Category Archives: Cases

Cases

Marketers should go beyond SWOT analysis

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Richard DAvneni

At the Dong-A Business Form, Richard D’Avneni, Bakala Professor of Strategy at the Tuck School of Business at Dartmouth University, gave an interesting talk about Hypercompetition, which is the term that he coined about 20 years ago arguing that there is no sustainable competitive advantage. In this talk, he emphasized the dynamics of market by telling us that Sears or the retailer with 90-year successful business history cannot help but leave the industry within only 15 years. Thus, he made a persuasive argument that well-known strategy/marketing tools such as SWOT analysis do not work anymore.

According to him, firms use the SWOT-based strategy for multiple times and, therefore, “learning” takes place. Imagine a firm uses the SWOT analysis and then selects a specific strategy based on some combination of Strength, Weakness, Opportunity, and Threat. In this case, the firm is highly likely to win over its competitors. However, those losing competitors learn what strategy the winning firm will select in the next round (e.g., when launching different products or when entering different markets) and they are able to respond to the same strategy smartly. This suggests that a single-shot SWOT-based strategy works but it does not work in the multiple contexts.

Then, what is an alternative tool that marketers could use when they want to conduct 3C analysis (understand consumers, companies, and competitors)?

Cases

Cafe: East vs. West

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People often go to cafe not for coffee but for work. According to Mehta, Zhu, and Cheema (2012), an appropriate ambient noise (e.g., cafe noise) enhances work performance. Their five studies showed that people performed creative tasks better when surrounded by the moderate ambient noise (70db) than the low one (50db) or the high one (85db). They argue that when people are surrounded by the moderate ambient noise, people cannot process information easily and thus they focus on their work harder and think more abstractly and creatively.

One website picked up their findings and enables its visitors to play a pre-recorded coffee shop noise at your computer (Coffitivity).

20120708 @ Cafe bene
Cafe “Bene” @ Seoul
Cafe @ Seoul
Cafe “Gurunaru” @ Seoul

Many other space attributes beyond sound are discussed on how to create the ideal workspace. According to the Psyblog run by Jeremy Dean, for instance, there are six tips to do so: (1) avoid open-plan, (2) the great tidy-messy debate, (3) curvy is beautiful, (4) room with a (picture of a) view, (5) plants, and (6) decorates. When it comes to coffee shop chains, Starbucks seem to meet many tips while other competing Canadian coffee shop chains such as Second Cup or Tim Hortons seem to meet only few.

However, more space attributes (in a coffee place) will affect work performance. Two example attributes are whether a coffee place is indoor or outdoor and whether it is brand-new or run-down. Interestingly, most local coffee shops in Seoul are indoors and brand-new while many local coffee shops in North American cities are outdoors and relatively run-down. Since I generally worked more productively when I was at the local coffee shops in North America than when I was at those in Seoul, I expect [outdoor] and [run-down] might be extra critical attributes for a coffee shop to be an ideal workplace.

Cafe @ Boston
Cafe “Au Bon Pain” @ Boston
Cafe @ Virginia
Cafe “Aromas” @ Virginia
Cases

Participation for immersive experience

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Exhibition @ Seoul
http://blog.daum.net/runman67/7047692

When people visit a historical place, they wonder what happened long time ago. They sometimes enjoy watching an exhibition such as changing royal guards in Seoul (above). In the historic place at the Colonial Williamsburg in Virginia, however, young visitors go beyond watching an event; they march in the parade with soldiers. This immersive experience will give the visitors an unforgettable piece of memory.

[youtube=http://www.youtube.com/watch?v=3JpWEr7WbLA]

Cases

Blue iced tea is popular

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Color determines food judgment. According to Hoegg and Alba (2007), for instance, the brightness of an orange juice affects people’s taste discrimination more strongly than its brand name (e.g., Tropicana or Winn-Dixie) or its price information. Food judgment is probably influenced by the hue and saturation of the food as well.

Recently, I find some stores selling blue-colored iced tea. This unexpected color may attract significant attention among those who do not drink teas or who is visually attentive such as kids. However, most adults around me infer it as a poor-quality fake beverage because, they believe, tea is supposed to be orange rust or brown regardless of its temperature. This suggests that changing the color of a given product enables designers and marketers to pursue a new market by sacrificing their traditional market.

Surprisingly, there exists a green wine called Vinho Verde in the world! 🙂

20130731_Ice tea @ Seoul

Hoegg, JoAndrea and Joseph W. Alba (2007), “Taste Perception: More than Meets the Tongue,” Journal of Consumer Research, 33 (4), 490–98.

Perceptual discrimination is fundamental to rational choice in many product categories yet rarely examined in consumer research. The present research investigates discrimination as it pertains to consumers’ ability to identify differences—or the lack thereof—among gustatory stimuli. Three experiments reveal systematic bias resulting from the presence of common visual and verbal product cues. Particularly noteworthy is the finding that the amount of bias induced by a subtle, nonevaluative cue can far exceed the bias induced by overt and well‐established evaluative cues. In addition, the effects these cues have on perceptual discrimination diverge from the effects they have on preference.

Cases

Street people: East vs. West

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20130717_Street people @ Seoul

Street people are the people who live a public life on the streets of a city. Some ask us to view them as our community members (e.g., Homelessguide) and others consider them as business opportunities (e.g., Fortune at the Bottom of the Pyramid). Regardless of our objectives whether we want to help them or make money from them, we need to understand street people more deeply.

From the psychological point of view, their behavior differs depending on where they live. Most street people whom I have seen in Seoul have avoided interacting with me; they hide themselves from public. In contrast, many street people I have met in Toronto have tried to interact with me; they ask passers-by for change and sometimes chat briefly. It seems that social issues (e.g., losing faces or keeping distant from people) are more critical to relatively passive, Asian street people whereas economic issues (e.g., making money) are more desperate to relatively active, North American street people.

By Jonathan Jenkins, Toronto Sun, August 14, 2011
By Jonathan Jenkins, Toronto Sun, August 14, 2011

If their behavioral difference comes from how WE treat them, we should not ask street people to change their behavior: Instead, WE may need to change the way we treat them. In particular, Asians including me may need to invest social resources (e.g., smile) rather than economic resources (e.g., money) to befriend street people.

Cases

What happens if we love artificial plants?

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20130606_Ran @ Kyunggi (2)

Most urban dwellers want authentic, natural goods. Unfortunately, growing plants or baking breads requires a significant amount of effort. Therefore, they often buy artificial ones instead.

20130620_@ Paris Croissant

Many artificial products are delicately crafted. I am often confused between an artificial product with a real one. See the two following pictures. The one above is the the real frozen beer in the plastic cup, and the one below is the artificial beer in the glass available at the Kirin Ichiban popup store.

20130621_@ Kirin Ichibang (1)
20130621_@ Kirin Ichibang (2)

In general, artificial products look too good to me. For example, artificial plants are cleanly green, artificial breads are beautifully baked, and artificial beers have a just right amount of foam. The more we are exposed to these perfectly beautiful artificial products, the more we will enjoy the visually best moment of each product and ignore the amount of effort to invest to enjoy it. Artificial products may lead people to discount the value of effort or labor, which is contrary to effort heuristic or IKEA effect.

**

Reference 1

Morales, A. C. (2005). Giving firms an “E” for effort: Consumer responses to high-effort firms. Journal of Consumer Research, 31(4), 806–812.

This research shows that consumers reward firms for extra effort. More specifically, a series of three laboratory experiments shows that when firms exert extra effort in making or displaying their products, consumers reward them by increasing their willingness to pay, store choice, and overall evaluations, even if the actual quality of the products is not improved. This rewarding process is defined broadly as general reciprocity. Consistent with attribution theory, the rewarding of generally directed effort is mediated by feelings of gratitude. When consumers infer that effort is motivated by persuasion, however, they no longer feel gratitude and do not reward high-effort firms.

**

Reference 2

Norton, M. I., Mochon, D., & Ariely, D. (2012). The “IKEA Effect”: When labor leads to love. Journal of Consumer Psychology, 22(3), 453–460.

In four studies in which consumers assembled IKEA boxes, folded origami, and built sets of Legos, we demonstrate and investigate boundary conditions for the IKEA effect-the increase in valuation of self-made products. Participants saw their amateurish creations as similar in value to experts’ creations, and expected others to share their opinions. We show that labor leads to love only when labor results in successful completion of tasks; when participants built and then destroyed their creations, or failed to complete them, the IKEA effect dissipated. Finally, we show that labor increases valuation for both “do-it-yourselfers” and novices.

Cases

Holistic approach for furniture sellers

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20130606_Ran @ Kyunggi (6)

An analytic approach can make a store appear cheap, while a holistic approach can create a more upscale impression.

20130606_Ran @ Kyunggi (4)

I recently visited a furniture store where items were simply piled up, making it hard for me to visualize how a room would look. This analytic approach discouraged me from making any purchases.

If the store manager adopted a holistic approach by displaying carefully selected items in themed sections, the store would appear more upscale, and I might be inspired to buy something. (Is this the secret behind the appeal of upscale home decor stores?)

Cases

Package design for health supplement

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Yuyu

Recently, Yuyu changed the package of its health supplement. Its previous package provides information mostly in the front side and mostly in the verbal format, which makes it challenging for its sale representatives to communicate with potential buyers.

The new package embraces visual design and zoning. It now provides much information visually as well as provides different types of information in different spaces (front/back). First, it has a huge alphabetical name similar to chemistry acronym (LT = Liver Therapy) and provides detailed instruction in a visual format. Moreover, the overview/functional information about the health supplement (what it is for) is provided in the front side, whereas its more detailed/usage information (how to take it) is provided in the back side.

20130602_Yuyu pill design (3)

20130602_Yuyu pill design (4)

Cases

Experiment for collaborative office space in Seoul (2)

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> Continued from Experiment for collaborative office space in Seoul (1)

The team discovered two issues for building a collaborative office space in Seoul.

  • First, people have a double standard. They generally use the open space for serious reasons such as discussing business issues or having meetings with clients. However, when they notice others occupying the space, the others “seem to” chat over a cup of coffee, read casual books, or just have fun. This unnecessary strictness of others inhibits them from visiting the open space.
  • Second, people prefer the sofas located next to the window over the white table located in the middle. This skewed flow does not allow accidental interactions.

The team decided not to attack the first, psychological issue but to attack the second, technical issue and then conducted a few experiments to smooth the flow with a hope to make the whole space more vital. For example, the sofas and the round tables with chairs switched each other. As shown below, many people followed the sofas and while doing so, they made some accidental interactions, which is a key feature for collaborative office spaces (see Adam Alter’s post).

Space design (1)Space design (3)

This project shows that a minor change in an office space determines the flow, which in turn makes the space where collaboration can happen.

Cases

Experiment for collaborative office space in Seoul (1)

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[youtube=http://www.youtube.com/watch?v=bpm_LIyMtMY]

Although many people want their offices similar to the Pixar’s office or the Google’s New York office, only few had them. Adam Alter, Assistant Professor of Marketing at New York University, wrote a piece of article on this issue at U99 (How to build a collaborative office space like Pixar and Google). In this article, he argues four key features of a collaborative office space.

  • An open plan and other design features (e.g., high-traffic staircases) that encourage accidental interactions.
  • More common areas than are strictly necessary—multiple cafeterias, other places to read and work that encourage workers to leave confined offices.
  • Emphasis on areas that hold two or more people, rather than single-occupancy offices.
  • Purpose-free generic “thinking” areas in open-plan spaces, which encourage workers to do their thinking in the presence of other people, rather than alone.

**

Dongwha holdings, a company selling interior items and dealing used cars based in Seoul, opened a space called Green Lounge in 2010. This space was dedicated to encourage collaboration among employees. It was equipped with sofas and tables, designer chairs, upscale coffee machines, and a plenty of casual books, etc.

20130306_Action Learning @ Dongwha (6)

This open space, however, was mostly empty. Very different from Californians and New Yorkers, people in Seoul avoided mingle with strangers and thus accidental interactions did not occur. Instead, they stopped by this space with their colleagues and picked up free coffee and left. Alternatively, they occupied meeting rooms for chatting with friends or keeping focused on their own businesses.

In order to revitalize this open space, a team of employees conducted research; they performed deep interviews with others, video recorded others’ behaviors, and collected and analyzed the flow in the open space. This research revealed two issues and the team decided to attack one of those issues by conducting several experiments.

> Go to Experiment for collaborative office space in Seoul (2)