Michael R. Solomon

Archive for the ‘Chapter 1’ Category

Is Cause Marketing Just “Charitainment”?

In Chapter 1 on October 12, 2009 at 9:20 am

In a thoughtful article in yesterday’s New York Times, Anand Giridharadas discusses the issue of “buycotting” or ethical consumerism; the objective of those who strategically make (or withhold) purchases depending upon a brand’s social or environmental repercussions.  As he observes, “Today one can buy not just carbon offsets, organic fruit and recycled paper, but also a iPod whose purchase combats mother-to-child H.I.V. transmission in Africa; a sneaker from Timberland made of biodegradable wool and organically tanned leather; “green weapons” like reduced-lead bullets from BAE Systems, the British armaments maker; and fair-trade condoms, made with sustainable latex (marketing pitch: “for guilt-free lovers who want to feel good in every way”). http://www.nytimes.com/2009/10/11/weekinreview/11giridharadas.html?_r=1&emc=eta1

Cause marketing is indeed the new cause célèbre – but does it have a dark side?  Giridharadas singles out the (PRODUCT) RED marketing campaign that one set of authors charged “…replaces the efficiency of tax-funded programs and transfers in improving health equity with a consumption-driven ‘charitainment’ model.”

That raised my hackles – especially since I’m working on a new partnership (via my Principles of Marketing text) to involve students in developing marketing plans for new (RED) products.  Then I remembered that just last year I provided this comment about people who buy carbon offsets to The Chicago Tribune: “…it could be counterproductive because it tends to absolve us of guilt. It’s like we’re buying forgiveness for our sins. What potentially could happen with these things is people could say, ‘I gave at the office. I bought my offset and now I can drive my Hummer as much as I want.’” http://archives.chicagotribune.com/2008/sep/21/business/chi-ym-spending-0921sep21

I still believe that allowing consumers to throw money at guilt may be counterproductive in the long run because it may interfere with deep-seated attitude change.  But this feels like a different animal to me:  The person who chooses to buy fair-trade coffee (or condoms!) or a (RED) version of a cool product still participates in the economic system; they’re just doing it in a more beneficent way.  And they can see tangible outcomes from their choices:   Since (PRODUCT) RED launched in 2006, (RED) partnerships with Converse, Gap, Emporio Armani, Apple, Starbucks, Hallmark, Dell, Microsoft and American Express (UK only) and (RED) events have generated more than $130 million for the Global Fund.

The emerging perspective that academics in our field call Transformative Consumer Research (TCR) promotes research projects that include the goal of helping people or bringing about social change.  Adherents of TRC work with at-risk populations, such as children, the disadvantaged and the disable or on such topics as materialism, consumption of dangerous products, and compulsive consumption. (RED) is a great example of that perspective at work.  Offsetting guilt is one thing.  Buying a perfectly good product that happens to be (RED) — and that results in a substantial revenue boost to a good cause for the same price — is quite another.

Adapted from Michael R. Solomon, Consumer Behavior:  Buying, Having and Being 9th ed, Prentice Hall, to be published January 2010.

When the inmates run the asylum

In Chapter 1 on August 18, 2009 at 6:09 pm

Adapted from Michael R. Solomon, Consumer Behavior:  Buying, Having and Being 9th ed, Prentice Hall, to be published January 2010:

Consumer-generated content, where everyday people voice their opinions about products, brands, and companies on blogs, podcasts, and social networking sites such as Facebook and MySpace, and even film their own commercials that thousands view on sites such as YouTube, probably is the biggest marketing phenomenon of this decade. The ad a pair of brothers created for Doritos that ran during the 2009 Super Bowl scored top honors as the spot the most viewers remembered – it beat out other expensive entries by a lot of ad pros (many of whom are getting a bit nervous as they look in the rear-view mirror).

If you’re reading this blog, you probably know that already.  Still, even grizzled veterans of Web 2.0 (well, I’m grizzled anyway) need to step back now and then to let the enormity of this cultural shift sink in.   Simply put, we’re seeing a fundamental transformation in the way people on the street relate to popular culture.  Why? Because increasingly we see ourselves not just as consumers of culture but also as producers of culture. Indeed, a recent survey reported that fully 1/3 of young people who use social media such as Facebook and YouTube consider themselves to be broadcasters in addition to audience members!

Heavy Users – or Micro Users?

In Chapter 1 on August 3, 2009 at 4:22 pm

Adapted from the forthcoming (9th edition) of Consumer Behavior (Prentice Hall):

Building loyalty to a brand is a very smart marketing strategy, so sometimes companies define market segments when they identify their most faithful customers or heavy users. As a rule of thumb marketers use the 80/20 rule; 20% of users account for 80% of sales.

How valid is this guideline in today’s micro-fragmented market?  A study Catalina Marketing conductd suggests not very.

Today the logic of the 80/20 rule still applies but the proportions are on steroids:  Catalina’s study of 54 million shoppers reported that only 2.5% of consumers account for 80% of sales for the average package-goods brand.  The 1% of pet owners buy 80% of Iams pet food spend $93 a year on the brand and the 1.2% of beer drinks who account for 80% of Budweiser sales spend $170 on Bud each year. Of the 1,364 brands the researchers studied, only 25 had a consumer base of more than 10% that accounted for 80% of volume.

%d bloggers like this: