The influencing of people during conversations is called word of mouth. Word of mouth is the most powerful and authentic information source for consumers because it typically involves friends viewed as trustworthy. According to a recent study, 67 percent of U.S. consumer product sales are directly based
on word-of-mouth activity among friends, family, and colleagues. The power of personal influence has prompted firms to promote positive and retard negative word of mouth. For instance, “teaser” advertising campaigns are run in advance of new-product introductions to stimulate conversations. Other techniques such as advertising slogans, music, and humor also heighten positive word of mouth. Many commercials shown during the Super Bowl, for instance, are created expressly to initiate conversations about the advertisements and featured product or service the next day. Increasingly, companies recruit and deploy people to produce buzz—popularity created by consumer word of mouth. Read the accompanying Marketing NewsNet to learn how this is done by BzzAgent. On the other hand, rumors about Kmart (snake eggs in clothing), McDonald’s (worms in hamburgers), Corona Extra beer (contaminated beer), and Snickers candy bars in Russia (a cause of diabetes) have resulted in negative word of mouth, none of which was based on fact. Overcoming or neutralizing negative word of mouth is difficult and costly. Marketers have found that supplying factual information, providing toll-free numbers for consumers to call the company, and giving appropriate product demonstrations have proven helpful. The power of word of mouth has been magnified by the Internet through online forums, chat rooms, bulletin boards, and websites. In fact, Ford uses special software to monitor online messages and find out what consumers are saying about its vehicles.
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5 comments:
Who in the enterprise is responsible for good working capital management practices?
I understand that the buck must stop somewhere and that somewhere is at the top. I think the buck should stop with the CFO. I understand the roles of the credit manager, production manager, and cash manager and they are essential to the control of the company's asset. But I feel that those manager still would have to report to the CFO and he or she would be the individual that would be called to make financial decisions. Of course, the CFO reports to the CEO.
What are the ethical issues supply chain stakeholders can have?
I think the ethical issue that company have is the point of selling items to people who cannot afford them. For instance, on BET they are pushing more and more bling items like they are the best thing since slice bread. I also saw a commercial to rent car rims. That mean that people will 3 or 4 times the amount of the value and then still will not own the property. I feel that these companies are praying on the weak and are not look out for their customers.
What is the relationship between short-term financing and working capital practices?
I think the relationship is that cousin you know but do not see that much. Short term financing is a method to companies use to get working capital but working capital is not always funded by short-financing. In many situations, short term funding is necessary to continue working progress and the company is normally in a bind. Working Capital is use to provide a company with the needs to implement their operation strategy. Therefore, if there is a mishap that is not foreseeable, the company would then use the short term funding as an option to continue with their strategy.
What are a lender’s ethical responsibilities in granting working capital loans?
I think what is ethical and what is legal could sometimes be considered the same thing but they are very much different. I think it is ethical to present an individual or company with an option to handle a projected short financing issue with a loan. However, I think it is unethical for that lender not to fully disclose all of the terms to the individual. Now, at the same time, it is up to the company or individual to conduct research to determine which option would best fit their situation. I think when it comes to leading and companies, it is 98% of the companies that do not handle their affairs properly. No one forces a company to take a high interest loan.
Can too much business put you out of business?
KISS- Keep it simple stupid.
I think that when a business is not balanced, it will not be successful. For instance, In downtown Atlanta, there is a high end party district called Buckhead. This One business owner wanted to bring the buckhead lifestyle to the suburbs. Now he had top of the line features in this restaurant but he did not have enough left over to market his business. Furthermore, he did not conduct any research about the area he selected for his business. Had he conducted any research, he would had found out that their were 3 churches and 6 supermarkets with a 3 mile radius of his business. The churches alone was the reason why he could not get a liquor license for his business which account for a huge amount of projected revenue. Then with the supermarkets, that would have suggested that the people in that area do eat out a lot. The last point was that there were not any other restaurants in his immediate area and it was that way for a reason.
Therefore, if a business is not balance, it is working at a disadvantage.
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