A document published by the Treasury of the New Zealand government provides insights into the real life differences between firms who develop relationships with members of their supply chain, in contrast to those who pursue more arms length exchanges. Here is an extract, followed by a video produced by Toyota which provides more detail.
One of my favourite journal articles is, 'Service Quality, Trust, Specific Asset Investment, and Expertise: Direct and Indirect Effects in a Satisfaction-Loyalty Framework' by Jyh-Shen Chiou and Droge and published in the Journal of the Academy of Marketing Science in 2006.
I like the article because it takes the concept of specific asset investments, something that is most often applied in the context of business-to-business marketing, and the authors apply in to the context of high-end cosmetics. The following quotations from the article help to explain why they are so relevant:
behaIn the matter of a few short sentences the writers have helped to explain the key characteristics of these goods using relevant marketing concepts. They make clear how these offerings are intangible (despite being goods) and their credence attributes are also highlighted. Even though the marketers are trying to enhance the search attributes of these products (via the computerised photos), it becomes clear that in such a situation trust becomes important because the need to believe the salesperson's promises.
The video below illustrates some of the ideas referred to in the quotation above.
Also worth noting from the perspective of a marketer behaving in an opportunistic manner when dealing with consumers who may have limited ability to assess the offering, is this comment from the FTC (Federal Trade Commission) in the United States:
Cosmetics company L’Oréal USA, Inc. has agreed to settle Federal Trade Commission charges of deceptive advertising about its Lancôme Génifique and L’Oréal Paris Youth Code skincare products. According to the FTC’s complaint, L’Oréal made false and unsubstantiated claims that its Génifique and Youth Code products provided anti-aging benefits by targeting users’ genes.
Discussions about risk and trust feature in many of the courses that I teach. I like this scene where Daniel Day Lewis highlights the risks the townsfolk will face if they get someone else to drill for oil on their land.
He then explains why he is so much more trustworthy:
Watching Jiro in action you can see how a product (the sushi) can be supported by a service component. In this instance, where the sushi is made and handed over by Jiro, arguably the service component dominates. Without Jiro being there would the experience still be the same - even with a very similar physical product?
Nice little story about how the fledgling Keurig, the coffee pod manufacturer took advantage of having larger competitors at the start of their product lifecycle. It's also a good illustration of the complementary nature of the promotion mix and how they can influence the different stages of the hierarchy of effects.
This is how we are used to seeing Iceland:
This is how Icelandair prefers to show Iceland in relation to Europe and north America:
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:
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:
- I can use the [innovation] on a trial basis to see what it can do.
- It is easy to try out the [innovation] without a big commitment.
- I’ve had opportunities to try out the [innovation]
In contrast observability was measured in the following way:
- I would have no difficulty telling others about the results of using the [innovation].
- I believe I could communicate to others the outcomes of using the [innovation].
- The results of using the [innovation] are apparent to me.
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:
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.
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'.
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.
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.