Green Marketing

In a recently announced action, Enterprise Rent-A-Car decided that they would begin renting hybrid automobiles to customers and would open "Green Branches" where nearly 60% of the fleet would by hybrid automobiles.

Green marketing is an extremely powerful and pervasive tool in todays marketplace. The environment is increasingly becoming an important issue to many consumers and companies, and we watch the effects of global warming on our climate and many of our natural resources. Because of this, many companies, including companies that deal primarily in the automotive industry are deciding to "go green" and introduce environmentally friendly initiatives.

In many ways, this is a very similar marketing strategy to cause marketing. Many companies use cause marketing to align their organizations with causes such as reducing breast cancer, AIDS awarness, etc. With green initiatives, companies are trying to align themselves with a more global cause, environmental protection. While green initiatives and cause marketing differ in that with green initiatives companies are generally not forming an alliance with a specific group or organization, it attempts to affect the consumers in a similar manner. By convincing the consumer that they believe in a cause (environmentalism) that is important to the consumer, they believe that they are more likely to gain business from that consumer.

According to the article:

"Those who are looking for a value in terms of dollar for dollar will absolutely not get hybrids," said Brian Chee, the head automotive analyst at MyRide.com. But he said there's a growing market that's willing to shell out an extra $40 for the hybrids during quick vacations.

That statement alone helps to show why green initiatives are so powerful. Simply having these cars, which would provide minimal cost savings for the consumer over such a short period of time, could gain the company an extra $40 per rental.

Starbucks

A company once thought of as being on the cutting edge of the coffee industry is taking a step back, to handle increased competition from unlikely rivals.

Recently, companies like McDonalds have noticed how much customers seem to enjoy "high profile" coffee blends such as the ones that they are used to buying from places like Starbucks. In response to this, McDonalds released their own premium blend of coffee, as did places like Dunkin' Donuts. This has spelled trouble for Starbucks. Whereas they used to be perceived as expensive but high quality, seeing the cheap high quality alternatives from places like Dunkin and McDonalds has started to erode their market share. People are choosing the convenience and price of places like McDonalds and Dunkin over the high quality, expensive coffee at Starbucks.

Faced with this competition, Starbucks recently announced that they would be adding a new blend, called "Pike Place Roast," that more closely mimics the McDonalds and Dunkin offerings. This, they hope, will bring back some of their customers that they have recently lost in the coffee wars to McDonalds and Dunkin. Interestingly, though, is going to be how customers will perceive the coffee blend being sold at Starbucks, and whether it will actually help their business. In the past, Starbucks blends have been considered a bit bitter and strong by their customers, but customers began to see this as a sign of quality. The Pike Place Roast is lighter in flavor, mimicking cheaper blends of coffee, which I believe will begin to erode Starbucks' image as the highest quality establishment. In the end, this could be a very risky move for the company, and one that could hurt their brand and long term profit potential.

Sonic: America's Drive-In

I was faced with an interesting situation today, which sheds light on a very interesting marketing issue that we have been studying. The setting is Sonic, at the Pittsburgh Mills out on Rt. 28. Sonic is a reasonably good fast food restaurant, serving burgers, chicken sandwiches, and delicious drinks in a "drive-in" motif. I have been to Sonic restaurants all around the country, and truly, the biggest reason to go to Sonic is the drinks. They offer fantastic fountain drinks, including my personal favorite, cherry limeade.

So here's the situation. I'm at Sonic, and I have made my order - this time, it was a breakfast burrito, an order of tater tots, mozzarella sticks, and my favorite, a cherry limeade. After making the order, I sit down to eat and begin enjoying what is normally pretty good food and a delicious fountain drink. Everything was fine, more or less, aside from the jalepenos that they put on my breakfast burrito. I finished up my cherry limeade, and look to one of the servers at the restaurant, and tell them that I would like a refill. "We don't do refills," she exclaims. Now, this was a huge surprise to me. I have been to Sonics all around the country - I'd estimate this was my 15th visit to a Sonic restaurant - and the free refills on the drinks is one of the primary reasons I go there.

Anyways, I try asking a few other workers if they would get me a refill, to see if I can skirt the system a little bit, but it doesn't work. Eventually, without my asking, the manager comes out and says "someone was asking about our refill policy?" I speak up, and explain to him that in all of my visits to Sonic, I had never been to one that doesn't offer free refills, and was clearly a bit upset by this. He continues to explain their policy, and how they're not allowed to do it because of a rule from the Allegheny Health Department (which I found curious, considering I have received free refills many times in Allegheny County), and eventually gives in and gets me a free refill.

Thinking about this from a marketing perspective, though, it raises a very interesting issue. I came into Sonic on this fateful Sunday with a perception about the restaurant - that I would be able to get a free refill. Now, despite the fact that my perception was wrong, it was very important that Sonic could handle it. Sonic is, in this case, in the business of managing customers perceptions of their chain and what they offer. No matter what a customer is expecting, if their expectations are not met, it is unlikely that they will come back. Had the manager not refilled my drink at the end of our argument, there is absolutely no chance I ever would have eaten there again. In order to better handle the perceptions of the customers, Sonic should post their policy on refills, which is clearly not in line with other restaurants in the chain, for customers to see. That way, after customers order, they will not have a perception that is different from the reality of the real situation. By doing this, they will create happier customers, and customers who are more likely to come back.

Uggs and Self-Concept

Following my teams presentation on Uggs, I got to thinking about why people really do make purchases after all. What really motivates people to buy? I think in a high percentage of fashion purchases, people make them based on a few dimensions of their self-concept. The two dimensions that I'm going to discuss are the Private Self and the Social Self. I will try to discuss this within the framework of Uggs, for simplicities sake.

The Private Self refers to how one sees them self. In terms of the Private Self, the purchase of a pair of Uggs is certainly a big issue. If the purchaser believes that the Uggs are in style, and fashionable, their purchase of Uggs indicates a lot about them. Since Uggs are in style and fashionable, if the purchaser buys them, it means that the purchaser is in style/fashionable. Since the purchaser likely thinks highly of their own sense of style and fashion, the purchase is a reflection of their Private Self.

If this is a widely held view, that Uggs are fashionable and in style, then it will cause others to see the purchaser of Uggs as being in style or fashionable. This is part of the Social Self, another aspect of self-concept.

This is not a process that is limited to the purchase of Uggs. In fact, it's not limited to womens apparel or even to clothing. Many purchases are motivated by this self-concept theory. While people purchase a big-screen TV because it's enjoyable to watch, another main reason for purchase is to show it off to their friends - part of their Social Self. Same goes with cars, or hair-styles, or nearly anything else people purchase. Even people who dress poorly, or wear ratty clothes, or have messy hair, use that as an element of their self concept and how they see themselves. It's easy to fall into the trap of believing that only women and fashion items are purchased for reasons of self-concept and perception, but in the end, it is a motivator for nearly all purchases.

Google

In November, I made a relatively courageous prediction. While Google was seemingly at the top of the world, and everyong was more or less enamored by anything and everything Google, I decided that they couldn't keep it up. They had too much positivity coming their way. Too much goodwill. Too much hype. And all of this without the underlying revenue to keep it up. In talks with a number of my friends who are "finance types," I told them that if I were an investor, I would short-sell Google in anticipation of their stock dropping significantly.

Turns out, I was right. While nobody in the world had anything bad to say about Google, I saw something in their business model that didn't seem to fit. Their business model was based on the idea that online advertising was the key to revenue. Everyone seemed to fall into this trap - Yahoo, Microsoft, and pretty much every other big online service provider decided that their ability to advertise successfully for clients was the key to their success. Keep in mind, this business model is successful...but it is becoming less successful each and every day.

Google's paid click through rates have been getting lower. Fewer people are clicking on their "targeted advertisements," and this could lead to some substantial problems for their business. In reality, though, this is not particularly surprising. Throughout the years, consumers have become less and less likely to be affected by traditional forms of advertisement on television, radio, and print mediums. Because of this, companies will often resort to newer, flashier forms of advertisement such as viral marketing and marketing stunts to get the attention of consumers. I would suspect that over the next few years, the strength of targeted online advertising will erode just as the strength of traditional advertising has eroded, and it will cause companies such as Google to adapt their methods and business models or else face significant problems in the future.

Information Search Process at PrincetonOne

I work at an executive recruiting (headhunting) firm called PrincetonOne. In our industry, the information search process is of the utmost importance, and is one of the greatest determinants of whether or not you will be successful in the industry.

As a sales-based role, the search for information - whether that information be new clients, candidates, or industry trends - is ongoing. Knowing what jobs are out there, what candidates are looking for jobs, and whether the long-term prospects of the industry you focus on are good is crucial to success within the recruiting world. Below, I will describe the information search process when looking for a candidate for a specific position. I will use a position I was trying to fill with Americo Insurance as the backdrop for this.

I was looking for someone to fill an Underwriting Manager position within Americo Insurance Company in Kansas City, MO. In order to fill this position, I started with a number of consideration sets of where I could find people, and they generally fell into two categories: geographic locations and experience level. I wanted people from the midwest territory, so that they wouldn't be opposed to relocating. I searched for people in Kansas, Oklahoma, Missouri, Iowa, and Nebraska. I was also mainly looking for people who already had management experience, so I focused my search on people who were currently Underwriting Managers or who had past experience in management. Finally, I was looking for people with a good background in the technical aspects of underwriting.

After making hundreds of calls to candidates that I thought fit the previously described considerations, I stumbled upon a candidate that fit the build perfectly. He had strong experience as an underwriter, had been managing a team for a number of years, and was located in the Kansas City area. What's better, his company was closing down in June, so he was motivated to make a move soon. Currently, he is still in the interview process, but he is an excellent fit that was found as a result of the information search that I used.

Personal Information Search

Monday:
Location - Strip District
11:30am - sitting at work, starting to think about where I will go to lunch. I have four potential places in mind: Penn Ave Fish Company, Big Mama's House of Soul, Chicken Latino, and Prestogeorge
11:50am - I decide that I'm going to go to Big Mama's House of Soul
11:58am - Right before leaving, I look outside and notice that it's raining, so I audible and decide to go to Penn Ave Fish Company, the closest restaurant to my office
12:02pm - I walk outside, and begin going to the Penn Ave Fish Company. As I'm walking, I notice the rain stopping, and change my choice again, deciding that I will go to Big Mama's
12:10pm - Arrive at Big Mama's. Restaurant is packed, and I won't be able to get my food quickly. I leave and go to Prestogeorge, which is close to Big Mama's
12:15pm - Arrive at Prestogeorge, and walk up the counter. I have two usual orders: Braunschweiger Club and Pastrami and Egg Club. It feels like a Braunschweiger day, so I put in my order
12:30pm - Arrive back at the office, and eat my sandwich. I feel a bit sad that I didn't get Big Mama's, but I'm happy with my choice overall.
Location - Oakland
6:34pm - Finish up a take-home test that's due today, and start thinking about dinner. I have two options in my head: Sushi or Hot Wings
6:38pm - Arrive home from the computer lab, and make my decision to go to Quaker Steak and Lube and grab an order of wings

Tuesday:
Location - Oakland
10:50am - Before class, start thinking about whether I want to grab something to drink before entering. I decide against it, and enter my 11:00am class.
12:15pm - Go to my usual Tuesday/Thursday lunch at Market Central with a number of friends. Although it's probably not worth the money spent on it, the company makes it worth it.
3:15pm - Purchase two lemon-lime Gatorades for practice, which begins at 3:30. I make the purchase from the Sutherland coffee cart at Sutherland Hall, which is nearby to our practice facility
5:45pm - Go to Sutherland's dining hall for dinner before my night class.
11:03pm - Entered Fuel&Fuddle for halfprice

Nearly all of these decisions are either Nominal or Limited decision processes. In the case of deciding where I was going to go for lunch on Monday, it was a Limited decision process, where I evaluated a number of different alternatives and made a decision between them. Despite being upset that I didn't get Big Mama's for lunch that day, I was still quite happy with my Braunschweiger Club, and there was little to no post-purchase dissonance.

Other decisions, such as where to eat lunch or dinner on Tuesday and where to purchase my Gatorade from, where both nominal decisions. I evaluated no alternatives in any of those purchases. I always eat lunch at Market Central on Tuesdays, no matter what. There are no alternatives. I always purchase two yellow gatorades before practice, and do not consider anything to be an alternative. For 11:00 halfprice, the only place I ever go is Fuel&Fuddle, so there was no alternative evaluation there either, making it a nominal decision also.