Copy This: Xerox’s Bold New Move

I was browsing through my October 24th issue of Bloomberg Businessweek and I skimmed past a colorful full page advertisement that consisted of passengers seated on a plane with a female office worker on the phone in her cubical.  I continued to flip through the magazine, but quickly did a double take because I thought I saw the Xerox logo on the advertisement I just passed.   I went back to the advertisement and was utterly confused by the verbiage displayed on the page.    Xerox wasn’t advertising its latest high speed color copier; it was explaining how Virgin American Airlines benefited from Xerox’s new call center services. 

Next, I visited www.RealBusiness.com which is a marketing tutorial that explains Xerox’s newly launched business services:  IT, Finance & Accounting, Customer Care, and Human Resources.  Xerox has repositioned itself as more than just a copier companies, but now into a complete office solutions management firm.   Xerox underwent an extensive costly advertising campaign which has ideally paid off as the new offerings make up half of its current revenues. 

Xerox has seen several ups and downs over the past decades including a resurgence to regain market share in the very competitive copier industry.   Xerox began as an American copier company, with now 75% ownership residing with Japanese partner Fuji Photo Film Inc.  Xerox is no doubt an international recognized as its office equipment offerings are used in offices all over the world.   The Xerox name has always been one of the most identifiable in the copier industry as even Apple contemplated purchasing the company in the 1980s.  Despite its strong brand presence, Xerox has battled and at times lost headway to the technology race with its competitors.   For instance, Xerox was slow to reinvent itself and miscalculated the advancement of its consumer’s behavior and preferences, driving document technological advancements in the 1990s.  Before its revival in the early 2000s, Xerox failed to recognize that businesses preferred to replace their paper flow with scanning and email capabilities.   Konica Minolta and Ricoh for instance, jumped on the R&D band wagon sooner than Xerox, ultimately stealing away significant market share from Xerox. 

Last year Xerox acquired Affiliated Computer Services Inc. (ACS), which was a Dallas based company that offered the outsourcing of business services, such as call center customer care.  Through this acquisition, Xerox is hoping that hospitals for instance, will realize the combined benefits of its data management technology (proprietary software) and HR outsourcing offerings.  Xerox is utilizing its strong international brand presence to offer a complete office management solution, or one-stop shopping.  

Xerox earnings have been strong as many corporations are onboard with Xerox’s new endeavor, such as Michelin.  The tire company has benefited from Xerox’s customer care solutions (outsourced call centers).  Perhaps Xerox has learned from its past mistakes of not diversifying its offerings to offset possible future advancements in copier technology.  Perhaps offices will go entirely paperless in the future, thus eliminating the need for scanning and copying all together… Consumer (B to B) behavior and their preferences will go green and more and more media will become digitized.   Don’t get excited though because trees will still have to be knocked down for other paper products, including toilet paper.  Unless of course, bidets make a marathon come back!

The evidence backs that Xerox is making a good move with its new campaign.   Xerox’s new business service offerings are not unrelated to its existing copying and document management technologies – after all, the services rendered do occur in an office!    Xerox has a powerful brand image and they aren’t veering away from its core competency, which is an inclusive office management solution.   Xerox’s broker-type outsourcing of services for its clients, such as opening up call centers in India for Virgin America, is a great complimentary sales add-on.   Xerox is simply making it easier for companies to gain access to outsourcing services.   In my opinion, Xerox’s new offerings will sell well to smaller domestic businesses that have a need to save money by outsourcing their operations, but don’t have the resources or international know-how to set up their own outsourcing outfits in other countries. 

 

Fly me to the moon (while I listen to Eminem and eat peanuts)

November 14 entry 

Airlines’ passenger mix is no longer considered a bunch of adults with a few ride-along kids; crying, sucking their thumbs, and spilling cheerios all over the isle. Today’s airline passenger load consists of well… the same mix, but all the adults on- board the plane need to be entertained like restless children, which of whom on a plane seemingly have less of an attention span than squirrels.  Or is that passenger behavior dictates simply wanting to fly with the tech gadget comforts of home, including one IPad, one laptop w/Wi-Fi service, IPhone, 1000 movies, and Willie Nelson’s entire music catalog?  Passengers can now share bunny hugs because the good news is they can have it all!

Personal inflight entertainment (independent entertainment consoles) used to only be available on long-haul international flights, such as a Cathay Pacific flight traveling from Los Angeles to Hong Kong.  However, some of the premium U.S. carriers, such as Virgin America, are now upgrading their cabins with a variety of entertainment options.[i]

Consumer demand driven by their travel behavior/preferences is what’s fueling an almost $1.5 billion a year inflight tech industry.   Some airlines are ahead of the curve as they find that most customers choose to spend their time noodling with the multitude
of apps their smart phones offer, even at 30K feet.  The tech industry is answering the call of consumer app demand and is working towards making Blackberry’s and IPhones
service uninterrupted during flights.  Today’s smart phones are a person’s complete communication tool, and folks literally can tense up with anxiety if they don’t satisfy their fix of text messages and emails every few minutes.

The main challenge of implementing continuous service on flights is fear of device/ electronic interference to an aircraft’s ILS (Instrument Landing System).  This system
communicates between ground traffic control personnel and the aircraft for
safely flying to and from locations all over the globe.  What also adds to the smart phone app upgrade challenge is that not all airlines can afford new technology/ radio frequency upgrades due to the volatile economy and lackluster airline profits (including
fuel price concerns).[ii]

All airlines want to be the first to offer new experiences and extra value to customers with the hopes of increased passenger loads.  For instance, Japan’s ANA airlines were quick to put in the first large order for Boeing’s new Dreamliner aircraft so that
customer’s would flock to ANA and experience a lavish new travel experience.  And in-cabin technology upgrades are no different; these are used as a marketing tool to bring in passengers.[iii]

The fast advance in upgrades to consumer electronics fuels consumer’s expectations for entertainment offered onboard flights.  Consumer behavior and their preferences is
driven by what lifestyle they’re accustomed to on the ground, including
smartphones and other communication devices- the present standard for communication amongst people.[iv]

One would think that most people would enjoy flying simply for the opportunity to rest and relax.  You know- perhaps snooze for a few hours under a cheap (hopefully clean)
blanket with a pair of Bose noise-canceling headphones.   The airlines are already increasing cabin comfort, easily satisfying consumers’ simple necessities. Boeing for instance, introduced the new Dreamliner luxury jet with an emphasis on providing premium comfort with less dry cabin air, which hopefully will induce more sleep among the passengers.[v]

A CNN article suggests that airline passenger behavior is simply influenced by boredom.[vi]  Some passengers who have trouble sleeping on planes require extra activities to occupy their time.  Passengers can carry their own personal DVD
players and video games, but the comfort of a larger inflight screen is ideal
for long-haul flights.  Also, passengers who do need to utilize a laptop to conduct business in the skies demand full connectivity, including power and internet access.

Some passengers worry about privacy when traveling.  Having confidential info displayed on a laptop could be easily absorbed by the guy touching elbows next to you.  Some airlines worry that violent inflight movies can be seen by younger viewer audiences…

When I was flying Cathay with my Chapman EMBA class to China, I was watching a complete season (from inflight on demand) of an R-rated television series, Starz’ “Spartacus”.  The show has a multitude of nude scenes and plenty of violence and
gore.  I like the show, but I did feel embarrassed because I would catch surrounding passengers peering at my screen, which coincidently happened to be displaying nude women prancing across the screen at the time.  To get over the discomfiture, I would remind myself that any other passenger could view “Spartacus” too on their own consoles because it was part of the “free” inflight service.

I’m in full agreement with passengers, especially when it comes to international long-haul flights – Airlines; please give us something to do!   It’s hard to sit for 15
consecutive hours unless entertainment is provided to help time pass by.  I and probably other passengers need to keep busy.  It’s part of our persona, how we
behave when crammed in an aluminum, close-quarter mode of transportation for a
gazillion hours.


HEADLINE: Pirates seek out software gold in China

 

 

A discussion and overview of the content from the AllBusiness.com  article, “Software piracy and ethical decision making behavior of Chinese consumers”, Written by Ouyang Ming

http://www.allbusiness.com/management-companies-enterprises/1174467-1.html

Week of October 17, 2011

Protect your patents Bill Gates, the most populous country, “China”, is now deemed as the highest software piracy places on earth.   In in order to combat this growing issue,
it’s important for software companies to understand Chinese consumer behavior
along with their ethical decision making processes.  China’s acknowledgement and attitude towards copyright law and the Chinese’ responsibility of knowing what’s right from wrong are really the main issues.

Software piracy refers to a computer user possessing counterfeit or illegally downloaded software from unscrupulous file sharing sources.  These software pirates also go as far as to distribute unlicensed copies of illegal material for financial
gain.

Piracy is not only prevalent in China; many other countries abroad are adding to the piracy turmoil that U.S. software companies face. Piracy results in a significant loss of revenue for organizations like Microsoft, especially in the Chinese market where losses reached a staggering level of $2.86 Billion in 2003.  Business software piracy is estimated as high as 92% in China!

China is a developing economy, turning macro overnight.  Copyright legislation/protection is only a recent undertaking in China.  Researchers are starting to focus their attention on collectivism, a structural component of culture leading to examining the Chinese’ ethical decision making processes.

One benefit that software developers/companies gain from piracy is free marketing/advertising.  Illegal and free software is passed along through a network chain of users and businesses, reaching up to 80% of the individuals who actually pay
for the software including complementary products.

While it would be virtually impossible to prosecute every pirate, it makes sense for software companies to educate consumers on ethics and self-discipline through with the advertising of successful past piracy prosecution cases.  A similar technique
is used in the U.S. when it comes to drunk driving.  Unfortunate fatality stories, as a result of drunken driving incidents, are frequently publicized by law enforcement to
persuade America’s youths to not drive drunk.

It might make sense to use stronger language to frighten away persons engaged in piracy acts.  For instance, if software companies would announce that software piracy is as an amoral act as shoplifting garments from a department store, the Chinese may better relate.   One possibility is that the word “piracy” is simply lost in translation when communicated in mandarin.  Piracy may also mean illegal, separate from unethical to some consumers.

Piracy acts also evolve from basic culture practices.  For instance, the Chinese proverb reiterated in many Confucianism driven Chinese education institutions is, “He who shares will be rewarded; he who does not will be condemned.”[i]  This type of thinking is less about individualistic ideals and more about what’s right from the perspective of a
society built around collectivism.  Hence, many Chinese view software piracy as the right thing to do.

A great book to read on the evolution of the internet and how software pirates came to exist is, “That Used to Be Us”, written by Thomas Friedman and Michael Mandelbaum. The book offers ideas that can relate to the global explosion of all forms of media piracy, including music and movies.  The book dives into the history of the internet and how the pioneers who’ve created it have lost control over its streamed content.  Music and movies are now exchanged between parties for free and foreign country leaders are suddenly being ousted out from power because of organized protests that begin on social networking sites like Facebook.  And who created the internet?  The major software designers and companies themselves!  There is no turning back as the world and the way we communicate is forever changed…


Stretch Pants are in and Calorie Counting is out!

Thread presented by Timmy P

Week of October 3, 2011

This week, our team would like to discuss a growing and sometimes mandatory trend that influences consumer behavior when deciding what to eat at some of America’s 5-Star dining establishments; KFC, Burger King, McDonald’s, and Wendy’s.  FYI, by “5-Star” we mean consumers can count their lucky stars for having the chance at increasing their risk of heart disease, gathering quintuple chins, and upgrading to over-sized stretch pants! Calorie posting in fast-food restaurants (a law in most states) is the listing of number ranges below menu items to educate consumers on the potential amount of calories they will consume from eating that item.  Calorie posts give health enthusiasts hope that consumers’ health conscious mindset will kick in, resulting in the consumer choosing a less calorie saturated item.

Example: Double Cheese Bacon Four Patty Fried Chicken Burger Patty w/ low fat mayo                 250,000-300,000 calories

 

The New York Times hit the streets of one of the United States’ obesity capitals, New York to see if consumers may opt for a healthy grilled chicken sandwich over a triple cheese burger with a fried onion ring in the middle.  First off, the NY times study showed that out of the 50% of consumers who actually noticed the calorie counts, only 28 % admitted to have been influenced by the calorie postings.  28% equates to 9 out of 10 consumers influenced to select healthier menu items with less calorie counts.  To make sure consumers with poor eyesight had a chance of at least seeing the calorie counts during the study, the NYT made sure large font numbers were displayed on each of the restaurants’ display menus they visited.

To collect a broad measure of the total influence on consumers that posted food calorie counts on menus in New York had, researchers pulled past sales receipts. The disheartened results showed that high calorie food orders had only gone up since the introduction of the law in 2008.  These results communicated  to consumer health authorities that these calorie signs are frankly not enough help consumers win the battle of the bulge.

One aspect that is driving consumer behavior when selecting fast-food menu items is price.  Consumers seem to be enticed to buy the unhealthy, cheaper value-menu items over the more expensive health-conscious food items.  As a result, food chains have increased their offerings of value-menu items such as side salads as opposed to fries, or yogurt to accompany one’s sandwich instead of chips (Subway). [i]

It is in consumers’ best interest to always look at the” big picture” when choosing what to foods to fuel their bodies with, especially at fast-food restaurants.  30 years’ worth of savings from ordering off fast-food restaurant value-menu items can’t compare to the
immense expense of future hospital visits with cardiologists and ultimately, feeling the depressing effects of poor health.

It’s no secret that American born fast-food chains have and are taking international markets by storm.  Russia is a notable receptive market/nation of the iconic American fast-food experiences.  One of the most recent Russian fast-food success stories is the explosion and popularity of Papa John’s Pizza franchises throughout Moscow. Now Yum Brand’s Inc., which owns KFC, Taco Bell, and Pizza Hut has created a Rostik’s-KFC restaurant chain; a Russian spin-off of KFC.

Russian fast-food chains financially flourish in a short time by charging more for the same food that is sold for less in the U.S.  Russians currently have more disposable
income than Americans because they aren’t burdened with as much debt, high
medical bills, and live mortgage free as a result of the mass privatization of
apartments (1990s).[ii]

Globalization is a beautiful thing, especially when cultures get to experience the popular memorable foods that have existed within other host countries for decades. There are some exceptions, especially when it comes to personal tastes of the more exotic cuisines.

In Honoi Vietnam, dognappers and dog (pet) owners are engaged in a struggle between keeping man’s best friend alive or turning Scooby into a hearty meal for the family.  It
turns out in Vietnam’s capital; dog meat is a delicacy and a main menu offering
in several restaurants throughout Hanoi.

Well… No comment and NO thanks from these two bloggers!  -We’ll snack on Cheezits instead.  Check out the link below for the complete story:
http://news.yahoo.com/dognappers-spark-deadly-violence-across-vietnam-090441619.html


Psychology and Consumer Behavior

Thread/response to an article written by:

Lars Perner, PhD

Assistant Professor of Clinical Marketing
Department of Marketing
Marshall School of Business, USC

www.consumerpsychologist.com

Response by Timmy P BUS-633

The information presented in the paper “Consumer Behavior: The Psychology of Marketing” demonstrates the extensive research on consumer behavior marketers (Global and domestic) conduct before entering new markets. In the face of a series proposed techniques in analyzing consumer behavior, the understanding of the foundation of psychology seems to be the core knowledge that a corporation’s marketing team turns to when strategizing as to where to move its pawn on the chess board.

It seems like the push for the understanding and praise of psychology makes it into nearly every classroom subject these days, especially now in business administration.  I’ve heard of large corporations now contracting on-site therapists to help troubled subordinates with conflicting (abrasive) personalities in the work place.  When I think of psychologists providing their expertise in the workplace, I picture a $250 per hour session saturated with 250 encouraging nods (from the therapist @ $1 each) coupled with a box of Kleenex on hand to support the sobs of a subordinate who simply doesn’t function at work to the fullest of his ability because he’s sad that his wife dislikes him.  Large corporations are funding these therapy sessions for issues that should be settled by the subordinate outside of workplace!

Hey, don’t get me wrong, the god of top selling management consulting books, Peter Drucker frequently referenced his knowledge of psychology and philosophy, among many other mind tools to convince readers how to boost profits and worker productivity.  I’m not knocking psychologists or psychiatrists and their assistance to ailing corporations

corporatiooooons adkjpjkj;ddfda678

Excuse me, I dozed off for a moment and went face down into my keyboard. It must have been the drowsiness caused by my Prozac.

The point I’d like to make is when understanding human behavior marketers simply need to know what their consumers want, then produce the product in a cost effective way that appeals to the masses.  Marketers don’t need to become Zen with B.F. Skinner and his theories on dealing with hungry pigeons in a cage.  Instead, marketers should turn to quantitative market and statistical analysis in its most practical form.  Sure, knowing where consumers sleep, eat, and roll with their posse is important to all components of marketing including distribution, but it doesn’t have to become a complicated process.

The paper provides guidance on remedies for mis-founded assumptions on cultural norms. The paper implies the true dilemma: Marketing campaigns must not only be driven to exceed customer expectations but –likely driven by the cumulative impact of their understanding of cultural preferences and lifestyles of their target market.  The question is, should marketers invest capital in extensive research methods (data) or dedicate the majority of their budgets on promotion and advertising that creates brand awareness?  The answer is, “yes” and “yes” 

The topic of analyzing secondary and primary data can be as boring or trivial as attending a political convention, but its place in marketing is essential.  The Marshall School’s Lars Perner suggests that conducting personal interviews with random target consumers is an in-depth and effective approach.  It’s also expensive and time consuming.   Most companies however, prefer a broad approach to gathering data, such as internet research or mass-mailed survey responses.

As an interesting corresponding analysis, a beneficiary of effective media coverage when introducing a brand (the now newcomer) into a foreign market, is witnessing apparent success over the competition. What we do know, versus what makes a good promotion headline, it does pay to invest additional capital in developing non-standardized marketing campaigns.  The pressures of local responsiveness that firm face when going global is enough to deal with.  Non-standardized advertising usually involves nailing local cultural attributes and behaviors in a campaign.   It comes down to having the expertise on what/where/how consumers will obtain the product.

The risk of blindly pursuing a marketing campaign will surely produce mediocre results at best. The paper implies successful marketers have met the challenge as the intruding foreigner with unmitigated success.  Additionally, as the paper notes, the expectation from consumers to buy a new product is its variety of conveyed experiences and ultimately “value”.  Broader-based failed marketing approaches have been mis-guided by the assumption that “a rising tide floats all boats,” and contrary to the assertion that one brand is better than another may spell doom for the less-fortunate company that ignores its consumer’s behavior driven preferences.

Without complete information on consumer behavior and preferences, any analysis has to come with ample hedging. However, with results in mind, marketing campaigns are most likely best served with a balance of investment in additional extensive research and smart advertising. The amount of additional capital investment should be determined by additional research: at what level of capacity of a target consumers group’s behavior leads to a path of perceived value?  The paper suggests the best returns from the investment in marketing campaigns will come from a product’s unique attractions or experiences, strictly adhering to target consumer preferences.