USA Gymnastics Sues Insurers for Refusing to Cover Legal Costs

 This Wall Street article talks about the legal battle that the non-profit organization USA Gymnastics is now fighting after its team doctor, Larry Nassar was accused of molesting at least 250 girls over the years. As a result, the USA Olympics is suing "a dozen insurers" because they have refused to pay for the lawsuits that many gymnasts have filed. Therefore, they are asking the judge to "better explain" the limits of their contract. At the same time, the organization filed for bankruptcy last December while at the same time being subject to the investigations that law enforcement might do regarding the lawsuits that even former Olympic Gymnastics have filed accusing the organization of not protecting them from the doctor. As a result, Nassar "pleaded guilty in 2017 to state sexual-abuse charges and federal child-pornography counts" and will be in prison for the rest of his life. According to WSJ, he volunteered for the organization for more than three decades and some girls have made accusations of sexual assault that "date back to the mid-1990s". 

According to the lawsuit, the insurance covers cost related to "state and federal investigations, internal and independent investigations, criminal investigations, crisis management, and the U.S. Olympic Committee’s decertification process". The implications of the lawsuit also affect their participation on the Olympic Games as the  U.S. Olympic Committee has started the process of revoking the organization's status of "sport’s national governing body". Therefore, they need to create a new governing body in order to participate in this year's Olympic Games once this process is completed. 
Also, as a result of the bankruptcy guidelines, the organization will probably invite anyone that might have claims to express them during a certain time frame, including claims not related to Nassar. At the same time, they can use their asset's money and "set deadlines for victims to come forward". All of these under the supervision of a federal judge. 
I think this article was very interesting because of its relevance to Marketing and brand image. This is the perfect example of how the lack of internal control resulted in the total damage of the USA Olympics brand image that is most likely to result in the end of the organization. At the same time, the organization is now receiving a high amount of negative publicity that is impossible to control. Not to mention that they also need to use publicity to invite possible victims to declare their stories. 
On the other hand, this scandal also affects their previous achievements and the status that they were able to build over the years. They are going to lose participation in the Olympic Games, and parents are not going to let their girls be part of the organization. It is important to highlight that this kind of scandals can happen to any organization, even if it is non-profit, and that the recovery of the reputation is extremely difficult because it does not deal with the person that was at fault only but also with their internal control and their trustiness.
Link to article: https://www.wsj.com/articles/usa-gymnastics-sues-insurers-for-refusing-to-cover-legal-costs-11549486473?mod=searchresults&page=1&pos=6
by: Adriana Chacon 

Lululemon Chief: ‘No Need’ to Discount $100 Yoga Pants

Lululemon is a Canadian brand that became known for its expensive workout clothes. The brand charges $100 for a pair of yoga pants, which is definitely a high price for most of the people. As a result of their big success, may cheaper alternatives have arisen, however, the brand’s Chief Executive Calvin Mc Donald does not see the “need” to lower its price, offer discounts or sell their products in any other store or website besides their own.

He believes that the brand has just started growing and is now focused on creating new products “from deodorant to sneakers”. At the same time, he would like to make the brand known by more people and expand to European and Chinese markets because he thinks that the brand is much more than just an “athleisure trend”, instead, it is a bigger trend. Also, the company has had some legal issues since the two previous CEO’s have been accused of improper conduct towards women, so McDonald made sure that he understood the culture of the brand before joining.

The success of Lululemon can be attributed to its distinctive “high-end attire” which is made of “unique fabrics” thanks to a patented component that makes them softer and that promises to offer excellent performance.  Even though its most famous products are the leggings, they also sell sports bras, outerwear, and work pants. The company also uses a marketing strategy based on “ambassadors” that wear their clothes and promote them at events and unlike other brands, they only sell their products through their stores and website. McDonald states that he focuses on innovation and experiences instead of founding discounts.

They are also testing stores that have a food and juice bar, yoga and meditation studios as well as a loyalty program. However, according to Bernstein, the brand is still not known by many people here in the U.S. Their competitors are Nike, Under Armour, Athleta and Victoria Secrets. Even though the company has been experiencing growth in their fiscal year reports, some analysts argue that this would not be sustainable if the brand does not become “more accessible”. Similarly, some shoppers believe that their product is too expensive for what it is even though they are the most famous among women that have higher incomes.

This article was the most interesting of all the articles that I have read during this project. It mainly focuses on the approach that Lululemon has taken on its price strategy since they decided not to offer discounts as many other brands. Instead, they believe that their brand image should remain exclusive and available only for those willing to spend that much money on high-quality sportswear. This is also the reason why they decided to only sell their products in their stores. However, I found interesting that they want to incorporate other kinds of products such as deodorants because I wonder how much it would cost and if people would be willing to pay as much for it. I also think that expanding to the international market could be risky because they are not even as known in the U.S. as other brands and also because of their “exclusivity” that might not sell in other countries as it does here. It is also amazing that they have been able to continue growing their sales after the scandals that they had with their two previous CEO’s. It makes me think on how they were able to maintain their brand reputation especially because their brand that mostly sells to women and these CEO’s were accused of sexual harassment and body shaming.  Finally, I would see if McDonald’s approach is going to work or if the analysts’ prediction turns out to be right.

Link to article: https://www.wsj.com/articles/lululemon-chief-no-need-to-discount-100-yoga-pants-11556035545?mod=searchresults&page=9&pos=10

By: Adriana Chacon

Tech-Savvy Critics Aim to Upgrade the Tampon Dispenser

This article talks about how the Tampon Dispenser machine has remained the same since many years ago. During the 70s many dispenser machines became popular since they are very convenient and accessible. As time has passed they have been advancing as new technologies develop, including card and mobile payment as an option and allowing customers to even customize their soda flavors. However, the only machines that still exist but have not been subject to innovation are the sanitary napkin and tampon dispensers. Many of the machines that we still see in bathrooms still require quarters, get jammed or are empty, leaving women without the comfort of being able to access to the basic sanitary items. Some improvement has been made but is still far away from being considered modern.

                Some advocates have been working on campaigns for free access to tampons and pads “arguing that they are as necessary to women’s hygiene as toilet paper or soap”. Also, these items were already approved as a free-necessity item that must be provided by schools in states like California a New York, which had stressed the necessity for some changes in the design of their machine. For example, Hospeco, a company that have been manufacturing and selling metal-box dispensers for over 40 years have stated that they are now implementing a “push-button with a programmed delay of 8 to 12 seconds to avoid product hoarding in places like public schools”.

                Other people still compare this kind of improvements to other products like air fresher that can speak and let the operator know that it is running out. Some of the reasons people argue that pad and tampons machines have been forgotten is because they are “behind the scenes” meaning that not everyone sees them and also because of “period stigma”. Another important reason might be the lack of women in technology.

                Surprisingly, there is a company that is currently developing a new tampon dispenser machine called Hooha that is Wi-Fi powered and “distributes tampons when users text a phone number found on the machine”. Also, “the system works out its own jams and keeps track of supply levels”. Alexandra Loffredo, who is currently working on this product’s marketing campaign claims that “There’s a lack of women sitting at a table coming up with ideas and innovating” in this matter.

The article highlights the product section of the marketing strategy as it shows how Hoola is developing a new product based on an older product that is very much outdated. Clearly, Hospeco is maybe not a company characterized by a culture of innovation so that is why other companies have has to develop a new and modern dispenser. Thus, it seems that Hooha is taking a great step towards analyzing what the consumer needs are and how to provide a product that will be attractive and useful. At the same time, their marketing department plans to partner up with a leading tampon company so they can offer their products, which is an excellent idea as they will be entering the market with the support of a well-known and trusted Tampon company.

Link to article:  https://www.wsj.com/articles/tampon-dispensers-lack-that-high-tech-wow-factor-11556800479?mod=searchresults&page=1&pos=5

By: Adriana Chacon 

XPO Logistics Earnings Slide in Weaker Freight Market

This article talks about Amazon’s new logistic move towards taking control of its own transportation system. The company is trying to lower the costs of transportation to ensure that they are able to maintain their one-day shipping offer. As a result, freight broker companies, like XPO Logistics have been very concerned because this means that they would have to compete with the giant e-commerce leader. 

Amazon launched an online freight brokerage platform that aims to connect shippers with available trucks that they are now testing in five states of the United States. This move makes Amazon the latest business to invest in the shipping business but with a more technological view since they plan on digitizing the inefficient business of booking freight transport. Other companies that have also invested in logistics similar to what Amazon is doing are now experiencing exponential growth in their profits, so Amazon knows that they are investing in a very profitable area. For example, “Uber Freight’s online platform generated $359 million in gross freight” according to the Wall Street Journal.

The e-commerce company is developing a platform in which they want to offer the best shipping rates for its customers, who can also get instant rate quotes online. Also, they are taking advantage of their already existing freight network and their relationship with truck companies in order to negotiate better prices.  Subsequently, they opened their platform to carriers and truck companies, creating a win-win relationship in which truck companies get more customers and Amazon gets to have a bigger network.

Amazon has also been decreasing its use of third-party logistics providers as it develops control over its distribution networks. These third party companies that used to work with Amazon have been experiencing an enormous loss, while others already know its power and are working carefully to make sure that they do not rely on this customer only.

The article is very interesting as Amazon is one of the leader of Supply Chain management along with companies like Walmart. I think this big move is very smart and something that we might expect from a company as powerful as Amazon. This is a perfect example of how to improve an important aspect of marketing, which is transportation. As we have learned, storing is costly, especially for companies like Amazon that carry a wide range of products. However, now they are going to be able to rotate their warehouse inventory much faster. Also, Amazon will be able to offer a faster, more convenient and effective one-day shipping service to its customers at an affordable price, and competitors will have a hard time finding a way to compete with this. Therefore, this move not only improves its operations but also secures its place as the leader of the e-commerce market.

Link to article: https://www.wsj.com/articles/xpo-logistics-earnings-slide-in-weaker-freight-market-11556753330 

By: Adriana Chacon

Yogurt Sales Sour as Options Proliferate

This Wall Street Journal article explains the changes that have been happening in the yogurt market. Initially, traditional yogurts were very successful, however, sales have been decreasing as they are being replaced by healthier choices. The brands that have been in the market for years are now suffering loss because they no longer lead the market and now have to compete with store-brand versions and many more alternatives. This phenomenon has also left many customers confused because there are too many options that make them feel overwhelmed when choosing.

The brand Chobani is the pioneer of this movement since it created a more natural, healthy and aesthetic product that became very successful and was even able to attract the traditional yogurt’s customers. As a result, many other companies followed the same tendency of offering a healthier product. Some other variations have emerged as well, such as non-diary and plant-based yogurts like almond and coconut milk based yogurts and Icelandic “Skyr” yogurts, which has a thicker texture and less sugar. Therefore, even though traditional yogurt sales are decreasing exponentially, innovative versions are experiencing growth in their sales.

          The traditional companies like General Mills (producer of Yoplait) and Danone have been working to develop a new product with a different branding, an example is Oui, the new glass-jar French yogurt introduced by Yoplait. Also, they have been rebranding the high-sugar ones so they can market those kinds of yogurt as dessert, as Danone did with their full-fat Oikos yogurt.

To conclude, this article shows how the traditional yogurt is at the end of the product life cycle, on the sales decline phase while the newer versions are on the market growth phase. As a result, companies are developing strategies to develop new products based on the interests of the consumers. It also highlights the power of substitutes as some consumers prefer to buy the cheaper store-brand versions. Promotion is also very important because innovative brands have been able to turn long-term traditional yogurt consumers into their clients by using a refreshed and healthier branding that matches their target market and takes advantage of the new organic/healthier trend that is happening right now.

Link to article: https://www.wsj.com/articles/yogurt-sales-sour-as-options-proliferate-11554811200?mod=searchresults&page=1&pos=9

By: Adriana Chacon 

Small Cosmetics Brands Make Over the Beauty Market by Targeting Millennials

Small cosmetic brands are taking a new approach to their marketing strategy that seems to be rapidly increasing their growth in the market by more than 20%. They are focusing on attracting millennials by promoting their products through influencers and social media. Their products are designed to attract this very specific niche because they know that millennial buyers are the ones who buy the most skincare products these days. Their products are often organic and personalized, and their branding is simple and modern. They also rely on online sales even though some have opened one or two physical stores. 

This strategy has been successful because these companies have shown how they understand their markets and customers despite being new and having less money to invest than bigger brands. In fact, global brands are even losing share because they are being replaced for the new "indie" brands. However, this big change is not only happening in the skincare industry, but also in the makeup industry, which had been led by giant corporations in the past and now is losing customers to smaller companies that are growing faster than them. As a result, big companies decided to keep their leadership in the market by buying stakes in small brands. 

The article describes the cases of three successful indie brands, True Botanicals, Glossier and The Ordinary, which now share their stakes with Unilever and Estee Lauder respectively. The decision of their owners of letting big companies acquire part of their stakes have brought negative and positive consequences. On one hand, some customers feel that they might stop using their natural ingredients and start using harmful chemicals that are known to be used by bigger brands. However, both the owner and representatives from Unilever have expressed that they plan on maintaining the brand's core value. On the other hand, the owners of small brands think that their corporate expertise is what they need to keep growing. 

To conclude, this article is very much related to the content that we have learned in the Principles of Marketing class. We can see how the indie brand really studied their market and develop a product based on the understanding that they got about their client’s needs, interests, and likes. Their marketing strategy was also created according to their target market, and that is how they got to attract so many customers in a short period of time. Also, their products successfully passed the Market Introduction phase of the Product Life Cycle and are now entering the Market Growth phase. On the other hand, the big brands are trying to acquire these indie brands under their “umbrella” so they can still be the leaders.

Link to article: https://www.wsj.com/articles/small-cosmetics-brands-make-over-the-beauty-market-by-targeting-millennials-11556296365

Written by: Adriana Chacon