Disruptive Innovation: The Netflix Way

Harvard Business Review’s article, What is Disruptive Innovation?, includes a great, short video describing disruptive innovation.  Check it out here!

In short, a big, established company is de-throned by a smaller company with less resources due in large part to the bigger company’s focus on sustaining innovation and overlooking certain customer segments or innovations.  Meanwhile, the small company establishes a foothold by identifying those overlooked segments and innovations and re-imagining how business could be done, while ultimately unseating the big giant.

As I read more and more about disruptive innovation, the most prominent example that comes to my mind is Netflix.  Netflix has re-defined watching tv and movies.  Prior to Netflix, Blockbuster was the market leader for newly released movies and tv shows. But the “inconvenience” of visiting a brick and mortar store, plus the expense associated with watching the beloved flicks was pretty substantial.

Netflix offered a new way of viewing for a fraction of the cost.  Not only could you enjoy browsing tons of different movies and tv shows and receiving it at your home, but it was also unlimited and only $7.99 per month. Blockbuster used to charge $4.99 for a 3-day rental of one new release.  While Blockbuster was focused on their stores, Netflix identified that there were many customers who weren’t close to a Blockbuster store and would benefit from receiving a dvd straight to their home.  It was convenient, quick and market-changing or put another way – a disruptive innovation.

Since Netflix first came out things have changed;  Blockbuster has diminished considerably; and the amount of people giving up cable tv has declined as well.  Netflix now offers unlimited streaming of tv shows and movies, as well as some propriety-branded shows.  Netflix and its shows are often mentioned alongside some of television’s most successful channels, such as HBO and Showtime, and has challenged other businesses, such as Amazon Prime and Hulu, to mimic their offerings.  Netflix has continued to evolve and has set itself up for continued success.

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Another company who has set themselves up really well by questioning traditional buying patterns is none other than Amazon.  Aside from their success in the online shopping realm, they continue to question every area of the business in the name of innovation.  One area that I am particularly interested in seeing evolve is their new initiative for delivering via drones.  To learn more, check these videos out.

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Amazon relies a lot on human interaction for labor and delivery of the goods purchased – which is also a high expense, so developing a way to deliver goods to people using a drone would cut down on labor and delivery costs, time and increase customer’s satisfaction.  Of course there is a lot of research and development that needs to be done prior to a major launch, but I believe Amazon is onto the next major innovation that could alter the world of delivery in a very impactful way in the next 5-10 years.

So many services have evolved to become digitally accessible.  The companies who are taking notice of the digital trends and identifying new ways to expand and improve their offerings via digital technology, will more than likely be on a path to continued success for the next decade.  The future is digital.

 

Online vs. Traditional: Is One Better than the Other?

For another great blog post on digital vs traditional education, check out KT’s blog “Lost in my Own Adventure!”

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As a digital native, online has slowly become more of a norm in the educational sector of our world. We slowly integrated technology into grade school and by the time I was in high school my dad started taking online courses to finish his college degree. I remember when commercials for University of Phoenix would come on and the idea of getting a degree online was kind of ‘second-class’. Now-a-days online is widely accepted as a practical way to obtain a secondary or higher degree. As a new online student myself with only traditional education in my background, I am constantly aware of and comparing the pros and cons for both methods of learning.

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Online classrooms have made learning not only more accessible, but also more affordable. For myself, I had to consider relocating in order to pursue a program in my field. Add up not only the cost to…

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Let’s Scream Beyond Ice Cream

Check the new post from the blog, “What About it?” It’s a good one!

What About It?

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The saying goes that, “we all scream for ice cream.” But what could ice cream scream for? For Ben & Jerry’s, the answer is for inclusion, equality, and human rights.

Who doesn’t love ice cream? And who doesn’t love ice cream with a social mission, amirite? Ben & Jerry’s, one of the most popular pruveyors of this frozen delicacy, is willing to step up and be the kind of company that loves a chocolate swirl and a just world.

Ben & Jerry’s has always had involvement in the community game. Humbly beginning in 1978, Ben & Jerry’s was simply two guys hawking ice cream. Some very good ice cream. And profits steadily began to rise. By 1985, they grew into the position to launch the Ben & Jerry’s Foundation, which focused on supporting community activism, and promised an annual donation based on the company’s  pre-tax profits, to boot.

And then, in 2001, they…

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Computer or Chalkboard: Is traditional, in-class learning on the outs?

Education has been evolving for the past decade and continues to make major changes in the name of learning.  Access to education, although increasingly expensive, is widely available due in large part to the many institutions implementing e-learning for different professional or degree-seeking students.  This shake up to the traditional learning style has opened up a lot of opportunities for people with extenuating circumstances and also offers a lot of others (a new concept to education) – convenience.

As a person who has studied via both traditional and online forums, I definitely can see the benefits of both options.  And although I don’t see traditional schooling vacating the “business” any time soon, I do see there are some very important discussions, and possibly, changes that need to occur to maintain its relevance.  However, my personal opinion is as long as people don’t become robots and that more than one personality exists in the world, then there will always be a need for both forms of education.

The way I look at my education is that my bachelor’s program at a traditional in-class college was a stepping stone into adulthood.  I mean, I had to do my own laundry, pay my own bills, and make my own responsible decisions or deal with the consequences.  I learned great in-person communication skills and met some pretty amazing people along the way.  It was more life learning mixed with a bit of education.  I’m afraid online classes wouldn’t have fit what I needed at that time in my life.

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Now, as an adult who has been out of college for a few years and has started my career, I recognized the need for a convenient way to continue learning and advancing.  My current online program fits the bill for me now.  The thought of going back to a traditional setting makes me want to tear my hair out, because I don’t think I could juggle the schedule and time constraints.

My point for that personal tidbit is that there will always be people who need education brought to them in the way they need at that time in their lives.  As a marketing professional, it is important to realize the strengths of the program you are marketing while also addressing the concerns that potential students may have – this will be the competitive advantage.

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Marketing is a way to connect to an audience, a person.  Get them to relate to the program by identifying common themes and personas.  For example, marketing an online program to working adults who need a professional program that can help advance their career, but offers flexibility and convenience. Two things that most traditional schools won’t be able to offer.  On the flip side, in-person interaction with teachers and other students, as well as learning with others as opposed to learning on your own are all pros for traditional education.  When used effectively, a competitive advantage is earned, but ultimately the advantage is identifying and recognizing the personas of students that your program works well for.

 

TOMS is Responsible, Be Like TOMS

A recent Forbes article, Millennials Driving Brands to Practice Socially Responsible Marketing by Sarah Landrum, discussed the buying patterns of the millennial generation.  Landrum explains “Millennials prefer to do business with corporations and brands with pro-social messages, sustainable manufacturing methods and ethical business standards.” In result of these key buying patterns, there has been a surge in companies who focus on socially responsible practices.  TOMS is one such company.

TOMS, originally a shoe company that has now branched into eyewear and other categories, promises for every shoe purchased, one will be donated to a child in need. The movement is called “One for One” and has won the hearts of millions and with its help has grown TOMS into a highly successful company.  Blake Mycoskie, TOMS founder, came up with the company idea while traveling in Argentina and found that a lot of young children didn’t have shoes.  A simple idea but an incredibly powerful message.

start-something-like-that-blake-mycoskieIn addition to “One for One,” TOMS has taken the program a step further by not only donating shoes, but also starting to produce shoes which in turn provides jobs to the communities in need.  A total of 60 million shoes have been given in over 70 different countries.

As TOMS has expanded into other categories, they have expanded their reach as well.  A similar business model is used for their eyewear program and in 2014 TOMS launched their TOMS Roasting Co.  As the TOMS website says “With each purchase of TOMS Roasting Co. Coffee, we work with our Giving Partners to provide 140 liters of safe water (a one week supply) to a person in need.”  Furthermore, children are near and dear to this company’s values, so the “One for One” movement took it even further with their bag collection.  For every bag that is purchased, TOMS provides a safe birth for a mother and baby in need.

Beyond the donations, TOMS also strives make their products from sustainable ingredients and use recyclable materials whenever possible.  Their shoe boxes are made with “80% recycled post-consumer waste and are printed with soy ink.” Obtaining quality responsibly made materials is at the forefront of the business, and TOMS continues to monitor their vendors and farmers to make sure practices meet their values.

It is clear that social responsibility is at the core of TOMS as a company.  As for the future of TOMS, Mycoskie says “…we know every day that we’re going to give away one pair of shoes for every one we sell, and that’s that. If we can’t make the business work that way, then the business just doesn’t work.”

“As we reflect on what we’ve done, we know that there is always more to do! In the coming months, we’ll broaden our understanding of our product and their impacts, explore additional sustainable materials and designs, and deepen our conversation with our supply chain partners. As we climb the mountain in front of us, we’ll celebrate our success while eyeing that next peak in the distance.”

— TOMS website

Knowing the buying patterns of Millennials, I think TOMS is in a great position to continue to grow and prosper as a company, and ultimately, help those in need.

Here is a TOMS commercial to check out.

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Oreo: Addictive and Marketing Genius

I have an addiction…a lot of people have an addiction…it is the Oreo addiction.  I have a burning love/hate relationship with Oreo cookies and every time I see an ad from Oreo, I can’t help but crave a “dunk session” with my favorite cookie.  Not to mention, their marketing is quite entertaining – some might even say they are one of the best in the social media marketing game. If you don’t follow them, I recommend checking them out.

Now, the target audience of Oreos is vast and limitless – truly – I cannot think of a certain demographic that wouldn’t enjoy the deliciousness of an Oreo, which creates a marketing conundrum. — Ok, ok I can think of one demographic that shouldn’t have Oreos and that is babies, but they don’t have teeth and they don’t have money, so I think Oreo is fine. And when I say conundrum, I know it’s not a bad one.  In fact a lot of companies would love to have such a “conundrum.” — But I digress, the main purpose of a marketing plan and/or persona is to identify your market, connect with them and build strong, lasting relationships by using their language and addressing their needs.  But really, how does a company communicate effectively to a customer base that varies so much from person to person?  Well, they change their tactic and gear their marketing efforts toward what is trending and relevant at that specific time.

For example, one the most famous Oreo ads came during the 2013 Superbowl.  When the power infamously went out while the San Francisco 49ers and Baltimore Ravens duked it out, Oreo capitalized on the opportunity with this ad:

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It went viral to thousands of customers in the few minutes after it was posted and remains a favorite for many.  Like I said, it is all about being relevant.

Oreo often shares posts that are holiday-themed, such as for Valentine’s Day or Thanksgiving or how about Elvis Week:

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Or there is always a movie release to celebrate:

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Or a popular product launch anniversary:

Oreo does a great job of hitting target audiences with relevant and entertaining marketing. The content is engaging, creative, and oftentimes humorous and witty.  Now, get on the dunk train and follow them…you won’t regret it.

Happy Dunking!

 

The Magical Persona: A Disney Experience

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For companies and brands, the main goal is to attract new customers and meet the needs of the existing customer base, so to help with that, companies often identify some generalized representations of those “ideal” customers, otherwise known as marketing personas. Ardath Albee had a great description for a marketing persona – “A marketing persona is a composite sketch of a key segment of your audience. For content marketing purposes, you need personas to help you deliver content that will be most relevant and useful to your audience.”

In order to create a customer persona, there are a few key components that need to be identified. As outlined Ian Lurie’s article, Get In Your Customers’ Heads: Creating Great Personas, those areas include:

  • Who they are, everyday: Demographics
  • What they want, all the time: Emotional
  • How they interact with you and your competitors: Relationship
  • What might make this interaction

These areas are classified using data produced by customer surveys, purchasing habits, lifestyle preferences, etc., and help to provide a more evolved and involved customer experience.

The demand for more personalized and engaged services have become increasingly popular and can often set a company apart from its competition. Disney is a great example of a company who utilizes this tactic. In fact, Tom Boyles, Senior VP of Global Customer Managed Relationships at Disney Parks once explained that the question, “Who owns the guest?” was raised and it was quickly determined that no one “owns the guest”, but you can always “own the moment.” Employees/characters are empowered to look at each guest as a unique individual and to treat him or her as such. Oftentimes, characters are given trinkets to give out when they have a great experience with a customer, which often becomes a profound and memorable moment in that customer’s time at Disney.

Also, every moment in a Disney park is engaging and interactive, which has been a main area of focus for Disney since its inception. Whether in queue, walking in the park or on a ride, Disney strives to meet the needs of their customers and in return, they have garnered an incredibly loyal customer base with a 70% return rate. Now that is impressive.

To sum up a Disney customer in one persona is not possible – they come in many forms. At first you think of Disney as a more youthful experience, so of course a young child experiencing Disney for the first time is one of the more prevalent customer personas. However, the mother and/or father who brought that child to Disney is also a main customer persona. In addition, teenagers, grandparents, and a young couple also find enjoyment at Disney theme parks. As best practice for developing customer personas suggests, it is in a company’s best interest to identify 3 to 5 core customer personas.

After those customer personas are fully developed, the next step is to pinpoint the best ways to acquire customers and develop a deep sense of loyalty. Again, Disney has mastered a few successful tactics and all of them help to establish Disney as the “happiest place on earth.” The first one is somewhat obvious, but nonetheless important: themes. From the costumes, the autograph experiences with characters, the props, the rides, to the people playing characters – everything is themed and everyone and everything lives the theme ALL. THE. TIME.

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And with that comes the next tactic, a fully immersive experience. Every area of the park has a purpose and creates a mood that customers are able to immerse themselves in the theme of the park. The details that go into this step are truly incredible. Customers are able to live the experience, and if they want, imagine themselves as a princess or another character, because as Disney would say “Everyone is a princess.”

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The last strategy feeds off the previous ones mentioned. We all know Disneyland is a park, and *spoiler alert*, the park is (for lack of a better word) an illusion, meaning magic doesn’t make the park operate, instead, electronics, creativity and hard work does, and they create the backbone of Disney. Disney makes every effort to make the business of the park operate without much interruption or attention. If there is construction to be done, oftentimes it is done at night. Staff areas are hidden underground or shrouded in foliage. And people playing characters have to “stay in character” if they are ever in view of customers – meaning they can’t take off their mask, they have to maintain the personality of the character and a Mickey can never be seen with another Mickey. Sorry, *another spoiler alert*, there is more than one Mickey.

Identifying the customer personas, creating experiences that the customers want and all of the strategies Disney uses lend a huge hand in the magical customer experience at Disney and thus creates a tremendous amount of customer loyalty. The magic never ends.

For a good video to describe the experience of Disney, check this video out on YouTube!

Dove: A Company or a Movement

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When I consider brands that leave a lasting impression, few actually come to mind. That is not the case, however, when it comes to Dove – it is the exception. What once started as a business with miscellaneous personal care products, Dove has now transformed their “business” into a social movement. Their vision statement says it best, “We believe beauty should be a source of confidence, and not anxiety. That’s why we are here to help women everywhere develop a positive relationship with the way they look, helping them raise their self-esteem and realise their full potential.

Dove has put their vision to action via campaigns such as 60 Years of Care, Beauty Portraits, Speak Beautiful, Real Beauty, Dove Legacy and many more.  One campaign that I often associate with the Dove brand, is the Real Beauty campaign.  Few of us can deny seeing some of their capturing advertisements where women of all shapes, sizes, races, and ages are shown in beautiful images that capture their “real beauty.” It was a campaign geared toward redefining the definition of beautiful by challenging the stereotypical, model-type beauty.

Was this campaign successful?  To be honest, that would be an understatement. The campaign went “viral,” crossing borders and getting international recognition.  It has had a lasting impact on today’s advertising surrounding the “beauty” industry, and is often referenced as a model to aspire to for many companies.  Now, with success also comes naysayers, of which there were a lot.  Concerns of Dove capitalizing on a deep-seeded issue among today’s women, and also that the movement was disconnected from their line of products – mainly that these products wouldn’t exist if such if women felt their most beautiful.

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Whether you agree with the Real Beauty campaign or not, no one can deny it’s success. The amount of attention and buzz that surrounded the campaign (and still does) helped reinvigorate the Dove brand itself.  The idea of embracing natural beauty, not the photoshopped variety, was utilized to refresh their branding of Dove products. Dove’s products are portrayed as simple, natural, clean, pure, and gentle, which definitely aligns well with the majority of Dove’s campaigns.

In a sense, Dove successfully rides the line between a business and a movement and I am all for movements.  Keep it coming, Dove!

The last thing I will leave you with is my version of a Mind Map of the Dove brand.  I only incorporated one campaign to show the (Social and Product) sides of Dove. Enjoy!

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Caribou Coffee: A SWOT Analysis

cariboucoffee_swotCaribou Coffee is a specialty coffee and espresso retailer based in Minnesota.  Initially, Caribou’s focus was to create a strong local/regional base of customers here in the midwest, to which they did successfully. It has continued its expansion throughout the nation and into other countries via franchises and some company-owned locations. In the last few years, there has been some shifting and downsizing with Caribou locations, but the company is still geared for expansion.

For my Digital Marketing assignment, I decided to do a SWOT Analysis to help narrow down some of Caribou’s key strengths, weaknesses, opportunities, and threats.  Please see my infographic above for a more visual overview.

Caribou Coffee has positioned itself as a fierce competitor of other major coffee chains. How, you may ask?  Well, first off, Caribou Coffee was built on the foundation of high quality coffee and ingredients, acquired via sustainable agriculture.  Obviously, the first thing that needs to be mastered is COFFEE in the coffee business.  Secondly, empowering their employees to give the best customer service has created millions of customers.  People come for the coffee and stay because of the service.

Aside from those two major strengths, Caribou has also created an impactful and strong branding image and has nourished their hometown markets with partnerships with major non-profit organizations and a local grocery chain, Byerly’s. Lastly, Caribou Coffee is known in Minnesota to be a great company to work for.  They have great employee benefits that show the integrity of the company values, which in turn creates very loyal employees.

It’s no secret that Caribou Coffee has done a great job, but there are definitely some areas that could be improved upon.  One simply being expansion.  Lets be honest for a moment – Starbucks are everywhere and Caribou Coffee locations are not.  This limited market fact is a weakness, but it is also an area for great opportunity.   Sadly, it has been reported that it can often take up to 5 years for a store to break even with the initial investment.  So franchise opportunities are limited to people who can afford to possibly not turn a profit for several years.

The last weakness is simply the costliness of buying Caribou Coffee.  The pricing is on par with Starbucks, however it is still somewhat of a luxury expense and personal finance articles often list cutting back on buying coffee as a way to curb spending.  So without consumers with disposable income, Caribou Coffee locations could suffer tremendously.

In terms of opportunities, there are many and some I have already touched on such as expanding into new markets – within the US and globally.  A couple I haven’t touched on are the importance of word-of-mouth, expanding food and drink offerings and diversification of acquiring new companies that complement their current offerings.

Word-of-mouth has always been huge for retailers, but Caribou emphasizes great customer service which produce great stories from peer to peer, as well as great experiences for people who happened upon a Caribou Coffee during their travels.  Every person who stops in a location is an opportunity to share a story and an experience, thus marketing the business in the best possible way.

Caribou Coffee also has an opportunity to acquire new companies that can expand the brand and products even more.  Starbucks is a good example of what I am referring to – they acquired Teavana, Tazo and Ethos Water to name a few.  Having some complementary offerings might help expand the market not only from a product view, but location-wise as well.

We have reviewed strengths, weaknesses and opportunities, but there is one more area I would like to go through – Threats.  Sounds scary, doesn’t it? A few of the weaknesses can coincide with with the threats, such as disposable income and competition with other coffee chains.  However, I really want to emphasize the competition threat in this post. Not only does Caribou need to be mindful of the coffee chains, but there is also a major movement occurring that are pushing people to shop, eat and drink local.  Also, a huge number of fast-food chains are now dabbling in the specialized coffee market, like McDonalds.  Like I said, FIERCE competition.

The below image from Case Study: Caribou Coffee vs. Starbucks shows the difference of online visitors for Caribou vs Starbucks.

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The buy local movement also leads into the idea of consumer preferences.  Coffee may be trending today, but tomorrow it could be something completely different.  As a coffee drinker myself, I don’t believe this really could happen, but hey, I have been wrong before. Also, in terms of consumer preferences, reports on how different coffee ingredients (ie: caffeine) can impact health can also sway a consumer from getting a coffee.  So many external factors come into play in the marketplace.

The last threat, which is an overall threat to retail and consumers alike, is the employment rate.  It isn’t a secret that when the employment rate is down, consumer spending goes up. It is also not a huge secret that when it is election season, consumers don’t spend as much due to uncertainty and lower confidence in the market.  This concept has been discussed numerous times during our most recent election.

All in all, Caribou Coffee is in a pretty decent position and there are many growth opportunities out there for the company.  It all comes down to what is in their best interest, keeping in mind their values and mission.