Posts con el tag ‘Collaborative Marketing’

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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Little did I know…

The end of the academic year is a good time to look back on the impact we’ve had on our students. How have they experienced the impact of marketing on society? What have they learned? Theories, paradigms,….?

But forget all that! Instead, I’d like to use the STUDENT SERIES format to see what insights the students will share and what our true impact has been. This year, I’ve been truly fascinated by the story of Carmen Friedinger: age 22, coming from the Vienna University of Economics and Business for a semester abroad at ESADE, and seeking a career in marketing. If you can’t enrol in my subject, don’t worry: here’s an exciting trailer, brought to you by another student.

“I could start this blog post by pretending that it was my vast interest in the topic of social marketing that made me choose this class. But I think it will be more interesting to read the truth, so here you go: the main reason I decided to take this class was because of the great reviews some students from my home university in Vienna gave the professor, and the fact that they said how fun and easy it was to come up with a plan for collaboration between an NGO and Spanish companies. Little did I know! Truth be told – it did not actually turn out to be so easy for my group and me. Of course, the professor and the guest speakers were all very helpful and open to answering any of our questions and doubts – of which we had many! However, instead of just “finding a company to collaborate with and making a nice and easy project” we ended up spending hours and hours of discussion and careful consideration together. We found it very hard to come up with a plan for how to tell an NGO that seems so confident in its own appearance that what they need most of all is awareness of the hospital itself before they can properly promote their organisation and raise funds. We used our briefings with the guest speakers and the professor to figure out a way to let the NGO know that their image is not as great as they think it is – but without insulting them, as our goal was to win them over. BUT: instead of getting a clearer view of how to solve this problem, every one of them told us their personal opinion, which differed greatly from each other, making it harder for us to find a way to fulfil all their requirements. This point right here is what made this class a real challenge for us, and I think it is also what helped me most to improve my consulting skills, because in real life you will face similar situations. Moreover, as the class was taught in Spanish and our team was made up of students from all different universities (ESADE, Austin, Indiana, Paris and Vienna) it was very interesting to see how differently we all approached this project. Of course, the language barrier led to a couple funny moments, too. Overall, I think this class taught me a lot about how consulting projects take place in real life and how to overcome the hurdles of being in a very diverse project team.”

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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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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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Change thyself

“Everyone thinks of changing the world, but no one thinks of changing himself.” This Leo Tolstoy quote was used in a recent McKinsey Quarterly article suggestively titled “Change leader, change thyself”.

Management scholars are forever researching companies that are changing the world or leading change towards a better world. Porter’s shared value strategies, JWT’s circular economy, Kotler’s marketing 3.0, Fordham University’s positive marketing…

On this topic, Prof. Mònica Casabayó and I have shared many experiences, cases and concerns. We have very different viewpoints, as is fitting for a plural school like ESADE. But in our research we have studied whether managers are generating change simply because they wish to change themselves. Business professionals are the same people who buy things, who have a family and a home, and who are concerned about the degeneration of our model and about unsustainability.

All this is covered in the new book Soul Marketing. We have asked various professionals who collaborate with ESADE to tell us about cases of business leaders who are changing the world by first changing themselves. They’re doing this by appealing to their stakeholders and creating value for them. Danone, Ecoembes, Roll’eat and Casa Camper are just some of the cases in which we have seen this sort of change.

Drops fill the ocean. We hope that the book presentation on 4th December, hosted by the ESADE Alumni Marketing Club, will generate minor impacts that help to bring about many individual minor changes.

 

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Marketing that isn’t marketing

When marketing works, it finds trends that provide opportunities for brands. The resulting innovation in marketing means looking for the “next big thing”. Social marketing puts social customers’ needs on the same level as those of the company, resulting in win-win arrangements with society.

Trendwatching fascinates its audience by detecting the novelties that accompany consumers’ insatiable desire to try new things — also known as Newism. The following are some of the innovations linked to social-marketing trends that were highlighted in the most recent Trendwatching report:

-          Consumers’ changing mobile attitudes. In the Philippines, fast-food players McDonald’s and Coca-Cola have launched BFF Timeout. This app rewards users for putting away their smartphones while they are hanging out with friends. Results are posted publicly on a leaderboard.

-          Consumers expect brands to contribute to social progress. This year, a Unilever-owned brand of cleaning products called Cif launched Clean Romania, an initiative to remove racist graffiti. Using a specific app, users can upload photos of racist graffiti. The brand then dispatches clean-up teams and posts “before” and “after” photos online.

-          Brands are making requests of their consumers. During the launch of The Walking Dead, Fox Portugal gave away promotional merchandise in exchange for donated blood. The initiative was a pop-up store organised in collaboration with the local blood bank.

-          Brands are prioritising customer needs. The Brazilian suncare brand Sol de Janeiro trained 450 tattoo artists to interpret skin lesions and the basic signs of skin cancer. They explain the symptoms to their customers and advise them to see a dermatologist for a full diagnosis.

-          Inefficiencies in our current systems are being targeted. PareUp launched a mobile app that enables restaurants and grocery stores to offer consumers food would otherwise be thrown away. Discounted prices give consumers more for less and help to reduce food waste, thereby creating win-win situations.

Does it look like marketing? Does it work? Does it create social value?

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Conscious consumerism: shop by cause


The decision tree is an extremely important concept in marketing today. It allows us to visualise how customers mentally structure the decision-making process for every choice they make, from what snack to eat to which cardiologist to visit. This consumer insight has given rise to shopper marketing and category management: stores and websites are being adapted to make the process easy for customers, so that they find what they’re looking for quickly and spend more money.

Today, the decision tree is powering an exciting trend at the intersection of marketing and society: the “shop by cause” concept. Tell me what causes you’re interested in, and I’ll offer solutions tailored to each one.

Some organisations have just started to develop this idea. The American Society for the Prevention of Cruelty to Animals (ASPCA) offers “anti-cruelty” and “anti-puppy mill” gadgets. Building Lives Up (BLU) has taken the model to a more sophisticated level by offering customers non-traditional ways to help charity organisations raise cash: a supermarket featuring products related to 32 very different causes.

“Shop by cause” is becoming professionalised at private companies. Philosophy, a line of cosmetics featured on “Oprah’s Favorite Things”, offers an innovative shopping menu: “shop by category” (hair care, shower gel, etc.), “shop by scent” (fruits, blooms, tropical, etc.) and “shop by cause” (women’s cancer, Rainforest Foundation, WhyHunger, etc.).

Toms Shoes has taken it a step further with its “One for One” model. Going beyond this innovative cause-related marketing approach, last November the company launched Toms Marketplace. At this new website, people can shop by the causes they care about as well as by product type. The site offers a different shopping menu for each of the 34 brands sold on the Marketplace, but shoppers can also browse by region or by social cause. The causes – animals, children, education, health, job creation, nutrition, social justice, water, women – were defined using insights obtained from the decision tree.

Aware that the appetite for conscious consumerism is on the rise, Toms Marketplace offers a different way to shop. Private companies are optimising their marketing; NGOs ought to follow their lead.

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Freedom from social guilt through indulgences

Guilt has always been used as an emotional driver in marketing. Guilt motivates action in so many different spheres:  consumption habits, personal and health-related routines, and even the decision to take out an insurance policy to protect one’s family. In the short term, it works… until you start reflecting on it some time later.

Now that Europe appears to be emerging from a new tunnel into economic confidence, we’re faced with a ‘new normal’ situation. Consumers have already decided, as a matter of mental hygiene, to change their consumption habits. Companies, meanwhile, are starting to use new marketing approaches. And many companies are focusing on frugal indulgence: spending less while still relieving stress through consumption. It’s a mutation of L’Oréal’s “Because I’m Worth It” campaign.

In previous recessions, indulgences were characterised by various differential attributes: they focused on basic needs, overt snob appeal or high intrinsic quality. In 2013, however, European consumers seem to need social-esteem-building indulgences that free them from their feelings of social guilt.

Companies are already generating solutions that maximise the ‘social-guilt-free’ attribute. Kellogg’s makes cereals from rice grown by farmers in the region; Carrefour sells vegetables grown locally by a farmer identified by first and last name… By buying these products, I am supporting my local community and reducing my environmental footprint. I don’t need products that are perfect in terms of sustainability or social responsibility; I just want something that immediately reduces my feelings of guilt.

Trendwatching dedicated its latest trend briefing to guilt-free consumption, but let’s expand this notion to include social aspects. This is a great opportunity for the NGO: I’m sensitive, my prayers that things not get any worse have worked, and now I want to indulge in things that instantly assuage my feelings of guilt. How about a donation that can turn a homeless person’s life around? It takes just three minutes. Now I feel better.

 

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Are you ready to start caring about sharing?

The Social Network has evolved into the Services Network – this was the revolutionary idea, based on the concept of collaborative consumption, presented by Lauren Anderson at ESADE this week.

What is collaborative consumption? All kind of  economic arrangements in which participants share access to products or services, rather than having individual ownership. Think about sharing, swapping or selling second-hand goods, and that often is enabled by technology and peer communities.

Elsewhere it’s described as a paradigm shift (a term used by ESADE); a time to start caring about sharing, according to the Economist; one of the 10 Ideas that Will Change the World, for Time; or in the words of Rachel Bostman, the currency of the new economy.    

At the Observatorio Consumo we spend our time analyzing insights we get from Spanish consumers. And we are seeing two groups of consumers. Firstly a niche  with an advocacy attitude, they even prefer talking about peers, rather than consumers. People disposed to buy to change the world, with a buycott attitude (proactive purchasing decisions to buy products linked to specific values) that research shows never last.

The big segment are those non-activist consumers, looking for convenience, excited by becoming co-creator  of services, and attracted by the concept of a sharing lifestyle. For a start, there’s Generation Y – a generation disenchanted with status conferred by ownership and purchasing power, who simply want access to and the use of products.

So who’s who in the collaborative consumption panorama?

At our event we met some local startups with interesting ideas. There is Social Eaters who are bringing strangers together over a meal – users meet online and eat offline, sharing costs in the process. Another is Trip4real which gives peers the unique chance to share a Barça match with a real supporter, full service, beers and flags included. My personal favourite was Bla Bla Car – a great idea that makes hitch-hiking look Stone Age, and uses pure emotional branding through the main benefit offered by sharing your car.

And then Lauren Anderson brought out the big guns with the idea of Services Network. And talked about TaskRabbit, a company based on the principle that you can outsource your daily chores to your neighbours, who bid for the job against its difficulty, time commitment, effort and distance. May be Lauren is right. We are beginning to see social networks evolve into service networks and the path is there for a real paradigm shift.

How about you? Are you ready to start caring about sharing?

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