Archive | December 2012

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.

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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.