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Archive for October, 2012|Monthly archive page

Internstrip: Application

In Fun on October 18, 2012 at 7:11 pm

Sebastian’s CV

During my internship I adopted a supportive position:

  • Maximising the comfort and functionality of the workspace
  • Handling the burdens of colleagues and superiors
  • Demonstrating flexibility
  • Intimately connected with the office’s motions

Star in Stripes: The US may lead, but not dictate

In Finance, Management, Marketing on October 14, 2012 at 11:42 am

America might lead the Fortune 500, but there is a lot more to its dominance than cultural imperialism.

Today, individuals, corporations and nation-states are able to reach around the world farther, faster, deeper and cheaper than ever before.

Traditional globalisation theory argues that those companies capable of doing the same business or selling the same product worldwide will be rewarded by economies of scale. The logical end of this process would be homogenised global consumption. Market connections and advanced communication technologies are creating a single marketplace, but, in 2012, we are finding that the most successful multinationals are adapting their offer to local tastes.

The modern advance of globalisation occurred after WWII. American policymakers – Stimson, Patterson, McCloy and Howard C. Peterson – agreed with Forrestal that the long-term prosperity of the United States required open markets, unhindered access to raw materials and the rehabilitation of much – if not all – of Eurasia along liberal capitalist lines.

By guaranteeing a minimum standard of living through the Marshall Plan and European Payment Union, policy-makers created an environment characterised by stability in domestic prices and exchange rates, increasing trade and confidence in the future both sides of the Atlantic. Washington’s reaction to the divisions of the Cold War foreshadowed the integration of the late twentieth century.

America’s leadership in the integrated world market can be explained, in part, by understanding the American origin of many of the key institutions controlling the global economy today. For instance, the capital markets and multinational corporations which make up Friedman’s ‘Golden Straitjacket’ were forged in American and the United Kingdom. The world’s financial centres are led by Wall Street.

Moreover, the information revolution, also of American invention, has provided the tools of cultural transmission – satellite television and the internet – which can easily surpass national boundaries and form an arena in which cultures vie for attention.

Through its economic reach, the USA has come to exert a powerful cultural pull. Here, America held two major advantages. Firstly, the prevalence of English as the principle language for science, business and diplomacy and mass culture gave America a distinct advantage over Germany, France, Russia and Japan. Secondly, America has mastered modern media technology before other countries.

From the 1920s, American culture was disseminated through movies, modern music such as jazz and rock, publications such as newspapers, mass-circulation magazines and comic strips. The diverse domestic market serviced by Hollywood created a movie industry well-practised in producing films with messages, images, and story lines that had broad multicultural appeal. Americans’ huge appetite for the movies provided Hollywood with financial resources and production facilities unmatched the world over. Consequently, by 1951, 61% of the movies playing on any given day in Western Europe were American.

Coca Cola’s uptake the world over is an example of the enviable ability of American companies to excel in the globalised economy. By the mid-1990s, only 21 per cent of Coca Cola’s sales were made in the United States. The product, inseparable from its American origin, was overwhelmingly glugged overseas.

The impressive international sales since the late twentieth century drive fears of Americanisation today.  Ishal Ismail, owner of all Malaysian KFC outlets understands the appeal of American products:

Anything Western, especially American, people here love. They want to eat it and be it. I’ve got people in small [rural] towns around Malaysia queuing up for Kentucky Fried Chicken – they come from all over to get it. They want it to be associated with America. People here like anything that is modern. It makes them feel modern when they eat it. 

However, the success of global franchises is as much about new foodstuff, international sanitation standards, quality controls and affordable prices as cultural statements.

America is a powerful exporter of culture, but these fears tend to be exaggerated in two ways. Firstly, critics take American culture to be the antithesis to Europeanism and the enemy of the continent’s common cultural heritage. Secondly, theories of Americanisation oversimplify the process of cultural influence.

James Cantalupo, President of MacDonald’s International undermines the concept of Americanisation as a zero-sum game:

You don’t have two thousand stores in Japan by being seen as an American company. Look, McDonald’s serves meat, bread and potatoes. They eat meat, bread and potatoes in most areas of the world. It’s how you package it and the experience you offer that counts.

James Cantalupo’s appreciation of the give and take necessary to make an American product successful abroad makes a strong argument for viewing globalisation as consisting of the interaction of cultures over Americanisation. MTV is one of the definitive exports of American popular culture of the late twentieth century. Yet, press reports in early 1996 suggested that, in a number of diverse television markets around the world, MTV was losing ground to local imitators who adapt its formulas but use local language and locally popular performers.

Though the aspirations of poorer countries to emulate America’s modern standards stokes fears of cultural imperialism, for the most part American businesses thrive today because they offer products and experiences palatable the world over and carefully moderated to appeal to local markets. We are caught in an international interchange of cultures, creating hybrid forms, trends and a new idea of what it means to live beyond borders.

Value customers: The limitations of the store brand

In Marketing on October 11, 2012 at 10:53 am

Store brands are more powerful than ever, conquering the chilled food market and making excursions into home furnishings and luxury lines. In the midst of this success, HBR looks at where they are still falling short.

The 2008 financial crisis left retailers feeling unloved. 74% of grocery retailers expected consumers to be less loyal than previous years (source: Food Marketing Institute). Store brands proved invaluable in restoring loyalty. Own-branded products differentiated outlets, provided retailer’s with control over shopper satisfaction and built profit,  (retail gross margins are higher on store-branded products – 35% – versus comparable nationally advertised brands – 25.9%).

Customers drove the resurgence in own-label brands, enthused by their low prices. Supermarkets encouraged price comparison between their label and competing brands products by mimicking existing products. For example, Sam’s Choice produced Dr Pepper and Mountain Dew imitators named, respectively, “Dr. Thunder” and “Mountain Lightning”.

Since 2008, retailers have positioned their own-label products to become an everyday part of consumers’ lives. Store brands have a record of success in the FMCG sectors where value is a greater priority than emotional appeal.  Own-brand food and drink has enjoyed particular success. Even in 2001, own-label accounted for 98 per cent of the UK chilled foods market (source: Mintel).

Effectively competing with national brands has taken significant promotional effort. In 2008, Marks & Spencer spent a 1/3 of its budget on M&S brands. Store brands are founded on the relationship between the store and its customer base. In this, retailers have an advantage in choosing how their own-label products are displayed within their stores.

Store brands now account for an average of 14.5% of sales with some stores projecting they will soon reach as high as 20% of all sales (source: Food Marketing Institute). But this success has come at a cost. With the food and drink market now saturated, store brands are having to enter new territory in order to expand.

The diversification of supermarket store brands began with the segmentation of the food and drink market, as retailers drew on their knowledge of their customer base to produce targeted sub-brands. UK retailers have produced low-price, value-for-money items to the premium and lifestyle areas so as to cater to comsumers’ healthy eating concern. Sainsbury’s and Tesco have dedicated considerable attention to aroma and flavour, taking advantage of global manufactures to source exotic products. While the emphasis remains on value, Sainsbury’s Taste The Difference premium range was estimated to contribute between £200m and £300m to the business.

As the food market faces saturation, retailers have sought opportunities in different sectors. Tesco’s own-label has extended to include a range of homeware including crockery, cutlery, towels and glassware. Sainsbury’s has launched cleaning and hygiene sub-brands brands Perform+Protect and active:naturals. The “George” clothing range has met astronomical success. It is estimated to be worth around £1bn in sales – making Asda one of the leading clothing retailers in the UK.

However, some markets remain elusive. It is not easy for private label brands to enter luxury segments, including up-market clothing and cosmetics. Own-brands cannot compete with well-established, premium brands when they have represented the budget option for so long. Although store brands can help retailers differentiate themselves from competitors, they are too readily available to hold much prestige among consumers in clothing or accessory lines or create emotional resonance in the gift market.

Harris (2007) has demonstrated crucial differences in the brand image evaluation for national brands and store brands. He established that own-label brands have the advantage of “cheap” and “good value” to compare with national brands, while national brands were used more with higher quality/superiority based on attributes than store brands. However, after breaking down store brands into three relative positions (premium, standard and value), he discovered that premium private labels were overpriced more without better value for money than national labels; customers buy more value private labels than national labels due to their cheapness. This implicates that consumers prefer the high quality of national brands and the good value of value own-label at the same time.

The key to own-label’s previous successes is restraining future expansion.

Internstrip: Etiquette

In Fun on October 8, 2012 at 8:44 pm

 

 

“Does my new bob-cut make me look mannish?”

Gangnam Style or gang mentality?

In Marketing on October 5, 2012 at 1:45 pm

Strange enough to be compelling, familiar enough to hold mainstream appeal, Psy has achieved the incredible, but does living in a “Gangnam world” have a dark side?

Guinness has crowned the music video for the Korean rapper’s “Gangnam Style” the most “liked” Youtube video of all time. His song remains at number one on the iTunes worldwide chart with the single topping charts in 30 countries around the world. Notably, Psy’s offering has found its way to the top of the UK chart and was prevented from achieving the feat stateside by Maroon 5.

At the time of writing, the video has almost 360 million views (many more counting the unofficial versions offered on different Youtube channels), but this will increase in the time taken to read this article.

The star is taken aback by his sudden international fame, morning show invitations and contracts with Justin Bieber’s manager and Universal Records. He has compared his disbelief to feeling as if he was the subject of a Truman Show style conspiracy.

Commentators share his surprise. Disparate explanations have been offered as to where in the 4 minute 13 second barrage of K pop, Korean celebrities, outlandish fashion and bizarre dance moves the magic ingredient can be divined.

Marketers view the success of “Gangnam Style” through the lens of the growing scholarship on viral campaigns. Analyses focus on the high-production levels, the colour and fast-paced action of self-parodying K-Pop and an appeal that transcends language.

Psy is perceptive in commenting, “I believe my success sprouted from laughter that people find it funny and enjoy it.” The humour in his comical dancing and odd locations (moving between a toilet, lift and hot tub) appears to be of the inoffensive, accessible and immediate stuff which internet trends are made of.

“Gangnam Style” was, to borrow the Guardian’s phrase, “born to spawn”.

Adding to the phenomenon’s force, viral elements of the video and song are not restricted to the internet. The dance (the main motif of which is underlined in the video by shots of stables) has escaped the trappings of Youtube to be performed by Korean presidential candidates, Britney Spears and flash-mobs.

“Gangnam Style” has become shorthand for a dance trend which has come full circle. Beginning on Youtube abnd spawning imitators who have also received minor fame on the video-sharing site. The video’s memetic reproduction in fan videos has been encouraged by a very conscious lack of copyright protection.

Another perspective has concentrated on the song’s potential anti-capitalist spirit. Culture columnists have rushed to herald the popularity of “Gangnam Style” as proof of a global antipathy against the wealthy. This argument proceeds from the song’s titular reference to a wealthy district of Seoul, notable for boutiques, clubs and plastic surgery clinics.

In an Associated Press article, Kim Zakka, a Seoul-based music critic wrote, “Gangnam residents are South Korea’s upper class, but South Koreans view them as self interested with no sense of noblesse oblige.”

This background is undeniably part of the songs domestic appeal, but South Koreans only account for 4% of the videos overall views. The US, UK and Canada represent Psy’s biggest audiences.

It is here that the “social conscience” argument falls apart. For the 47% of the song’s listenership in the United States, the 7% in Britain and the 6.8% in Canada, the social message of the song is lost and, dislocated from a local understanding of Seoul’s pecking order, it appears to celebrate ostentacious consumerism in the tradition of Western pop and rap music.

Like pop sensations Katy Perry and One Direction, “Gangnam Style” uses sex to sell (most obviously in beauties performing rooftop yoga). Psy seeks to find his dream girl in the song’s narrative. Differentiating “Gangnam Style” from pop at large, however, is that Psy takes central stage not as a sex symbol but as a figure of fun, clearly complicit in the humour innate in a 34 year old man in a blue tuxedo jacket mincing with supermodels.

This speaks to the British tradition of diffusing the taboo surrounding sex with laughter, as seen everywhere from 007 quipping as he beds 3 women in a single film to the puns in page 3 of The Sun.

It isn’t all fun and games, however. Another factor behind the video’s success with an English speaking audience might be its confirmation of racial prejudice. It has become common currency on internet forums to swap examples of oddities turned up by Asian cultures, most prominently Japan which has historically been isolated in its cultural developments. In mainstream media, Takeshi’s Castle represents a popular view of Japanese entertainment. Psy’s colourful clowning might do Korea’s reptuation more harm than good.

What do you think? Is the success of “Gangnam Style” attributable to originality or Orientalism?
Comment Below.

Internstrip: Morning routine

In Fun on October 4, 2012 at 8:11 pm

Internstrip

Plugged in: Why business is turning social

In Informatics, Management, Marketing on October 4, 2012 at 11:35 am

You have to be totally connected to anyone who touches your brand, if you don’t do that, I don’t know what your business model is in five years.

– Angela Ahren, Burberry CEO

McKinsey has predicted that social media is capable of unlocking $0.9-1.3 Trillion in value, and businesses are waking up to this fact.

Booz Allen and Buddy Media found that 57% of businesses plan to increase social media spending and 38% of CEOs label social as high priority. Celebrated examples of online engagement include Burberry’s website-as-social-network and Intuit’s use of crowdsourcing techniques to make their TurboTax service unbeatable.

Social media is even encroaching on the “real world”. Coca-Cola set up a theme park to check visitors into rides on their Facebook pages and Domino’s Pizza relayed comments they received online onto a billboard in Times Square. However, new technologies have worked to empower the customer and employee as much as the company.

……….

In 2006, Time Magazine chose “You” as the Person of the Year to reflect the growing power of social media. Last year, the magazine celebrated “The Protestor” – another subversive choice connected with the potential of social networks. In the 21st century, citizens have become empowered through technology: able to topple regimes, protest economic structures and target businesses that mismanage public relations.

When Netflix announced changes to its pricing structure, 82,000 negative comments flooded Twitter and Facebook. Within months, the company lost two thirds of its market share. Social media provides a highly visible platform for opinion – good or ill. In reaction, some business leaders approach marketing as, essentially, the continual management of online reputation. The embarrassing and damaging consequences of getting online interaction with customers wrong is writ large in Toyota’s handling of high-profile recalls in August and BP’s response to the 2010 Gulf oil spill.

With public disasters dominating news coverage of businesses’ forays into social media, it is unsurprising that Havard Business Review found that half of managers have a negative or uncertain attitude towards social media. Organisations are still liable to view social media as a threat to productivity, intellectual capital and privacy, rather than the future foundation of business.

This must change. Conversational channels, such as digital networks and social media, are making instant connectivity a norm of business life and early adopters have enjoyed the benefits of enhanced communication with internal and external stakeholders. The shift from broadcasting models of employee and market communication to more discursive modes has been prompted by long term trends, beyond the technological.

  • Economic change: Service industries have become more significant that manufacturing in developed economies, and knowledge work has supplanted other forms of labour. This has added importance to processing and sharing information.
  • Organisational change: Frontline employees are more pivotal in value-creating work. This has determined that lateral and bottom-up communication is as highly prized as top-down decrees.
  • Globalisation: Navigating cultural and geographic lines has necessitated fluid and complex interactions.
  • Generational change: Younger workers expect peers and authority figures to communicate with them in a dynamic, two-way fashion.

The relationship between digital networks and knowledge is crucial in explaining the power of social media. In 1999, Richard Varey observed, “A knowledge-based global order is growing. Yet the bulk of useful knowledge lies unused among employees at the bottom and scattered outside office walls among customers, suppliers, communities and other stakeholder groups.” Today, we may say this order has come to pass. A 2010 study by McKinsey & Co found that 85% of new jobs created since the turn of the century required complex knowledge skills. Further, intellectual property, brand value, process knowledge and other manifestations of brainpower were responsible for 70% of all US market value created between 2008 and 2010.

Technologies – such as computers, internet, email, intranet and digital networks – have made accessing the knowledge spread within organisations progressively easier. Crucially, however, valuable information also exists beyond the businesses four walls. Customers hold the invaluable knowledge of their wants, needs, desires with regards to product design, customer service, delivery, ect. Social media has been transformative in connecting businesses and their customers to an unoprecidented degree, allowing savvy organisations to monitor, amplify, respond to and lead customer opinion.

The benefits are apparent. Companies that adopt social technologies can see a 50% increase in customer satisfaction, 48% increase in business leads and 24% increase in revenue. However, companies have found that they cannot harness the collective knowledge and influence of online communities while preserving traditional silos and business philosophies.

Twitter may be able to be latched on as a channel for voting in the X Factor final, but incorporating social media into a business’s product development, marketing and customer relations requires a change in mind-set and organisation.

Sixty-second case studies: Red Bull

In Marketing on October 3, 2012 at 9:14 pm

My first memory of Red Bull was in the changing room of the local swimming pool. After a primary school swimming lesson, one of the boys proudly produced a blue and silver can. The drink seemed illicitly adult and (despite the vague idea it was related to bull testicles) I held my classmate in higher estimation for his swaggering possession.

Red Bull created and dominated the energy drink market with a single, expensive product, challenging Lucozade and surpassing offerings from Coca Cola, Pepsi and Asda/Wal-Mart. Even before I was old enough to constitute part of their target market, I had been exposed to Red Bull’s ‘anti-brand’ marketing strategies.

Red Bull is impressive in its ability to circumvent the cynicism of ‘millennials’. Red Bull recruited opinion leaders as Student Brand Managers and the Wing Team to launch their product in new markets. Empty cans were left in fashionable bars and clubs. Word of mouth both broadened Red Bull’s appeal and made it more left-field, the company’s target consumer segment dubbing the drink ‘liquid cocaine’ and ‘speed in a can’.

The versatility of Red Bull’s promise to ‘give you wiings’ is evidenced by its parallel adoption by truckers and young professionals. The company has broadened its draw with sugar free alternatives and stunning viral campaigns including the “Way Back Home” video.

Thanks to the brand’s evolution, a child today is as liable to become aware of Red Bull through one of its 21 million fans on Facebook as from a classmate swigging from a 30 oz. can.

As we may continue to think

In Informatics, Management on October 3, 2012 at 9:09 pm

Internet to intranet: communication has changed, but the ideals remain the same.

Vannevar Bush’s 1945 article “As We May Think” is remarkable in many respects. It reflects the thinking of a scientist dedicated to war but looking forward to peace, represents a new idea of managing human knowledge and is renowned as the theoretical beginning of the Internet.

Bush looked to create a machine that would make collective memory and experience accessible to all. He headed the Advanced Research Projects Agency (ARPA), created in 1958 by Eisenhower in response to Soviet success  in the space race. 54 years later, we live in a world marked by his legacy.

The cumulative invention of the Web in the last three decades of the twentieth century forms one of the most important turning points in human history. From the turn of the 21st century, businesses have taken Bush’s legacy forward: applying the new technologies to the problems of intra-organisational connectivity. The result was the intranet – a network built for an employee audience.

Today, many organisations use internal networks to deliver tools and applications, contain complex corporate  directories and steer culture-change (i.e. take inspiration from the ideas employees post on forum conversations). The intranet has proved one of the most empowering and cost-effective technologies since the telephone. When used well it’s been found to:

  1. Increase productivity by making information immediately available
  2. Facilitate communication vertically and horizontally
  3. Make time: employees can link directly and swiftly to data
  4. Preserve knowledge: many corporate internets hold a central bank of up-to-date advice and learning
  5. Save money: IBM saves more than US$ 500 million a year performing HR services over the intranet*
  6. Create a common culture: the same information is available throughout the corporate structure
  7. Enhance personal branding: users consistently find authentic input increases their internal reputation
  8. Address the individual: intranet applications can be tailored to the user
  9. Empower employees: conversations are opened to the collective experience of the organisation
  10. Make you happy: 52% are more satisfied to be an IBM employee because of information obtained on the intranet*

*[Source: http://www.prescientdigital.com/articles/intranet-articles/the-intranet-as-an-employee-retention-tool/]

Employees themselves have adapted to use their intranet to receive corporate news, access customer information and share successes. Despite its integration into many modern workers’ lives, predictions of the death of internal networks linger on the lips of many tech analysts. According to these doomsday prophets, intranets are set to be replaced by social media. Cooler heads observe that, as long as companies continue to want the ability to address and hold conversations within a purely internal audience, intranets are not at risk.

Yet, social media has its place. Toby Ward (CEO, Prescient Digital Media) explains, “Social media merely represents another channel, another technology, to augment, or enhance the corporate intranet.” Ward argues that social media platforms – SocialText, SocialCast, ThoughtFarmer – are likely to become the main technology platforms powering the intranet. Yammer is a powerful example of this. Social media is the future, not the end, of internal networks.

After all, while technology has much changed from 1945, the principles remain the same. Intranet and its forefathers have always been about information sharing, knowledge gathering and collaboration. These are principles no organisation can do without and now fall firmly within the remit of IC. Embrace your role and ensure your intranet is used to forge a more collaborative, communicative, efficient and happy organisation.

After 6,000 years, are we doing it right?

In Coaching, Management on October 3, 2012 at 7:41 pm

Since its inception, the evolution of writing has responded to and prompted dramatic shifts in the focus and capabilities of human society.

Around the 4th millennium BC, the complexity of trade and administration in Mesopotamia outgrew human memory.  Clay tokens had been used to represent commodities and labour, but with the diversification of the ancient near eastern economy the variety of these tokens in circulation ballooned to more than a hundred categories. The need for simplicity spurred invention and a new communication form was created: writing. Tokens were wrapped and fired in clay, with makings to indicate the kind of tokens within. Archaeologists have convincingly argued that these were the prototype for writing tablets.

Since then, technology has transformed our use of the written word, but not reduced its importance. The Egyptian pharaohs read from papyrus, the British Domesday Book was arduously written on sheepskin parchment and Gutenberg revolutionised communication with the invention of the printing press. Today, available channels are so diffuse and varied that Twitter can sell itself on the basis of a 140-character limit – excess is available in excess.

But there are constants too. In 2012, we’re still dealing with services and commodities, but clay tokens have become a huge array of national currencies. Like the ancients, our response to the complexity of the global economy has been to simplify – translating the perceived worth of a company into share and stock options within a single system of trade.
This still leaves an economy as massive as it is intricate. Our secondary response has, therefore, been an accelerated process of specialisation. The high level of expertise required to negotiate the trading floor has meant many in the financial sector have operated without adequate scrutiny. This year alone, banks have been criticised for fixing key interest rates and mis-selling personal payment insurance and financial products to small businesses. Sir Mervyn King, Head of the Bank of England, stated this week “Something went very wrong with the UK banking industry and we need to put it right.”

While the modern economy has been made possible by mathematics,transforming the culture informing the behaviours of economic operatives will take written communication – capable of conveying narrative, emotion and a sense of duty and responsibility.

Kingbofe

So, what does this mean for communicators today? As written communication has developed from counting to the instrument of discourse and persuasion, communicators have had to be more sophisticated in their approach. It’s now necessary to analyse your audience, leverage your resources and find a unique voice to engage and convey authority and invite action within your organisation. We come to writing 6,000 years into its development; in this period of change for many organisations, we would do well to learn how to use it effectively.