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.

Let’s say that you run a bank. You decide to give more credit to your good customers. Should you give it those who increase their account balance by any amount (even as small as 1 euro) per year? Or to those who just maintain their account? Which offer would they find more appealing?

Now imagine that you are running a charity and you want to increase repeated donations. Should you ask your contributors to pre-commit to making the same donation again and again? Or should you ask them to pre-commit to increasing their donation every time they donate, even if the increase is just only 1 cent? Which setup would they find more motivating?

Can such small differences (1 euro, 1 cent, etc.) have an impact on consumer behavior, consumer welfare, and business outcomes? And what impact, exactly?