into India has been more slow and on the cautious side, having to consider several key issues, they do not expect to have a store launched before 2018.

One key lesson they can learn from their China experience is that DIY (do it yourself) will not work in India for locals are not keen to assemble and would rather have a do-it-for-me model in place which Home Depot did not practice in China and paid the price having to close down their remaining  operations in 2012.

In China IKEA started with a higher price model which subsequently had to be lowered by 50% for the PPP (Purchasing power parity) may have been higher but income levels were quite lower for the intended target market, each potential Chinese customer earning $400 a month.

After initial experience IKEA realized that if they built bigger stores the crowd would come now eight of their 10 biggest stores in the world are in China where their outlets have 40% more traffic than other countries customers treating them as destination stores spending a a significant part of the day, exploring, relaxing and dining their time away.

IKEA also had to come to terms with its positioning strategy in China initially focusing on the 20 to 35 year old market and then repositioning to include the wealthier 35 to 45 age segment with children.

Undoubtedly when entering India IKEA would look upon their experiences entering other emerging markets including China and adapt to local customs and tastes. It already faces challenges in seeking changes to a rigid single brand retail policy for foreign firms investing in India and for the Government to allow foreign retailers to be able to sell online.

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Make Your Blog More Dynamic with a Slider

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Originally posted on The WordPress.com Blog:
When you read the word “slider,” what do you think of? Baseball? Burgers? How about blogs? The best way to build an audience is to produce awesome content — write posts that your…

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^IR Looking forward to industry visit to

^IR Looking forward to industry visit to #Hootsuite with #Kwantlen marketing students #KMA

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