Category: + Stewardship

Silencing the Slurp

11/17/2017

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

What do you like most about your favorite food: the enticing appearance, the alluring smell, the delicious taste? How about the intriguing noise? Of course, most foods don’t make significant sounds when eaten, and if they do, they’re generally not pleasing ones. Such a sound problem, however, is exactly what a Japanese company has purposed to fix for one of its nation’s staple foods.

Japan is a country of great cuisine that includes sushi, tempura seafood, miso soup, and ramen noodles. So, what Japanese fare is responsible for emitting unpleasant sounds? The noise is in the noodles.

The world is home to all kinds of pasta and noodle-eating techniques from twirling, to stabbing, to scooping. In Japan, the preferred method is slurping, which basically means using chopsticks to start the noodles into one’s mouth, then inhaling.

That approach works well, both in terms of eating efficiency and enjoyment—many Japanese believe slurping is the best way to appreciate the full flavor of the noodles. With slurping, however, comes sounds that some people, namely Westerners, find unsavory. That’s where Nissin’s “noise-cancelling” fork comes in.

That’s right, this Japanese company has developed a piece of flatware, called Otohiko, that aims to eliminate the noise of slurping noodles. How is it possible to silence such a sound? Well, the fork has a highly directional microphone inside its electric toothbrush-looking handle that senses the slurping, then signals an app-connected smartphone to play “a loud, electronic noise that sounds like waves washing ashore combined with futuristic space sounds.”

But, does this technique really eliminate the slurping noise, or does it just cover it up, the way some people try to mask their post-workout pungency with a few swipes of a deodorant stick? As Nissin’s video shows, it’s a little bit of both. Apparently, the company has conducted extensive research of slurps, which has led to the creation of the aforementioned sounds that strategically conceal the slurping beneath the louder swooshes and swishes of the app.

It’s not surprising that a firm found in a nation known for its technological leadership would identify an electronic answer to an ancient eating issue. One might wonder, though, whether the problem is significant enough to warrant such a sophisticated and expensive solution, not to mention whether it really works.

Nissin expects each utensil to retail for 14,800 yen, or $130, which certainly isn’t cheap compared to most flatware. The fork will not be found in any stores, however, unless the company hits a goal of 5,000 pre-orders. Only then will manufacturing begin.

On one hand, Nissin can be commended for its broad cultural sensitivity. Here’s a Japanese company that’s trying to respect the sound sensibilities of Westerners, while allowing its own citizens to enjoy one of their favorite foods to the fullest. The intentions seem noble.

Of course, we also know “the road to . . . is paved with . . .” That’s not to suggest that anything about Nissin’s product is immoral, but rather that consumers’ response to the fork may not be as favorable as the company would hope. Here are three questions that suggest concern about the product’s mass market potential:

1) Will users of the fork be satisfied with a sound cover-up? True, those within earshot, will no longer discern the slurping, but they’ll hear other noises that may also be irritating. Plus, if one connects the new noises to the slurping, ala Pavlov’s classical conditioning, suddenly the manufactured sounds carry the same negative associations.

2) Is the fork a practical solution? Most people don’t want to carry around their own utensils, especially one as big as an electronic toothbrush, to restaurants, etc. Transporting becomes an even greater inconvenience after the fork has been used. Where do you stash a dirty fork? There’s also the issue that if the user’s phone, which generates the camouflaging sounds, is going to be heard, it needs to be placed in the open, with volume turned up, which adds unexpected phone calls and text messages to the list of possible dining distractions.

3) Is the product worth the price? One hundred and thirty dollars is considerable cash to plunk down on an implement that may get very little use. Along those lines, one also might suspect that the same Japanese consumers who prefer to slurp their noodles may want to eat them with chopsticks, not a fork. Maybe, then, Nissin should make noise-cancelling chopsticks instead.

It’s great when people care enough about others to alter their own behavior in order to make someone from another culture feel more comfortable. Nissin certainly seems to have that intent, but unfortunately it’s unlikely that its innovative flatware with find significant success. For that reason, the firm’s noise-canceling fork should be considered “Simple-Minded Marketing.”

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Breathing Easier

11/2/2017

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

When thinking of things you do most often each day, working, eating, and checking your cellphone may come to mind. However, there’s another essential activity we tend to forget that everyone does with even greater frequency—breathing. Unfortunately, that involuntary behavior is becoming more dangerous for a greater number of people. It’s good, therefore, that a German company has developed an innovative device to make for better breathing.

It’s tempting to think that what we don’t see can’t hurt us, but that belief couldn’t be more misleading when it comes to air quality. In 2012, over 6.5 million people died from diseases related to air pollution worldwide. That 11.6% of all global deaths, making air pollution “the fourth-largest threat to human health, behind high blood pressure, dietary risks and smoking.” Or, to frame it differently, more people died from air pollution-related diseases in 2012 than died from tuberculosis, HIV/AIDS, and road injuries combined.

We might think those risks belong to others because the air we breathe seems fine, but “more than nine out of 10 of the world’s population – 92% – lives in places where air pollution exceeds safe limits, according to research from the World Health Organization (WHO).” So, air pollution should be everyone’s concern.

One company that has made better breathing its mission is Green City Solutions. The Berlin-based company has developed “The world’s first bio-tech filter to quantifiably improve air quality.” When you think “air filter” you might picture what’s under your car’s hood or in your home’s HVAC system; however, Green City’s “CityTree” filters look more like a piece of lawn than layers of ribbed paper.

Each filter, which is about 3.5 square meters in size (9.84 ft. wide x 13.12 ft. high x 7.19 ft. deep), contains an inner layer of moss that “binds particulate matter, produces oxygen and cools the air.” However, moss’s unique ability to permanently integrate pollution particles into its own biomass comes with a limitation: The low-profile plant needs amble water and shade to survive, which are noticeably missing in many urban areas.

Fortunately, Green City has developed a solution. An outer layer of shade-giving plants protects the moss from direct sun, while an automated water supply keeps the all of the plant-life hydrated. In addition, built-in solar panels provide the energy needed for each CityTree to function, and integrated IoT technology transmits environmental and performance data in real time. In sum, CityTree is a both a natural and intelligent air filter.

As a result, each CityTree can provide “the same environmental benefit 275 actual trees would. It’s able to absorb some 250 grams of particles per day, removing 240 metric tons of carbon dioxide every year.” The key is the moss’s larger leaf structure, which allows the ‘lowly’ plant to absorb more pollutants than any other vegetation.

But, air filtering isn’t the only thing that a CityTree offers. An installation can also include a built-in bench in a variety of woods, offering a pleasing place for people to lounge.

So, what do CityTrees cost? They average about $25,000, installed. That’s considerable cash for an air filter, but they seem to be well-worth the price when one considers the deadly outcomes of air pollution mentioned above and each CityTree's unique purification potential.

Also, the cost can be offset by an optional advertising display. If a city persuades a company to underwrite an installation, that firm can have its name or other promotional message placed tastefully on the giant filter.

However, an important concern is the efficacy of Green City’s post hoc air-cleaning versus more preemptive pollution control. As Gary Fuller, an air effluence expert at King's College London, suggests, there’s no way to route automobile emissions and other urban pollution to CityTrees the way the air in a house is channeled through the home’s AC filter. The best solution, therefore, is to stop pollution before it’s made, rather than trying to capture it after the fact.

Fuller’s point is a good one. By way of analogy, driver-assistance technology that can help avoid car accidents, like a lane departure warning, is more ideal than devices that lessen injury after accidents happen or as they occur. Still, automobile manufacturers shouldn’t stop installing airbags and mounting seatbelts. At least at this point, saving lives in car accidents should continue to be a multipronged, before-and-after approach.

The same is true for pollution control. Until air pollution is no longer produced, it’s important to try to reduce what’s already been made. However modest it may be, that reduction will also save lives.

As of this past June, Green City had installed about 20 CityTrees in many major metropolitan areas around the world, including Brussels, Hong Kong, Oslo, and Paris. The company’s sales success is helping our world breathe a little easier, which deserves to be called “Mindful Marketing.”

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Hurricane Heist?

9/15/2017

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

As Hurricane Irma turned toward Florida, an angry consumer shared a screen shot of a 24-pack of 16.9 ounce bottled water that Best Source Office Supplies was selling on Amazon for $99.99. Inflating the prices of necessities ahead of an impending natural disaster is a tactic that most people find deplorable, but not everyone. Of course, companies taking that tack rationalize their actions, but certain others also make a compelling case for such price hikes.

Price gouging is "the practice of raising prices on certain types of goods and services to an unfair level, especially during a state of emergency." Although it’s not uncommon for companies to increase prices on goods and services to levels that consumers think are too high, price gouging is different.

Consumers are price gouged when the item in question is something they must have (e.g., food, water), but the product’s supply is severely restricted, often to a single seller, so consumers have no choice but to pay the exorbitant price. In contrast, although the new iPhone X starts at a staggering $999, Apple is not guilty of price gouging because it’s possible to survive without the newest iPhone.

In the case of Hurricane Irma, certain sellers reportedly gouged consumers for water, ice, food, and fuel. One Orlando Shell station supposedly sold regular grade gas for $5.99/gallon and premium for $6.99. Even Disney got into the act: A Twitter user posted pictures from Disney’s Art of Animation Resort, which offered small bottles of water for $2 and juice boxes for $2.69 each. A Disney spokesperson later said that the situation was an isolated incident that had been rectified.

To document such abuse, Florida’s attorney general Pam Bondi set up a hotline that received over 8,000 calls about price gouging, which violates Florida law and is subject to “civil penalties of $1,000 for each violation, and up to $25,000 for several violations within a 24-hour period.” Beyond the legal penalties, Bondi promised violators personal retribution: “I will be saying your name all over national television and telling people not to go to your business ever again if you’re stealing from Floridians and taking advantage of Floridians in a time of need.”

Despite the fact that certain states have made price gouging illegal and most people consider it immoral, some claim that capping prices actually makes situations, like those surrounding hurricanes, worse. Writing for Forbes, Adam Millsap argues that pricing gouging laws are what empty store shelves, not natural disasters. The best thing, Millsap contends, is to let supply and demand determine prices like they normally do.

Similarly, in a New York Times article, Andrew Ross Sorkin states that “several respected economists from the Milton Friedman school of free-market theory” support the argument against price gouging laws because artificially low prices “remove the incentive for consumers to conserve essential supplies,” and they discourage sellers from increasing stock.

So, maybe Adam Smith’s “invisible hand” is the best way to determine supply when natural disasters strike. That belief aligns well with an increasingly popular pricing strategy, dynamic pricing, in which firms like airlines use algorithms to quickly increase prices to whatever level the market will bear. Unfortunately, such approaches also tend to have some very undesirable side effects.

For one thing, higher prices naturally favor the wealthy. That advantage is understandable under normal circumstances: People with more money should be able to buy higher-priced items. In the case of natural disasters, however, it doesn’t seem right to price anyone out of the market for food, water, or other basic survival needs.

Also, there’s no reason retailers can’t impose limits on how much or how many of an item customers can buy. Stores successfully ration items all the time. For instance, a grocery store runs a sale on granola and dictates: “Limit, two boxes per customer.” Likewise, arguments against price gouging laws don’t give people much credit. When asked to conserve, most individuals will limit their consumption for the sake of others.

In addition, the notion that businesses should maximize profits at their customers’ expense is both antiquated and short-sighted. Sure, people may have no choice but to pay ridiculously high prices when they’re put between a rock and a hard place, but they won’t soon forget what it felt like to be treated as a means to an end. Firms that price gouge run a great risk of alienating consumers and ruining their reputations.

On the other hand, companies that show restraint and price “to create shared value,” generate considerable goodwill, especially in the face of a natural disaster. A few firms that bolstered their brands by taking this more enlightened and socially responsible approach when Irma struck were JetBlue, Airbnb, AT&T Wireless, and Martin’s Famous Pastry Shoppe.

It’s hard for most people to know how they will react in the face of life-threatening natural disasters like hurricanes Harvey and Irma. Businesses, however, should know not to take advantage of people in such vulnerable states. Companies that do are guilty of various offenses, and one of them is “Mindless Marketing.”

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Should Donations Be Discreet?

9/2/2017

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

We’ve seen the havoc that Hurricane Harvey has wreaked around the Gulf. We’ve also witnessed an outpouring of physical and financial support for those in need. Such altruism makes me ask: Is it right to recognize those who give, or should such benevolence be anonymous?

Although I’ve considered this question before, the issue struck me more squarely than ever when I received an email a few days ago from the American Marketing Association (AMA). Like several other organizations, the AMA sent a message to its constituents, encouraging them to contribute to the relief effort, in other words, marketing giving.

The email contained a link to an American Red Cross/AMA fundraiser page, powered by Crowdrise. On the right side of the page was a box, listing the amount of money raised--$5,095 at last check. Also in the box was a scrolling list of names and dollar amounts, showing who’s given and how much, for instance:
     Andrew Smith         $50
     Erika Alexander      $10
     Anonymous             $50
     Yanliu Huang         $100
     Gunisha Samir       $50

I never saw anything quite like this revolving list of donors, which made me think: Should I be recognized for my giving?

Of course, Crowdrise didn’t invent the idea of donor recognition. There are plenty of other examples, ranging from acknowledgment pages in high school yearbooks to the names of buildings on college campuses. What’s different with Crowdrise, however, is the unique and unconventional appeal, bluntly stated below the company’s logo: “If You Don’t Give Back No One Will Like You.”

Now, I’m really questioning my motives: Do I give to others because I want to help them, or because I’d like other people to acknowledge and appreciate me. This reflection is personal, but companies wrestle with similar questions, which affects how they handle their giving.

For instance, Houston Texan defensive end J.J. Watt has effectively used his celebrity to raise over $15 million for victims of Hurricane Harvey. Given that more than 152,000 people have contributed to Watt’s fund on YouCaring.com, gifts must be coming in all sizes. Probably the largest contribution has come from retail giant Walmart, which cut a check for $1 million. However, Walmart didn’t make its donation discreetly through Watt’s website. Instead, the company handed a massive 3 ft. x 7 ft. presentation check to Ellen DeGeneres while she spoke with Watt during a taping of her talk show.

Was Walmart wrong to promote its philanthropy on national TV? Probably not. For one thing, the visibility of this very significant gift will likely raise awareness of the need for hurricane relief and encourage others, especially large corporations, to contribute. In addition, given that Walmart is a publicly-traded company, its management is accountable to shareholders, which means announcing material transactions and building goodwill for the firm, which publicizing charitable giving tends to do.

So, should you and I hand an oversized presentation check for our next $100 donation? No, but that doesn’t mean it’s wrong to be recognized. At least one of the reasons mentioned above for Walmart can apply to individuals: When others see that we give, they may be inspired to do the same.

There are, however, a few important things to consider, whether it’s an individual or a corporation building its brand. As suggested above, any publicity should be in keeping with the size of the gift. Also, motivation matters. No person or company should give simply because they want recognition. That doesn’t mean forgoing any acknowledgment, but it does mean that recognition should not be the driving force, or the primary motive.

It’s fine to have multiple reasons for doing things. Life is complicated, and our motivations must reflect that complexity. However, as a society we’ve gone askew if we allow promotion to overtake compassion. We need organizations and individuals who genuinely care about others and who are willing to help even if no one else knows they did.

So, while Crowdrise’s tagline, “If You Don’t Give Back No One Will Like You,” is unseemly, there’s not necessarily anything wrong with receiving recognition for giving. In fact, appropriate recognition can be helpful for all involved. Giving for the right reasons, anonymously or with one’s name attached, is always “Mindful Marketing.”

P.S. Helping those impacted by Hurricane Harvey is much more important than a blog about marketing ethics. If you’re thinking of giving, here’s a great list of organizations that can put your donation to good use.

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Fixing iPhones

8/10/2017

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

One rainy morning many years ago, I was driving to work (my first career position after college) when a car hit me from behind and pushed me into another vehicle. It was a relatively slow-speed collision so the damage to my car wasn’t extensive, but the insurance adjuster called it “totaled” since the repair estimate exceeded the car’s low value. My car wasn’t worth fixing; I needed to get a new one.

That experience reminds me of the many products we use each day but seldom repair when they break. For instance, most of us don’t think of fixing a broken toaster; we look for a new one. This tendency to replace instead of repair places significant strain on our environment, but the practice becomes even more troubling when talking about expensive and easily ‘injured’ items like our ever-present smartphones.

If you own a smartphone and haven’t dropped it or had some other mishap, you’re either extremely careful or very lucky because, “Each year millions of cell phone owner’s drop, sit on, flush, swim with and even throw their phone, which normally results in some sort of damage.” After such an unfortunate occurrence, the question becomes whether to repair or replace the indispensable device, which probably cost at least a couple of hundred dollars, or several hundred-plus if you’re packing a newer iPhone or the latest Samsung Galaxy.

Fortunately, a variety of online outlets will repair broken phones, for example:

However, using an online organization for repairs requires a major sacrifice of time. Many people can’t be without their smartphone for a few hours, let alone several days or more. And, there’s the issue of trust: We don’t know these companies well and can’t watch them make the repair. How can we be sure they’re respecting our privacy when so much of our lives literally rests in their hands?

Also, again, there’s the issue of cost. Is it worth $100 or more to repair even a relatively new device when technology is changing so quickly? As a result, it’s easy to rationalize spending a few hundred more to have a new one.

You may be wondering, "Where are the smartphone manufacturers? Why don’t the cellphone companies have our backs when their products so easily and often get broken?" In the U.S., that criticism has hit especially hard at Apple, which has a whopping 44.6% share of the smartphone market.

For years, the only place iPhone users could get their cracked screens ‘officially’ replaced was at an Apple store. Unauthorized repair centers, like the three listed above, might be able to fix the phones, but if Apple later detected their work on the device, the warranty would be voided.

Apple would suggest that the reason it has kept a tight rein on screen repairs is that it wants them done right, especially “to ensure that the new screen is properly calibrated – and in particular to allow the Touch ID sensor to be replaced without bricking the phone or losing use of the sensor.” Those more cynical about the tech leader’s motives might suggest that Apple wants to drive business to its own stores in order to capture the repair revenue or, even better, to sell users new iPhones and other items, i.e, to replace, not repair.

In any case, there are currently about 270 Apple stores in the U.S. That number may seem high, but it’s not when you consider, for instance, that Illinois and Pennsylvania, the fifth and sixth most populous states in the nation have 12.8 million and 12.7 million residents, respectively, but only nine Apple stores each. Such ratios can mean a loooong time waiting at a Genius Bar.

The good news is that Apple has recently eased its repair site exclusivity. The firm has finally authorized a few select retailers to fix broken iPhone screens. How can Apple guarantee the quality of those third-party repairs? Well, the company has not conceded control completely.

Apple is giving each authorized repair center a highly-specialized and proprietary machine that not only replaces the screens but also tells “the iPhone’s processor, its silicon brain, to recognize a replacement sensor. Without it, the iPhone won’t unlock with the touch of a finger. Banking apps that require a fingerprint won’t work either, including the Apple Pay digital wallet.” Pictures of the closely guarded apparatus can be found on 9 to 5 Mac website.

Currently only a couple of Best Buy stores in California and Florida have these machines that are capable of making same-day screen repairs. However, by the end of this year it’s expected that the equipment will be present in “about 400 authorized third-party repair centers in 25 countries.”

So, the future is looking brighter for all of us clumsy iPhone users, but won’t the delegation of this service take a bite out of Apple’s business? What about its revenue from repairs, the loss of traffic in Apple stores, and the sale of new iPhones? All of the above are real considerations but they pale in comparison to one meta-goal for Apple: maintaining its strong brand.

Apple has become the most valuable brand in the world for a variety of reasons, but the overarching one is strong customer satisfaction. People who use Apple products are almost always delighted because of their look, their performance, and the aura around them. Apple smartly wants to avoid tainting that stellar reputation, which could occur if people become disenfranchised from inconvenient and lengthy repairs.

However, averting a negative product experience is probably only part of Apple’s plan. The company also needs to increasingly position itself as a good steward of resources and as an organization that cares about the natural environment. Allowing smartphones that still have significant useful life to prematurely become paper weights or other waste does not accomplish those objectives.

Likewise, as the market for smartphones becomes more and more saturated and competitors’ product features converge, factors like repair service and social responsibility will likely gain weight as decision-making criteria. Every point of difference matters in a mature market.

Apple’s decision to outsource and broaden its repair network will be very helpful for consumers. The strategy also will prove very beneficial for the firm. As it’s done many times before, Apple has made an adept move that can be called “Mindful Marketing.”

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E*Trade Encourages Envy

7/14/2017

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

People often point to advertising as the main influence on individuals’ buying decisions. Certainly ads can be effective, otherwise there wouldn’t be so many of them; however, another major influence on what we buy is other people, e.g., "keeping up with the Jones." E*Trade’s new ad campaign leverages the persuasive power of peers, but is the firm’s two-pronged promotion effective and ethical?

E*Trade bills itself as “the original place to invest online” and “the first to give Main Street the chance to trade like Wall Street.” The company has become well-known for empowering ordinary people to trade like professional stockbrokers. Instead of paying costly commissions, individuals who open E*Trade accounts put down just $6.95 per trade of stocks, bonds, and exchange-traded funds (ETFs), and that fee drops to just $4.95 after 30 trades in a given quarter.

Do E*Trade and similar on-line trading platforms (e.g., Ameritrade and Scott Trade) work? They can, if you know what you’re doing. Online trading is much like do-it-yourself (DIY) home projects. Getting the tools to renovate your own kitchen is easy; using them properly is the hard part. Some, however, have been very successful using online trading tools, like the New Jersey high school student who turned $10,000 into $300,000 in about a year, by buying and selling on E*Trade.

This information provides an important backdrop for E*Trade’s new advertising campaign, as each spot features an unambiguous attempt to pit poor against wealthy. The commercials entice the “have nots” to long for the lifestyle of the “haves.”

For instance, in one commercial a young cubicle-dweller gets blown-off by his much more affluent boss, which launches the young office worker into imagining the extraordinary lives of the exceptionally well-to-do: lounging around lavish pools, hitting golf balls off yachts, doing donuts in super cars, feeding exotic pets, waterskiing behind helicopters, having food fights with expensive edibles. A music bed of “If I were a rich man” from Fiddler on the Roof plays beneath these and several similar clips, all culminating with an arousing call to action: “Don’t get mad, get E*Trade.”

The campaign’s other spots feature different video footage and music but suggest the same problem/solution: Your life is lacking because you don’t have what the rich have, but you can get it all with E*Trade.

What’s been the reaction to E*Trade’s campaign? Adweek gave it the designation of “Ad of the Day” for June 19, 2017, describing the ads as “remarkable,” while adding that the company “stokes rage at the 1%.”

Fast Company’s take was more critical: “By using opulence to sell its investment services, the online broker patches together a plutocratic vision of the American dream, ignoring how entrenched inequality is–and how much more difficult it is to overcome.”

In addition, CNET succinctly summarized the campaign’s ironic prescription: “The rich are awful, so use ETrade to become one of them. That seems to be the logic behind the company's new ad campaign.”

I tend to agree with these analyses and draw my own conclusion about the campaign’s mindfulness through a combination of these points and several new ones. Here are the five unfortunate outcomes I believe E*Trade’s ads inspire:

1. Unrealistic expectations. Certainly people can go from rags to riches by trading stocks, but how likely is it to happen? Making a fortune in the stock market requires considerable skill and some luck—much more than just opening an online account.

2. Envy: Benchmarking helps businesses get better by showing them how they might improve their products and processes. Personal comparisons, however, are often problematic, especially when they involve wishing for what others have.

3. Terminal Materialism: Money isn’t inherently bad; it depends on what one does with it. Many of its uses in the E*Trade ads, however, suggest owning for the sake of owning, vs. buying practical things (instrumental materialism), or using money to help others, e.g., paying for education, creating jobs.

4. Poor Stewardship: Beyond being impractical, much of the behavior the campaign glamorizes is overindulgent and outright wasteful.

5. Inaccurate Perceptions: While some extremely rich people live lives of ridiculous luxury, most are not so crass and careless with their spending. The way they became wealthy was not by being frivolous but frugal. Also, many use their money in ways that benefit others.

Against these points, some may argue that the ads are puffery, i.e., extreme exaggerations meant to be funny and not taken seriously. While some of the scenes are over-the-top, e.g., the all-out food fight among elites, most of the cuts are realistic and certainly could happen, if they haven’t already. For instance, a Google search of “helicopter water skiing” produces over a million hits, including a variety of real pictures and the story of a father who towed his son on water skis with a copter, to the chagrin of others.

Will the E*Trade ads be effective? Probably. As mentioned at the onset, the desire to emulate others, especially in terms of their possessions, is a very powerful one. Consequently, E*Trade’s appeal to become one of the very rich will strike a nerve with many, and the oversimplification of achieving the dream will help induce people to try online trading. As suggested above, however, the campaign rests on a foundation of deception, disrespect, and excess, among other indiscretions, which results in E*Trade earning this return: “Single-Minded Marketing.”

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Hotdog Heroes?

7/7/2017

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

What did you enjoy eating during your recent 4th of July celebration: a burger, some watermelon, a side of potato salad? How about 72 hotdogs? If you’re competitive eater Joey Chestnut, that’s exactly what you downed on Independence Day, in just ten minutes.

According to Nathan’s Famous, people have been gathering at its first hotdog stand on Coney Island, NY every July 4th since 1916, to see who could devour the most dogs. The first recorded contest came in 1972. Since that time, Nathan’s has built the event into a media spectacle that attracts contestants from around the world, draws over 40,000 spectators to Coney Island, and engages nearly two million viewers on the ESPN broadcast.

Yes, ESPN televised the event live, and SB Nation provided a thorough recap of the action. Does that mean that eating qualifies as athletics? If so, the United States, which ranks as the 12th most obese country in the world, might also be one of the most athletic!

Although we shouldn’t expect eating to become an Olympic event anytime soon, it’s helpful to understand exactly what competitive eating is and why it’s so popular:

“Competitive eating, or speed eating, is an activity in which participants compete against each other to consume large quantities of food in a short time period. Contests are typically eight to ten minutes long, although some competitions can last up to thirty minutes, with the person consuming the most food being declared the winner. Competitive eating is most popular in the United States, Canada, and Japan, where organized professional eating contests often offer prizes, including cash.”

Beyond individual participants, there are actual organizations whose mission is consumption as sport, most notably Major League Eating (MLE), “the world body that oversees all professional eating contests.” Its logo features a hand holding a fork. MLE’s website lists dozens of official eating contests ranging from oysters to ice cream sandwiches, with prize purses between $1,750 and $40,000. Chestnut has won many of these events, including Nathan’s contest 10 times, which gives new meaning to the saying “eat to live.”

Surprisingly, Chestnut, Miki Sudo, who ate 41 hotdogs to take the women’s title, and most other competitive eaters are not big people; they’re average-size, and some are even very fit. So, how do they eat so much? Here’ the basic strategy:

“Many competitive eaters, like those competing in the Nathan’s Hot Dog Eating Contest, practice stretching out their stomachs for the main event by drinking gallons of milk or water very quickly, or by downing lots of filling, fibrous foods like watermelon and oatmeal in a matter of minutes.”

Nathan’s website goes on to explain the exercise and eating regimens of many of its contestants:

“Despite consuming mass quantities of high-calorie foods during competition season, most professional competitive eaters are very fit. Many contestants weight train and exercise vigorously to build muscle and increase their metabolism. Most also eat healthy, low-calorie diets after competitions. Why? Because their stomachs are so stretched out, they can no longer tell when they’re full!”

So, maybe competitive eaters are athletes who deserve more recognition for their accomplishments. Not so fast. It’s also important to consider the ‘damage’ they do to themselves and potentially others through their day-of-event activities.

For instance, Chris Weller of Business Insider wrote an article titled “The terrifying totals of calories, fat, and sodium consumed at Nathan's Famous Hot Dog Eating Contest,” in which he presented the nutritional numbers for the 72 Nathan’s Famous skinless beef franks (4 kg) and 72 Ball Park hot dog buns (3 kg) that Chestnut quickly consumed this past July 4. Here are some of those statistics, which include the metric weights and their respective percentages of daily nutritional values:

Fat: 1 kg, 1606%
Saturated Fat: 360 g, 1800%
Cholesterol: 2 g, 667%
Sodium: 46 g, 1917%

To help put these numbers into perspective, that’s about 16 days’ worth of fat, 18 days’ worth of saturated fat, and over 19 days’ worth of sodium, all packed into a ten-minute timeframe. Of course, Chestnut and his colleagues aren’t downing those kinds of calories (19,433), every day, but if competitive eating is their job, they’re engaging in similar indulgence more than a few times a year. Even if someone exercises regularly and maintains a trim physique, it’s hard to imagine that kind of extreme consumption doesn’t take its toll over time.

Such overeating reminds me of a now-defunct television show I watched several times, not without misgivings: the Travel Channel’s “Man vs. Food.” In each episode, host Adam Richman visited a different city where he interacted with locals at a couple of their favorite restaurants and eventually took on a mammoth eating challenge, like a 5 lb. sandwich.

After four seasons of such extreme consumption, Richman retired from the popular series without offering a specific reason; although, some suggested there were “concerns over ensuring Adam Richman's health if the show had continued in its previous format.” Richman has since lost about 70 lbs.

Some may argue personal choice: “If people want to tackle food challenges as TV show hosts or as competitive eaters, it’s their prerogative. They’re only affecting themselves.” Unfortunately, it’s not that simple.

While an individual’s gluttony does primarily impact him/her, it also affects others by virtue of the fact that we’re social beings who often learn from and emulate the behavior of others. That influence is greatly magnified when mass media share the actions, and it’s even worse when the destructive behavior is presented in a positive light.

The bottom-line is competitive eating glamorizes gluttony. Chestnut and other eating contest winners receive prize money and they’re lauded as champions. There’s nothing praiseworthy, however, about stuffing oneself with 72 hotdogs in ten minutes.

True, few rational people will attempt to consume the quantities of food that competitive eaters do, but they’re still teaching wrong attitudes toward food, e.g., that eating is sport and that it’s okay to continue consuming even after you’re full. Those are likely the kinds of beliefs that have helped place America 12th on the list of the world’s most obese nations.

Competitive eating comes into even poorer taste when one considers the hundreds of millions of people around the world who don’t have enough to eat. “The United Nations Food and Agriculture Organization estimates that about 795 million people of the 7.3 billion people in the world, or one in nine, were suffering from chronic undernourishment in 2014-2016.”

According to Poverty.com, it’s estimated that “a person dies of hunger or hunger-related causes every ten seconds.” That means about 60 people passed away during the time it took the Nathan’s competitors to each down several dozen calorie-heavy hotdogs.

Competition is generally a good thing that brings out the best in people. Competitive eating, however, showcases an unseemly side of humanity—one that’s harmful to its participants, as well as to hosts of others. Given the great attention it receives each year, Nathan’s Famous Hotdog Eating Contest appears to be effective promotion, but the bad behavior it encourages makes the competition an example of “Single Minded Marketing.”

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Scary Good Marketing

6/23/2017

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

Parents of young children face many challenges as they try to get their kids to do things they don’t want to do, like pick up their toys, take a bath, and go to sleep! Perhaps the biggest battle involves having them eat healthy food, especially vegetables. Is it possible that better vegetable marketing can make this age-old impasse a thing of the past?

When I first saw The Wall Street Journal (WSJ) article titled, “How Schools can get Children to Eat their Vegetables,” I was skeptical. Generations of very capable moms and dads have tried for decades to push produce with relatively little success. How could school districts suddenly crack the code?

What’s more, I’ve spoken to groups about the simplistic approaches that some marketers take, trying to sell vegetables to young people. For example, several years ago an alliance of carrot farmers led by Bolthouse Farms spent a couple of million dollars on a marketing initiative aimed at positioning baby carrots as junk food.

The strategy relied heavily on promotion, including over-the-top television commercials and “extreme” packaging, but it did nothing to make the product itself more appealing to young people. Although media embraced the campaign and suggested it was successful in two test markets, several years later I still haven’t come across the rebranded carrots in supermarkets or seen anyone eating them.

Marketing aimed specifically at kids also can be a concern. Compared to adults, children have less developed cognitive skills and more limited life experience, which makes them more susceptible to marketing tactics based on deception, coercion, and manipulation.

So, I started reading the WSJ article about kids and vegetables with more than a little disbelief. The article did a good job, however, highlighting and synthesizing research results that in general found that kids were more likely to eat vegetables when schools employed several specific strategies. I’ve summarized those strategies here and categorized each (in parenthesis) using the traditional 4Pmarketing mix:

1. Putting vegetables at the front of the cafeteria: When children saw vegetables first, they were more likely to take them, as primacy effect would predict. (Place)

2. Offering vegetables as snacks: Another study found that timing mattered in as much as kids were likely to take vegetables when they were the only thing offered as snacks outside of regular meals. (Place)

3. Making food easy to eat: Children, especially those with braces, were more likely to eat fruit that was sliced into pieces, rather than try to eat a whole apple. (Product)

4. Creating an appealing presentation: Like adults, kids ‘eat with their eyes,’ which explains why children took more healthy food when it was placed in colorful bowls instead of in gray industrial tubs. (Product)

5. Using enticing promotion: Similarly, researchers at Cornell found that kids ate more fruits and vegetables when those items were promoted via attractive signage and brands (e.g., an Elmo sticker on an apple). (Promotion)

6. Tracking purchases: Two elementary schools in Chicago used digital technology to track the food kids took from the cafeteria line and what they threw away. As in a business environment, this kind of data proved valuable for deciding which menu items to keep and which to cut. (Product)

7. Hiring professional chefs: A key factor in making food taste good is its preparation. So, it’s not surprising that when experts were brought in either to cook the food or design menus, the vegetables tasted better and kids ate more of them. (Product)

8. Educating about vegetables: For many people, food will not make it into their mouth unless they know what it is. That’s why children who were taught about vegetables in their classrooms or on field trips were more likely to try them. (Promotion)

It’s worth noting that out of the eight strategies just described, two involved putting vegetables where and when it was most convenient for kids to eat them (i.e., Place) and four involved enhancing the vegetables themselves or their presentation (i.e., Product). Meanwhile only two of the strategies involved messaging designed to put a good spin on produce (i.e., Promotion). In contrast, promotion was by far the main focus of the ultimately ineffective baby carrots campaign described above.

So there’s empirical evidence to support that more systematic, serious marketing strategies can be effective in getting kids to eat vegetables, but what about the issue of marketing directly to children? Is it fair to use such tactics to target impressionable young people who are not seasoned consumers?

If that question were asked about many other, less edifying goods and services, the answer would be “no, it’s not right.” A society needs to protect people who might easily be taken advantage of by unscrupulous others. However, it’s hard to imagine anything but good coming from increased vegetable consumption, especially when the ones eating them are growing children.

There’s also a greater societal good here. The United States is suffering an obesity epidemic in which one in three adults is obese and another third is overweight. Meanwhile, about one in five school-age children (6-19 years old) is obese, which represents a threefold increase since 1970.

Of course, obesity poses serious health risks for individuals, e.g., high blood pressure, diabetes, heart disease, stroke, and certain cancers. Aggregated across the population, such sickness presents a great strain on health systems and comes with considerable financial cost. In 2008, the medical costs of obesity were estimated at about $147 billion, while obesity-related absenteeism was believed to be responsible for lost productivity costing between $3.38 billion and $6.38 billion.

Furthermore, there is the social estrangement the comes with being obese. “Overweight and obese individuals are often targets of bias and stigma, and they are vulnerable to negative attitudes in multiple domains of living including places of employment, educational institutions, medical facilities, the mass media, and interpersonal relationships.” Add to this the unfortunate fact that kids are now experiencing body shaming at younger ages than ever.

Are vegetables the cure for obesity? No, but eating more of them and less of other food, especially simple carbohydrates, definitely helps. Likewise, marketing that is effective in getting kids to eat more vegetables is good because it is in the best interest of the children and society on-whole. In short, strategies that work to get young people to pick produce represent “Mindful Marketing.”

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Is Amazon Bribing Buyers?

6/16/2017

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

There are many different ways to get people to do things, e.g., ask them nicely, argue it’s in their best interest, or just pay them! There’s not necessarily anything wrong with the last option, unless it’s a bribe, which is what a popular news portal has accused Amazon of offering.

Jason Kastrenakes, news editor for the Verge, chose an intriguing title for his June 13, 2017 article about the enormous etailer: “Amazon is now bribing Prime members to avoid credit card fees.” Bribery is a pretty serious indictment to make of anyone, let alone America’s most prolific ecommerce company. In some situations bribery is illegal (e.g., when it involves foreign officials), and in virtually any context it’s considered unethical. So, what exactly is Amazon up to that has invited such a charge?

Amazon has introduced a new payment option called “Prime Reload” that enables Amazon Prime members to earn 2% Amazon rewards credit each time they transfer money from their checking account to their Amazon Gift Card Balance. To process these payments, Amazon requires a U.S. bank account and routing number, which is to be expected. The program also demands a debit card in order to allow Amazon to “fulfill your reload faster.” Users’, then, receive their 2% bonus whenever they reload their Gift Card balance.

Given there’s no such thing as ‘free money,’ especially in the increasingly-competitive retail sector, it’s reasonable to question Amazon’ motives: Why would a super-savvy, profit-minded company like Amazon, suddenly want to giveaway 2% of every purchase? In 2016, Amazon had sales of $135.9 billion, which means if Prime Reload had been used for every purchase, the firm would have forfeited $2.7 billion for the fiscal year. Relinquishing that kind of revenue doesn’t seem financially sound.

Amazon knows, however, what it’s doing. A key part of the company’s strategy is to avoid costly credit card fees, which average between 2.3% and 2.5% for online businesses where the consumer’s credit card is not present. However, given its size and buyer power, Amazon’s effective processing rate is likely lower, so there probably are advantages beyond avoiding credit card fees.

Another benefit Amazon enjoys via Prime Reload is the temporary use of customers’ deposits in their Amazon gift card accounts. Yahoo Finance suggests that Prime Reload “may encourage people to load large lump sums into their Amazon Balance, in order to ensure they never accidentally pay for an item through their debit or credit card directly,” which would cause them to miss-out on the cash-back bonus. Amazon, then, can act like a bank, earning interest income on this “float,” from the time consumers deposit the money until they spend the excess funds.

There’s at least one other advantage likely to accrue to Amazon through Prime Reload. Yahoo Finance predicts that users of the program will be more likely to make impromptu purchases since “they won't have to do the math as to whether the item is something they can afford. Effectively, it feels the same as having a Gift Card balance ready to be used.” Therefore, Prime Reload might ultimately encourage more purchases from Amazon.

So, Prime Reload seems like a wise financial move for Amazon, but what about the original issue: Does the 2% bonus constitute bribery? This question is particularly relevant to the third/last point—the possibility that customers who participate in Prime Reload will end up purchasing more from Amazon.

The short answer is “no,” that’s not bribery. The main reason is that bribery requires three parties and an agent/principal relationship. Perpetrators offer bribes to agents (e.g., employees) with the hope that they will take actions that are probably not in the best interest of their principals (e.g., employers). For instance, someone says to a purchasing agent, “Here’s $1,000, just for you. I hope your company will sign a contract with our firm to buy its new __________.”

The bribe-brandishing supplier may be offering products that are not the best quality or price; however, the purchasing agent might choose them anyway because of the self-enriching incentive. As such, a bribe pits the interest of an agent against that of his/her principal, thereby compromising the agent’s fiduciary responsibility.

In the case of Prime Reload, there are only two parties (the consumer and Amazon), with no agent/principal relationship—the consumer is both agent and principal. As such, the customer is free to negotiate whatever product-price combination best meets their needs. If the consumer wants to accept a special discount or some other deal from the seller, he/she has the authority to do so, owing no accountability to an employer or any other principal.

Does Kastrenakes really believe that Amazon is trying to bribe Amazon Prime members? Probably not. Beyond the heading, he makes no other mention of bribery, and at the end of the article he says, “[Amazon] is both making a savings and passing some of it along to customers.” So, using “bribing” in the title was likely a somewhat misleading attempt to call more attention to the piece.

The bottom-line is that Prime Reload represents a win-win scenario in which both buyer and seller come out ahead. Furthermore, encouraging more people to use debit cards instead of credit cards may also be good, given that 65% of Americans carry a balance on their credit cards that averages $4,717. In sum, Amazon is helping itself by helping others, which is a key foundation for “Mindful Marketing.”

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Jeans with a View

5/12/2017

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

Everyone who wears jeans is entitled to their favorite cut and color, whether they’re relaxed fit or skinny, midnight black or sky blue. For clothing in general, and especially jeans, beauty is on the waist of the wearer, but does that belief apply to jeans cut out of clear plastic?

Yes, you heard right. One trendsetting retailer, Topshop, has decided to market clear plastic jeans. You can click here for more pics of the disappearing denim, which kind of seems like wearing a giant, form-fitting Ziploc bag. In this case, not seeing is believing.

If you’ve never heard of Topshop, you may be like me, plodding a good distance behind cutting-edge style. Those familiar with the high-end fashion world, however, know that Topshop is an avant-garde “multinational fashion retailer of clothing, shoes, make-up and accessories.” Based in Britain, Topshop has 510 store locations in 37 countries, as well as a significant online presence.

The retailer is known for displaying designer brands, such as those of supermodel Kate Moss and ultra-celebrity Beyoncé. These high-fashion collections, in turn, help drive foot-traffic to flagship stores in places like New York City, Los Angeles, and Las Vegas. A few of these locations even offer Topshop Personal Shopping, “a premium, complimentary shopping service” that gives patrons “one-on-one style advice and access to the latest arrivals in the comfort of [their] own private dressing suite.”

So, why does a retailer of such exclusive style decide to come out with clear plastic jeans? It’s hard to say for sure, but the best guess is that Topshop is just doing what other fashion-forward companies regularly try: to push the envelope of clothing design. We’ve all seen video of runway models wearing designers’ latest creations, some of which seem completely crazy—“There’s no way anyone would wear that in public,” you’ve probably thought.

My suspicion is those ridiculous apparel innovations are often just for effect: to get a designer recognized and hopefully remembered. Sometimes, however, certain styles stick and become a fad, or even a trend, for instance, bell-bottom, or flare, jeans. Interestingly, the Gap is currently positioning another novel pair of pants as the new must-have fashion for men: wader jeans. The mid-market retail icon describes the denim as “ankle-length jeans you can wear all-year long.” Think capris for guys, only a little longer.

So all of this analysis takes us right back to the beginning: Style is a subjective and personal thing. But does individual fashion preference mean there should be a place for clear plastic jeans? I’d like to suggest ‘no.’ Others probably can offer even better rationale than mine, but here are my reasons for pooh-poohing clear plastic pants:

No Coverage: A fundamental function of attire is concealment. In other words, we wear clothes to cover, or hide, what’s below them, i.e., our undergarments and naked bodies. What’s the point, then, of wearing something that doesn’t serve that basic purpose?
Invisibility: We also wear clothes for less practical and more aesthetic reasons, i.e., we like the way certain colors complement our complexions or accessorize with other clothes we wear. This purpose of attire is also largely missed by clear clothing.
Uncomfortable: The words ‘plastic’ and “comfort’ are hard to put together. The thought of sitting on plastic is less-than-desirable for most people. Why would you want to have your whole bottom half encased in a material that tends not to be very soft or breathable?
Health Threat: There is evidence that plastics may be harmful to humans: “Chemicals added to plastics are absorbed by human bodies. Some of these compounds have been found to alter hormones or have other potential human health effects.” Perhaps plastic is not something that should be constantly pressing against our skin.
Environmentally Unfriendly: Most of us have heard that plastics are notoriously slow to biodegrade, especially when buried in landfills, out of range of sunlight. Over time, therefore, plastics pose an increasing environmental problem for our planet.

Will plastic jeans become the next bell-bottoms or any significant fashion fad? Probably not . . . hopefully not. Just like “The Emperor's New Clothes,” most people will ultimately see the silliness of wearing clothes that you can’t really see, and they’ll show concern for the other problems described above. In sum, few people will pull out their plastic (credit cards) to buy plastic clothes, making Topshop’s transparent pants a clear case of “Mindless Marketing.”