English Tea Shop Organic: Competitive Advantage through Sustainable Solutions
The case describes how the English Tea Shop Organic (ETS) brand has created a sustainable ecosystem ensuring the growth of supplier livelihood and the company’s competitiveness in the branded tea space. In 2021, they embarked on their second ten-year plan, which included their transformation into a sustainable, employee-owned business that promoted its brand as purpose – by 2022, 30% of the company was employee owned. The case addresses the challenges ETS faces in building and scaling its brand by attracting the mindful consumer to its organic tea offerings while helping farmers become organic, grow tea more productively, and earn a sustainable living. The case looks at the different options open to them: geographic options; developing its gifting offering that represents 71% of its revenues or focusing on regular in-home consumption; enter adjacent categories; or explore B2B options, possibly in the HoReCA segment. ETS wanted to build its brand further around purpose but discovered that ‘doing good’ wasn’t enough to make people pay a premium price – how could they achieve this? They had developed a blockchain system that could be used to connect with their customers better. But how could they use this to spur growth?
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:
- whether and how it should speak to social issues such as gender equality and incorporate those issues into its brand purpose;
- how digital technologies should be effectively integrated into every aspect of the brand experience;
- how it should synergistically leverage social media, metaverse and other media platforms; and
- 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.
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.
Research: A busy mindset can be a marketing tool
Framing products around virtuousness can help businesses market to those with a busy mindset, according to new research.
Global business school, Insead, recently found the mere perception of yourself as a busy person, or what they call a busy mindset, is a ‘badge of honour’ that can be used to promote better self-control, and marketers can leverage this with ‘virtuous’ offerings requiring this self-control.
When Busy Is Less Indulging: Impact of a Busy Mindset on Self-Control Behaviours, was created by Amitava Chattopadhyay, professor of marketing at Insead, and co-authors, Monica Wadhwa, associate professor of marketing and supply chain management at Fox School of Business at Temple University, and Jeehye Christine Kim, assistant professor of marketing at HKUST. The report shows there can be a flip side to being busy. While people who feel under significant time pressure tend to get anxious and make hedonic decisions, those who simply think of themselves as busy tend to make virtuous choices as a result of their perceived self-importance.
“It is common for marketers to use busy-ness as a campaign concept, as many consumers can relate to it. However, if the advertised product is an indulgent one – such as fast food – the campaign could backfire,” Chattopadhyay said. “Busy-ness appeals should be more effective for products that require people to assert self-control, as would be the case for a gym chain, for example.
“What we show is that feeling busy helps when the offering is virtuous. For many products, this is a matter of framing. If an oatmeal cookie is framed as rich in fibre, then it is seen as virtuous. However, framed as being delicious, it is seen as indulgent. So framing it right is important.”
What is missing in Japanese firms? – Even MNCs lack true understanding of customers
The second part of the interview with INSEAD Professor Amitava Chattopadhyay, on the management approach and latest trends of EMNCs defying the common wisdom.
This time the discussion explores what is missing in Japanese companies.
Ararat Brandy: Transforming a Legend in to a Modern Icon
Ararat, the largest brand of brandy in Russia, with an enviable 32% market share and a long history, was one of the jewels in Pernod Ricard Russia’s alcoholic beverage portfolio. After a recent product update, five key questions needed to be answered: 1. Which consumer segment(s) should ArArAt be targeted at? 2. What should be the ArArAt brand platform? 3. Which of the five advertising options before him (recent agency pitches for the ArArAt account) should he choose? 4. Should all seven sub-brands in the ArArAt portfolio feature in the campaign, or only some of them? If the latter, which ones should he select? 5. In which magazines should the ads be placed?
The book talks somewhat about using cheaper labour from abroad (especially in regards to cost leaders). Is there an ethical part of this for EMNC’s or does the ethical side of it come in after they have already been more established in their market?