The good life

“Wine is bottled poetry” wrote Robert Louis Stevenson. The Bangalore International Wine festival seemed like it chose to differ. A couple of us dropped by at the wine festival on an unusually hot Sunday afternoon hoping to catch some interesting photo ops. The “eclectic” event was a mish mash of food stalls (the ubiquitous CCD kinds),wine sampling events (where some sloshed visitors looked like they would leave no stone unturned in extracting the last penny of their visitor passes) and a.. err.. rock music show. Now I love rock, but a wine festival and rock music? Or maybe that was eclectic.

The British government added sparkling wine to it’s Consumer Price Index market basket of goods this month. “Sparkling wines are also being added due to their increased consumption” – added an official note. A case of a luxury good becoming a normal good? Flummoxed…eh? Rare occasions when I would want to gloat about the economist in me but shall spare you in peace. A luxury good, non technically speaking is what the poor cannot have and only the elite can. The funny thing about a luxury good is however, once it gets increasingly democratised, it ceases being one. Technology is a very good example. Even before you know it, that hottest gadget you got for yourself becomes a normal good. So much for social signalling!

So what does it take to know how hard it is to be immensely rich these days? Check out the Forbes' "Cost of Living Extremely Well Index". Its components include: Gucci loafers, one year at Harvard University, a night at a one-bedroom suite at the Four Seasons in New York, 1oz of Joy (a perfume by Jean Patou), Davidoff cigars, a Hermès calfskin bag and much more. Also, what matters is not just the good itself but under what brand it is being sold.

Recent research also suggests that luxury brands act like marketing placebos and could improve human performance! Think your photography ain’t good enough…maybe you should get the Canon EOS 5D Mark II!! (macro man fits the bill , Alleppey fellow travellers would agree:-0)). For those not so inflicted by such fallacies of human thought, there is always the inhouse photography expert..or better..a pirated version of photoshop:D. Okay photographers,we will debate on the “moralities” of photo editing next time!

Photo credits:Shireen

Attitudinal segmentation – the game of Chinese whispers in consumer decision making

A couple of days back we were at a team dinner , a whole bunch of 20 of us from the marketing analytics team. Someone came up with the idea of playing a game of Chinese whispers – a commonly known game where one person starts with whispering a sentence. The fun lies in the unintended distortion of the information as it is passed from one person to another - larger the group , higher are the chances of distortion. In one particular round , a colleague started off with a sentence which said ”Heaven is an American salary , a British house, an Indian wife and Chinese food”. By the time it had reached the last person , the final piece of information had an Indian salary , a motley group of British ,Italian and Japanese wives and a Chinese daughter thrown in for company.

So what was happening in this innocous game of whispers? Every single person was responding to an information signal differently (One of my team mates said he thought the information piece consisted of a Chinese wife because Chinese wives were pretty:)). Marketing space today is experiencing a similar game of Chinese whispers. In a digital world , the explosion of channels and information has put the balance of power in the consumers' hands. Marketers can no longer differentiate or control the information stimuli they want to use to influence different segments of consumers. And every single person will choose to react to the same stimuli in a different way.

Traditional marketing thought has revolved around the idea of consumer decision making occuring through a funnel process. In a world where information channels were limited, marketers constantly tried to reduce the number of potential brands that the consumer has in mind till they emerge with one brand that they choose to purchase. In the process what they built on is who to target , how to target and what to target through an understanding of segments based on an intersection of factors – mainly demographic and financial in nature.

Well, why doesn't the “funnel” hold today? Here is why:

a. The consumer is much more informed and has access to unlimited information. The “touch points” of marketing are virtually present everywhere for everyone – from a 5 second TV ad to a pop up on your facebook account. The process of selection of relevant information is no longer linear.

b. Segments are not defined by conventional demographics anymore. I relate much more to my 50 year old academician aunt who travels to a different country every two years than my 27 year old cousin who is a working female , lives in a metro and hates the idea of travel . In short , attitude or behavior now transcends age, geography , income and other conventional demographics . And attitude is almost impossible to predict.

So consumers now scan their environments for personally relevant information and self select themselves into responding to relevant stimuli. Marketers will need to understand how this process of self selection works and create stimuli which bring them into the initial consideration set and keep them in that set as their target consumers move ahead in their decision making while constantly being bombarded with new information. Some of the most important questions in marketing analytics/research now revolve around how this process may be captured through attitudinal segmentation – which creates actionable segments for marketers to work on.

The game of chinese whispers is on and marketing thought should change to discover consumer segments that recognize variance in consumer behavior by itself as the driving force behind consumer decision making.



References: David W. Stewart (1991):”Consumer self Selection and segments of one : The growing role of consumers in segmentation” (Advances in Consumer research Volume 18,1991)

David Court, Dave Elzinga, Susan Mulder, and Ole Jørgen Vetvik:” The consumer decision journey” (Mckinsey Quarterly,June 2009)