Top 10 posts

Just Marketing is closing in on two years of weekly publication. For the end of year festivities, where you'll want to kick up your feet and settle down to read on your tablet, here is a selection of the top 10 posts from the blog:

10.  Customer satisfaction or market share? Pick one
9.    Expect the unexpected 
8.    Why do your customers buy from you? 
7.    Value creation versus value capture  
6.    Why we segment
5.    Santa Claus, the Real Thing? 
4.   Should Facebook break itself up?
3.    B2B brand architecture 
2.   Apple, Directionless? 
1.    What the heck is a brand anyway?  
  
Happy reading, Happy Holidays, and don't forget to leave your comments on the posts.

How Zong Qinghou became the richest man in China

Back in 2003, my former student, Nancy Dai, and I wrote a case study on the rise of the Chinese beverage giant Wahaha. We called the case “Cola Wars in China: The Future is Here.” The second half of that title was obviously a play on Wahaha’s cola beverage brand, Future Cola, and the size and pace of growth of the Chinese market. It was also a reflection of the optimism we found in the Wahaha company, where people were convinced the future was theirs.
 
The case has been used in many MBA and Executive programs around the world to discuss doing business in China, competition between multinationals and local companies, and targeting the emerging market consumer.

In the ten years since the case was written, Wahaha has grown into a giant company, and its founder and head, Zong Qinghou, has become the richest man in China. 

Re-reading the case today provides an interesting set of lessons from Wahaha’s strategy as a domestic upstart in an industry globally dominated by some of the largest multinationals, with the savviest marketing and brand building skills in the world. The case gets to the heart of what made Wahaha such a formidable  challenger.

• Early on, the company realized its advantage resided in getting to the mass rural market first. It sidestepped the intense competition in the large urban centers where the international players were already battling for share, and went into the interior.

• In the smaller towns and villages, Wahaha built a formidable, low cost distribution network of bicycle delivery.

• It created pull for its brand by having large numbers of people call retailers and ask for the brand by name.

• It was able to withstand a bruising disagreement with its bottling partner, the French giant Danone.

• It focused on kids as the key target market, and happiness as the key benefit,  in a market where the one child policy had made kids the focus of their parents’ spending, their happiness mattered to both parents and grand parents.

Although the data in the case are now dated, the case contains several anecdotes that shed light on the journey of Zong Qinghou and the company he has built.

Here's a video profile of Zong:

The Facebook spurious legal notice

This week you probably saw some of your friends on FB post this nonsensical statement:

"...in response to the new Facebook guidelines I hereby declare that my copyright is attached to all of my personal details, photos, drawings, illustrations, paintings, audio, and videos, etc. (as a result of the Berner Convention).
For commercial use of the above, my written consent is needed at all times!
Anyone reading this can copy this text and paste it on their Facebook Wall. This will place them under protection of copyright laws.) By the present communiqué, I notify Facebook that it is strictly forbidden to disclose, copy, distribute, disseminate, or take any other action against me on the basis of this profile and/or its contents. The aforementioned prohibited actions also apply to employees, students, agents and/or any staff under Facebook's direction or control. The content of this profile is private and confidential information. The violation of my privacy is punished by law (UCC 1 1-308-308 1-103 and the Rome Statute).
Facebook is now an open capital entity. All members are recommended to publish a notice like this, or if you prefer, you may copy and paste this version. If you do not publish a statement at least once, you will be tacitly allowing the use of elements such as your photos as well as the information contained in your profile status updates..."

The fact is, you entered into a contract with FB the moment you opened an account. As far as content you post on FB goes, your contract states that:

"For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us [as in FB] the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it."

So, FB can use any content you post online in just about any way it deems fit (so don’t be surprised if your photographs appear in an advertisement for a product you have no connection to, which is shown to your friends without your knowledge).

But the fact that so many people posted the spurious notice on their wall suggests a large latent demand for privacy, and for FB to get off its users backs.  It also suggests a level of ignorance on the part of FB users about the uses of their data.

Eventually, over the next few years, users will become more aware of the use of their data (indeed, this week's hoax legal notice is an encouraging sign); and the lines of data use will become clearer. Consumers will demand greater accountability from holders of their data, and control over the uses of their own data. Governments will, as usual, be behind that curve.

And then, someone will suggest a simple market solution to the problem: have users pay for their privacy. Right now, advertisers pay for our use of FB. What if FB were to offer an advertising-free version for, say, $99 per year, with an additional option of $250 per year if you don’t want your data used for marketing purposes – would you pay for it?

Now check out the list of privacy protections Facebook has agreed to offer European users (but not users elsewhere). But some European users want more.

Meanwhile, in North America, those think they have a right to privacy by posting the legal notice on their Facebook wall have become the laughing stock of those that have given up on privacy:

 

CollegeHumor's Favorite Funny Videos

Ho Ho Ho Happiness

This is a guest post by Jennifer Jeffrey, a third-year PhD candidate in Marketing at the Ivey School of Business and the current S. C. Torno PhD Scholarship Award Holder. Jen's research interests include the effects of negative affect on persuasive appeals and the impact of authenticity on endorser effectiveness.  

 

There are lots of reasons why I’m a little envious of the big guy’s job: a flying sleigh, a legion of elves at his disposal, and unlimited access to fresh-baked cookies…really, what’s not to like?  It turns out, however, that there’s an even better reason to lust after Santa’s job: the oodles of happiness it must surely bring with it. 

Elizabeth Dunn, Michael Norton, and Lara Aknin have spent considerable time researching the age-old question of whether money can truly buy you happiness.   The results of their research suggest that it can, with one big caveat; you need to spend that money on other people if you want to increase your happiness.  

Dunn, Norton, and Aknin started researching the topic of happiness through a series of surveys, looking for the relationship between spending patterns and reported happiness levels.  For example, in one study they looked at employees who received an annual bonus, measuring their happiness prior to receiving that bonus and then eight weeks later.  What they found is that employees who had spent their bonuses paying bills, mortgages, or purchases for themselves reported similar happiness levels after their bonus spending sprees to before.  Those employees, however, who had spent more of their bonuses on purchases for other people and on charitable contributions actually reported increases in their happiness levels at follow-up.   

These findings were further tested through several field experiments, where participants were randomly given a sealed envelope containing either $5 or $20, and the instructions to either spend that money on themselves or on others by the end of the day.  Happiness levels were recorded at baseline, prior to anyone receiving their envelope, and again after the money had been spent.  As the researchers predicted, the amount of money given out had no impact on later reported happiness levels, but the manner in which the money had been spent sure did.  Those participants who had spent the money on themselves reported no difference in happiness after their unexpected windfall, whereas those who spent the money on others reported a significant bump in their overall happiness levels.  

Subsequent studies showed that spending money on close others yields the highest happiness returns, versus on more casual friends and acquaintances. 

Why do we find these results surprising?  It appears that many of our lay beliefs about money may just not be accurate.  For example, Dunn, Norton, and Aknin also found that in general we overestimate the impact that money has on happiness, assuming erroneously that big salary increases lead to big happiness increases and that the poor must also be significantly less happy than the wealthy. We also assume that spending on ourselves is the quickest route to happiness (in spite of what many of our grandmothers have told us!).  When the researchers presented a new group of people with the same four options as in their original field experiment and asked them which option would make them happiest, most assumed that more money equaled more happiness, and that money spent on themselves was the best choice. 

 

As the holiday season approaches, many of us are dreading the busy shopping malls, hours of gift wrapping, and inevitable shock of that January VISA bill arriving at our doorsteps. But lest the thought of shopping for others start bringing out the Scrooge in you, take a page from Santa’s book. It turns out the reason he’s so darn jolly isn’t the cookies or the flying sleigh, but rather it’s from the happiness he gets giving others so many gifts. As you fight through the crowds and the stores this December, take some comfort in the fact that the more you harness your own inner Santa this year, the happier you too will be. 

Dr. Michael Norton will be presenting some of his research at Western University on November 30^th. 

Selected Readings:

Aknin, L.B., Norton, M.I., & Dunn, E.W. (2009), From wealth to well-being?  Money matters, but less than people think.  The Journal of Positive Psychology, 4(6), 523-527.

Aknin, L.B., Sandstrom, G.M., Dunn, E.W., & Norton, M.I. (2011), It’s the Recipient That Counts: Spending Money on Strong Social Ties Leads to Greater Happiness than Spending on Weak Social Ties, PLoS ONE, 6(2), e17018.

Dunn, E.W., Aknin, L.B., & Norton, M.I. (2008), Spending Money on Others Promotes Happiness, Science, 319, 1687-1688. 

Prisoners of war

At 11:00 AM on November 11^th, we will gather at cenotaphs, pause at work or at school, and reflect on past wars, on the sacrifices of our troops, and on the debts we owe those who fight.

I pause to think about the folly of war. I think about all of the victims. That includes the countless civilians killed.

I reflect on the puzzle of why civilian casualties remain “countless” in a world where everything else is meticulously counted. "What gets measured gets managed," is a well-known management maxim. Is this why we refuse to tally the civilian toll of our wars?

I reflect on the stark asymmetry of our concerns. We agonize over the psychological trauma of our returning troops, but do we ever look back on the village where our bombs killed most of the boys aged 10 to 15 who were gathering firewood on a hillside?

I reflect on the hypocrisy of the rhetoric of a “just war” deployed to justify control over resources. I wonder how we square the circle of the sanctimonious, straight-faced claims that we can impose democracy and human rights through the barrel of a cannon.

I reflect on the liberties we so easily give up in the heat of war; how we allow our governments license to kill and incarcerate their own citizens, without trial and without the checks and balances that underpin our freedom. In the whipped up fury against the enemy du jour, we shoot ourselves in the foot.

I reflect on the blank check we write our armed forces. I wonder why we do not demand accountability for the trillions spent laying foreign lands to waste. I wonder why, despite the vast superiority of our resources and firepower, our forces are still being chased out of countries we attack, by resistance fighters in sandals, armed with little more than Kalashnikovs and home-made bombs.

I wonder why in the twenty-first century, we still resort to the barbaric idea of war.

I wonder how many of those present at solemn cenotaphs at 11:00 AM on November 11^th are reflecting on reasons that glorify, justify, and perpetuate war. 

I wonder whether, as long as war continues to be glorified and marketed, we are not all prisoners of war.

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Hobson's choice on Tuesday

One of the things that marketing does really well is to make small differences loom large. To believe the ads, the difference between Tide and Sunlight laundry detergents, between Coke and Pepsi colas, Nike and Adidas athletic shoes, and Shell and Exxon gasoline, are so vast and so consequential that you should make your decisions to buy one or the other very very carefully.

But common sense tells us that the differences are not so large, and the choices not so consequential that we cannot switch between them, or even choose not to choose at all.

Could it be that the perception of extreme polarization of American politics, the perceived gulf between the right and the left, the supposedly irreconcilable differences between the red states and blue states, are the result of the magnification of small differences – the result of marketing by the two parties to frame the debate as a choice, and maximize the perceived differences between a diet Coke and a diet Pepsi, between a mocha latte and a mocha cappuccino?

Perhaps the choice between alternatives that are almost indistinguishable is the result of a two-party system in which both parties must appeal to a broad center. That gives us the spectacle of the two parties trying to make a very big deal of differences that are otherwise trivial (they are both less filling; they both attempt to taste great).  Each campaign has spent one billion dollars trying to stir up storms in teacups.

A multi-party system would be messier in that it would bring out more and different positions. But under the present system, those positions are aired and dispensed with early, in the primaries, when few people are watching: the Ron Pauls and Dennis Kucinichs have their say at the fringes, and exit left or right before even making it to the main stage (see their 2012 and 2008 ads below).

On the main stage, the debate is no longer about broad policy aspects because the two parties are essentially in agreement: the Republican candidate does not question that the President has the right to order the assassination of American citizens, or to order assassinations without legal process – presumably they both agree that that is AOK; The Republican candidate does not bicker about provisions of the Democratic President’s NDAA that encroach on civil liberties – those merely build upon and extend the Patriot Act introduced by his Republican predecessor; Both parties support democracy in the Middle-East. Except, of course, in Bahrain, Saudi Arabia, and Kuwait, where both parties agree it is inconvenient to support democracy. Neither party questions the seriousness of the other’s commitment to democracy in allowing these exceptions. Neither party wants to touch climate change as a topic when coal appears to be the fastest growing energy source over the next decade. Both candidates' plans will add trillions to the national debt (will that be on Visa or Mastercard?). One candidate will be great for the defense and health insurance companies' shares in the voters' 401k, the other will be pretty good.

The two parties are far more similar than they want voters to believe. The differences are carefully crafted, and marketing helps magnify them to give the impression of choice. But it remains Hobson’s choice.

Is it any surprise, then, that as many as half of eligible American voters will exercise that choice by not voting on Tuesday?