Tribute to Steve

What Brands are Doing to Our Brains?

Brands activating our left angular gyrus, left dorsolateral prefrontal cortex  or left orbitofrontal gyrus, ie systems  in our brain that are associated with the extraction of meaning, conceptual organization,  reward, etc could be  common topics in the  daily agenda of branding managers of  high-value brands in our  times.

Neurosciences have entered in a close engagement with marketing in search of the Holly Gray of Branding: finding  and controlling  our Buy  Button in the deep of our vast brain ocean with billions of connections.

But where are the ethical boundaries of such initiatives like  Neuromarketing and Brain Branding? Paradoxically, and contrary to what is believed by naïve observers and writers , in the last  decades the more the brands were growing  and flourishing the less  is the level of  human happiness and human satisfaction, in steady decline in the western world (see Easterlin Paradox).  We are not all aware but we are  living in the era of Branded…  Unhappiness, as I had analyzed in my  book Nice Capitalism. As Tim Kasser’s  (The High Price of Materialism) research shows, those who place a higher value on acquiring material goods  and brands, aren’t as happy as their less materialistic counterparts. He further provides evidence that such a behavior leads to low satisfaction, personality disorders and even antisocial behavior. And are the brands today that,

through advertising, are imposing our Value System  and Lifestyle.  But what is even more worrying is that brands , through overstimulation, invasion and manipulative techniques, could lead  individuals to  the dark sphere of depression. Depression will be the second larger killer after heart disease by 2020 and a contributor to coronary disease. Almost 15% of the population suffers severe depression  in the western world (more than 20 million Americans). Further on, it appears now  more and more in  the youth and not only in those around 40 years old. The mechanism that describes the secret path to depression in  our branded world is described in detailed in my book and is graphically presented in the illustration above (click to enlarge). As a scientist  with a long experience in marketing, I strongly believe that branding  should exist for the mutual  good of the individual and the business. And that good, ultimately, is to improve human satisfaction and human happiness and well – being. Those brands that are investing in the exploration of the ocean of  our brain connections should  return back to their true  and legal mission. In the opposite case the society has to  re - evaluate  their license to operate. What’s your opinion? Do you share the view that branding should have certain moral boundaries? Let’s start the discussion. 

Brands in search of a more enlightened form of capitalism?

 “Conventional capitalism is dying with yesterday’s industrial era model of growth in permanent decline. Increasingly, the advantage will cede to companies that practice a more enlightened form of business, paying more than just lip-service to environmental and social agendas. According to the Irish Times, that’s the central premise of Umair Haque’s thesis in his book which offers a blueprint for a better form of capitalism.

Capitalism, he says, is founded on the equation of creative destruction. The cornerstones of capitalism as we know it systematically and chronically undercount the costs of destruction and over-count the benefits of creation. The result is an oversupply of “bads” with too much economic destruction for too little creation. The sum of over-destruction and under-creation is the deep debt a society incurs. Umair Haque  is clarifying the goal of the 21st Century brand, which is to create what he calls “thick value”—value that matters, value that lasts and value that multiples, not the “thin value” of the 20th Century firm that is artificial and unsustainable, often gained through harm to or at the expense of people, communities or society. It is about making a positive difference in people’s lives, not merely having a differentiated product and brand. The New Capitalist Manifesto by Umair Haque is  also available at Amazon.

Towards the customer obsessed brand?

Welcome to the Age of the Customer and invest accordingly says Josh Bernoff  of Forrester Research , author of a new report titled "Competitive Strategy In The Age Of The Customer". According to the report, previous sources of dominance (ie  manufacturing, distribution, even information mastery ) are now just table stakes. This is the age of continuous disruption. Your relationship with customers is the only thing that enable you to survive that disruption. Companies must be more than customer focused, they must be customer obsessed. A customer obsessed company focuses its strategy, its energy, and its budget on processes that enhance knowledge of an engagement with customers, and prioritizes these over maintaining traditional competitive barriers. An interesting piece of work. Find more here.

Restoring Confidence in Brands: What’s your Big Idea?

”Business (and brands ? ) is a necessary evil in society… only the worst sorts of people are involved”, Plato,  the ancient Greek philosopher used to say.

Corporate power, accumulated by the “Arrogant Capitalism” of the inequalities, is dramatically deteriorating, also as a result of the economic crisis. “Disaster Capitalism”(see Naomi Klein’s latest book) and the School of Chicago failed. Now  “Nice Capitalism” is wanted (see at Amazon Costas Kataras latest book here). Long before the crisis, a number of studies showed a growing lack of trust in business and their leaders,. For example, only ¼ of the public trust them. Further on, brand importance goes also steadily down. For example, brand loyalty today is only 9%, from 40% some years ago. The crisis also showed that the notion of “Powerless State” is a myth. Society is now pressing harder for a new “corporate social contract “ and the new issues for the businesses are endless, including: regulation, environment, unions, privacy, safety, off shoring, civil society, governments as owners, consumer activists, NGOs and others. How modern corporations and brands could respond to these strategic and organizational challenges, beyond simplistic CSR, “Green Wash” practices and the recently invented by brands concept of “social missions in the supermarket shelf? . And this, at a moment where “shareholder value is growing increasingly irrelevant as government and society take a larger role in shaping business and industry. This discussion is about sharing ideas. So I am very pleased to ask you what is your big idea on how to restore confidence in brands. Please join the conversation by providing your best idea by sending an email at: costas@costaskataras.org

The stigma of CSR

Numerous studies in the last decade or so are supporting the view that brands and corporations involved in CSR are rewarded with a number of benefits: from increased brand preference and brand loyalty, to improved financial performance and stock prices. But from now, these CSR conscious brands and corporations will have also to carry a stigma: the stigma of being bad corporate citizens and.. irresponsible. According to a recent working paper by the National Bureau of Economics Research (USA)  " companies are engaged in CSR in order to offset Corporate Social Irresponsibility (CSI)". Authors Matthew Kotchen and Joe Moon suggest that their, more than 10 years, research shows that "harmful companies are those mostly involved in CSR. When companies do more harm (CSI) also do more CSR" , the authors suggest. Or to make it simple: companies do "good" in order to offset "bad". What a nice subject for a debate. Looking forward to hear your opinion. For the full text of the paper, click here . 

Focus on “Nice Brands”:Patagonia - Nice Lessons from a Reluctant Businessman

Before the recent global interest in  corporate social responsibility (CSR), there is already a  sustainable company called Patagonia. Yvon Chouinard, the founder and owner of Patagonia, Inc is one of the few business leaders who understand that if your business is not part of the answer, then your business is part of the problem.

Patagonia grew out of a small company that made tools for climbers. Alpinism remains at the heart of a worldwide business that still makes clothes for climbing – as well as for skiing, snowboarding, surfing, fly fishing, paddling and trail running. These are all silent sports. None requires a motor; none delivers the cheers of a crowd. In each sport, reward comes in the form of hard-won grace and moments of connection between us and nature.

The company’s values reflect those of a business started by a band of climbers and surfers, and the minimalist style they promoted. The approach it  takes towards product design demonstrates a bias for simplicity and utility. Patagonia, amongst others,  uses a portion of  its sales to support grassroots groups working to make a real difference .  To make it short , Patagonia is one of the most representative Nice Brands that are emerging in the new brand ecosystem.

Find out more about Patagonia’s environmental initiatives here. In 2001, Yvon also co-founded 1% for the Planet, an alliance of businesses that contribute at least 1% of their net annual sales to approved environmental organisations.

Who says beauty is not sustainable?

Why is an ageing society significant for L’Oréal and its consumers? How the cosmetics giant approach biodiversity challenges? What is its position on scientific breakthroughs such as adult stem cell research?
These and other key sustainability topics have been identified by L’Oreal through active engagement and consultation with stakeholders. Each topic has been analysed, both in terms of stakeholder concern and relevance to the company, and mapped on a grid . Click here to see the graph and to download a factsheet summarising L’Oréal’s approach to each of these challenges and topics. For the company’s latest sustainable report click here.
“L’Oréal’s engagement draws on a vision of corporate responsibility in which economic success, human progress and social development go hand in hand”, says Jean-Paul Agon, the company CEO. And he adds: “Providing access to products that add to quality of life, while safeguarding the planet’s natural capital and contributing to society, are the key ways in which L’Oréal can create value to benefit everyone. Contributing to a more beautiful life and a better world is L’Oréal’s constant ambition”. Who says beauty is not sustainable?

Two books and the Greek crisis: A BBC Perspective

BBC’s Paul Mason noticed two books in English on the desk of the Greek ex finance minister a couple of months ago: Andrew RossSorkin’s “Too Big to Fall” and Costas Kataras “Nice Capitalism” . As Mason starts his interesting article “ Greece: Spearing the Octopus ” …. ‘”Greece has had all it is going to have of “nice capitalism” for some time and the Greek finance minister is about to discover if his country is like the book says, too big to fall”. Always relevant analysis, regardless the fact that the country has today a new finance minister.

Arrogant Brand? You're Dead To Me!

It’s almost three years now, and before the economic crisis, that I wrote my book “ Nice Capitalism- A Secret Journey to the Death of the Arrogant Brant”. Since then, continuously and steadily new research data and studies are confirming my theory. Recently, I was very pleased to read an article in S+B magazine presenting fresh data from a survey in the context of Young & Rubicam’sd Asset Valuator (BAV) . According to the article “among the once-prized brand attributes that declined in this period were:“exclusive” (down 60 percent), “arrogant” (down 41 percent), “sensuous” (down 30 percent), and “daring” (down 20 percent). On the opposite side of the scale, the brand attributes Americans found more important as they began to sense the impending recession and then suffered through the crisis were: “kindness and empathy” (up 391 percent), “friendly” (up 148 percent), “high quality” (up 124 percent), and “socially responsible” (up 63 percent). But if the Death of the Arrogant Brand is an inevitable reality, which are the new emerging species in today’s Brand Ecosystem? The book explains why a number of emerging forces could have devastating effects on brands and lead to the rise of a new species of brand, “Nice Brands” and “Nice Capitalism”, two developments that are clearly interrelated, as the book explains, which usually lead to happier people and more “Happy Nations”, particularly in Europe. Find more in my book here!

The two pillars of any successful Community investment

Financial commitment and active engagement are the two pillars of any successful community investment according to experts. . And Bell Canada seems to know well this rule.
The largest communications company in Canada, has just published its 2010 Corporate Responsibility Report online. The report meets the Global Reporting Initiatives GRI–G3 A+ reporting level.
Among other things, the report details Bell’s leadership in sustainability including the company’s recognition from the FTSE4Good Global Index, the Jantzi Social Index and Oekom Research.
The report features detailed performance data and qualitative descriptions of several key corporate responsibility initiatives. The five main sections of this electronic report address the issues that are most relevant to the company’s business and to its stakeholders.
However, of particular interest is the company’s Community program : a five-year, $50‑million Bell Mental Health Initiative and other community investments. Bell people are actively engaged in their communities. In addition to giving time and money to worthy causes, many employees are playing leadership roles, mobilizing themselves and others by getting involved. The company encourages community involvement through internal campaigns, volunteer grants, payroll and credit card deductions, and organizing volunteer teams. See more and download the report here.

Harvard now(?) wonders how to fix Capitalism: Replace it with … Nice Capitalism stupid!

Anna Farmery of the Engaging Brand is producing another top class podcast, talking about how business can help create social value. This time in an interview with Mark Kramer, founder and managing director at FSG and a Harvard CSR fellow, who co-authored the article with Michael Porter of Harvard Business School. So sad that Harvard was not aware about the research work and the book “Nice Capitalism” by Costas Kataras ,published before the 2008 financial crisis, that was prophetic. Do not miss this podcast, click here.

CSR conscious companies have better access to finance ?

This is under examination in a recent Harvard paper by B.Cheng, I. Ioannou and G. Serafeim.
Authors investigate “whether superior performance on corporate social responsibility (CSR) strategies leads to better access to finance, hypothesizing that better access to finance can be attributed to reduced agency costs, due to enhanced stakeholder engagement through CSR and reduced informational asymmetries, due to increased transparency through non-financial reporting." To read the complete paper use this link.