Bleak Friday

Summary

November 27 was the beginning of holiday shopping in America. Shoppers are especially aggressive during this day hunting for greatly discounted items. Regardless of the amount of craze during this time, the recession seems to have increased the growth of online retailing. This year's Black Friday was to be bricks and mortar retailing taking back the initiative. Online retailing or E-commerce, appeals to the consumers with several advantages. By reducing labour costs, they are able to have more discounted prices than bricks and mortar retailing. Online retailing also able to have an advantage by eliminating local sales tax and shipping usually comes free. Although online sales grew 13% in America, it only accounts for 6% in all retailing sales of America. With the growth of online retailing, some online retailers are beginning to sell groceries and other household necessities. The response to online retailing for conventional retailers is to increase their efforts online. In “multichannel” shopping, people can buy the items from the same retailer in different ways such as online or in shops. Conventional retailers are trying to change by giving shoppers an experience instead of the traditional. In the future, mobile phones may develop NFC, a technology that lets you scan items and learn more about them.

Connection

This article talks about a type of nonstore retailing on the rise. Internet retailing is a major type of retailing not mentioned in the textbook. A nonstore retailing operation is special in that it does not require a location to become successful. Because it does not require a location, it costs much less to operate by eliminating the expenses of rent and of market researching. Due to the reduction of so many costs such as labour, the prices of merchandise online are generally cheaper than those of conventional retailers. Internet also has many advantages such as saving time and the ability to compare products in little time. Online retailing is now a bigger part of our lives than other types of nonstore retailing.

Reflection

I think it is very fascinating how many retailers in America actually do not make profit throughout the year until the beginning of holiday shopping, Black Friday. What is even more remarkable is that although there is a huge growth of online retailing, it only accounts for a mere 6% in sales of all of America. Although internet retailing does not seem to be that major when included in all of retailing, many brick and mortar retailers are still taking action to try to regain the initiative to try to encourage the concept of touch and feel, something online retailers do not have. I think it is good that there is competition between internet retailing and conventional retailing and we consumers will be able to benefit from it.

"Shockvertising" spreads to cut through media clutter

Summary

Toyota is sued by a woman for causing her to have emotional distress through the use of “terror marketing”. The acts include the sending of emails and videos for five consecutive days and it was later revealed that the man stalking her was actually invented by an ad agency which was launching a new advertising campaign to promote Toyota’s new vehicle. Marketing professor Lindsay Meredith of Simon Fraser University says if you are thrown an annoying ad, you would be more likely to remember the product than remembering why you remember it. The analogy used was of a knife, the knife can hurt you if you are not careful. There are many other examples of “shockvertising”. Most of them are outrageous such as Boost Mobile showing a pig eating another pig just to advertise that hidden cell phone fees are wrong. Oliver Gleeson, vice-president of development for SDI Marketing said, “It’s amazing how 10,000 can enjoy an ad but it only takes one person to call the Competition Bureau and make waves.” Only one offended person out of so many can make a difference by suing these companies.

Connections

This article connects with the chapter when the chapter touches on niche marketing. Niche marketing is to sell products to a specific group of people. This connects to terror marketing because terror marketing would only appeal to certain people who might find the ad interesting enough to remember. Terror marketing also connects with the chapter because of demographics. In order to market to the right people, the company must first do a demographic profile in order to market correctly. If terror marketing was used to the wrong type of person, it would not have an effect and therefore not help promote their product.

Reflection

Because it is presently the Information Age, we will be affected by “shockvertising” by quite a lot. Through the use of computer, you are able to have access to a lot of information and the use of terror marketing would also rise. This connects to me a lot because everybody today can be targeted by terror marketing. I think there needs to be something limiting advertisements so they do not go too far such as the woman who was emotionally distressed. I think this may happen to even more people if a line is not drawn limiting the use of terror marketing and nobody should be hurt because of an ad campaign.

A PepsiCo Deal Comes Full Circle

http://www.nytimes.com/2009/04/21/business/21views.html?scp=20&sq=channels%20of%20distribution&st=cse

Summary

This article is about Pepsi offering $6 billion to buy back the bottling companies which they separated from in 1990s. Separating from bottling companies was once thought to be a brilliant plan. Pepsi followed Coca-Cola’s decision to spin-off bottling companies in the 1990s because it would give main beverage shareholders a bigger benefit. Pepsi’s decision to combine companies may weigh down its financial measures. However, combining companies would still be a good decision because not only does Pepsi not just a soda company anymore, it also sells fruit juices and sports drinks. Since more than just soda bottles are to be produced, it would be smart to combine its different distribution channel in bottling.

Connections

Our chapter talks about different types of distribution channels. With Pepsi buying back its bottling company, this would allow Pepsi to own more than one part of the distribution channel therefore turning into an integrated channel of distribution. In this situation, Pepsi has owned both aspects of production, primary manufacturing and secondary manufacturing. This would cause producing the different types of beverage and bottling it to become more convenient. Shipping out different Pepsi products would also become more efficient since they will come from same bottling company.

Reflection

This article is interesting to me because I never thought producing and bottling Pepsi would not happen at the same company. It is strange to think that the Pepsi drink and the Pepsi bottle did not actually come from the same place and that it was quite complicated to produce a bottle of Pepsi until now. If Pepsi followed Coca-Cola’s decision to separate bottling companies during the 1990s, would Coca-Cola now follow its rival to join the company together again? I actually don’t have a preference to which drink is better but it’s fascinating to watch both companies follow each other’s financial plans.