Posts filed under 'consumers'
Almost like the real thing
by Giles Powdrill
Counterfeiting has, in all likelihood, been around for as long as currency itself but as the exchange of goods and services has become more complex, so has the trade in fakes. The forger’s business goes well beyond banknotes, art and documents these days. Everything from aircraft parts and microchips to pharmaceuticals and even baby milk powder can be, and is, reproduced for an illicit profit.
Globalisation and the internet means that our exposure to the phony has increased dramatically in recent times (the catchily-named International Anti-counterfeiting Coalition says the problem has grown 100-fold in the past two decades). The Counterfeiting Intelligence Bureau, run by the International Chamber of Commerce, estimates that the fakes business accounts for between 5 - 7% of total world trade, worth around $600 billion a year. And while it’s generally in the interests of such organisations to talk up the threat from fakes, by way of comparison, global advertising revenue runs at around $70 billion a year.
Asia is undoubtedly one of the principal sources of the world’s fake brands, while China is the largest contributor. Counterfeit products could account for a sixth or more of all products made in China, representing 8% of China’s US$2.6 trillion GDP. For the largest global brands it’s a large and growing concern. It’s also quite a tough business problem, since they typically hope to expand in markets which apparently originate much of the imitation merchandise.
And much of the anecdotal evidence suggests that in a post-modern world consumers are getting more tolerant about fakes. A survey last year by a British law firm deduced that one in eight Britons had bought a fake handbag or watch over the previous twelve months. The three most-purchased fake products purchased were Louis Vuitton, Gucci, and Burberry.
These cultural attitudes are likely to be reinforced as economies stall. Louis Vuitton, according to the 2008 brandz study by our sister WPP company Millward Brown, has a brand value of $25.7bn. This is a substantial figure, and only a small dent in this from the sales of fakes is a significant problem. It seems more likely that they’ll have to learn to live with it, as Microsoft did when it tolerated copies of Windows circulating in China because it realised it might build a long-term market for the company’s software. There is some good news on the consumer side: the survey mentioned earlier found that almost a third of the buyers of fakes said that the experience made them more likely to buy the real thing.
Perhaps the lesson to be learned is from judo rather than boxing; to find ways to work with the grain of the counterfeit business, rather than trying to confront it.
The image at the top of the page is from the Chinese site jjunda.net, which has a whole gallery of pictures of fake products.
Add comment 24 November 2008
The future of consumer advocacy
Andrew Curry writes:
Another organisation which has changed its name recently is the National Consumer Council, which became Consumer Focus on 1st November - not just a piece of rebranding, since it took on new responsibilities at the same time.
As part of the planning for the handover, we ran a futures project with the NCC on how consumer advocacy would look in 2020. The report was published by the NCC shortly before the handover.
The analysis and the process are laid out in the report. The work identified four significant challenges for 2020 - some adaptive, some emerging:
- Engaging the less-engaged: How can consumer policy advocacy organisations continue to engage and maintain their dialogue with an increasingly diverse and fragmented population?
- Supporting empowerment: How to provide consumers with the skills and confidence to promote and protect their interests, to ensure that they get a fair deal, and that they have access to the right communication channels to make their voices heard.
- Managing consumption in a resource-stretched world: How will consumer behaviour and advocacy change in a world in which consumption is more constrained?
- Global relations for the benefit of consumers and producers: How to operate at a sufficiently global level to give consumers power over global and international matters which affect their interests.
The report’s not currently available from the NCC site, one of those technicalities to do with reassigning NCC legacy pages to the new organisation’s web site. For the moment, therefore, you can download it via the link below.
And a word about the picture at the top of the page; it’s by Ian Mcdermott, an illustrator who sat in on the futures workshop abd sketched his impressions of the discussions going on around him. The work he produced on the day illustrates the report - a series of visual metaphors, if you like.
You can download the report here:
Add comment 31 October 2008
Choice editing at Rough Trade
From Rashbre Central
Joe Ballantyne writes:
I was browsing in the wonderful Rough Trade record shop in Notting Hill the other day, and I noticed that they’ve started an ‘album club’ service. For a monthly fee they send you a new album, chosen from a selection and tailored around your musical preferences.
At first glance, this looks like a rather counter-intuitive business decision – half the fun of going to Rough Trade is about rummaging around the racks in search of lost gems. If CDs arrive on your doormat every month, even with Rough Trade packaging wrapped around them, there’s less chance of randomly coming across a few titles that you feel you may just have to take home. It also seems quite old-fashioned, in an age when music distribution is increasingly digital and consumers are supposed to be sovereign.
However, the idea of the album club seems to fit into a wider trend we’ve been observing recently – ‘choice editing’. Consumers are exposed to an ever-growing selection of goods, services and brands
(and the number of CDs released every year remains high despite falling sales) – but at the same time there is some evidence that we’re less interested in spending time sifting through them. Making choices takes time and energy - both resources which we are short of. The choice editor becomes an trusted (and expert) friend who can cut through the market noise.
Perhaps in future, it won’t be endless choice which is going to be seen as a luxury – but rather, being able to pay others to make our choices for us. But only a few companies have sufficient credentials to earn that trust.
The picture - of Rough Trade West in Talbot Road - is from the Rashbre Central blog.
1 comment 20 October 2008
The ‘five gaps’ around behaviour change
Courtesy of DEFRA
Rebecca Nash writes:
Behaviour change is much talked about, but still not well understood, which is why it seemed a good subject for the IIPS - the Institute for Insight in the Public Services, the think tank jointly run by Henley Centre HeadlightVision and BMRB - to take on in its third breakfast briefing of the year at the ICA in London. The challenge is how to link the ambitions of behaviour change in policymaking with the various levers which can influence it, such as legislation, incentives, taxation, policy, fines and, most specifically, communications.
The event was unique in explicitly positioning policy making and communications within a shared ‘behaviour change strategy cycle’, and approaching strategy planning (top down) and communications planning (bottom up) from a coordinated perspective.
The speakers were Alex Oliver, who’s recently joined the IIPS from the Cabinet Office, who made the connections between behaviour change and Whitehall’s ‘Public Service Agreements’, and BMRB’s Helen Angle, who’s an expert at campaign evaluation.
In their presentations, they identified five key challenges or ‘gaps’ faced by both ‘sides’ of the cycle: the gap within and between policy areas, the gap between high level strategy and implementation, the gap between success factors and evaluation measures; the gap between government action and public reaction; and the gap between incremental insight and strategy.
Bridging the gaps is hard but not impossible. Success requires, among other things, internal coherence, cross-policy alignment, and agreement about common success factors. The panellists, Sam Davis of the Central Office of Information, and Dr. David Halpern of the Institute for Government suggested that behaviour change theory informs both halves of the strategy cycle. And picking up one thought from the audience comments: that the government’s behaviour change efforts should be linked, explicitly, to a broader project of political and social renewal.
For more information about IIPS events, please visit the IIPS website.
Add comment 7 October 2008
Everyday toxins
Rachel Claydon writes:
Momentum around the issue of toxic-free consumption seems to be building. New research released recently by the principal investigator at the Medical Research Council’s Human Reproductive Sciences Unit, Professor Richard Sharpe, provides further evidence of links between the toxic chemicals contained in many everyday products and major heath issues. This recent study warns that chemicals found in many cosmetics can damage the reproductive system in male foetuses, especially during the eight to twelve week stage of a pregnancy.
While the research was based on tests with rats and does not provide conclusive proof of harm, it nonetheless resonates with previous studies which point to a link between infertility problems and testicular cancer, pollution and chemicals in everyday products, and pregnant women are nevertheless being advised to avoid using perfume and scented creams.
Cosmetics are not the only products causing concern. Carpet, bedding, cling film, air fresheners and non-stick pans are among a number of household goods containing chemicals that campaigners believe have not been adequately safety tested. And American research published this week suggested an association between Bisphenol A - a chemical found in plastic packaging for food and drink - and the incidence of heart disease and diabetes, although it is a ‘preliminary’ stidy and it didn’t show a causal connection.
Toxic accumulation has been on environmentalists’ radar since the 1960s, and there is a growing body of regulation to try to tackle it. The issue is increasingly reaching the general public through media coverage of this kind of research – “Perfumes linked to infertility” screamed the front page of London’s Metro in response to Richard Sharpe’s research. Increasing consumer awareness of toxins in everyday goods is an important emerging trend, and we are seeing growing interest in toxic-free products such as Ecover and organic cotton. Producers who want to stay ahead of the trend would do well to check for poisons in their supply chains - before campaigners or researchers do.
Add comment 17 September 2008
Understanding the ‘Aldi effect’
Alastair Morton writes:
The Guardian last Friday splashed pictures of baked beans and ‘Beamers’ across its front page to make the point that consumers’ habits are changing as a result of the credit crunch and other pressures on incomes. In particular, there are some startling statistics about BMW sales (down 40% on last year) and people’s levels of savings (down 48% on last year). In all of this, they suggest that a number of companies are benefiting from the ‘Aldi effect’, meaning that budget retailers and products (such as Aldi, Premier Inn budget hotels and own label foods) are more in demand as consumers tighten their belts.
However, the headline effects of downturn mask some more complex value trade-offs that consumers are making, and will continue to make, as they manage their squeezed finances. Over the last 5 years, discounters (especially Lidl) have added branded goods to their shelves, reaching levels as high as 30% of the product assortment in UK stores (sourced from MVI research). So switching to these retailers need not mean buying different products. Are consumers trading down and buying lower quality, or are they simply looking for the same quality, even branded, products at a cheaper price? Paul Foley, UK Managing Director of Aldi, argues ‘there is no trading down in buying the same quality product. You are just trading down in price.’
In ‘Feeling the Pinch’, a piece of research that we did recently, we were able to dive deeper and unpick the different ways that consumers are managing their money differently. Using a factor analysis, we found eight themes of coping behaviour that consumers are likely to draw on over the coming year, from spending wisely to borrowing to cutting back to reducing ethical consumption. Obviously there’s far more detail in the 70-page report, but a couple of core findings stand out.
First, people’s initial response to downturn is to try to buy the same things cheaper rather than buying fewer or different things. After this they buy less or cut out treats or luxuries. Secondly, levels of anxiety about economic downturn are a strong predictor of consumer behaviour - the more anxious consumers are, the more likely they are to make specific changes to their consumption behaviour in order to save money. Measuring consumers’ anxiety levels about their economic position - and how they’re changing - is the best way to gauge how rapidly consumer behaviour is likely to change.
The ‘Feeling the Pinch’ report is available for £3,500+VAT. Tailored briefings, which explore the findings and their implications for individual companies’ strategies and brands, are available from £6,000+VAT. To find out more, please email ftp@hchlv.com.
Add comment 11 September 2008
Recession and sustainability
Courtesy of the Transition Island Blog
Andrew Curry writes:
We’ve been thinking quite a lot recently about the impact of recession on consumer behaviour, and I was asked by Radio 4’s Beyond Westminster to join a panel discussion about this, which is broadcast tomorrow (Saturday 9th - if you missed it, you can hear it on the website for another week).
The other panellists were Chris Leslie, of the New Local Government Network (and a former Labour MP), and Jeremy Leggett, who runs one of Britain’s largest solar energy companies, solarcentury, and also wrote a fine book, Half Gone, about the end of the oil economy.
It’s difficult to summarise the flavour of a fifteen minute discussion in a few lines, and I wouldn’t want to spoil the programme, but some themes seemed to emerge:
- The upwards shift in oil and energy prices is a step change not a blip (a Dutch energy consultancy recently estimated that the floor price for oil had reached $110/barrel).
- In the short term this is reducing car use, but hurting the poorest hardest, mostly through the cost of their domestic energy bills (the poorest tend not to own cars).
- In the longer term, however, the government has to make a choice between orchestrating a full-scale shift to renewable energy sources, or trying to muddle through with conventional energy (Leggett is a member of the group which wrote the recently published The Green New Deal, which linked energy innovation, climate change response, and financial reform).
- Shifting to renewables will take investment, which probably isn’t going to come from taxation but could - without going into the economic theory here - come from market incentives and from encouraging people to save more, which would be good for the long-term stability of the economy.
Some of the evidence suggests that people are ahead of the politicians here. But it will still take some political courage to act on this - a quality which seems sadly lacking from British politics at the moment.
Add comment 8 August 2008
Brand impressions
From Brand Tags
Giles Powdrill writes:
The new media and marketing strategist Noah Brier has recently launched a simple, but fascinating website, brandtags. Its premise is “that a brand exists entirely in people’s heads. Therefore, whatever it is they say a brand is, is what it is.” Users of the site are presented with logos from different companies and invited to type in the first thing that comes into their head. The results are then displayed as a cloud, where the relative size of the words reflects the number of times it has been typed in.
Whilst ostensibly a bit of fun, the results are both revealing and potentially unnerving for brand owners who have spent time, money and effort to convey a certain set of attributes, only to then see their brands assessed in such a raw (and realistic?) fashion.
The site is a great example of the sort of visual and engaging research application which will surely become more commonplace as we enter the next phase of web development. It is also a long way from the traditional questionnaire typically used to measure brand awareness and perceptions and a useful reminder that methodologies will evolve just as fast a brands do.
The picture at the top of the post is a selection from the brand tags generated in response to the ‘International Olympic Committee’. There are also some more sympathetic responses in the full list.
1 comment 17 July 2008
It’s the planet, stupid
Source: ICM/Guardian 2008
One of the more interesting pieces of data to be published this month was the result of a Guardian/ICM poll which showed that a majority of UK adults thought that it was more important to deal with environmental issues than the economy. Interesting, because the notion that people always turn back to financial self-interest when times are tight is so ingrained that my first thought was that the poll must be wrong.
But maybe not. Looking at the poll through the lens of our 2007 Green Consumer Segmentation (summary here), there are high degrees of consistency. The segmentation generated five segments: two small activist groups (about 8% of the population); a larger group, ‘Positive Choosers’, representing 31% of the population, who were informed about ethical and environmental issues, and expected companies and organisations to act on them; a fourth segment, the ‘Conveniently Conscious (35%), who are environmentally and ethically informed, but don’t tend to act unless choices are framed from them; and finally a group of Onlookers (26%), who are unaware or sceptical. The point is that the top three groups are all more likely to prefer that the government tackles environmental issues - and so is some of the fourth group. From this perspective, the 52% figure seems completely plausible.
There were also strong degrees of consonance between the ICM research and our findings. For example, both pieces of research find that young people and older people had the highest levels of environmental concern (with a sag in the age cohorts between), that women had slightly higher levels of concern than men, that there was a poor correlation between socio-economic class and environmental concern, and that there were relatively few differences between different regions of the UK. With one notable exception: in the South east, Britain’s richest region, 52% say the economy matters most, compared to only 38% of Scots, perhaps more evidence to undermine the widely held idea that environmental concerns are a product of affluence.
And as it happens, the Green Consumer Segmentation has just won an Atticus award from our parent company, WPP, for being one of the best pieces of work in the area of ‘Market Research and Insights’ across the whole group worldwide last year. The Atticus competition, named for the Cretan storyteller, is designed to encourage and promote new thinking across the company. We’re delighted, obviously.
Add comment 15 July 2008
