Chipotle Crows for Cause Marketing

June 9, 2014

Have you ever considered that viral videos might tickle your taste buds, say for a burrito? Well, Chipotle thinks they do.

Chipotle elegantly combines the art of storytelling, and the branding imperative of cause marketing to communicate its quest for wholesome, sustainable food. With over 12 million views on Youtube since it was posted in September 2013, Chipotle’s “The Scarecrow” has created quite a buzz. So what are the critics saying? As expected, much of the reactions spawned by the video’s release have been mixed; some fault it for misrepresentation of sustainable farming, some regard it a triumph, and others perhaps as a misstep in brand recognition. Chipotle’s first messaging on sustainable practices, “Back to the Start,” and more recently a four part series on Hulu, “Farmed and Dangerous“, also stoked both praise and controversy.

From a marketing perspective, one of the most intriguing of the critiques suggests that the lack of explicit branding or brand placement is harming the video’s effect on sales. This decision, however, may have very well been deliberate; done in order to appeal to a vital consumer demographic: Millennials – 86 million strong and $1.3 trillion in direct annual spending. Like Chipotle’s mission statement — “food with integrity” — The Scarecrow film aligns to the company’s sentiment that food (and ultimately the brand itself) should be simple and unadulterated. This messaging resonates with Millennials who gravitate to companies that take a genuine and holistic branding approach to making the world a better place. Through digital storytelling and minimal focus on Chipotle itself (and rather our food system), the film ultimately motivates purchasing behavior of Millennials who want to actively contribute to a brand with a strong purpose as opposed to the company’s bottom line. “Millennials view the lack of TV as more authentic,” said Carol Phillips, adjunct marketing and branding instructor at University of Notre Dame. “Millennials are likely to dismiss a lot of claims. They’re responding to everything the brand does and says.”

Plus sales growth doesn’t seem to be an issue, as Chipotle announced first quarter results on April 17th, with revenues of $904.2million, an increase of 24.4% from its prior year period and 7% from the fourth quarter of 2013. With numbers like these, it’s hard to make the case that the Scarecrow video produced a negative ROI.

Over the last six years, the role of social responsibility tied to purchasing decisions — and an awareness of which companies have joined the movement and which have not — has been a growing trend across consumer groups. Millennials are no exception. What’s more is that they expect what is called the reciprocity principle; a two-way mutual relationship with companies and brands. As a result of this engagement, Millennials are influential consumers and marketers in their own right and are significant indicators in consumer trends and behaviors.

Millennials are one of the most socially conscious generations and the most active on social media accounting for 47% of Facebook users, 68% YouTube, 34% Instagram, and 31% Twitter. Products or services that fail hit a high note with Millennials can quickly become a subject of negative feedback reverberating within the realm of social media. However, the risk/reward is huge for any company that embraces this new environment and leverages Millennials who are likely to project via social media their purchasing decisions and brand affiliations. In a recent article published by the Boston Consulting Group, the point is made that, “companies need to make marketing to Millennials a top strategic priority” and “move from push communications to two-way open dialogue.” Since 2009, Chipotle has taken this strategy to heart and sought to demonstrate that when you buy their burritos, you are “doing good” and acting as an agent of change.

Despite individual opinions of Chipotle and its videos, Crimson Hexagon, a leading social media data intelligence company conducted a study of the Twitter conversations following the video’s launch and found that 98% were positive, with 12% claiming the ad revolutionary and having set the standard for value-based advertising. But some may wonder if the championing of sustainable farming is a sustainable strategy for the Chipotle brand. When considering a brand holistically, it is important to remember that some of the most iconic brands, Coca-Cola and Apple, were not built in a day. Cause marketing takes time to become part of a brand’s DNA because consumers need not only to believe in the cause, but believe that the brand itself is actually putting its burrito where its money is.

BY JENNIE MILLER ’15


Enhancing Consumer Performance in Idea Generation

April 28, 2014

Toubia_IdeaGenerationIt can be argued that there is a science to ideation and innovation; it’s not “strictly” about creative inspiration and throwing caution to the wind. More and more, companies in a variety of industries are looking to consumers for fresh ideas (i.e. My Starbucks Idea).

Columbia Business School’s Olivier Toubia and Marshall School of Business’ Lan Luo found that for effective consumer ideation, the research process cannot be a one-size-fits-all approach. Their study, Fostering Consumer Performance in Idea Generation, offers research to help marketers and research and development teams to extract “better quality ideas from consumers and to identify their needs to inform new product and service development.”

Toubia and Luo write, “As firms… increasingly seek out consumers’ ideas in various domains, they will encounter individuals with different levels of domain-specific knowledge.” They segmented such individuals as low-knowledge and high-knowledge with regards to a particular area of interest. But with consumer segments at different ends of the knowledge spectrum come challenges in extracting insights. “The performance of low-knowledge consumers is likely to be hindered by their lack of relevant knowledge in the problem domain…,” note Toubia and Luo. “[High-knowledge] consumers often do not perform in accordance with their full potential (due to factors such as shallow processing and inattention).”

Despite the discrepancy in depth of knowledge, each segment provides valuable insights on said domain. The study examines the interplay and outlines a process for creating customized ways to mitigate such obstacles, so companies may experience enhanced consumer performance in idea generation. Further, their research explores ways to apply this customized task system to open innovation platforms conducted online, a practice many brands currently use.

Download Fostering Consumer Performance in Idea Generation to learn more about taking a strategic approach to consumer ideation.

BY ALLIE ABODEELY


CMO insights from IBM’s Global C-suite Study

April 28, 2014

IBM-Infographic-2014

For more than a decade, IBM has built upon research to produce its C-suite Studies series, one of the largest collections of C-level executive insights. Its latest research Stepping Up to the Challenge: CMO Insights from the Global C-Suite Study focuses on how CMOs “are helping their enterprises become more ‘customer-activated.’”

IBM Institute for Business Value found that employing a revenue-generating, customer-centric strategy can stem from digital marketing capabilities. But despite digital being a current area of focus for CMOs, it’s a world many still struggle with. Specifically, less than 20% of CMOs interviewed for the study “have integrated their company’s interactions with customers across different channels, installed analytical programs to mine customer data and created digitally enabled supply changes to respond rapidly to changes in customer demand….” Such CMOs are segmented as “Digital Pacesetters” in the report.

The issue isn’t that the other +80% are fire-walling technology, but rather they grapple with maneuvering through the explosion of data, and tethering digital media to bottom line numbers. As one CMO (anon.) in the study explains, “We know what we want to do. Our biggest challenge is creating the data infrastructure.”

This translates into potential missed opportunities. IBM Institute for Business Value reports, “There’s a close link between the degree of digital acumen CMOs display and the financial performance of the enterprises for which they work.” The research revealed that many CMOs have de-prioritized monetizing social media. They are “presumably finding it too difficult or see social mainly as a tool for building awareness and forging connections.”

While CMOs are becoming a stronger force when it comes to influencing CEOs on strategy, second only to CFOs, it’s the CMOs’ relationships with Chief Innovation Officers that generate results. IBM Institute for Business Value reports that businesses are 76% more likely to outperform in terms of revenues and profitability when CMOs and CIOs effectively work together.

According to the study, analytics are top priority for CIOs. IBM Institute for Business Value suggests partnering with CIOs to create an infrastructure for scalable cognitive analytics that produce actionable customer insights. It cautions not to be “all things to all people,” but rather concentrate analytics on those customer lifecycle phases that will be of utmost importance to your business in the next few years.

IBM Analytics InvestmentDigital Pacesetters, notes IBM Institute for Business Value, are “actively investing in the later phases of the customer lifecycle, where digital channels make the biggest difference.” While traditional phases end with the transaction, Pacesetters look at the bigger picture – focusing resources on long-term relationships and cross-channel experiences to turn customers into loyalists and collaborators and encouraging them to share these experiences. Such companies, per the study, “are 59 percent more likely to be outperformers.”

Download the complete study to learn more about IBM’s findings and strategizing digital.

BY ALLIE ABODEELY


Retail as a Media Channel: Rachel Shechtman’s STORY

April 23, 2014

STORY_Color-STORYRachel Shechtman is redefining the way we measure success in brick and mortar retail. Her 2000 square foot store in New York City–STORY–has the point of view of a magazine, changes decor like an art gallery, and sells products like a store. Against the odds, Shechtman’s innovative concept and business model drove STORY to be profitable by the end of its first year–physical retailers usually break even by year three.

STORY is intended to create unique experiences meant for the physical world and offers the type of in-person interactions that stimulate emotional brand associations which lead to word-of-mouth publicity. Shechtman explained during the BRITE ’14 conference that while digital retail has considerably progressed in the past twenty years, stores have remained in many ways static and, “judged only by their sales per square foot.”

Shechtman is redefining how to build a successful retail store in two main ways: by using brands as sponsors that contribute to the store’s concept, content, and revenue, and by monitoring the impact of the store experience, as much as its sales per square foot.

Like a magazine, STORY has an editorial perspective, releasing a new “issue” every few weeks. It engages shoppers by partnering with brands to rotate its design and merchandise around carefully curated content and experiences. Like an art gallery, the team behind STORY creates immersive experiences that encourage participation from store visitors, transforming every aspect of the environment: from wall color and textures to merchandise and fixtures.

STORY’s model of innovation through brand sponsorship helps bring a different source of revenue and provides unique encounters that cannot be experienced anywhere else. The Making Things STORY edition –sponsored by GE– used 75% of the space for “pure experiences,” with laser cutters and injection molding machines available for customers to make plastic robots, jewelry, sunglasses, and customized MetroCard holders.

In 2012, STORY partnered with Benjamin Moore to create the Color STORY, where Benjamin Moore got to showcase its newest collection, Color Stories, and present a session, “The Power of Color & its De-Stressing Benefits,” led by a Benjamin Moore senior designer and a color marketing expert. They taught attendees how to use color in small living spaces with the purpose of detoxing and de-stressing. Shechtman pointed out that not only does this provide a second revenue stream for STORY, but it enables the brand to be their own storyteller. As she explains, “Benjamin Moore knows a lot more about color than Rachel Shechtman or the STORY team.”

The current issue, Good STORY, features a combination of brands including TOMS, Uncharted Play, ROMA boots, and Bombas socks, focusing on the stories behind the products, their missions and their vision for social change. As explained on STORY’s website, “each product tells a story that matters because it’s a story of people joining together to do something good.”

BY GABRIELA TORRES PATIÑO


Combining the Seemingly Incompatible: The MAC Case Competition

April 4, 2014

Combining the seemingly incompatible is an inspirational way to ideate.

On March 28, 2014 the Center on Global Brand Leadership, in collaboration with the Marketing Association of Columbia (MAC), hosted the 2nd annual MAC Case Competition. Twenty-eight MBA students from Columbia Business School were tasked with developing a hypothetical game-changing business strategy by conceptualizing a unique way to incorporate one of today’s hottest digital trends with a major brand, one that is seemingly incompatible with the trend itself.

Jawbone

More and more articles of clothing and accessories, items we wear on a daily basis, are produced with the ability to gather personal data, and connect us and the collected data to the digital world. With this “wearables” trend, brands are now challenged to create more robust brand experiences.

Students had three hours to develop a positioning for Unilever or one of its brands by integrating the wearables trend and new consumer expectations for information access and interconnectivity.

To judge the competition, the Center on Global Brand Leadership invited Marissa Freeman, VP of Global Advertising at HP and founder of Bee Raw, and Fabian Pfortmüller, Co-founder of Holstee and Founder of Sandbox. Both are experts at understanding trends and using them to create innovative strategies for their businesses. The winning team, Hasbleidy Castaneda ‘15, Nate Champion ‘15, Melissa Gavin ‘15, and Emmy Vallandingham ‘15, developed The Water Band, an extension of Unilever’s Save Water, Save the World initiative.

The Water Band would be a wristband with the goal of reducing shower time. The team explained that it’s great for environmentally-conscious individuals. “Shortening a shower by 2 minutes can result in 4600 gallons of water saved per year,” shared the students. When wearing Water Band, the consumer would be alerted when their shower is running long.

They developed this idea to align with Unilever’s sustainability platform to provide value to its consumers, and to promote a sense of community and mutual responsibility amongst its stakeholders

Two teams tied for second place with The Bobby-Bit, a bobby pin that captures environmental data for a customizable action plan–using Unilever brands– for taking care of skin and hair based on environmental triggers; and Dove For Me, a system that uses wearables to capture environmental and physical data from individuals (e.g. activity, climate, location, vitamin deficiencies, hydration, etc.) to enhance and personalize Dove skin and hair care products at home.

MAC-Winners-2014

The Case Competition experience was rewarding for the judges and the students alike, Marissa Freeman commented “I was astounded by the level of strategic insight, the thoroughness of the foundational data and the professional manner in which the cases were presented.  It would have been impressive if they had 4 days to do it, let alone 4 hours.  In my mind, they were all winners.”

While Sheera Hopkins ’14, from MAC, explained that participating in “The Case Competition was a great experience where I had the opportunity to put into practice many of the ideas and frameworks I had learned my first year at CBS. Even though it was only a one-day exercise, it helped prepare me for my summer internship.”

The Center on Global Brand Leadership looks forward to hosting the 3rd annual Case Competition in the spring of 2015 at Columbia Business School.

BY GABRIELA TORRES PATIÑO


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