MGT322 – Spring 2013

Perception is Reality…The Saga of Abercrombie & Fitch and CEO, Mike Jeffries

Posted on by spr1334staylordeaderick
http://girltalkhq.com/abercrombie-fitch-wont-make-clothes-for-fat-women-because-they-arent-cool/

When discussing quality and the various factors and dimensions that contribute to quality, we cannot overlook Dimension 9: Perception.  No matter how many of the dimensions of quality that a product or service may have, public/customer perception is inevitable and should be nurtured. It seems that the CEO of Abercrombie and Fitch, Mike Jefferies, may have forgotten this. In the year 2006, Mike Jefferies made very controversial (and exclusionary) comments about the brand’s target consumers. As stated by Jefferies…”In every school there are the cool and popular kids, and then there are the not-so-cool kids, “Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely.” The statement not only gives the perception that kids who do not wear or cannot fit the clothing are somewhat unworthy and not allowed to be in the “in crowd” but it is also hurtful.

Since the comments made by CEO, Mike Jefferies, surfaced, Abercrombie & Fitch has had to do some major damage control but for those customers who do not fit the mode of Abercrombie & Fitch or those who are simply against this exclusionary attitude, the damage is irreparable. The perception of quality for the brand Abercrombie will no doubt suffer. I have never been a consumer of Abercrombie & Fitch for personal fashion preferences but at this point, even considering this brand or recommending it to others will be a nonoccurrence. Look at that! … someone who did not necessarily have any hard feelings toward a brand now will not even consider recommending simply based of perception.  A negative attitude toward a brand can form very quickly and this happens all of the time because a company does not take the time to consider how it actions will look in the eyes of consumers. I have no doubt that Abercrombie & Fitch sells clothes that comply with other Dimension of Quality- Reliability, Durability, Aesthetics, etc.…but if the brand is perceived as hurtful and exclusionary to anyone who does not fit the mode, purchasing or any recommendation for others to purchase will not even be considered.

As stated before,  Abercrombie & Fitch has had to do some major damage control after the unapologetic comments that CEO, Mike Jefferies has made on behalf of the company; issuing a sincere apology to those who may have offended. The image of Abercrombie & Fitch itself should also be considered for revision. The images that the company releases for the purpose of advertising all portray a specific group of individuals, not leaving any room for interpretation. If Abercrombie changed that very influential aspect of the brand…things could change for the better, almost immediately.

What do you think about the comments made by CEO, Mike Jefferies?
Has something of this nature ever stopped you from supporting a company?

http://www.guardian.co.uk/commentisfree/2013/may/25/abercrombie-fitch-controversy-skinny-backlash

 

 

Businesses Are Moving to the Clouds

Posted on by spr1333trogers

 

Cloud computing can best be described as a real-time communication network that involves a large number of computers, servers, desktops, tablets, laptops, phones, etc. Cloud computing allows for running programs on many connected devices at the same time. Cloud computing in the business environment started with employees. Employees want the option to have their office travel with them. Cloud computing allows employees to have all the benefits of working in the office without actually having to be in the office. All they need is a device that can connect to their business network; even a phone with internet capability can be sufficient. This is beneficial to any company, because employees have proven to be more efficient and with the flexibility of working remotely employees are even willing to work longer hours if that means they can work outside of the office. Another benefit is bringing in your own device for work. If you have an Apple computer, you know how to work your Apple computer, and the same goes for Dell, Asus, etc. The point being, employees do not want to learn to use a new device when they are perfectly comfortable with their own and that makes cloud computing useful in that sense.

Not only do employees reap the benefits of the cloud computing system, the business/IT model forecasts are more accurate than ever. In the past when businesses would purchase new hardware or software they would have to forecast into the future spanning five to ten years. The problem is, businesses grow which inhibits the need for more employees which demands more storage space, and you get it… the forecast is wrong and you have to purchase more, and it’s not cheap! With cloud computing server capacity and running out of storage space is no worry.

Most importantly, cloud computing has positively effected customers. As we learned in class via the airplane experiment and have been reminded all quarter, the customer is the most important aspect in any business. If you don’t know what your customer wants, how will you be successful? Cloud computing has changed the way a company can interact with the customer. It allows for a business to react to customer needs as soon as the customer wants. Customers don’t have to wait to shop for products and services they have access 24/7. With cloud computing customer satisfaction reaches all new levels.

The newest cloud on the market is CenturyLinkVoice. CenturyLinkVoice is promoted as a business solutionfor small and large companies. And the idea is the same as all of the factors above; it provides a network for employees that will enable them to work wherever they have a functioning device, and more importantly it caters to customers wants and needs. For a short promotional video about CenturyLinkVoice, please see the link at the bottom of this post as well as an article discussing the impact cloud computing has had on Toyota.

 

To Understand Just How Much The Cloud Will Change The World, Look At Toyota

CenturyLink Promotional Video

Article – Cloud Computing: Effectively Changing The Business Operation Model

Advertising: The Connection for Twitter and Television

Posted on by spr1333jroe

twitter

Anyone who has a Twitter knows that it is not out of the ordinary for users to tweet about a certain television show or sports program as they are watching it. While Twitter users may think this is just them stating their opinions to the Twittersphere, these tweets are actually giving the social networking site an opportunity to capitalize on advertising.

Last year, Twitter partnered with ESPN and Ford to expand their advertisement section. The partnership with ESPN and Ford allowed for replays from football games to be promoted to people who showed interest in sports. The executives at Twitter saw this worked in their favor, and wanted to continue  improving their advertising process. They knew their advertising results would not change unless they implemented another change into their process. They needed to stretch their goals beyond where they were currently standing.

Twitter executives are taking the steps towards improvement by capitalizing on all activity users are sending out during programs. A new product will send ads to people who are commenting about multiple programs. In other words, brands will now be able to match advertisements with tweets sent out by viewers.

Twitter said they will be working with media companies, including Time Inc., Bloomberg, Discovery, Vevo, Vice Media, and Warner Music Group to allow a format of digital video or television clips from the shows.  Those clips will then be able to be shared on Twitter by users, and advertisements can be run before or after the videos are viewed. Matt Derella, a director of brand and agency strategy, said, “When people turn on TV they turn on Twitter.”

Do you think this move will be beneficial to Twitter? Do you foresee people sharing these clips and getting advertisements out there? 

References: http://www.nytimes.com/2013/05/24/business/media/twitter-lets-brands-find-viewers-of-their-tv-ads.html?ref=technology

Reebok: Using CrossFit to Fire Up the Intensity

Posted on by spr1333cpassage

reebok

Many of us have heard of the fairly new workout brand CrossFit that has been sweeping the world for the past decade or so (2000). Some of you may even participate in the ultra intensified fitness regiments at your local CrossFit gym, or “boxes” as the growing cult has come to call them.  For those of you who are unfamiliar with CrossFit, it is an exercise program that advocates a mix of aerobic exercise, body weight exercise, gymnastics, and Olympic weight lifting that requires an individual to “to keep up the intensity, each and every time.” What does CrossFit have to do with total quality management within a corporate conglomerate you ask?

Well it just so happens that Adidas recently purchased Reebok back in 2006 and the company has been struggling mightily ever since the latter lost its decade long contract to outfit the National Football League last April to its biggest rival, Nike. This loss will reportedly cost Adidas an estimate of upwards to $250 million in lost revenue annually, a crushing blow to a company that was already being scrutinized for its purchasing of the floundering organization that had become Reebok. Reebok has also suffered heavy losses from lawsuits regarding their falsified health claims of their new “toning” shoes that deceived consumers. These allegations were brought forth by the Federal Trade Commission and required Reebok to pay nearly $25 million in total refunds. To top it all off, there has been turmoil within the infrastructure of the organization as an investigation has been prompted relating to alleged fraud by two former executives. However, there may be a silver lining yet for this once promising business transaction as Adidas hopes that sponsoring CrossFit using their newly affiliated business partner Reebok as its representative will not only reverse the current trend of posting a decline in sales the last three of five years, but also restore the brands image as a major powerhouse in the industry that is a force to be reckoned with.

adidas

Adidas continues to stand by there decision to purchase Reebok and hopes that their new two year deal with CrossFit will help them accomplish their goals that they set for themselves prior to their recent setbacks. In hopes of reaching the $3 billion objective for 2015, Adidas believes that their sponsorship of CrossFit will help speed up the process and provide them with some insurance they desperately need. The rapid growth of the CrossFit health craze is most certainly a positive sign for pulling Reebok out of the gutter as more than 3,000 gyms have popped up worldwide. The cult-like fitness routine seems it will continue to grow in popularity in the future as people gravitate towards the infectious atmosphere of the contagious motivation/energy and the promise of a complete workout in under 20 minutes. Will Adidas end up regretting their decision to purchase Reebok in the future? Or will the new addition of Reebok and the sponsorship of CrossFit pay off in the long run?

 

Source: http://www.businessweek.com/articles/2012-06-21/how-adidas-is-whipping-reebok-into-shape

 

Crowd Funding…imperative to global change.

Posted on by spr1333rnassar

Crowd Funding is a fairly new way to raise money from a group of people towards a campaign one is working on. Introduced by the organization Kiva via the micro funding platform to aspiring third world country entrepreneurs and causes. Crowd Funding is really changing the way people view getting investment for their venture. An investment option for entrepreneurs wanting to really grow their business organically via sites like indie gogo and kickstarter. A whole eco system has been created around  crowd funding eco system. Peoples dreams actually can come to fruition, the more creative or social you get the better your chance to rile up a crowd to invest in you. The crowd funding is changing and the article I chose, highlights this ever growing phenomena. Coupled with a good  team and strategy this could really accelerate an idea or companies growth. The numbers in 2012 for crowd funding amounted in nearly 2.7 billion dollars. Major banks in 2013 including the World Band look towards crowd funding to stimulant economic development further into needing environments. This type of fund raising will change how the every day person gives back, as it develops and more innovative techniques within the field develop, we will see a radical change in balancing the negatives in areas that need economic stimulus.

It is a really exciting time to be an entrepreneur and 2013 has much in store. I believe if you want a job you can find one or make one. I believe many college students who are unemployed will have no other choice but to follow a passion and build something from it they can monetize and hopefully flourish from. A first hand experience, I encountered was a new client of ours the 1facewatch.com who put together a viral crowd funding campaign basically pre selling their product allowing them to reach a 1 million dollar revenue mark in their first month of the company. Without crowdfunding this social campaign really could not have happened as organically as it did. It is awesome to have them as a client of mine and I hope to learn from them moving forward with my career. Check them out, they are changing peoples lives.

http://venturebeat.com/2013/05/22/5-ways-the-booming-crowdsourcing-ecosystem-is-changing-in-2013/

Product or Patient? How Lean Manufacturing is Saving Lives

Posted on by spr1331baccarino

When someone suffers a stroke they must receive anti-clotting medication in several hours to prevent them from dying. At Southwest Medical Center in Oklahoma City, just a few years ago it would take on average 71 minutes for ER patients to receive the drug. Now, their average is 53 minutes, a decrease in 25%. In order to make this change the hospital learned from Toyota’s lean manufacturing.

A team of nurses and doctors looked at the process flow of a patient and identified several key points that wasted time. Just like Toyota’s lean manufacturing, their goal was to get rid of any waste. For example, they leave the patient on an ambulance gurney through the entire process instead of transferring the patient to a bed, which was the traditional process.

Improving this process may not save more lives but it does enhance the treatment of the patients. Treating a stroke patient about 20 minutes earlier “can save an average of 38 million neurons, depending on the type of stroke. That could mean the difference between walking out of the hospital to live a normal life or living the rest of one’s life in a nursing home with constant care.”

Source: http://asq.org/qualitynews/qnt/execute/displaySetup?newsID=16039

Retail to E-tail

Posted on by spr1333rmortha

There are a lot of pros and cons to doing online shopping as opposed to in-store shopping. Online shopping seems like it only affects consumers by giving them a different medium to make their purchases but we fail to realize that it affects the sellers as well. Through online purchases, businesses gather a lot of data about consumers. Sellers can track which sections of items are the most popular, which products are the most viewed and for how long, and which products are most browsed at but not bought. This gives online sellers a competitive advantage over in-store sellers as they know more about their customers. And everyone knows that the understanding your customer is one of the most important factors in having a successful business. This is empowering in-store sellers to seek e-commerce level data.

The article talks about one company that brings customer tracking data to in-store businesses. This is in hopes of slowly bridging the competitive gap between in-store purchases and online purchases. How can they possibly get consumer data without changing the in-store purchase process? By simply observing the customers! Prism Skylabs specializes in in-store surveillance equipment that tracks customer movement. Prism installs special cameras that captures everything in the store and then is sent to the store’s computers where it is processed by Prism’s special software. The images of the actual shoppers are cut out to respect their privacy.

What is so different about Prism’s techniques than regular surveillance cameras? Prism’s software allows them to “look at which products are hot, which are being moved around and touched, and all kinds of data that allow merchandise teams to understand what is going on across a wide range of stores”. This allows the sellers to get information that the type of information that online sellers use to enhance their systems to get more purchases.

Who is using Prism? Right now, Prism has partnered up with 30 retailers. Retailers that Prism is working with include T-Mobile and Famous Footwear. Does it actually work?  A candy store in Oklahoma City was using Prism in their stores and after close observation they changed their premium display to low-selling seasonal candy rather than their famous candies that buyers usually take the time to look through the store to buy. This allowed the store to quantify the customer’s thoughts and make an effective decision in their operations.

Moreover, Prism is not the only data providing company that is emerging. Other companies are picking up on the importance and building unique strategies and techniques to sell to businesses. For example, Shopkick is an app which personalizes deals for a customer in real time as they walk through the store.

Is it worth it to sellers to invest in these data gathering companies?

How do you feel as a consumer towards this type of innovation? Do you feel that you will be making more beneficial purchases or do you feel manipulated by the sellers to buy their preferred products?

Link:http://www.businessweek.com/articles/2013-04-25/to-catch-up-with-e-tail-tools-to-track-shoppers-in-the-store

WHOLE Fresh Foods?

Posted on by spr1332khendricks

 

 

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Entrance of Whole Foods Market

 

 

 

 

There are companies who do it better than others, and those who do it better, eventually gain more customers, and a larger portion of that market. I am talking about priming consumers how to subconsciously shop by precise marketing tactics that show symbolism of freshness and purity.

For instance, Whole Foods Market strategically places fresh flowers at the entrance of their stores to create an illusion of fresh, different and what it means to have high quality not only in their products, but as well as in their environment.  A study indicated that flowers are associated with implications of fresh, therefore, gives the consumer walking in an unconscious suggestion that the store is bursting with freshness. They have dominated this type of consumer priming that positioned them to be leaders in the market, “priding themselves on selling the highest quality, freshest, and most environmentally sound produce.”

Another occurrence is the abundance of ice everywhere and sprinkled drops of water on produce being another symbolic unconscious suggestion of freshness and purity again. There is no actual need for the ice and constant water drops, as it tends to make the produce rot more quickly. However, the point is the perception and illusion of the products being fresh and of high quality and that association is continued subconsciously, with the consumer as they shop. Approaches alike are being implemented as retailers use these mechanisms of luring and encouraging customers to spend more than they need to and more than they intended to.

The point is that by focusing on how to hook and gain customers, is quality compromised at all? Definitely not, as one of the main differences between Whole Foods Market and other retail supermarkets is that they can actually back it up with all the products they offer and high level of customer service they provide.  They have quality standards and are extremely devoted to serving the consumer as the medium in making informed choices when it comes to discovering the best of the best. From seafood, meat and animal welfare to unacceptable ingredients in food they do not carry*. Their core business is to sell the highest quality foods they can possibly find at the most competitive prices. In addition, they evaluate quality in relation to nutrition, freshness, appearance, and taste, and their search for quality is a continual process involving the vigilant decision of buyers throughout the company.

So why do customers keep coming back even if they know they are being primed? They like the experience of going in there, as it is aesthetically pleasing to consumers’ senses and their subconscious. Besides, who doesn’t want better, quality products that aim at always being environmentally sound, and that are good for your mind, body and soul? Everyone’s a winner in this occasion.

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Caulk boards gives illusion and implication of being fresh daily

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Sources:

http://www.fastcompany.com/1779611/how-whole-foods-primes-you-shop

http://www.wholefoodsmarket.com/about-our-products/quality-standards/unacceptable-ingredients-food

 

*disclaimer  from WHOLE FOODS reserving the right to change this list at any time. Please note that creating a product with no unacceptable ingredients does not guarantee that Whole Foods Market will sell it. This list is intended for illustrative purposes only. If you are interested in selling your product to Whole Foods Market, please contact a WFM buyer.

 

Grubhub Grabs Profit by the Seams

Posted on by spr1332bhalan

GrubHub and Seamless have now merged into one company. Last year alone they collectively earned over $870 Million dollars in profit. GrubHub has Chicago origins while Seamless started in New York.  Mike Evans the co-founder of GrubHub and the newly combined companies COO said, “I’m excited about the expanded restaurant network that our diners will be able to use.”

The merge initially has many benefits, but over time there are very important executive decisions to make in order to optimize all dimensions of a quality service. One benefit is that combined they will operate in over 500 cities in the United States. They also decided to keep all 650 full-time employees. The former CEO of GrubHub Matt Maloney will remain CEO while the former CEO of Seamless Jonathan Zabusky will be president.  Both former companies have merged with much smaller organizations in the past. For example in 2011 GrubHub bought Dotmenu which gave them an extra 250,000 menu listings at different restaurants around the nation.

The company still has many decisions to make. One decision the company has yet to make is the name of the new brand. Perception is reality, and they should take very careful consideration of how to name the new brand. They have been heavy competitors in cities like Chicago for many years, and they have both built their own brands into what they are today. GrubHub did have more profit, and therefore it would be advantageous to keep that name over Seamless. Changing the name entirely is also an option. Since there whole process is derived from online use it is unlikely they will create a new name. For example if a family uses GrubHub or Seamless on a nightly basis, they will likely have the URL memorized or saved in their favorites. This means the new company needs to be very transparent and loud with their changes in order to retain the brand loyal consumers from both companies.  I have one recommendation if they decide to change the name of the company, and that is to buy a new website with the company name. Then link both former websites to the new website which on the surface seems like it would satisfice all the consumers. From there the new company needs to internally improve their servicing process.

After the merged company has chosen a conforming brand they should also merge the processes to optimize reliability. They can assume they will have a large impact in the market for online food ordering because separately they held large portions of the market share. It is likely that both former organizations had their own unique processes, but one standardized process would be most financially beneficial.

Do you think the new company should change their name? Or should they use GrubHub or Seamless as the new company name? Do you think they should standardize their processing systems? Overall do you think this merge is beneficial to the owners?

 Sources:

http://www.chicagotribune.com/business/breaking/chi-grubhub-seamless-20130520,0,4610644.story

Who said you can’t have it all?…. in the back seat of your car!

Posted on by spr1331acorvera

Mercedes Benz, also known as one of the long-held ranked luxury brands in the auto industry which lost its title of N0.1 in 2005, is focusing on its biggest market, China, to get their N0.1 spot back. The Chief Executive Officer Dieter Zetsche of Daimler realized there was a problem while leaning back in the rear seat of a prototype S-Class sedan in 2010. Zetsche realized that the seat did not incline far enough to fit the needs of the wealthy consumers accustomed to spacious airline seats. There is a reason behind him comparing the back seats to an airline seat, S-Class owners generally experience their car from the “second row”, which in China is very common where luxury cars are mostly driven by chauffeurs and not the actual owner. I believe this quality problem of the back seat could have been avoided if engineers were not focusing on the driver seat position so  much but in the overall car.

benz

The S-Class has been the leader, without a doubt, in luxury sedans since it was first introduced to the market in 1972. Because of heavy import levies, Mercedes is allowed to charge more than rivals for its cars in China, which can costs as much as $486,000.  This is a way Mercedes Benz can keep a good reputation when it comes to its image on their cars. The S-Class, as said by August Joas the head of the global automotive practice consultant in Munich, stands for luxury, prestige, comfort, and safety. All of these characteristics of the car can be easily measured by the quality ranked by previous owners. Mercedes Benz must maintain a good ranking on all of these aspects to continue holding the leading position of the luxury brand.

After thinking deeply about what China consumers will enjoy in the back seat of their S-Class Mercedes Benz, it was time to get to work.  Zetsche had his designers create a one of a kind back seat that reclines to a 43.5 degree angle which was available as an option on extended-wheelbase versions of the S-Class. Zersche thought about the comfort of sleep in the back seat, so they made the front passenger seat in a way where the seat slides forward to add legroom while the backrest recedes in a recess illuminated by ambient lighting for a more relaxing feel. In addition,  a calf support swivels forward and a heel rest pulls out of the front seat. And because a bed like back seat with relaxing features such as dimmed lighting wasn’t enough, they added a hot-stone massage function in the back part of the rear seat which can be used for long drives.  At this point it’s tough to even think about how safe this would be if the car was involved in an accident, but because everyone must follow  safety regulations, including ISO certifications, there was a special air bag to prevent passengers from sliding  under the seat belt during an accident presented in the image below.

comp_mercedes21__01__630x420 (1)

Well-heeled Chinese, who account for more that half of all S-Class sales worldwide, are critical to reviving the Mercedes brand. This will remain Mercedes biggest focus, targeting wealthy consumerss in China. Mercedes will continue offering additional services to impress more consumers along with building trusted relationships with current customers to remain brand loyal. They offer perks such as a 13 seat movie theater, located in Shanghai, along with a cigar room, and an in-house tea artist. Management has taken different routes to attract and keep their wealthy consumers, especially in China. The bottom line is that wealthy Chinese buyers will continue to account for more than half of all sales of Mercedes S-Class cars.  That being said, why not focus on making this group of consumers happy? After all, they are who are keeping the brand so exclusive and popular in China.

 

 

 References:

www.businessweek.com/articles/2013-05-16/mercedes-revamps-the-s-class-to-lure-chinas-wealthy-buyers

www.mbusa.com