Thursday, December 8, 2011

Online Marketing Campaign

Facebook: Targeted ads:  $1,000 per month.

Google:  2 Targeted ads: $250 per month

Yelp: $1,000 per month

Total: $2,250 per month ---> $27,000 per year

SaladCreativity.com

Domain Name: $10
Development: $10,000
Hosting: $50 per month ---> $600 per year

Sub Total: $10,600

Grand Total: $37,600

Wednesday, December 7, 2011

Yelpers -- Just How Many are There

According to Tech Crunch, Yelp is now drawing 50 million users a month to its 17 million reviews.
So just how many Yelpers are there?  If Yelp has 17 million reviews and an average Yelper writes 100 reviews, then there are approximately 170,000 Yelpers.   There are roughly 150 locations worldwide, including many small cities, that makes about 1,300 users per city.  But Yelp is in just about every city or town in California, some with only a couple hundred Yelpers.  So bigger cities like NYC, DC, LA, SF probably has several thousand Yelpers (2,000 -- 10,000)

Large city -- 8-10,000
Medium city -- 4-7,000
Small city -- 1-3,000

Wednesday, November 30, 2011

Salad Eaters in DC

So you are a health conscious salad eater in DC.  Then you likely fit into one of these categories.  Not to worry if it's not totally clear cut -- it's not meant to be. You fit into whichever box you define and there is a whole lot of gray.  Good thing is that age, race and occupation are not much of a factor in determing which bucket you belong in -- it's how you live your life, what's important to you, who you hang out with your overall mission locally and nationally.  And if none of these categories fancy you, then we either overlooked a category or perhaps you should question whether you're able to fog up a mirror.  Offended yet?


Yuppie -- Young Urban Professional.  Originally, they were baby boomers but today the generation range has expanded from 20s to 60s, so age is really not much of a factor anymore.  Many wear high-fashion clothing, drive nice cars (so they have disposable income) and care about their image.  Can be easily found on M Street in Georgetown and along Bethesda Row. Also found near college campuses -- take a look at Fraternity Row.

Photography by Della Chen
Urbanite -- This term has evolved in the last 10 years. Similar to Yuppies, but more socially conscience (Environment, Poverty, World Hunger, etc).  Many work in non-profits.  Dress and image are not as important to them but they still try to maintain a professional-looking image.  Generally older than Yuppies Can find them around Sweetgreen carrying their own resusable salad bowls.  Willing to pay $15 for a salad and bottled water. So willing to spend money on food and drink and are just as social as Yuppies.

Hipster --  Social animals who like to wear Indie or Retro clothing as well as enjoy Indie music.  Tend to be in teens to early 30s.


Contrary to public opinion, they are well educated and are early adopters of technology.  Hipsters love to congregate in urban settings such as McPherson Square.  They are vocal in their beliefs and many are active in protests.  Go to Freedom Park and you find lots of them occupying all areas of DC.





Socialite -- As the name implies, highly social and active in networking and promoting oneself.  Normally as attended prestigious universities and has a well-paying job.  Can be wealthy and usually chooses a career path in art, literature or law.  Many are bilingual -- known to hang out at Embassy Row.
SipwithSocialites.com


Fashionista -- Someone with a penchant for shopping and a natural flair for combining both current and vintage fashionable trends.  Think of Sex and the City and Lady Gaga.  Trendy but don't expect them to be shallow or materialistic, and yes, it can even be a guy. Fashionistas are highly regarded today.  Like Yuppies, they are found in Bethesda and Georgetown


Wonk -- an intellectually curious person who is an expert in a field.  Many are knowledgeable Washington insiders, focused fervently on an issue and passionate about creating meaningful change.  Many are part of the growing DC Tech trend and attend meetups throughout the city.  You are focused, smart, committed.  Wonks can also be found hanging around major university campuses (Champs) and near Georgetown, AU and UMD.  Generally, you wouldn't know one if you spotted one because appearance doesn't really define a Wonk.
American University
DCist -- if no other category fits you perfectly, than you are most likely a DCist.  You are well rounded and care about a lot of things.  You care about news, events, food and culture but not to the extent of any of the other demographic groups.  In short, you are a moderate in your lifestyle, kind of one of each of everybody.  You are intelligent and caring but you're likely not the one trying to save the Earth.

Wednesday, November 23, 2011

Lifestyle Demographics in the Nation's Capital

So are you a Washingtonian -- You live, work, shop in or around the Nation's Capital? (Bethesda and Arlington included) After work, you attend events around the beltway.  On weekends you also hang out in DC and you prefer shopping on Connecticut Avenue rather than at the Potomac Mills Mall.

Then you likely fit into one of these categories.  Not to worry if it's not totally clear cut -- it's not meant to be. You fit into whichever box you define and there is a whole lot of gray.  Good thing is that age, race and occupation are not much of a factor in determing which bucket you belong in -- it's how you live your life, what's important to you, who you hang out with your overall mission locally and nationally.  And if none of these categories fancy you, then we either overlooked a category or perhaps you should question whether you're able to fog up a mirror.  Offended yet?


Yuppie -- Young Urban Professional.  Originally, they were baby boomers but today the generation range has expanded from 20s to 60s, so age is really not much of a factor anymore.  Many wear high-fashion clothing, drive nice cars (so they have disposable income) and care about their image.  Can be easily found on M Street in Georgetown and along Bethesda Row. Also found near college campuses -- take a look at Fraternity Row.

Photography by Della Chen
Urbanite -- This term has evolved in the last 10 years. Similar to Yuppies, but more socially conscience (Environment, Poverty, World Hunger, etc).  Many work in non-profits.  Dress and image are not as important to them but they still try to maintain a professional-looking image.  Generally older than Yuppies Can find them around Sweetgreen carrying their own resusable salad bowls.  Willing to pay $15 for a salad and bottled water. So willing to spend money on food and drink and are just as social as Yuppies.



Hipster --  Social animals who like to wear Indie or Retro clothing as well as enjoy Indie music.  Tend to be in teens to early 30s.


Contrary to public opinion, they are well educated and are early adopters of technology.  Hipsters love to congregate in urban settings such as McPherson Square.  They are vocal in their beliefs and many are active in protests.  Go to Freedom Park and you find lots of them occupying all areas of DC.





Socialite -- As the name implies, highly social and active in networking and promoting oneself.  Normally as attended prestigious universities and has a well-paying job.  Can be wealthy and usually chooses a career path in art, literature or law.  Many are bilingual -- known to hang out at Embassy Row.
SipwithSocialites.com


Fashionista -- Someone with a penchant for shopping and a natural flair for combining both current and vintage fashionable trends.  Think of Sex and the City and Lady Gaga.  Trendy but don't expect them to be shallow or materialistic, and yes, it can even be a guy. Fashionistas are highly regarded today.  Like Yuppies, they are found in Bethesda and Georgetown

Sports Fanatic -- Someone who is crazy about most major professional sports: NFL, MLB, NBA, NHL, Soccer, etc.  Can be found in sports bars and often attends games in the Verizon Center, Nats Park and Fedex Field.  Loves beer as well as wings, burgers and sandwiches.  Can be found on non sports days wearing a sports jersey.  Favorite part of town: Chinatown

Politico -- Someone whose life or lifestyle revolve around politics (Federal or State).  Can be a Hill Staffer, Pentagon Puzzle Palace worshipper, Lobbyist, Govt employee whose after hours life is centered around networking with other other politicos or anyone who enjoys politics and chatting about the topic.  Can we found in watering holes in Capitol Hill (Hawk n Dove) and even Pentagon City (Champs).  If they watch Sunday morning political shows as fervently as a Sports Fanatic watches Sunday afternoon football, then they are beyond recovery.

Economist -- Someone who sees something that works in practice and wonders if it would work in theory.  Usually works in the field of economics, finance, business or social science.  Many work at the World Bank or are K Street insiders lobbying the government or working as a Consultant for Booz Allen, advising the government how best to earmark their precious, shrinking dollars.  While Economists tend to be social, the practice what they preach, meaning they keep a budget and are frugal spenders.  They would rather pay $6 for a salad at McDonald's then $10 for a salad at Chop't.
Wonk -- an intellectually curious person who is an expert in a field.  Many are knowledgeable Washington insiders, focused fervently on an issue and passionate about creating meaningful change.  Many are part of the bourgeoning DC Cocktail Tech trend and attend meetups throughout the city. Can also be found hanging around major university campuses (Champs) and near Georgetown, AU and UMD.  Generally, you wouldn't know one if you spotted one because appearance doesn't really define a Wonk.
American University
DCist -- if no other category fits you perfectly, than you will have to resort to being a DCist.  It's a catch all term that means a lot but also very little.  You care about news, events, food and culture but not to the extent of any of the other demographic groups.  In short, you are a moderate in your lifestyle, kind of one of each of everybody.  You are intelligent and caring but you're likely not the one trying to save the Earth.
Flickr: dcJohn

So this is the Lifestyle bucket list -- all 10 of them.  You fit in one of them so you best get to know your neighbors.  How 'bout if 2 or 3 also know my name.  Well, there's only one dominant one.  You're only one today and tomorrow you can try out a new label.

Any more buckets I left out? Sure, it's not humanly possible to catch everyone.  How about the Surburbanites? Oh, you mean those who live in Woodbridge or Gaithersburg.  First, sorry about your commute. Secondly, sorry for missing out on City Living.  Third, I'm afraid we had to exclude you and your 1.5 kids, your medium-large size dog and yes, your luscious, green back yard...

Friday, May 6, 2011

Social Media has been a Bane not Boom for Marketeers

With the big rise in social media, everyone has so many attractive options right now, they can pick and choose which event to attend, what to read online, what causes to support, which store/restaurant to visit and so on.

In a town like DC, there's always been a plethora of events. The only issue, we didn't know about 90% of them.  Unless someone emailed you or called you directly, you were oblivious. Now just about every open event can be marketed to anybody which leaves a socially active person with dozens of choices a day (not to mention, his/her personal events).

Yes social media is a double edged sword -- it gets the word out to the masses but it also makes marketing massively difficult.  Last week, I attended a happy hour organized a major national company -- with less than 10 people showing up.  There were more people from the organization than there was of us.  At the end of the evening, I was assured a raffle prize because there were only 3 attendees left.  I won the T-shirt and 2 tickets to a concert.

With Yelp, diners have the final word, and if they are not completely satisfied with their dining experience, they can certainly make the restauranteurs regret it -- so yes, restauranteurs have it a lot tougher today, also.

So the power of peeps has risen astronomically.  For us marketeeers and event planners, it's getting harder and harder to attract people to take a look, to read, to subscribe, to attend, to shop.  Even worthwhile events that are free have trouble attracting attention.  Many people are also signing up for multiple events at the same time ,waiting until the last minute, or simply not showing up.

Now if content online is not targeted directly at you, no one is going to pay attention to it.  Today, all the online ads are targeted to you and you only -- this is called door-to-door marketing. In the future, all online news will be targeted to the individual.

This is becoming the same with events. So what's good for the peeps is now tougher for the planners.

This is becoming the same with events. So what's good for the peeps is now tougher for the planners.

Tuesday, March 29, 2011

QuickMedx -- Rapid Growth Ahead.


1) What is the QuickMedx business model?

QuickMedx’s business model is to provide fast and convenient testing centers in high-traffic, retail environments that are close to pharmacies (McDonald’s of simple health-care services). For a payment of $35 per visit, patients are provided rapid testing, diagnosis, and prescriptions for 11 common illnesses by a certified nurse practitioner. This service provides an alternative (although not a replacement) to visiting the primary care physician's office or emergency room for simple cases.

2) Is the QuickMedx business model viable?

Yes, the QuickMedx business model is viable for the following reasons:
1.     The company pioneered a unique concept; at the time of the case, there appears to be no competitor in its niche.
2.    Many common illnesses are easy and quick to diagnose.  Patients familiar with these common illnesses (e.g., strep throat) know the symptoms, prognosis, and likely treatment and just want confirmation and the right prescription to get their loved one on the road to recovery with as little wasted time as possible.
3.    Early sales indicate the concept appeals to the targeted market segment (busy middle- and upper-income families), and produces even stronger financial results in lower-economic demographic regions, where many blue-collar workers did not have insurance coverage and simply want an inexpensive alternative for basic illnesses.
4.    QuickMedx wisely chose to keep cash flow as simple as possible, by dealing only with retail customers and avoiding the morass of filing insurance claims for its patients.  This helped the company avoid the administrative and float costs involved in insurance claims.
5.    The business is modeled on the concept made famous by McDonald’s:  a limited menu that enables the business to serve customers quickly and affordably.
6.    QuickMedx and its host client (Cub Foods) focused on risk management.  Together they developed refinements and releases that helped make the company less vulnerable to lawsuits than more versatile (and more expensive) clinics.
7.    Strong leadership by the founders helped to preserve the concept through birth and initial growth, and makes it more likely that their vision will remain intact going forward.
8.    QuickMedx’s exclusive deal with Supervalu that allows them the right to integrate with any of the 800 stores nationwide.  In the event that Supervalu doesn’t allow QuickMedx to enter a particular market, it must release QuickMedx from its obligation and allow it to find a different retailer.
3) How quick should QuickMedx grow?

QuickMedx's growth should be rapid for the following reasons:
1.     Kiosks are relatively easy and inexpensive to build and operate.
2.    There are many possible locations in retail and universities
3.    High standardization makes it relatively easy to franchise the concept, in addition to growing through direct investment in new locations.
4.    The company retains the option of dealing with insurers.
5.    Their service was attractive to both unions and members of unions (due to lower costs and 100% reimbursement of claims) which leads to a huge boost in sales.
6.    The company could also increase the number of conditions that it diagnoses and treats in future.
7.    There is an abundant pool of nurse practitioners to staff the kiosks.
8.    QuickMedx benefits from Supervalu/Cub food’s advertising that promotes QuickMedx as an added feature of that particular store.
4)  Is QuickMedEx a "disruptive" innovation?

Yes, QuickMedx is likely to be a disruptive innovation because it serves the needs of abundant, low-income customers with few cheap alternatives and busy high-end customers seeking simple, convenient service.  Locating in partners’ retail stores helps minimize costs, enabling the company to undercut other providers when consumers are stressed about costs and convenience.

Wednesday, February 23, 2011

Saturday, February 12, 2011

Poor Children are More Prone to Eat Junk Food

I live in Congress Heights, a blighted community that just two years ago got our first grocery store.  Before IHop opened last year, we had no sit-down restaurants and our choices for food was relegated to Popeyes or Chinese carry-outs.  Three years ago, our first Subway opened on Martin Luther King Ave.

First Lady, Michelle Obama


Still there is a dearth of quality, wholesome food in our area which explains why low income people eat more unhealthy and have more health problems than the upper class?

There are many reasons that contribute to this vast separation:


Food Deserts:
As mentioned, there are many areas that simply are not serviced by grocery stores, let alone healthy food.  A food desert is any area that is not serviced by a grocery store or Mom and Pop store that sells healthy food within walking distance or reasonable commute distance.


Income:
We all know that fast food is cheaper than healthy food.  When your budget for food is minuscule, fast food seems to be the winning option.

According to the 2010 US Census, single parents comprise 70 percent of all poor families with children.  The US is slowly becoming a two caste system with marriage and education as the line of separation.  In the top one-third of the population, children are raised by married parents with a college degree. In the bottom third, children are raised by single parents with no college education.



Convenience:
When both parents are working or when there is only one parent, there is often no one available to prepare meals at home, making fast food a very easy alternative.  According to the US Census, among single parent families, 26.6% live in poverty.

Life's Stress and Addiction
According to a March 28, 2010 study in "Nature Neuroscience," fast food is addictive.  The study likened the effects of high-calorie fast food to those of cocaine or heroin, in animals.

There are also claims to the structural changes to the brain because of fast-food consumption.

The stress of low-income thus may lead to craving of unhealthy food.

And the effects of childhood obesity can be devastating.
Childhood obesity leads to better chances of obesity as an adult and raises the cost of health insurance for everyone.

So, shall the government fight childhood obesity by regulating fast food?  Shall the city step in to regulate the construction of new fast food restaurants in healthy-food deprived areas?  How about banning trans-fat oil or even regulating the advertisements that appear to target children.

A July 2010, Rasmussen Poll shows that 36% believe that the government does not regulate fast food enough.

"There is no way that the first lady can or should go into someone's house and tell them what to eat — it doesn't work. It wouldn't work in my household — in fact, I would resent it. But what I do know that parents want is they want help."
-- Michelle Obama

The First Lady has created a healthy campaign targeting childhood obesity called "Let's Move."
The First Lady is also working diligently with Wal-Mart to reduce the amount of sugar, sodium and trans-fat in their food options (without raising the price).

People need help and even reach out to get some.  They know ultimately eating better is their choice, but when the odds are stacked against you, we all need to step in and intervene.

When the local DC government started regulating the licenses of liquor stores in Anacostia and Congress Heights, public drunkenness, loitering and crime started decreasing.




Source:

Saturday, February 5, 2011

McDonald's Response from Danya Proud



From: "Proud Danya" <Danya.Proud@us.mcd.com>
Date: Feb 20, 2011 3:55 PM
Subject: RE: Happy Meal Toy Study and Survey
To: "Chito Peppler" <chito.peppler@gmail.com>


Good afternoon,

In response to your inquiry, please find below a statement for your use:

February 16, 2010

MEDIA STATEMENT

“While we share in the desire to find a meaningful solution to the growing problem of kids' health and nutrition, we believe taking away a toy from a kids meal
does absolutely nothing to improve children’s health, nutrition or well-being. 

We are extremely proud of our Happy Meals which give our youngest guests wholesome food and toys of the highest quality. Getting a toy with a kid's meal is just one part of a fun, family experience at McDonald's.

Public opinion has – and continues to be - overwhelmingly against this idea. It 
does not reflect what consumers want, nor is it something they asked for.Parents tell us they want to have the right and responsibility to make their own decisions and decide what’s right for their children – not lawmakers.
Any fair and objective review of our menu and the actions we’ve taken will demonstrate we’ve been responsible, we’re committed to children’s well being, and we’ll continue to learn and take action for our customers that is guided by science and facts.

Banning a toy is not the way to fight obesity or improve children’s well-being. Solutions will come only from education and awareness based on science and fact.”

Danya Proud, Spokesperson
McDonald’s USA

McDonald's Happy Meal Toy Survey


Should McDonald's be allowed to put toys in their Happy Meals? Obesity in children has tripled in the last 30 years. The American Academic of Pediatrics considers advertising to children illegal since they do not have the cognitive capability to understand deceptive marketing.



DownloadCreate Chart1. McDonald's claim that the Happy Meal does have one healthy option: chicken nuggets, apple dippers, juice and low-fat milk. However, children do not always pick the healthy option. McDonald's claim that their freedom to advertise is protected under the First Amendment.
answered question58
skipped question
1
Response
Percent
Response
Count
Including the toy in the Happy Meal is ethical
34.5%20
The toy is deceptive marketing but McDonald's should be allowed to include a toy
34.5%20
The toy is deceptive marketing so McDonalds should NOT be allowed to include it.
19.0%11
Not sure
6.9%4
Other (please specify)
Show Responses
5.2%3

Friday, February 4, 2011

The Most Influential Man Who Never Lived


He was the most famous man who never lived.   The iconic image of this rugged, handsome cowboy riding off in the sunset was indelibly stamped in the hearts and mind of both smokers and does who staunchly opposed it.  He was so effective in tugging both the heart strings and pocket strings of people of all ages all over the world and personally responsible for the suffering of millions that he was eventually banned from TV, print and billboards.
 

In 1999, Marlboro settled a lawsuit agreeing to remove all cowboys from billboard ads.  This ended one of the most mythical, successful and hated brand icons in the advertising history.

Leo Burnett, the former Peoria Journal reporter turned advertiser, created the Marlboro man in 1951.  The success was astronomical.  Marlboro sales increased nearly 3,250% in 1955.

In 1964, Phillip Morris refreshed the image by putting him in mythical Marlboro country.  In 1971 cigarette ads were banned from TV, but the vivid image of the rugged cowboy smoking a cigarette endured.

Even today if you see a picture of a cowboy riding off in the sunset, you may immediately think of Marlboro Man.  In fact, USA Today has ranked him number one in the 101 list of most influential people.

That is because Marlboro has indelibly stamped this rugged image into the hearts and minds of people all over the world.

At least for this generation, the image belongs to them.  Marlboro gets free advertising and don't even need to do the work.

For example, if you search for the word "cowboy" in Google, the very first picture that comes up is the one above.  

Are Happy Meal Toys Bad for Waistlines?

Should McDonald's be allowed to put toys in their Happy Meals.  The Center for Science in the Public Interest (CSPI) is suing McDonald's to remove the toys.  Claiming that childhood obesity rates have more than tripled in the last 30 years.  McDonald's claim that the Happy Meal does have a more healthy option:  chicken McNuggets with low fat caramel dip, apple dippers and low fat milk.  Still the Washington-based consumer advocacy group stated that many children opt for the less healthy option.  Further study shows that McDonald's staff automatically serve the hamburger and fries to the kids without mentioning the healthy option.

Say "No" in Santa Clara
Already, California's Santa Clara County voted in 2010 to ban restaurants from giving away toys with high-calorie meals.  The problem with the toys according to the CPSI is that kids will nag parents to get the meals because of the toys.


First Amendment
McDonald's is defending their position based on the First Amendment.  However, the CPSI claims that the free speech clause does not give companies a blank check to advertise deceptively to individual groups especially children.



Brilliant Marketing Campaign
Ever since the first Happy Meal was sold in 1979, McDonald's has released thousands of varieties of toys.  They also earn advertising revenue by marketing movie and Disney promotions.  In 2005, Disney celebrated their 50th Anniversary by releasing a special edition toy comprised of Mickey, Minnie, Goofy, Pluto, and others.  Today, Happy Meal toys are popular collectors items.  A 11-year old kid recently sold his 7,000-piece collection at an auction in England for $11,000 US.

Too Many Empty Calories
A 2006 study by the Journal of Pediatrics shows that the average child consumed up to 165 calories more than needed and some teens took in as many as 1,000 calories more each day than needed.  A recent article in the Journal of the American Dietetic Association states that kids are not only eating more, but they are getting empty calories -- food that are high in calories, fat, or sugar, but low in nutrition.


Should Big Government Regulate?
Supporters of consumer advocacy groups state that the government should step in to protect groups against such vices as obesity, smoking, drinking, etc.  Marketers in general will try to push their products zealously -- that's their job.  The job of consumer advocacy groups and the government is to keep them in check.  Thus we should not allow companies to advertise as they wish, right.


Touted for Ethics



 McDonald's touts that it has recently received an A+ rating at the Better Business Bureau for its "proven record of trustworthiness and ethics in its customer-related business practices."

Socially Responsible?
Researchers have proof that children are drawn to meals associated with toys.  


They further state that companies are offering these toys as a form of marketing to lure children to purchase the meals. 
The key issue here is whether this is deceptive.  Because children do not yet have the reasoning to understand unfair marketing.  "The American Academic of Pediatrics considers advertising to young children to be inherently deceptive and exploits children under the age of 8 years."


Exercise is the Antidote
Meanwhile, advocates of McDonald's claim that the best way to fight childhood obesity is more exercise and less time spent watching TV or playing video games.

Should advertising fast food to children be illegal?  Certainly, there are many questionable cases. But what is the government's role? The FTC, FCC and BBB already have their hands full of deceptive marketing claims.  They cannot tackle every one of them.  And when it affects critical issues like childhood obesity,  consumer watchdogs and even the American public are now stepping up to the plate to pinch hit.

Friday, January 28, 2011

Thursday, January 27, 2011

The New Tool to Democracy: Social Media



As a public affairs officer in the US Navy, I was intimately familiar to the power and pull of the social media revolution. Tweets, status updates, blogs, microblogs, and yes, even Vlogs, have been indispensable tools to communicate in a viral medium as well as to track the pulse and viability of a story long after it is written and forgotten.

Credit: thepunch.com

During the Iran presidential elections in the summer of 2009, the US State Department specifically requested that Twitter not be taken down for maintenance.  This request substantiated the geopolitical value of Twitter and forever changed the landscape of social media in government, politics, and yes, even diplomacy.

A mini revolution ignited in Iran after the flawed Presidential election of dictator Mahmoud Ahmadinejad.   Meanwhile, the Iranian fascist government virtually choked off the flow of news to and fro Tehran.  Many Iranians who protested that the election was rigged did so via Twitter. Twitter, not CNN, evolved as the ideal medium because it was real-time, was shot-gunned by the people closest to the action, could be deployed by virtually anyone with a computer or cell phone and was virtually impossible for the government to track or block.

During a revolution, crisis or emergency, Twitter really showed its spunk and stamina.  Forward to the present day: Egyptians vividly remember Iran's Islamic Revolution of 1979, almost a generation ago.  The unprecedented uprising of how the people threw out an indominable monarch has been magically weaved into the anecdotes of society as cohesively as the tales of Sinbad have become an endearing part of Arabian culture.  
Credit: Washington Post

However, history is never fully flawless. Diplomacy is screened through dense filters manipulated by the ideology of totalitarian states.  In today's dramatic string of Middle East uprisings, social media has been the decisive medium to execution.

So could this revolution happen without Facebook?  It is no coincidence that Mark Zuckerberg was chosen as the 2010 Time Person of the Year.


Just as Twitter was instrumental in Iran, Facebook has been even more crucial to the development of political ideology that has led to this historic uprising.  Without Facebook, poverty, struggles and tension would still exist in Egypt.  But without a Facebook, there would be virtually no way for these tensions to escalate to a boiling point and no way for disparaged Egyptians to vent their anger at Mubarak and no way for that anger to be fostered via uprisings across nations and borders.

Wednesday, January 26, 2011

Greenwashing -- Navigating the Complicated Eco-babble


"So even if the plastic bags were to degrade within a year in an open-air environment, most Americans do not compost their plastics making the 'degradable' claim irrelevant."

Greenwashing is not a recent phenomenon.  For the last 20 plus years, the practice of making an unsubstantiated or misleading claim about the environmental benefits of a product, service or company has surely existed.

But in the last few years, the use and abuse of green advertising has sharply escalated as companies strive to meet burgeoning consumer demand for products that will help save Mother Earth for our children's children.

Just make your weekly pilgrimage to Whole Foods and there are surely a whole slew of products that claim to be ozone-safe, eco-friendly, carbon-negative and made with renewable energy.

They all sound well and good and makes me feel extra eco-altrusitic (until I go home and slaughter a whole pig for dinner) But will they really make Mother Earth beam with pride?  Or perhaps more importantly what do these terms mean and do these products meet the industry standard set by the consumer-coddling Federal Trade Commission?

Taco Bell Meat Washing?




Dee Miles, who represents the plaintiff, said Taco Bell calls its product "taco meat filling" inside the company, but beef to customers
"The 'chicken' and 'carne asada steak' served by Taco Bell is, in fact, chicken or carne asada steak," the lawsuit says. "The 'seasoned beef,' however, is not beef."
Taco Bell simmers 100 percent U.S. Department of Agriculture-inspected beef in a "proprietary blend of seasonings and spices" to give it a signature taste and texture, Taco Bell President Greg Creed said in a statement.  
All seasoning ingredients are listed on the website, he said.


SEASONED GROUND BEEF

Beef, Water, Seasoning [Isolated Oat Product, Salt, Chili Pepper, Onion Powder, Tomato Powder, Oats (Wheat), Soy Lecithin, Sugar, Spices, Maltodextrin, Soybean Oil (Anti-dusting Agent), Garlic Powder, Autolyzed Yeast Extract, Citric Acid, Caramel Color, Cocoa Powder (Processed With Alkali), Silicon Dioxide, Natural Flavors, Yeast, Modified Corn Starch, Natural Smoke Flavor], Salt, Sodium Phosphates. CONTAINS SOYBEAN, WHEAT


"Unfortunately, the lawyers in this case elected to sue first and ask questions later -- and got their 'facts' absolutely wrong," Creed said..

Let's see what Taco Bell Tweeters are saying in the Twitter World:








Sunday, January 23, 2011

2010 -- A Disastrous Year for Google in China

Will Google Strike Gold in 2011

2010, to put it lightly has been a solemn year for Google in China, and it started exactly a year ago with the cyber attack to Google's Gmail accounts.  Here's a rough chronology of what happened and what didn't go so well. 
  • ·      Chinese cyber attack at Google (Jan 2010)
o   Linked to mainland and targeted Chinese human rights workers’ Gmail accounts

Saturday, January 22, 2011

Cemex -- Mexico's Steady Rock in a Turbulent Economy

Mexico is experiencing tremendous problems. Their drug war is weighing on the economy and the unprecedented violence is damaging tourism.

But not all Mexican firms are gravely affected by the burgeoning drug empire.  CEMEX, the third largest cement maker in the world, is based in Monterrey.

Founded in 1906 at its lone facility in Northern Mexico, CEMEX today maintains production facilities in more than 50 countries. Throughout the years, its focus on reducing costs, standardizing business processes, technology and organizational structure has transformed this company into a key player in the world cement business.

In this article, we will analyze how CEMEX expanded and the Global Integration and Local Responsiveness pressures surrounding CEMEX's drive to globalize. 

At their inception, the concrete and cement industries were fragmented because the high cost of transportation prevented much competition.


First, CEMEX had many important customers.

Who is Cemex's largest customer? The United States of course. The US not only imports more cement than any other nation, they are Mexico's next door neighbor and in 1994 signed an agreement to eliminate barriers of trade and investments between these two countries and Canada.

Keep in mind, none of these customers were multi-national, meaning for each location, there would be several multi-national customers.

Cemex 50 lb bag Mesh Sand in Home Depot
Cemex has capitalized on the growth that the US experienced last decade.  The US simply could not buy enough portland cement from U.S. producers.  Meanwhile Cemex was able to sell cement to the US at lower prices than their American counterpart without the restrictions of tariffs and trade barriers after NAFTA was signed in 1994.

Other important customers: Europe has increased significantly in the last decade. But lately, that growth in the West has slowed, but demand in Asia has picked up.  Meanwhile, Egypt's construction industry is booming.  So it appears that even if one part of the world is experiencing a slowdown in construction, there is always other parts of the world that is experiencing a boom.

Mexico Earthquake
In 1985,  Mexico City was hit by a devastating earthquake that killed over 10,000 people.  The severe damage to so many buildings was blamed on lax enforcement of building codes.  Because so many people were left homeless, CEMEX was busy contributing to the rebuilding of the city.

High Barriers to Entry (Aggregates and Cement)
Aggregates and cement are upstream products with high barriers to entry with initial investments starting at $50 million.  Initially, there is little product differentiation.

Concrete and asphalt are downstream products with few barriers to entry, short payback periods and ability to distinguish between products.

Stepping Out at Home

In 1989, CEMEX was facing mounting competition in Mexico.  In addition, the Mexican construction business was very unreliable.  

They started consolidating its position in the Mexican cement market by acquiring Mexican cement producer Tolteca, making CEMEX the second largest Mexican cement producer and making the Top Ten list in the world.

And when they started to acquire, they began to realize that they had found their niche.  The CEMEX way was an outstanding method of doing business and they maintained tight centralized controls.

Going Global
So when did Cemex start going global?  They made their first international acquisition in 1992.  In 2004, they acquired RMC of Great Britain for $5.8 billion and 15 years after their first acquisition  in 2007, they won a majority stake in Australia's Rinker Group.

RMC -- Different Strokes
The acquisition of RMC altered the geographic landscape for business.  This deal opened up France, Germany and several Eastern European countries.  RMC was a highly decentralized company that differed from country to country.  On the other hand, CEMEX had a single way of doing business and a standardized operating and engineering culture.

In the 25 years, leading up to the Rinker deal, CEMEX has grown from a small firm of 6,500 employees and $275 million in revenue to a global leader of 65,000 employees and $21.7 billion in annual revenue.  Today, CEMEX brings in annual sales of more than $15 billion with only 15 percent of the sales being generated in Mexico.


Foreign Direct Investment

CEMEX relied heavily on FDI.  For companies in the cement business, the only cost-effective way to globalize is to acquire plants in different, strategic locations throughout the world.  Because of its weight,  cement could not be easily shipped from one country to another.

First, CEMEX targeted developing nations, especially those who would be experiencing future construction demand.  They purchased cement companies that were being run inefficiently and transferred its skill sets and customer service savviness to those locations.

CEMEX plant in Fairborn,Ohio


Presence of Multinational Competitors
In 1992, CEMEX was facing competition from Holcim at home.  As a result, CEMEX acquired a major stake in two Spanish cement companies, Valenciana and Sanson, giving it a majority share in one of Europe's largest cement market.

At that time, Spain was an attractive country to invest in. They had just entered the European Monetary Union, and working in Spain allowed CEMEX to tap the lower cost of capital.

So CEMEX's global expansion was first spurred by local competition. Their further growth overseas was spurred by subsequent global competition

In the Cement and concrete business, there is not much distinction from one brand to another.  Buyers make decisions primarily on price resulting on global pressures in cost reduction.

Carbonate rock quarry used for cement production, Aruba
The main barrier to competitive entry in the  cement business is access to rock quarries.  Since rock and gravel is difficult to transport, it is critical to have access to a rock quarry nearby.  CEMEX operates more than 560 rock quarries strategically around the world.

CEMEX Way

CEMEX's success is attributed to how it acquired companies and how it integrated with them after the merger.  CEMEX standardized business processes, technology and organizational structure throughout the world, while catering to the individual company and host country needs.

This technique made CEMEX's process unique.  Instead of eliminating the company's prior practices, CEMEX catalogued and stored these practices in a centralized database.  These steps were then compared against current practices.

The benefits of the CEMEX Way was extremely profitable.  From 1991 to 2003, their earnings grew more than 18 percent annually.


Information Technology


CEMEX has been a clear leader in the implementation of Information Technology.  Because ready-made cement has only 90 minutes before solidifying, precise time of delivery is crucial.  CEMEX is able to track their trucks using GPS, radio transmitters and satellites, allowing the company to control the production and distribution.  Customers receive lower costs and stellar customer service -- both hallmarks of CEMEX.

The key to CEMEX's foreign direct investment success was creating a reliable communications grid.  CEMEX did this by creating CEMEXNET,  a global satellite communications system. Leadership was then able to easily conduct "virtual inspections" of CEMEX's operations remotely.


Environmental
Cement production accounts for as much as 5 percent of global emissions of CO2.  CEMEX is reducing its carbon footprint by shifting to renewable energy and by using biomass as inputs to its kilns.  CEMEX is striving for 18 percent of their electricity to come from renewable energy sources.  A new 250-megawatt wind farm in Mexico will provide one quarter of CEMEX's electricity needs in Mexico.

So why did CEMEX globalize?  Pankaj Ghemawat, who teaches at the Harvard Business School, has collected data that shows that globalization has profound limits. Ghemawat states that CEMEX becomes profitable only by buying capacity in foreign countries thus reducing the number of competitors resulting in higher prices for the cement.

Haiti

CEMEX has two terminals in Haiti which supplies almost 70% of the local market.  Today, CEMEX and CHF International are working together to train young Haitians to make better concrete blocks.

In the past, Haitians made concrete blocks that were of low quality. CEMEX is teaching these men how to make exact measurements of good quality water and sand in the cement mix.

CEMEX is also providing the proper technology to mix the cement:  Bicycle powered mixers instead of mixing the cement on the ground.

Pretty soon, there will be many strong cyclists in Haiti to compete in the Tour de France.

Will CEMEX capitalize greatly on the future Haiti reconstruction? Since CEMEX is local and they have established a great rapport and training regimen with the local populace, it appears that CEMEX will surely be in the thick of things.

Recently the Haiti reconstruction fund approved US$65 million for rebuilding damages homes and homes in Port-au-Prince.


CEMEX
GLOBAL INTEGRATION PRESSURES
HIGH
MEDIUM
LOW
Important multinational customers
       

 X
Presence of multinational competitors
       X


Large investment intensity
       
 X

Technology intensity in design, production
  
 X
      
Pressures for cost reduction

        X

Universal needs
       X


Access to localized resources

        X

LOCAL RESPONSIVENESS PRESSURES
HIGH
MEDIUM
LOW
Different customer needs


     X
Differences in distribution channels


X
Availability of local substitutes

       X

Market structure (local competition)

       X

Host government demands

       X

 




RUNIN OUT