UW Professor Emeritus of Marketing Thaddeus Spratlen, founding faculty director of the Consulting and Business Development Center (formerly the Business & Economic Development Center), discusses segregation in higher education during the 1960s, how he became one of the first African American professors to teach and publish at a mainstream (non-historically black) US university—and how the UW Foster School of Business BEDC all began.
Professor Spratlen and his wife Professor Lois Price Spratlen have given $1 million to the UW and the Consulting and Business Development Center over their lifetime, ensuring the center will continue for generations to come as one of only a few centers at top public business schools in the country devoted to minority business economic development.
Guest post by Shailendra Jain, associate professor of marketing, UW Foster School of Business
Apple has been called “the most admired company in the world.” There are some good reasons for this. Apple is very innovative, very cool, very personality-oriented.
But while Apple’s iPhone has achieved landmark success in the United States and redefined the smart phone category, it has so far struggled in two of the world’s largest markets. The iPhone has yet to create much interest in India and is, at best, a fledgling brand in China.
It has not met the success in these markets that Apple expected for a variety of reasons.
First is a technology issue. In India, the market I’m most familiar with, the iPhone has compatibility issues. That’s an amazing thing to ignore. Your product has to be aligned with the context in which you are marketing it. Apple, reportedly, is in talks with carriers in China and India to overcome this compatibility issue and is believed to be launching an iPhone with CDMA technology, which is compatible with Chinese and Indian telecom standards. It will be interesting to see whether this enables Apple to capture a larger chunk of these two enormous markets.
Second is a pricing issue. At its introduction, an iPhone cost about the same price in India as it did in the U.S. (about $700). But the way consumers process price information is interesting. In India, many potential customers reasoned that for the price of three iPhones they could buy a Nano car. And they were not sure if this was a good trade off. For these consumers, Apple may have gotten the price wrong. They may have ignored the how people in these countries process price information.
A third reason is that people in India are used to an unlocked phone. Apple does not want people to buy unlocked versions of its phone. But the moment there is a gray market where people can buy another compatible version of the iPhone, Apple will be challenged.
A fourth reason—and this is personal speculation—is a misalignment of “softer” brand attributes. What Apple as a brand means in the U.S. is very different from what Apple means in Asian countries. It was born in the U.S. and has produced a long line of successful “i” gadgets—iMac, iPod, iPad—whose branding is rooted in individuality. This is clever branding, and has been a good fit for an influential segment of the American and Western population: rebels, early adopters, would-be innovators who want cutting-edge technology and are relatively less sensitive to price. In Asian countries this is not such a strong fit, in terms of perceived personality. Asian cultures tend to be more collectivistic, and the theory is that millions of consumers in these cultures may find “i” less appealing than “we.”
For the iPhone, a whole set of factors converge to the same outcome. And I think this is typical of marketing failures. Rarely is it the fault of one or two factors. Usually it’s a complex confluence of multiple factors—product design, pricing, revenue model, distribution, promotion, branding, competition. Underestimating your weaknesses or overestimating your strengths. More often than not, multiple factors feed into most marketing failures.
Guest post by Dan Turner, senior lecturer in marketing, associate dean for masters programs and executive education at the UW Foster School of Business
New Coke is—for my money—the most epic new product fail in marketing, more so than the DeLorean, Apple’s Lisa and Newton, Sony’s Betamax, and even the Edsel.
Many people have selective memories about the Coca-Cola Company’s decision to launch the product and the initial consumer reaction. Coke’s market share had been falling for years, and consumers overall expressed a strong preference for Pepsi over Coca-Cola in blind taste tests. The new, improved, sweeter formulation of Coke tested extremely well, with more people preferring the New Coke formula over both “old” Coke and Pepsi.
In a naïve way, it made perfect sense for the Coca-Cola Company to improve their product, making up for a known deficiency versus a focal competitor. In fact, sales analysis trends immediately following the product launch showed significant gains for the Coca-Cola Company. In informal blind taste tests, Seattle retiree Gary Mullins, founder of Old Cola Drinkers of America, failed to distinguish between old and new Coke or expressed a preference for the latter.
Of course, we know the rest of the story. The public revolt ensued shortly thereafter, and it had little to do with the taste of the soda. In launching the new version of Coke, the Coca-Cola Company had a made a fundamental error in forgetting the source of the value it was truly offering consumers.
A soda that tasted good was nice, but Coca-Cola really offered value on the basis of its strong, favorable, and unique brand associations: America, friendship, nostalgia, and the like. In changing the formula, the company walked away from all of these sources of value, and customers reacted strongly, emotionally, and in a predictable fashion.
The silver lining for the Coca-Cola Company rested in the fact that the re-introduced product, Coca-Cola Classic, created a firestorm of marketing communications activity, reminding consumers why Coke was so great in the first place and dramatically communicating the value of the brand.
Guest post by Elizabeth Stearns, senior lecturer in marketing, UW Foster School of Business
When the Beetle was first introduced in the early 1960s, people would joke that you could go up a hill or you could have heat in a Bug, but you couldn’t do both. It was a quirky car, to put it mildly. Even VW engineers called it a lemon.
But the company positioned the Beetle as a different kind of automobile with a unique personality in a series of funny, brilliant advertisements. It found a target audience that was really interested in expressing their own personality, and they found this car was an extension of who they were. A generation of Beetle drivers reveled in its lack of frills. They didn’t care if you could drive up the hill with the heat on.
Then when the New Beetle was introduced in 1998, decades after the original was retired, the big issue was: how do you guide Baby Boomers down memory lane while also attracting the younger generation, because you need to grow that market and the Beetle is an entry vehicle into the VW line?
Cadillac had tried to attract younger drivers for years and failed because they simply did not want to drive their father’s car. There was the same danger for the reintroduced Beetle. It’s very difficult to design a campaign that successfully reaches two different demographic targets.
But VW pulled it off. The campaign was genius, with modern taglines like “Less flower, more power,” that sparked nostalgia in Boomers and spoke individuality to Millennials. The result was immediate success, creating a new “odd-shaped” category that would soon see competition in the reintroduced Mini Cooper, the PT Cruiser and others.
The original Beetle is a superb example of a flawed product saved by great marketing. And the marketing that launched its reintroduction was even better.
India is a country where women are widely undervalued—a bride is burned every two hours. And where, equally counterintuitive, far fewer women go into banking, so the pool of qualified females is smaller.
Our first visit was with top female executives at ICICI Bank in Mumbai, the country’s largest private bank. ICICI has been the training ground for most of the top women in Indian banking. Why? It grew rapidly beginning with India’s economic reforms in 1991, providing opportunities for women. It also paid less than other banks and so attracted proportionately fewer men than other banks.
“We don’t do anything special for women,” says CEO Chanda Kochhar. “But we are in a way special because we don’t have any biases. When it’s an employee, we go by the merit of the employee. When it’s an entrepreneur, we go by the merit of the entrepreneur.”
Women also work harder even in an organization of hard workers, explains Abonty Banerjee, general manager for ICICI’s global operations. “We work very long hours, typically 12 hours per day, six days per week. That is a function of our population. If you don’t do it, there are so many others to fill the job.” There is no daycare, though relatives often babysit. Women are generally expected to manage households and children regardless of career. “Women succeed because they work harder at home and at work.”
We also visited with one of ICICI’s prominent alums, Veena Mankar. Veena founded Swahaar (“self-support” in Hindi), a bank and finance organization dedicated to making tiny loans to Mumbai’s urban poor—especially women—and teaching them how to manage money.
Inspired by the plight of her own household help, Veena is determined to make a difference in the lives of poor women. The challenge, she says, is to change their mindsets, to convince them they are as deserving as men and that their daughters as well as sons should be educated. Once they realize this, their girls often go to college, marry later, delay childbearing and have healthier children, thus ensuring a better life for future generations and the community.
This is where it comes full circle. Highly-educated and affluent women in banking use their success to change the context for women at other levels of society. “It’s not just about giving a woman a loan. It’s about giving her a place in society and her family,” explains Veena.
Guest blog post by Cate Goethals, UW Foster School of Business lecturer
I first noticed it on the plane before I even reached Mumbai when I sat next to a woman who owned a handicraft business. I told her I was bringing a group of 22 students to India. “Come to my home,” she said. “Let me cook for you.” Her sister-in-law, who ran a different business, came to sit in our row. “Please let me host your group,” she said.
University of Washington students and I (their faculty trip organizer) had set out to study women’s leadership in India. I expected the accomplished women we met to be powerful, visionary, confident, charismatic, any number of traits. What I had not anticipated was generosity. Extreme generosity. The more responsibility someone had, the more time and attention and respect they gave us. Some more examples:
Rohini Nilekani, who runs a multimillion-dollar foundation in Bangalore and is known as “the Melinda Gates of India,” spoke to us and then had to go to a meeting. After the meeting, she returned and gave us another hour of her time. Half of that was spent asking us for our ideas.
Poorvi Chothani, well-known attorney often seen on Mumbai TV, not only agreed to brief my group on women and the law in India – but went on to spend many more hours organizing a special session of the Ladies Wing (!) of the Mumbai Merchants Chamber to gather dozens of women in our honor. She turned what could have been a personal platform into an exchange of ideas.
Veena Mankar, leading banker and co-founder of microfinance institution Swadhaar, had to cancel our visit to go to a funeral. She then rearranged her schedule and spent more than an hour driving across Mumbai to meet with us at our hotel early one morning. “Young people have the best ideas,” she told me. “I talk to them whenever I can.”
Amma, “the hugging saint” and most well-known female spiritual guru in the world, heard that we were rushed through our first session with her. Although she hugged thousands of other people that day, she invited us for a second session, asked that we sit at her feet and personally answered our questions about women’s leadership. Then she asked her swami to give us back the money we paid to stay at her ashram. “Students should have pocket money,” she said.
Women of the world-famous Self Employed Women’s Association greeted each of us several times with a personal flower, a special bindi (red dot pressed with rice on our foreheads to nourish our spirits) and a bit of sugar to eat.
I was struck by this generosity on nearly every visit. It may be part of Indian culture, it may be related to gender, it may be a function of the exceptional people we saw. In any case, it is an overlooked and undervalued leadership trait – and one that is infectious, making the students and I want to give back…and give elsewhere…and do it again, creating new cycles of generosity even now that we’re home. The ripples are still being felt.
Greg Bigley, Associate Professor of Management and Longbrake Endowed Professor in Innovation at the University of Washington Michael G. Foster School of Business, presents to alumni at the Executive MBA 25th Year Celebration and Alumni Back to School Day.
Ali Tarhouni, Senior Lecturer in Business Economics at the University of Washington Michael G. Foster School of Business, presents to alumni at the Executive MBA 25th Year Celebration and Alumni Back to School Day.
Rocky Higgins, Professor of Finance and Marguerite Reimers Endowed Faculty Fellow at the University of Washington Michael G. Foster School of Business, presents to alumni at the Executive MBA 25th Year Celebration and Alumni Back to School Day.
– Faculty perspectives, alumni happenings, student experiences, Seattle and Pacific Northwest community connections, and a taste of life around the Foster School.