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Are There Rules When Everyone's an Endorser?

8/13/2022

6 Comments

 
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by David Hagenbuch - professor of Marketing at Messiah University -
​author of 
Honorable Influence - founder of Mindful Marketing 

There was a time when only celebrities and aspiring actors were spokespeople.  Now the friend you’re having lunch with tomorrow may, unbeknownst to you, have an endorsement deal.  It’s nice that company sponsorship has been democratized, but with so many people pushing products, how can consumers survive the promotional onslaught?
 
The great expansion of spokespeople hit home for me a few months ago during a discussion about personal branding in our university's capstone marketing course.  As we considered the notion that those present might be future endorsers, a student in the front row spoke up, “Do you know Rachel Delate?  She’s already endorsing products.”  A classmate quickly added, “Yeah, she has a deal with Body Armor.”
 
A year earlier, Rachel was in my intro to marketing class where she distinguished herself as a strong student.  She’s also a very good lacrosse player, e.g., first team All-Conference, first team All-Region, third team All-American.  After the NCAA’s recent relaxation of rules involving name, image, and likeness (NIL), that talent put her in a position to accept endorsement deals.
 
Besides Body Armor, Rachel also has enjoyed sponsorship experiences with TreadBands, Barstool Sports, and LiquidIV, which have provided her with a variety of branded gear.  She says the experiences have been very worthwhile, as she summarizes in a sentence, “I’ve had the opportunity to connect with awesome brands and people and receive cool stuff!”
 
Knowing Rachel, I’m confident she’s a responsible influencer, but what about many others who have suddenly become spokespeople and might be looking to make quick money, not caring much about what they’re selling or to whom.  How should they see their roles?  But first, how did we get to this point of influencer inundation?
 
The rapid rise in number of endorsers has been the result of a perfect storm of at least three interwoven social trends and economic incentives.
 
First, over the last several years, new ecommerce platforms and tools have made it relatively easy and inexpensive to operate online shops, which has encouraged many people to start, run, and promote their own businesses.
 
Second, there’s been a steady increase in influencer marketing due mainly to the seismic shift from traditional media to social media.  Advertisers have always needed to be where consumers are, which has recently meant firms moving money from the likes of NBC and the New York Times to an up-and-coming influencers’ TikTok and YouTube channels.
 
Third, crypto currencies and NFTs, two new categories of virtual products that were virtually unknown a few years ago, have offered an array of endorsement opportunities not only because they’re new but because many people still don’t know exactly what they are and, therefore, lean on endorsers to guide them.
 
It’s this third trend that recently grabbed product endorsement-related headlines, but not for good reasons:
  • Bloomberg described “the disastrous record of celebrity crypto endorsements,” such as that of actor Matt Damon who plugged cryptocurrency exchange Crypto.com, only to see Bitcoin’s price plummet by 60%.
  • BuzzFeed News reported that the watchdog group Truth in Advertising warned Jimmy Fallon, Gwyneth Paltrow, and fifteen other celebrities that they violated Federal Trade Commission guidelines by failing to disclose on social media their money-making connections to certain NFTs.
 
The proliferation of new and experienced influencers playing fast and loose with their referral power, makes me wonder:  Have we entered the Wild West of product pitching where laws are lacking and consumers must take their protection into their own hands?
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Hopefully, most influencers will have the conviction to self-regulate.  For those who are so morally and professionally inclined, here are four best practices for product endorsement:
 
1. Know the product:  An endorsement is basically a recommendation.  People want recommendations because there’s something they don’t know well, and they’d like someone who’s more knowledgeable to guide them.
 
For that reason, every endorser should be very familiar with the product and/or company they’re recommending; otherwise, they’ll fail to offer value or worse, they might mislead the people who are trusting them for help.
 
2. Believe in the product:  Although information is very important, head knowledge is only half the product-endorsement equation.  Spokespeople should also believe in the merits of what they advocate.
 
Several years ago, a reporter asked basketball great LeBron James how he had improved his game and physique over the off-season.  James unwittingly replied that he stopped eating at McDonalds, which was one of his main sponsors at the time.  James’ slip underscores the fact that knowing about a product is not the same as believing in it.  Endorsers shouldn’t recommend to others products they wouldn’t want for themselves.
 
3. Ensure the product is a good fit for the target market:  Notwithstanding the previous point, there are instances in which endorsers don’t use the products they’re recommending because they’re not in the target market.  In those cases, it is especially important that influencers understand the needs of those who do use the product.
 
For example, doctors often prescribe pharmaceuticals they’ve never tried.  They can recommend them with confidence, however, because they’ve read the drug studies and believe in the companies that provide them; then, knowing their patients’ medical histories and symptoms, they can project with some certainty that their patients will benefit from them.
 
4. Disclose your relationship with the organization:  From native advertising to salespeople acting as if they’re customers, one of the greatest deceits in business occurs when marketing promotion tries to pretend it’s not.
 
Advertising and personal selling are useful tools from which consumers can gain very helpful information; however, people need to know when the information source is objective (e.g., a fellow transit rider) versus compensated by a company (e.g., an online product reviewer who receives the items for free).  It’s difficult for anyone to be unbiased about an organization that’s paying them, which isn’t necessarily a problem provided consumers know the relationship.
 
Developments in areas such as deepfake video, the metaverse, and NIL, give reason to be both excited and anxious about the future of marketing influence.  Endorsers who see their roles as involving both individual opportunity and social responsibility will likely be promoters of “Mindful Marketing.”
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6 Comments

Do Subscriptions Make Sense?

7/30/2022

9 Comments

 
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by David Hagenbuch - professor of Marketing at Messiah University -
​author of 
Honorable Influence - founder of Mindful Marketing 

“That’s the gift that keeps on giving the whole year”—such was Cousin Eddie’s inane attempt in Christmas Vacation to console a devastated Clark Griswold after he found out his firm gave him a Jelly of the Month Club membership instead of a generous cash bonus.  Clark had good reason to resent receiving a product subscription, but  how should consumers feel about more companies moving to subscription models?
 
If you’re like most people, you’ve noticed a steady rise in reoccurring payments.  Decades ago, monthly bills were restricted to things like rent and utilities, but they’ve since expanded to include regular charges for cellphone plans, movie streaming, and online news.  And, the list keeps getting longer, as even more organizations find opportunities to automatically tap their consumers’ wallets for things like clothing (e.g., Stitch Fix), meal kits (e.g., HelloFresh), and shaving tools (e.g., Harry’s).
 
These examples aren’t particularly surprising—each day people wear clothes, eat food, and shave their bodies, so it makes sense to automate the purchase process and save consumers time shopping for such staples.  However, subscription services for some other products should make any of us wonder, ‘Why?’
 
For example, BMW has begun to offer “heated seat subscriptions” in certain vehicles for $18 a month.  According to James Vincent, writing for The Verge, “BMW has slowly been putting features behind subscriptions since 2020.”  The automaker’s other reoccurring charges include automatic high beams and adaptive cruise control.
 
There’s also sneaker maker Cloudneo, which offers a “100% recyclable running shoe that’s only available by subscription.”  For $29.99 a month, customers receive “an endless supply of shoes.”  When pairs are past their useful lives, customers request new ones while returning their old ones, which the company grinds down and melts into plastic pellets used in its new product manufacturing.
 
These last two examples and several of those mentioned earlier are innovative approaches that reimagine marketing’s 4 Ps.  All share strategic similarities as they fall under the subscription umbrella, but there also are significant and sometimes unsettling differences that make me want to better understand: When is subscription pricing right for both companies and consumers?
 
To answer this question, I turned to someone who has navigated the challenging process of transitioning his company’s signature product from a one-time purchase to a monthly subscription.  Jason Kichline is founder and chief technology officer of OnSong, namesake of one of the world’s most widely used music performance apps.  It allows musicians to digitally store, sort, and customize their music, saving them time and enabling them to focus on what they do best.
 

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An annual guest speaker in my capstone marketing course, Kichline has told us of his firm’s deliberations about transitioning the OnSong app from a one-time Apple App Store purchase to a monthly subscription.  OnSong started to offer a feature-enhanced, subscription version of its product a couple of years ago.  This past June, OnSong finalized the monumental move by eliminating the one-time purchase option.
 
For many companies, the decision to go to full sail on a subscription model is simply a matter of what nets the most money, i.e., will more revenue from reoccurring payments offset sales not realized from potential customers who want a one-time purchase?
 
Although OnSong certainly considered income projections, it’s analysis was much more circumspect and other-oriented, which is evident as Kichline explains three main reasons for the move:
 
1.  Relationships:  “We’ve always placed a high value on supporting our users.  A complex and full-featured app like OnSong demands a level of support that goes beyond that of a one-time purchase. A subscription creates the opportunity for a more formal relationship with users and the need to continually provide them with value.  Our goal is to make our customers incredibly happy with the level of service, support, and features we offer.”
 
2.  Continuity:  “Although OnSong has been successful for more than 10 years, many software firms don’t last as long—they go out of business, or they’re acquired.  A developer can keep an app around for a long time for some side money or an owner’s salary, but a buyer typically wants ROI.  For this reason, new owners turn many one-time-purchase apps into subscriptions and try to ‘leverage’ the existing user base.”
 
“Even though app customers often assume they’ll be forced to upgrade to a subscription, we didn’t feel it was fair, so we grandfathered existing users.”  Still, because going out of business also leaves customers stranded, we believe that subscribing to OnSong is the best path forward for all.  A subscription to OnSong is an investment in the company and its product’s future.”
 
3.  Value-Added:  “The defining measure for most consumers is what they receive compared to what they pay.  Although a subscription costs more than a one-time purchase over time, it also provides greater benefits, including important updates and improvements in an ever-changing technological environment.  A cancelable subscription also reduces financial risk for consumers by allowing for product trial, which is often not possible with one-time software purchases.”
 
“Looking to the future, OnSong wants to provide a web-based version of the app that will store music and resources in the cloud, as well as manage bands and teams.  A subscription model supports this additional functionality and added value.”
 
Kichline acknowledges that the transition to a subscription model has not been without challenges, which include effective communication with consumers, who can be swayed by public perceptions in social media.
 
Still, the change has been a good one for OnSong and its customers.  After experiencing one “tight month,” the company’s revenues quickly rebounded to previous levels with continuing growth.  That success should also be taken as a sign of the strength of OnSong’s value proposition in the eyes of consumers—the benefits they receive from the app are well-worth its reoccurring cost.
 
For Kichline, key to the whole process has been “having the mind of the consumer.”  His analysis above and this summary statement make me ask:  Do the subscriptions for BMW’s heated seats and Coudneo’s recyclable running shoes show an understanding of “the mind of the consumer” and a desire to truly meet customers’ needs?
 
Cloudneo’s product subscription may represent such a market orientation for certain hardcore runners who cycle through sneakers at a rapid clip.  They might wear out a pair of running shoes every few months and could easily spend $360 or more per year on performance footwear.
 
BMW’s subscription is harder to justify.  In his Verge article mentioned above, Vince raises good points that call into question the automaker’s motives:
 
“BMW owners already have all the necessary components [for the heated seats], but BMW has simply placed a software block on their functionality that buyers then have to pay to remove. For some software features that might lead to ongoing expenses for the carmaker (like automated traffic camera alerts, for example), charging a subscription seems more reasonable. But that’s not an issue for heated seats.”
 
When BMW manufactures vehicles with heated seats, it likely passes on the added material and labor costs to consumers at the time of purchase.  So, the automaker is essentially holding back a feature for which customers have already paid so it can charge twice for what is an increasingly common new car addition.  Such a motive certainly wouldn’t represent a customer-centric attitude.
 
As BMW has shown, there are situations in which paying a reoccurring fee for a product makes little sense for consumers.  However, when companies prioritize the three principles that Kichline has identified (relationships, continuity, and value-added), subscription pricing is “Mindful Marketing.”


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Should AI Impersonate People?

7/1/2022

2 Comments

 
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by David Hagenbuch - professor of Marketing at Messiah University -
​author of 
Honorable Influence - founder of Mindful Marketing 


“Imitation is the sincerest form of flattery”—it is a high compliment when people respect someone’s work enough to replicate it.  But, when one of the world’s largest companies’ smart speakers start imitating people’s voices, has flattery drifted into deceit?
 
It’s difficult to keep pace with innovation in artificial intelligence (AI), but one particular advance that's certainly worth attention is the impending ability of Amazon’s Alexa to mimic voices.  After hearing no more than a minute of audio, the smart speaker reportedly will be able to deliver a plausible impersonation.
 
Alexa’s voice is apparently one that appeals to a very large number of consumers:  A 2021 Statista study showed that Alexa was the most widely used assistant across four of six age demographics. So, why would Amazon want to mess with the sound that’s helped it sell so many smart speakers?
 
According to Amazon senior vice president Rohit Prasad, the change “is about making memories last,” particularly remembrances of those who’ve passed.
 
In many ways that motive makes the voice mimicking technology seem like a great idea.  For those who have lost loved ones, one of the greatest blessings would be to hear their dearly departed’s voice again.
 
Since my father passed away last August, I’ve thought several times how nice it would be to talk with him again—to hear his opinion about the latest news, to ask him questions that only he could answer.
 
On a lighter side and also related to Alexa’s voice imitation, I’ve always enjoyed good impressionists.  It’s fun to hear comedians who can act and sound like famous people.  One of my favorites is Frank Caliendo, who is best known for impressions of famous sports figures; his John Madden and Charles Barkley impressions are great!
 

Frank Caliendo impersonating John Madden on the Late Show with David Letterman
 
So, I can see why Alexa doing impressions of people we knew and loved could be popular.  However, AI impersonations should also give us pause for at least four reasons:
 
1.  More than a voice:  Of course, just because someone, or something, sounds like a person we know, doesn’t mean they are that person.  Every individual is a unique curation of beliefs, affections, and experiences that influence what they say and even how they say things.
 
Frank Caliendo may sound like Charles Barkley, but he obviously isn’t the NBA legend and popular sports broadcaster.  Consequently, Caliendo can never truly say what Barkley would say and neither can AI.  Only a person knows what they themself would say.
 
2.  Respect for the deceased:  Per the previous point, if AI speaks for anyone, beyond playing back a recording of them speaking, it’s putting words in that person’s mouth.  A living person could conceivably give such permission, but how would a dead person do the same, short of adding some kind of addendum to their last will and testament, allowing AI impersonation?
 
I’m not sure it would be fair to ask anyone before their passing to give a smart speaker carte blanche use of their voice.  As hard as it is to let go of people we loved, it’s something we must do.  The longer we’d allow AI to speak for a loved one, the greater the probability that the technology would say things to tarnish their memory.
 
3.  Vulnerable consumers:  Given how good machines already are at imitating life, it will likely become increasingly easy for techno fakes to fool us.  However, there are certain groups of people who are at much greater risk of being duped than the average individual, namely children and older people.
 
It’s scary to think how those with heinous motives might use AI voice imitation to make young children believe they’re hearing the words of a trusted parent, grandparent, etc.  Similarly, the Mindful Marketing article, “Preying on Older People” described how senior citizens are already frequent targets of phone scammers pretending to be someone they’re not.  AI voice imitation could open the flood gates for such abuse.
 
4.  Distorting the truth:  Thanks to fake news, native advertising, deepfake video and the like, the line between what’s real and what’s not is becoming more and more difficult to discern.  University of Maryland professor of psychology Arie Kruglanski warns that a truthless future is not a sustainable one:
 
“Voluminous research in psychology, my own field of study, has shown that the idea of truth is key to humans interacting normally with the world and other people in it. Humans need to believe that there is truth in order to maintain relationships, institutions and society.”
 
“In the extreme, a lost sense of reality is a defining feature of psychosis, a major mental illness.  A society that has lost its shared reality is also unwell.”
 
While examples of the innovation in imitation are fascinating, it’s concerning that in the not-too-distant future, fakes may become undetectable.  At that point, it seems like our world will be well on the path to what Kruglanski  forewarned: ‘losing its sense of reality’ and becoming ‘unwell.’
 
In the 1994 movie Speed, Sandra Bullock and Keanu Reeves try to stop a city bus that’s triggered to explode if it drops below 50 mph.  AI deception can feel like that runaway bus, barreling forward with no way to stop it or even slow it down.
 
However, large corporations like Amazon share the driver’s seat and have some control over the AI vehicle.  Although having them put the brakes on innovation may be too much to ask, they can at least integrate some forms of notification to clearly indicate when people are seeing/hearing a fake and not the real thing.
 
Even with such notifications, Alexa’s application of voice impersonation is wrought with potential for abuse.  For the four reasons outlined above, Amazon should shutter plans for its smart speaker to imitate people and thereby avoid talk of “Single-Minded Marketing.”


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2 Comments

Selling Social Issues

6/5/2022

1 Comment

 
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by David Hagenbuch - professor of Marketing at Messiah University -
​author of 
Honorable Influence - founder of Mindful Marketing 


Besides being a tasty treat that almost everyone enjoys, ice cream is a ‘celebration food’ served at birthday parties and used to reward kids' sports team success.  So, why did Walmart’s new frozen dairy flavor created to celebrate Black Americans’ emancipation leave a bad taste in so many people’s mouths?  Moreover, what can the failure teach organizations about commercializing social issues?
 
In its ongoing search for profitable new products, the world’s largest retailer recently cooked up a novel plan—tap into Black Americans’ and others’ celebrations of Juneteenth, the federal holiday commemorating the end of slavery in the United States.

Walmart’s strategy to support the celebration involved a line of party products, including napkins, plates, and drink koozies branded “Juneteenth” using the black, red, and green colors often associated with Black liberation, and carrying the tagline, “It’s the freedom for me.”
 
Walmart also created a special food worthy of the branded partyware--Juneteenth Ice Cream, a frozen concoction resembling swirled red velvet cheesecake. However, it wasn’t long after the company launched its Juneteenth line that social media began to skewer it, as shown in these sample tweets:
 
“Walmart needs to do better. It shows the lack of understanding of the pain and suffering that made Juneteenth come about. It is absolutely insulting to have this special holiday turned into some commercial product.” (@The Next Ceiling)
 
“This isn't "wokeness", it's corporations trying to profit off of minorities by acting like they care about us.” (@DeadpoolLIFE69)
 
“So let me get this straight 🤔, y’all made more money keeping us enslaved after the Emancipation Proclamation, and NOW that it’s a recognized Federal Holiday y’all want to make MORE money off the same culture you enslaved??” (@MoodaSchmooda)
 
“White America: Mmmm...best thing we can do is some Walmart Juneteenth ice cream that we'll profit off of.” (@RedeemRobinson)
 
In the face of the backlash, Walmart made a quick pivot and pulled its Juneteenth-themed ice cream.  It also apologized:

“We received feedback that a few items caused concern for some of our customers and we sincerely apologize. We are reviewing our assortment and will remove items as appropriate."
 
Companies are increasingly ‘hitching their wagons’ to social causes’—an alignment that many people prefer including 83% of millennials.  Consequently, the approach often proves profitable.  Furthermore, during recent years filled with race-related violence, many consumers expect companies to show their support for racial justice.
 
So, wasn’t Walmart right to support Black Americans by launching a line of Juneteenth products?
 
Although the Twitter feedback above is enlightening, social media responses often prioritize ‘quick and pithy’ over ‘thoughtful and measured.’  For that reason and to help me better understand how Black Americans might perceive Walmart’s tactics, I reached out to a colleague at my university who’s well-qualified to offer an informed perspective.
 
Dr. Todd Allen is Vice President for Diversity Affairs and Professor of Communication at Messiah University.  He’s also the founder of The Common Ground Project, “a community-based non-profit dedicated to teaching the history of the Civil Rights Movement in the United States.”
 
When I asked Allen about Walmart’s Juneteenth product line, he shared these insights:
 
“I think the timing (a new holiday) and some people still feeling burned by the promises of 2020 (which haven’t necessarily resulted in the hoped-for transformative change) just made this too soon.  The fact that they pulled [the ice cream] so quickly also makes me wonder who was in on the decision making in the first place.  It seems like if the TV show Blackish were still on the air, this would be an episode.”
 
Allen also offered one word that captured much of what he shared, “context.”  For instance, he mentioned that Walmart is not known for being progressive on racial issues.  He also said that the company’s approach “felt just a bit too commercial and too opportunistic.”
 
So, what if the context were different?  For another company with a more positive race-related track record, offering different products with better messaging, public perceptions may have been more positive.
 

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Allen’s response and the idea of context got me thinking:  Beyond just Walmart and Juneteenth, are there principles that all organizations should follow when connecting with social causes?  There undoubtedly are many, but here are perhaps three of the most important questions to ask:
 
1. What’s the company’s track record on the issue?  Whether it’s an individual or an organization, we’re more likely to trust the motives of someone who has already demonstrated genuine concern about the social issue at hand.  In the case of Walmart and race, results have been mixed. 
 
On one hand, in June 2020, the company pledged $100 million over five years to address racial disparities in the U.S.  However, in January of 2022 a black correction officer sued Walmart for racial profiling when he was wrongfully accused of shoplifting, then in February, the U.S. Equal Employment Opportunity Commission (EEOC) sued Walmart because “Walmart violated federal law when it gave a Black female employee an unsanitary lactation space based upon her race.”
 
In contrast, Fundraising for a Cause, the world’s largest manufacturer of awareness products, enjoys strong credibility when it comes to earning income through social causes, partly because it’s owner and CEO, Karen Conroy, founded the company after her sister was diagnosed with breast cancer and also because her company passes significant profits onto her customers, e.g., they can buy 50 silicone bracelets for $40, sell them for $5 each, and net $210 for their cause.
 
2.  What’s the nature of the product?  There’s a place and time for most products; the key is to ensure that the product personality aligns with sentiments surrounding the social issue. 
 
Juneteenth is certainly a cause for celebration but that’s because it marks the end to several centuries of enslavement.  As such, the holiday understandably evokes mixed emotions that aren’t necessarily in keeping with an all-out party atmosphere, or at least not one worthy of a namesake flavor of ice cream.  Would it be right to have a dairy treat marking the end of the Holocaust? 
 
For comparison, Mennonite Central Committee (MCC) is a nonprofit organization that works in over 50 countries around the world to provide disaster relief, foster economic development, and promote peace.  Among its biggest fundraisers are quilt auctions, which raise hundreds of thousands of dollars each year.  Quilts are items of beauty and comfort that complement MCC’s three-fold mission.
 
3.  Is the company adding value?  Whether it’s a single salesperson or an entire organization, the measuring stick for any marketer is the value they add in an exchange.  No company should extract more value than it gives.
 
It’s hard to know how much money Walmart would have made on the Juneteenth ice cream and other products.  Knowing Walmart’s typical pricing approach, the profit margins on the items were likely low; however, selling them across more than 5,300 U.S. retail stores, even modest margins would have added up quickly.
 
Walmart also likely hoped to pocket goodwill from the products; however, the biggest grab by Walmart was its attempt to trademark (TM) Juneteenth, as if it had created the name, so that only it could sell Juneteenth branded products.
 
On a positive side, Walmart consumers could purchase the branded products at reasonable prices.  However, it’s unlikely that Juneteenth-imprinted paper products and ice cream would deepen anyone’s understanding of and appreciation for the momentous historic event.  If anything, Walmart’s products may have trivialized it.
 
Other companies have made money, in some cases very large amounts, from marketing race-related products; however, many times they’ve added extra value through education.
 
A good example of such value-added is the feature film Selma, “a chronicle of Dr. Martin Luther King, Jr.'s campaign to secure equal voting rights via an epic march from Selma to Montgomery, Alabama, in 1965.”  An Academy Award nominee for best picture, the movie grossed over $66.7 million worldwide on an estimated budget of $20 million.
 
Selma was very profitable for Harpo Films and the other production companies that made the movie.  However, those who watched the film also ‘profited,’ not just from two hours of entertainment but from a better understanding of a very important historic event.
 
As Allen suggested, context matters.  Like others, he wondered why Walmart didn’t instead promote a Black-owned ice cream brand, Creamalicious, which it was already selling in its stores.  Such an approach would have been a better context in at least two of the three ways described above.
 
Unfortunately, however, Walmart tried a more self-serving strategy that quickly melted.  So instead of celebrating, the company is doing damage-control because of its “Single-Minded Marketing.”


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1 Comment

The Real Beef About Burger Ads

5/22/2022

2 Comments

 
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by David Hagenbuch - professor of Marketing at Messiah University -
​author of 
Honorable Influence - founder of Mindful Marketing 


While Ukrainians mourn their war dead and Buffalo residents grieve victims of a hate crime, a guy in New York cries foul because his hamburgers aren’t bigger.  Of course, not every real problem is a matter of life and death, but  could some seemingly frivolous lawsuits challenging fast food promotions portray broader communication concerns? 
 
On May 17, Long Island resident Justin Chimienti filed a legal action in a Brooklyn federal court, accusing both Wendy’s and McDonald’s of “defrauding customers with ads that make burgers appear larger than they actually are.”
 
The lawsuit alleges that the restaurants’ use of undercooked beef in photo shoots leads to promotional pieces with burgers that appear 15% to 20% larger than those customers actually receive.  The suit also suggests that Wendy’s exaggerates the toppings that embellish its sandwiches.

Burger King, the third of the big three fast food competitors, was slapped with a similar lawsuit just over a month ago.  In fact, the same law firms that sued BK are also representing Chimienti in the most recent litigation.
 
To many, these lawsuits are the epitome of money-grabbing lawyers eager to profit from a first-world problem--With so many truly important events happening in our world, why should anyone worry that Whoppers aren’t as juicy as they appear in their pictures?
 
However, Anthony Russo, one of the main attorneys representing the plaintiff, argues that there’s a bigger issue at play--corporate accountability.  He maintains that these legal actions will make the companies mend their ways, stop false and misleading advertising, and ultimately give consumers a better idea of the food they’re eating.
 
That justification sounds good, but it does come from one of the people who stands to gain the most from the litigation.  In fact:
 
“A detailed examination of eight years of consumer class actions in federal court found that consumers received only a tiny fraction of the money awarded in those cases while plaintiff lawyers frequently claimed a bigger share of the settlement than their clients.”

Still, legal action can be an effective way to bring about corporate change, and it usually takes attorneys to move such proceedings through the courts.
 
Imagining the burger court cases, the defendants might offer a counterargument like:

"When it comes to promoting themselves, don’t individuals and organizations have a right to ‘put their best foot forward,’ and doesn’t everyone expect others to do the same?"
 

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Most people don’t have sections of their resumes labeled ‘Main Flaws’ or ‘Greatest Failures’; instead, we list our ‘Special Skills’ and describe ‘Awards and Recognitions.’  Likewise, no one reviewing resumes expects to see those self-deprecating categories.  That’s why interviewers often ask job candidates things like, “Tell me about one of your weaknesses.”
 
So, shouldn’t companies also be allowed to brag a little and show their best examples versus humiliate themselves with mediocre or bad ones?
 
Curating top quality products for promotion certainly isn’t unique to fast food chains.  Grocery store flyers rarely feature misshapen fruits and vegetables, car commercials don’t use vehicles with scratches or dents, and clothing ads don’t show shirts that are wrinkled or frayed.
 
As consumers, not only do we routinely see such examples, many of us are involved in the same sort of careful curation of ourselves and the organizations we serve.
 
During my two-plus decades in higher education, I’ve often helped select ‘best’ examples to help promote my department and university.  For instance, when asked to suggest students or alumni who might provide a testimonial, I take plenty of time to think before offering names of individuals who I believe have had very positive experiences.
 
However, just because we engage in such selective promotion doesn’t mean that we should, i.e., we need to be careful about reasoning from ‘is’ to ‘ought.’

The main moral questions to ask are whether the recipients of the promotion are deceived and harmed.
 
Personally, I don’t feel misled by pictures of perfect peaches, super clean cars, or spotless shirts.  Most people also probably expect the actual items they buy to have at least some minor imperfections when compared to their pictured counterparts.
 
Depending on the nature and cost of the product, there’s a level below perfect condition that we readily accept knowing that we live in an imperfect world.  Furthermore, in terms of food, visual imperfections probably don’t matter as much as they do for many other products because although we eat with our eyes, the appearance of what’s on our plates is short-lived.
 
That takes us back to burgers and the main moral questions:
Do differences between what Burger King, McDonald’s, and Wendy’s depict in their ads and sell in their stores deceive and harm consumers?
 
First, it’s important to recognize that for the vast majority of consumers, these fast food restaurants’ ads represent reminder advertising, i.e., most people have already eaten in one or more of the chains, possibly multiple times, so they’re well aware of what they’ll receive the next time they visit.
 
Second, fast food is a rather low-involvement, low-risk purchase.  When deciding what to order, people typically spend a minute or less, not hours, days, or weeks, as they might when selecting some products.  Likewise, the average McDonald’s Big Mac Meal costs only $5.99, and customers can buy two cheeseburgers for just $2.00.  So, if the beef patties don’t look quite as pretty as the pictures, it’s no big loss.
 
All that said, there is a difference between misrepresenting quality and misrepresenting quantity.  Whether burgers look more or less appealing than their pictures is a somewhat subjective matter.  Size is not.  People almost always want to get more product for their money, not less, so it’s a problem if a burger’s picture looks 50% bigger than the one we actually receive.
 
In this sense, the burger lawsuits have more teeth.  Consumers will quickly forget whether the Big Mac Meal looked as good in person as it did in the picture, but they won’t forget if they’re still hungry after eating it, especially if they have no more meal money to spend.
 
Although that’s not a life-threatening problem on par with those mentioned at the outset of this piece, it is a legitimate consumer concern, particularly in inflationary times.  Whether they’re spending a lot or a little, people should always receive the amount of product they’re promised.
 
So, there is a plausible and practical component to the burger lawsuits; however, their bigger contribution is their call for accountability, which also may  mean modeling more genuine communication.
 
It’s not to say that people take their communication cues directly from fast food ads, yet there’s an unsettling resemblance between the idealized product promotions and the utopian pictures many individuals paint of themselves in social media.
 
When people see large, heavily advertised corporations like Burger King, McDonald’s, and Wendy’s freely exaggerating and glamorizing their truths, it implies permission for others to do the same.  
 
The world becomes a better place when individuals and organizations take care to represent themselves realistically.  It’s okay to put our best foot forward, but it must be our foot, not some fantastical version of it.  Those who walk with realism are stepping into “Mindful Marketing.”


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Is Netflix Content 'Good Enough'?

4/23/2022

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by David Hagenbuch - professor of Marketing at Messiah University -
​author of 
Honorable Influence - founder of Mindful Marketing 

How old were you when you made your first solo shopping trip?  If you’re a Boomer, Gen X, or Gen Z, your answer might be 8, 12, or even 18.  Japanese youth apparently run errands much earlier—as in age two—to the amazement of many Americans who are now streaming the cultural curiosity.  Whether toddlers should be by themselves on road-trips is a worthy question, as is why people a half-world away are watching a decade-old television show.
 
From ‘Stanger Things,’ to ‘Bridgrton,’ to ‘Squid Game,’ tastes for Netflix series change like the seasons.  Now, one of the streaming giant’s popular properties is an unlikely reality series that comes courtesy of East Asia and the 1990s.
 
‘Old Enough!’ is a documentary-style television program in which Japanese parents send their toddlers on their first independent errands.  Camera crews capture the highly cute and often humorous action, while witty narration added in editing gives viewers a window into what the tots may have been thinking at the time of their adventures.
 
In light of today’s often hovering helicopter parents, it’s refreshing to see young people given real responsibilities and freedom to act independently.  However, it’s also kind of unnerving to watch a kid, who’s still wearing diapers, wander by himself more than a half mile to a grocery store to pick up ingredients for dinner.
 

In terms of social skills, these parents are placing their children far ahead on the developmental curve.  Given what these kids are doing under age four, there’s no telling what they’ll be capable of by the time they’re 10 or 20 . . . if they live that long!
 
In terms of safety, there’s likely little danger to the children.  Camera crews are filming them the entire time, so in some sense they’re safer during shooting than they may be any other day.  However, no camera operator could intervene in time if a three-year-old suddenly skipped off the sidewalk, into the path of a moving vehicle.
 
Another issue to consider any time children are placed in media roles is informed consent.  How can a child under the age of five possibly understand what they’re doing: the risks they’re incurring at the time and the implications their ‘celebrity’ may bring in the future?  Most fathers and mothers pursue their children’s best interest; yet there are always unfortunate cases in which parents become blinded by their offspring’s potential popularity and prosperity and intentionally place them in harm’s way.
 
This potential may be even more of a concern in today’s social media infatuated society.  Now any parent with a smartphone can capture their child doing ‘something special’ and broadcast the clips or stills to anyone in the world. 
 
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All the above are real moral concerns; however, it’s hard to paint ‘Old Enough!’ as irresponsible entertainment.  Most parents who aggressively promote and profit from their children probably have never seen the show.  Also, given the series’ longevity and apparent track record of ‘safe success,’ the show seems like acceptable diversion.
 
So, back to the second question posed at the outset of this piece:  Why have so many Americans suddenly been smitten by a decade-old Japanese documentary featuring toddlers running errands?  ‘Seinfeld’s George Costanza’s gave a reason for watching ‘a show about nothing’ that may help answer the question: “because it’s on TV.”
 
Of course, there’s sarcasm in that answer, but there’s also truth.  Although the increasingly competitive streaming market is saturated with shows, after spending 18 months or more homebound in a pandemic, many people feel they’ve already seen everything worth watching on Netflix, which has left the company scrambling for new content—scouring space and time for entertainment that will keep people from unsubscribing.
 
Speaking of subscriptions, during the first quarter of 2022, Netflix lost 200,000 subscribers and even more staggering, it expects to lose 2 million more by July—an announcement that has precipitated a decline in the company’s stock price of more than 30%.
 
During video rental era and in the early years of streaming, competitors had largely the same video libraries, so cost and convenience were key to attracting customers.  Now content is the most important differentiator, as evidenced by the rapid rise of relatively new competitor Disney+, which has ridden the popularity of proprietary shows like ‘The Mandalorian,’ ‘The Beatles: Get Back,’ and a long list of Disney movies.
 
Netflix needs original content.  Over the past five-to-seven years, it’s certainly had success creating content, but subscribers burned through that content with a flurry of pandemic-prompted binge-watching.  Creating compelling original content takes considerable time, money, and expertise, but even then, there are no guarantees it will be well-received.
 
These reasons are likely why Netflix acquired the streaming rights for ‘Old Enough!’—a show the company could make available immediately to a subscriber base that, by and large, had never seen it, but would find it at least a little entertaining, since reality TV still resonates and people like cute kids.
 
Netflix also probably didn’t overpay for those rights.  True to the show’s name, the 20 episodes now on Netflix were produced in 2013,  nearly a decade ago, giving ‘Old Enough!’ a double meaning and likely meaning that the series was a bargain.  Unfortunately, inexpensive does not necessarily mean good.
 
My wife and I are not representative of all Netflix subscribers, but after watching three episodes of the grocery-toting toddlers, we had our fill.  The children were cute, and the scenarios were kind of funny, but reading the subtitles made the entertainment feel a little like work.  Even though a fourth episode promised a different kid in a unique situation, it didn’t seem like we’d really see anything new.
 
Perhaps ‘Old Enough!’ has outperformed Netflix executives’ expectations.  Still, the show can’t be more than a bandage on the company’s expanding wound of subscriber attrition, which will only be healed by a more drastic strategic prescription.
 
Interestingly, Netflix is now looking to incorporate advertising.  Such sponsorships could help contain, if not lower, the cost of the platform; however, people won’t stay subscribed just because rates don’t rise, any more than they'll watch shows ‘just because they’re on TV.’  Subscribers of any streaming service must believe there’s enough new, engaging content to warrant whatever amount they’re paying.
 
There are no serious moral concerns over a show about toddlers ‘doing nothing,’ but there’s also little economic upside for a streaming giant that desperately needs more compelling original content.  For these reasons, Netflix’s ‘Old Enough!’ is good enough to be “Simple-Minded Marketing.”


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Recognizing 'Kid Concerns'

3/11/2022

1 Comment

 
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by David Hagenbuch - professor of Marketing at Messiah University -
​author of 
Honorable Influence - founder of Mindful Marketing 


What worried you as a child? Maybe it was not having friends at your lunch table or embarrassing yourself in PE class.  For kids, those are real concerns.  Of course, they pale in comparison to adult anxieties, like deciding who to marry or how to make the next mortgage payment.
 
Images of war in Ukraine, including bombed buildings, fractured families, and bloodied bodies have made us realize that our daily worries are ‘kid concerns’ compared to the existential threats Ukrainians face.  Paying more to fill our cars' gas tanks is nothing next to the calamities those in Ukraine are enduring.
 
Businesses, however, have a much wider range of concerns than individuals do. Unlike you and me, they need to navigate the complexities of supplying products, making payroll, and paying dividends.  For the world's largest organizations, customers, employees, and shareholders number in the millions.
 
Despite these very real stakeholder obligations, a growing list of 300+ multinational corporations have decided to cease operations in/with Russia.  Among the notable are Apple, Amazon, Coca-Cola, Disney, Exxon, FedEx, Goldman Sachs, Ikea, KPMG, Mastercard, McDonald’s, Nestlé, Netflix, Nike, Pepsi, Procter & Gamble, Samsung, Shell, Starbucks, Toyota, UPS, Visa, and Volkswagen.
 
It’s no small thing to curtail commerce with Russia.  With a population of 145.9 billion, it’s the ninth most populous nation in the world.  For instance, 4.5% of McDonald’s 2021 revenue, and 4% of Pepsi’s, came from Russia.  Those percentages may seem small, but for companies with sales of $23.3 billion and $79.4 billion, respectively, those are hits of over $1 billion and $3 billion for each firm.
 
Although, it’s become increasingly popular to spurn Russia, is it fiscally prudent and morally right for companies to do so, given their multifaceted stakeholder obligations, not to mention the notion that withholding Big Macs and Pepsi is unlikely to deter Vladimir Putin from his geopolitical goals.  Some may even argue that with so many competitors closing shop in Russia, it’s a good time to gain market share.
 
So, why should McDonald’s, Pepsi, or any of the other 300+ economic objectors bother to boycott Russia?
 
It’s because, even though many of these corporations have revenues that exceed the GDPs of entire nations, the current crisis is bigger than any company.  These companies’ self-interests are certainly real, but they’re ‘kid concerns’ compared to what’s happening in the world now and where it could lead.
 

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It’s hard to imagine how any individual or organizational benefits could outweigh the death and destruction Russia is enacting on Ukraine.  What’s more, it’s possible that this unprovoked infringement on one nation’s sovereignty may only be the beginning.
 
Given Putin's past comments, it’s possible that other former Soviet republics are on deck for annexation.  There’s also speculation that China is carefully weighing other nations’ responses to the war in order to assess its potential for taking Taiwan.
 
Many believe that Ukraine’s fight for freedom foreshadows a much bigger battle for democracy.  Given the gravity and plausibility of that prediction, it’s difficult to understand how a company could put limited and likely short-term losses ahead of civil liberties and self-determination for potentially billions of people, for possibly centuries to come.
 
Yet, some companies still aren’t taking a stand against Russia’s aggression.  As of this writing, “companies that remain in Russia with significant exposure” include: Bridgestone Tire, Cargill, Caterpillar, Citi, Deere, Hilton, Hyatt, Kimberly Clark, Marriott, Mondelez, and Whirlpool.
 
Perhaps some of these organizations are still planning to act, they just need more time to execute their exits.  Hopefully, none are thinking that their absence in Russia won’t make a difference, as it most certainly will.
 
Because of tightly controlled media, the Russian people can’t see the devastation their country is inflicting on its neighbor.  What they will notice, though, are unavailable products, closed stores, and lost jobs, as well as a ransacked ruble.
 
Although unfortunate, that sudden economic distress will cause Russians to question what’s happening and why.  Eventually, the truth will spread beyond the thousands who already know the ugly reality and have courageously protested the incursion.

As abhorrent as the currently conflict is, hopefully a positive outcome will be a new recognition of companies’ collective abilities to stand down aggression and precipitate peace.  There are times when the most helpful thing marketers can do is not market.
 
We all have legitimate responsibilities to ourselves and others.  We all also must recognize when larger societal concerns should supersede those smaller self-interests.  Such self-awareness is  a prerequisite for “Mindful Marketing.”


Here are 11 verified charities to support Ukrainians.

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Marketing Ideology

2/27/2022

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by David Hagenbuch - professor of Marketing at Messiah University -
​author of 
Honorable Influence - founder of Mindful Marketing 


Principles of marketing professors teach that “products” are more than tangible goods; they’re also services and ideas.  While it’s easy to identify organizations marketing goods and services, noticing idea marketing takes more discernment. Recently, the world witnessed one of the most blatant examples of idea marketing ever.  It worked but unfortunately not for good.
 
In the annals of persuasion, one of the hardest ‘sales’ must be convincing one’s country to start a war, given the likelihood of loss of life, property, political allies, and more.  In persuading Russia to invade Ukraine, Vladimir Putin, achieved such a seduction, while providing an example of idea marketing at its worst.
 
Of course, Russia’s largely autocratic regime doesn’t require the consensus-building demanded in a democratic state.  Still, Putin was undeniably successful in marketing a momentous idea by convincing other government officials, military leaders, and to some extent the Russian populace to embrace the notion that invading Ukraine served a national security interest while accomplishing historically based cultural and ethnic reunification.
 
Mindful Marketing rarely tackles politics.  I’m addressing this situation not just because it’s a poignant example of idea marketing but because of its significant human and economic impact, as well as its potential to become one of history’s biggest geopolitical events.
 
Russia’s incursion into Ukraine is also personal for me.  Both of my wife’s parents were born in Ukraine, where they endured extreme hardships during WWII.  Consequently, my wife and our children share Ukraine’s rich cultural heritage by birth, as I do by marriage.

The necklace in the picture above is my wife's tryzub, which her father brought back for her from one of his many return visits to his homeland.
 
Of course, millions of others also have personal connections.  In fact, as I was writing this article, I read a post by one of my LinkedIn connections, Cait Mack who wrote:
 
“This has been one of the worst days of my life.  The war in Ukraine feels like it’s pulling at the very fiber of my being.  For those who don’t know, I’m Ukrainian.  My grandparents came over during WW2, fleeing from Nazis.  I am sick with grief.  Everything feels so stupid and trivial in comparison to what’s going on over there.”
 
“I think of my grandparents.  Our extended family in Ukraine.  All the innocent people.  The parents with their children.  The harsh reminder that we can’t really keep our families safe.”
 
As Mack mentions, the secondhand angst that any of us feel can’t compare to the fear and horror that those in Ukraine are experiencing, which reminds me of the focus of this piece—Putin marketing the idea of invasion.
 
Rather than commending his cunning, the intent here is to extract something edifying from the unfolding tragedy—to identify how individuals and organizations should market ideas responsibly. 
 
Autocratic leaders have the advantage of superior political power.  Marketers enjoy information superiority, i.e., they naturally know more about their organization and its products than do consumers.
 
Because of their very intangible nature, the information imbalance involving ideas becomes even more skewed, which means marketers are under even greater moral compulsion to carefully steward their influence on the conceptions of others.  The following are five steps toward marketing ideas responsibly:
 
1. Seek Understanding
It’s hard to understand when uninformed, which is why the first act in understanding is gaining information by researching the issue at hand and, above all, listening to those closest to it.
 
Courtroom dramas sometimes culminate with an attorney introducing a new witness or piece of evidence, which unexpectedly changes the minds of jurors.  Such are likely violations of legal discovery, but the examples are helpful reminders that additional and possibly more accurate information can help change our minds for the better.
 
2. Explore Other Perspectives
As implied above, it’s helpful to lean on others, not just because they can provide additional facts but because they might offer their own experienced and informed interpretation of the information.  Whether at the boardroom level or shop floor level, the best leaders always avail themselves of others’ insights.
 
It sometimes seems that people avoid other perspectives, fearing they’ll change their opinions.  That may happen, which is not necessarily a bad thing.  However, seeking others’ perspectives is often like a fan who's loyal to a certain football team watching two other teams play.  Watching them will probably not change the fan’s team loyalty, but they may see in the other teams things that enhance their understanding of the game, as well as things their team does well or could do better.
 

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3. Present a Rational Argument
People can be persuaded in different ways, including by deception (painting an inaccurate picture of facts) and coercion (compelling an action from a position of power).  Neither of these alternatives allows people to exercise informed consent, or freely choose to adopt an idea based on its logical merits.
 
Although we occasionally act otherwise, people are rational beings who can understand and make sensible decisions based on logical arguments.  Even young children comprehend reason—‘If you eat your whole meal, you’ll get to have dessert.’  People of any age deserve clear, logical, communication.
 
4. Don’t Play on Emotion
However, humans aren’t simply rational beings.  Our complex psychology also includes emotion, which makes us even more interesting.  Yes, we should make most decisions by reasoning with objective information, but sometimes it’s appropriate for people to choose things that they enjoy or that make them happy, like playing a favorite game with a friend.
 
What’s unacceptable is to use others’ emotions against them, e.g., to persuade them to do something out of an irrational fear or a sense of guilt.  Although good in moderation, too much emotion can cloud people’s thinking and cause them to do things that they otherwise would not rationally choose.  The outcome is like a doctor tapping a patient’s knee with a reflex hammer:  Their leg will move involuntarily no matter how much the patient may reason that it shouldn’t.
 
5. Be Truthful
The fifth act encapsulates the preceding ones and should go without saying; however, even when people fulfill the first four steps, they still must ensure follow-through of this final one, particularly to avoid selective presentation of facts.
 
For example, I could support the morality of advertising by referencing Gallup’s annual poll about the honesty and ethics of various occupations and accurately report that advertising practitioners ranked in the top 20 of all occupations.  That may sound impressive, but the statement would be misleading because the survey only asked about 22 occupations and advertising practitioners ranked 18th.
 
What we don’t tell people is often as important as what we tell them.
 
Again, the point of this piece has not been to detail Putin’s tenuous argument for the invasion of Ukraine; however, this website, among others, provides a window into how his rationalization evolved.  In short, Putin appears to have violated more than one of the preceding five steps; for instance, he played on his own people’s emotion with a “rousing speech” in which he called Ukraine a U.S. colony ruled by a “puppet regime.”
 
From my own reading and experience, Putin’s biggest breach of the steps of responsible influence has been of #5, by being untruthful, particularly with respect to his denial of Ukraine’s historic statehood and his claim that Russians and Ukrainians ‘are one people.’

Soon after my wife and I started dating, I learned two important facts involving her family’s ethnic heritage.  First, the nation is not “the Ukraine;” it’s “Ukraine.”  Adding the definite article “the” diminishes the country’s stature to that of a territory or colony, (e.g., the Louisiana Territory, the Yukon), which Putin directly suggested in his “rousing speech” referenced above.
 
Second, my wife’s family and their friends frequently reinforced that ‘Ukrainians are not Russians.’  I experienced firsthand that Ukrainians have a unique language, history, food, customs, and other rich cultural distinctives that distinguish them from their homeland’s northern neighbor.
 
My evidence spans more than three decades, but it is personal and, therefore, anecdotal.  The most compelling proof of Putin’s misinformation is, regrettably, what’s happened during the invasion, as a 2/26 New York Times Breaking News headline read, “Ukraine, outmanned and outgunned, has slowed Russia's advance on Kyiv and two other cities as its forces wage a ferocious resistance.”
 
If Ukraine were just a Russian territory, if the majority of Ukrainians wanted unification with Russia, and if Ukrainians and Russians were one people, why are so many Ukrainians valiantly fighting and giving their lives to stop the invasion and maintain their nation’s sovereignty?
 
The disconnect stems from a lack of truthfulness, which many of Putin’s own people have recognized, hence widespread protests by Russians against the “war without a cause.”
 
Tragically Putin was effective in selling the idea of invasion to some, at the cost of many lives and the freedom of a peaceful people.  That underlying deception and unimaginable destruction makes his strategy the worst example “Single-Minded Marketing.”


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Should Social Responsibility be Selfless?

1/16/2022

12 Comments

 
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by David Hagenbuch - professor of Marketing at Messiah University -
​author of 
Honorable Influence - founder of Mindful Marketing 


While people gave gifts to loved ones last month, the world’s largest pizza chain was providing presents to some very surprised recipients—other restaurants.  True, “it is more blessed to give than to receive,” but was Domino’s philanthropy actually aimed at putting itself on the receiving side?
 
As you may have seen in the 60-second spot from its feel-good campaign, Domino’s bought over $100,000 in gift cards from local restaurants and gave them to its own customers.
 
It doesn’t take much business background to know that the goal of an enterprise is to build market share for itself, not competitors.  Even Vickie Corder, one of the restaurant owners who appeared in Domino’s commercial, was astonished by the action: “I can’t believe one restaurant is buying another restaurant’s gift certificates.”
 
Why would Domino’s want to support its competitors’ sales by buying their gift cards, and even worse, giving them to its own customers, making them less likely to buy Domino’s pizza?  Some of the ad text suggests an altruistic reason:  “Domino’s wants to help the people and restaurants in our local communities.”
 
One might take that explanation at face value.  After all, the firm did fork over $100,000.  However, for a company with annual revenues of $4.37 billion and operating income of $801 million, $100,000 is immaterial.  There’s also some understandable skepticism--Why haven’t we heard before of Domino’s feelings of responsibility for other restaurants?
 
Instead, some of the chain’s social responsibility has looked more like ‘marketing gimmicks,’ such as its “Paving for Pizza” program, aimed at filling potential pizza-delivery-wrecking potholes, and its “carryout insurance,” guaranteeing free replacements for customers who inadvertently fumbled their pies.
 
The vast majority of people probably never had a poor pizza experience resulting from either of those issues and never will, so it’s realistic to suggest that in both instances Domino’s was making much ado about nothing, positioning for the free publicity that each unconventional campaign elicited.  So, is gifting other restaurant’s gift cards just another attempt to gain exposure through oddity?
 
The gift card campaign certainly seems like it could be another gimmick; yet, there are some notable differences, namely that COVID has put unprecedented pressure on restaurants, causing many to shutter their doors permanently.  In fact, Domino’s commercial mentions that “over 110,000 U.S. restaurants have closed since March 2020.”
 
That to say, unlike the exaggerated ideas of potholes pummeling delivery vehicles and consumers carelessly dropping carryout orders, the pandemic’s negative impact on restaurants has, unfortunately, been very real.
 
The ad also mentions a related phenomenon that COVID didn’t cause but did increase:  the use of third-party delivery companies.  During the height of the pandemic when most restaurants’ sit-down dining was paused, more and more people started getting restaurant food delivered to their homes and offices by providers like Grubhub, Uber Eats, and DoorDash.
 

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Although selling food, whether for dine-in or delivery, seems like a good thing for restaurants, apparently the math doesn’t work well when third-party delivery companies are involved.  Irene Li, another restaurant owner interviewed in Domino’s ad, affirms the profit predicament: “[Third-party delivery fees] take a huge chunk of our bottom line; all of that comes out of our pocket and goes to them.”
 
Others have echoed her concern, including NPR, which reported that apps often charge commissions of 17% or more, in addition to delivery fees.  Likewise, the LA Times found that one local restaurant paid $35,000, or roughly a third of its annual rent, in delivery fees, which led the Times to recommend, “The next time you order takeout, call the restaurant [directly].”
 
Domino’s suggestion that delivery apps wreak havoc on restaurants’ bottom-lines is on-point; however, the pizza chain is also very well-known for doing its own deliveries.  Does that mean that Domino’s is selflessly looking out for others?  Not exactly.
 
Apparently, some of the many people who have grown accustomed to the third-party apps for food delivery have also used them to place orders for pizza, doing to Domino’s the same fiscal damage described above. In fact, another Domino’s ad has suggested such delivery difficulties, warning consumers that third party delivery firms charge “surprise fees,” but it will reward certain loyal customers who use its app with “surprise frees,” or, free food.”
 
Likewise, during an interview on CNBC’s Mad Money, Domino’s President and CEO Ritch Allision suggested that third-party delivery apps have, to some extent, stunted the company’s growth.
 
All this to say, by buying and giving away other restaurants’ gift cards, Domino’s has brought added attention to an issue that doesn’t just hurt its local restaurant competitors.  It also  bruises Domino’s own bottom line.
 
The question, then, becomes, Is it right for Domino’s to help itself while helping others?
 
Before considering the ethics of this query, it’s worth noting that Domino’s strategy does seem to be effective marketing.  The unconventional approach gains attention, and the corporate social responsibility builds goodwill.
 
What’s more, because delivery is both the focus of the ad and a key component of the company’s value proposition, the promotion is more meaningful and memorable.  When people consider Domino’s brand, the company wants them to think of food delivery, which the commercial accomplishes.
 
So, what about the marketing’s morality?  One consideration could be the amount Domino’s spent on the gift cards ($100K+) versus how much it’s paid for the ads.  Excluding  production expenses, U.S. television broadcasting costs alone, average about $115,000 per 30-second spot, which means the campaign’s promotional budget certainly far exceeded the value of the gift cards.
 
The extreme imbalance may make some rightly question the company’s motives.  Although Domino’s franchisees did assume some risk by giving other restaurant’s gift cards to their own customers, most people who eat out probably patronize multiple restaurants, making it unlikely that Domino’s lost business.  In fact, free gift cards may have led some of their recipients to reciprocate by buying more pizza.

All said, it’ hard to paint Domino’s promotion as selfless:  The company benefited from the tactics as did the other restaurants and those who scored the free gift cards.  So, is such mutual benefit problematic?
 
Most business exchanges result in win-win outcomes.  From the clothes we wear to the computers on which we type, we’re usually very glad we have those products and not the money we paid for them.  Meanwhile, the marketers are grateful for our money and don’t want back their products. 
 
Mutually beneficial exchange, in commercial and noncommercial contexts, is a very good thing. Some may argue that such a philosophy shouldn’t extend to corporate social responsibility, but why not?
 
Several years ago, two colleagues and I conducted research in which we identified three unique types of corporate social responsibility: donation, volunteerism, and operational integration.  In the study we affirmed that helping others was very good, but implementing philanthropic acts that simultaneously furthered the economic goals of the organization was even better.  The positive response to this article and another like it suggests that many others share the same viewpoint.
 
The reality outside business isn’t much different.  When individuals give of their time, money, etc., benevolence in some form usually comes back to them.  The stories found in the Go Giver artfully describe that phenomenon.
 
Domino’s did a good thing by buying and giving away other restaurants’ gift cards.  Although it wasn’t a major act of corporate social responsibility, it was a meaningful one.  The fact that the philanthropy also benefited the pizza chain, doesn’t stop the strategy from being "Mindful Marketing."


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Are Apple AirTags Too Risky?

12/19/2021

4 Comments

 
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by David Hagenbuch - professor of Marketing at Messiah University -
​author of 
Honorable Influence - founder of Mindful Marketing 

Most of us played ‘tag’ as a kid and loved the simple thrill of chasing others around and trying not to get tagged.  Thanks to Apple’s advanced tech, the game has graduated to adulthood; however, criminals are increasingly “it, ” and the stakes are much higher for those being chased.
 
So, if you’re wondering what to buy for that childhood friend-turned-felon this holiday season, Apple has the perfect present:  AirTags--The gift that keeps on taking.  This dark humor aims to underscore some disturbing news:  More criminals are finding that AirTags are a convenient way to pilfer the valuable property of others or even worse, to stalk people.
 
Apple introduced the small electronic tracking devices this past April to help individuals more easily locate products they’re apt to misplace like keys and bags.  The company’s website explains how the 1.26” diameter tags work:
 
“Your AirTag sends out a secure Bluetooth signal that can be detected by nearby devices in the Find My network.  These devices send the location of your AirTag to iCloud — then you can go to the Find My app and see it on a map.”
 
Given that this location system leverages a vast network of strangers’ devices, Apple has made privacy a top priority.  The company ensures that only the AirTag’s owner can see where their AirTag is, and its location data and history, which are always encrypted, “are never stored on the AirTag itself.”
 
These measures appear effective in protecting the property owner, i.e., the person who places the AirTag on their own phone, in their own bag, etc.; however, it seems that a major security risk remains, namely preventing those with ignoble intentions from attaching AirTags to the possessions of others.
 
Of course, most people would notice if an AirTag inexplicably appeared on their coat or keychain, but they’d probably never see one affixed to the underside of their automobile.  Unfortunately, it didn’t take long for car thieves to realize AirTags’ wonderful potential for pilfering.
 
Various news media have reported the troubling trend in which thieves see sought-after vehicles in public places like mall parking lots, attach an AirTag to the car in an inconspicuous spot, and track the vehicle to a more private place, like the owner’s driveway, where it can be stolen more easily.
 
The notion of ‘auto theft made simple’ is disconcerting, but even more disturbing is the idea that criminals could use AirTags to stalk people.  What if you’re in a public place and someone inconspicuously slides one into a bag you’re carrying?  The wrongdoer could show up at your home anytime.
 
Fortunately, Apple claims there are measures to thwart such chilling contingencies; its website explains:       
 
“AirTag is designed to discourage unwanted tracking. If someone else’s AirTag finds its way into your stuff, your iPhone will notice it’s traveling with you and send you an alert. After a while, if you still haven’t found it, the AirTag will start playing a sound to let you know it’s there.  Of course, if you happen to be with a friend who has an AirTag, or on a train with a whole bunch of people with AirTag, don’t worry. These alerts are triggered only when an AirTag is separated from its owner.”
 
These precautions do help ally some concerns; yet, a few questions remain, for example:
  • What if the person who’s unknowingly been ‘tagged’ doesn’t own an iPhone or have it with them, in which case they wouldn’t receive the alert?
  • How long does it take for the alert to be triggered?
  • How far does an AirTag need to be from its owner in order for the alert to be sent?
 
In keeping with the last question, if a person has an AirTag in a key chain that she hangs in a first-floor entryway, she won’t want an alert to sound each time she takes her iPhone to her second-floor bedroom.  All this to say, AirTags’ security features give some significant reasons for pause.
 
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Geoffrey Fowler, a columnist for the Washington Post, substantiated such concerns when he asked a colleague to pretend to stalk him for a week “from across San Francisco Bay.”  He found that it took three days for the alert to sound, which amounted to “just 15 seconds of light chirping.”  What’s more, if he didn’t own an iPhone, he wouldn’t have received any notification.

Although Fowler credits Apple for trying to do more to keep people safe than other tracking device makers, like Tile, have done, his experience still leads him to conclude that AirTags are “a new means of inexpensive, effective stalking.”
 
So, should Apple stop selling AirTags?  Based on Fowler’s experiment, a natural conclusion is ‘yes.’  However, as it is with so many products that offer both positive and negative outcomes, the answer is not that easy.
 
For instance, many of us travel in automobiles each day to go to work, school, shopping etc.  Tragically, more than 38,000 U.S. residents die in car crashes each year, and many more are injured.  Also, we’ve unfortunately seen some use cars maliciously to kill others.
 
However, such incidents don't make many of us think twice about climbing into a car or crossing streets where others are driving them.  Although the potential negative outcomes of injury and death are daunting, the great individual and collective benefits of car use overshadow those remote probabilities.
 
Similar rationale can be applied to many other products from kitchen knives to prescription drugs.  We welcome their use because in the vast majority of cases they help people, not harm them.
 
Still, it’s fair to ask if AirTags offer a high enough risk-to-reward ratio.  Yes, misplacing one’s car keys is annoying and can even be very frustrating, but we usually find them.  How do we weigh the convenience of finding lost keys against the use of the devices to track others’ property or people themselves?
 
Those risks, especially if they become more common, likely don’t outweigh the rewards of quicker key recovery.  However, there are several other, potentially more critical functions that AirTags can serve.  Writing for Gadget Hacks, Jake Peterson identifies several of those uses, which include:
  • Lifesaver Beacons:  People with severe allergic reactions can place AirTags on life-saving medications like EpiPens.
  • Location Trackers for Children:  Parents can put the devices in their children’s backpacks or pockets and hopefully avoid experiencing their worst nightmare—a lost child.
  • Location Trackers for People with Dementia:  At the other end of the age spectrum, some individuals beset by mental decline wander off.  AirTags can make it easier to find them quickly.
  • Beacons for the Visually Impaired:  The Find My app can help people with limited or no sight precisely locate important objects within their homes.
  • Location Trackers for Pets: An AirTag can help ensure that a beloved animal is found, without needing to insert a microchip into the pet.
 
Do the benefits of these latter applications outweigh the risks of unscrupulous AirTag use?  They probably do, provided that Apple continues to improve AirTag security and that the deviant behavior remains isolated.  Assuming those two ‘tag rules,’ AirTags can be useful for many people, helping to make the tracking devices “Mindful Marketing.” 
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