Category: Promotion37eb4ea826

Kidfluencers

10/5/2019

by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Do you remember doing ‘connect the dots’ as a kid? You probably liked seeing a picture appear as you drew lines from one number to the next. Today’s online influencer marketing makes it difficult even for adults to connect the dots between product users and corporate sponsors. Imagine how hard it is for kids, who some companies intentionally target, to put together a picture of that influence.

Influencer marketing, or influence marketing, “is a form of social media marketing involving endorsements and product placements from influencers, people and organizations who possess an expert level of knowledge and/or social influence in their respective fields.”

Although influencer marketing has been around for ages with celebrities (movie stars, TV personalities, famous athletes, etc.) endorsing products, it’s different now because social media have democratized the process. Now anyone with a significant following on Instagram or other popular platform can become a paid product ambassador.

One of the most popular influencers is a 7-year old named Ryan Kaji who has an astounding 32.3 billion views on his YouTube channel Ryan Toy Review. His 21.7 million subscribers ‘tune in’ to watch him unpack and play with a wide variety of toys provided by sponsors such as Hasbro and Walmart.

However, Ryan’s YouTube channel is just part of his ever-expanding commercial influence. His parents also record Ryan and his younger siblings’ visits to commercial tourist attractions, like Legoland California, for Ryan’s Family Review. In addition, Ryan stars in a Nickelodeon cable and online series called Ryan’s Mystery Playdate. Other signs of his great popularity are branded products, including a “a Ryan Kaji action figure, T-shirts and a plastic dinnerware set.”

Ryan Kaji is far from the only “Kidfluencer”; however, and he’s not close to the youngest. For instance, a four-year old named Samia has over 203,000 YouTube subscribers and 143,000 followers on Instagram, where she attracts paid promotions from HomeStyle Harvest chicken nuggets and Crayola, among other brands.

Then there’s Kyle Fisher’s two-year-old identical twins, Taytum and Oakley, who have over 2 million Instagram followers. Advertisers like Mattel pay between $10,000 and $20,000 to sponsor a single post featuring Fisher’s daughters.

Of course, children have long been cast in commercials, which many of us older adults remember when we were kids. Who can forget young actor Tommy Okon asking Pittsburgh Steeler Mean Joe Greene, “Do you want my Coke?” There are some important differences, however, with today’s Kidfluencers.

First, the Internet is still like the ‘Wild West’ in terms ‘lawlessness.’ Thanks to the Federal Trade Commission (FTC), advertisers on television and radio must abide by rules that separate program content (the show) from commercial content (the ads) and that limit a character’s or program host’s use of promotions or product placement, but the Internet has no such restrictions.

So, there’s not much to stop the families of Kidfluencers from blurring the lines between programs and ads. Unlike when we watch traditional television that has distinct commercial breaks, online media often blend the two together such that influencers like Ryan Kaji are playing with and promoting sponsored products at the same time.

That blending leads to the second issue, mentioned above. Even adults can have a hard time distinguishing an unbiased product user from a paid endorser. Kids often have no concept that another child might only be playing with a toy online because his/her family received it for free or because they’re being paid to promote the product.

Children tend to take what they see and hear at face value. They’re unfamiliar with the notion of ulterior motives. As a result, kids can be easily misled.

I gained a sense of this vulnerability while teaching classes in Advertising Ethics for about a decade. Each year I was able to have my college students spend a little time talking with much younger students (sometimes just 4-6 years old) about advertising. Although the kindergarten-age kids could recognize almost any consumer-products brand from its logo, very few could explain what advertising was or why we had it.

Josh Golin, the executive director of the Campaign for a Commercial-Free Childhood, affirmed those observations by saying that it’s not until they’re 8 or 9 years old that most children recognize advertising. Similarly, in a complaint it filed against Ryan Toy Review, the nonprofit organization Truth in Advertising contended that preschoolers can’t differentiate an unbiased product review from a commercial.

Deception of young consumers isn’t the only potential ethical issue involving Kidfluencers. There’s the question of whether it’s right for parents to make their children promote products and whether such promotion constitutes work that might be subject to child labor laws.

But, back to the original issue: Although, Kidfluencers are very effective at ‘moving product,’ the deception used to accomplish those ends plays on the inexperience of some of society’s most vulnerable consumers--children. So, connecting the dots, the use of kids to influence the consumer behavior of other kids makes a picture of “Single-Minded Marketing.”

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Who's to Blame for Opioid Abuse?

9/8/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

‘It’s hard to protect people from themselves.’ That saying resonates with everyone from EMTs who wish motorists would wear seatbelts, to parents who demand that their kids “Stop climbing on that!” So, who’s responsible when a significant portion of the population harms itself with prescription painkillers?

If you’ve been following the news, you’ve heard of America’s troubling opioid epidemic, which unfortunately has seen:

Misuse among 21-29% of those who are prescribed opioids for chronic pain
Use disorders in 8-12% of those who take the drugs
Transition to heroin for 4-6% of those who misuse prescription opioids
More than 130 people a day dying from opioid-related drug overdoses

What are opioids? They’re types of drugs that come naturally from the opium poppy plant that are often used to reduce pain. They also “can make some people feel relaxed, happy or ‘high,’ and can be addictive.”

The most common prescription opioids are Vicodin and OxyContin. Fentanyl is a synthetic opioid, “50 to 100 times more potent than morphine,” that’s often used to treat pain from advanced cancer. Then there’s heroin, “an illegal, highly addictive drug processed from morphine.

Recently, the name often heard in the same sentence as opioid epidemic is Purdue Pharma, the Stamford, Connecticut-based company that makes OxyContin, the brand name for oxycodone hydrochloride. The drug’s position at the center of the opioid crisis has made Purdue Pharma the focus of frequent legal scrutiny.

Used to “help relieve severe ongoing pain (such as due to cancer),” OxyContin should be a ‘medication of last resort.” In other words, if people suffering from very serious illness cannot find relief from anything else, OxyContin can be used to mitigate their pain.

Sufferers of significant, relentless pain, however, are not the ones driving the opioid epidemic. The problem stems, instead, from those who don’t need the drug but take it to get high and, if they don’t end up overdosing, often become addicted.

Should Purdue Pharma be accountable for this abuse by illegitimate users? More broadly, to what extent is any company culpable when consumers don’t use its products as intended. Are organizations responsible for protecting people from themselves?

Since the advent of mass-production, there have been continual examples of consumers injuring themselves by misusing products, often despite clear warnings from manufacturers, e.g., “Don’t stand on the top of this stepladder”; “Don’t put this plastic bag over your head.”

One of the most recent examples of widespread abuse was called the Tide Pod Challenge, which involved mainly teens videoing themselves chewing on the small detergent sacs and posting clips of their reactions on social media. Tragically, several people died as a result of ingesting the liquid.

Procter & Gamble (P&G), the maker of Tide, responded to its product’s misuse by offering advice on Twitter to those affected by the Challenge and by asking YouTube and Facebook to remove Tide Pod Challenge posts. P&G also produced a television commercial with former New England Patriots tight-end Rob Gronkowski urging viewers not to eat Tide Pods. All of these efforts were in addition to the company coating the Pods with a bitter-tasting substance in order to discourage children from biting into them.

P&G hasn’t stopped making Tide Pods, and as far as I know, the company hasn’t assumed responsibility for the Challenge-related injuries and fatalities. Is the firm wrong for failing to take those actions? No. The Tide Pod Challenge is an example of consumers' blatant product misuse, despite the company’s multifaceted, good-faith efforts to avoid it.

The same cannot be said, however, about Purdue Pharma and OxyContin. Here’s why the two cases of consumer abuse are very different:

In contrast to the Tide Pod Challenge, which was a short-lived ‘fad,’ Purdue Pharma knew for decades about OxyContin abuse but avoided addressing it. A New York Times piece details the timeline, beginning in the late 1990s, when the company concealed its knowledge that the medication was being stolen and sold illegally to abusers. Meanwhile, the firm promoted the exact opposite—that OxyContin was less prone to abuse than other prescription opioids.

Although serious, there never was an “epidemic” of Tide Pod misuse; cases were relatively isolated. As the earlier opioid statistics suggested, however, opioid abuse has been shockingly widespread. For instance, during the early 2000s, prescription drug distributors “sent enough pain pills to West Virginia over a five-year period to supply every man, woman and child there with 433 of them.”

Unlike Tide Pods, OxyContin is highly addictive. Probably no one who did the Tide Pod Challenge wanted to try it again, but those who start using OxyContin often can’t stop.

Despite the added exposure it brought the brand and the additional revenue it produced, all evidence supports that P&G did not want anyone eating Tide Pods. On the other hand, the New York Times suggests that Purdue Pharma, essentially encouraged abuse of its product by claiming that the company “planted the seeds of the opioid epidemic through its aggressive marketing of OxyContin.”

As I’ve read and heard about the opioid epidemic, I’ve wondered about the responsibility of doctors who liberally prescribed the drugs and of the consumers who misused the medication. I now understand that these persons share responsibility with at least one company that knowingly fueled the crisis. Purdue Pharma’s profiting from the nation’s opioid pain is a clear case of “Single-Minded Marketing.”

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Do You Believe in Better Business?

8/23/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Does the word business carry positive or negative connotations for you? My associations are affirmative ones, but for many people business carries significant baggage, perhaps from personal experience or from things they’ve read or heard. Those impressions may be changing, though, thanks to a bold pronouncement by leaders of some of the world’s largest companies.

On August 19, 2019, 181 CEOs of the Business Roundtable, a Washington D.C.-based nonprofit comprised of “chief executive officers of America’s leading companies,” issued a Statement on the Purpose of a Corporation.

That news may not sound startling, but what is surprising is the new Statement’s focus on serving “all Americans”—an abrupt departure from what most people associate with business: making money for shareholders. The new Roundtable Statement, in contrast, details the executives’ commitment to serving the needs of all corporate stakeholders by doing things like:

Delivering value to customers
Investing in employees
Dealing fairly and ethically with suppliers
Supporting communities

The men and women who endorsed the new Statement aren’t just any execs. They’re the heads of many of the world’s largest and most successful corporations, for instance:

Jeff Bezos, Founder and Chief Executive Officer of Amazon
Tim Cook, CEO of Apple
Brian Moynihan, Chairman of the Board and CEO of Bank of America
James Hackett, President and CEO of Ford Motor Company
David Solomon, Chairman and CEO of The Goldman Sachs Group
Marilyn Hewson, Chair, President, and CEO of Lockheed Martin
Lisa Davis, CEO of Siemens Corporation USA
Doug McMillon, President and CEO of Walmart, Inc.

Several signatories supplemented the statement with their personal thoughts, for instance, Jamie Dimon, CEO of JPMorgan Chase & Co. and Chair of the Business Roundtable said:
“Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.”

Similarly, Alex Gorsky, CEO and Chair of Johnson & Johnson added:
“This new statement better reflects the way corporations can and should operate today.” “It affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders.”

Those are nice sentiments. Unfortunately, though, they fly in the face of what many have accused business of doing for decades if not millennia—profiting at any cost. Moreover, some champions of capitalism have openly embraced that calloused approach to commerce, perhaps none more famously than economist Milton Friedman. In a September 13, 1970 New York Times article, among other places, Friedman argued that business’s only social responsibility was to increase profit, i.e., to maximize shareholders’ return on investment.

Beyond Friedman’s free markets manifesto, public cynicism about business has gained momentum thanks to a seemingly never-ending series of moral lapses and money grabs by certain businesspeople and companies such as Bernie Madoff, Enron, Arthur Andersen, Bear Stearns, Martha Stewart, Barclays, WorldCom, and Volkswagen.

It’s no surprise, therefore, that some are very critical of the new Business Roundtable Statement. One such cynic is business columnist David Lazarus, who in a recent Los Angeles Times article maintained that the edict is nothing more than “corporate propaganda” put forth by conscience-stricken executives trying to save face amid growing business backlash. Furthermore, Lazarus argues that the statement is conspicuously light on specifics, such as how exactly the companies purport to make all stakeholders their priority or what they might do to address the gross asymmetry in executive pay.

Lazarus is not the only one skeptical of the Roundtable Statement. For his article, he interviewed several others who share his beliefs, including Kenneth Osgood, a history professor at Colorado School of Mines, who said “It seems pretty obvious that CEOs are trying to head off growing public pressure on a number of fronts, including how much they’re paid and taxing the rich.”

Echoing those sentiment was professor of public diplomacy at USC, Nicholas Cull, who said “There seems to be a concern among the CEOs that they’re becoming the bad guys.” “This suggests that the business community is expecting blowback from their policies, and they’re trying to get ahead of it.” Similarly, University of Alabama history professor Margaret Peacock simply called the Roundtable Statement “a clear and pretty heavy-handed attempt to obscure reality.”

Time will tell whether such strong criticism is deserved or if, instead, the signatories’ companies will live up to the commitments. In the meantime, Lazarus and others critical of the Roundtable Statement should consider two key points about business:

1) Business benefits society. Yes, certain businesspeople and companies have made mistakes, but that harm is far outweighed by the positive economic and social impact business has had and continues to have on local communities, nations, and the world.

So many people, including Lazarus, owe their livelihoods to businesses, so many consumers enjoy the products/services firms offer, and so many governments benefit from the tax revenue companies provide.

2) Responsible business strategies and tactics stem from a proper philosophy of business. Just like we wouldn’t expect someone who has a distorted view of relationships to treat others decently, we shouldn't expect businesses to consistently treat stakeholders with respect unless they first make it their mission to do so.

The Business Roundtable Statement isn’t intended to be an A to Z blueprint for how exactly to increase employee compensation or build communities, but what it does propose is a very important prerequisite: an overarching goal that can serve as a guide for all other business activities, including marketing.

No businessperson is perfect, but when they hold each other accountable for positive impact, they’re often able to bring about good that they couldn’t achieve individually. That’s the promise and potential of the Business Roundtable’s new ‘purpose statement,’ which also makes the edict “Mindful Marketing.”

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Reading for Profit

8/9/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

How did you earn money as a kid? Maybe you babysat, mowed lawns, or did chores around the house. Did you ever get paid to read? Probably not, but now one creative company rewards kids for reading while they get their haircut.

A haircut is a uniquely intimate interpersonal experience for someone of any age. You sit still for a half hour or more, while a person you may not know very well stands inches away, repeatedly handling your most important body part—your head.

Beyond the physical experience, there’s the social dimension of a haircut. Sitting so close to someone for that amount of time, it’s awkward not to talk. However, even adults can find such chitchat challenging; for kids, it may seem impossible. Most children don’t have advanced conversational skills, and they’re naturally short on life experience and knowledge of topics that tend to be good conversation starters, e.g., current events, food, sports, etc.

Those aren’t the reasons, though, that City Cuts, a barbershop located in Kutztown, PA, pays children to read while they receive haircuts. More comfortable kids may be a side benefit, but it wasn’t the main thing that motivated shop founder and owner Jon Escueta to start the ‘novel’ program.

Escueta immigrated from the Philippines when he was just eight years old. Not knowing any English proved to be a formidable social barrier, but a caring teacher helped him overcome the obstacle by using a book about basketball to encourage him to read.

Escueta, now 32, employs the same strategy in his barbershop, where kids can read aloud a book of their choice to the person cutting their hair, and anyone else within earshot. For every book kids read, they receive $3.

The benefits of reading are well known: greater knowledge, mental stimulation, vocabulary expansion, memory improvement, stronger analytical skills, improved concentration, etc. However, all of those advantages can accrue to readers who sit alone and read silently to themselves. Why, then, doesn’t City Cuts simply let kids borrow books to take home and read on their own time?

The reason is there are also significant benefits that can come from reading aloud in front of others. On her website Tutoring Academy, Sharee Chapman identifies some of those positive outcomes, for instance:
- Improved diction and expression
- Enhanced visual memory and the ability to see images in one’s mind
- Better spelling from sounding out words, detecting syllables, and visually connecting words to sounds
- Great practice for public speaking

It’s the last benefit that aligns most closely with Escueta’s intent and reflects the way his program seems to be working. For example, 8-year-old Connor, whose mother travels 20 minutes to take her two children to the shop, says that reading aloud has really helped him in the classroom. He explains: "It [the reading time] made me speak up," so that "I am always raising my hand to get picked."

However, as much as Escueta may want to help, City Cuts isn’t a charity. Without seeing its financial statements, one can imagine that a small barbershop, located in east-central Pennsylvania, doesn’t make money hand-over-fist. So, how can it afford to pay both its barbers and its customers?

Fortunately, the program has gained considerable community buy-in. City Cut’s customers and others donate both the books for the young readers and the funds to compensate them. Also, this past January, Escueta started a GoFundMe account that has raised over $6,100 toward its $7,000 goal.

So, the reading program seems sustainable, but shouldn’t we be cautious about such corporate influence in children’s lives?

From banks to bakeries, all kinds of businesses want to make inroads with kids, not because children have much money to spend now but because they are the next generation of consumers. Some big players have even used reading programs as a way of reaching kids.

For instance, Pizza Hut’s BOOK IT program has been rewarding kids for reading for the past three decades and still seems to be going strong. Children enrolled in the program receive a certificate for a free one-topping Personal Pan Pizza, a prize, and a sticker for every month they reach their reading goal.

Given that the program is “free,” those rewards for reading seem like a great deal. Of course, most parents don’t drop their kid off at Pizza Hut and say, “Go in and eat your free Pizza,” i.e., one certificate likely draws the entire family into the restaurant for food and drink, resulting in a profitable tab for the company.

Pizza Hut also gains brand exposure in the ‘sacred’ learning environments of schools from BOOK IT-related items on which its logo appears such as posters, flyers, and the award certificates. All that said, it’s reasonably to wonder if the benefits the company receives far outweigh the few pizzas the children earn.

Then again, BOOK IT does get kids to read. Maybe that outcome justifies the corporate influence, but there’s also the risk that kids’ interest in books may begin and end with free food. In other words, the extrinsic, physiological reward of pizza may overshadow the more important intrinsic, intellectual reasons for reading, mentioned above.

City Cut’s reading program, on the other hand, appears to avoid these risks. Unlike pizzas, haircuts are necessities that children typically don’t crave and upon which families rarely overindulge. Similarly, unlike problems inherent with connecting reading to eating, it’s hard to imagine an association between reading and haircuts that could negatively affect kids later in life.

In terms of corporate collateral, it would be naïve to think that City Cuts doesn’t profit from its reading program. Like the mother who drives 20 minutes to take her children to the shop, there are probably other parents who go out of their way to involve their kids in City Cuts’ reading program.

However, whatever increased business City Cuts gains, it deserves. By encouraging children to read aloud, Escueta and his colleagues offer young customers a uniquely valuable, developmental experience while extracting very reasonable value in return.

It’s fine for companies to profit from their philanthropic efforts, provided that the community/company benefits are balanced. City Cut’s reading program seems to strike that right ratio, which makes inspiring confidence in young customers “Mindful Marketing.”

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Artificial Endorsers

7/26/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Have you ever thought you saw someone you knew, went to talk to them, but found it wasn’t them? That’s embarrassing. Or, have you ever thought ‘someone’ was a real person, only to realize they weren’t? This second kind of mistaken identity will become more common if one particular promotional trend continues.

In an age of artificial intelligence and deepfakes, it’s not surprising that some brands are promoting themselves using people who aren’t people. Enter “virtual influencers”—digitally-developed endorsers who plug products not because they like the brand and want the money but because they were programmed to promote.

Perhaps the best known virtual spokesperson is someone/thing named Miquela Sousa, or Lil Miquela. From the splattering of freckles across her youthful face to her complaints of cold temperatures outside, Miquela looks and acts like a real person; however, she’s actually an avatar, the creation of Brud, “a mysterious L.A.-based start-up of ‘engineers, storytellers, and dreamers’ who claim to specialize in artificial intelligence and robotics.”

The company crafted Miquela’s persona to be that of a “19-year-old Brazilian-American model, musical artist, and influencer” who appears to hang out in hip New York and Los Angeles locales, with real-life celebrities. The avatar’s carefully curated personal brand has made her alluring to millions of real-life fans, including more than 43,000 subscribers on YouTube and over 1.6 million followers on Instagram.

That large of a following also makes Miquela highly marketable, which, after all, is her reason for existence. Although, a computer generated influencer (CGI) can’t really use brands, she showcases ones such as Coach, Balenciaga, Ouai, and Proenza Schouler. The promotional potential of Miquela and her fellow avatars (e.g., Blawko) certainly is real, as further evidenced by Brud recently raising $6 million in venture capital and Time placing Miquela among its “25 Most Influential People on the Internet” along with the likes of Kayne West and Kylie Jenner.

But, potentially big fan-bases are not the only attractive attributes of virtual influencers compared to real ones. Digital beings don’t need to be paid. Contrast those zeros to the seven-year $75 million sneaker endorsement deal basketball phenom Zion Williamson just signed with Nike.

Virtual influencers also can be precisely controlled to do and say exactly what advertisers desire, ‘on- and off-camera.’ Contrast that certainty with the risk inherent with real human endorsers, such as Tiger Woods, whose 2009 sex scandal caused two of his biggest sponsors, Gatorade and AT&T, to bail.

There seems to be real value in using unreal influencers, but as this blog always suggests, just because marketers can, doesn’t necessarily mean that they should. So, the question: Is it ethical for organizations to employ virtual influencers?

The thought of “employment” raises an immediate concern: Will digital endorsers put real ones out of work? It seems that some displacement is inevitable: If Miquela is promoting Coach, the brand probably doesn’t need as many flesh-and-blood models or actors.

On the other hand, there are also now new jobs. Someone needs to create and manage the digital personas. So, an argument about unemployment can be countered by the age-old logic that people always need to adapt their job skills in order to keep pace with new technology and not be displaced by it: To stay employed, people who dug holes with shovels needed to learn to drive backhoes and bulldozers.

For what it’s worth, my prediction is that virtual influencers will proliferate to a point of saturation, after which the pendulum will swing back in the opposite direction, at least somewhat, as consumers reaffirm their appreciation for real people’s authenticity, genuineness, and unmanipulated humanity.

For me, the biggest ethical concern surrounding virtual influencers is the potential for deception. As consumers, it’s critical that we recognize when someone is sharing an objective, unbiased recommendation versus one with some corporate connection. There’s not necessarily anything wrong with paid endorsement, but consumers need to know when they’re experiencing it so they can raise their perceptual defenses and properly interpret the message.

For example, as a college professor, I often speak with prospective students and their families about their college choice. They expect me to describe my school in a positive light and understand that I can’t be completely objective. However, if in some social setting I happened to have a conversation with a family, without revealing my association, they might gain an unreasonably favorable impression of my school because they didn’t know that the institution I described was my employer.

For virtual influencers, the potential for deception is different in one way but very similar in another. For instance, when Prada used Miquela to promote its 2018 collection, people probably recognized the ads as corporate messages, not an average consumer’s unbiased recommendation. However, to the extent that viewers didn’t realize Miquela was 100% digital, they may have been deceived.

The reason is that there’s a reasonable expectation that endorsers, whether paid or unpaid, either use the product they’re promoting or have some special knowledge about it that makes them reliable sources of information. For example, I earned my bachelor’s degree from Messiah College and have taught there for nearly 20 years, which should give me some credibility as an endorser. It’s impossible, however, for a virtual influencer to use or otherwise experience the brands they advocate because virtual influencers are not real.

When we see a human endorser in an ad, we assume they’re getting paid, which lessens their perceived objectivity. Still, even if they’re like Zion Williamson and receiving a boatload of money for their support, it’s reasonable to think that they wouldn’t risk their reputation with a brand in which they didn’t believe. People who can command significant sponsorship dollars usually have various endorsement options and can choose reputable ones.

Although Miquela can be pictured wearing or holding Prada products, she can never experience them because she isn’t human. But, if people believe she is real, they can incorrectly assume that her actual interaction with the brand allows her to make sound judgments about it. In short, consumers can be deceived.

Some may be thinking, “But, virtual endorsers really aren’t new, so hasn’t the potential for deception existed for decades?”

It’s true that companies have been using various types of animated endorsers for a long time, e.g., the Pillsbury Dough Boy, Tony the Tiger, the Energizer Bunny. In the 1950s, Pepsodent created Susy Q, an original cartoon character, to promote its toothpaste. More recently, some companies are offering to create unique animated spokespeople that even small businesses can afford.

The difference is the technology used to create Miquela and similar virtual influencers is much more sophisticated, making it increasingly difficult for consumers to distinguish who’s human and who’s not. Therein, again, lies the problem.

When we can tell that animated brand ambassadors aren’t real, we’re under no illusion that they use the products. However, when we believe a spokesperson is human, we assume that they use the product or have some special knowledge about it, which may give us unwarranted confidence in their recommendation.

It’s fine for organizations to use animated beings to promote their products, but they should be careful not to mislead consumers by making the influencers so real that they seem human when they’re not. That kind of deception may sell products but it is really “Single-Minded Marketing.”

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Pizza Protection

6/29/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Unfortunately, there are accidents in life. Cars collide. Homes flood. People break bones. Insurance lessens the impact of such events, but what about damage to pizza? Well, Domino’s now offers protection for even that unexpected occurrence.

The nation’s pizza deliver leader is very good at getting its products from its stores to our doors, but it seems less confident about our ability to do the same. For that reason, the company recently introduced “carryout insurance.”

Domino’s now promises: “If damage occurs to your carryout order after you leave the store, just bring it back and we’ll remake it for free.” The firm lists a few reasonable provisos: The order must be uneaten, with nothing missing, in its original packaging, and accompanied by a receipt. The firm also offers examples of accidents that qualify for a claim like slipping and falling, "my kid sat on it," and "a stranger sneezed on it." In other words, it seems like the company will cover just about any claim consumers make.

How much does the pizza insurance cost? According to Domino’s it’s “free for all customers.” Some may be thinking, “But, there are no free [pizza] lunches,”—customers must be paying for the insurance indirectly. That may be true; however, Domino’s doesn’t appear to have increased its prices. The company needs to be careful that the costs of its pies stay in-line with those of Papa John’s and Pizza Hut in the highly competitive pizza market.

It’s also likely that pizza insurance claims haven’t taken a significant bite out of the firm’s bottom-line, which raises a key question, “Do people really need pizza insurance?”

Let’s say that someone spends $30 on a pizza pickup order, then drops it while taking it out of their car. The accident may ruin their day, but it probably wouldn’t pose any significant financial hardship. People who can afford to spend $30 on takeout food generally can afford to lose $30 worth of takeout food.

Contrast that loss to a serious car accident, a home fire, or the death of a family’s primary breadwinner. Those events could prove financially devastating, if not insured.

Such scenarios remind me of advice my dad once gave me: Insure the big things that could break you; don’t bother to insure littler things like electronics and lawn mowers. Even though they may be somewhat costly to replace, it’s worth the risk because replacement wouldn’t be financial catastrophic. I also liked the line my Dad said to salespeople who tried to pressure him to insure small items: “All your talk of insurance is making me wonder about the quality of this product and whether I should be buying it.”

My father’s insurance advice is similar to that of Todd Erkis, a professor of finance and risk management at Saint Joseph’s University, who says that “Insurance is key to protecting yourself against financial ruin.” Consistent with that view, Erkis suggests that new college graduates should buy just four types of insurance in order to hedge against possible financial hardship: health, long-term disability, renter’s, and car insurance.

Writing for Mint Life, Nicholas Pell adds just two other types of insurance to buy: home owner’s, which is analogous to renter’s, and life insurance. New college graduates often don’t have dependents and, therefore, don’t really need life insurance, but those who do should use insurance to protect their survivors from poverty.

All this to say, people don’t need pizza insurance, even if it’s “free.” So, what is Domino’s doing? In the very crowded market for restaurant pizza, Domino’s is probably trying to gain a little bit of perceptual separation from its closest competitors. Papa John’s and Pizza Hut don’t offer carryout insurance, which makes Domino’s distinct.

However, while Domino’s may have created a difference, the insurance doesn't deliver any real competitive advantage. Again, people don’t need the insurance, so it probably won’t sway many purchase decisions. Furthermore, who ever thinks they might drop their pizzas? In sum, the insurance just doesn’t offer any measurable improvement to Domino ’s value proposition.

Still, Domino’s has savvy marketers. The company wouldn’t be so successful if it didn’t. The firm’s marketing team probably intends carryout insurance as more of a promotional strategy than a product enhancement. In other words, it doesn’t matter if the insurance causes people to buy more pizzas, as long as publicity and word-of-mouth about the unusual offering helps keep Domino’s top-of-mind. That added exposure, in turn, should lead to more pizza purchases.

But would the firm really go to such lengths just for promotion? It's done so before.

Prior to carryout insurance, the company’s “Paving for Pizza” campaign represented a similar strategy. Domino’s promised to patch potholes around the country so the road hazards wouldn’t wreck pizza deliveries. Of course, a company as far-flung as Domino’s could never repair enough roads to actually make a significant delivery difference in most of its locations. However, the notion of a pizza company patching roads was so novel it captured press attention, as well as created some community goodwill. In short, the program seemed to be a very effective, albeit unconventional, means of pizza promotion.

Will carryout insurance, work as well for Domino’s? I doubt it. Despite the fact that I’m writing about it now and you’re reading about it, I don’t believe the company’s newest ploy will capture the interest or hearts of people like the paving program did.

There’s nothing wrong with Domino’s promising extra protection for pizzas; in fact, it’s a nice extra benefit, if anyone ever needs it. However, that lack of real consumer value, teamed with minimal promotional impact, places carryout insurance in the box of “Simple-Minded Marketing.”

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What Does "Meat" Mean?

6/1/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Girl Scout: “Is this [lemonade] made from real lemons?”

Wednesday and Pugsley, seated at their lemonade stand: “Yes.”

Girl Scout: “I’ll buy a cup, if you buy a box of my delicious Girl Scout cookies.”

Wednesday: “Are they made from real Girl Scouts?”

This dark humor from the 1991 comedy movie The Addams Family may scare up a few laughs, but it’s actually a good example of the product name debate that has many people asking, “Does a burger have to be meat?” and “What makes milk, milk?”

Hamburgers are to blame for the most recent round of debate. A few weeks ago, Burger King started testing a “meatless Whopper,” a vegetable-based patty that contains heme, “a protein cultivated from soybean roots that mimics the texture of meat.”

Veggie burgers have been around for a long time, but thanks to business partner Impossible Foods, founded in 2011 by Stanford biochemistry professor Patrick Brown, the newest generation of vegetable patties not only taste much more like meat, they even bleed like beef.

Burger King isn’t the only fast food chain seeing potential in a plant-based future. McDonald’s has started selling a McVegan burger and vegan McNuggets in Europe, Del Taco will begin to offer meatless tacos, and White Castle and Red Robin are already serving meatless burgers.

For years, nutritionists have been telling us to eat less meat and more vegetables, so what’s not to like about the growing selection of ‘plant food’? The concern is that the new nomenclature, like the word meatless, confuses consumers.

For instance, Nebraska’s farm groups have lobbied for a more restrictive use of the word meat: “any edible portion of any livestock or poultry, carcass, or part thereof.” As one of the nation’s leaders in commercial red meat production, the state has a real “steak” in ensuring that consumers do not migrate away from ‘real’ meat.

Last October, Missouri became the first state to legislate that anything that doesn’t come from “harvested production livestock or poultry” cannot be called meat. That goes for lab-grown meat, like Finless Foods is creating by taking cells of dead fish, putting them in pretri dishes, and cultivating their division into edible protein.

The dairy industry has faced similar and even more far-reaching name-related challenges. For about the last two decades, producers of traditional cow’s milk have witnessed a surge in competition from the likes of almond, cashew, hemp, oat, rice, and soy “milk.” According to Mintel, dairy milk sales declined by 15% from 2012 to 2017, all while non-dairy milk sales increased by more than 60%, with almond milk grabbing a 64% share of the market.

It was in this context that the Food and Drug Administration (FDA) Commissioner Scott Gottlieb remarked that almond milk shouldn’t be called milk since “an almond does not lactate.” Shortly thereafter, the FDA opened a public comment period, inviting consumers and industry members to share their opinions on the milk-naming debate.

The FDA is justified in asking whether there’s been slippage in the “standards of identity” that ensure consumers understand exactly what they’re purchasing. That’s its job. However, the agency would do well to look back much further than the last 20 years, for instance, to 1626 when Francis Bacon observed that certain plants “have milk in them when they are cut.” Likewise, in the late 1700s, the Encyclopedia Britannica published that “the emulsive liquors of vegetables may be called vegetable milks.”

The fact is, people have been using the word milk to refer to similar-looking white liquids for centuries, if not much longer, from a wide variety of sources. Consider, for instance, milk from coconuts, as well as milk from other animals like goats and camels. Indeed, “nondairy milks [have] abounded in many other cultures across the globe.”

Furthermore, meat and milk are far from the only names that have been extended to describe a broader range of products. Take another common dairy product—butter. Peanut butter is entirely plant-based (no dairy), yet the FDA carved out an exception because the product's creamy texture resembles butter and because few people would be eager to purchase “peanut paste.”

It’s not to say that anything goes, i.e., that industries and companies can feel free to call their products whatever they’d like. However, names needn’t be limited to one narrow product category, provided that they serve at least one of the following legitimate functions:

Identify who makes or sells the product, e.g., Avocados from Mexico, Starbuck’s
State for whom the product is intended, e.g., Children’s Tylenol, Dove for Men
Describe what’s in the product, e.g., wheat bread, whole grain pasta
Identify key product features and/or benefits, e.g., fat-free yogurt, Sketcher’s Relaxed Fit
Describe the product’s consistency, e.g., chunky peanut butter; Silk Soy Milk
State the product’s intended use, e.g., Hamburger Helper; Liquid Plumber

Most importantly, neither the product category name nor the brand name should mislead a reasonable consumer. The labels listed above probably aren’t confusing to you or the vast majority of people who read them because marketers and our culture in general have done good jobs educating us about the words’ meanings

So, most Americans know “meatless” means a product does not contain meat. Likewise, as attorney Justin Person has said, “If a consumer is confused about the source of a product labeled ‘almond milk,’ then he has bigger problems than being confused about which milk to buy.” Reasonable people also know that Girl Scout cookies don’t contain Girl Scouts.

It’s not surprising that the beef and dairy industries want to preserve exclusivity for their product category names. However, given that consumers aren’t confused by broader-based naming and may even be helped by it, it looks like the two industries are doing little more than protecting their own livelihoods, which makes their name-related lobbying “Single-Minded Marketing.”

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Preying on Older People

4/5/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

As I chatted with prospective students and their parents at a luncheon in our college’s cafeteria, I suspected that something wasn’t going well for one of the families. While others talked and laughed around the table, one mom seemed distracted, checking her phone and whispering with her daughter. Then suddenly she stood up, apologized for needing to make a call, and walked quickly from the room, leaving us to wonder what was wrong.

Sometime later, she returned to the table with a look of relief. After others left, she told me what had happened. Her own mother, a senior citizen, had received a ‘distressed’ phone call from someone claiming to be her grandson, who said he was sick and needed money. Confused but ready to act, the grandmother called and left messages for her son and for her daughter, the mom at our table, who fortunately was able to explain to her mother that someone was trying to trick her.

I told the mom I was very sorry to hear what had happened and was glad she was able to intervene. I also said I could empathize because the same thing had happened to my mother just a couple of years before! Then the real irony of the situation hit me. Here was a family, attending a luncheon to talk with a professor about marketing, all while they became the victims of a ‘telemarketing scam.’ How could their college visit and any interest in marketing be redeemed?

People do some terrible things under the auspices of “marketing.” Granted, most people are probably quick to differentiate this type of telephone scam from any legitimate business; still, these calls and others involving more or less manipulation form a continuum that many likely lump together as telemarketing. Allow me to paint a picture of that spectrum as I see it, then I’ll return to the targeting the older consumers.

On one end of the scale, call it the left, are calls like the one described above, or worse. Some extremely ruthless individuals conduct “virtual kidnappings” in which they contact victims by phone or social media messaging and pretend they have abducted one of their loved ones in order to collect a ransom. Kidnapping is illegal and considered immoral by most rational people, so it’s nonsensical to support it as legitimate business or valid telemarketing. The practice also involves blatant deception and coercion in that the perpetrators lie to their victims and exert pressure to try to force them to act.

On the opposite, or right, end of the continuum are examples like this one: Your bank calls to ask if you’d be interested in a home equity loan or a great rate on a certificate of deposit, etc. You may or may not appreciate such calls, but you do know your bank is a legitimate business that can follow through fairly on its offerings. Furthermore, if product descriptions are accurate and you don’t feel forced to accept them, there is no deception or coercion.

Occupying the middle of the spectrum are a variety of other phone calls with different degrees of deception or coercion. For instance, at our home we regularly receive calls “about our electric bill.” The voicemail messages are vague enough to make me wonder if they’re from our current utility provider, wanting to correct some kind of billing mistake. However, I realize it’s actually some other company, hoping to gain our business.

Those types of calls are probably not coercive, i.e., if I ever spoke with one of their representatives, I could freely choose whether or not to make a switch. The initial calls, however, are deceptive and, therefore, unethical, which is not a good way to begin a business relationship or any other relationship.

Also in the middle of the scale are calls that say your computer’s software is out of date or it memory is running low, etc. Most of us recognize that those claims are untrue and there’s no way such outsiders could know if they were. So, most people see through the deception, ignore the coercion, and dismiss the calls as scams. However, not everyone does.

Not as technologically savvy as those in the younger generations, many older folks are unsure if the supposed computer issues are real or how serious they may be. So, their relative lack of knowledge makes them more easily deceived. Furthermore, concern that something bad may happen to their computer can coerce them to take unneeded action. Fortunately, however, many senior citizens will first call one of their children, grandchildren, or other trusted individual and ask their advice.

Any of us can be duped about products/services that we don’t know well. For older individuals, there’s the added challenge of declining mental and physical faculties. Their minds often aren’t as sharp as they once were. They may not process information as quickly or remember as many details, both of which can negatively affect their decision making.

In addition, declining physical skills further complicate decreased cognitive capabilities. As we age, our vision and hearing decline, which can prevent us from doing things like reading small print on product packages or catching every word a phone caller says. For these reasons older people are particularly vulnerable to illegitimate forms of telemarketing.

That last sentence and my earlier bank example point to my opinion that, despite the many bad examples, there are legitimate forms of telemarketing, namely ones that provide a fair value to consumers, that use honest communication, and that allow freedom in response, all while respecting individuals’ home lives. For instance, someone in need of extra money may appreciate a phone call from their bank informing or reminding them that it offers a good rate on home equity loans.

In contrast, telemarketing that’s fraudulent is against the law. Title 18 of U.S. Code § 1343 identifies such illegal activity as wire fraud, which involves any interstate or foreign commerce that uses electronic communication to gain “money or property by false or fraudulent pretenses, representations, or promises.” Using the phone to scam people is a “common example” of wire fraud. Those found guilty of wire fraud are subject to fines as high as $1 million and up to 30 years in prison.

However, fraudulent telemarketing is not just illegal, it’s also unethical. It’s deceptive to mislead others about who’s calling and the nature of the call. Similarly, it’s coercive to play on people’s emotions and/or to apply unnecessary time pressure in order to force quick action. It’s especially abhorrent to do those things to individuals who are more vulnerable to such tactics.

So, how did this professor try to help marketing save face with a family and young person considering a career in the field? I explained that such occurrences of coercion and deceit don't represent marketing's core tenet of mutually beneficial exchange. At the same time, such examples are good reminders that those of us in marketing need to work harder to distance such illegitimate behavior from proper practice of the discipline.

I also mentioned Mindful Marketing and the possibility of writing a piece related to the incident for the blog. We talked about more typical college visit items afterward, but as the family was leaving, the mom’s attention returned to the telemarketing scam, and she suggested it would be good if I’d write about those issues.

When Gallup presents its annual research about the honesty and ethical standards of various professions, telemarketers typically rank near the bottom of the results. There are legitimate forms of telemarketing, but phone scams aimed at our moms, grandmas, and other older people certainly aren’t among them. Given that these practices hurt those targeted and can land the perpetrators in jail, such schemes make it easy to call them “Mindless Marketing.”

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Paying with Your Personal Brand

3/23/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

It was shocking to hear the news: TV’s beloved “Aunt Becky” charged with fraud in “the biggest college admissions scam ever prosecuted in the U.S.” Most people understand that a business model based on bribery is wrong, but there’s another angle to this story that's relevant to each of us, as marketers of ourselves.

To summarize the scandal, Lori Loughlin, who played Rebecca Donaldson-Katsopolis on the classic ABC sitcom Full House and the Netflix sequel Fuller House, and starred in the Hallmark's When the Heart Calls, was one of fifty people implicated in the admissions scandal that also netted actress Felicity Huffman, known for her role in ABC’s Desperate Housewives. The mastermind of the manipulation was Rick Singer, CEO of The Key, which promised to help “the wealthiest families in the US” get their children into some of the country’s most prestigious colleges.

Many tutors, SAT prep courses, and other admissions aids honestly and legally help students improve their chances of acceptance to their preferred colleges. So, how did Singer run afoul of the law? He allegedly helped his clients’ children cheat on ACT and SAT tests, and he bribed college athletic department personnel so they would claim that certain students were recruits for their teams, even when some never played the sport in question.

However, perhaps the most devious thing Singer did was create “The Key Worldwide Foundation,” which was supposedly a charity that funded programs for underprivileged children in the U.S. and abroad. In reality, the Foundation served as a front for money-laundering, or a way for the wealthy to pay Singer who then channeled bribes to accomplices on college campus that included USC, Yale, and New York University, among other prestigious schools.

As someone who works in higher education, has one child who recently graduated from college, and has another who is currently making his college decision, the admissions scandal hit close to home. However, the scandal is even more unsettling to me as a marketer.

No, I’m not just talking about what Singer did. His bad decisions to build a business based on cheating and bribery and to operate a fake foundation were certainly appalling and surprising. What was even more amazing to me was the apparent ease in which he secured willing parties to the schemes, not just from the general population but from those representing high society and higher education—people who stereotypically ‘should know better.’

In addition to accomplished actresses Loughlin and Huffman, alleged scandal participants include an array of elite professionals from business, academia, and other fields. Some of the specific individuals implicated, along with their current or former positions, are:

Rudolph Meredith, head women’s soccer coach at Yale University
John Vandemoer, sailing coach at Stanford University
Igor Dvorskiy, director of West Hollywood College Preparatory School
Gordon Ernst, head tennis coach at Georgetown
Donna Heinel, a senior associate athletic director at USC
Jorge Salcedo, the head coach of UCLA men’s soccer
Gordon Caplan, New York attorney and co-chairman of the law firm Willkie Farr & Gallagher
Gregory Colburn, a radiation oncologist in Palo Alto
Robert Flaxman, chief executive and co-founder of Crown Realty & Development, and a Beverly Hills resident
Homayoun Zadeh, associate professor at USC’s Herman Ostrow School of Dentistry and director of the school’s Advanced Program in Periodontology

Why would so many smart and talented people risk their reputations and/or careers to associate with Singer. The motives were likely mixed. Of course, many of the participants were parents who may have been willing to do anything to see their children succeed. Those who accepted bribes, probably wanted the money. Some may have felt pressure to assist for the good of their institution. Maybe some saw or heard of others doing similar things and rationalized ‘there’s safety in numbers.’

Whatever the motive, I doubt that many of the participants, if any, seriously thought that they would get caught. If they did, they probably wouldn’t have participated. Instead, they operated under the delusion that what could be hidden from public view didn’t matter.

That misconception is one of the biggest fallacies of marketing, in general, and personal branding, specifically. In an article I wrote a couple of years ago, I aimed to debunk that myth by suggesting that a personal brand consists of three elements: character, competencies, and communication. I likened the first two components to the layers of a cake and the last one to its icing.

Some individuals erroneously act as if they can overcome flawed character and inferior skills by spreading on a thick layer of overly flattering or even disingenuous communication. Besides being dishonest, this approach only works for so long. Eventually cracks in ‘the cake’ show through the communication. Unfortunately for them and others impacted by their indiscretions, those involved in the college admissions scandal seemed to subscribe to this hollow approach to personal branding.

As I was writing this blog post, my wife shared with me some very sad news. A good friend of ours from early in our marriage had passed away suddenly at home, at the age of 58. Mark Sneff was someone who built his personal brand the right way. Even as he developed his competencies to rise to the top of the HR profession, his character exuded integrity. Mark also was uniquely gifted at communicating “the truth in love”: He could offer an honest critique that felt like a high compliment.

As the outpouring of fond remembrances on his LinkedIn page suggests, Mark was a widely loved individual who many held in high regard. I’m not sure he thought much about personal branding. I am very confident, though, that he never would have resorted to a ruse to advance the educations or careers of his two children, who he loved greatly. Interestingly, Mark was the first person I ever invited to speak to my college classes.

It’s so nice to know people who ‘market themselves’ the right way. The recent college admissions scandal should be a reminder that it only take a moment to destroy a personal brand that took decades to build. Unfortunately, that fact means that Loughlin and all who participated in Singer’s schemes, not only injured themselves and others, they’re also guilty of “Mindless Marketing.”

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Just Blew It

2/23/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

The stage for a college basketball game couldn’t get much bigger: two top-ten teams in a packed arena, one of the best rivalries in all of sports, several projected NBA draft picks in the lineup, two hall of fame coaches on the sidelines, the likely NCAA player of the year on the court, and the 44th president of the United States in the stands. Then a piece of footwear malfunctioned, and the stock price of the world’s most iconic sports brand took a dive.

This past Wednesday, #1 Duke hosted #8 North Carolina for one of the most highly-anticipated men’s college basketball games in recent memory. Tickets were selling at Super Bowl-like prices, not just to see the two storied programs clash, but also to witness what was sure to be a marquee performance by one of the most talented and exciting college athletes ever—Duke’s Zion Williamson.

Just an 18 year old, standing 6’ 7” and weighing 285 lbs., Williamson’s unique combination of extraordinary basketball skill and incredible athleticism had captured the attention of all college basketball fans, international news media, and every NBA team, making him the odds-on favorite to be the first choice in the league’s next draft. Then the unimaginable happened.

Just 33 seconds into the game, Williamson received the ball, took a few dripples, planted his foot near the foul line, and fell awkwardly to the floor, while a look of pain raced across his face. As those watching gasped, the cause of the slip quickly became apparent: Williamson’s foot had burst through his Nike sneaker. Camera footage even caught former President Obama, pointing to the court and saying “His shoe broke.”

The story spread like wildfire over traditional and social media, as sports analysts, basketball fans, and others reacted. Many expressed amazement at the occurrence. Rival sneaker maker Puma tweeted snarkily “wouldn’t have happened in the pumas.”

Nike execs were undoubtedly reeling from what must have felt like their worst nightmare: The best known player in college basketball and a likely NBA superstar had just suffered an injury because of their shoe. Not only did the chances of signing Williamson to a future multi-million-dollar endorsement deal drop precipitously, the endless images of the prodigy wreathing in pain with foot popped through the side of his Nikes, was a picture that athletes and other sneaker buyers would not soon forget.

Nike did wish Williamson well: “We are obviously concerned and want to wish Zion a speedy recovery.” The same company spokesman added, “The quality and performance of our products are of utmost importance. While this is an isolated occurrence, we are working to identify the issue.” Still, the day after the blowout, Nike’s stock fell by 1.05%.

Was Nike simply the sufferer of a very unfortunate accident at one of the worst possible moments? Probably not. It seems that Williamson’s shoe blowout could have been predicted and prevented in light of previous player experiences, as well as others’ product reviews.

In 2016, the foot of Orlando Magic’s Aaron Gordon blew through the side of some Nikes when he landed after a dunk. Two years earlier, in the same NBA season, Golden State’s Andrew Bogut, the Spur’s Manu Ginobili, and the Sixer’s Tony Wroten, all experienced major Nike malfunctions.

Of course, one can argue that Williamson and these professional athletes put more strain on a pair of basketball shoes than the average sneaker wearer does, which is probably true. Many average wearers, however, also have experienced quality issues with their Nikes. Some have been frustrated enough to upload their sneaker stories to YouTube, for instance:

One consumer shows how the soles separated from the rest of his $200 Nikes after limited wear.

Another tells how several different pairs of his Air Jordans have fallen apart after moderate use.

A golfer shows how the soles came off his new-looking Nike golf shoes while playing.

Another user shows how his Nike Shox are falling apart after about six months. He laments, “I spend so much money on a shoe, and this is what it comes down to. I thought better of Nike, but this is what it is, y’all.”

Besides these sad stories, others have posted about similar durability issues with their Nike Air LTD’s, their Nike TN’s, and their Nike SB Diamond Dunks.

Four years ago Nike pulled the Lebron 12 from the market on the day of its scheduled release due to quality concerns. About three years ago KicksOneTwo noted ongoing quality control issues with Nike sneakers.

But, Nike’s annual footwear revenue is over $21 billion, which means it sells hundreds of millions of shoes a year, so aren’t there bound to be some production problems? Yes; however, it’s curious that in so many of the defect videos, the problem is the same even for different kinds of Nikes—the shoes just come apart, similar to the way they did for Williamson and for the NBA players mentioned above.

I’ve also had a similar experience with the brand. It had been several years since I’d gone running, when I decided to put on an old pair of Nike running shoes I owned and take a jog around the neighborhood. It wasn’t long into the run when I started to hear an unusual noise and feel a flapping under my feet. I soon realized the soles were falling off my running shoes. Granted, it was an old pair of sneakers. Still, I’ve owned many different styles and brands of athletic shoes over the years, including ones that I’ve worn much harder, but that’s been the only time anything like that has happened to me.

So, maybe Nike does have quality issues that need to be addressed, but some may be wondering what they have to do with the company’s marketing? Well, effective marketing involves much more than what a company says, or communicates.

Every marketing students learns the four P’s of the traditional marketing mix: product, place, promotion, and price. A primary objective of an entire organization, not just its marketing department, should be to ensure that each “P” meets the target market’s needs, as well as the organization’s goals, ultimately creating a mutually beneficial exchange.

However, if a company’s product is deficient in some way, it may overcompensate with another P, often promotion, which reminds me of a metaphor I've used before—baking a cake. Sometimes a cake comes out of the oven with cracks, which can be hidden with a layer of icing. The deeper the cracks, the thicker the icing needed to cover them.

It seems that Nike shoes on whole have some “cracks,” which the company has adeptly covered over the years through enticing layers of communication, ranging from highly-produced TV commercials, to prominent team sponsorships, to superstar endorsers.

That’s not to say that Nike’s value proposition is just a façade—not by a long shot. The company generally makes good quality products that serve people well, otherwise it wouldn’t be the world’s most valuable sports brand. Still, a significant number of people probably do buy into Nike more because of the icon’s icing than the consistency of its cake.

I still haven’t seen from Nike a true apology to Williamson for the shoe blowout. Saying that it wishes him well and promising to investigate the issue do not constitute a confession. Perhaps for legal reasons, Nike really hasn’t taken ownership of the incident.

No company or product is perfect; accidents happen. However, even for a company as big as Nike, the reoccurrence of such high-profile product malfunctions should give everyone pause, from the guy wanting to jog around his neighborhood to the next NBA superstar looking to ink a multi-million-dollar shoe deal. Nike will recover from the latest incident, but the injury to Williamson and the damage to the company's brand make what led up to the shoe blowout “Mindless Marketing.”