Category: Consumers and markets

All posts related to consumer behaviour and market dynamics, including topics such as ethical consumption, green and health marketing, consumption communities, and much more.

New Challenges in Luxury Branding

During Fall 2013, I had the opportunity to be at Columbia Business School as visiting scholar to work on my research project related to brand value in luxury.  There, I had the pleasure of working together with Professor Don Lehmann on refining my research topic and setting-up the methodology that would allow me to move forward with my Ph.D. project.

After spending several years in the private sector, I was highly interested in putting together a project where I could combine academic theory with a practical approach.  Given my background in Environmental Management and Policy, and my particular interest in both, luxury and sustainability, I decided to conduct research in these two areas.  Since brand value (also known as brand equity) is probably one of the most important assets within luxury, I thought it would be interesting to understand the potential effect that sustainable practices can have on brand value.

In order to conduct this study, I decided to use a mixed-methods approach.  First, I would conduct a statistical analysis of the main determinants of brand value, and then, triangulate the results of the statistical model with input from industry.

Given the institutional links between the University of Glasgow and Columbia University, and the fact that the U.S. and New York City (NYC) are currently the most important markets for luxury, I thought it would be valuable to spend some time in NYC working on my research project.  Thus, with the support of my supervisors Iain Docherty and Deirdre Shaw at Glasgow, Professor Don Lehmann at Columbia, and the Scottish Government’s Saltire Scholarships Outward Mobility Fund I managed to undertake a visiting scholar position at Columbia Business School.

Columbia University. Photo by Ramon Bravo-Gonzalez
Columbia University. Photo by Ramon Bravo-Gonzalez

Being at Columbia Business School was a wonderful experience.  Some of the highlights from my visit is that I was able to take part in the Annual Luxury Roundtable organized by the Luxury Education Foundation.  I was also able to interview over 20 experts from the luxury industry ranging from CEOs to brand managers, and fashion designers.  More importantly, I got valuable feedback on key variables that should be included in my statistical model, as well as potential approaches to gather and analyze the data.

One of the preliminary findings of my research is that consumers are evolving and thus, the luxury industry needs to adapt to this changing environment.  For example, the luxury sector is saturated with hundreds of brands.  In an industry where most luxury products share key characteristics such as heritage, superior craftsmanship, quality, and design; brands are no longer able to differentiate themselves just on the products they make.  Instead, a key differentiator for them is how they create a superior customer experience and how they nourish the dream factor of their brands.

Luxury is experiential and sensorial.  Traditional luxury companies have usually offered this superior customer experience at their stores or through targeted events.  However, the landscape has changed, and now hundreds of thousands of customers are buying luxury products online, especially through tablets and smart phones.  Therefore, luxury companies are being faced with the significant challenge of creating a superior customer experience online. With the slow adoption of e-commerce in the luxury sector, and with the ever increasing demand for it, luxury firms need to adapt their business models rapidly to meet this demand.  Otherwise they risk being relegated to a thing of the past.

By Ramon Bravo-Gonzalez

PhD researcher at the Adam Smith Business School and part the MaRVL research group

Animal welfare and ‘the market’

Animal welfare is an important ethical issue in relation to modern food production and consumption and awareness of the negative consequence of current production practices is growing. Public outrage is instant and vociferous when pictures of maltreated animals are shown on TV. Inevitably, this results in calls for malpractices to stop and for changes to be made.

Politicians and authorities, who used to be in charge, increasingly look to ‘the market’ to drive improvements in animal welfare, as there seems to be a consensus that regulation alone cannot secure the desirable level of animal welfare. This market is usually taken for granted and assumed to work via anonymous market mechanisms such as Adam Smith’s famous invisible hand. However, in recent years there has been a realisation that markets do not simply exist, but are enacted on an ongoing basis through the concrete everyday activities of different actors.

Together with my colleagues Kathrine Nørgaard Hansen and Maja Pedersen, I have explored how the conditions for animal welfare are shaped by the practices of various actors in the pork industry and how these practices can reshape the market with a view to improving marketing activities and increasing sales of pork produced to better welfare standards than mandated by regulators. As viewers of Borgen will know, animal welfare can be a highly contentious issue in Denmark. The overall purpose of our project was to analyse if we can expect markets to play a role in promoting animal welfare in the Danish pork sector.

The Danish pork sector is interesting in this regard because it is very export-oriented (more than 90% of production is exported). Furthermore, the Danish pork sector is under pressure to keep costs down, as labour costs are higher in Denmark compared to competitors in order countries. There are therefore widespread concerns about the ability to recoup extra costs if animal welfare standards are improved unilaterally in Denmark. 

Data was collected with actors along the entire value chain in Denmark and customers on five export markets (Australia, China/Hong Kong, Great Britain, Sweden and the US) and relevant export managers from Danish firms.

The study uncovered particularly interesting market practices:

  • Practices differ significantly between countries, both in terms of the importance assigned to animal welfare and how animal welfare issues are enacted in day-do-day operations of various actors in the food chains. However, in all six countries, actors are trying to improve animal welfare. They sometimes have different ideals and goals and to some extent actors can therefore see each other as obstructing the good they are trying to accomplish.
  • Although most actors agree that animal welfare can be improved, animal welfare improvements are highly contested. Different and to some extent conflicting considerations have to be reconciled in order to successfully improve animal welfare. How should pigs and sows be treated? This can be contentious in itself, but what is ideal from an animal welfare perspective is also up against economic considerations as primary producers, slaughterhouses, etc. are concerned about whether they will be able to recoup extra costs they will incur if they improve animal welfare or if they will we loose competitiveness on international markets.
  • Marketing considerations need to be taken into account, can animal welfare be used to position and differentiate  from competitors?
  • Animal welfare is systemic – one actor cannot improve animal welfare in its own. It requires coordination and collaboration of numerous actors: farmers, slaughterhouses, meat processors, retailers, consumers, authorities, animal welfare organisations, third party auditors and more

By Lars Esbjerg

Lars speaking speaking at MaRVL
Lars speaking speaking at MaRVL

 

Lars is a MaRVL visiting scholar  from the MAPP Centre for Research on Customer Relations in the Food Sector, Aarhus University, Denmark

Further readings on the animal welfare project can be found here, in Danish.

 

 

The Caring City: Sustainable Communities of Care in Glasgow

Drawing on new approaches to thinking about care as complex, other and self-regarding behaviours, which is partially socially constructed, this research project explores the interrelationships between sustainability, health and quality of life. Care about and for ourselves as individuals, and for our wider communities embodies issues of sustainability, health and quality of life. The research investigates these issues by actively engaging with groups involved in promoting local food production and consumption in Glasgow. The project is funded by the University of Glasgow’s Knowledge Exchange Fund and is concerned with developing new resources about local food projects in partnership with existing local groups.

The term ‘urban agriculture’ (UA) is one we might not associate with an old industrial city like Glasgow but like other old industrial cities in the UK, a discourse of UA is finding its way into local government policy initiatives. For example, during the first week of our research we attended a conference organised by Glasgow City Council (GCC) in partnership with the Soil Association Scotland entitled ‘Glasgow, Sustainable Food City’. This involved a series of talks and discussions geared towards implementing a sustainable food strategy for Glasgow. The event elicited a range of ideas: “more school gardens”, “a much better map of available and potential growing land”, “a vibrant street food culture” and much more.

While the event noted above marks an important juncture in the City Council’s approach to UA, of crucial concern to our research is an already existing network of grassroots community food initiatives in the city. In the same week as the GCC event, we attended a meeting held by the Glasgow Local Food Network (GLFN). The GLFN is an informal network of community organisations and individuals from across the city “that are passionate about local food and strive to produce more of what we eat and eat more of what we produce” (http://glasgowlocalfood.blogspot.co.uk/). The passion and commitment of local growers across much of Europe, like the GLFN, has helped push UA up the policy agenda. Similarly, for a sustainable food strategy policy to be effective, it must value and utilize the wealth of knowledge being cultivated at the ground level.

Community gardens: an alternative to global food production and consumption
Community gardens: an alternative to global food production and consumption

The value of grassroots community food initiatives and UA more generally is quantifiable. For example, we can measure: a decrease in food miles that comes with local food production and consumption; the acreage of unproductive urban space revitalized through a variety urban agricultural practices, and the volume of materials recycled in such practices (e.g. timber for raised beds; food waste for compost; water capture and storage). Other potential values of UA are less easily quantified but no less important for people committed to creating sustainable communities of care in our city. These relate to, amongst other things, awareness of environmental and human health, community cohesion and resilience and the co-production and sharing of knowledge and skills. It should also be noted that modern urban agricultural practices are, for some, deeply embedded in issues of political struggle. Many UA practitioners understand their work as part of an ongoing struggle to de-commodify urban spaces and secure an urban commons for future generations.

Our project began in earnest three weeks ago and in that short time we have encountered all of the issues raised above and more. With a clear methodology beginning to develop, the next five months should be an exciting time for all involved.

John Crossan

John is a researcher at the University of Glasgow in the Adam Smith Business School working with Professors Deirdre Shaw, Andy Cumbers and Robert McMaster on the Caring City project.

To find more about local food communities in Glasgow, visit:

Gendered identity negotiations through food consumption

I am absolutely delighted to present this research on Thursday 20th March 2014 at 9.30am in the Department of Marketing, University of Glasgow and as a preface to the seminar I hope a little back story might be interesting, hence this blog post.

Let’s start from a pedagogical experience, the kernel of this research came from undergraduate student work in the Department of Marketing, University of Otago, New Zealand. The film that is part of this published research was developed from an earlier version that was submitted as a visual media presentation of a consumption experience analysis for a 300 level Consumer Culture paper. We started encouraging students to work in visual media (most commonly videography) as a mean of representing knowledge and creating insight.

Our experience reinforces current research in this area, not only can videographic research be a powerful alternative to the dominant textual form but it effectively records bodily representations and presence in contextual space; emotional, resonant and attention grabbing expressions; more “real” and “authentic” representations and ability to capture context-rich and multi-sensory environments. We also found that our students are more intuitively eloquent in the visual than the textual form. Our experience finds that our undergraduate students are able to express subtlety and tension in consumption experience analysis that often eludes them when seeking to express the same insights in a textual form. The range of topics addressed visually have been ‘eclectic’ from Ken and Barbie discussing gendered stereotypes at play in alcohol advertising to ‘trolleyology’ (a visual exploration of the supermarket environment) to crossing the gender divide (comparing media representation of androgyny with consumers lived experiences) to using self-reflexive video diaries to illustrate consumption practices used to recreate a sense of home for international students.

Ken & Barbie gender stereotypes?
Ken & Barbie gender stereotypes?

The common element to all of these topics is the insight added through the use of a visual aspect which so often challenges verbal or textual representations. For example in the accompanying film linked to the published article, we ask our male household to consume a meal commonly consumed by the female household and vice versa, the film illustrates clearly the tension, discomfort and distaste that accompanies this experience far more eloquently than the actual words uttered (click link below).

Video on Gendered Consumption of Food

Shelagh Ferguson

MaRVL Visiting Scholar, Senior Lecturer in Marketing at the University of Otago, NZ

Further readings:

  • Belk, R. W., & Kozinets, R. V. (2005). Videography in marketing and consumer research. Qualitative Market Research: An International Journal, 8, 128–141.
  • De Valck, K., Rokka, J., & Hietanen, J. (2009). Videography in consumer research: Visions for a method on the rise. Finanza Marketing e Produzione, 27, 81–100.
  • Pink, S. (2007). Doing visual ethnography. London: Sage.
  • Pink, S. (2009). Doing sensory ethnography. London: Sage.
  • Spanjaard, D., & Freeman, L. (2007). Tread softly: Using videography to capture shopping behaviour. In M. Craig-Lees, T. Davis, & G. Gregory (Eds.), Asia-Pacific Advances in Consumer Research, 7. (pp. 26–29) Sydney: Association for Consumer Research.
  • Schembri, & Boyle (2013). Visual ethnography: Achieving rigorous and authentic 388 interpretations. Journal of Business Research, 66, 1251–1254.
  • Turner, K., Ferguson, S., Craig, J., Jeffries, A., & Beaton, S. (2013) Gendered identity negotiations through food consumption. Young Consumers 14(3), 280-288

It’s too hard to be green

Why do consumers who say they are concerned about the environment continue to purchase products that are not environmentally-friendly? This is an interesting phenomenon because despite consumers’ growing environmental consciousness and positive attitudes towards the environment, the adoption rate of green products in recent times has been falling. Indeed many consumers continue to buy environmentally hazardous products regardless of their concern for green alternatives. To quote Michal Carrington and colleagues, they do not “walk the talk”.

Dr Lay Pen Tan (from Macquaire University) and I decided to explore this phenomenon in more depth, which involved conducting focus groups as part of a pilot study in New Zealand. Reasons given by participants for not purchasing green products varied. For example:

  • Green products were perceived to be more expensive than other products. As Tracy stated, “well if you’re struggling to pay the bills you’re not going to worry about it”.
  • Some consumers queried whether environmentally-friendly products were as effective as other products.
  • Other consumers did not trust the product’s environmental claims. As Mary informed us, “I don’t trust people who are using the word…everything is organic and green….It’s just a marketing ploy”.
  • For many consumers, the information provided was often confusing.
  • An important issue also was the perception that it is too hard to be green. As Kim stated, “I think at the end of the day people are inherently lazy.  And if it’s too hard they’re not going to do it.”

As our study highlighted, some consumers have not yet personalised the green issue because they have difficultyidentifying how and why it is necessary to take action. Consequently, short-term gains are valued over long-term benefits. In other words, people would rather experience immediate gratification than wait for larger future gains. This typically holds true for environmental gains because it may be difficult for consumers to comprehend what the long-term effects are, when they are likely to occur, or how their actions can have an impact. As one person said, “they haven’t actually ever proven that anyone’s died from using XYZ [well-known brand]”.

The challenge then for marketers, is trying to make long-term social dilemmas such as the environment, meaningful to consumers. Whilst there is a growing awareness of environmental issues, the majority of consumers today continue to purchase along traditional lines; in other words they seldom, if at all, buy “green” products. If marketers and policy-makers want to encourage more people to become green, they need to focus on this group rather than the elusive “green segment”. The green challenge might be difficult but it is not hopeless. As a twenty year old participant stated, we need to change “the idea in people’s minds that even just doing something is better than doing nothing”.

Dr Micael-Lee Johnstone

MaRVL Visiting Scholar, Marketing lecturer at Victoria University of Wellington, New Zealand.

Source:

Carrington, M., Neville, B., and Whitwell, G. (2010), “Why ethical consumers don’t walk their talk: Towards a framework for understanding the gap between the ethical purchase intentions and actual buying behaviour of ethically minded consumers”, Journal of Business Ethics, 97(1), 139-158.

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Rebellion in the consumer ranks

As brands become increasingly present in our lives, and the subject of more and more fandom and adoration, anti-branding is reversing the trend by showing everything that is wrong and despicable about companies and their products.

We asked ourselves: why do people hate brands, and why do they also feel the need to join online groups of hateful consumers? There is an increasing number of anti-brand groups on social media and we discovered through an online survey and interviewing some reasons that drive people to join anti-brand online communities:

  • Doubtful brand ethics, or contradiction between consumer and corporate values
  • Preference for a competing brand
  • Need for social approval
  • Want to detach oneself from material and branded goods in general
  • Negative experiences with the brand

Multinationals seem to gather the most negative attention, probably due to their higher visibility and reputation. The profiles of consumers who join anti-brand communities is on the other hand very complex: from disgruntled customers to former or current employees of the company, going through tech or ethics experts, all sorts of people seem to find a sense of belonging and fulfillment in these groups. 

In the face of hordes of haters, which position do you think is best for companies to adopt?

Laurence

More about anti-branding: