Archivo de la categoria ‘Private Sector’

From Goodvertising to Meaningful Brands

It’s a fact: people value brands less and less. Ninety-one percent of Spaniards say that they could do without brands altogether. The Meaningful Brands study, conducted since 2008 by the Havas Group, shows that a majority of consumers wouldn’t mind if practically all brands disappeared.

One proposed solution is to create “advertising for people”, as argued by Thomas Kolster, who coined the term goodvertising. This is the concept of sustainable communication, which proposes that advertising should be used to improve the planet and educate society.

Just advertising? Communication as a transformative element, as we saw in the last Super Bowl, where ten spots were clearly oriented toward the social value of brands? Or communication as the tip of the marketing iceberg? Let’s review the question of whether brands need more than advertising. Here are two examples I love (two steps forward):

-          Mattel’s iconic Barbie doll is now available in three more realistic body types – tall, curvy and petite – and seven different skin tones. It’s an attempt to make the doll relevant and beloved again. More dolls, more ways for girls to use their imagination with a Barbie. Doing good and making a positive change in people’s lives.

 

-          Pontevedra has been recognised by numerous international bodies – the Urban Institute of Beijing, the prestigious Centre for Active Design, the UN Habitat programme, etc. – for a mobility design that increases the livability of this small Spanish city. The main marketing contribution is Metrominuto, a pedestrian map that indicates walking distances, which has now been introduced in more than 30 cities around the world.

In the words of Miguel Anxo Fernández Lores, the mayor of Pontevedra: “Sometimes I feel like a preacher.” Or, as implied by the Soul Marketing concept, when managers embrace their role as citizen-consumers, learn to grasp contradictions and understand the need to enhance positive effects on society, they can create projects that end up generating solutions and advertising that is valuable to people.

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The Sharing Economy: Neoliberalism on Steroids

My latest contribution to the ESADE Economic Report, on the topic of the sharing economy, once again focuses on the dilemma that always arises in relation to this concept: Is it positive or negative for society? Or, as Martin put it in the title of his well-known article: “The sharing economy: a pathway to sustainability or a nightmarish form of neoliberal capitalism?”. The sharing economy has been described as a post-crisis antidote to materialism and the excesses of consumption, but also as “neoliberalism on steroids”.

It’s a model that is perpetually associated with paradoxes. Besides genuinely collaborative, community-based, not-for-profit platforms that offer shared assets in exchange for no money, it also encompasses multinational enterprises that are truly motivated by profits. This paradox is derived from our present-day culture, which is dominated by economic imperatives but also clamours for more cooperative modes of action.

To understand this paradox, we propose using the framework proposed by Tsing. What we’re seeing is not a coherent set of synchronised economic practices, but rather a set of disjointed actions better described as “the continual emergence of new capitalist niches, cultures and forms of agency’ rather than any ‘capitalist monolith”.

According to McKinsey, the sharing economy is a business model that is here to stay. It’s an opportunity for companies that know how to work in this disjointed environment, as the Daimler Group has been trying to do with its Car2Go car-sharing service and its mobility platform Moovel. Or, as Tim O’Reilly wrote in The Economist, “The idea of renting from a person rather than a faceless company will survive, even if the early idealism of the sharing economy does not.” The sharing economy, therefore, is not an alternative with a discernible ideology but a reality validated by consumers who have ultimately decided that they are willing to share in order to consume less.

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Cause Marketing: Love it or Hate it

Causegood.com estimates that cause marketing has grown in the past 15 years from $700 million to $2 billion. Cause marketing is growing rapidly and for a good reason: it simply works. It is a business strategy – not just an evolution of philanthropy – that strongly influences purchasing decisions.

It works by providing a growing funding stream for NGOs, reaching $1.9 billion in funds in 2015 in North America and developing a new donor base of millennials who want to support causes through the brands they patronise.

It works, evolves and innovates, as seen in some 2015-2016 cases:

-       Toms Shoes evolved from the “one-for-one concept” to “One Day Without Shoes”: using the Instagram platform where for every photo of bare feet that was tagged they gave a new pair of shoes to a child in need.

-       Doritos with the “It Gets Better” project: For every $10 donated, donors received a bag of rainbow chips. This is a new development called causejacking: when a brand rides the wave of a cause’s popularity.

-       Partnership between Subway and Coca-Cola: For every bottle of Dasani water sold in 2,200 participating US Subways, Coca-Cola donates 30 cents. A total of $125,000 has been donated to World Vision, the NGO that is the largest non-governmental supplier of clean water around the world.

-       Nivea India’s “Mom’s Touch” partnered with Aseema Charitable Trust, an organisation dedicated to providing quality education to children from marginalised communities.

-       Budweiser’s “Give a Damn”, broadcasted during the 2016 Super Bowl. Helen Mirren addressed drunk driving in a wonderfully witty spot in which the only commercial reference was a bottle and a mention of its cold temperature.

Meanwhile, tons of difficulties have been foretold from the NGO sector. A false solidarity in which the real winner is the for-profit company. An unhealthy lifelong dependence for these campaigns. A consumer who likes to maintain this altruistic vein through consumption practices. Consumers’ scepticism towards these campaigns. And thousands of ethical and mental barriers.

Now that Marmite suffers the consequences of the Brexit, let’s benchmark their claim. Cause marketing: do you love it or hate it?

 

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Purpose brands: standing for something

In subjects like Business in Society, we think about what the truth is and the interrelationships between – and the future of – concepts such as CSR and social marketing. The eternal debate about the virtue of sales gains from CSR. Until once again managers find an alternative route to avoid arguing about organisations with a soul (it’s marketing that has a soul!). Let’s give the consumer a more credible value: brands have a soul; brands are becoming purpose-oriented.

When many companies have to fight to turn a profit while competing in price, new leaders emerge, such as Indra Nooyi of PepsiCo, the guest speaker at the recent ESADE Alumni Annual Conference. When digital media generate real-time conversations about companies’ activities and new ways for consumers to access information, consumers expect transparency, authenticity and higher standards of ethical conduct.

Philips has its own index to measure the number of lives the company improves each year, calculated using an algorithm that looks at demand for products directly related to health and how many people those products have affected. Today, Philips is a purpose brand: this KPI explains who they are as a company, their courage to stand for something. This is the only benefit they bring to the world, beyond the proposal of Milton Friedman. And like Philips, there are also the companies ranked by Radley Yeldar, for example.

These are brands that, without being perfect, bring out the enthusiasm in consumers and the talent of the millennial generation that they want to attract. Brands that offer to become part of the solution. When we talk about brands in the non-profit sector, we talk about advocacy or relief brands. But profit-oriented companies are starting to talk about creating movement brands.

Do they work? Take a look at the three following purposes. If you can identify the brands that have these purposes, you’ll know it works.

  • To empower creative exploration and self-expression.
  • To bring inspiration and innovation to every athlete in the world (everybody is an athlete).
  • To help women reconsider and redefine what beauty is.

Want more? Attend the ESADE Alumni conference on purpose brands in early 2017.

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A little bit of content

“A Little Bit of Soul” was the title of a talk I gave at RCD Espanyol when the club was looking for Asian investors, with the subtitle “Football as a Business Platform for Asian Companies”. Here’s a reflection on the sport’s marketing appeal: professional football is the world’s most popular sport. Sixty percent of fans see football as a religion, 67% have cried at a football stadium, and 78% often bring family members to matches with them. Venues such as the new RCD Espanyol Stadium, which won the Venue of the Year Award at the 2010 Stadium Business Awards, are pure emotional retail.

My conclusion was that working in professional football entails an evolution from simple sponsorship to emotional content: rituals in the stands such as Borussia Dortmund’s Südtribüne and Iceland’s ‘Viking thunderclap’ celebration at the recent Eurocup. Pure branding – seared into the skin!

But if marketing evolves from “offerings that have value for customers, clients, partners, and society at large” – according to the AMA 2007 definition of marketing – today football is a marketing asset directed towards other stakeholders. If we analyse Chinese entrepreneurs’ incursions into European football, we notice the professionalisation of the process:

-          From the passion of the benevolent leader to the passion of the new megamillionaires. A lifelong football fan, President Xi Jinping hopes the sport will provide new challenges for China’s 1.4 billion citizens. Three of the country’s ten largest fortunes have already invested in football. Business, relationships and egos. Millionaires such as Jack Ma (Alibaba), Jia Yueting (LeEco) and Wang Jianlin (Wanda) have invested in shares of Atlético de Madrid and Manchester City, as well as Chinese teams such as the top club Guangzhou Evergrande Taobao.

-          Expanding the list of stakeholders: They buy the television rights agency Infront, headed by the nephew of Sepp Blatter; they buy shares in Jorge Mendes’s Gestifute, the largest football agency service; and they buy the television rights to the China Super League – a five-year contract worth $1.3 billion.

In China today, football is no longer a useless social hobby or an alternative to sponsoring. It provides dreams of world leadership, a multifaceted business, and content marketing for telling stories to attract and retain both customers and presidents of some republics.

 

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Big food is the new bad underdog

I was invited by Fira de Barcelona to speak at the presentation of Alimentaria 2016 to the international media. In my talk, I described the consumers and the society that the food industry will be facing in the coming years. It’s no trivial matter: Europe has the world’s most highly developed food and agriculture industry. The nine largest companies in the sector move €227 billion each year and employ 750,000 workers.

These are great times to be in the food business, as the general manager of one such company told us at Desayunos ESADE. The future will be built on three main market segments:

-          Emerging countries, which are eager to consume calorie- and protein-rich diets

-          Aging baby boomers, who are looking for healthy foods associated with major changes in the way we produce food and beverages

-          Millennials, the new commanders of food, eager to discover new things

In all three cases, however, there’s a “big chill”: the unstoppable shift to fresh and refrigerated foods. Studies by Technomics and MSI have found that 87% of adults feel that fresh foods are healthier, 80% believe they are tastier, and 78% are making a strong effort to eat more fresh versus processed foods.

Fresh products versus processed food: that’s the challenge for big food producers in marketing terms. “How can we remake ourselves?” (Smuckers CEO); “Big has become bad” (ConAgra CEO); “We understand that increasing numbers of consumers are seeking authentic, genuine food experiences, and they are sceptical of the ability of large food companies to deliver them” (Campbell Soup CEO).

The idea of “processing” – from techniques of curing and salting to the modern arsenal of preservatives — arose to make sure the food we ate didn’t make us sick. Today, society fears that processed food itself is making us unhealthy.

This is a marketing challenge – “the most dynamic, disruptive and transformational time that I’ve seen in my career”, in the words of one marketing professional. Right in front of us.

 

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Better to be feared than loved

Machiavelli used both concepts, to be feared and to be loved, as alternative strategies to succeed. Nearly 500 years later, Joseph Nye coined the term soft power to reflect the loved option. And today it’s a marketing strategy.

Soft power is a term coined by Joseph Nye in 2004. The origin of the word was the concern that Nye, former US Under-Secretary of Defense, had with ways in which nations could exert power other than by coercion through force. Soft power was seen as diplomacy aimed at attracting support, creating benevolent disposition, using the power of attraction, subtle persuasion, seduction. “In individuals, soft power rests on the skills of emotional intelligence, vision and communication; in nations it rests upon culture, values and policies.”

Soft power is now a market orientation concept: it is the ability to get what you want by attracting and persuading others to adopt your goals. Heed Nye’s warning: “Soft power is a dance requiring partners.”

Given that we as a human brand, our company as a competitor, will hardly have hard power to succeed (formulas, new raw materials, better technical quality), we focus on our potential soft skills. Or maybe we could apply psychologist Peter Cooper’s statement: “a brand as being like an egg – a hard shell outside, and a soft yolk inside.” Let’s see some cases.

-       Innocent drinks are one of the best embodiments of soft power in a brand: an amiable approach, sponsoring for instance “the big knit” by paying 35 p. to Help the Aged for every woolly hat knitted for its smoothies.

-       Toyota chairman, forced to recall a staggering 8.5 million cars, apologized with “I myself, as well as Toyota, am not perfect.”

-       South Korea has increased its popularity since the ’90s thanks to the Hallyu phenomenon, “the Korean Wave”: K-pop, intense use of YouTube, and efforts to become a centre of excellence in design.

-       Barcelona competing with Rome or Paris as a tourist destination, through soft skills: people, weather, food, shopping…

So let’s think about Machiavelli advice; do you prefer to be feared or loved? Although we must acknowledge the whole quotation: “It is better to be feared than loved, if you cannot be both.” Let’s give to Caesar what is Caesar’s.

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Big players, big marketing

Is social marketing for real? We often get this question during Q&A after our sessions at ESADE, in both the BBA and Executive Education programmes. Social marketing sounds appealing – especially to managers – but is it for real?

Let’s take a look at some big players recently mentioned by Knowledge@Wharton:

-          Amy Chen wanted to put PepsiCo on the cutting edge of figuring out new business models that generate revenue while also having a social impact. She developed a plan for a social business incubator and was given one hour to pitch it to PepsiCo CEO Indra Nooyi. Thus was born Food for Good, an initiative whose mission is “to make healthy food physically and financially accessible for low-income families through sustainable, business-driven solutions”. It’s a fascinating social approach. In marketing terms, as Amy noted, “The task of selling oatmeal to someone is a lot harder than getting them to eat a bag of Doritos.”

-          On March 16, Howard Schultz launched Starbucks’s “Race Together” campaign: the company’s baristas were asked to write the words “Race Together” on customers’ cups as a way to stimulate conversations on race issues. The final result: customers were skeptical, thinking there was an ulterior motive. But, as Prof. Kenneth Shropshire said, “Starbucks is the kind of enterprise that can really have an impact in the long run.” Schultz has no intention of giving up, and will keep trying to stimulate conversations and empathy.

-          Under new CEO Steve Easterbrook, McDonald’s recently announced that its US locations would stop selling chicken raised with antibiotics, in an effort to provide safe and healthy food. Difficulties are expected; McDonald’s is still expected to be the fastest and the cheapest. But Steve Easterbrook thinks of himself as an “internal activist”, eager to change the way his company is perceived through a strategic move that has been described as smart marketing that is also beneficial to customers’ health.

As leaders and internal activists, these three CEOs are surfing the markets, thinking ahead to understand what the market wants, and not being cocky by going into a wave that could crush them. Big players, big marketing, real impact.

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Care as the best marketing strategy

We are launching a new section on this blog: the Student Series. After five years of teaching subjects on the social effects of marketing, we thought it was vital to offer different students a space to share their thoughts on the topic.

Sonia Glushkovsky is a student in the International Bachelor of Business Administration (iBBA) programme at the Schulich School of Business in Toronto, Canada, specialising in Marketing and Operations Management. She is currently studying at the ESADE Business School in Barcelona, Spain, as part of an exchange programme.

Gary Vaynerchuk once noted, ‘The best marketing strategy ever? Care.’ The Oxford Dictionary defines the verb ‘to care’ as ‘Feel concern or interest; attach importance to something’. Therefore, businesses need to be interested in ‘something’, but what? Profit?  Themselves? The answer is society, an important stakeholder for any caring business anywhere in the world.

 Of course, that ‘care’ needs to be authentic and genuine, and not simply a hollow message communicated in a marketing campaign. To achieve a win-win situation, efforts must focus on areas that are aligned with the corporate strategy. A company’s internal corporate culture (values) and daily business operations shape its image and can alter profits dramatically. Many companies have corporate social responsibility programmes and focus on ethical issues such as environmental stewardship, providing safe and equal working conditions, and supporting local charities and communities. Even Henry Ford once said, ‘A business that makes nothing but money is a poor business.’

 Not only does caring make you feel like a good citizen, it boosts your company’s image, reputation, and brand in the eyes of both your customers and the public at large. Partnering with local charities that support your values is a prime example. The intangible and tangible benefits to be gained from social marketing are unlimited, from empowering your employees in order to increase productivity and loyalty to generating free publicity in the media.

 Many companies use social marketing to differentiate themselves in the market. Coca-Cola, for instance, has partnered with the World Wildlife Fund’s campaign to protect polar bears. For animal lovers and conscientious soft-drink consumers around the world, the polar bear effort is a decisive factor when choosing between Coke and Pepsi. 

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From peer-to-peer to client-to-client

From peer-to-peer to client-to-client

Rachel Botsman (co-author of What’s Mine is Yours: The Rise of Collaborative Consumption) predicted the development of a new economic model based on peer-to-peer sharing: “It involves the re-emergence of community. […] This works because people can trust each other.” From here on, all the debates revolve around the ideology, the values, and the social-change aims of the companies, managers, developers and entrepreneurs involved in this shared economy. Four years ago, Time identified collaborative consumption as one of the 10 ideas that will change the world.

Let’s hear from the experts – those as committed as the pigs in the fable “The Chicken and the Pig”. A few days ago, Jeroen Merchiers, a fascinating executive committed to Airbnb, participated in an intimate roundtable discussion at ESADE. Jeroen fielded numerous questions regarding the fascinating value of collaborative consumption: consumption and ownership reduction, sharing instead of buying, the millennial generation’s pursuit of experiences rather than properties, a sustainable model, and so on.

But Jeroen underscored two main issues, the key factors for success in this new economic model:

  • Social media play a key role in decision-making.
  • The supplier-client relationship is evolving and disappearing. The model being developed takes the market orientation to an extreme: all parties are clients, guests and visitors. Jeroen’s company manages relationships between external parties, all of whom are clients. It’s therefore important to create value for everyone involved. The clients who pay are clients. The guests who offer me rooms are clients. With this absolute application of the win-win-win concept, the principle of “winner takes all” is fulfilled for everyone involved.

So we’ve moved from “peer-to-peer” to “everybody is a client”, or, as Kotler said ten years ago, from transactional to collaborative marketing.

 

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