Social Issue Based Brand Transformation: Strategies of the Luxury Beauty Brand SK-II
SK-II, a leading luxury beauty brand in Japan, was experiencing a decline. Its customers were aggressively courted by rivals, and changes in society made it difficult for the brand to stay compelling to its customers. SK-II must formulate a new strategy to fundamentally transform itself, bolster relevance and transcend the competition. The case describes the market landscape, economic, societal and technological changes, as well as SK-II’s prior strategies and their implementation. In developing the new strategy, the brand needs to decide 1) whether and how it should speak to social issues such as gender equality and incorporate those issues into its brand purpose; 2) how digital technologies should be effectively integrated into every aspect of the brand experience; 3) how it should synergistically leverage social media, metaverse and other media platforms; and 4) how it should work with established celebrities as well as emerging influencers to create a prestigious and yet engaging brand image. The brand needs to thoroughly assess the pros and cons associated with the potential options, craft its strategy and develop a detailed implementation plan.
Dilmah Ceylon Tea: Committed to Taste, Goodness and Purpose
When Xiaomi entered the fiercely competitive smartphone market in 2010, it did so without even offering a real phone. The company only offered a free Android-based operating system (OS). Yet, within seven years, Xiaomi became one of the world’s largest smartphone makers, reaching $15 billion in revenue. Accelerating its growth rate, Xiaomi transformed into the world’s largest consumer IoT (Internet of Things) firm by 2020, with its revenue surpassing $37 billion and more than 210 million IoT devices (excluding smartphones and laptops) sold across more than 90 countries.
How was Xiaomi able to grow so explosively and what lessons can other companies learn from Xiaomi’s rise?
Marketing Mania Talks: Episode 2–Talk with Amitava Chattopadhyay
It’s been a long-standing interest of mine to understand how businesses can be a force for good. That desire stemmed from a conversation with a former classmate, a pioneer in social innovation, who cogently argued that there simply wasn’t enough money in the form of charitable giving to alleviate poverty on a global scale. Thus, the best way forward was for business to invest behind social innovation, also referred to as sustainability.
Kolo Nafaso – a new way of doing business in shea.
I was invited to give a talk at the executive committee meeting of AAK held in Singapore, in early 2018. In my conversations with senior sourcing representatives of AAK, I learned about the Kolo Nafaso programme and wanted to understand more deeply what AAK was doing in terms of creating a sustainable supply chain, working directly with the women from small-holder families in rural West Africa, who collected the shea kernels, the first link in the shea supply chain. My goal for learning more was threefold. First, there was my personal curiosity, the Kolo Nafaso programme seemed to be an interesting and meaningful initiative, that could impact poverty alleviation at scale. Second, I teach a class on strategies for social impact and profit, and this seemed to be an interesting example of just that, and I wanted to write a case study that I could use in my course. The third was that innovations like Kolo Nafaso pose challenges, since they require the balancing of two motivations: profit and social impact. They also require managing the differences in perspective across functions, within the organization. This hasn’t been studied in the management literature, and I saw an opportunity to contribute to the discussion of how to manage the balance by learning from the experience of AAK.
Market Disruption Strategies: The Transformation of Xiaomi
AAK, a Swedish company providing vegetable oils and fats for various industries for more than 140 years, has been a dominant player processing shea since the 1950s. In 2009 in Burkina Faso, AAK started a project to work directly with West African women with small farm holdings, to improve their productivity as well as pay them fair prices. This project evolved into an alternative supply chain. The shea nuts through this programme – called Kolo Nafaso – were traceable to the women’s group level in West Africa. Kept segregated, the shea was not blended with AAK’s conventional shea supply, such that clients could lay claim to having sustainable and traceable sourced shea, when using Kolo Nafaso shea in their products. This was becoming increasingly important, as focus on sustainability grew among end-consumers, employees, as well as investors. The Kolo Nafaso programme expanded to Ghana, as AAK realized the potential of this alternative supply source, especially in 2018 when there had been a global shortage of shea. The issue was how to significantly grow this alternative sourcing programme, and how to realize its value
Perfume Branding: Strategies for Succeeding in India’s Fragrance Market
For conventional, profit-seeking companies, moving into social impact carries huge contradictions. An ad hoc, small-scale initiative is an inexpensive way to do a bit of good and receive a nice warm glow in the process. But any attempt to achieve more serious impact through scaling the initiative will likely trigger awkward discussions about how much that warm glow is worth to the firm. Thus, the ceiling remains low on social impact unless it can be justified in “win-win” terms. Needless to say, this is no easy feat.
My recently published case study about Swedish oils and fats producer AAK’s “Kolo Nafaso” programme in West Africa describes how one company redefined “win-win” by creating a sustainable and scalable shea butter supply chain. In so doing, , creating ripple effects with strongly positive implications for the firm’s most important stakeholder relationships and future activities in the region.
An Unexpected Product Benefit Can Be a Powerful Marketing Tool
As companies test a new product, they often learn that it can deliver unexpected benefits. This very famously happened in the case of Viagra, a product originally developed to treat cardiovascular problems. During the first human trials of the compound, a study nurse reported that male subjects would frequently lie on their stomachs on the examination table, trying to hide their erections. The compound did indeed dilate blood vessels, just not where expected.
It is common for companies to discover unintended benefits to their products after launch, once customer reports start flowing in. This is particularly true in the health and beauty industry. Just read online reviews for omega-3 supplements and you will find people claiming the heart health supplement helped them with a wide range of issues, from brittle nails to weight loss. Similarly, Botox was approved for cosmetic use in 2002, but users soon started reporting that the injections improved their migraines as well. It was licensed for this type of treatment in 2010.
Research has shown that consumers value a product’s benefits more when they believe a firm was intentional about creating them. For instance, if a company launches a programme that accidentally helps the environment, it is less likely to get praise than if the programme was expressly designed for that purpose. In law, premeditated crime is punished more harshly than an involuntary act that led to the same result. Intentions matter, because they are associated with effort, and effort with value (whether positive or negative).
However, another stream of research suggests that an unexpected benefit can pique consumers’ interest and lead them to anticipate other potential benefits from the product. This has a biologic basis: Studies on mammals (from rats to humans) have shown that receiving an unexpected reward (such as a squirt of juice instead of plain water) fires up neurons in the regions of the brain associated with reward anticipation and seeking. In a way, a nice surprise is perceived as a sign of more good things to come.