the last blog.

One main concept that I have learned from this course from working on this group project is the concept that there are so many things to learn from a customer segment and it is difficult to gain insight and understanding about everything you would like to just through surveys and collages. At the beginning of this class and the beginning of our group project, I underestimated how difficult it would be to get hard data from our surveys and collages that would tell us all the exact information we needed in order to create the most fitting and perfect product for our segment. I haven't conducted many surveys since high school and so I had forgotten how difficult they can be. Although we had a good amount of subjects for both of our research methods, some responses were not helpful towards our project, but some were. This project has really helped me gain a better understanding of surveys and the kind of information you can or cannot collect from them. For instance, when asking a subject a question- even though they answer it, there may be underlying thoughts or ideas under their responses that even they are not aware of. So I also learned that it is important to really dig into their answers and responses and see what else you can pull from them.


The next main skill that I have learned from this course from working on this group project is presentation skills. Throughout this project and class, I have presented a couple times- some informally, and a more formal one. I learned that it is important to be able to convey your thoughts and findings to the group so that they will better understand the project and the goals we were trying to achieve. Along with speaking in front of a group of people, I also learned how to more thoroughly make PowerPoint presentations. For example, during our updates- Professor Walls always challenged us to write very thorough thoughts in the notes section to explain what we were trying to convey through our slides. Though these updates, I have had a lot more practice with making PowerPoint presentations now- which is a skill that I will widely use in the workplace when I graduate this May.


Since I am a Supply Chain Management/Finance major, it was interesting working on a group with two Marketing major students. I’ve always heard in the workplace how ideas can clash between finance and marketing or how it can be difficult to see eye to eye with the other “group” of people. I can kind of see what they are talking about. I think that it is definitely a learning experience and I enjoyed working on a team with them, but there were times where I could see my mind and thought process for something venturing off a different way than they did. But in the end, I really do think that we all were able to add something different to the project that made it that much better. At first when we were picking our segment- affluent empty nesters, I felt very optimistic and thought that this would be a good segment to find out more about. But as we found out our room selection- the bathroom, I was a little nervous about how we would find a connection between these two pieces of information, and how successful our project results would be. As time went on, Professor Walls did a great job of coaching us and stretching us to dig deep and find out what things really mean. He also suggested different things for us to find out and really helped out in this aspect. Towards the end of the project, things slowly started to come together. I think that our second survey method- collages- really helped out in terms of providing usable information for our project. It seemed to provide more insight into the subjects and their thoughts, views, and needs when it comes to this room. Creating a prototype for the project was interesting- I’ve never had to do that before. From this I learned that it is important to come up with a great product idea, but it is also important to make sure it is feasible and can actually be constructed in a way. All in all, I have taken some learnings away from this class and just wanted to thank Professor Walls for helping us through the process!

comments on another blog

I am critiquing Julie Phan's "Starbucks Expanding into China" blog. It was a very interesting topic and I agreed with her thoughts. She talks about how the Chinese culture is very much set on tea, and with Starbucks coming in trying to change the taste of Chinese people- it will be a huge task for them. Without knowing too much about this topic, it was interesting to learn this and see her perspective on this current issue. I like how she found a topic that she was interested in and really spilled her thoughts out and how it relates to consumers. Also, Julie picks a side that is not what Starbucks is currently doing, and I think this is always good to be challenging what's happening and see it from a different point of view. For example, she says: "I honestly thought that Starbucks should try to appeal more towards the China culture because it would be more of a gradual change that would get the Chinese people's attention. Starbucks decided to take the other route and want to change the taste of Chinese consumers all together. This is a big risk, seeing as how China's 1.3 billion people do not care for coffee, according to the article I read. " And I completely agree with her viewpoint.

Coincidently enough, I am just beginning a group project on Starbucks in one of my management classes. We are taking a look into companies that may be having some sort of problems and giving recommendatios on what they should do to turn it around. I just interviewed someone at the Starbucks on campus (Texas Union) yesterday, and it seems like Starbucks' strong points are the culture and atmosphere that they create within the store. So piggybacking off what Julie said about how "People don't only go there for the great tasting coffee, but they also come there for the experience." is completely true. Customers feel good and like they're drinking high quality, brand named coffee when they sit there and sip on their grande iced caramel macchiato with nonfat milk and a shot of something in it (which did you know Starbucks' macchiato is different from another coffee shop's macchiato? they just call it this, but in other coffee shops you'll find it under "latte").

So if that's their strength- what are their weaknesses? From my interview and research online, I've found that they have been opening up too many stores- you can almost find one on every major street corner now, similar to a gas station. The "specialty" of Starbucks that they once tried so hard to create is being shot down with the abundance of stores around the city. In Julie's blog she talks about how they are moving some of their business to China- and in my opinion, this is really going to be a hard task for Starbucks. Especially if their strength is in the experience they create at the store, I really don't think it will transfer as well into the Chinese culture. Also, stores like Mcdonalds and gas stations have cheap alternatives for a customer's coffee fix. You can run through the drive through line really quickly and be gone onto your next location at one of these locations. Starbucks has many competitors meaning many different acts that needs to be taken strategically on their part, and if they are hoping to be successful in the coming years- I think it's important for them to focus on what they're doing well on right now or change their strategy abroad. I realize that it is important to be global in this day and age, but it's also important to not spread yourself thin and start to fall in different areas opposed to focusing on what you can do well- and constantly challenging this area.

extended outline- consumer's brand loyalty in this recession

Concerns: Is there too much information packed into the first part of the body? I assume I will find more information for the 2nd and 3rd parts of the body as I do more research, but I have a feeling there will be much more information for the 1st part regardless.

I. Introduction

a. Thesis- In times of economic uncertainly, consumers become even more interested in obtaining value-for-money in their everyday shopping and private labels know this, and so customers' brand loyalty are continually being tested each time they enter the grocery store.

i. Private labels vs. Brand names
ii. Rewards Programs
iii. My Insight

II. Body

a. Consumer's attitudes, beliefs and motivations behind private label versus famous brand purchases.

i. Consumer trends have shown an increasing interest in private labels.
a. Private label sales grew 10.2% in 2008, while brand name sales increased only 2.6%. For example, one consumer says “the only difference is the label on the package”.
b. Any worries that consumers have about the economy only serve to strengthen private label spend because store brands are seen as an important way of achieving value for money.
c. Marketing fatigue potentially enhances the appeal and relevance of private label brands, especially as advertising is a key defense tactic for famous brands. Across the 15 countries surveyed by Datamonitor in August 2008, 47% of respondents 'strongly agreed' with the statement, there is too much advertising today.

ii. Another factor that is interesting is that sometimes when you have a whole bunch of different brands out there and not a lot of differentiation among some of them or not a lot of knowledge about them, people get frustrated and confused and end up just picking the private label
a. We studied this in the pod cast about choices. Sometimes, choices are not the best thing for companies.

iii. Furthermore, seeking to combat stiffer competition from cheaper store brands- big-name food manufacturers, including Kraft Foods and General Mills are joining forces with retailers to promote their brands alongside private-label goods.
a. In the past, big food companies didn’t worry too much about cheaper store brands encroaching on their turf, because consumers were more loyal to name brands and generally believed better quality justified their higher prices. But now, retailers have improved their store brands and have mimicked the innovations that brand names have introduced (such as cheese with extra calcium).

b. Rewards Programs- Brands better keep members by instilling reward programs.

i. A new study from Colloquy finds that customers who participate in loyalty-building efforts are 70% more likely to actively recommend a product, service, or brand than the general population.
a. Examples: MyCokeRewards and the Best Buy Reward Zone

c. My Insight

i. “Branding is so much about psychology it’s almost frightening”.

a. For example, the Miss Clairol feeling was the girl next door but just a little prettier and L’Oreal made women feel sophisticated and worth it (hence the tag line “because you’re worth it”).

b. If brand names want to keep their profits and popularity high, they need to figure out what consumers want to feel when they buy a product- the psychology that is attached to their product, and then how to position it.

III. Conclusion

a. In times of economic uncertainly, consumers become even more interested in obtaining value-for-money in their everyday shopping and private labels know this, and so customers' brand loyalty are continually being tested each time they enter the grocery store.

b. Topics covered
i. Private labels vs. Brand names
ii. Rewards Programs
iii. My Insight

c. Companies, private labels or brand names, need to rely on product innovations and value marketing to drive growth behind its brands.

WALMART & RFID technology

In class we learned how Walmart is implementing the use of Radio Frequency Identification (RFID) technology. The improvements in sensitivity, range and durability, have enabled widespread RFID use in the logistical planning and operation of supply chain processes in the manufacturing, distribution and retail industries, and helped move its adoption into services such as security and access control, tracking, and monitoring/management. A RFID tag is consisted of a microchip and an antenna packaged into many forms, such as a label, or imbedded in between the cardboard layers in a carton. Information about the product that the tag is stuck on can be recorded when the tag passes through a RFID reader before you walk out of the Walmart store. This is linked to a computer system that updates the location status of the associated product.

This means that Walmart can very quickly, gather information about the customer, the types of groceries or products he/she is buying and further, maybe even come up with some assumptions based on this information. Walmart not only acquires efficiencies and cost reductions (for example, in inventory management) but they are able to gain customer insights about what they are buying more of, how often, what other products complement well with it, what type of customers are buying what specific types of products, etc.

Along with RFID tags are not only great efficiencies but also like we learned in class, there can be privacy concerns. When we gather lots of information from consumers, what we do and who sees this information can get us in trouble. So, Walmart just needs to make sure they are monitoring this and has control over gathered information. Walmart's RFID mandate has enormous strategic implications, not just for their direct suppliers, but the suppliers own operations and vendors in turn. The ripple effect of the mandate will cause RFID costs to drop in general, opening the door for RFID applicability to smaller companies and industries that to this point haven't been able to cost justify using RFID.

It will also enable new applications such as RFID-enabled personal safety and security. These kinds of applications in turn become particularly attractive when combined with GPS technologies to enable comprehensive tracking whether in a building or on the road. Once costs drop enough, and if privacy concerns are able to be overcome, using RFID at the individual consumer product level will open the door to a new generation of retail efficiencies. These may lead to more discovered customer insights, and companies can invest and discover what customers really need when it comes to safety and security.

the persuaders

In The Persuaders, they take a look at the multibillion-dollar "persuasion industries" of advertising and public relations and how marketers have developed new ways of integrating their messages deeper into our lives. With very well thought out methods, they attempt to better understand consumers, and they look to the techniques of public relations to make certain their messages come from sources we trust, since the public is becoming increasingl cynical. The Persuaders covers their market research methods that helps them understand consumers, and how they can get us to buy into their product. This includes short case studies from different companies on how they are selling their product ranging from the airline industry or a company that produces laundry detergent. The podcast also address marketing effects in politics- and how politicians use these tools to get elected and stay in office.

Dr. Rapaille has interesting viewpoints. He has a 3 step process to figure out our link to products. His thoughts are that consumers don't really understand why they do things a certain way and so they try to figure it out and give false reasons for why they buy things. Rapaille also states that there is a mental connection with the products. He uses this process to figure out what people associate with the word luxury. He has also used this method in the SUV industry. He found that dominance was the code for SUVs, so he persuaded SUV producers to make their vehicles even larger, but with tinted windows to give off the feeling and idea of dominance. The 3 step process is:

Subject’s Reason- asks the people in a focus group questions related to the subject matter; real information is not really gathered during this time, but it breaks the ice for the people and gets them ready to answer the rest of the questions and feel as if they were an integral part of the focus group

Subject’s emotion to gain insight- this happens after a break; asks people in the focus group to perform unconventional tasks (telling stories to young children from other planets); this way, the subjects can break away from common sense reason and logic showing him the emotions that these subject relate to the subject matter

Primal core- this happens after yet another break and is crucial (where decisions are REALLY made); chairs are taken from the room perplexing the subjects, and asked to think about their memories relating to luxury and jot them down; this information is used to decode the word

Song airlines has been criticized and deemed crazy for coming in the airline industry at this time of economic crisis and slowing demand in the airline industry. I think that their idea is good in theory- creating a place (tailored really for women) where luxury meets an airline. But right now, with consumers pinching their pockets for every last penny, I really don’t think it’s the right time to enter. They created focus groups and have gone through some unconventional ways of finding employees who are “so song”, which is pretty neat- but the question is, is all of this just “neat” and not a good business idea?

The right and wrong way to ask people what they want

Kenna's Dilemma chapter talks about a customer's decision-making process- the context in which a judgment is made. Gladwell employs many examples and case studies, most of which are drawn from the world of marketing and focus groups. His main point is that in many situations, people will make the wrong quick judgment if they are being asked to decide something that is outside of their range of knowledge. Also, he shows that taking a problem from its normal context makes it difficult for people to make accurate decisions.

This is the first lesson from this article. For example, in the Pepsi Challenge, it was demonstrated that 57% of the subjects preferred Pepsi over Coke. What was later found was that samples consumed of this drink had a different effect than if you were to drink the entire can of Pepsi. So in the sip that subjects took of Pepsi- they tasted a sweeter and more citrusy taste. But when tasting the Coke- they tasted a raisiny vanilla taste. This is why home tests give the most accurate information. This is the first learning for a marketer trying to gain insight from current or potential customers- if they are interested in knowing how their product will TRULY compare with competitors or on it's own, then let them take it home. For example, marketers can give larger samples out to the public- so that customers will get an accurate picture of what the product does or how it tastes. And as for the company, even though a larger sample will mean more costs for them- it will give the most accurate information of how their product will compete in the long.

Another learning from this article that a marketer could use if they are trying to gain insight from current or potential customers is an idea stemming from Cheskin- he believed that most of us don't make a distinction- on an unconscious level- between the package and the product. The product is the package and product combined. For example, in the margarine test- he found that consumers don't really know what they want, but they can pick the "best" one- or the one that they would rather use. You ask a consumer which butter they like- and it's the one that looks more yellow, has the foil, etc. The ideas behind this are that consumers like the color yellow for margarine because that's the normal color- any color beyond this is weird and won't seem like they're eating margarine. As for the foil- it was found that the foil made the product seem more expensive and better quality, and so hands down each time a consumer was presented with margarine with and without foil- they would choose the one with foil. So an important learning for marketers is to research what aspects of the product are crucial to the consumer (aspects that they need and view as "normal" for the product) and then also be creative to think of other things that you can bring to their attention that they would desire as well but never even knew about- this will get them places.

To sum up, Gladwell tells that focus groups often fail to return accurate assessments because they both stretch the limits of the participants’ expertise and remove the product assessment decision from the normal context in which it would be made. In two instances that Gladwell cites, evaluations of musician Kenna’s potential for Top 40 radio success and the infamous blind taste tests between Coke and Pepsi, focus groups and experts reached very different conclusions in different settings. He says that if you want to be effective, market research must match as closely as possible the environment in which the consumption of a product, whether it is rock music or soda, will actually occur.

Brand designs: The lure of the names we know

Heinz, Kraft, General Mills, Nabisco, Oscar Meyer, Yoplait, Frito Lay, Kellogg’s, and Sara Lee- what do these names all have in common? They are brand names that we all know and love in the consumer goods industry. I am looking into doing a study on consumer goods brand loyalty in this particular economic recession. This topic really interests me because I myself am really brand loyal usually. But when I see the private label right next to my brand label on the shelf being almost a dollar less, sometimes I find the private label in my shopping cart at the end of the trip. I generally associate brand names with good quality, healthy ingredients, delicious, etc. and I generally associate private labels with just the opposite. So I wanted to research this topic and see JUST what interests us and strikes us about the brand names and how far are we willing to stick with it even during this time of economic recession.

Through some of my preliminary research, I have found that private label sales grew 10.2% in 2008, while brand name sales increased only 2.6%. This shows that consumers have really been more interested into the private labels. For example, one consumer says “the only difference is the label on the package”. Another factor that is interesting is that sometimes when you have a whole bunch of different brands out there and not a lot of differentiation among some of them or not a lot of knowledge about them, people get frustrated and confused and end up just picking the generic brand (private label). We studied this in the pod cast about choices. Sometimes, choices are not the best thing for companies.

Furthermore, seeking to combat stiffer competition from cheaper store brands- big-name food manufacturers, including Kraft Foods and General Mills are joining forces with retailers to promote their brands alongside private-label goods. In the past, big food companies didn’t worry too much about cheaper store brands encroaching on their turf, because consumers were more loyal to name brands and generally believed better quality justified their higher prices. But now, retailers have improved their store brands and have mimicked the innovations that brand names have introduced (such as cheese with extra calcium).

An aspect of brand loyal-ness that I am looking into is the reward programs. Through some research, I have found that brands better keep members by instilling reward programs. A new study from Colloquy finds that customers who participate in loyalty-building efforts, like MyCokeRewards and the Best Buy Reward Zone, at 70% more likely to actively recommend a product, service, or brand than the general population.

From the article I have cited below, one person says “Branding is so much about psychology it’s almost frightening”. Relating this to our customer insights class- the lecture about the differences between Miss Clairol and L’Oreal and how they make a woman feel, once they dye their hair with these specific brands. For example, the Miss Clairol feeling was the girl next door but just a little prettier and L’Oreal made women feel sophisticated and worth it (hence the tag line “because you’re worth it”).

Some questions I will be looking into regarding this topic are what really drives a consumer to be brand loyal? To what extent are they brand loyal? What kind of products are they most brand loyal? More to be found.

Article used: "Brand designs: The lure of the names we know" By Meg Carter http://www.independent.co.uk/life-style/food-and-drink/features/brand-designs-the-lure-of-the-names-we-know-1607049.html