Week8 EOC: Subliminal Advertising

The gasoline company Shell Oil, eager to find the reason behind their decade long slump, they tried everything from: psychographic memory triggers, dream therapy, tangible manifestation exercises, they even asked customers to mold a figure out of clay expressing their feelings towards the company. Nothing worked! “‘All the techniques…— they’re all legitimate tools for arriving at consumer insight,’ he says. ‘But they only operate on the surface level.’ To craft a more potent appeal for its brand of gasoline, Oeschle concluded, Shell would have to go deeper — much deeper.” So they decided to call in Hal Goldberg, a consumer researcher who specializes in focus groups conducted under hypnosis. Hal took customers all the way back to when they were infants and then he said “Tell me about your first experience in a gas station.” All of the customers’ responses were similar, tying them to their family. “It dawned on us, as a result of this process, that we’d better figure out how to favorably impact people from an early age,” he says. Many companies use this form and many other forms of subliminal advertising, in order to persuade their customers to keep being their products. What is subliminal advertising you may ask? Well subliminal advertising is a “Promotional messages the recipient is not aware of, such as those played at very low volume or flashed on a screen for less than a second. Its effectiveness is not supported by scientific evidence, and its use is considered a deceptive business practice in some jurisdictions.” I am not too sure what to think about this method that businesses use to capture the attention from customers. It is both good and bad in certain ways. It is good because businesses are able to find out what it is that its customers want, need, and expect from them, but on the other hand it is bad because it “forces” you to purchase from a brand without you even knowing why you felt you needed to.

Citations:

Subliminal Advertising Definition. Retrieved on September 1, 2013 from http://www.businessdictionary.com/definition/subliminal-advertising.html

The return of the hidden persuaders. Retrieved on September 1, 2013 from http://www.salon.com/1999/09/27/persuaders/print

Week 7 EOC: Retail PEST

"No brand exists in a vacuum, and a PEST analysis helps a company determine the political, economic, social and technological environment the brand will live in."

Political:

Environmental Policy- “Forever 21 is committed to reducing its environmental footprint throughout its global operations. Environmental sustainability is a key responsibility and we can play an integral role in ensuring that our impact is minimal in the countries where we source materials and products through to the markets where products are sold.” Forever 21 plans on doing this by transporting its products by sea so that they can help reduce carbon emission, they now use energy efficient lights in their stores so that they can cut down on energy usage, and they have committed to recycling all shipment boxes.

Taxation- To import Forever 21 clothes into a country the tax rates can range from 0%- 27% and that doesn’t include some of the additional taxes that are charged from other country fees.

Competition- “Analysts Lorraine Hutchinson, Paul Alexander, and Jessica A. Lebo at Bank of America warned that competitors need to start paying attention to the privately-held retailer right now.” As Forever 21 keeps growing and doing what they do best, giving its customers the latest trends at low prices, it will run over its competition. Forever 21 has expanded worldwide, broaden its customers to not just teens but to the entire family, and they are no longer just in malls they now take on bigger and better locations. They have put a dent in big teen retailers such as Abercrombie & Fitch, American Eagle, and the Gap, due to its extremely low cost on clothing. Forever 21 sells jeans that can cost around $15 whereas other retailers average pair of jeans cost $30.

Consumer Protection- Forever 21 protects its customers by setting a privacy and security policy which are “…intended to protect your privacy and provide you with a safe and secure experience in fashion, style and shopping.”

Economic:

In a time of hardship and struggle Forever 21 is having tons of success with expanding their business and product range, while other retailers are struggling to stay afloat. Instead of moving to smaller locations they have expanded its square footage into the 100,000s. They now have over 480 stores in 8 countries and project revenue of more than $3 billion a year. Each time a customer visits a Forever 21 store they spend an average of $21-$40.

Social Demographics:

Forever 21’s target demographic is from the age of 12 to 34, but they primarily target women from the age of 16- 24. They mainly target women, but they also carry men’s and kids clothing as well. The income that their customers typically have is $20,000, with a college education. “The primary target consists of highly fashionable women on a lower budget. They are motivated by the trendy, fashionable and frequently changing clothing styles on the market. These women want runway looks for a reasonable price. They also like the idea of “disposable” clothing that makes it possible for a woman to outfit herself for a party one week, and then come back the following week to find something completely new and hip to wear and still have enough cash left over to treat herself to lunch or the latest CD”

Technological:

Forever 21 typically conducts its research in the form of online surveys they will send out Facebook messages out to its customers and ask them to take a survey, such as the survey they gave out to better understand why college students preferred Forever 21 over other stores. This form of research has appeared to be very effective for them as they have a response rate of 92.9%.

Citations: 

Davis, M., and Baldwin, J. (2006). More Than a Name: An Introduction to Branding. AVA Publishing. Page 192

Forever 21 and Corporate Social Responsibility. Retrieved on August 24, 2013 from http://www.forever21.com/Htmls/CustomerService/en-US/socialresponsibility.html?8/26/2013

Import duty & taxes for Forever 21 women’s clothes. Retrieved on August 24, 2013 from http://www.dutycalculator.com/dc/127733-import-duty-rate-for-forever-21-womens-clothes-is-27/

The Competition Should Be Terrified of Forever 21. Retrieved on August 24, 2013 from http://www.businessinsider.com/forever-21-dominating-teen-retail-market-2013-3

Privacy & Security. Retrieved on August 24, 2013 from http://www.forever21.com/Htmls/CustomerService/en-US/privacy.html

Forever 21 bursts retail boundaries with huge stores, aggressive growth. Retrieved on August 24, 2013 from http://www.timesdispatch.com/business/forever-bursts-retail-boundaries-with-huge-stores-aggressive-growth/article_ece0f546-d103-5f8f-bcb0-b599ce6bb05d.html

Forever 21 Inc-Account Planning Briefing. Retrieved on August 24, 2013 from http://kaylathorn.files.wordpress.com/2011/06/account-planning-briefing.pdf

Forever 21 Research of College Students. Retrieved on August 24, 2013 from http://ethnographyprojectpur3500.files.wordpress.com/2009/07/write-up.pdf

Week 7 BOC: Largest Retailers

Who is the world’s largest retailer?

            Its no surprise, Wal-Mart still holds the number one spot at world’s biggest retailer. As of 2012, Wal-Mart sales were $328,704,000 with a 4.0% growth. Wal-Mart currently operates under three segments:  Wal-Mart U.S., Wal-Mart International, and Sam’s Club. The Wal-Mart U.S. segment reaches all 50 states and Puerto Rico, the International segment reaches 26 different countries, and Sam’s Club reaches 47 states and Puerto Rico. Kroger is in second place as of 2012 with sales at $92,165,000 and Target in third place at sales of $71,960,000.

Who is the world’s largest fashion retailer?

            The world largest fashion retailer is Inditex, or as we commonly know it by their brand Zara. They are located in Galicia, Spain. In a time that GAP was struggling, Zara was able to expand its stores across the globe, making it not only number one in America but also number one in the world. Zara recorded a 9% increase in sales in its first quarter of its financial year while the GAP saw it revenue fall by 10% within that same period.  “Every one of Inditex’s brands — Zara, Zara Home, Bershka, Massimo Dutti, Oysho, Stradivarius, Pull & Bear and Uterqüe — follow the Zara template: trendy and decently made but inexpensive products sold in beautiful, high-end-looking stores. Zara’s prices are similar to those of the Gap: coats for $200, sweaters for $70, T-shirts for $30.” Inditex now has more than 5,900 stores in 85 countries. Their main rivals are Topshop, H&M, and Mango. They have annual revenue of $15 billion. “While the world's largest retailer, Wal-Mart has more than 10,000 stores, most of which sell apparel, Wal-Mart stores are classified as hypermarkets. Inditex is strictly a retailer of apparel and fashion merchandise, and therefore, is considered to be the world's largest fashion retailer.”

Who is the world’s largest music retailer?

            It is none other than iTunes. Although it is the worlds largest it is mainly popular within the states. “iTunes Store surpassed Wal-Mart to become the number one music retailer in the US, based on the latest data from the NPD Group*. With over 50 million customers, iTunes has sold over four billion songs and features the world’s largest music catalog of over six million songs” With Spotify being the second largest source for music in the world, but number one in Europe. Spotify saw a 20% growth in its sales in Europe in 2010.

Citations:

Stores’ 2013 Top 100 Retailers List Shows Continued Industry Growth. Retrieved on August 21, 2013 from http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1612

Which Retail Clothing Chain is the World’s Largest Retailer of Fashion Apparel? Retrieved on August 21, 2013 from http://retailindustry.about.com/od/FrequentlyAskedQuestionsFAQs/f/Which-Retail-Clothing-Chain-Is-Worlds-Largest-Retailer-Fashion-Apparel-Clothes.htm

Zara overtakes Gap to become world’s largest clothing retailer. Retrieved on August 21, 2013 from http://www.theguardian.com/business/2008/aug/11/zara.gap.fashion

iTunes Store Top Music Retailer in the US. Retrieved on August 21, 2013 from http://www.apple.com/pr/library/2008/04/03iTunes-Store-Top-Music-Retailer-in-the-US.html

Spotify Second Largest Source of Revenue in Europe For Labels. Retrieved on August 21, 2013 from http://www.arcticstartup.com/2011/02/09/spotify-second-largest-source-of-revenue-in-europe-for-labels/

Wal-Mart Stores Inc. Retrieved on August 21, 2013 from http://topics.nytimes.com/top/news/business/companies/wal_mart_stores_inc/index.html

Week 6 EOC: Rocky Ford- Restoring the Brand

What Happened?

A cantaloupe grower (Jensen Farms) was farming just 90 miles away from The Rocky Ford farm was miss advertising their cantaloupes as “Rocky Ford” cantaloupes back in 2011. The cantaloupes that were supplied by this company were not washed properly and developed listeriosis on the external skin; there was an outbreak in 19 states and infected 84 people and killed 15 people. “Listeriosis is a serious infection usually caused by eating food contaminated with the bacterium Listeria monocytogenes.”

 

How should Rocky Ford Protect Their Brand?

 

“Wal-Mart, Jensen Farms, and other food companies have a public responsibility to all consumers to sell and distribute food that is free and clear of dangerous adulterants such as Listeria–no exceptions,” said the Palmer family’s attorney, William Marler. “In this case, a lapse in food safety assurance has relegated an innocent man to a hospital bed for a long time.” In order for Rocky Ford to protect their brand they should recall all of its products. Although it was indeed a different supplier (Jensen Farms) who supplied contaminated products under their name they should still recall their products. Why you may ask? Well because it will give their customers the assurance they need to be able to trust their brand again. By recalling their products it will show that they care about their customers’ health and safety. Rocky Ford should also trademark its name so that no other companies can try to use their name for their production and have lower standards and processes. “A trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others.” Also Rocky Ford should really try to develop good relationships with the companies that they do business with. I don’t know if Wal-Mart knew that it was getting its cantaloupes from a different farm that was just using the “Rocky Ford” name but they should have. Or Wal-Mart was just trying to get its cantaloupes at a lower price so they didn’t care that it was from a different supplier that was using a more trusted companies name.

Citations:

 Investigation Update: Multistate Outbreak of Listeriosis Linked to Whole Cantaloupes from Jensen Farms, Colorado. Retrieved on August 14, 2013 from http://www.cdc.gov/listeria/outbreaks/cantaloupes-jensen-farms/093011/

Lawsuit Filed In Rocky Ford Cantaloupe Listeria Outbreak. Retrieved on August 15, 2013 from http://www.foodsafetynews.com/2011/09/lawsuit-filed-in-rocky-ford-cantaloupe-listeria-outbreak/#.UhQXk3-rPwl

Trademark, Patent, or Copyright? Retrieved on August 15, 2013 from http://www.uspto.gov/trademarks/basics/definitions.jsp