Journal
This is an interesting take on clothes shopping. The retailer works on a subscription basis and for US$60 they will send customers a selection of clothes. The target market is men, who don't like to waste time shopping. Benefit for the company is that they have 'loyal' customers guaranteed.
Just as the beef patties have come under scrutiny for whether or not they really have 100% beef, so the same criticism has been made about the fast food restaurant's eponymously named homes. These are located close to hospitals and are short-term residences for families wanting to live close to their children, who are ill.
Ronald McDonald Houses for Children are held up by the fast food restaurants as their contribution towards social responsibility. However their efforts have drawn criticism:
“Pop quiz: Who do you think funds the hundreds of Ronald McDonald Houses around the nation? McDonald’s right? Sort of, but not really. While McDonald’s gets 100 percent of the brand benefit from Ronald McDonald House Charities, the burger giant only provides about 20 percent of its funding globally. At the local level, it’s closer to ten percent, with some of that money coming from donation boxes at McDonald’s outlets, that is, from customers.”
Rogers (1995) identified the role of product characteristics in determining the successful diffusion of products into the market. The characteristics were: relative advantage; compatibility; complexity; trialability; observability. Meuter et al (2005, p.81) writing in the Journal of Marketing provided some of the measures that can be used to assess each of these. For example, respondents were asked about trialability using the following questionnaire items:
In contrast observability was measured in the following way:
ith innovations such as the Copenhagen wheel (see video below) it can be interesting to assess how they rate using the criteria such as the ones above.
There's an increasing number of concepts around the notions of co-production and co-creation. The following matrix helps provide a useful map to navigate between them. The matrix distinguishes between the concepts according to whether they are consumer led or producer led and whether the value being generated is standardised across customers or personalised for the individual.
The complete report from which it is taken is here:
http://personal.lse.ac.uk/samsona/cocreation_report.pdf
This Apple advert shows customers how they can use their iPads.
I think this is an interesting illustration of what happens when a marketer has to anticipate and teach customers their needs, rather than just reacting to them.
Intuition and marketing texts make the importance of customer satisfaction to marketers pretty obvious. Customer dissatisfaction is similarly considered to be obviously bad news. However, there can be instances where dissatisfaction serves a purpose and could even be engineered.
A short while ago there was some analysis undertaken by Neil Cybart about the storage that Apple provides for its smart phones. The assessment was that the 16GB memory option may make the range seem affordable to customers (a lower headline price), but the 16GB option was also supposed to encourage the realisation amongst customers that it was not adequate for their needs. As a result in year two these people would migrate to the 64GB version, which may be more than adequate for their needs.
“While some may say this discussion of purposely limiting storage capacities to help maintain profitability is anti-consumer and a money grab, observers need to look at this process as a bit more than just greed. ”
That this is not a new idea is reflected in the comment made by Oliver (1997, p9), he goes on to cite a General Motors executive who is supposed to have said that the company's corporate mission was the 'organised creation of dissatisfaction'.
“one purpose of new products is to create dissatisfaction with the prevailing style, a common strategy of automobile companies through the release of new models”
The Jax Coco example shows how a firm can position a product, that is otherwise similar to others, in such a way that it is seen as being different to competing offers. Also in this instance the packaging chosen supports the position that the firm is trying to achieve.
“Jax Coco’s concept of elevating the natural drink to one of sophistication sets the brand apart from the numerous others. Jane states, “We positioned Jax Coco coconut water as a lifestyle product. Our competition has mainly focused on the sporting sector. We expanded into art, music, and lifestyle.” The company has sponsored Elton John concerts, a charity performance by Chinese classical pianist Li Yundi, and English rugby player Chris Ashton.
Jane highlights another branding difference that sets Jax Coco apart from the rest ‒ the glass bottle. This is unique in the coconut water market, and has been geared toward premium food and beverage clientele, as it’s a sophisticated step up from a Tetra Pak. Restaurants, clubs, bars, hotels, and first class lounges of Eurostar trains stock Jax Coco’s glass bottle; in addition, retailers, Whole Foods, Amazon, Vitacost and Starbucks (Hong Kong) carry both the bottle and Tetra Pak. Cathay Pacific, awardee of Skytrax’s 2014 Airline of the Year, and Asia’s largest international carrier, has reported that it too will offer Jax Coco’s coconut water in its lounges and on selected flights.”
The video illustrates how, for watches at least, this marketer tries to develop an innovation that looks and feels as much as what people have become used to wearing.
One of the most widely commented limitations of using advertising is that viewers tend to discount the claims being made, because the advertiser has an incentive to present only the positive aspects of the product.
The following advertisement challenges this.
Unlike most adverts you'll see people actually saying that they hate the product. This is effective in a number of different ways and not least because the viewers will tend to view the marketer as being honest.
This video shows potential customers how they can spend 10x more than they would for competing products in order to buy something that is actually more challenging to use. Then again he is talking about a Leica - the only brand other than Apple I ever heard Steve Jobs mention at an Apple keynote presentation.
“10:32AM “You gotta see this in person. This is beyond the doubt, the most precise thing, and one of the most beautiful we’ve ever made. Glass on the front and back, and steel around the sides. It’s like a beautiful old Leica camera.””
This point is also picked up in the following news article:
“I love my camera. I love it even though I took terrible pictures with it for a month. I love it even though I have to adjust the aperture, worry about depth of field and annoy my family while I twiddle with its metal knobs. I love it because it makes me think: about light, colour, composition. I take fewer pictures with it than I take with my phone, but much better ones. And I’m not alone in my love for my camera. While sales of point and shoot technology continue to decline, the market for fiddly manual cameras is growing nicely.”
So some references then, to the hedonic benefits that customers can derive from this brand, and there are some more after this video.
I think the following comments from a review of the camera on DigitalSpy give some indication of its hedonic attributes:
“When you consider what you could buy for more than £5,000 plus the cost of a lens, the Leica M starts to look overpriced. Is it worth spending all that extra dough when your photos are only slightly better? Assuming, of course, you get the composition right. Perhaps not. But then this camera is not for those on a budget or the penny conscious.
Like an expensive Ferrari turns a mundane drive into something special, the Leica M brings back the satisfaction from photography mastery.
”
Going back to the comparison with Apple, DPreview.com had this to say about the Leica T (which is made from a single block of aluminium), 'This, you can't help but feel, is the kind of camera that Apple might make, if it were so inclined.' http://www.dpreview.com/previews/leica-t-typ701
Last year Ryanair went back to using a GDS (global distribution system) and struck a deal with Amadeus. Until that time Ryanair had sought to sell its tickets only via its online presence. The Amadeus will enable Ryanair to sell tickets via travel agents and to customers who would otherwise not have bought directly from the company
More about Amadeus:
“Today over 70 low fare airlines have chosen Amadeus as their distribution partner and low fare airline bookings via the Amadeus system increased by 21% during 2013. Since its introduction in 2007, Amadeus’ XML link has enabled low fare airlines to benefit from the reach and yield provided by travel agency distribution without the complexity associated with traditional ticketing processes for airlines. Amadeus’ Light Ticketing enhancements were first deployed by a low cost airline in 2013, allowing travel agents to use standard pricing workflows whilst being able to access the airline’s content from the standard neutral availability flow, modify PNRs and finalise the booking process with the creation of ticket numbers – just as they do when booking traditional flag carriers.
”
The product lifecycle concept refers to the adoption of an innovation by end-customers, since the vertical axis can be measured in terms of sales. The Pebble story is an interesting one insofar as it takes place in a world where consumers can also be investors and the firm's performance so far has shown how the two domains of fund-raising and consumer marketing can overlap. By appealing to consumers in terms of fund-raising the firm is also hoping to validate its technology and appeal in a way that focusing on private equity may not necessarily have done.
Lego has announced its annual results for 2014. The FT describes the firm as having come back from a 'near death experience' to being the largest toy company in the world. This is a corporate presentation by Connie Kalcher. She explains how Lego has sought to engage customers.
Writing in the Academy of Management Review, Clemente and Roulet (2015) deal with the 'spiral of silence', which explains how public opinion is formed. Individuals avoid expressing views publicly that they think are marginalised. As a result,
“members of a minority ae less likely to express their opinion, while members of a majority are more likely to express theirs. These dynamics lead to the emergence of a dominant opinion.”
Clemente, M., and Roulet, T. J. (2015) Public opinion as a source of deinstitutionalisation: A 'spiral of silence approach', Academy of Management Review, Vol. 40, No. 1, 96–114.
Keeping the motivation to go to the gym can be difficult. Pact uses behavioural economics to address this.
Loss aversion, the fear of losing money is 2.5 times more effective in changing behaviour than receiving a reward. One of the founders of PACT is an endocrinologist and he finds the incentive aspect of the app important, clearly having information about the benefits of exercise is not enough.
There's more about this in the following story in the FT:
http://www.ft.com/cms/s/0/11f7908c-b796-11e4-8807-00144feab7de.html#axzz3SZcSZEef
