Sunday, July 26, 2009

Conceptual consumption

Rob Walker’s column in today’s New York Times Magazine uses the example of the retail chain “Lululemon” to expand on the concept “conceptual consumption” that Dan Ariely and Michael Norton recently coined as a new technical term. Lululemon is one of the brand examples where the actual product usage is going further and further away from its original core product benefit, in this case practicing Yoga in the appropriate clothes. Lululemon’s product are bought increasingly by consumers who have never done Yoga and who have no intention of every practicing, they are buying into a particular life style and attitude that the brand represents.

This notion is not a truly new concept. The whole SUV category lived for a long time on consumers who never really needed the functional benefits of a SUV but who wanted to be part of a particular life style, being the Hummer as its most extreme representation. Another good example is Nike’s extension of its running shoe usage beyond real running. Most Nike’s running shoes will never experience a speed of over 3mph, but they carry the emotional benefit of the “Just do it” potential.

But Dan Ariely and Michael Norton still have a relevant new idea that warrants attention. Their compelling distinction between physical and conceptual consumption reveals instances where consumers are willing to trade off negative physical consumption aspects with a higher perceived conceptual consumption. Most marketers heavily used distinction between rational and emotional benefits of a particular product or service does not seem to be necessarily wrong but Ariely’s work suggests a deeper understanding of consumer’s behavior. Any brand manager needs to realize that the rational and a large part of the emotional benefits of a brand remain on the physical level of consumption. Ariely and Norton demonstrate how our understanding of the interaction between physical and conceptual consumption are critical to understand consumer and a particular brand in their lives.

Lululemon is in the good position to provide comfortable and attractive clothing while offering a conceptual consumption aspect that ensures premium prices. The high price for a Hummer as part of its conceptual consumption worked only as long (despite all its clearly physical/functional deficits) as it was able to allow the consumer to experience its conceptual values. When the conceptual context and surplus of the Hummer brand started to disappear, its functional failures in non-war like situation became too apparent.

Behavioral economists like Ariely and their concepts will increasingly influence the field of marketing. We should be welcoming it.

Saturday, July 18, 2009

Marketing School of thoughts?

A few weeks of vacation in old Europe enabled to me to catch up with some non-marketing centric reading and thinking that was not solely driven by urgent client needs or very urgent New Business concepts. One thing that struck me as a result of my random reading behavior was the observation that so many disciplines have different “Schools” of thoughts, like in Design (e.g. Bauhaus), in psychology (e.g. the Freudian school), or in economics (e.g. the Chicago School). Additionally the visit to two outstanding exhibitions, the “Blaue Reiter” in Baden-Baden, Germany, and the amazing Van Gough landscape exhibition in Basel, Switzerland, strengthened this particular observation, since the group called “Blaue Reiter” had very specific beliefs and ideas, expressed in their famous manifesto “The Blue Rider Almanac” from 1911. Van Gough was drifting back and forth between different affiliations to various schools within expressionism before his mental state did not allow anymore for a constant commitment to a particular group or abstract concept of common beliefs.

Why is there a total lack of different “schools” in marketing, especially in the domain of marketing agencies and brand marketing departments? It seems that there are few reasons:

  • Marketing service provider are too scared on missing out on client opportunities if they would adhere too strict to a particular set of paradigms that could be read in a manifesto. It’s easier to chameleon like adjust to particular clients needs and tell them “I will be what you want me to be”
  • Brand marketers most often don’t have the intellectual freedom and time to pursue the development of a particular school. It’s too hard to write down, improve, and practice strong beliefs in today’s time of daily pressure and sales goals. The brand for which the marketer works is the hero, not a potential school of thought.
  • The academic community of marketers doesn’t seem to have the impact and influence of creating leading “School of thoughts” that people in the marketing practice would follow. It seems to be easier to work on more specialized topics, transformed into specific research papers, than defining a very broad point of view towards the marketing universe.

And still, I would not be surprised if we will see in the next five years a stronger effort of different groups, especially in the marketing agency and academic community to create a particular “school”, all with the goal of setting down principles and believes that can guide them and their followers. Today’s ever more complex marketing discourse screams for a holistic and simpler view of things, all expressed in a concise document. One needs a powerful Manifesto that generates strong following to create a “School of Marketing”. But the group “The Blue rider” has shown how a few strong personalities can create something permanent that is still considered a school almost hundred years after its creation.

Saturday, July 11, 2009


Please check out a brief article of mine that AdAge published this week: