Spring Break: Good or Bad for Popular Destinations?

Every year, babbles about spring break plans start sprouting after winter break. Destinations are brainstormed and flights are booked. While I can’t say I’m participating in a “college spring break” this year, I know many people travelling to Punta Cana, Cancun, Fort (“Frat”) Lauderdale, Las Vegas, and Puerta Vallarta. Despite many students trying to save a few dollars by driving to their destination of choice, money will be spent upon arrival. Despite the magnitude of the city’s marketing efforts, spring breakers will be found throughout the country.

Different cities choose to attract college spring breakers. For instance, the Daytona Beach Convention Center does not spend any marketing dollars on Spring Break. The hotel chooses to focus on the family visitor, but does not turn down any groups of students. On the other hand, Panama City allocates a good portion of their budget to enhance its reputation as an exciting spring break destination. Depending on the type of image the city is trying to maintain, locals have different views of the economic benefits spring break brings the community. As stated in The Daytona Beach News Journal, “Community boosters estimated Spring Break pumped $120 million into the local economy, but many felt negatively publicity generated by the event outweighed the benefits.” With the city hoping to attract family vacations, MTV hosting spring break did not help promote positive PR for Daytona Beach through various fights, one fatality, and an increase in burglaries and rape reports.

It’s very interesting to compare the opinions of locals living in spring break hot spots. Some are very supportive of the economic boost spring break provides to their community, and several stores rely on this business. However, others look down upon the partying and negative image college students bring to their city. I believe cities have more control over the publicity spring break generates than they think. Through taking an approach similar to Daytona Convention Center -- keep the  focus on the target customer. If a city/hotel does not wish to advertise to spring breakers, it should not spend any money towards doing so. Rather, through marketing to its desired consumer, the location will maintain its image and likely draw less attraction to those looking to party nonstop for a week in March. The majority of college students aren’t seeking a family resort when making their plans. They look to dominate a student friendly location where they will be among a sea of other college students.

The article includes a quote from Kyriakos Drymonis, a Daytona Beach restaurant owner, stating, “You never get a second chance to make a first impression. You have to let people see the product.” It is imperative that cities maintain the reputation they wish to possess. For instance, spring breakers visiting family vacation spots may likely look to return when they, one day, have a family of their own.

The article I reference in this blog can be found here: http://www.news-journalonline.com/news/local/east-volusia/2012/03/06/spring-break-fun-begins-in-daytona-beach.html

Best Buy Cinema Now: How Best Buy Decided to Compete with Netflix

With the drastic increase in technology the past few years, companies are determined to find ways to stay competitive with trends. Netflix has completely changed the movie rental business. Individuals are now able to rent movies and TV shows from the convenience of their home, and receive these items via mail only a few days later. The convenience and ease of this process resulted in the company to gain popularity and become very successful. While Blockbuster attempted to compete through creating a similar program, I believe its brand name hindered the program’s success. Everyone continued to associate Blockbuster with the experience of going to the store and physically looking through the vast selection of films. I find it interesting to discover other companies attempting to compete with Netflix as well. Best Buy, although not in the movie rental business, exclusively, created Best Buy Cinema Now. This service allows customers to instantly rent or buy movies online. The movies are downloaded to your computer. While this service has consumers pay per movie, versus a fixed monthly fee, Best Buy has not done a good job advertising it. The service is not even easy to find on the company’s website. Slightly more differentiated from Netflix than Blockbuster’s at home rental service, I feel Cinema Now could gain interest and popularity if it was better promoted. The instant access to movies and TV shows paired with low prices would interest consumers who value convenience and speed.

Failing to inform the public about a new offering can be equivalent to not even providing the product/service. Unless a company is able to rely heavily on word of mouth and a strong reputation, customers will not know about specific items unless the company advertises the benefits of them. While introducing services that mimic market leaders can be advantageous, and a means to stay competitive, it is important for firms to plan and implement their strategy well.

The Importance of Market Research when Entering New Markets

Panasonic is an example of a company using market research to enter a new market. The company is about to enter the European smartphone market. While Japan is Panasonic’s main market for phones, the company does not see many growth opportunities there. Laurent Abadie, Panasonic European CEO, stated how the decision to enter Europe was on behalf of the consumer demand. The European market for mobile phones is continuing to grow and mature, but does not have many choices for consumers. Hence, the Panasonic Eluga will be the company’s first phone to enter the market in April. It’s sleek design and quality features will hopefully win over smartphone users. As stated by Abadie, “We believe the market lacks a range of phones that successfully mixes beauty, high-quality engineering, and the most advanced lifestyle-enhancing technologies.” Through analyzing market offerings, Panasonic was able to create a product that provides unique features. Not only does the Eluga possess a sleek appearance, the phone is waterproof and works with Panasonic’s Smart Viera TVs.

There are many elements involved with entering new markets. A company must take multiple factors into consideration and do extensive research to prevent and mitigate the risk of failure. For instance, cultural differences can have significant consequences on a firm’s decision to enter a new market. Specific customs may prohibit a market from being interested in the company’s offering. Also, many firms are restricted due to language barriers. Product slogans can translate to completely different meanings. Unfortunately, this has prevented various companies from entering some markets. For instance, the baby food company Gerber is not in France because its name translates to “vomit” in French. In addition, Crayola needed to change some crayon names due user perceptions. The color “Indian red,” originally named after a specific red pigment from India, users assumed it to be named after Native Americans. Hence, Crayola changed the name to “chestnut.” It is vital for firms to understand the social norms, customs, and culture of different markets to ensure successful implementation. Despite globalization, markets continue to have specific characteristics that may require firms to alter their products before entering these regions.

Good market research permits firm’s to set realistic goals. Panasonic hopes to sell 1.5 million smartphones in Europe by March 2013. Furthermore, market research enables firms to understand possible threats and barriers they may encounter. For example, Fujitsu is looking to enter the European smartphone industry. While Fujitsu is still negotiating the logistics of entering Europe, it is important for Panasonic to be aware of this possible competitor when making decisions.

Markstrat

I am very excited to begin the MarkStrat simulation. I feel this will allow my teammates and I to apply not only what we have learned in M510, but our other courses as well.

I predict I will find resisting real world assumptions most challenging. As Professor Talbott explained in class, we must remember to play the game within the simulation. Also, with so much information available, I imagine it will be difficult to sort and identify what data to focus on. However, I am looking forward to seeing the effects of our decisions and how our team’s company performs relative to our competitors. Since each company starts the simulation in a different initial position, I am interested to see if one position has any particular trends across the three industries in our class.

The simulation will give me a good understanding of the types of decisions that need to be made everyday in business team environments. 

Culinarian: Should Companies use Price Promotions on Premium Products?

Thursday’s class made me think a lot about the effects pricing has on customer perception and its importance to a company’s market position. As is the case with Culinarian, competing as a company that offers quality products, the negative effects related to price promotions may outweigh any benefits. It is important for employees to not make false assumptions. For instance, many assume that offering a price reduction will generate more interest in their product, and increase their customer base. However, there are factors that counter this argument. These include the indirect effects associated with price promotions. When retailers offer premium products at discounts, consumers may question the item’s quality, brand value, and effectiveness; this damaged view of the product may deter them from making the purchase.

I do not think premium goods should offer price promotions through their main distribution channels. The most effective way for consumers who are unable to pay full price, but interested in purchasing these products, is by making the purchase through discount stores/websites such as eBay or amazon. These mediums can be very effective to increase product distribution of premium products without affecting its perceived value.