Apparently businesses have a heart and soul….

I’d always thought that businesses when a business links with a charity it was out the goodness of their cold shiny business heart……..

Cause related marketing (CRM) is definitely not an act of compassion.  It is simply one big money making scheme for the business which happens to benefit a good cause at the same time.

One famous CRM on-going campaign is the link between McDonalds and Ronald McDonald houses which provide a home for the families of sick children whilst they are in hospital.  In the video below, there is a quote from the CEO of McDonalds saying the charity as “at the heart and soul of McDonalds”, but is this really believable…..is the only reason McD’s exist to raise money and awareness for the houses…I somehow think not.

Okay, so it is nice that companies do attempt to support charities but it is really for their own benefit, to enrich the relationship between the business and the stakeholder and enrich the brand image whilst increasing brand awareness through targeting new customers (Hoeffler & Keller 2002).  The way that the consumer perceives the brand is one of the most vital parts of the brand umbrella (a term I just made up to include everything about branding), if a consumer doesn’t like the brand or the values it carries then they simply won’t purchase from that brand.

Consumers may sometimes purchase a product simply because it is linked with the support of a good cause and made the consumers feel more positively towards the brand (Ross, Strutts & Patterson, 1991).  I know that I always feel obliged to purchase a product when I see a product is linked to charity, this could because I want to be seen as pro-social by other people. By making purchases that link to good causes, other people will see what I have bought and will think that I am a wonderful giving person who supports charity (Ariely, Bracha & Meier, 2009).  I know I don’t buy the innocent smoothies at any other time of the year than the time when they have the hats on because I know that there will be a donation to Age Uk (and also the hats are absolutely adorable).  I do however wonder how effective the CRM is at promoting the good cause though as I knew that innocent donated to a charity for older people but I wasn’t sure which one so is CRM effective as people think?

One company has cleverly played upon a term which most consumers know extremely well and has adapted it to make them look good, help a charity and help the consumer feel good. ‘Toms’ shoes have a one for one policy (also known as Buy one Give one).  When a customer purchases a pair of Toms shoes, a pair of shoes are sent to Africa to help give a child in need something.  Now I’m all for helping to clothe children in Africa but do they really need a pair of what I consider high end high-street shoes?  Toms shoes are essentially flimsy cotton pumps with mere price tags of £35! Ok so you get two pairs for that price (one for you and one for your new African child friend) but £35…..I have seen Tom replicas (ok so they don’t have the name)selling from about £5.  That could buy 6 pairs of shoes, one for you then you could buy another 4 pairs and ship them to Africa giving 4 kids shoes for the same price….

But I think what makes Toms so popular and people purchase them is the feel good factor you get when you buy them which may make consumers think that they got this good feeling from the company which may make them purchase from Toms again.  It could be an interesting topic to explore using research however since people tend to lie/tell people what they want them to hear, the research would need to find a way to mind read……

But how does Toms create these feelings of warmth and ‘I am a wonderful personness’?????  They put messages on the shoe box saying how much of a nice person you are for giving a child a pair of shoes and they put pictures of African children in the shoes to tug at the old heart strings since emotive images of children cause an emotive response Burt and Strongman.

Although I don’t own any myself (which is highly surprising as it’s the kind of clever ploy that I fall for), I can see why people do buy them (especially women since we are more likely to make CRM related purchases )(Ariely, Bracha & Meier, 2009).  Is this because women are more emotional and have more feelings towards charities or because men do not feel that donating will be adhering to a social norm since creating social norms can increase male donations to charity (Croson, Handy & Shang, 2010).

Overall, companies can use CRM and links to increase brand awareness and to help to increase profits since consumers are more likely to purchase when brands have links to the business for example the fact that Toms sells shoes and the good cause is shoes is more effective than McDonalds and the Ronald McDonald houses.  It is seen as more favourable when this is the case which may make consumers more likely to make a purchase.

I will leave you with one final thought.  If you love ice cream, you need to love the honey bee too.  It’s a very linked CRM campaign since Haagen-Dazs  would not exist without the bees and so it is definitely in their interest (on more than one level) to promote people to save the bees.

Branding is Evil (Well sometimes)

The dark side of branding

 

Like many things, branding has a dark side.  Behind the shiny clean cut image and positivity that many brands exude, there is a dark side waiting to escape.

 

I’m a fan of brands.  I wouldn’t say that I’m loyal to any brand in particular but I think that the concept of branding is important to help consumers simplify the decision making process and help people to identify different products and can even help consumers to feel part of a group.  When consumers become loyal to a particular brand and choose to only purchase that brand products, it is known as a ‘subculture of consumption’.  All of the consumers in this subculture will have similar values to each other and also the brand.  It’s kind of like a special member’s only club where members incorporate the brand into their everyday lives, so it becomes part of their lifestyle, their habits and even their beliefs!

 

The love of brands can be compared the devotion to a religion for example the fans of Apple can be compared to religion since the underlying constructs behind the religious beliefs and the brand devotion are similar…One research paper  found some quite startling similarities:

• Religions aim to explain to believers about creation and how the world came to be.  It is a key part of the religion and it turns out that devoted  Apple fans know and understand the Apple origins in as much detail as a Christian knows the bible creation story.
• Also in every religion there is a hero or a saviour for example Jesus Christ in the Bible.  The most devoted of Apple fans see Steve Jobs as their hero, their saviour and that he had to go through troubles to reach out to the world.
• In Christianity, there is the Devil who tries to manipulate and ruin the lives of believers and Apple has its own Devil – Microsoft.  Users see Microsoft as an “evil empire” and view the creator Bill Gates as an antichrist.

The similarity that I am most interested in is the idea that Apple users see Microsoft as evil…surely as logical human beings; we can surely understand that a company can’t be evil for being in the same sector as a brand we love.  Brand loyalty can in fact have a negative impact upon brand followers: some people have compared Apple to a cult in terms of the way it obtains its customers (some may say they brainwash consumers, convincing them that they need the product through the in your face happy happy staff in the Apple stores approach) Kahney, 2004.

Anyway, back to the purpose of this blog.  Why can brands be considered evil…

After perusing the internet for inspiration about “consumery” ideas that were a bit different from the norm, I came across an article that linked schadenfreude with branding!  Shockingly, when consumers are loyal to a particular brand and are part of the brand community for that brand, they are more likely to negatively communicate about other brands in “their brands” sector.  For example, Apple lovers are likely to negatively talk about Microsoft.  It is not just what people say though, it turns out that the love of one brand can impact the emotion that a consumer feels towards other brands.  When brand loyalists of one particular brand where told of an opposing brands misfortune, they felt pleasure.  The schadenfreude emotion! This suggests that branding can make consumers become malicious towards other brands.

I think this could be a danger to the economy since if people enjoy seeing businesses fail then they may go out of their way to cause the failure.  This could lead to reduced spending across various sectors of the economy, especially areas where there is a lot of competition.  So I think that although branding is good, extremist loyalty to a brand could be detrimental, or is it just me being cynical?  What are your thoughts? Do you love any particular brands? Hate others?

NEWS FLASH: Shopping can actually make you happy….well sometimes it can

With Christmas coming up, I get to do what I love the most without feeling guilty. No, not eating…..shopping.

Now I like to think that shopping makes me happy.  I oppose research which states that shopping does not make you happy, since I swear by a trip to the shops on a bad day to cheer me up.  One thing I do love doing however, is buying little presents for other people.  When I see something that reminds me of someone I have a tendency of buying it and making that purchase gives me the same gooey feeling as when I buy myself a new pair of shoes or a new dress.

As it turns out, other people are the same and it has been seen in research that buying for others can have an increase on your happiness.  With Christmas coming soon, I think this is an excuse to buy a few extra presents for people since it can help to increase your own happiness.

It also seems that experiential purchases can in fact make you happy, so I was right.  Shopping can make people happy.  I can completely and utterly agree with this, when I think of the times when I’ve spent money on doing something or going somewhere, it really has made me happy.  But what is it that causes an experiential purchase to make you happy and material purchases have a negative effect?

In my opinion, it’s all about memories.  When you make a material purchase, all you are getting is an object – although some may argue that objects can make you happy, in reality I think it’s only people who can truly make a difference to your emotions.   This is why experiential purchases can make you happy.  Normally, when you have an experience for example, go to a music festival, you do this with other people.   Yes the ticket price is extortionate and the prices of everything when you get there are extortionate, but you will be spending time with other people (presumably people who you are friendly with…..or at least can tolerate…), so money almost doesn’t matter.

Also, once the experience is over, it isn’t like a material item, just another dress in your closet, but it is so much more.  The happy memories, the funny stories and the experience of maybe trying something new or doing something fun are what are driving the happiness since we humans are driven by curiosity and wanting to feel part of a group.

My point is almost that in a world where people spend time together, money almost doesn’t matter.  If people are buying things to spend time with other people then it is likely that it is the company of others that is making them happy but this may be masked by the shopping and so the individual feels that it was the shopping that made them happy…..story of my life…

Research has indicated many times that buying material items can actually make you unhappy.  Which I can kind of agree with since whenever I buy anything, I’m always left wanting something else.  This effect has been seen in other research and can help to explain why people continually spend even though they may seem to have everything.   This is because the rush you get from shopping is not from the product you buy but from the purchasing process and so making any kind of purchase, whether it is experiential for someone else, yourself or an experiential purchase it may make you happy in the short term.  However, if it is a material item you are purchasing, it is unlikely that the happiness will last long.

So, in order for shopping to make you happy, don’t buy yourself ‘useless c**p’ you don’t need  and instead spend your money enriching your life through experiences and buying stuff for other people since that could make you genuinely happy.

What Coffee? Where?

 

I often question my behaviour since I have fallen deeply and uncontrollably, into a commercial world where it is acceptable to pay £3 for a coffee, which probably costs about 50p to make. I realise that it’s not a scientific calculation, but it must cost them somewhere in the region of 50p to make and so the mark-up is rather large…
http://wiki.answers.com/Q/How_much_does_a_latte_cost_Starbucks_to_make_like_unit_cost_per_cup

 

I think what makes consumers head towards the brands of coffee is that we know what to expect from different places.  Humans resist change and like things to stay the same (Bagozzi & Lee, 1999).  Also, as consumers, we develop preferences for different brands, for example, I prefer the ambience of Café Nero over other coffee shops even though all of the chain coffee shops are very similar and sell pretty much exactly the same product and have very similar store atmospheres.  I first started going to Café Nero when one opened by my bus stop so I started going out of convenience since the location was handy, which seems to be the case for many consumers (Farquhar & Rowley, 2009).  Once I had been a few times, I knew what to expect and knew I would enjoy the coffee so I now actively seek out the store when I am looking for coffee.

One possible explanation for loyalty to one brand over another in the coffee shop world is that consumers want to make life easy for themselves.  They want the decision making process of buying a coffee to be quick simple and often to require as little thought as possible (especially since commuters often buy coffee on the way to work in the morning when they are half asleep).

 

We need to understand the Consumer Decision Making Process in order to understand why we may choose one store over another.  The first time we make a decision about which coffee shop to go to, the process is long and time consuming.  However, after we have prior experience, we can skip some of the stages and make a quick and simple decision.

 

Firstly, we will recognise we have a problem – we need coffee. Then we will search for all of the different options and then we will evaluate the alternatives using information from other people (friends/reviews/other sources of information).  Once the options have been evaluated, we will then make a purchase which will then be evaluated- if we like the product we are likely to go again or if not then we would not repurchase.  For a simple product like coffee, the level of involvement (how much time we spend making a decision about a product) will be lower than a more expensive, more important product such as a new car or home.

 

This website has nice diagrams and discusses the decision making process quite basically but it is good to get an understanding of the topic.

 

Once we have been to a coffee shop once, we will have a mental representation of the experience and will have evaluated it after we have been.  The next time we go for a coffee we will try and make a decision where to go.

Coffee shops offer a social place to gather, as humans, we love to interact with others. In fact interpersonal relationships with others is a human need (Baumeister & Leary, 1995) While I was in Café Nero the other day, there was a group of mums and babies clearly using the store as a place to socialise with others, I saw couples there together, I saw groups of friends but I didn’t see  anyone there alone.  To me this suggests that people find that coffee shops are a good place to socialise and offer a chance to communicate with people in a calming environment.

 

Overall, I think that coffee is a great commodity and although we often get ripped off by global chains, I believe the social experience that it offers is vital, especially in the 21^st century since we only seem to communicate via phone, computer or mobile and so the face to face interaction which occurs at such places is important.