Cafeteria Boutique Kafedaky

For my final blog post, I would like to analyze the innovative business idea of a Viña del Mar establishment called "Cafeteria Boutique Kafedaky".  The overall premise of the store is a mix between the typical sit-down cafe and the stylish women's clothing store.  They offer an assortment of foods and beverages, but also a wide array of attractive clothing options.  This combination is something like I have never seen in the United States.  Lascu's Marketing Principles book states, "Reference groups are defined as groups that serve as a point of reference for individuals in the process of shaping their attitudes and behavior."  I think the reference group that Cafeteria Kafedaky has kept in mind when designing their business is women, as most of their marketing decisions seem aimed at one specific gender.  I believe that the concept of joining a clothing store and café is clever and would appeal to many women.  When I brainstorm activities that women like to do together most, getting a cup of coffee and going shopping are definitely at the top of the list.  The fact that they can accomplish these two fun tasks in one place only makes it so much easier for the consumer.  Cafeteria Kafedaky is aware that the majority of their clients are going to be women and caters to this gender.  Their Facebook page and signs feature images and logos of attractive women shopping and drinking coffee.  There are no pictures of men, as they accept that this other reference group will not be as inclined to partake in these activities.  All of their branding choices have been made with women in mind.  By marketing so much to only one gender, the company is losing half of their potential clients, but are also making the 50% of the population that they do have, feel more welcomed and comfortable.  Although I have never seen a store such as this one in the United States, that does not mean that I do not think it would be effective there as well.  The gender is the reference group and there are certain qualities that remain prevalent in men and women, no matter the country.  One might worry that trying to succeed in 2 industries (clothing and restaurant) would be difficult, but it seems like this company is utilizing the combination to capitalize on both of the different products and services.  An innovative idea indeed.      
       

The Power of Futbol

Banco de Chile has decided to use the marketing strategy of sponsorship and is financially supporting the national futbol team.  Lascu's marketing principles book explains sponsorships: "Sponsorship marketing involves a company paying a fee to an event, person, or organization in ex- change for a direct association with that event, person, or organization".  In exchange for this financial support, Banco de Chile has created a valuable direct association with the all-mighty Chilean futbol team.  In order to capitalize on this partnership, the Bank has developed one of the most motivating advertisements that I have ever seen.  Here is the link if you have not watched it: http://www.youtube.com/watch?v=tmLmWiqSVS8
Selecting the heroic Chilean miners to deliver this message to the team and country proves very inspiring.  The commercial creates a connection between the two underdog stories of the Chilean national team and the trapped miners.  Even as a foreigner, I can honestly say that this commercial is effective in moving me and creating emotions within.  One can definitely feel the genuine power and passion in the miner's words.  It does a great job of "pumping up" the fans to stand behind their country's football team no matter what the odds are.  But what does this advertisement and sponsorship do for the Banco de Chile?  The stories of the Chilean futbol team and miners lie in the hearts of all Chileans and this association with the bank will definitely do great things for their brand.  Even if Banco de Chile is not the first thing that viewers will think of when they see this advertisement, the fact that they are the company that developed and brought the commercial to the public means that the Banco shares these same Chilean values.  Not too mention the millions of views that the video has gained on youtube.  Sponsorships are interesting because they might not seem effective initially, as the commercial barely even mentions the bank.  But in reality, the sponsorship shows the Chilean public that our company supports the team and shares the same values as all Chileans.  This is something that not all commercials can do effectively.    
   

Hostelity in the US

I have just returned from a trip to the south of Chile where I stayed in quite a few hostels.  I also stayed in hostels for my other trips to Buenos Aires and La Serena.  These are the first times that I have stayed in a hostel and before coming to Chile, I did not even know what the word meant.  As I look at my bills from my variety of vacations, I am realizing that these hostels are a fraction of the price of a hotel in the US.  It is the perfect form of lodging for a university student, such as myself.  I now wonder why hostels rarely exist in the US and why they are not a popular option for traveling within the country.  This is evidently a cultural difference and I think that it can be attributed to the role of status in the mind of the American cosumer.  Lascu's marketing principles book explains that "often, the products consumed convey messages about the consumer in the same way that language does."  Americans definitely take this to heart when making purchase decisions and like to appear of high status.  This past week at the hostel, I met quite a few people who planned on traveling for a few years.  Some were Australian and others were European, but none were from the United States.  American workers seem to receive the least amout of allowed vacation time when compared to other western nations.  This contributes to why American vacations tend to be shorter than individuals of other coutries.  When traveling for an extended period of time, such as a year, budgeting is an crucial aspect which makes the hostel a viable option.  On the contrary, I believe that since American usually take less frequent and shorter vacations, they can often be associated with massive consumption.  In the rare instance, that an American is on a break from work, they want to "live it up".  This means saving up for a nice hotel room and a fancy restaraunt.  The idea of sharing a room with complete strangers when on a vacation, troubles Americans and conflicts with their self-perception of status.  As the economy changes and budgeting becomes a priority for more Americans, I am curious to see if more hostels emerge within the nation.  As for now, the American mind set is that a night at the Marriot beats a week at a no name hostel.              

Service Marketing: Public Transport Edition

For this week's blog post, I would like to examine service marketing and how it applies to one of the most popular services in the world, public transport.  The Marketing Principles book explains that the "Gap Theory" is how consumers measure a service.  The gap is between the expectations and the actual evaluations of the service.  The factors involved are the tangibles, reliability, responsiveness, empathy, and assurance.    The forms of public transportation that remain popular in Viña are micro, metro, and collectivo.  To be honest, when I ride the micro, I am not that satisfied with the tangibles.  I am used to a little more personal space in the United States buses and when the micro is crowded it becomes pretty unpleasant.  I began to question some of the marketing decisions that the city's department of transportation made when they designed the micro.  The current system features a small bus but it comes very frequently, as opposed to the general United States choice of larger buses, but they do not arrive quite as often.  This debate raises the issue of which do consumers prefer: Speed or comfort?  The fact that these two aspects are attributed more to a bus in each country may even tap into cultural differences between the United States and Chile.  I also noticed that many of the micros during busy hours have an employee who just stands by the door, runs out when the bus stops, and tries to convince people to get on.  I have never seen this direct selling method applied to public transportation in the United States and I wonder if an increase in popularity can be attributed to this extra worker on board.  The collectivo also exemplifies cultural differences between the United States and Chile.  I have never once before seen a taxi where the riders share the toll with strangers.  The U.S. is yet to implement a system like this if they ever do.  I believe that this form of cab has not caught on in the states because, even at a higher cost, Americans enjoy the experience of having a personal driver and being taken exactly to your destination.  Many taxi drivers in the United States carry your bags and hold the door for you and I think that Americans cherish this brief moment of power rather than saving a few bucks.  I would be curious to see how Americans would respond if a collectivo company started in our cities.      

Entering Chile's Mobile Phone Market

In marketing class, we have often discussed entering the Latin American market as a foreign company. We have addressed what tactics to take and which countries might be more successful for doing business with.  This week, I decided to investigate further and examine what the thought process was for Virgin Mobile who recently joined the Chilean market, as their first South American investment.

In this insightful interview: http://www.youtube.com/watch?v=F0PcAoMq4NQ

Famous CEO, Richard Branson, discusses why he and his associates chose to bring his company, Virgin Mobile, to Chile.  Branson explains that the main reason Virgin decides to join a market is when the existing companies are not doing a good job and they see that there are areas that can be improved upon.  He mentions a more specific group within the Chilean market that he chose to focus on was the youth of the nation.  Virgin Mobile noticed that many young Chileans were not happy with their current cell phone and the company aimed to provide a better service and product.  The specific point that Branson notes is that young people were being penalized by their cell phone carriers for using social media (i.e. Facebook, twitter).  Thus, it is evident that Virgin Mobile has used this knowledge when making marketing decisions in Chile.  In the International Marketing book, the many ways to enter a foreign market are identified and discussed.  Virgin Mobile chose to create a strategic alliance with an existing phone company and serve as a mobile virtual network operator with an agreement with Movistar.  It is seems to have been the right decision to enter Chile as the first country in South America, as expansion has already begun within the continent.  Virgin Mobile Colombia was started the year after Chile and Virgin Mobile Mexico and Virgin Mobile Brazil are up next.  Richard Branson is often seen as an innovative businessman and thus it is interesting to see what marketing decisions he and his company would make when entering a Latino market for the first time.     

Argentina Street Markets

I spent the past week in Buenos Aires, Argentina and examined the marketing principles applied by a variety of street vendors.  We spent much of the weekend at many artisan markets including La Recoleta, La Boca, and San Telmo.  These markets went on and on with hundreds of different vendors.  The products varied dramatically with everything from leather purses to steel crafted animals.  The majority of the stands that we looked at carried only home made products by the sellers themselves.  As I watched hundreds of artists try to make a living by receiving money for their hand crafted passions, I began to wonder what their pricing process was like.  How does one calculate a price that a consumer would pay when they believe that their work is priceless?  I started to put myself in the mind of one of these artisans, but tried to use my marketing knowledge to create the best results.  These street vendors must at some point consider the "Law of Demand".  This states that consumers purchase more products at a lower price than at a higher price.  They must also take into account their competitors, as I noticed that many of the products appeared similar throughout many different stands.  The artists should also consider their internal influences as they have the fixed costs of building rentals and staff, but have many variable costs as well, mainly raw materials.  Although the operations are small and may seem simple, the price that the vendor determines could make or break their career.  There is also a pricing battle with the consumer that comes into play.  One must know when to lower their price to make a sale  or when to stay put as to gain the largest profit.  When we tried to bargain with one purse salesman, he would barely decrease his price.  He ended up going down 10 Argentinian pesos, which was not enough for us to make a purchase.  Another tried to stay true to his price, as we attempted to get a 50 peso discount.  As we walked away, he conceded and ended up reducing the price and making a sale.  This complex method of pricing proves interesting, as I will never know which purse salesman made the better decision and ended up doing better. 

Party Promotion Positioning

This week, I would like to examine the profession of Club Promotion and specifically what marketing tactics are used in Chile.  One party promotion company that I have seen a lot in my short time here is "Saint Jueves".  They have elevated to become one of the top party promoters in Viña/Valpo and function by throwing one of their trademarked events in a different discoteca each week.  Saint Jueves has distinguished themselves with a large online presence and product quality to strategically position themselves in the mind of the consumer.  I believe that the type of positioning that they have utilized most is Attribute/Benefit Positioning, which has differentiated the company from competitors.  Each week, Saint Jueves, uses social media, and invites over 14,000 people to their event on Facebook.  Thus, it is evident, that they have put in much effort into creating a large client base to draw in consumers from.  When it comes to the specifics of one of their events, they offer a variety of services, that reveal the benefits to the potential customer.  This week, they celebrate their one year anniversary, and do so by providing free drinks, free food, free games, and free entertainment.  Each one being an attractive benefit that sets their company apart, as no other club promoter presents such enticing options.                  They have also worked to create a memorable logo to represent their brand and linger in the mind of the customer.  At every party, they offer their iconic "bucket", which carries a huge "Saint Jueves" sticker. This pushes the customer to identify and remember who is throwing the wild carrete that they are attending.  Another impressive tactic that I have noticed is the effort they put into making the intercambio feel important.  They call us "invitados especiales" and offer us special discounts.  This could be because they think we are fun or they know that we are more willing to spend more money on drinks.  Either way, many of their marketing tactics in party promotion have positioned themselves as a positive brand in my mind and the minds of many others.