Market norms come into play
any time money enters into the equation, sometimes counter-intuitively! Ariely
gives the example of a group of lawyers who were approached by the AARP and
asked whether they would provide legal services to needy retirees at a
drastically discounted rate of $30/hour. The lawyers said no. From a market
norms perspective, the exchange didn't make sense. Later the same lawyers were
asked whether they would consider donating their time free of charge to needy
retirees. The vast majority of the lawyers said yes. The difference is that,
when no money changes hands, the exchange shifts from a poor-value market
exchange to an altruistic and therefore high-value social exchange. It is a
strange psychological quirk that 'once market norms enter our considerations,
the social norms depart.'
Mixed
signals: when social and market norms collide
In
a book called Positioning: The Battle for Your Mind by Al Ries and Jack Trout (originally
published in 1981), the authors describe the 1950s as the 'product era' of
advertising, when 'advertising people focused their attention on product
features and customer benefits.' It was all about the unique selling
proposition (USP).
However,
as the sheer volume of products on the market increased, it became more
difficult to sell a product simply by pointing out the benefits. As Ries and
Trout put it, 'Your "better mousetrap" was quickly followed by two
more just like it. Both claiming to be better than the first one.'
They
describe the next phase of advertising (which hit its peak in the 1960s and 70s
and which we can probably all relate to if we watch Mad Men) as the 'image
era', pioneered by David Ogilvy. In this period, successful campaigns sold the
reputation, or 'image' of a brand and a product rather than its features. Ries
and Trout quote Ogilvy as saying that 'Every advertisement is a long-term
investment in the image of a brand'. Examples include Hathaway shirts and
Rolls-Royce.
as
more and more brands imitate the strategy of these successful campaigns, the
space gets more crowded and the consumer becomes more jaded and these
techniques become less effective.
According
to Ries and Trout, this brought the world of advertising into the 'positioning
era' of the 80s, which is where they positioned (hehe) themselves. As they
described this, "To succeed in our overcommunicated society, a company
must create a position in the prospect's mind, a position that takes into
consideration not only a company's own strengths and weaknesses, but those of
its competitors as well."
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