Another example of how giving power to its consumers can turn against the company shows the recent failure of Mc Donalds twitter campaign. Mc Donalds run simultaneously two campaigns on twitter, the #MeetTheFarmers and #McDstories. Both campaigns aimed to raise awareness for the brand. #MeetTheFarmers main goal was to acknowledge the freshly produced food (SO provocative in my opinion!), while #McDstories aimed to share experiences among the Mc Donald lovers (a sense of community? sharing consumption experience etc). The campaigns though, did not work out, as twitter users started to bombard Mc Donald’s twitter dashboard with many not very flattering stories related to Mc Donalds and their consumption experiences! Actually, this initiative turned out to have the opposite result than what Mc Donalds wanted to achieve. I wont go deeper to the comments, but you can enjoy by your own in a relative article of The Daily Mail.
Yesterday during our mini case presentation we discussed the power of word-of-mouth (WOM), one of the topics to be discussed in Thursday’s lecture. But as you can all imagine, influence differ among people and it is hard for companies to reach those that have a high influence to optimally use WOM.
In 2009 two guys started the company Klout to overcome this problem. Klout measures the influence of people online. As they state on their website: “our friendships and professional connections have moved online, making influence measurable for the first time in history. When you recommend, share, and create content you impact others. Your Klout score measures that influence on a scale of 1 to 100.”
I think this article gives a good explenation of the way CEO’s have to work when it comes to brand leadership. CEO’s have a lot of different aspects to manage. One of them is Brand leadership. It’s not possible to be an expert on all the aspects, so if they know the
key elements of each aspect and more importantly, when they know the right questions to ask, CEO’s can be succesfull.
The five key tenets of brand leadership, given in the article, are the same points students learnt in the first block of this year in the class of Branding & Advertising. So I can do nothing than agree that these key tenets are important.
In my opinion, some brands are succesfull thanks to a combination of two aspects. In the Netherlands we say, a good product sells itself. And that’s true. Take as example the Iphone. It is not because of the good advertising apple became that strong, but because of the good products and everyone was talking about it. Word of mouth in combination with a good product is the key to succes in my opinion.
Inspired from the International Film Festival of Rotterdam, and mainly from the fact that I will watch a Greek movie tonight in the IFFR, I thought that this is an interesting post.
It is a nice example of how crowdfunding can contribute to culture…and academia. Alithea Avramis is a Greek-American Master student of UCLA’s honored School of Theater, Film, and Television, in California. One of her dreams was to shoot a film in Greece, and more specifically in Mani, a geographical region in Greece. Mani is a central peninsula, which extend southwards from Peloponese in southern Greece. Although Avramis was born in the US, she has a great interest for her Greek roots, and she decided to do her Master Thesis project, which actually is a short movie, in Mani. The short movie deals with the Greek temperament and way of living within the economic crisis in a small village close to Mani, which suffers from depopulation, but all these through a comedy spirit! The point is: who would fund this project?
The solution came up from crowdfunding. After she uploaded a short video on www.indiegogo.com, an international funding platform, where she explained the reason she wanted to be funded to make this film, users of the website started to fund the project. As a result, Avramis reached the amount of money needed to finance her project. The film has been already completed, since September 2011, and it is ready to travel in many film festivals around the world, while its director is entitled as a Master graduate!
I apologize to my non-Greek speaking colleagues, because the above link is from a Greek newspaper and it is only in Greek.
The music industry has clearly changed. The music industry has turned digital. That’s a fact. Traditional models do not apply anymore. Distribution rules shifted towards online channels. The main distribution of music comes in digital formats through digital environments. The industry is in need of new business models. A few years ago, Trent Reznor, the mind behind the band Nine Inch Nails, decided to change the rules. He left the big record companies, and decided to distribute the band’s albums through their website, for free! However, he managed to create strong bonds with the fans and offered exclusive offers to make the traditional formats of the album more attractive.
Another example discussed in class relates to the pricing methods followed. Radiohead, an English rock band from UK, decided to work interdependently and self-released their seventh album, In Rainbows (2007), as a digital download for which customers could set their own price. The Radiohead experiment set new standards for the industry.
Successful or not in terms of profits, these approaches showed that the future of music business is based on different dynamics between b(r)ands and consumers. All aspects of the value system have changed and new models need to be implemented.
Inspired from the Tesco case we discussed last week in class, I would like to share two videos related to Tesco and the technologies that the company pursues. One of the distinguishing approaches that made Tesco quite successful was the introduction of Online Grocery Home Shopping. The idea is pretty obvious and straightforward, they reallocate some of consumers’ effort needed (to come to the store and carry the shopping back home) to their processes (hand pick the items you want and deliver them at home). Actually, it may be strange to a lot to use such a system, but although in theory the company loses the retail impulsive behavior of some consumers, they have a very interesting channel to apply all their services, their offers, personalized to the fullest. See how it works:
In addition, we also talked about the recent developments in Tesco: Mobile Apps. Whether that is in a metro station while waiting (see an example here), or just by scanning a barcode of every item you hold, in any place, at any time:
However, when talking about these new technologies, we also have to take into consideration, who the target group is, and what may the reactions be (see for example the response of the person in 1:25). Interesting to see whether this will indeed be teh fitire of shopping!!
We’ve recently been talking a lot about using social media to promote a brand. The UnME jeans case is just one example of the various discussions we had. Many of us think Facebook is a great way to promote a brand. Companies create their own Facebook page on which they interact directly with their customers who can “like” the page.
This is the way most companies do it, but Volvo decided to do things differently. Instead of liking Volvo, they decided to like you!
Around 10,000 love notes where distributed among Volvo drivers asking them to receive a personal tribute on Facebook. All that Volvo drivers will have to do is leave their license plate number and they will receive a personal tribute. This campaign is supported by an online film showing several Volvo drivers that got a personal tribute from Volvo (it’s in Dutch but you will get the ideal).
I think that this is a nice way to not only do things differently, but also gain some attention and honor your customers.
Last Thursday we talk about Tesco and the possible extensions for Tesco Direct. During the presentation we showed you a picture of the new Tesco Homeplus system. With this system you only have to scan the QR-code from the product and after that the groceries are delivered at your home. Tesco tested this new system in the subways of South Korea, with giant stickers of products on the wall. So while waiting the grocery shopping can be done! The next video is about why Tesco introduce this new system and how it works.
Last Monday we had a discussion in class about taxes on products that were purchased online. The amount of tax and when you have to pay them or not was unclear. On the website of the Dutch customs we found that on all items bought trough the net (from companies outside of the Netherlands) there actually should be duty paid. This obviously reduces the attractiveness of online purchasing. The amounts vary, based on the product types that are imported. However, customs only check imported packages randomly. So not everyone is paying, while actually it is mandotory to declare. The customs website claims the following:
Social networking sites are a hot topic. For us marketing students, it is inevitable to think about the consequences social networking sites have for companies and consumers. In class we discussed some issues arising from the existence of these sites, like building brand communities, and also on this blog people wrote about it. Despite the popularity of this subject, there is one relatively new social networking site that is only mentioned incidentally, both in class and in the blog. Google+. When it was launched in July 2011, there were many speculations about how the new social platform would perform. Would it stand a chance to grow big next to market leader Facebook? How would the public react on another social networking site; will the users of these switch from Facebook to Google+ or have an account on both? Or should the first question posed here be: Will people actually start using Google+? These and many more questions were the subject of numerous blogs, articles and conversations.
Half a year later, not all the question marks have disappeared yet. However, what can be answered now, is how Google+ performed in the first half year of its existence. Last week, Larry Page announced the 2011 annual results for Google, including figures regarding Google+. With 90 million users, Google+ has already exceeded expectations. Compared to Facebook, with more than 800 million users, this number may not seem really impressive, but if you take in consideration that Facebook exists since 2004 and Google+ only for 6 months… The strong brand of Google and people already being familiar with social networking sites are obviously factors that play a role in the fast growing number of users of Google+, but nevertheless, Google+ had a great start.
Giving the stage to your consumers to raise their voices can be beneficial for everyone. Everyone seems happy within such a system. Companies get a lot of insight about their preferences and needs (in a rather cheap way), you get bonded to them, you get them committed. Consumers are willing to participate because they feel they belong to a community of look-a-likes and they love the freedom to raise their thoughts, feelings, concerns. Well, let me stick to that last word…concerns!
Yesterday I read in the news the failure of McDonald’s Twitter strategy. They wanted to create an interface where consumers would share their positive experiences regarding the McDonald’s restaurants. Therefore they created the account @McDStories (currently deleted). However, they neglected the fact that word-of-mouth can be also negative. Given the past reputation of the restaurant chain, I doubt that giving the freedom to all consumers to speak up was the rightest choice! It started as a few tweets from the brand (“Meet some of the hard-working people dedicated to providing McDs with quality food every day #McDStories”). But soon it ended full of tweets such as :
Result: Not only the bad publicity and the need to switch down the account, but also consumers bonded even more against McDonald’s and made the story viral. Not only they failed to create brand value from their customers but rather they lost control of the negative brand associations promoted by their “customers” (if we can call them customers).
Empowering your consumers is a good strategy. A very good and promising strategy. But it is not a panacea. It is not a strategy to put all your other worries aside. It needs control, it requires that companies set the boundaries of the communities within which the brand stories would prevail.
Mass customization is a widespread thought as an overwhelming competitive advantage. I want to share with you an interesting article that takes a second look at the benefits from the implementation of mass customization systems.
-It requires a highly flexible production technology. Developing such technologies can be expensive and time-consuming. Some processes, moreover, are more flexible and easier to digitize than others. Examples include information processing, printing, and cutting metal rods and tubes.
-It requires an elaborate system for eliciting customers’ wants and needs. To make something unique for someone requires unique information. Eliciting such information entails, for instance, asking the right questions and taking the right physical measurements — and that’s more difficult than it appears.
-It requires a strong direct-to-customer logistics system. Fulfillment is the weak link in much of e-commerce, and the same is true of mass customization.
-People are not willing to pay to have everything customized. In every case, companies must determine whether there is a potential mass market for custom features. Customers demand variety when they differ sharply in their preferences for certain attributes of a product. Under such circumstances, customization may truly add value. Products
that require matching different physical dimensions fall into that category.
I hope you enjoy reading it, it really got me thinking about the alternatives of mass customization. Good night!
I came across this presentation about the top 10 business models of 2010.
Some of them are quite known by now, like Groupon, Spotify.com, Flattr.com, while others are less known, like PatientsLikeMe.com and paywithatweet.com.
Interesting to see is that quite lot of them actively involve the consumer. For instance at PatientsLikeMe.com people can give feedback about their expierence, and other people can learn about that through the forum, simple as that. Only thing provided by patientslikeme.com is the forum and the network.
Quirky.com offers a co-creation platform, where it pays out all the influencers.
The presentation gives an example for all the business models, and describes the rationale behind the model (how it makes money in the end).
Can you think of the most innovative business models of 2011?
One of the topics discussed in session 2 was “collaborative filtering”. Collaborative filtering is the process of filtering for information that customers help to make the right choice on a website based on previous user experience.
The system has benefits and also drawbacks. Some consumers appreciate the fact that they can order products others recommend, others get the feeling they are getting tracked.
A website that has collaborative filtering integrated is not hard to notice. There are lots of websites that don’t let you notice that they are tracking you. The most used system is the “cookie system”. Simply it means that every website leaves a “cookie” on your computer that tracks all action you do on the web. Also it registers when you are returning to their website.
What most users don’t know is that tracking starts with the startup of Google. Almost 19.1 billion search queries are entered yearly, in the Netherlands only. All of them are getting tracked.
With the combination of Google + and a Gmail account every ad on Google.com and their partner websites is based on the content of the mail, page visits, and clicked ad content.
Below you find an example of a Google tracking partner website link. It is a news article about a falling crane.
I see an advertisement below that has an advertisement for hiring a crane (webpage content based). But I also see an advertisement about hiring an apartment in Rotterdam (search preference based). The system let every user see a different ad, based on their previous internet behavior.
Google + initially started with the idea of having friends recommend other pages so that Google can show the results recommended by your friends at the top of the page. ( collaborative filtering with Google search results ).
Below you find an article about how consumers turn against tracking behavior. It was in the USA Today. The article also shows the tracking behavior Facebook uses. It also tells you how to avoid tracking. The writer concludes that people will accept tracking if it becomes really beneficial instead of annoying.
And if you always thought that you only used Google as an online search engine and I didn’t affect you online consumer behavior. Please watch the following link:
New technologies will give mass customization a big boost. The days that mass customization is restricted to alternating standard designs or add some different colors to an item are long gone. One particular new technology that will definitely be the future is the 3d printing technology. This technology literally gives mass customization another dimension. The opportunities with these 3d printers are enormous for both consumers and companies in various sectors. The technology is still developing, so there is yet more to come. These videos give an impression of the capabilities of 3d printer technology. Pretty cool stuff if you ask me!!!
The video that is posted hereunder deals with the fact that some companies make the attempt to check-out from their website really difficult for their customers.
Take for example Ryan Air: you find a ticket for 30€ from London to Rome, for instance. You think what a great deal! I will book this ticket. However, what the customers, if he is a first time user of Ryan Air, does not know is that the price of the ticket does not take into account insurance, luggage costs, etc. In other words, at the check-out, the customer will end up with a ticket with all the additional extra costs that, for example, will costs him 100€. This means, during the check-out, the consumers has to carefully check all the boxes for the features he needs and uncheck all the boxes for the features he does not need. This demands a lot of effort from customers’ point of view. Personally, I could understand that some customers would switch to a different brand. Especially, due to the fact that the other brand offers the same product, maybe for higher price premium, but offering a user-friendly interface that enables an easy check-in, search and check-out on the websites.
To conclude, companies can create value for their customers when they design the communication plattform as such that it facilitates the flow of information between them and makes the usage of the website as easy as possible.
According to a study by eMarketer in 2012, for the first time in US history, the ad spendings on online advertisement will surpass the spendings on printed ads in magazines and newspapers. Since we had a slight discussion during the UnMe Jeans roleplaying part in class about different media types to use as promotional tool I thought it might be interesting to share some of this study’s findings with you all, my dear companions.
Expected for 2012 $39.5 billion will be spent on online ads, which is an 23,3% increase compared to the spendings in 2011 ($32 billion). This while spendings on printed ads are expected to be $33.8 billion, according to the great analysts over at eMarketer. A +23,3% change in online ad spenditure is quite a lot, especially because the fact that a year before (2010 vs. 2011) the same rate was calculated at +23%. Looking at the upcoming years eMarketer expects the online advertisement spendings to keep growing up to $62 billion in 2016.
Taking a look at the printed ad spendings, the study expects a 10,3% downfall by 2016 compared to 2011. While in 2011 these spendings were $36 billion in 2016 they’re expected to be $32.3 billion. Compared to the online growth, i think this decline isn’t that bad actually. Reading the article i expected much more. Here’s the graph..
In an interesting article Connecting to a sustainable future (written by Ernie Hood, 2003) I read that mass customization could be a key driver of sustainability. Mass customization could generate environmental benefits through the different parts in the process such as production, stocks, transportation and reduced use of materials.
The use of recycled materials in the production makes the product not only environment friendly but could also create a unique product for a specific type of customer. I found a nice example on www.freitag.ch, the company FREITAG mass customizes all kinds of bags produced of used truck sail. The production of the bags is also environment friendly by saving water and energy.
FREITAG is a nice and inspiring example of sustainable development by mass customization.
To buy new products, a lot of consumers do not go to the shop anymore but buy products on the internet. To sell more products, companies offer different approaches on recommendation techniques, because in general, product recommendation leads to more sales.
The first approach is Rule based non compensatory, which can be based on Elimination by aspects (EBA)and lexicographic. Rules based non compensatory on Elimination by aspects is showed through the red lines in the picture of bol.com.
Consumers first make a choice between different products and then make a choice in the product category. In this example consumers first choose books (instead of DVD’s, toys, games etc.) and then which languages, like English, Spanish or French.Rule based non compensatory on lexicographic is showed through the red lines in the other picture. It is the same as elimination by aspects but in this case people can fill in what they think is most important. So if they think a low price is important they get camera’s with low prices.
Drawbacks for non-compensatory technique are that it makes it complex for more options, because consumers has eliminated a lot things to come where the want to be. It’s easy to imitate for other companies and it passively provides information, which mean that inexperienced consumers don’t know what to with it. As example the pixels from the camera, what are 6.5 pixels?
May be some of you are already familiar with this website, but for those who doesn’t know it I think it will be interesting to see. The website is called http://www.decide.com/ and it is designed to help you with big electronics purchases at the right price at the right time.
In other words, Decide.com uses clever prediction algorithms to warn you if the price of any given electrical product is about to drop, increase, stay the same, or if a new model is about to be released. So you’ll know exactly when to buy the camera, laptop, smartphone or plasma TV that you want to have. It’s a great tool, in my opinion, may be according to some not so practical in your decisions, but it is always fun to check future prices. They give a 77% of accuracy in their price predictions, so go and see if they are right ?
Do you think you would trust it and use it for some future electronic purchases ?
Consumer Value Creation 