Buy n Large: Your Friend, and Your Leader

BnL is a company that sells everything and anything

…but it’s not just any company, it’s also the leader of world government.

(or at least it is in the Wall-e (Pixar) universe)

This is quite an interesting scenario, and something that actually seems relatively familiar to us in our world of consumerism and multinational supermarket chains, in which everything one needs can be purchased/ordered/delivered/ to anywhere on the planet

How many times have we implicitly been told this?

The reality is, that we have many ‘BnL’s in the marketplace, offering us everything we could ever need, under many different names, brands, and companies.

One of the obvious examples of this are the big players such as Unilever, Mars, P&G, Pepsico, and Coco Cola. These companies own vast swathes of the products we all know and repeatedly buy, and we often don’t consider the ‘bigger picture’ of who owns the companies that own the products.

The web of companies that make up the consumer universe.

Often these mega companies don’t significantly advertise their involvement in the brands they own, for fear of backlashes for owning brands with conflicting ideologies (such as the Lynx/Axe – Dove relationship). Or perhaps they’re worried people won’t like the idea of superbrands owning everything…

However, when they do acknowledge themselves as owners of their products, it’s known as umbrella branding.

Umbrella branding allows companies to extend product and brand lines, whilst still being able to use their name in order to allow consumers to make inferences about the new products based on their views of the larger ‘umbrella’ brand (Hakenes & Peitz, 2008). For companies, this reduces the overal costs of bringing out new products.

Take a company such as Virgin, if you had gained experience of the Virgin voyager train service, would that influence your perception of their Virgin atlantic service if you had never used it?

Hakenes and Peitz, (2008) further investigated how product quality is influenced by umbrella branding. They found that umbrella branding did demonstrate an effect on how novel products were perceived when put under the umbrella of another brand. It was even found that products that were viewed positively under the umbrella, could be viewed negatively without it.

The USA in association with Exxonmobil perhaps?

Arguably, even supermarkets are setting themselves up as mega brands, offering everything one needs as well as their standard groceries. If I pop to Tesco online, not only can I pick up a pint of milk, but also: insure my cat, purchase a DSLR camera, set up a mobile phone contract, buy a t-shirt, and even take out a mortgage for my house. Laforet (2007) further investigated how customers perceived supermarket brand extensions in relation to finance. It was found that within three different retailers, the financial services were seen as trusted, in relation to the overal brand of the retailer. This could further demonstrate that if the overal brand of a company can appear trustworthy (this includes the risk of purchasing for the consumer), then they can extend their brand to nearly any other product or service.

This suggests that the mega brands, could only grow bigger, either through umbrella branding, or under the guise of other companies the mega brands own.

So when the world has run out of resources, the sky has been scarred from pollution, and humanity has finished it’s final stand, will it be a Unilever spacecraft that we board to take us away and save us? A P&G teleportation device to deliver us to safety?  Or perhaps we will pop over to the planet Mars brought to you by Mars©. All of them still brimming with all the consumerism we could ever need to entertain and nourish us.

I think I’ve just managed to frighten myself.

GoPro Cameras (In association with Red Bull (In association with GoPro Cameras (In association with Red Bull )))

There have been plenty of blogs that have analysed Red Bull’s marketing strategy. However, in this blog, I’m going to anaylse how they associate themselves with a new, up and coming camera brand:

The GoPro camera system.

(For those who don’t know, GoPro cameras are famed for their ruggedness, making them ideal for extreme sports and the outdoors.)

Now these two companies have never explicitly said they are linked, however, nearly all recent Red Bull marketing material was shot (in part) with these GoPro cameras…..

….and conversely, a lot of GoPro advertising has featured Red Bull-sponsored extreme sports personalities and various objects featuring the now famous Red Bull branding.

To illustrate my point, here are 2 ads, one’s GoPro, one’s Red Bull.

Both brands have utilised each other’s brand strengths in order to sell their products.

This is an example of Co-branding.

Co-branding allows companies to utilise each others brand attributes in order to market their product. However, co-branding can be used for a variety of reasons.

So for the example of GoPro, by featuring Red Bull in their advertising, they are demonstrating their links with the extreme sports scene (in which Red Bull is a major sponsor), and that their brand values, relate in some way to those of Red Bull. This is sometimes referred to as a spill-over effect (Erevelles, et al. 2008). Co-branding is especially beneficial for newer brands entering the markets, since this not only helps to strengthen the brand, but also to increase the attractiveness of it.

In the context of Red Bull’s use of GoPro cameras, the GoPro brand could be seen as an example of ingredient co-branding. This refers to the use of a brand within the production of another brand. Whilst cameras are obviously not used in the production of energy drinks, they do have a huge role to play in the production of the Red Bull brand through their marketing and advertising. This further demonstrates the beneficial role co-branding plays in the marketing environment.

This baby even shoots in 3D.

Rao, et al. (1999) demonstrated that the use of co-branding can influence consumers’ perceptions of a brand for which a consumer has no previous experience with, which may elude to GoPro’s recent rise to fame within the photographic and extreme sports worlds.

Since rugged cameras are a relatively niche market, many people may have qualms with the quality of this new-fangled camera entering the market. However, research by McCarthy and Norris (1999) demonstrated that even perceptions of quality can increase depending on the ‘host brand’ of another brand. The perceived quality of low-quality brands could be significantly increased if the host brand was of a higher quality. This possibly suggests that the perceived quality of the camera is increased, simply because it is paired with the ‘super-brand’ Red Bull.

All of this demonstrates how this relatively small, yet fast-growing camera company has now become one of the biggest names in extreme photography, as well as in extreme sports. Through pairing itself with one of the largest sponsors of extreme sports, its quality, values and brand knowledge have been substantially strengthened and increased.

Ain’t no party like an ASDA party.

People queuing in the rain for anything suggests that there must be something worth waiting for.

But when it’s the opening of a new ASDA store…you can’t help but think it’s a strange thing to get excited for.

Despite the rain, the atmosphere was quite upbeat. About a hundred people, huddling under free ASDA umbrellas provided by the store staff, a male voice choir warming up, school kids preparing to cut the ribbon, free food samples, and a photographer capturing the event, all for the grand opening of this relatively standard super market.

This type of euphoric atmosphere seems to be quite common in store openings, none more so than in the opening of apple stores. This builds anticipation, which has been shown to increase memory formation (Machiewicz, Sarinopoulos, Cleven & Nitschke, 2006). This makes the event memorable, thus helping the ASDA brand become more memorable. If a photographer is papping you in the queue, and as you enter the store like on a rollercoaster ride, then people are going to get excited.

ASDA want to play a lead role in their local community, and this new store in Bangor is nothing different. The store has done well to brand itself as a very Welsh ASDA. Slate adorns the outside of the building (somethings that’s very related to North Wales culture). A male voice choir was present at the opening ceremony (which again has deep roots in Welsh culture). The kids from the local school cutting the ribbon, again shows ASDA are trying to be part of the local community.

May I just remind you that Walmart (owner of ASDA) is the third biggest company IN THE WORLD.

 These guys are far from your ‘local’ supermarket.

Then there’s the charity scheme (pioneered by Waitrose) where customers can choose (via the use of a green token) which local charity they want to support. This further helps ASDA to brand  itself as part of the local community, despite the fact it’s been here for (at the time of writing) only 1 full day.

Another thing the store utilised was having their manager and other senior stuff at the door to greet people with a warm welcome from the cold, wet outdoors. This has been shown to have a significant effect on how consumers perceive a shopping environment (Peritz, 1993). Generally the more positive the reception and perceived likability of the salesperson (such as warmth and dynamicness), the more positive the shopping experience (Lemmink & Mattson 1998). Research by Brown and Sulzer-Azaroff (1994) also found that if shop assistants greeted and smiled at customers within the first three seconds of contact, the rate of customer satisfaction increased. In the case of the Bangor ASDA opening event, it was the store manager rather than just an ordinary staff member that greeted prospective customers, which could suggest this effect was more amplified since she was of a senior role.

The free food samples given at the door perhaps provided reward for going to the opening event (it’s worth mentioning that most of the free food was sweet, such as waffles, pancakes, and strawberries and cream). Lammers (1991) found that when customers were given free samples of chocolate, the sales of chocolate significantly increased.

We were even given maps upon entering the store to aid searching whilst attempting to purchase.

However, I think one of the cleverest marketing tools ASDA used was actually due to the rain. The free umbrellas were a stroke of genius. Not only were they allowing the waiting masses of people to wait even longer, they also provided free advertising for the supermarket. I myself was guilty of this, walking home in the rain, I put up the umbrella as I walked down the main road. I’m willing to bet a few of cars that drove past me saw the ASDA logo (or at least the green and white colour scheme) and may have considered popping in.

Hundreds of umbrellas were given out.

Meaning the rain actually allowed them to spread the advertising out across the city even more so than if it had been a gorgeous sunny day!

What a way to say: WE’RE OPEN!

Postscript:

On a side note, if you go to the egg section, they have 2 chickens, that cluck at the touch of a button. Not something I’ve ever seen before! Conveniently  the button is at “child height”, possibly there to encourage kids to drag their parents over to the egg section so they see the chickens, and also so the parents replenish their eggs (seeing as eggs are a regular purchase for most families).

I couldn’t see this working in the meat section!

Refreshing Sweat, Addictive Carmex, and the Power of Cravings.

Cravings are a huge influence when it comes to consumer’s decision making processes, and it’s something that marketers can easily tap into to try influence our purchase (and repurchase) of things we didn’t necessarily need.

Amongst the wide spectrum of consumers, you will often come across those who have a complete addiction to certain products or brands, from the Coke vs Pepsi fiends, to the creatives and their addiction to Apple products. All of these addictions can be a mix of the psychological (Brand loyalty of Tesco supermarkets) and the physical (salty and sugary McDonalds burgers) aspects of addiction .

According to Lindstrom (2012), these shopping ‘addicts’ go through two stages through which addictions to products and brands can form.

• The first is described as a ‘Routine stage’. This is created for the brands we use in a routine, such as soap, toothpaste, washing up liquid etc.
• The second stage is called the ‘Dream stage’, which occurs as a result of the items we buy for ourselves that we don’t necessarily need, such as perfume, ipods, dvds etc.

These ‘addictions’ are driven by consumer’s ‘cravings’, which can often be linked to physical or emotional cues within an environment (Lindstrom, 2012).

One example of a physical cue to induce a craving is often used by drinks companies within their advertising and sales, and it’s something that seems to apply to any drink which should be drunk cold.

Sweat.

This is a term used to describe the condensation that adorns drinks from Coors light bottles to Coke cans to Beer glasses. This ‘Sweat’ in beverage advertising is used to demonstrate that their drink isn’t just cold, it’s beyond freezing.

This sweat is even used in your local pub to influence you to crave that sweet, cold refreshing beer.

Go have a look, any beer denoting that it’s “Extra cold” will have a pump covered in droplets water to increase your craving.

Soft drinks companies have even experimented with the sounds their drinks make, and how this can induce cravings.

Everyone can imagine the sound of their favourite can of drink, as they pull the tag, and the familiar “tssssh” sound as the air escapes. The signal of anticipation for that first sip of that sugary hit.

This sound isn’t due to pure chance, marketers have even manipulated the cans, and even researched the effects of different sounds on the human brain in fMRI scanners, in order to find that perfect fizz to make you crave their product. Lindstrom (2012) even claims that one company would see sales of their drink increase whenever this perfect “fsssttt” sound was played at major sporting events, often with consumers “suddenly choosing” that particular beverage over another.

Sometimes drinks companies can take the term ‘brand addiction’ a little too literally. In Germany,  Bell (2009) found traces of cocaine within Red Bull, which led to a series of states to ban the product. Not even these guys have considered it! However, when it comes to Red Bull, it’s more likely the six/seven teaspoons (27g in a 175ml can) of sugar that it contains, is what keeps consumers hooked to their energy drink (Sugarstacks, 2012).

But it’s not just the drinks industry resorting to physical addictions…have you ever considered your use of lip balm?

How many times do you apply the stuff in one day?

5?

7?

10?

Have you ever considered that you might be over using it?

This even exists in the real world: http://www.lipbalmanonymous.com/

It’s been suggested that menthol lip balms can create addictions in the consumers that use them (Ellis-Christensen, 2011). The use of preservatives, colourings and fragrances in the lip balm can even irritate the lips, and the use of carbolic acid and phenol can apparently even dry out lips (Lindstrom, 2012), prompting the use of yet more lip balm.

Lindstrom (2012) also discusses the use of acids with the lip balm brand Carmex during the late 1990’s. The balm actually contained phenol and salicylic acid, which is used on wart and calluses etc in order to exfoliate the skin. In the words of Lindstrom (2012), “Carmex was ‘exfoliating’ the surface of consumer’s lips…effectively eating away at the living tissue”. This obviously made people apply more and more of the balm to moisten their dry lips, ultimately leading to more repurchases, and more and more dry lips.

…which is a little scary.

So next time you buy a product, and somebody asks you why.

If you respond with “I don’t really know”

Chances are the marketers have subtly tapped into your inner cravings.

The Evil Empires Hijack Christmas.

So this is something that I’ve tried to overlook every year because I find it slightly crazy how much people can love an advert, and how much it can mean for them.

I am of course, talking about the Coca-Cola Christmas advert.

Here’s the classic ad:

Remember Olympic Coca-Cola?

Everyone was summery, happy, enjoying being outside, exercising.

Now it’s Christmas/Winter Coca-Cola.

How can Coca-Cola not only hijack your Christmas and your summer, but also manage to create an advert that has people euphorically discussing it the moment it comes on the telly, and (apparently) also signals the start of the Christmas period? (For those of you like me who don’t like the Xfactor, it was shown earlier this week during the show’s advert break)

To illustrate their involvement in Christmas, did you know that it was Coca Cola that popularised the red and white Father Christmas colour scheme?

… whilst red Santa existed, he had no fixed colour before Coke’s advertising.

Something Coca-Cola acknowledge on their website

Let me just remind you Coca-Cola is a cold, soft-drink.

Something you’d, perhaps, normally associate with summer.

Yet I’d like to make a small bet, that when you think of Santa (and therefore in some ways Christmas) Coke would be one of the things you’d probably associate him with.

It’s marketing genius.

Because let’s be honest, without the brand association with Santa, Coke has virtually NOTHING to do with Christmas.

The Coca Cola Christmas campaign began as early as 1931, whereby they cleverly hijacked one of the many Father Christmas colour schemes: The red and white Santa, and in doing so cemented their brand colours into the heart of Christmas. Ever since then, Coke has retained Santa as their figurehead, and kept using the association, reinforcing the link with xmas for nearly 70 Christmases, making Coke’s Christmas advertising a holiday standard across the generations.

Interestingly, the company often uses the original stylised Santa Claus used in their 1930’s advertising on most of their packaging and adverts. This is presumably used in order to evoke a nostalgic feeling within consumers across all ages (Mikkelson, 2008). This allows parents, grandparents and kids to reminisce and share the Coca-Cola xmas experience. Nostalgia that evokes warmth, happiness and joy are often the most effective (Holak & Havlena, 1998), which coincidentally are also common feelings associated with Christmas, possibly eluding to the success of Coca-Cola’s xmas advertising.

This success could be in part due to the fact Father Christmas has no ties to any religion, culture, or time period. Making him perfect to be utilised by marketeers, since people are unlikely to be offended by the use of the lovable face of consumer Christmas. I mean, would you be offended if Cadbury associated with the Easter Bunny?

This created one of the most famous brand associations in the world, which in my opinion, could only be trumped by somehow associating God or Jesus with a product.

With regards to the Coco-cola advert signalling the start of the Christmas period, I could not find any mention of where this tradition might have come from…possibly suggesting it’s simply a consumer tradition (though knowing Coca-Cola, it was possibly nudged from their marketing department, and something they are now using to their advantage.)

The company has built on this by creating a hype about their drink on the build up to Christmas using the now iconic lorries featured from the advert. The Coca-Cola Christmas truck tour, now travels around the country spreading the “Holidays are coming” message. As well as running a “recognise local heroes” campaign to help put a positive spin on their Christmas brand image. This helps to create a buzz leading up to the inevitable advert, coupled with social networking and packaging changes (which feature the nostalgic Coke Santa), (Dean, 2010).

Out of interest, do you buy Coke around Christmas? As much as I see the association, It doesn’t specifically make me want to buy the product.

Do you feel Coke has hijacked your consumer year with it’s brand associations?

Coke have been successfully associating Santa (ergo Xmas) with Coke for nearly 70 years now, using nostalgia, and brand association to extreme effect. This has meant members of nearly every generation alive today have possibly been exposed to their advertising. This suggests that this association is something that will stay engrained in consumer’s minds for many years to come, with one of the biggest consumer superbrands being associated with the biggest consumer holiday of the year.

Let’s hope our kids don’t have their presents delivered by Father ChristmasTM in association with Coca-Cola.

At least Pepsi has a sense of humour about it:

Pity, Guilt, Sympathy and Shock.

Consumer psychology is held (by some) as the evil arm of psychology. The allegations of manipulation and deception by the big corporations in the name of money, has given consumer psych quite a negative image.

However….

There is one area consumer psychology is helping*.

Charity.

*this ‘helping’ still involves essentially getting consumers to part with their cash, but rather than it going into people’s pockets, it’s doing something to help (hopefully).

If a charity wants to be successful, it needs to run itself like a business. Despite the local charity shop’s innocent image, the big charities like Oxfam and the British Heart foundation are real hardcore businesses.

Nearly £11 billion was donated to charity last year , below shows the number (millions) of people that donated to particular charitable sectors:

• Medical 11.1 (38%)
• Hospitals 7.7 (26%)
• Children 7.2 (24%)
• Overseas 5.0 (17%)
• Other causes 4.4 (15%)
• Animals 4.3 (14%)
• Religious 3.8 (13%)
• Disabled 3.3 (11%)
• Homeless 2.6 (9%)
• Elderly 2.3 (8%)
• Health 2.2 (7%)
• Schools 2.0 (7%)
• Environment 1.6 (6%)
• Sports 1.0 (3%)
• Arts 0.4 (1%)

(UK Giving, 2011)

However, despite all this, it’s still a challenge to get people to part with their hard earned money. Charities obviously encourage donations through their advertising, and surprisingly a lot of research has explored how different types of charitable advertising effects donation behaviour.

The most appealing charity ads employ emotive words, vivid images, emotional connections, and persuasive statistical evidence (Chang & Lee, 2009).  Burt and Strongman (2005) investigated how these emotions in advertising could increase donation behaviour.

Across four experiments, they varied the precesnce of adults and children within the advert, as well as manipulating the overall emotion displayed within the advert, so as to determine how this changed peoples willingness to donate. It was found that that negative emotions increased the monetary value of the donation the most. It was also shown, that the presence of children also increased the level of donation, since it created a higher level of emotional engagement with the advert.

Some of the most effective negative emotions within charitable advertising have found to be the  feelings of guilt, sympathy and pity, where it has been shown that these emotions are extremely effective at increasing commitment to donating, (Earys & Ellis, 1990).

It’s amazing how powerful the effect of these emotions can be: 

However sometimes these emotionally provocative ads can push the boundary to far. Charities are now increasingly relying on these negative emotions to engage attention, often relying on the ‘shock factor’. Shocking stimuli attracts attention, and will often encourage additional information processing, which allows them to be more easily retained in memory (Manchanda, Dahl & Frankenberger, 2002). Shocking ads often use the breaking of social norms to attract people’s attention, which has proven to be very successful (Manchanda, Dahl & Frankenberger, 2012). If you want to change an individual’s donation behaviour, you need them to actually remember to do it, which makes this tactic a very successful advertising tool.

Whilst donations may rise as a result of these adverts, the effect can actually be negative towards the brand, as was the case with this barnados ad, which was eventually banned by the ASA in 2003 (I’ve put them as a link so you don’t have to view them if you don’t want to):

http://www.barnardos.org.uk/2003cockroach.jpg

http://c0033089.cdn2.cloudfiles.rackspacecloud.com/2003/novemberjpgs/meth.jpg

This advert by the NSPCC was also deemed shocking, and received over 800 complaints.

Do you feel this encourages you to donate? Does it grab your attention? or does it simply shock you?

Apologies if all these adverts have left you feeling a bit depressed, here’s a shocking ad that might cheer you guys up:

I can’t believe it’s not I can’t believe it’s not butter!

So at the risk of doing another blog about Aldi, today I’ll be writing about copy-cat branding, and how it effects consumer decision making in supermarkets, and if it really works at all.

Firstly, I want to make the distinction between copy-cat branding and simply ‘fake’ brands.

This is a fake brand, and this is a copy-cat brand. I will be analysing the latter, since these are what tend to appear on our mainstream supermarket shelves.

In the US, Scott-Morton and Zettelmeyer (2004) found that nearly half of all the brands they surveyed on supermarket shelves mimicked brand leaders in colour, size and shape.

CC branding can either mimic the appearance of a product, such as the green colour of fairy liquid, or the theme of a product, such as copying the use of slogans or brand message (Horen & Pieters, 2012). These products are often sold at a much lower price than the brand leaders, in order to entice consumers further.

Aldi is obviously a huge perpetrator of copy-cat branding (see below for examples). In many ways, Aldi’s brand IS copycat branding, since it’s become so synonymous with the store, and it seems to be working for them ok.

These are some terrible examples of fake products copying brand names :

CC branding even extends into the sales of cars, especially overseas in China:

Consumers are getting the feeling they are being duped into buying these brands. With 1 in 3 consumers admitting to accidently buying the wrong product (British Brands Group, 2009). Horen and Pieters, (2012) found that, consumers general view of CC bands were negative, often viewing these brands as unfair and unacceptable. Participants believed the imitation of a product to be deceiving, to the point where there was a visible reactance to copying their much loved brands.

Kapferer (1995) investigated how these brands can be confusing, and found that CC brands create a real confusion for shoppers. To support this, the British Brands Group conducted a survey into CC brands, and found that nearly 65% of consumers were confused by these brands. With some of these being the most confusing:

So why is this method of branding so popular?

By imitating brand leaders, these cheaper products can free-ride on the product leader’s brand recognition (Horen & Pieters, 2012). Kapferer (1995) calls this “a halo of resemblance, on the basis of which consumers may make inferences and attributions of similarity of use, of content, if not of origin”. This means that when you see the colours of Coke on a similar can of fluid (product X), you’re more likely to associate the values of coke, with product X.

The nature of accidental purchases through confusion will also generate sales of the CC branded products, which again makes them a very successful marketing tool, and one that is being used more and more by supermarkets. According to the British Brand Group (2009), this is aided by the use of repeat purchases, whereby consumers will often engage in a ‘semi-automatic’ purchase mode, which can often lead to mistakes in purchasing look-a-like items. It appears young adults are most at risk, with 54% of 16- 24 year olds making mistakes (British Brand Group, 2009).

Here’s a great news article for those interested: http://www.marketingweek.co.uk/trends/what-you-see-is-not-always-what-you-get/4002432.article

The nature of mimicking well known brands is risky business, with many high profile copyright cases, such as the sainsbury’s own brand cola  case, whereby Sainsbury’s cola cans were deemed to be too similar to Coke Cola’s copyrighted cans.

This risk-taking demonstrates that the rewards of CC branding and marketing must be worth taking the chance if British supermarkets are willing to sneak around the megabrands of the US and beyond.

In recent years, there has been a recent 60% rise in the use of CC branded products by UK supermarkets!

How does it make you feel that these companies are relying on your inattentiveness to trick you into buying their brands?

Do you feel deceived?

STOP NUDGING ME: Governmental Nudges on the British public and beyond.

A classic Nudge

The government is changing you for the better whether you like it or not

…and the chances are you’re not even aware of it.

For those of you who are unfamiliar with the concept of ‘Nudge’, it encompasses the idea that an individual’s behaviour can be changed (often without them knowing) via the use of ‘nudge’ in the form of a simple stimulus (Thaler & Sunstein, 2009). A classic example of a ‘nudge’ would be to increase children’s intake of healthy food in school meals, by placing healthier foods at eye level (Thaler & Sunstein, 2009), or to illuminate the healthier foods with more light (Wansink, 2010).

The Nudge Bible

One nudge you Welsh residents may be familiar with, is the 5p fee on carrier bags.

Here’s another good example

And Here.

Now, the ability to change an individual’s behaviour with a nudge is a subtle yet powerful tool, and one that the current UK government is using on the British Public to great effect.

This wing was set up by David Cameron’s cabinet office in July 2010 under the name: The Behavioural Insights Team by a Psychology graduate David Halpern, who claimed that BIT could save the government millions of pounds, through comparably VERY low cost nudges.

In the words of BIT “the Coalition Government’s intention is to find ways of encouraging, supporting and enabling people to make better choices for themselves”

And personally, I’m all for it.

…I think.

But should the government be interfering with people’s free will, even if it is for good?

Currently, the areas that the team have focussed on are:

• Fraud, Error and Debt
• Energy Efficiency
• Consumer Affairs
• Health
• Test, Learn and Adapt

With these interventions, BIT aims to save £300million over the next 5 years simply with the use of Nudge.

Here’s a few examples:

Test, learn and adapt essentially refers to the use of BIT’s randomised controlled trials (RCT) to test how effective their interventions are. Whilst this seems nothing new, BIT claim their RCTs to be very successful  and that their how-to guide on RCT is there most downloaded document (as of September 2012).

BIT’s Fraud error and depth policy will lead to an estimated £70million worth of savings per annum. One example of their nudges is the sending of personalised text messages to individuals who owe fines. BIT found that in trials, texts were SIX times more successful than warning letters, saving nearly £30million pounds, 150’000 baliff interventions, and all for the price of simple text (Cabinet office, 2012).

When it comes to energy efficiency, (amongst other things) the unit has found that by offering free loft clearances, they can increase loft insulation purchases four-fold, simply by appealing to the lazy consumer, who can’t be bothered with he hassle of cleaning their loft, (Cabinet office, 2011)

By all accounts, many people in government believe nudge methods too good to be true.

Low cost.

Low risk.

Huge savings.

In a recession. 

But the governmental evidence (and outside research) is stacking up, and as a result, the UK is now at the forefront of using Nudge in government initiatives, to the point where the Behavioural insights team are even being enlisted by the Australian government to aid in policies in New South Wales.

Despite all the good Nudge can bring, how does it make you feel that the government has this very subtle power?

Here I presented only a brief introduction to some of the nudges BIT is involved in, if you want to find out more, check out the website.

Aldi: A Force of Good Against the Evil Empires

I’ve been sitting here for a while now, trying to come up with a topic for this blog, with only one thing on my mind. “When can I stop thinking and have some lunch?” Now I’ve got some choices, either head up the hill to Morrisons, which provides lots of choice at a competitive price.  Maybe head over to Poundland for a cheap sandwich of dubious quality. However there is a much better choice lurking in Bangor, a supermarket which has been voted Britain’s BEST supermarket…which may be a surprise to some of you, to be a German supermarket chain by the name of…

Aldi

(Touch me)

Who as of June 2012, own 2.8% of the UK market share, (TNS global, 2012), and is the 9th largest grocery chain in Europe.

As a student, cost is everything. This not only includes price, offers and discounts, but also the time and effort it takes to go shopping. Students have a reputation for being lazy after all…

With the help of consumer psychology and behavioural economics, supermarkets have perfected the art of ‘aiding’ consumers with their purchases. It’s the inevitable scenario; all you need is milk.

You head into your local shop.

Twenty minutes later, you’re leaving with a carrier bag filled with a haddock, some Red Leicester cheese, a bag of pork scratchings, a trashy magazine, and a pack of gum.

Now after a while, this becomes rather frustrating. You’re being sucked in by the evil empires (cue the music), and part of you knows it. You’ve spent more money, time and effort shopping than previously planned.

Aldi has a different approach. In the most stereotypically German way, they are beyond efficient. Aldi want you in their supermarket, spending your money, and out again, as quickly as possible. This means more customers going through their tills, bringing in more profit for the company.

Some of the ways in which they do this include:

• They only have approximately five staff working in their shops at any one time.
• Their cashiers are the Olympic scanners of the supermarket world (heaven forbid if you can’t sweep your newly bought possessions into the trolley fast enough).
• They even position bar codes on their products which make them quicker to scan.
• The layout of their buildings don’t involve pesky aisles. Instead you have below eye-level aisles in the centre, with refrigerated items stacked around the edges, to make it easy to spot your milk from half way across the store.
• No outside brands, means no outside vouchers. So no fussing at the till.
• HUGE conveyor-belts on their tills to maximise the amount of people per checkout.

The supermarket may look uninteresting, but it’s deliberate. Aldi = efficiency, and believe it or not, it actually helps the consumer to.

In most cases, Aldi offers you just ONE choice. Where in most supermarkets you have to make a choice between 10 different types of baked beans, in Aldi you have just ONE brand to choose from…their own, which also look borderline identical to the brand leaders of that specific product. Some might say this choice is limiting, but it actually makes your shopping experience comparably stress free and speedy. This therefore decreases the cost to the individual, compared to the average consumer decision making process, perhaps making them more likely to return again. The use of own brands also allows the company to increase their own profit margins (Ailawadi, 2001). (Here’s a great link about choice overload)

However, much research has found (Cunnigham et al, 1982 and Hawes et al, 1982) that people generally prefer national brands over in-store brands, as overall quality is can be viewed as less than national brands.

To address peoples qualms with the one brand system, Aldi recently released the (quite British) comparative advertising campaign “Like Brands, Only Cheaper”, whereby ‘average consumers’ compare Aldi products with other known brands. The price of each item is then displayed, thus implying that Aldi is providing essentially the same product, but cheaper. They also included some humour, families, and small children to elicit some emotional engagement with the audience to make them that more appealing. Here’s some examples:

On the Aldi UK website, they even suggest that in blind-tests, the British public like Aldi brands “as much” as normal brands. Suggesting that quality isn’t sacrificed with their low prices.

Aldi have targeted the consumer from a completely different angle to their competitors, and it’s paying off. Providing comparably stress free, speedy, low-cost shopping in their uniquely German way, they’re now Blighty’s (and apparently Jesus’s) favourite supermarket.

For the record, I don’t work for Aldi.