The power of sponsor love

Staying with a problem athlete is not an easy decision for businesses and many times it proves to be a very costly one. For example, in 2009, when the Tiger Woods cheating on his wife scandal broke out, in just a couple of months, major sponsor companies such as Nike experienced a decline on the stock market in the order of billions, attributable to the scandal, according to the Wall Street Journal. Time has passed and Nike stuck with him, and even helped Tiger create the famous “apology” commercial. Nike didn’t stay beside Oscar Pistorius after he was arrested or with Marion Jones after the steroid scandal. The brand is still alongside tennis superstar Maria Sharapova, despite the 2-year ban from competition for using meldonium.

Speedo also supported their star athlete Michael Phelps through his marijuana and DUI adventures, only for him to ditch them in 2016 for a new company. What Speedo would have loved to know beforehand is probably Ryan Lochte’s storytelling skills, for the whole robbery saga that was created at the Rio Olympics. The company did drop him, together with his other sponsors, before any official legal charges were made. So where is the difference? What are the criteria used for making the decision whether to continue supporting an athlete?

First, you can easily add the word “star” before the name of every athlete sponsors continued to support even in a moment of crisis. Woods, Sharapova and Phelps are all superstars and champions in their sports and overall.

Second, it is usually about the nature of the offense, how consumers perceive it and the degree of negative attitude it receives. The Jones and Pistorius scandals were unforgivable and unforgettable, something not good for a brand. The Lochte scandal appears to easily go away (he is on Dancing with the stars); however, Speedo wanted to be able to fully take advantage of the positive aspects of the Olympics and not have consumers distracted.

Third, it is also about the length of the relationship, the sentimental connection. Athletes like Tiger Woods and Sharapova have worked since their debut with Nike, making the company a lot of money and also establishing rapport with the organization. It is not easy to let a lifetime of happy and profitable relationship go away, even in business. Unless consumers signal that time has come.

Image source: WVUsports.com, 2017

Maria Petrescu, Ph.D., is an Assistant Professor of Marketing in the H. Wayne Huizenga College of Business and Entrepreneurship, Nova Southeastern University. She can be reached at mpetresc@nova.edu

“Business” is not a dirty word!

From time to time some business students proudly announce their decision of following more “important”, “impactful” or “rewarding” areas, such as non-profit. Sometimes, the word “business” sounds as an inferior career choice, undignified in front of more “noble” causes, such as working for PETA or WWF. However, business is without a doubt a good guy in the fight against the evil forces. Businesses are key players in an economy and deal with the allocation of resources around the world, in a world where we suffer from scarcity. They also create jobs and incomes, promote economic development and, due to the global economy, contribute to increasing the standard of living for everyone. Last, but not least, businesses donate money and support numerous social causes, from global warming to microloans in underdeveloped countries. Just look at the example of the Gates Foundation created by Bill Gates.

The second “dirty” word that can be heard in business classes is advertising. Besides the sometimes hilarious ads that entertain everybody, most consumers, including business students, consider advertising the manipulatory member of the business family. It is true that consumers, regulators and academics have called in time for better efforts to improve the image and practices of advertising. However, less known are its benefits. Advertising feeds us information on a daily basis, it provides us necessary pieces of knowledge that help us make decisions. It also helps keep businesses in check and, many times, it acts as the market regulator, as comparative ads will surely underline the errors and weaknesses of competitors. Advertising stimulates competition, innovation and new product development, and many times it promotes freedom of communication. Nevertheless, it creates jobs and keeps the economy developing. After all, a well-developed economy is desirable for governments and non-profits.

Could we benefit from the presence of more ethical individuals in business? Absolutely, nothing could be truer. However, we cannot dismiss business as bad for society just because of a few “wolves from Wall Street”, just as we cannot belittle all non-profits just because some of them have been proven scams. Honest business and advertising are some of the best causes where you can be involved. Giving someone a job is a great cause.

Maria Petrescu, Ph.D., is Assistant Professor of Marketing in the H. Wayne Huizenga College of Business and Entrepreneurship, Nova Southeastern University. She can be reached at mpetresc@nova.edu

No high five for marijuana TV advertising

The first recreational marijuana advertisement created for TV was in the talks and negotiations in Colorado with ABC's Denver Affiliate, but never aired after all, according to Advertising Age. Cannabis marketing agency Cannabrand tried to run a commercial for Neos, a vaporizer and cannabis oil company, before “Jimmy Kimmy Live”. Colorado’s Amendment 64 permits TV advertising if 70% of the audience is at least 21 years old. However, airway transmissions are still federally regulated and marijuana is still illegal at the federal level.

Nevertheless, there is a large and developing online advertising market in this domain, and even before receiving green light for TV commercials, there are a few ethical questions that advertising for products like alcohol and cigarettes has also brought into discussion. The current advertising context makes it even more complex due to the widespread access to Internet, viral advertising potential, and global access to online information. There are the classical issues related to exposing children and other vulnerable categories to this type of ads.

There is the potential of spreading the message in areas and countries where the product is illegal, even just for the fact that the advertisement is an excellent viral ad.

Is it ethical from the part of marketers?

Can you blame a marketer for creating a great ad for a product legal in his/her state or country?

As far as controlling distribution and access only in legal states and countries, it is clear it is extremely difficult online, with easy download, copying and reposting… Can we count on consumers’ common sense in managing these issues, their advertising entertainment and their brownie ingredients as a function of local regulations?

Maria Petrescu, Ph.D., is Assistant Professor of Marketing in the H. Wayne Huizenga College of Business and Entrepreneurship, Nova Southeastern University. She can be reached at mpetresc@nova.edu

Mobile Advertising: Billion-Dollar Fraud!

There are over 5,000 apps that display unseen ads on both Apple and Android devices, engaging in mass fraud regarding advertising and slowing down devices. They also deprive consumers from advertisements that could have brought them useful or entertaining information. This conclusion was drawn in a study performed by Forensiq, a company that tracks fraud in online advertising. Over ten days, Forensiq observed more than 12 million unique devices running at least one of the 5,000 apps flagged for ad fraud. These hijacked devices represent about 1% of the mobile devices observed in the US and 2–3% of those observed in Europe & Asia.

According to the study, the threat to advertisers continues to increase with the use of known fraud tactics including device emulation, mobile user agent and location spoofing, and user acquisition fraud. In addition, the emergence of new fraud tactics not only serves to impair advertiser ROI but also impacts the consumer segment. Forensiq has discovered this new type of ad fraud called mobile device hijacking, a tactic used by mobile applications to steal revenue by rapidly loading hidden ads and emulating human behavior. While in traffic statistics the ads appear as shown, they were actually never seen by consumers. The company projected that in the US alone in 2015, $20B will be spent on mobile in-app advertising and the annual impact of in-app fraud will surpass the $1 billion mark globally in 2015.

These conclusions underline once again the importance of every basic stage in a well-planned advertising campaign, including monitoring and evaluation. Work does not stop once the campaign is formulated and the ad is running. The marketer should constantly monitor the evolution of the campaign and its preliminary results in order to be able to make adjustments and deal with potential issues, including this type of problems. Nevertheless, dealing with trustworthy partners, from a reputable advertising agency to the right platform of communication, is also very important. Otherwise, the company will end up paying money for advertisements that nobody will ever see and keep wondering why they did not work.

*Image source: http://www.youvisit.com/virtual-tours/blog/how-to-generate-leads-using-mobile-marketing/

Maria Petrescu, Ph.D., is Assistant Professor of Marketing at the H. Wayne Huizenga College of Business and Entrepreneurship, Nova Southeastern University. She can be reached at mpetresc@nova.edu

Anonymous – Cyber Robin Hood or Invisible Hand

Let the market decide. Let the market regulate itself. Let the invisible hand deal with the free market. All these ideas, coming all the way from Adam Smith, Milton Friedman and many other supporters of a free, deregulated market are brought into question especially when governments and justice fail.  However, despite the benefits of this doctrine for the free market, it seems to be much easier for companies or for other organizations to organize in the purpose of unethical (and sometimes illegal) activities, than the civil society or the consumer. Of course, due to the Internet, consumers have a much louder voice when it comes to sanctioning unethical behavior, with social media, viral videos, tweets and reviews. However, there is still a limited amount of pressure that can be generated against decisions from giant companies who are more or less close to a market monopoly position, such as TV cable companies. Even less power has the civil society against, for example, terrorist organizations.

In this context, the cyber-activism and hacking group Anonymous, brought into attention by the dreadful attacks in Paris, represents an interesting topic of study and reflection.  Known more for attacks on governmental agencies around the world and their support for Wikileaks, they recently announced war on terrorism in support of Charlie Hebdo and freedom of speech, and an initiative of taking down websites supporting terrorist activities. It represents a major attempt of organized action of the civil society against terrorism, a cyber-activism strategy on responding with concrete actions to extremism.

There is, nevertheless, another side to Anonymous and its increasing role in letting the market decide. While less known, they also organized attacks on several major companies, such as PayPal, MasterCard and Visa. Can this organization represent a way for the civil society, for consumers, to participate in a more active way in regulating the market? Could Anonymous be a way for consumers to respond with efficient tools to businesses’ unethical decisions? Is Anonymous a modern day, cyber Robin Hood, an online invisible hand not only for social, but also economic activism? Let the market decide.

Maria Petrescu, Ph.D., is Assistant Professor of Marketing in the H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University. She can be reached at mpetresc@nova.edu; http://www.huizenga.nova.edu/Faculty.cfm/mpetresc/Biography 

Kiss and Tell

While kissing is usually associated with pleasure, not business, there are international settings where kissing is an essential part of a proper greeting. Especially in a business environment, where decisions can be made in just a couple of seconds based both on number and interpersonal relationships, it is extremely important to be well-informed regarding the traditions of your business partners.

There are many elements in a greeting sequence, and in many cultures in includes a kiss as a traditional greeting. In other cultures it can be a sign that you are well-respected and accepted in your partners’ social circle. Nevertheless, besides knowing when and who to kiss, an essential detail in demonstrating your businesses kissing skills refers to how and how many times. And believe me, it is in no way pleasant to prepare for a kiss on both cheeks and then be left” in the wind” because your partner comes from a culture where they kiss just once. And it also happened that I left people “in the wind”, because I did not know about the 3 times rule. While some persons would kindly explain you how you should have done it, others just leave it alone as a slightly embarrassing moment. However, in an international business environment nothing says that you are a well prepared, thoughtful and respectful individual than knowing the habits and traditions of your discussion partners.

So, just a few examples from around the world can show you how complicated the world of kissing is. For example, in some regions of France, such as Burgundy, a proper greeting includes 3 kisses on the cheek, while in other areas of the country, including Paris, 2 kisses are enough. The same happens in Brazil, some of my students told me in class. The 3 kisses rule can also be found, for example, in Serbia or in different countries in the Middle East. The kiss on both cheeks rule is rather common around the world, even though, there might be differences regarding on which side to start. Hungarians, for example, start from right to left, while in Portugal from left to right. Other cultures, like the United States, the UK, Belgium and the list can go on, use the one kiss rule.

Other details refer to how formal or informal this form of greeting is considered, how much contact is expected and who initiates the greeting. Nevertheless, cultural differences also reflect on the role of genders in this non-verbal communication act.

Therefore, when discussing about business and formal settings, please remember to do your homework ahead of time. And if you kiss, please tell. Tell us how you do it.

Maria Petrescu, Ph.D., is Assistant Professor of Marketing at the H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University. She can be reached at mpetresc@nova.edu; http://www.huizenga.nova.edu/Faculty.cfm/mpetresc/Biography

The MINT Countries, Risky or Minty?

The BRIC countries, term formulated in 2001 by Jim O'Neill from Goldman Sachs, were identified as key targets for investment and growth for the future. In this context, analysts estimated that Brazil, Russia, India and China represent great investment destinations, whose long-term growth depends on their working population and labor productivity. South Africa was included afterwards by some analysts to form the BRICS.

While after 2001 these countries seemed to receive a boost, some more than others, in 2014 the situation is not as optimistic as predicted, due to country characteristics and the global economy recessionary issues. For example, China has experienced a significant increase in manufacturing due to Western companies’ outsourcing, with growth rates of up to 14% in previous years, but they decreased to around 5% in 2013. The same situation applies to Brazil and India.

Some of the major challenges of these countries include inflation, corruption, unstable policies and regulations, as well as significant inequalities between the rich and the poor is common. Just a few recent examples of what is happening in these countries make investors less excited about these prospects: signs of corruption and overspending have been signaled in Russia’s preparations for the Olympics, and in Brazil’s work for the Soccer World Cup. Instability in economic and financial policies in countries like Russia, India and China make investors worry about increased interest rates, inflation and taxes. Nevertheless, a better informed and organized workforce in China is starting to ask for higher wages and better work conditions, which led to increases in labor costs. Overall, the general characteristics of any developing country, such as corruption, unstable currency and policies, combined with other internal political and civil conflicts, have affected the BRICs.

In this context, at the beginning of the year, Jim O’Neill came up with another set of tempting countries, the MINT group: Mexico, Indonesia, Nigeria and Turkey. O’Neill underlined the fact that all four countries have very favorable demographics for at least the next 20 years, and their economic prospects are interesting.

One of their advantages is represented by their geostrategic position either near major economic players, such as Mexico and Indonesia, or in zones that allow for future penetration of other countries, such as Nigeria and Turkey. Especially considering Nigeria, investments in this country can represent a significant opportunity to penetrate a huge African market that has remained almost untouched by major companies. Regarding wealth, Mexico and Turkey are at about the same level, earning annually about $10,000 per person, while Indonesians earn $3,500 and only $1,500 per head is being earned in Nigeria (on a par with India). WealthInsight noted that the MINT countries are expected to rank within the top eight countries set to create the most millionaires this year. Led by Indonesia, which is expected to see a 22% increase in the number of millionaires this year, the list is followed by Nigeria with a 10% increase, Turkey with an 8.5% increase and Mexico with a 7% increase. However, as a general trait of developing countries, increases in the number of millionaires does not mean higher incomes for the general population, due to the high income disparities exhibited by these countries.

While the IMF estimates that MINTs could have growth rates in the double digits by 2050, this does not mean that businesses will not face the major issues accompanying any developing country: inflation, unstable currency and interest rates, taxation issues, corruption, unstable judicial system and politics. Moreover, each country has its own internal problems that need to be resolved before making them an attractive market. For example, Mexico’s war on drugs does not provide a safe environment for local and foreign businesses in many areas of the country. Turkey was faced with its own civil and political unrest recently and the situation does not seem to have been completely solved, while corruption and security issues in Nigeria are also high risks that need to be taken if investors expect high rewards.

Overall, statistics show a significantly positive evolution of the MINTs; however, investors who do not to their research and are unprepared will risk finding out that the actual situation is not as minty.

*Image source: World Bank

Maria Petrescu, Ph.D., is Assistant Professor of Marketing at the H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University. She can be reached at mpetresc@nova.edu

Healthy Employees, Happy Customers!

Happy employees, happy customers - This is what we keep discussing with managers and students, not only in the context of human resources, but also regarding internal marketing. As its name suggests, internal marketing focuses on the interior of the company, treating the employees as customers. Keeping employees well-informed, involved, and motivated has been proven to help them promote the company’s products and goals. It has also been shown that satisfied and happy employees are able to ultimately offer better customer value. It is not for charitable purposes that major companies, such as Google, ensure not only a great working environment for their employees, but also treat them as if they are the most important employees in the world, and with all the benefits and personal perks offered on the job.

In this context, it is surprising how many companies have been aggressively criticizing the regulations regarding the Affordable Care Act, or Obamacare. While it is expected for businesses to avoid and fight any additional taxes and expenses, this is related directly not only to the welfare of their employees, but also to the performance of business. Surprisingly, even some major companies from the food industry, including a well-known pizza chain, where employee health could be considered essential, have come forward complaining about the obligation to offer health care to their employees. While many managers might perceive employees with health issues as not being a major problem, especially if the company does not offer any paid sick days, they are, unfortunately, overlooking the importance of internal marketing and of treating employees as customers if we want them to perform their best. Moreover, if a company publicly shows disinterest in the welfare of their employees, why would I believe, as consumer, that they would care in any greater measure about their customers?

We obviously do not live in a socialist society that offers free universal healthcare or other similar social benefits. However, offering employees the opportunity to benefit from health insurance and other perks, even on their own dime, can improve their health, job performance and motivation.

Healthy employees, happy customers!

Maria Petrescu, Ph.D., is Assistant Professor of Marketing at the H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University. She can be reached at mpetresc@nova.edu

Pour Some Sugar On Me

It is rather common knowledge that in the U.S. we take life with a large side of sugar. Media present different discussions and debates related to the high rate of obesity, sugar consumption and the size of soft drinks in the U.S. We even had the example of Mayor Michael Bloomberg trying to prohibit oversized soft drinks in New York. They might be right about America's sugar obsession.

One of the key decisions that marketers need to make when doing business in international markets refers to standardization versus adaptation. In order to be successful, major companies are trying to adapt as much as possible. Regarding sugar preferences and regulations around the world, companies have shown that many times adaptation is the best approach. For example, Nabisco was forced to adapt to the local preferences after introducing Oreos to the Chinese market. Among others, they reduced the amount of sugar in the Oreos, because they seemed too sweet for Chinese consumers' tastes.

When discussing about Coca-Cola and its products, there are also differences from one country to another regarding the amount of sugar and the ingredients used. For example, 100 ml of original Coke have 42 calories in the U.K. and in France, but 44 calories in the U.S., where we also benefit from an additional gram of sugar. It might not seem much, but multiply this by 10 for two oversized drinks per day, and you will see the difference in calories.

For Coke's sibling, Fanta Orange, not only the sugar content differs around the globe, but also its color and taste. The bright orange drink in the U.S. has even more calories (45.6) and sugar (12.5 g) than Coke for 100 ml. At the same time, in the U.K. and France, just to name a few countries, it includes way less sugar and its color is much closer to yellow than the American bright orange. In the U.K., incredibly, Fanta has only 28 calories and 6.9 grams of sugar, while in France, 39 calories and 9.6 grams of sugar per 100 ml, significantly less than its sugary American sibling. There are many other examples of countries where Fanta counts on less sugar and on a more savory flavor. Moreover, while European products include sugar, their American counterparts are based on high fructose corn syrup.

The examples do not end here. Take some products from an ethnic store and compare them to their U.S. made correspondents. You even have a reason to indulge in the name of research.

Have a sweet week.

Maria Petrescu, Ph.D., is Assistant Professor of Marketing at the H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University. She can be reached at mpetresc@nova.edu More About the Contributor