Barack Obama has just inherited $750,000 from a long lost friend. In discussions with various friends and professionals, he’s deciding between two businesses in which to invest his money. The first business, called “Clever Sub-Routine” (CSR), is an Internet business that lets designated websites play sound messages just slightly below the audible range of most human beings…but that can still be “received” by the unaware listener. The CSR business benefit is that it delivers subliminal messages to the website visitor in a way that has shown an 80 percent increase in purchasing the website’s products and services. The second business, called “Peripheral Pet Marketing” (PPM) is an animal resources business in which PPM takes advantage of the high number of pets in most urban areas that need to get out and play. One marketing strategy is that PPM hires people’s pets at $2 an hour to wear bright colored pet sweaters that carry various explicit marketing messages that promote sales for PPM’s clients.

CSR has presented a business plan that forecasts escalating annual sales profits from $100,000 in 2010 to more than $500,000 in 2015. One of the business income models is to make the CSR monthly fees very affordable, at just $8.33 a month ($100 a year), so CSR just has to get 1,000 websites to sign up for the subliminal message in the first year. Although CSR knows there may be some ethical and legal questions (subject to lawsuits), it wants to be the first in the marketplace with this new program that makes website visitors much more likely to purchase. CSR has used the program at its own website with great results.

PPM has presented a business plan that shows $150,000 in 2010, but due to the limited number of pets, is expected to “top off” at $400,000 a year by 2012; however, since there are other animals that can be used for some time, this business is expected to be financially sound and growing for many years to come…tweet about that!

Business Development Principles

ROI (return on investment): This is a performance indicator used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by its cost; the result is expressed as a percentage or a ratio. ROI is a very popular metric because of its versatility and simplicity. That is, if an investment doesn’t have a positive ROI, or if there are other opportunities with a higher ROI, then the investment shouldn’t be undertaken.

Ethical marketing: This will care about the honesty of its messages with customers, employees, suppliers, the local community, society and the environment. Such ethical marketing will not use unfair practices to entice or coerce customers into a purchase. There is considerable evidence that doing good pays in the long run…it pays to believe in the golden rule.

 

Time to dig deeper

Now, as you might imagine, two watch-dog companies (no pun intended) have taken notice of both CSR and PPM. The consumer agency known as Searching Ethical and Timely Issues (SETI) has filed a lawsuit on behalf of consumers who purchased the various products on the “infected” CSR websites. Meanwhile, People for the Ethical Treatment of Animals (PETA) is very upset with PPM and wants them to stop treating the animals in such a cruel manner…even though the dogs love the cute sweaters…and besides, the dogs can’t read the marketing messages.

Next, CSR sends an opposite subroutine to the SETI website to cause its donors to start requesting their donations back, thus undermining the funding for its legal attack against CSR. At the same time, PPM decides to have a protest outside of PETA headquarters, where animals (stylishly dressed, of course) protest PETA’s interference with the animals’ right to make an income.

Do You Have the Answers?

1. Assuming Barack Obama needs to work in CSR, how will the ROI be?

a. The ROI will be better since he has “added value” to the business.
b. The ROI will be lower by the value of his reasonable salary.
c. The ROI will remain the same.

2. Which business has the larger market (the biggest potential to make money)?
a. CSR because it has more websites to sell to.
b. PPM because everyone can benefit from such advertising.
c. CSR because its overhead will be lower.

3. Which company has the better ethical standards in its marketing practices?
a. CSR since it only affects human beings.
b. PPM since it only affects animals.
c. Neither because, in the end, only the lawyers will win.

 

How Business Smart Are You?

What would you suggest to Barack to make CSR and PPM successful?

Click here to post your answer to this month’s question. The best entry receives a $50 gift certificate at a local restaurant!