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the last word : page 08

THE LAST WORD

By Professor Adrian Furnham Know your consumer. Understand their values, motives and needs. Get beneath their skin and really understand them. There are many ways to segment markets: geographically, demographically, economically, and psychologically. Psychographics started in the 1930s but was developed further in the 1960s and was an attempt to capture what was going on in consumers’ minds when they went shopping or sat watching television. It focused on individuals’ preferred activities, interests, opinions and values in order to gain an understanding of their lifestyles. Psychographics seeks to describe the motives, needs and self-concepts of consumers which have a direct bearing on their responses to products, packaging, advertising, even public relations efforts. The essential idea was to split the market into definable types which had different preferences and perceptions.

Psychological consumer profiling has two approaches: the general and the specific. The general is an attempt to “categorise” the population into known, distinct, lifestyle groups. But do these different groups consume differently? Indeed. Their consumption of products, the media, and participating in activities is closely related to their types. This categorisation has been revised and updated over time, and it has been challenged by new and improved systems with new questionnaires and fancy labels. In addition to general systems, many manufacturers and advertising specialists have tried to come up with product-specific psychological segmentation. Thus one manufacturer of prescription drugs found four groups: realists, authority seekers, sceptics and hypochondriacs. Some have attempted segmentation of larger consumer groups. One study conducted many years ago suggested that American women could be classified into Outgoing Optimists; Conscientiousness Vigilants; Apathetic Indifferents; Self-Indulgents; Contented Cows and Worriers all based on their values and lifestyles. Television audiences, supermarket customers, and those after luxury or specialist products such as cars and cameras have all been the target of enthusiastic profiling gurus. Early studies by companies were aimed at differentiation; what are the peculiar characteristics of people who choose this camera or car and are they

different from those who choose another brand? Do they see themselves differently? Do they use the product differently? All this encourages targeting the customer more closely.

thegrinder

issue six

Is psychological profiling a powerful tool to understand markets and inform consumers, or just another daft misapplication of psychology? Critics make a number of points. First, the unique groups overlap too much. Next, different studies and systems lead to different groupings – it’s more a case of imaginative labelling than marketing science. Third, do these profiles add anything to what the perceptive marketing person already knows? Is it not just another gimmick? If it is a gimmick, it has stood the test of time. Perhaps as a species we have been taught to think in categories and differentiate between groups. Journalists and lay people make classifications all the time. Frequently a hated out-group is lambasted in psychographic terminology: ‘Guardian-reading, tree-hugging, muesli-eaters’, or ‘selfish, Telegraphreading, planet-destroying, greed-isgood merchants’.

Professor Adrian Furnham on psychological consumer profiling Is this the end of celebrity endorsement?

I conclude therefore that it is true – there are patterns to people’s values, beliefs and purchases.

Avoiding communication faux pas around the world

thegrinder has made a donation to The Salvation Army in return for this article. The Salvation Army is one of the largest, most diverse providers of social services in the UK. www.salvationarmy.org.uk

Why PR agency networks don’t work

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If you have any comments on this edition of thegrinder, or any information you would like to contribute for future editions, we would like to hear from you. Please contact Natasha Earl on tel: +44 (0)20 8870 6777 or e-mail: grinder@saltlondon.com

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Mattel toys with consumers over global product recalls : page 07

thegrinder

MATTEL TOYS WITHOF CONSUMERS OVER GLOBAL PRODUCT RECALLS THE ADDED VALUE DOING GOOD

is full of straight-talking articles and opinion pieces which take a fresh look at the world of marketing and corporate communications, three times a year. This issue looks at why PR agency networks don’t work, how scientists may be the next celebs in product endorsement, how communication differs around the world, why companies need to put more thought into going green, and how Mattel handled concerns over the safety of their products.

Special thanks go to Professor Adrian Furnham for his insight into psychological consumer profiling. We hope you enjoy reading thegrinder. Your thoughts and contributions are welcome. thegrinder

WHY PR AGENCY NETWORKS WORK ON PAPER – BUT RARELY IN PRACTICE Large PR agencies have two distinct assets: their geographical networks and their wide selection of expertise. It’s a great offering to pitch to clients: we’ll develop a single, global strategy and deliver it seamlessly through all our offices. Can you see all the nice dots on the map? They’re our delivery machine. You needn’t worry about anything – leave it to us.

THE BEST STRATEGY IN THE WORLD IS MEANINGLESS IF IT ISN’T LANDED PROPERLY ON THE GROUND Sounds tempting, but the reality is often quite different. The office which wins the business (say, London) takes the lion’s share of the fee and strong-arms the offices in other countries to sign up to the role that’s been promised of them, at a fee designed to protect London’s P&L. As a result, the regional offices are not committed, put the cheapest resource against the brief, and the regional delivery

fails. At the same time, the local country client has an agency allocated to them, not one of their own choice - one more obstacle to them embracing the global strategy. The best strategy in the world is meaningless if it isn’t landed properly on the ground. The alternative model is for the global brand owner to work with a single, specialist agency partner. Working as an integral part of the central team, they develop the global PR strategy (without carrying the higher overhead of the global agency) with no group finance director mandate to sell the services of their partner offices in Mumbai or Manhattan. The central team – and the country client – then appoint local PR agencies based on their suitability for the programme and right culture fit. Result: delivery partners who are fit for purpose and who actually want the business. They are supported by the country client, who may very

well have identified them and be working with them already, because they are the right agency for their needs. Somewhat different from the formerly independent corporate PR firm in city X, acquired by the international network and transformed, in name only, to a one-stop PR shop ... and then handed consumer PR briefs which they are singularly ill-equipped to deliver. Using a specialist central agency and a selection of hand-picked local agencies is easy to do. Today’s technology (and engaging country marketers in the choice of their agency) makes it very simple to identify, recruit and monitor the best agencies in each market. The benefits will be seen from every perspective. The client gets the right global strategy, and motivated local agencies focused on flawless delivery of that strategy. It yields better results, quicker, and for less money.

“We were let down and so we let you down” said Mattel’s CEO, Robert Eckert in August 2007, referring to a series of global product recalls. Case study Mattel, one of the largest toy manufacturers in the world, issued five global toy recalls in 2007 over concerns about safety of the products. Situation Fisher Price was the first brand to announce a product recall. The company asked its customers to bring back over 1.5 million toys including Sesame Street’s Big Bird and Nickelodeon’s Dora the Explorer over fears that paint on the toys contained too much lead a health risk if ingested. The Chinese manufacturer had used a non-approved paint pigment. In the worst case, the lead found in the paint was 180 times the limit allowed. Concern mounted two weeks later when Mattel recalled 18.2 million magnetic toys worldwide - 1.9 million of which were sold in the UK - after a design flaw caused concerns over potentially-lethal loose magnets in the toys. A further three recalls were issued during the crucial sales period in the run up to Christmas.

Mattel has now increased the audits and testing of all its products, but negative media coverage has taken its toll: Mattel is now faced with declining market share, flat sales of its core toys, and parents boycotting its products. thegrinder opinion As one of the largest toy makers in the world, Mattel has a responsibility to produce products of the highest standard for children. Its toy recalls have sparked fresh debate over the safety of its products, but their biggest concern now is that consumer confidence in the company is dented and that their reputation is irretrievably damaged. Mattel has put a crisis PR strategy in place on a global and national scale. Customers were kept fully informed of all recalled toys. This involved setting-up dedicated help-lines, e-mail addresses and posting information on its website. Mattel’s CEO has been used in global media relations, and local representatives have been actively commenting on the situation in their respective countries. This ‘voice from the top’ approach emphasises how seriously the company is taking the situation.

To regain the trust of the world’s parents, Mattel will need to engage with, inform and reassure its stakeholders through carefully constructed messaging. Its voluntary recalls may have damaged the company’s reputation in the short term, but it may possibly save the company’s brand equity in the long term. Mattel is now implementing changes to its ways of working and has taken full responsibility for its mistakes. The main thing, is that the company’s conscience is clear – they acted swiftly and before any children were harmed. Mattel’s CEO, Robert Eckert, said: “The safety of children is our primary concern, and we are deeply apologetic to everyone affected. Mattel has rigorous procedures, and we will continue to be vigilant and unforgiving in enforcing quality and safety”.

TO REGAIN THE TRUST OF THE WORLD’S PARENTS, MATTEL WILL NEED TO ENGAGE WITH, INFORM AND REASSURE ITS STAKEHOLDERS THROUGH CAREFULLY CONSTRUCTED MESSAGING With Christmas - the toy industry’s busiest period - over, Mattel’s sales results will offer an indication of consumers’ perception of the company. It’s also a good time for Mattel to focus its attention on devising a strategy to re-build consumer trust in the brand.

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the cult of personality : page 03

it’s good to be green ... isn’t it? : page 06

IT’S GOOD TO BE GREEN … ISN’T IT?

THE CULT OF PERSONALITY

We should all recycle more. Government bodies and councils should provide more recycling facilities. Manufacturers should build easier recyclability into their products and packaging. Retailers should encourage their suppliers and their customers to recycle.

What should you do to get people to believe in your brand? Who should you attach to your product to develop credibility? And who is best placed to tell your brand story in a way consumers find compelling and attractive?

director. And this is where out-oftheir-depth celebrities often come unstuck, doing brands more harm than good.

Jamie Oliver and Sainsbury’s, Kate Moss and Rimmel, David Beckham and Armani, Police, Pepsi, Brylcreem … just about anything this latter-day Midas touches. As Hamish Pringle shows in Celebrity Sells, the peerless book on the subject: “… celebrities influence how we look, how we dress, where we live and, ultimately, our body shape”.

So who is best placed to deliver “the science bit”? To be compelling and credible, the science behind products must be clearly and simply expressed – simple but never simplistic, informative not patronising. This is where the expert comes in: a researcher or academic with the common touch, a mediafriendly nutritionist, biochemist or behavioural psychologist. Brands from sectors as diverse as food, cars, entertainment and beauty all successfully deploy experts to tell their brands’ backstory and so validate their points of view.

At the same time, we should all be doing what we can to improve conditions for workers in developing world countries. No more sweat shops, it’s Fairtrade all round. It is, of course, not so simple. Despite starting with the best intentions, many organisations have rushed to prove their green and social credentials and in doing so failed to think through the consequences of their actions. This has led to those same organisations suffering reputational damage. Take Tesco’s announcement that it was going to reduce its environmental impact by getting its suppliers to cut the emissions they cause in supplying their goods. It’s great news for the environment, but had anyone stopped to think about the impact on farmers and field workers in developing countries? Christian Aid had, and

so simply by axing overseas suppliers, where what's needed is help and support from rich world companies to help them to go green too.” What had started as a well-intentioned plan to reduce the company’s carbon footprint (and improve their reputation along the way) turned into a communication problem. Could Tesco have avoided this? Yes, by engaging all stakeholders in discussions about how to reduce their carbon footprint without causing unbalanced collateral damage. Many organisations caught-up in the rush to recycle are in danger of forgetting that recycling is often the third best option for the environment, behind not creating the product or packaging in the first place, and reusing it remember milk bottles? The recent rebirth of reusable shopping bags is a welcome move towards the greater re-use of existing products. The balance can tip the other way too. Tata, the increasingly global symbol of India’s growing corporate confidence has finally unveiled its much anticipated ‘People’s Car’. Selling for as little as 100,000 Rupees (£1,300), the

DESPITE STARTING WITH THE BEST INTENTIONS, MANY ORGANISATIONS HAVE RUSHED TO PROVE THEIR GREEN AND SOCIAL CREDENTIALS AND IN DOING SO FAILED TO THINK THROUGH THE CONSEQUENCES OF THEIR ACTIONS they responded by saying: “We are seeking assurances that the company will stick by its promises, but also ensure that it does not do

car’s marketers promise everything from increased social mobility and road safety (as drivers trade up from motorcycles), to greater rural

? employment and faster economic growth. This will bring social and developmental benefits to a further sub-group of the Indian population, and may be a factor in lifting people out of poverty. Its introduction, however, has raised cries of concern from environmentalists in India and across the globe. We challenge business to be more socially responsible, but then criticise them if their commitment to ban the use of cheap labour leads to factories closing, turning cheap labour to no labour in communities which need it the most. We also urge retailers to go green, then attack them for pulling the plug on developing world farmers. So what’s the answer? Genuine two-way, timely communication with all stakeholders can help avoid the pitfalls and identify the best solutions both for the planet and its people. Better information leads to better decision making. Sustained stakeholder communication creates support and limits the likelihood of attack. It’s not always easy, but it’s always necessary and the results benefit all, environmentally, ethically and economically.

For many products, sprinkling celebrity stardust on a brand is like giving it a leg-up to stand on the shoulders of giants. When the fit is good and the choice of channels is right, celebrity endorsement can be incredibly impactful.

FOR MANY PRODUCTS, SPRINKLING CELEBRITY STARDUST ON A BRAND IS LIKE GIVING IT A LEG-UP TO STAND ON THE SHOULDERS OF GIANTS

To steal competitive advantage and capture attention, products are getting more complicated. Science has always helped create and differentiate consumer goods – from TVs to margarine – but hard scientific innovation today provides many products’ most compelling reasons to believe. Consider the burgeoning nutraceutical food sector. Science is coming out of the shadows, as useful to the marketer as the research and development

Sense About Science runs a crusade against the worst abuses of science made by celebrities in the name of product endorsement. Each year, this brilliant educational charity issues reports exposing the pseudoscientific babble spouted by such A-list luminaries as Stella McCartney, Gwyneth Paltrow and Nicole Kidman.

If Andy Warhol’s future is here today – the one where everybody is famous for fifteen minutes – it’s increasingly the case of “Move over celebrity – let’s hear from someone who really knows what they’re talking about”.

Experts are both medium and message. Our attention doesn’t get distracted by our previous knowledge of and associations with the messenger. We quickly check out their credentials (“Are they the sort of person I would trust to deliver this kind of message?”) and then move on to hear what they have to say. WPP boss Sir Martin Sorrell has said: “Buying celebrity for a

MOVE OVER CELEBRITY – LET’S HEAR FROM SOMEONE WHO REALLY KNOWS WHAT THEY’RE TALKING ABOUT

brand may be an investment of incalculable future value – or, just as easily, an act of thoughtless extravagance.”

What the rise of the expert suggests is that not only may the celebrity route be unnecessarily risky and expensive, it may also be the wrong strategy to adopt for the long-term benefit of the brand, particularly in indirect forms of communications such as public relations. What it also suggests is that some experts – notably those in the less directly commercial world of academia – should seek help in establishing and exploiting their true market value, as many are now beginning to do.

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how to jet-set without creating an upset - communicating differences around the world : page 05

HOW TO JET-SET WITHOUT CREATING AN UPSET COMMUNICATING DIFFERENCES AROUND THE WORLD Actions speak louder than words. If your mouth is saying one thing and your body another, then it’s unlikely that your intended message is getting across. Nowhere is there greater room for confusion and mixed messages than in communication across international borders. Communicating with people around the world is an increasingly essential part of business today. And although the rise of technology such as email, teleconferences and webinars means there are many ways in which to talk across borders, many of us still travel

the world to meet colleagues and clients. Hundreds of millions of people travel internationally for business each year. When they step on the plane, boat, train, bus or in the car they leave behind a world they know and venture into a different culture of communication, with its own set of rules. Unbeknown to the jet-setting businessman, normal and familiar words, habits and actions may now be considered rude, impolite or improper. Crossing international borders can therefore lead to confusion, challenges, and ultimately mistakes.

What can our British jet-setter do to make sure his reception is a welcome one, and that he doesn’t alienate the people he travelled for hours to impress? It pays to spend some time finding out about the culture and business etiquette of the country you are visiting, and it will make you a more respectful and effective communicator. Below are four key areas where business communication differs significantly around the world – greetings, during a meeting, eating together and gift giving.

Introductions and greetings Making a good first impression often starts before you have had a chance to say anything. In England, being punctual and dressed conservatively is a good start. The English are well known for offering a hand to shake, but you should also expect to shake hands when visiting someone in the USA or Brazil for example, although Brazilians tend to go one step further and shake hands to say goodbye too. Greeting a business person in India isn’t limited to a handshake, it’s a more open and friendly affair and often includes a few questions about your family and background. This isn’t them being intrusive, it’s considered friendly. Compared to

many countries in the West, Indians have a lesser sense of privacy. While you might still be offered a hand to shake in China, it’s more likely you will be greeted with a bow or nod. Wait for the Chinese to offer their hand first, before offering yours. Chinese greetings are formal and introductions include formal titles and position - most Chinese people have a Western name which they will give. In a meeting So you managed not to offend too badly in the half hour it took to arrive at your meeting room, but there is still a lot of business etiquette to be aware of. Privacy is important to us Brits, so asking personal questions or staring at us is generally a no-no, and loud talking and disruptive behaviour should be avoided. We also like our personal space, and are often uncomfortable by the more open displays of affection shown by the mainland Europeans. But do other nationalities share our sense of privacy and reserve? Chinese business people are also reserved. Unlike Italians, the Chinese do not speak with their hands and so large hand movements are likely to distract your host. Pointing is allowed, but use an open palm rather than an index finger. Personal contact should generally be avoided - it’s considered highly inappropriate for a man to touch a woman in public. When exchanging business cards in China, ensure you present and receive the cards with thumb and forefinger of both hands.

Most Indians enjoy good conversation on a variety of topics. Even in business meetings, it is common to start discussions with 'small talk' on other unrelated issues as a way of building rapport and trust. Conversation in India is as much an exchange of views as it is a mode of building and strengthening relationships, so complimenting and showing appreciation are quite normal. Indians seldom express their disagreement in a direct manner; open disagreement is likely to be interpreted as being hostile and aggressive and is only openly expressed with those they have a trusting relationship. On the other hand, Brazilians enjoy loud, informal, animated conversation and enjoy interruptions when talking. They have several non verbal ways of communicating such as flicking their fingertips underneath the chin to indicate that they don’t know the answer to a question. Eating together Although business lunches in England will often be held in a pub or informal restaurant, the conversation usually stays polite and conservative, with a mix of discussion about business matters and some basic exchanges of personal information. The approach in the USA is to use a lunch as an excuse to get to know one another on a more personal level; it’s treated as a rare social occasion in which to get to know one another.

Eating together in China is much more regulated and sharing a meal can be full of potential areas to offend. It’s improper to start eating or drinking before the host, and conversation - whether work related or on personal issues should be led by the most senior person in the team. Although it’s polite in China to taste all the dishes you are offered, you should always leave some of your meal. If you eat all of your meal, it looks like you weren’t given enough food and are still hungry. It’s even possible to run into potential problems when you think you are being your most polite. Saying "thank you" for your meal is considered a form of payment in India and is therefore insulting. Gift giving In general, it’s better to take a client or colleague to lunch or dinner and socialise with them rather than give expensive gifts, as this is seen as inappropriate in many cultures. If you must give a gift, it’s more acceptable to give gifts to someone in private, or to a group as a whole. While in England it’s seen as a bonus, or perk of the job, the giving of gifts is discouraged or limited by many companies around the world. In China - clocks, handkerchiefs, or anything white, blue or black is associated with death and should not be given. Whether it is differences over giving gifts, who should be speaking at mealtime or whether to bow or shake a hand, there are many different ways of communicating around the world.

WHAT CAN OUR BRITISH JETSETTER DO TO MAKE SURE HIS RECEPTION IS A WELCOME ONE, AND THAT HE DOESN’T ALIENATE THE PEOPLE HE TRAVELLED FOR HOURS TO IMPRESS? With all the potential areas to go wrong, it’s surprising that there is such a thing as successful crosscultural relations. Wherever our jet-setter visits in the world and whomever he is meeting with, it will be noted and appreciated if he has done some research into the business etiquette of the host nation and is doing his best to adhere to it. One question remains; when people from two or three countries convene on neutral soil for a meeting, which national rules apply? Should you greet with a kiss on the cheek like the Italians, bow to be agreeable to the Chinese, or offer a handshake to preserve the embarrassment of the English? Possibly a mix of all three – what an interesting sight of kissing, bowing and shaking that would be.

WHEREVER YOU GO IN THE WORLD IT WILL BE NOTED AND APPRECIATED THAT YOU HAVE RESEARCHED YOUR HOST NATION, AND ARE DOING YOUR BEST TO ADHERE TO THEIR BUSINESS ETIQUETTE

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the grinder (issue3)  

a quarterly publication from salt pr, covering industry specific and general communications issues

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