Salesmen and Criminals

When I was 17 I signed up to my first ever phone contract. I was spending way too much money on top-up cards from newsagents and I thought a contract would be a good way to help reduce my costs.

I went into an Orange store where I was approached by a salesman. He asked me a few questions about what I wanted and then told me that the company were giving away a free Xbox 360 on selected contracts.

cartoon-of-excited-kid-receiving-a-gift-isolated-clipart-83383871

BING!! My eyes lit up!

He asked me if any of my friends had Xbox 360s (which many at the time had) and then told me about how I could play online with them. He also informed me of the extensive range of games that were available and described some other impressive features of the console.

It wasn’t until I was fully drawn into the idea of having a free Xbox that he began to mention anything about the prices of Orange’s phone contracts. He told me that I could only get an Xbox on a £40 a month contract that lasted for a minimum of 18 months. By that time I was so entranced by the idea of playing FIFA 07 against people on the other side of the globe that there was no doubt in my mind regarding what decision I should make.

In the end, I spent a ridiculous amount of money and when I got home I began to seriously regret my decision.

Now I would like you to picture another scenario…

A woman is sitting by the window in a café, reading her book. A passer-by stops outside where she is sitting and knocks on the window. The passer-by mimes that he would like to know the time and the lady looks at her watch so she cburglar-thumb8724036an tell him.

As she is doing this a different person in the café walks past her, steals her bag (which is resting on the floor by her seat) and proceeds to leave. The woman has no idea she has been the victim of a robbery until she herself is about to leave.

Is there something similar about these two stories?

Yes there is – both the salesman and the thief took away their target’s attention in order to get what they wanted.

The salesman diverted my attention away from selecting a sensible phone contract by discussing something he could almost guarantee a 17 year-old boy would be interested in. Using exactly the same principle, the thief diverted the attention of the lady in the café away from caring about her bag by giving her something different, and perhaps a little surprising, to concentrate on.

This is known as the distraction principle and works on the theory that “while you are distracted by what retains your interest, hustlers can do anything to you and you won’t notice” (Stajano and Wilson, 2009).

As you can probably tell from the use of the word ‘hustlers’ the distraction principle is used mainly in relation to crime. However I would argue that there are many examples where this principle is used in the world of business.

xbox_360a

Does this mean salespeople are criminals?

No, certainly not.

The Orange salesman didn’t rob from me; in fact he helped me get a nice shiny new Xbox. But he did make me spend a hell of a lot more money that I wanted to.

The 18-month contract cost me £720 in total. This figure is a great deal higher that I would have ideally like to have spent which, in retrospect, would have been around £20 a month (£360 in total). At the time I made this decision an Xbox was worth £249.99 so even if you extract the value of the Xbox, I spent £470.01 on the phone contract. This amount is still much more than what I would have initially wanted to spend; demonstrating how incredibly effective the Xbox promotion was.

Does the distraction principle work everywhere?

At the time of writing there is actually very limited research looking into the distraction principle’s role in business. However, it is clear that it is being used.

As Stajano and Wilson (2009) showed, the distraction principle relies on drawing the customer’s attention away from what they are trying to steal (or in this case, sell). This sounds like it goes against the nature of marketing because marketers are always looking for ways to make people focus on their brands and products (Jansson-Boyd, 2010). Despite this, there are many examples where the distraction principle is being used. Take a look at the video below for instance:

This advert is probably very relevant to many of the people who will see it. In addition, the advert’s friendly tone and helpful nature may make QuickQuid seem like an incredibly good option. However, if you look at the small print at 26 seconds in you will see that the representative APR for a QuickQuid loan is 1734%. This means that people will have an astonishingly large amount to pay back, even if they take out just a small loan. So perhaps QuickQuid is not such a good option after all?

I would argue that the distraction principle works best when it is used in a one-to-one situation by a salesperson. This is because it enables the salesperson to use a distraction to fully engage the customer to the point where they are almost certainly going to make a purchase. This puts the salesperson is a position of power because they can then decide when to inform the customer of what they are really trying to sell. A good example of this is a car salesperson who lures a customer in with a low base charge but then hits them with the delivery charge once they have already committed.

jsin209l

How can the distraction principle be avoided?

Well I know nothing about how to prevent crime, so I’m not even going to attempt to give any suggestions about that.

In regards to avoiding the distraction principle in a business context, the main thing is to remember that this principle exists. I got caught out in the phone shop because I wasn’t expecting any tricks. I entered the store to buy a phone so the prospect of getting a ‘free’ Xbox was a shock and therefore incredibly exciting. This is exactly what happened to the lady in the café; people don’t often tap on windows to get the time so there was no way she would have been expecting it.

Just by knowing that salespeople will attempt to use this technique makes you slightly more resilient to it. If I had known that the salesman was going to distract me from buying a sensible contract with a fancy deal then I easily could have chosen to avoid it and stayed focused on the task in hand.

So what does this all mean?

It means that salespeople and criminals often use similar tricks to get what they want. Obviously, they are both operating on opposite sides of the law, but the underlying principle remains the same.

The distraction principle is commonly found in sales because salespeople are often fighting for commission. This means that salespeople are likely to use every trick available to them to make a sale. You can’t blame them for this and also can’t really expect them to stop.

However, wouldn’t it be nice to see some transparent salesman techniques as well? For example, the Orange salesman could have worked with me to discover what my budget was and then found me a suitable package, rather than immediately trying to sell me the most expensive contract. True, this probably wont make the company as much money but it would reduce the feeling of regret that I had when I got home. This strategy could even help to generate more repetitive purchasing behaviour.

In summary, my advice is to just simply remember that the distraction principle exists, especially when you are being given your next salespitch. Otherwise you could end up like the boss in this video…

Finally, (just in case you’re interested) the Xbox 360 in question now sits under my TV collecting dust. I never play games on it because it turns out I’m absolutely rubbish. So I just stick to playing football outdoors instead!

As always, I would be delighted to hear your thoughts. Perhaps you have some advice to overcome the distraction principle? Or maybe you think it is a clever technique salespeople are entitled to use? Either way any feedback is greatly appreciated.

Thanks for reading.

A Totally Unnecessary Evil

I brush my teeth twice a day, once in the morning and once in the evening. Toothbrush-and-toothpaste

Nothing shocking there.

I buy my toothpaste from Morrisons.

Nothing shocking there either.

Once I buy this toothpaste I go home, take it to the bathroom, take it out of its box to put in the recycling bin and put the tube on the shelf next to the sink.

There is something a little bit odder about this…what on earth is the point in that box?

In 2010, the UK threw away 10.8 million tonnes of packaging (DEFRA, 2011). This is a huge amount of waste but according to DEFRA, 67% of it was recovered through recycling (ibid). Although this sounds impressive it still means that over 3 million tonnes went to landfill, the majority of which was plastic because only 24.1% of all plastic packaging was recyclable (ibid). There are clearly still some issues regarding the amount and types of waste we are producing.

colgate just box

To me, the cardboard box enclosing my toothpaste is totally pointless. I throw it away while I’m still unpacking my shopping. I never read it and I can’t use it for anything else. It’s also not the only example of totally unnecessary packaging I can think of. This week I have bought kiwis, lemons, apples and broccoli, all of which came in clear polythene wrapping, and in the case of the lemons and kiwis, a plastic tray.

lemon_before

None of this packaging was recyclable and all of the products were on sale next to identical items, which were not wrapped in anything whatsoever.

This is ludicrous, right?

Everyone knows that reducing the amount of natural resources we use is incredibly important and the data by DEFRA supports the need to do it. So why then, are companies adding totally unnecessary packaging to their products?

Or am I missing the point? Is there actually a purpose to this packaging that I’m failing to see?

To help answer this question it might be a good idea to find out what the point of packaging in general is. To do this I am going to turn to some experts in the field; Unilever.

Unilevunileverer have been packaging the products in our homes for many years. Brands such as Lynx, Dove, Pot Noodle, Simple, Domestos, Ben and Jerry’s, Wall’s and Vaseline have probably all found a place in our homes and each of them are owned by Unilever. They also all come in a variety of packaging.

In a report produced 2009, Unilever claim that their packaging occurs for 6 reasons:

1. Containment

“Packaging encloses the product. We simply couldn’t store powders and liquids without it.”

Fair enough.

2. Protection

condoms for packaging“Packaging keeps products safe and clean, avoiding the risk of contamination.  It also helps them stay fresh for longer. It means that goods arrive in shops and homes undamaged.”

Again, fair enough. I will never, ever, ever buy condoms that don’t come in a sealed packet.

3. Displaying information

 “Packaging is used to display vital information about ingredients, use, transport and disposal of products.”

No arguments from me here – I think this is totally appropriate.  Including a list of ingredients is also a legal requirement for many items such as pharmaceuticals, food and chemicals (BIS, 2009).

4. Portion control

“Packaging enables the amount of goods sold to be matched to the needs of different consumers. For example, in Europe the rise in single person households means there is more demand for smaller portions.”innocent NEW

This is an interesting point. Not all people know how much they should or shouldn’t eat, and food packaging can be a very useful guide.  It can also be helpful for illustrating ways for people to get their five daily portions of fruit or vegetables.

However, I would argue that in most cases packaging is rarely used for this purpose. Items such as bread, butter, milk, flour, pasta and rice to name but a few, all come with no obvious portion controls. People are encouraged to use their judgment and self-control to measure the portions of these products and they seem to do just fine.

5. Convenience

 “Packaging enables manufacturers to stack, handle and deliver products efficiently.”

This makes sense. It must be easier for companies to ship and stack a box of oranges than to move them individually.

6. Marketing

 “Packaging carries brand messages and makes products stand out on the shelf. The pack design is an important component of product marketing.”

This again is understandable. Many products look very similar and packaging can be crucial for making them appear unique. Packaging is also an area where advertisers can introduce some key psychological marketing techniques. One such technique is using packaging to determine the status of a brand  (Moran, 1980). Companies can make consumers perceive their brand as old-fashioned, contemporary, luxury or even good value just by manipulating the packaging.

Marketing clearly goes some of the way to help explain pointless packaging. For example, Higgins (1984) found that consumers often find food sold in foil more desirable that food without it. Higgins also discovered that foil can actual add value to a product and people are prepared to pay more for foods with it.

After 8 300G

I would also argue that another example is Nestle who use unnecessary packaging on their After Eight mints to make consumers percieve them as a luxury chocolate.

 

So where does the toothpaste cardboard box fit in?

Well in all honesty I’m still struggling to see what its purpose is – even if I use Unilever’s 6 purposes of packaging. Firstly, it definitely contains the toothpaste – no one can argue with that. But it’s not really necessary is it? I’m sure we can all agree that the toothpaste would survive perfectly well outside of its cardboard container.

The cardboard box does admittedly protect the tube because it’s the only way to tell that no one has tampered with the contents. However, selling products in tubes with tamper-proof seals is not a new concept. If these guys can do it then why can’t Colgate:

no more nails NEW

In terms of displaying information, I have read both the entire toothpaste box and the entire toothpaste tube (it’s not easy being an only child) and the information is identical. They both show the same ingredients, the same ‘how to use guide’ and the same pretty illustrations of plaque-free teeth.

Regarding portion sizing the cardboard box does inform me how much toothpaste I should use but in itself it is useless for helping me choose the right amount of paste to apply to my brush.

The cardboard box may well make it more convenient for the manufacturer and retailer. A box is certainly easier to stack than a loose tube but I’m 100% sure that a shelf could be designed in a way to eradicate this problem – I mean we managed to walk on the moon didn’t we? Also, it’s not as if Colgate don’t have experience in making boxless toothpaste:

colgate-kids-toothpaste

Finally, the box does not appear to assist in marketing its contents. Please have a look at the picture below:

colgate NEW

Not a lot of disparity, right? In this incredibly dull game of spot the difference we can all agree that the only change is the word ‘NEW!’. For the life of me, I can’t see why this word couldn’t have been written on the tube and I see even less reason why the tube couldn’t have been sold alone. Perhaps, subconsiously we percieve toothpaste in a box as having a greater value. But I think its highly unlikely that anybody is going to stop brushing their teeth if all toothpaste brands stop selling their products in boxes.

The cardboard box still makes no sense. From an environmental point of view it is a dreadful waste of a valuable natural resource. And for those of you who think that this is a ridiculously small issue not worth bothering about, please note that almost everybody in the UK uses toothpaste (97%) (Mintel, 2012) and in 2010 the UK toothpaste industry was worth £391 million (Ibid).

The cardboard box also doesn’t make sense from a financial point of view. Why are companies increasing their costs through packaging that they don’t need?

I mean why don’t they try something a little like this?

save_paste photo

save_paste how to use

Save Paste is a new packaging design for toothpaste. It removes the fustration of getting the last bit of toothpaste out of the tube and it encourages recycling. Additionally, it is made from less material than a normal toothpaste tube (and box) and it can actually help companies reduce their shipping costs:

save_paste lorries

The Save Paste initiative shows that organisations can reduce their costs significantly (both environmentally and financially) if they just employ a little creative thinking. Exploring the purposes of packaging has also vindicated my belief that some packaging is utterly pointless. Selling bananas in shrink wrap with a polystyrene tray (see below) when they are grown with their own natural packaging is a ridiculous waste of resources and money.

Morrisons_Bananas

The more you think about pointless packaging, the more examples of it you see. Cardboard sleeves on DVDs that are identical to the plastic cover, shrink wrap on cucumbers and even shoe boxes are all absolutely unnecessary.

But the question still remains – why do companies do it?

Well perhaps it’s down to a reason that no one should be surprised to hear; money. According to the World Packaging Organisation (WPO) (yes, that actually exists) the global packaging industry was worth $485 billion in 2004. The WPO also say that there are approximately 100,000 packaging manufacturers in operation which employ roughly 5 million people (2008). This is a significant figure and it goes some of the way to explain why so much packaging exists in the world. By reducing the amount of packaging it is probable that you will decrease a country’s GDP and increase their unemployment. This is never likely to be a popular choice so, as a result, very few governments are going to going to make it.

An unpopular choice or not I believe pointless packaging has to be eliminated. Researching this area has opened my eyes to a totally unnecessary form of waste and I am going to do all I can to try and avoid it. Taking steps like selecting my own carrots, rather than purchasing a ready collected bag is a good way to start. And from now on I am going to try my upmost to avoid buying toothpaste surrounded by a cardboard box, even if it means buying a tube with Spongebob Squarepants on it!

As always I would be delighted to hear your thoughts and in particular any examples of pointless packaging you have found.

Thanks for reading.

A Very Green Dilemma…

People often tell me that they care about the environment, and that they would happily switch to renewable energy sources if they could. What these people don’t realise is that there is an option actually already out there for them:

Ecotricity claims to be Britain’s first ever green energy company. Founded in 1996 by Dale Vince, the organisation provides electricity and gas to 67, 974 customers (as of 25/11/2012) through its 53 windmills and one solar farm (Ecotricity, 2012). Ecotricity have no shareholders or investors and therefore have no financial obligations to meet after their costs have been paid. The company use this opportunity to pump all their profits into developing, enhancing and extending their green energy initatives.

First things first – is the energy they supply totally green?

No, but they do appear to be totally honest.

Let’s use the example of electricity. Ecotricity’s electricity is sourced from its own windmills but is, “topped up with ‘brown’ electricity” which is bought from the wholesale market (Ecotricity, 2012). Ecotricity say the amount of brown electricity reduces each year as they build more of their own green (This is Money, 2012). The graph below depicts how much green and brown electricity makes up Ecotricity’s electricity. Green electricity means it comes from renewable sources such as the wind, sun or sea whereas brown electricity means it comes from non-renewable sources such as coal, nuclear or gas.

As you can see, Ecotricity currently provide electricity where 64.3% of it is produced from renewable sources (Ecotricity, 2012).  This is very impressive, especially when you bear in mind that only 9.6% of the average UK electricity is made up of green electricity (DECC, 2012). You can also see from the graph that they want 70% of their electricity to be produced by renewable sources by 2013.

However, what’s really worth noting is that because of their non-profit business model, when more and more people switch to Ecotricity the company will have more money to invest in their green initiatives which will allow them to eventually provide fully green energy.

Customer Service

Ecotricity are not only the leading supplier of renewable energy in the United Kingdom, they are also highly acclaimed for their customer service. Earlier this year (2012), the Office of the Gas and Electricity Markets found that Ecotricity received the least complaints out of all British energy providers. The worst offender was British Gas, followed closely by nPower then EDF.

Other Projects

Forest Green Rovers

In 2010 Ecotricity founder, Dale Vince, became the Chairman of the Gloucestershire based football club, Forest Green Rovers (BBC Sport, 2012). Vince became involved with the club at a time when they were in financial difficulty and he became the majority shareholder in order to give the club the monetary backing it needed to survive (ibid). Since then Vince has set out the aim of making Forest Green Rovers the first ever truly sustainable football club (Forest Green Rovers, 2012).

Vince and Ecotricity are steadily working towards this ambition by introducing some unique initatives at the club. For example, Forest Green Rovers now treat the pitch using cow manure; this has resulted in the club now playing on the world’s first ever organic football pitch (BBC Sport, 2012).

Ecotricity have also installed 180 solar panels at the stadium which generate 10% of the total electricity used there. Finally, Vince has placed a red meat ban on all of his Forest Green players as well as stopping any red meat products being sold at the game (ibid).

The Nemesis

The ‘Nemesis’ is an electric car designed and built by Ecotricity (pictured below). The Nemesis is powered entirely by electricity produced by the wind and can reach speeds of 151mph (which is incidentally the UK electric car land-speed record) (Ecotricity, 2012).

The car took two years to build and was designed to “smash the stereotype of electric cars”.  I don’t know about you but I think they have done a pretty good job!

So if they provide the cleanest energy, have the best customer service and run some other cool green projects why doesn’t everyone use them?

One word – cost.

In a study conducted by financial website This is Money (2012), the average Ecotricity customer on their New Energy Plus with Green Gas plan would pay £1,325 per year. This is £271 more than the cheapest option, First Utility’s iSave v2, which costs just £1,054 per year.

This presents energy customers with a dilemma…

Do they get the cheapest option and carry on using primarily nonrenewable energy sources or do they pay more and use a greener energy source?

Personally, I believe in the power of economics. If the people who understand the importance of using renewable energy sources and have the financial security to be able to afford an extra £271 a year were to switch to Ecotricity, there would be two main benefits:

Firstly, Ecotricity would have more revenue to be able to invest in their green initiatives. This would mean that they could eventually offer entirely green electricity and gas.

Secondly, if a large number of people were to switch to Ecotricity, the existing energy companies such as EDF would lose custom. In an attempt to regain these leaving customers, these companies would be forced to increase the percentage of renewable sources that makes up their energy.

I do not believe that Ecotricity should be the only company to offer a green product and have a monopoly in this industry. My hope is that Ecotricity can be used as a platform for environmentally conscious consumers to show the large energy companies how much renewable energy means to them. If the big energy companies start losing money because people prefer to buy a greener product, they will be forced to offer a greener product themselves. It is at this point that renewable energy will become much more affordable because as the amount of competition goes up the price goes down (this happens because companies who offer identical products to their rivals tend to try and attract customers by offering the lowest price). Then, if all goes to plan, green energy will become much more accessible for every single person living in Britain.

As always, I would love to hear your thoughts.

Thanks for reading.

Sex for Less

Unless you are very religious, I bet there is one thing that you and I have in common. We both like sex.

And why wouldn’t we – sex makes our brain release endorphins which make us feel incredible.

But sex is not without risk. Sexually transmitted diseases and infections can be spread. And there is also the very real possibility of creating a little pooing, crying machine. However, there are many ways to overcome these problmes; the pill, the morning after pill and even abstinence can be used.

This blog, however, will focus on just one form of contraception; male condoms. 

Condoms are great. They are 98% effective at preventing pregnancy and because they prevent the exchange of bodily fluids they help to protect against many STIs, including HIV (NHS, 2012). Additionally, condoms are easy to use and can be purchased in a myriad of places.

But….

Even though condoms are clearly a wonderful invention there appears to be a number of barriers which stop people from purchasing them, and more worryingly, using them. In 2012, market research organisation, Mintel, discovered that 4% of men don’t use condoms because they don’t like the feel of them or the hassle of putting them on. Mintel’s research also found that 2% of males did not use condoms because of their religious beliefs. For these people it is clear that condoms aren’t for them and very little can be done to make them change their mind.

However, Mintel also discovered that a large number of people were not buying condoms due to two other reasons; price and embarrassment.

Mintel’s study showed that 45% of under 25’s (which includes students) thought condoms were overpriced. In Superdrug in Bangor at the moment a packet of 12 Durex Pleasuremax condoms costs £9.99. If you round that up to £10 then that’s 83p a condom. That is pretty costly especially if you bear in mind that the NHS give them out for free at sexual health clinics and most GP surgeries.

But most people don’t go to these places to get condoms for the other reason highlighted by Mintel – embarrassment. Mintel’s research showed that 3 out of 10 males found it embarrassing to buy condoms in a supermarket. This research supports earlier work by Dahl, Gorn and Weinberg (1998, 1999) who found that the embarrassment of purchasing condoms is one of the main obstacles to practising safe sex.

Is there a solution?

Yes, and it’s very simple – buy condoms online.

Freedoms is an online shop (and a NHS backed initiative) which specialise in selling cheap condoms and lube. On the website at the moment you can buy a bag of 72 Durex Pleasuremax condoms for £9.99 with free delivery. Just to clarify that’s the exact same price as Superdrug for 60 more condoms. If you again round that up to £10 then it works out as 14p a condom. That’s a lot more reasonable right? Alright it’s not free, but you have to bear in mind that neither is producing or shipping condoms.

As if the diminished cost isn’t a big enough motivator, shopping online removes all the embarrassment from purchasing condoms. The internet is the perfect place to purchase discreet purchases such as Viagra, sex toys, porn or condoms because there is nobody physically there judging you.

OK guys, so now you know – go and enjoy yourselves!

(Thank me later!)

Your Power is in Your Wallet

As I sit writing this blog I have my favourite study snack by my side – a KitKat Chunky. To many of you this will seem like a completely irrelevant piece of trivia, but to many others this information can be used to judge me. This is not because of the health issues related to my choice of food but down to the fact that KitKat’s are a product made by Nestle.

And to many people Nestle is a dirty word…

In the 1970’s Nestle began selling formula-milk to the developing world as an alternative to breastfeeding. The company used aggressive marketing to inform mothers in poorer countries that Nestle formula-milk was safer than the milk in their breasts  (Klein et al., 2001). This was proved not to be the case because the formula-milk had to be mixed with water, which is a major problem when the mothers in question have no access to clean water (Moorhead, 2007). Nestle were also found guilty of selling cans of formula-milk which included instructions written in the wrong language for the women who needed them (ibid). These actions caused outrage because they were putting the lives of millions of babies at risk. So in 1977, protesters began calls for a boycott of all Nestle products, a boycott which still exists today.

So, what is a boycott?

According to Freidman (1999) a consumer boycott is “an attempt by one or more parties to achieve certain objectives by urging individual consumers to refrain from making selected purchases in the marketplace” (pp.4.)

Why do people do it?

Boycotts typically take place as a reaction to a negative activity that people feel very strongly about. In 1989, a tragic accident happened at a football ground in the UK . This was the Hillsborough disaster where 96 Liverpool football supporters lost their lives because too many people were let into a football stadium and were crushed (BBC News, 2012). After this horrific event the Sun newspaper published the following front page:

The city of Liverpool was disgusted with the article and accused the paper of lying. Therefore a boycott was placed on the Sun newspaper in the Merseyside city. The ‘Don’t Buy the Sun’ campaign became an incredibly strong movement and even held a concert featuring Mick Jones of the Clash (BBC News, 2012).

It should be noted at this point that another reason people undertake boycotts is that they are very effective. In 1990, the Economist argued that consumer boycotts were popular “for one simple reason: they work” (pp.69).

The effectiveness of boycotts can be demonstrated by returning to the example of the Sun. On the 14th September, 23 years after the Hillsborough disaster, the boycott finally paid off when the newspaper published the following front page admitting that they were wrong and that they had lied:

So what does this mean?

It means that consumers have more power than they think. It means that people can influence companies more than they think they can, simply by using their purchasing behaviour. We live in a time where people know that companies are often doing wrong but do nothing to try and stop it. People’s power is in their wallets and they need to remember this, we all need to remember this. If you’re not happy with a company then don’t buy from them, it’s as simple as that. This applies to me as well – so perhaps I should rethink my favourite study snack?

Finally, if you needed any more proof that boycotts can be incredibly effective, how about this for an amazing result?

Water, Water Everywhere …

Imagine the following

You’re out shopping, you become thirsty, you have no water with you and you are nowhere near home. What do you do…?

You go and buy a bottle of water, right? And you’re not alone…

In 2010, the UK consumed 2055 million litres of bottled water (UK Soft Drinks Report, 2011). But why? Here in the UK we all have access to fresh, running, drinkable water in our homes 24 hours a day.

The average house in England and Wales spends approximately £376 a year on water. That’s just over £1 a day. What’s interesting here is that people are not willing to pay a penny more for this utility. In April this year water bills in England and Wales rose by 5.7% (BBC News, 2012), this was met with a wave (great pun) of annoyance by the general public (including my Dad, who went ape s**t).

But despite the fact that we have access to running water and that people begrudge paying for tap water they seem completely unfazed by paying £1 (or even a lot more) for a 500ml bottle of water. In fact you can actually pay 2,000 times more for a bottle of water than the water you get from your tap (Fishman, 2011).

So why do we do it?

Well one of the reasons has already been alluded to in my story at the beginning – convenience. Not everyone is organised enough to take a bottle of water with them when they leave the house. Even if you are organised there still may be the odd occasion where you simply forget to take water with you.

But this isn’t the only reason. Bottled water has become such an incredibly profitable industry (Americans actually now drink more bottled water than milk or beer (Gleick, 2010)) because the demand for it has been manufactured.

How has the demand been manufactured?

In the 1970’s, soft drinks companies became worried about their projected profits decreasing (Gleick, 2010). So they came up with a new strategy – sell bottled water. But at this time people were not buying a lot of bottled water – they saw it as unnecessary (I mean it is free from a tap after all!). So they came up with two very clever ways to make people want bottled water:

1. They scared people off tap water.

The soft drinks manufacturers used fear appeals in their advertising to stop people drinking the water from their taps (Rollings, 2012). Fear can be a very effective way of affecting consumer’s behaviour because it makes them feel insecure and scared if they don’t have the product (Snipes, LaTour and Bliss, 1999).

A great example of water companies using fear to put people off tap water is Calistoga Mountain Spring Water (a large American bottled water producer) who released a series of adverts showing a picture of a goldfish in a glass of water. Below this picture was written “There is something in this glass you do not want to drink. And it’s not the fish.” (Gleick, 2010).

The example below shows how Fiji water used a fear appeal to tell the people of Cleveland, America that their water is better than Cleveland tap water.

This actually turned out to be one of the biggest marketing mistakes in recent history. The citizens of Cleveland were so incensed by Fiji’s ‘joke’ that it was decided that a series of water analysis tests should be undertaken. Ironically, these tests actually showed that Cleveland tap water was healthier than Fiji water (Fiji water was found to have traces of arsenic in it!!).

If this isn’t enough evidence for you, in 2000 Robert S. Morrison, the vice chairman of PepsiCo, publicly declared “The biggest enemy is tap water. . . We’re not against water—it just has its place. We think it’s good for irrigation and cooking.” (Gleick, 2010).

2. They made bottled water look like a safer, cleaner, healthier option.

Notice that on each of the labels of these bottles of water there are images of greenery, mountain streams and immaculate nature. Well this is (unsurprisingly) done on purpose. It’s done to make you associate bottled water with pureness and cleanliness. But guess what… loads of bottled water is just tap water!

In fact approximately 40% of all bottled water in the U.S. is filtered tap water (Co-op America, 2001). This includes Aquafina, which is the brand of bottled water produced by PepsiCo – making Robert S. Morrison probably the biggest hypocrite to ever walk mother earth. And it’s no better in this country either. As recently as August of this year it was revealed that both Tesco’s and ASDA’s own brand bottled water was just filtered tap water (Telegraph, 2012).

But if you ignore that and do drink bottled water , look at the incredible effects it could have on you:

So what does this all mean?

It means clever marketing can make people want a product they don’t really need. We hear a lot of these stories (e.g. Listerine inventing halitosis etc.) and the message seems to be remarkably clear – if you scare people enough you can even get them to buy or not buy what you want. The question is, is this ethical? Well, that’s up to you to decide…

As always, I would be delighted to hear your thoughts.

Thanks for reading

Basket Case

Look at the picture below. Recognise it?

Yes that’s right it’s the M&S in Bangor, now what’s wrong with it?

The second question is a lot harder to answer. In fact, to you and I there is nothing wrong with this image. The sign is where it should be, the stock looks fine and the baskets are in their usual place. And BINGO, you’ve accidentally stumbled upon the problem – the baskets are in their usual place.

What you are looking at is known as the ‘transition zone’ or ‘landing zone’ (Underhill, 2000). This is the area where the shopper first enters the store and then adjusts to their surroundings – if it’s raining outside, this is the area where they remove their coat or if it’s sunny outside, this is the area where they remove their sunglasses. This is also the area where people tend not to pay much attention. BUT despite this, it is the area where stores always put their baskets.

In 2000, a book was written by Paco Underhill looking specifically at the science of shopping. In his research for the book Underhill found that fewer than 10 percent of customers used baskets when they were positioned by the door of a store. Other research has shown that people‘s purchases increase if they have a basket (Desai and Talukdar, 2003). Therefore, if less that 10 percent of shoppers are using them, this is a large problem for shops.

So how do you solve the problem?

Simple – move the baskets!

Let’s use the example of a book shop.

People who go to book shops rarely take a large shopping list with them. They usually go with just one book they want to buy in mind. But bookshops are attractive places, you can browse and flick through fascinating books on all sorts of subjects and nowadays you can even enjoy a coffee while you do it.

Quite often people will find more books that they want to buy and they will stack them up in their arms. But books are often big and uncomfortable so even if they find another book they really want to buy (perhaps a consumer psychology one!) they won’t pick it up because they physically don’t have room in their crowded arms.

What do they need? That’s right, they need a basket. Paco Underhill argues that baskets should be positioned right through the store encouraging people to make impulse purchases. He also found that at a store in America a member of staff went round the shop offering baskets to the customers who didn’t already have one. Because of this simple act, basket use rose instantly and unsurprisingly so did the size of the average sale.

Paco also argues that in stores like bookshops where the products for sale are heavy, a different basket should be used.

The big plastic ones you are given can really make your arm ache if you pile them up with a few textbooks so Underhill suggests that over-shoulder canvas bags should be used instead. This stops people not buying more things they want, because they physically can’t carry them anymore.

Summary

This idea shows that it just takes a little creative thinking to make a huge difference to  a company’s profits. This idea is also great because it is totally accessible for small and medium sized enterprises as the whole concept is inexpensive – in fact canvas bags are cheaper for a store to get hold of than the plastic ones. So if you ever get the chance to run a store, think twice about where your baskets are located.

Thanks for reading.

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