Don’t Buy our Product?

While the majority of retailers were busy sending out email blasts promoting their Cyber Monday deals in the hopes of increasing sales, Patagonia took a dramatically different approach.  Recipients on Patagonia’s email list received the following message, demanding that they not purchase a Patagonia jacket on Cyber Monday.

As part of their Common Threads Initiative, Patagonia hoped to encourage consumers to think about the environment and over-consumption before purchasing anything on Cyber Monday.  The Common Threads program aims to reduce consumption of the environment by making all Patagonia items 100% recyclable.  Consumers are encouraged to turn in their worn out Patagonia items in the store before purchasing additional merchandise.  These items then get sent to refurbishment centers where they are processed and turned into new Patagonia products.  The statement released by Patagonia on Cyber Monday stated:

“Cyber Monday, and the culture of consumption it reflects, puts the economy of natural systems that support all life firmly in the red. We’re now using the resources of one-and-a-half planets on our one and only planet.

Because Patagonia wants to be in business for a good long time – and leave a world inhabitable for our kids – we want to do the opposite of every other business today. We ask you to buy less and to reflect before you spend a dime on this jacket or anything else.”

While protecting the environment is a very important issue and one that Patagonia fully supports, their Cyber Monday email was also a disguised marketing campaign.  After all, Patagonia is a company and companies need to sell their products in order to stay viable.

First of all, by bringing awareness to their cause, Patagonia is aligning themselves with a large segment of their target consumer.  We know that people have a more positive attitude about people or companies that they feel share similar values with themselves.  Therefore, people who are also concerned about protecting the environment will likely have a positive attitude about Patagonia and be more likely to purchase products from them in the future.  Jackets and outdoor wear sold by stores like Patagonia aren’t typically viewed as impulse Internet buys like electronics and other products.  In an attempt to stand out from the barrage of Cyber Monday impulse advertising by other retailers, Patagonia used this opportunity to be noticed by making a bold statement in the hopes of boosting sales as they enter the winter and holiday season.

Patagonia’s ad campaign is actually quite clever.  By telling consumer’s not to buy something, it might actually increase sales of that product.  This counterintuitive phenomenon can be explained by the theory of psychological reactance.  Psychological reactance is an emotional reaction to the elimination of behavioral freedoms.  People like to feel like they have choices and freedom, therefore when they are told that they can’t have something, it often increases the attractiveness of that product.  Telling its customers not to purchase their jacket might actually increase people’s desire to have that jacket even without their awareness.

Lastly, the design of the message clearly features the Patagonia jacket like most product advertisements would.  As seen above, the image is simple – plain black font with a picture of a new vibrant blue jacket.  Due to the color and size of the jacket compared to the rest of the message, your eye is first drawn to the jacket before even reading the message.  If this message were solely meant to bring awareness to the Common Threads Initiative and encourage people not to consume as much on Cyber Monday, Patagonia could have used other images like the image shown below of discarded clothing that is on their website.  However, they wanted to showcase their product and draw the consumer’s awareness to it.  And, we know that mere exposure can create a consumer’s positive attitude about a product, which in turn leads to increased probability of the consumer purchasing that product as well.

 I am not at all trying to detract from Patagonia’s Common Threads Initiative or message – they are a great company pursuing a very worthy cause…and they are very clever marketers.   I found this anti-purchase ad to really stand out from the crowd especially on a day like Cyber Monday when my inbox was flooded with emails from retailers pushing their products.  What appears to be a bold statement against buying their products is in fact a creative marketing campaign that employs psychology to raise awareness of their cause and boost sales of their products in this time of advertising overload.

In the Spirit of Holiday Travel

With the holidays just around the corner and everyone gearing up for their holiday travels, Spirit Airlines has just announced that they are going to start charging $34 to book a domestic round trip flight online.  Spirit Airlines, the Florida based airline that promotes itself as the ultra low budget airline, has one of the most extensive extra fee lists of any airline.  Sure, when searching Expedia, you may think you’re getting a really good fare on Spirit compared to the other airlines, but don’t forget about the new $34 online booking fee, $10 reservation fee and $16.99 passenger usage fee.  And unless you’re going on a day trip, you probably have luggage – that will be another $20-$35 for one carry-on and $18-$33 for your first checked bag.  You’re hungry or thirsty on your flight?  That will cost you too – there are no complimentary beverages or snacks (not even water).  Oh, and did I mention that the only way to avoid the new online booking fee is to book your flight at the airport counter, but starting January 24, 2012, they will charge you $5 to print your ticket at the counter.  Bottom line, it adds up.

Long gone are the days when people choose their flights based on the amenities offered by certain airlines or their loyalty to a specific airline.  Airline deregulation brought us lower airfares and travel comparison websites like Kayak and Expedia have brought us the ability to search for the lowest cost possible for travel to our destination.  On these websites, having the lowest fares compared to competing airlines is very important and this is what Spirit capitalizes on.  The contrast effect shows that a fare that is cheaper than all other fares will be viewed as an especially good deal in contrast to the more expensive fares.  Therefore, people will choose this cheaper fare even if it does not include all the additional “optional” fees and that is where airlines, like Spirit get you.  Spirit’s pricing model is an example of “drip pricing” – pricing where the actual total price of the purchase is only revealed at the end of the purchasing process after a number of compulsory and hidden fees have been added on.  However, from a psychological standpoint, this may be an effective way of marketing, especially with online purchases.  Typically, the total price isn’t shown until the very end of the purchasing process after consumers have already filled out a number of web pages with their personal information, billing information, etc.  At this point, the consumer has pretty much already committed to the purchase and we know that people like to appear consistent, even if no one else is around.  Once they commit to a decision, people are much more likely to follow through with the behavior in an effort to remain consistent.  Additionally, effort justification may cause people to rationalize any cognitive dissonance they may feel about the increase in price compared to the good deal they thought they were getting – “this fare was so much lower than all the other airlines so I’m still getting a good deal!”  Lastly, once you’ve purchased your ticket, what choice do you really have about some of the fees like the baggage fees and food/drink fees?  You’re not going to leave your luggage at home for a week-long trip just to avoid additional baggage fees.  And, besides, other airlines charge for baggage too, right? The airlines know this and that drives their pricing and marketing strategy.  Show the lowest possible fare and then make up the cost through extra fees once the passenger is committed.

Air travel is no longer viewed as a luxury and more as a means to get from one location to another.  However, can Spirit’s ultra low budget method harm them?  Just as people often follow the stereotype of “expensive = good” when selecting a wine, conversely when it comes to airline travel, ultra low budget can imply poor service, poorly maintained aircraft and an unpleasant travel experience.  It will be interesting to see if, over the long term, people still fall for the low prices of Spirit Airlines or whether all the additional fees will deter people from booking with Spirit.

I’m Shocked…

Recently, Richard Leon, a federal judge, ruled that forcing tobacco companies to place health warnings that included pictures of cadavers and diseased lungs on their packaging violates the 1st Amendment Rights of the tobacco companies.  Judge Leon went on to say that the “images went beyond disseminating ‘purely factual and unconventional info’ and ventured into advocacy.”  This ruling was made in response to legal actions brought against the FDA by a number of tobacco companies resulting from a FDA sponsored law enacted by Congress in 2009 which was supposed to go into effect in September 2011.  Obviously, the FDA was  hoping to scare people into not buying tobacco products by requiring graphic images on tobacco packaging.  All of which raises the question:  what are shock campaigns and are they an effective form of marketing?

Shock advertising, also referred to as Shockvertising, is a type of advertising that deliberately startles and offends its audience.  It achieves this by violating social norms and personal ideas.  In addition to being offensive,  the information is often times frightening and controversial.  Benneton, an Italian clothes retailer, is considered the originator of shock advertising when they ran ads in the late 1980’s, which showcased various images about HIV/AIDS.  Everyday, consumers are bombarded with advertisements in all aspects of their lives.  One of the main purposes of shock advertising is to cut through the rest of the advertising “clutter” and to stand out among the crowd by capturing the audience’s attention with graphic images or blunt slogans.

Research conducted on shock advertising has found that using shocking content in ads does “increase attention, benefits memory and positively influences behavior.”  One reason for this could be that shocking ads evoke stronger feelings among consumers and therefore they notice and remember the message more strongly.  Relating to the current situation with the tobacco companies, James Wheaton, a 1st Amendment expert at UC Berkley, states –  “You can’t force a company to carry the government’s opinion on an issue.  These images are clearly not limited to a statement of fact. They’re designed to evoke an emotional response.”  It is precisely this emotional response that the FDA is trying to capitalize on in getting their anti-smoking message across.

The effectiveness of shock advertising can also be explained by the theory of selective perception.  According to this theory, individuals choose and evaluate stimuli from the external environment based on what is meaningful to them.  This focus on certain features to the exclusion of others occurs without awareness and is filtered based on earlier experiences.  Therefore, shocking advertisements could either increase or decrease a behavior depending on the recipient of the message.  If an individual feels like the message is beneficial, it may stick out in their minds and they may remember it better.  On the other hand, if an individual finds the message to be threatening or disturbing to them, they may filter the message out.  For example, in the current situation, a heavy smoker may ignore the picture of diseased lungs on the cigarette packaging because this image is seen as disturbing to them and could lead to cognitive dissonance.

Shock advertising has benefits in getting a message to stand out and be more easily remembered.  Historically, anti-smoking campaigns capitalize on shock advertising by showing graphic images such as a woman smoking out of a hole in her throat and bodies in body bags, which are meant to frighten its audience.  While it is important to spread the message about the dangers of smoking, especially to children, requiring companies to employ shock advertising against their own product on their packaging does seem to violate 1st Amendment Rights.  The FDA may wish to continue the use of shock advertising in their campaign against smoking but requiring marketers of tobacco products to incorporate anti-smoking shock ads on their packaging is just plain wrong.

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Food Fight: Should Food Companies be Allowed to Market to Children?

Does marketing contribute to childhood obesity?  With one third of US children classified as either overweight or obese, the debate over food marketer’s responsibility for this phenomenon is heating up.  Critics are painting a bull’s eye on food marketers as the main culprit in causing childhood obesity.  Others argue that the combination of marketing unhealthy food to children, parent’s inability to say “no” to their children and general lack of exercise are all contributing factors to this growing problem.  Recently, the debate has focused on whether food companies should even be allowed to market to children.  One side argues that restrictions should be imposed on the marketing of unhealthy foods that are aimed directly at children, while the other side of the argument believes that the only solution is a complete ban on marketing towards children.

The Interagency Working Group was formed in 2009 to try and develop nutritional guidelines for foods marketed towards children.  The Federal Trade Commission has recently joined the Interagency Working group in an effort to develop standards for self-regulation within the industry.   The proposed voluntary guidelines would cause companies to reduce the sugar, fat and salt and increase healthy nutrients in foods they wish to market to children.  Currently, about one third of the foods marketed to children would not pass these guidelines. However, many companies, like McDonalds, have come out with their own standards to make children’s food healthier.  For example, McDonalds now includes the option of apple slices instead of French Fries as part of the Happy Meal.

Critics who oppose guidelines for the voluntary self-regulation within the industry argue that marketing towards children should be banned all together.  This side argues that voluntary guidelines do not make economic sense for companies and therefore the industry won’t be responsible for establishing and following guidelines that conflict with their economic interests.  Companies know that junk food — foods that contain high levels of sugar, salt and fat — sells and therefore, these are the products that they advertise.  Critics of industry self-regulation believe that banning marketing altogether is the only option in our efforts to reduce childhood obesity.  Instead, they believe that food marketing should be aimed at parents and they can and should be the ones who decide what their children eat.  This side also believes that banning marketing to children will make the food industry a more level playing field – companies that want to produce nutritionally healthy food won’t be placed at a competitive disadvantage.  However, it can be argued that companies that market “junk food” will now be placed at a competitive disadvantage, since parents are more likely to pick the more nutritious food for their children.

From a psychological standpoint, there are a number of reasons why the traditional marketing of food products is successful.  First of all, children are a lot more easily persuaded than adults and an attractive TV commercial can easily sway their attitudes about certain products.  Also, the fact that many food companies offer prizes or toys in their products can increase motivation to purchase these products.  These toys serve as incentives and make the products more attractive.  Lastly, many food companies use popular cartoon characters in their marketing campaigns.  Like celebrity endorsements, these cartoon characters serve as spokespeople for the product and due to the balance theory, children are more likely to like a certain product if they see a character they like “using” that product.

It is clear that there is an increasing problem with childhood obesity in the United States and the food industry’s marketing to children plays a role in the foods they choose to eat.  Most of the food commercials on TV are advertising “junk food.”  However, I don’t think that banning all marketing to children is the solution.  In fact, banning marketing to children would work against a company’s economic best interest.  Instead, I think that guidelines should be implemented to promote more nutritional options to children.  Industry self-regulation may in fact work if companies implement some of the strategies they currently use like incentives and “celebrity” spokespeople in an effort to promote more nutritional food options for children.  Why not have a popular cartoon character advertise oatmeal instead of a sugary cereal?  By capitalizing on the psychology behind marketing, we may be able to change the eating habits of children and reduce childhood obesity.

The “MAGIC” behind Celebrity Branding Deals

Celebrity endorsements are everywhere we look and cover a multitude of products from clothing to sports drinks to medicine.  Just a few of the places we constantly see celebrity endorsements are on TV, in magazines, and billboards.  We know that celebrity endorsements can be very beneficial to a company.  However, I never really took the time to think about how these branding relationships come about.  I always assumed that these partnerships between celebrities and companies were formed by one party calling up the other party and expressing interest in forming a relationship.  I recently read an interesting LA Times article that discussed the sophisticated marketing efforts behind these deals.  Sure, some deals are formed by one party reaching out to the other, but in what seems to be a relatively recent phenomenon, concerted, precisely planned events are being organized to bring celebrities together with a large number of products and brands.  One of the most prominent of such events is the Sundance Film Festival in Park City, Utah.

Many of these branding events are organized by two LA natives – Michael Baruch, Fred Segal Beauty cofounder, and Jeffrey Best, an event planner.  Baruch and Best realized that the multi-day Sundance Film Festival presented a perfect environment to create branding opportunities between celebrities, and products and companies.  The Sundance Film Festival brings together a powerful mix of celebrities in one place at the same time, so Baruch and Best arranged for companies to bring their products and brands to the celebrities and organized events to foster new connections.

More recently, Baruch and Best planned a branding lunch in Las Vegas to accompany the MAGIC apparel trade show, a biannual 3-day event.  In essence, this situation was the reverse of Sundance – the products and companies were all in one place, so Baruch and Best focused on bringing celebrities to Las Vegas.  Along with Advanstar Communications, who owns the MAGIC trade show, Baruch and Best organized a branding luncheon to bring together the celebrities with the products and companies.  Every detail of the event was carefully planned to facilitate creating relationships between the celebrities and companies.  The luncheon had 15 tables of 10 guests and each table was organized to pair specific brands with celebrities.  As Joe Loggia, the CEO of Advanstar, said, “There’s no random anywhere.”  For instance, they knew that Jennifer Love Hewitt was interested in a beauty deal, so they sat her at a table next to someone in the beauty industry.  These events are proving to be successful in creating contacts and relationships between celebrities and brands.  Cedric the Entertainer recently launched a line of hats with the help of a company he met at one of these branding lunches.

Psychologically, we know that celebrity endorsements can prove to be very beneficial to companies and products.  Fritz Heider’s Balance Theory explains the effectiveness of celebrity endorsements when a well-liked celebrity uses a product.  The balance theory states that people like balance in their lives and if they have a positive attitude towards a celebrity and they see that celebrity using a certain product or service, then they will likely have a positive attitude toward the product or service as well.  The Principle of Attractiveness says that people are more likely to listen to a message from someone they find attractive. Thus, having an attractive celebrity deliver a brand’s message may broaden the audience and increase the chance of the message being heard and remembered.  Lastly, having a celebrity promote a product can increase the familiarity of that product and the Principle of Familiarity and the Mere Exposure Effect states that people are more attracted to things that are more familiar to them.  Conversely, a celebrity with a poor image can damage harm a brand.  This is why we see celebrities losing endorsement deals when they are involved in a public or personal scandal.  We saw this happen with Tiger Woods – companies he had endorsements with quickly withdrew their relationships with him as his personal transgressions were exposed.

Branding relationships between a company and a celebrity can be extremely beneficial to both parties if they are both viewed in a positive light and Baruch and Best have hit on a great strategy to facilitate these connections.  I’ll be curious to see how popular these branding events become to create branding relationships between celebrities and brands as competition heats up for both celebrities and product marketers.

Will Humor Sell Personal Injury Law Services?

“Remember that guy? Who came in second in the last New York Marathon? Neither do we. Winning is everything.” (Commercial)

Catches your attention, no?  This is the script of one of the new commercials aired by Jacoby and Meyers, a full-service law firm.  In a new marketing campaign, Jacoby and Meyers is taking a notably different approach to their personal injury practice TV advertisements than they have in the past.  We’ve all seen the advertisements for personal injury lawyers (and probably rolled our eyes at them) where a tough talking lawyer informs us that we have options if we’ve been injured in an accident and then promises us revenge and justice if we just call their office.  By now, most people don’t pay much attention to these advertisements since all of them seem the same and have the same message, regardless of the law firm.  For the majority of the population, they probably aren’t even relevant anyway.  Psychology shows that people are much more likely to listen to a message and be receptive to a message if it personally relates to them.  Therefore, due to the repetitive nature and lack of relevance, most people probably tune these commercials out.  However, by changing the message and format of their advertisements and adding in some humor, Jacoby and Meyers can potentially separate themselves from the other advertisers and stimulate renewed attention to their message.

Rather than having a tough talking lawyer assault you from the TV screen, the 3 new Jacoby and Meyers commercials are devoid of people.  They are comprised of a simple black background with clever statements in white lettering; the advertising message is narrated by a male voice with music playing in the background.  What stands out the most in these commercials from previous Jacoby and Meyers commercials is that they employ humor in their messages.  In addition to the commercial message described at the beginning of this blog, another commercial shows portraits of the historical figures Horatio Seymour, Charles C. Pinckney, Hugh L. White and Lewis Cass (all losing opponents in Presidential elections) while “Hail to the Chief” plays in the background.  Then, a voice says “Presidential elections are like lawsuits.  You’re nobody unless you win.”  The third commercial states, “They say it doesn’t matter if you win or lose.  As long as you tried your best. They probably weren’t rear-ended by a truck.”  By adding humor to their commercials, Jacoby and Meyers is trying to humanize their message and  they are making  it more personal to the consumer while trying to set their message apart from other personal injury law firms by presenting a novel approach.  This should increase consumer’s awareness of their services and make it more prominent in their memories.  Lastly, Jacoby and Meyers may be employing humor to catch the consumer’s attention so that they will pay attention to the message.  And, as we know, mere exposure increases a person’s positive attitude toward that product or service.  This is commonly seen in insurance commercials – they employ humor to get consumers to pay attention to what would otherwise be a boring message.  An insurance company that employs this tactic is Geico with their Geico Gecko.

These three commercials are also trying to appeal more directly to the consumer.  Potential clients in personal injury lawsuits are interested in success, so all of the messages are focused on “Winning.”  By humanizing the message and relating it more directly to potential clients, Jacoby and Meyer’s is increasing the chance that their message will be viewed in a favorable light and will be remembered by consumers.  Lastly, the “Marathon” and “They say” commercials are noticeably shorter, 16 and 17 seconds in length respectively, than the average TV commercial including past Jacoby and Meyer’s commercials.  The shorter duration might increase the likelihood that viewers will watch the entire commercials.

While I don’t know how successful these commercials will be in the long run, Jacoby and Meyer’s new marketing approach definitely sets them apart from the advertisements of other similar firms.  I am much more apt to watch these commercial (at least for a couple of times) than their old ones because they are clever and novel.  The novelty of these specific commercials may sizzle out, but if Jacoby and Meyers can continue to come up with clever statements, they may find marketing success.

Great Expectations?

My mom recently related a conversation that she and a friend had about how they decided what movies to see.  My mom will look up movie reviews online before selecting which movie to go to, whereas her friend will choose a movie if there is an actor or actress she really likes, regardless of whether it received good reviews.  She went on to say that she was rarely disappointed when she went to see movies with her favorite actor or actress. Even if the movie wasn’t great and had received bad reviews, she didn’t have high expectations of it going in and thus she was able to enjoy the movie more than if she expected to see a great movie.  Hearing this conversation got me thinking about expectations and how companies manage expectations about their products.  When launching a new product, of course, companies want consumers to be excited about their product but should they be concerned about building too much hype about their product and risk having consumers be disappointed?

A recent example of this challenge was Apple’s introduction of the new iPhone 4s last week.  For the past year, rumors have been swirling about Apple’s new iPhone 5 which was expected to incorporate the latest 4g internet capabilities. So, when Apple delayed the release of its new phone to Fall 2011, the public’s expectations were further heightened as social and traditional media outlets buzzed about the iPhone 5.  However, Apple didn’t introduce the 4g internet capable iPhone5 last week – instead, announcing the iPhone 4s, a phone that looks the same as the iPhone 4 but with some improved technology.  There has been lots of talk about consumer’s being disappointed with this announcement despite the fact that more than 1 million units of the new iPhone 4s were pre-ordered within the first 24 hours.  So, we are faced with the question of whether Apple failed to meet consumers’ expectations and even more importantly, should they have done a better job of managing consumer expectations to avoid disappointment?  Traditionally, Apple has done an extraordinary job of managing expectations – they consistently follow the policy of under promising and then over delivering.  Although they like to appear silent and secretive, in the past, Apple has strategically leaked information to trusted media sources in an effort to adjust the expectations of consumers prior to new product announcements.

Expectations influence people’s motivation both intrinsically and extrinsically.  From a personal standpoint, people are motivated to do things and purchase products that they find satisfying, enjoyable, novel or those that they get rewards from.  Therefore, consumers often have expectations about what they will get out of an experience or product ahead of time.  Failure to live up to these expectations results in disappointment while things that exceed expectations result in increased satisfaction.

As a company or marketer, it is important to get consumers excited about your product, however, you don’t want to create too much hype so as to create disappointment in your product if it doesn’t live up to consumers’ expectations.  While there is no magic formula for how to strike this balance, perhaps the best plan is to do like Apple has done in the past – under promise and then over deliver.  This strategy will typically cause consumers to have an even more positive reaction to the new product or service as their expectations are exceeded.  It isn’t clear why Apple didn’t mange consumer expectations more before last week’s announcement, since managing consumer’s expectations about their products has been a successful marketing technique in the past.  Was it a lapse in strategy without the maestro’s touch or could it be Apple’s marketing genius at work to reset our expectations for new Apple products?