July 30, 2007 by Robert Kozinets.

Okay, you’re waiting for the rest of the Poschiavo mysteries, like the Alpine witch trials, right? Well hang in there. I wanted to post something about Green Cars and Green Consumption first. The Swiss Horror stuff is coming soon….and it’s juicy….

This is a different kind of story. It start with an updated major research study by CNW Marketing Research. The report looks at the “life cycle” energy required for more than 100 makes of cars and trucks, a rather gargantuan task that had been tried once by Volvo, and then abandoned. The article in the newspaper I read, one of Canada’s national rags, the Globe and Mail, calls this “the world’s most comprehensive analysis” of this sort.

Here’s their punchline: when you account for all of their additional energy costs, and for how many miles they are likely to be driven in their lifetime, hybrids like the Prius are not very Green at all. Many different cars and trucks, Hummers, Durangos, Explorers, TrailBlazers, and Grand Cherokees are more environmentally friendly than hybrids in terms of the reports’ energy costs. That cost is the dollar cost of energy per mile of use, or “US dollars per lifetime mile.” So while a Toyota Prius has a lifetime energy cost of $2.86 a mile, the Hummer has one of $1.90 according to the report. The writer of article, Neil Reynolds, used this finding to consider that the tax credits being offered by a Provincial government in Canada are a waste of money and energy (the American government does something similar). Rather than subsidizing Prius drivers, if we really want to look at all-in energy costs, we should be looking at the best cars overall.

Which cars are those? Although Toyota disagrees with a lot of CNW’s findings, assumptions, and figures, CNW doesn’t see to be biased against the company, it just critiques their (and others’) hybrids. The report finds that Toyota makes some of the most energy efficient cars on the road: the Scion (48 cents per lifetime mile), the Corolla (72 cents), and the Echo (77 cents). Apparently, those are the cars we should be subsidizing. If you drive one of those cars, you deserve some subsidizing.

On closer reading, the article gave me a sense of deja vu, since I remembered reading something like it last year and sure enough, the main findings seem to date from April 2006. But this is the second annual report.

As someone who has thought carefully about these issues, and taught the Toyota Priis case for several years in my Consumer Behavior course, I think that the article raises some very valid points about hybrids. Consider what it says about the massive, vaunted nickel-hydride battery of the Prius:

“Toyota buys 1,000 tonnes of nickel a year from Ontario (mined and smelted in Sudbury). This nickel gets shipped to Wales for refining, then to China, for further processing, and then to Toyota’s battery plant in Tokyo - a 10,000-mile trip, mostly by petrol-gulping container ships and diesel-powered locomotives.”

This is good cradle to grave sustainable design stuff. That’s very valuable in that it points us to the lifetime energy costs of cars, directing us to try to guesstimate holistic environmental impacts.

These ratings don’t take into account other important factors in environmental degradation and cultural reality however, and that’s been the point of some negative responses to the report. An extremely well-reasoned response, for example, is Prius versus Hummer: Exploding the Myth by Bengt Halvosen. Halvosen has read the entire 300 plus original report and makes some insightful comments.

Here are two additional things to consider. First, consider the development of innovations. At the beginning of innovation cycles, products are always more expensive to produce and can be considerably more energy intensive. But as production grows, the kinks come out of the system, scale efficiencies are realized, and the innovation realizes its potential. According to this way of thinking, hybrids will, as they get popular, achieve real energy returns on the energy invested, and reduce dependence on oil. Of course, this future gains type of thinking can be used to justify almost anything and, at its core, isn’t all that different from any ends-justifies-the-means kinds of argument (and we all know where those tend to lead).

Secondly, and even more importantly, I think the symbolic identity function of cars like the Prius fulfills a very important cultural role that transcends (for the moment) their actual environmental impact. The Prius says something about Being Green. It sends out a message that tells people that you (yes, you Mr. And Mrs. Upper-Middle class) are willing to shell out extra money to drive a slower, smaller car in order to seem environmental. To me, that says something about Green Chic, which we need a lot more of. Of course, the ultimate Green Chic is to drive you bike to work, but there are lifestyles that make this difficult (commuting with four kids, for example). In a culture in which personal and collective prestige is built through massive potlatch like burns of money and resrouces, this is a movement in the right direction. Maybe the crest of a real, lasting Green movement. Maybe.

A bigger implication of the study that is worth thinking about is the role of marketing research firms like CNW Marketing Research. A lot of the complaints about the report sounded something like this:

But the biggest problem with engaging in a serious debate is that CNWMR won’t release its data or methodology from its report for critical peer review. Meanwhile, the report’s conclusions are often stated as fact throughout conservative and anti-environmental commentary (from autobloggreen, which is, you guessed it, a Green Auto blog).

So who is CNW Marketing Research? Searching their web-site, reading their FAQs and other information, I gather that…they apparently like to golf. A lot. And, apparently, to boat. From my read of it, the studies that they specialize in look at the purchase process, including such consumer behavior-y types of elements as the size and income of intended car purchasers, and consumer “wish lists” of product features. The survey-regression skillset of this kinds of study seem pretty distant from the delicate engineering calibrations and resource engineering perspectives required of a cradle to grave resource impact study of the entire automotive study.

This type of research study is called a “Syndicated study” which means that they perform the research and then sell it later to clients. They claim that they did this so as not to be influenced by anyone during their data gathering and analysis. Perhaps, but they still probably had a target consumer in mind. They still likely knew that their report was going to appeal more to particular players than others, depending upon what it says, and who it favors.

That leads to my central point. Marketing Research is increasingly politically important. Because it is legitimized as factual “research” it gives companies like GM confidence to present products like the Hummer in a particular light. It gives newspaper and blog writers material they can use as “facts” that then go to publicly criticize government policies that affect consumption and to encourage consumers to take actions in forms both political and financial. It can be used to influence consumers and to suggest to politicians material changes in legislation and regulation that affect consumption. In the absence of other facts, it becomes the de facto set of facts.

In North America today, we are currently in the Age of Green Consumerism, where the consumer is expected to bear almost the full weight of making the right environmental decisions, from using the right recycled toilet paper and replacing light bulbs to driving the right car. But where is the quality assurance of the information that the consumer is to use to make those decisions? It’s a free for all! How is the consumer to decide on the scientific rigor and general accuracy of research? How do we judge its quality? Who is conducting and overseeing the research? Who is paying for it, and whose interests is it likely to manifest? Who is rating it and telling us it is legitimate? As it currently stands, anyone can hang up a shingle and practice marketing research, saying just about anything they want. They get coverage, they get press, they have influence.

I’m not saying that I completely mistrust this particular set of findings. But is this marketing research firm really qualified to make the delicate and highly-skilled engineering types of estimations that this type of report requires? I am saying that I don’t have enough information or knowledge to really be able to evaluate its quality. And I’m a skilled marketing research professional with a Ph.D. and twelve years of intense research experience. I’d expect the average consumer to be even more confused. And the fact that the way these important judgments are reached is kept “proprietary” doesn’t help things one bit.

In this age of Green Consumerism, when there are a lot of people who care and truly want to try to make a difference through their shopping and consumption, I think we deserve better information, valid and validated research.

Not only is Knowledge Power, but in this contemporary world (Marketing) Research is Power. Those can be very different things: knowledge and research findings. That power is in the hands of a lot of private companies right now, with almost no oversight. We need to ask ourselves if self-regulation is adequate in these important matters? Are operational codes tight enough? Are we really trying to change to world through redirecting our consumption? If so, then these are by definition world-changing matters and should be taken seriously as such. Could a government agency or another arms length certified party start to oversee the quality of work that impacts the environmental impact ratings that products contain ? How can we all get more critical of the research that gets report to us as fact?

Posted in Marketing Research, Green marketing | No Comments »

July 19, 2007 by Robert Kozinets.

I’ve been fascinated by the theory and practice of innovation for years, having taught and developed the New Products course at the Kellogg School of Management for seven years. My recent blog entry on the Conference Board’s critique of Canada as a stagnant cesspool of unimaginative copycats has spurred my interest in this area even further.

The more I personally experience of Canada’s business climate, the more despondent I become. The Canadian economy is an American business clone living in a different political-social-cultural ecosystem. The supermarkets are all-American styles, but the service and stocking systems are pathetic. Same for all the franchised “services”? All-American style, but with the Canadian spin on “service.” Is there a unique Canadian cuisine? Canadian health care advances (American style, but without the budget or the service orientation)? Canadian rituals and customs? Uniquely Canadian brands (you mean President’s Choice?)? Almost everything manufactured is Made in China and consumers here don’t seem to really care: Made in Canada seems to signify nothing in any sector of the economy. And why should it?

No wonder Canadian national wealth is based on the hewing of trees and the dredging of oily tar sands. Oh, and tourism. Camping, fishing, hunting and skiing. It is a patchwork economic system based on raw material exports, exploiting land mass, and a plethora of professional services based largely on (watered down) imitation (of course there are notable exceptions, like Research in Motion, but far too few of them). It needs more.

Many of these critiques could also be leveled at the American economy. It isn’t nearly as apathetic as Canada’s, but its design and innovation orientation are slipping. What does Made in American signify anymore? In which sectors (besides Hollywood, weaponry, and high-tech) does it matter anymore? American and Canadian, heck, the rest of the world too: these are challenging times requiring immense innovation. We can all do better.

I recently came back from a magnificent trip to Italy and Switzerland as part of the European Association for Consumer Research conference (Stefania, Cele and Mary Ann put on the best conference I’ve ever attended…bravissimo!). While I was on that trip I spent a lot of time with my colleague Diego Rinallo at Bocconi University in Milan, and we spoke about the topic of innovation, and creating innovative industries. I can’t say enough about Bocconi, by the way. It is the #1 University in Italy, it has a gorgeous campus and, best of all, it is chock full of brilliant scholars doing cutting-edge, important work in the areas of consumer culture and marketing, people like Antonella Caru, Bernard Cova, Stefania Borghini, Stefano Pace and of course Diego.

So let’s talk fashion. Milan is chock full of important and innovative designers: Prada, Armani, Versace, and Dolce & Gabbana are households names around the world. There are many others: Emilio Pucci, Navarra, Cavalli. Somehow, I was under the impression that Italy and in particular Milan had always been important fashion centers, that their innovation in clothing design had been long-standing, like maybe from the Roman ages when togas were all the rage. But Diego’s recent historical studies set me straight.

Amazingly, given its international influence and renown, the Italian fashion industry is actually only 56 years old. That’s pretty amazing. Before February 12th, 1951, there was no Italian fashion industry as such. Italian dressmakers were simple copycats. They looked to Paris for design, creativity, novelty. Paris dictated fashion. Milanese and Italian dressmakers built it. Doesn’t that sound familiar?

Then along came Giovanni Battista Giorgini. He was originally a buyer of handcrafted leather goods (and much more) for a set of American department stores, a guy in touch with markets and marketing, who knew how the fashion industry worked at the level of merchandising and retailing. With some hard work, he convinced thirteen important Italian dressmakers to present their own designs and collections in Florence, at the beautiful Sala Bianca of Pitti Palace, in front of a selection of American buyers and journalists.

And the rest, as they say, is history. The idea caught on, Italy became a center for design, and a major high-value-added Milanese and Italian industry was born.

I think that major case studies of how innovative industries and companies begin and work is of immense value to managers, educators, and policy-makers. I’d love to work with Diego on building a more rigorous examination of Giorgini’s Milanese success story into an article about creating innovative industries.

Here are Five Initial Principles for Creating Innovative Industries that we can learn from the Creation of the Milanese Fashion Design Industry. Without wanting to personalize them too much (because I believe and assert that we can definitely learn from what he has done, and others can do it again in other industries), I call them “The Giorgini Principles.”

1. Code-Switching: The innovative industry “movement” was led by Giorgini, a man with cross-continental experience, a fluent translator who spoke fluent American-English, fluent Italian, fluent business/marketing lingo, and fluent fashion. He was a perfect ambassador.

2. Histori-Localization: Giorgini maintained and emphasized the Italiano aspects of design. He talked about how Italian collections would have particular lines, cuts and portability that drew from the Renaissance artistic tradition. Locating the critical “First Italian High Fashion Show” in the 15th century Palazzo Pitti was brilliant and highly symbolic of this historical-national connection. We now find that historical and local connections are read as the harbingers of authenticity by consumers of all kinds (this goes for B2B buyers as well). There was no real historical continuity between these Renaissance designs and the current Italian fashion industry. It, too, was manufactured. And fairly recently.

3. Tuning: Giorgini not only initiated creative ideas, he knew how to sell them, by first learning, building connections, tuning in and customizing for the relevant market, which was the American (and Canadian) market, through his connections with major retailers like Bergdorf Goodman, H. Morgan, Tiffany, Bonwit Teller, and Sakowitz. Staying in touch with American buyers and customers meant that Georgini was balancing multiple needs. He was managing the creative market-driving of designers, but also matching and directing it to be market-driven by the needs and responses of the American markets. That opportunity to bring in a fresh perspective and listen exists for every entrenched market.

4. Rupture Opportunism: The timing was no accident. Paris had been battered by WW2 and Hitler had misunderstood the value and placement of the Parisian fashion center and tried at one time to move it to Berlin. Paris’s dominance as a fashion center had been challenged and weakened and the time was right for a strong challenger to step in. Giorgini’s genius was to recognize this, get the timing right, and implement perfectly.

5. Pattern-Breaking: Giorgini planned the fashion shows to occur immediately after Paris held their own fashion shows. This left the designers with no time to imitate French fashion designs. They were forced to be innovative and unique.

I think that this story and these principles can be an inspiration for Canadian companies, industries, educators, and policy-makers to wake up and find an industry to claim (or reclaim) as its own. I think that industry should be in that oxymoronic necessity of environmental “technology.” I use the word “technology” loosely, to also denote new changes in techniques, procedures, practices, and ways of living, as well as in complex machines. Canada still has a natural (as in close-to-nature) “brand” meaning for the rest of the world, especially Europe and the USA (they buy Canadian mineral water for this reason). Will the world attune to our new technologies and systems to help form a more sustainable future?

What will the future cities of the world look like? Europe is ahead in innovations in this area, but with its environmental challenges, its educated workforce, and its access to capital, I think that Canada could become a quick study. The first step is that we are going to need major public and private players who recognize that the oil-and-trees boom is going to go bust very soon.

Who will be Canada’s green tech Giogini? Will someone please step up? You will need to be

• An excellent code-switcher, attuned to the realities of global environmental markets
• Aware of local and historical backgrounds, and able to build a strong case for the basis and value of Canadian ingenuity and design in this area
• Tuned into international opportunities and sales/consumption networks
  Able to take advantage of the ruptures caused by the general lack of green technology or emphasis, particular in the current Bush-led America
• Capable of devising ways to break Canadian thinkers, engineers, students, educators, policy-makers, and companies out of their intellectually lazy imitative funk, and able to motivate them to create novel products and procedures for a world that needs them

Canadian industry needs a new direction. Merely talking about “commercialization:” (the current buzzword, even worse than innovation) or “innovation” is far too general. Canada needs a specific sector or sectors where a small country like Canada can sustainably focus its “resources” literally and figuratively into particular kinds of investments and risks, portfolios of places that lock together into the kinds of microclimates and ecosystems we see in places like Silicon Valley or Hollywood/Burbank, where expertise builds on top of expertise, instead of single isolated bubbles of technology.

We have the beginnings of some interesting innovative clusters: hydrogen in BC, handheld devices in Waterloo, theater in Toronto. So how can we use the Giorgini Principles to get the geographical clustering that will attract diverse but focused talent (a la Richard Florida’s very important Creative Class work), build communities of interest and concern that functional alongside the economic practicalities of workaday culture, lead to an easy informational marketplace that aggregates ideas and companies, and lead to centers of excellence that get funded and richly pay out their investments? That’s a big question, but it’s well worth getting our finest minds tgo start thinking about it.

In Canada, for sure. And everywhere else.

Posted in Innovation & Creativity, Green marketing | 1 Comment »

June 27, 2007 by Robert Kozinets.

Well of course it is. Every year the event sells out of tickets. But this year there’s lot of controversy over whether the event is selling out the values that have made it so attractive as a countercultural haven and hotspot.

Every year Burning Man has a guiding “theme” that organizes the event and directs some of its art. I find the themes to be a little inconsistent, but often they give rise to some very intriguing and beautiful moments. One of my favorites was the marine theme that gave rise to giant lit up whales and pirate ships roaming the playa. They’re like a physical cogitation of an idea or an issue. They turn the place dreamlike, and the dream has a common thread. This year’s theme, The Green Man, is about the environment. And in order to truly have a social impact—the Burning Man Organization’s goal has always been explicitly experimental and utopian—they have invited in a number of companies to demonstrate their advanced, clean technology.

The Burning Man community might have mixed feelings about letting corporations and venture capitalists promote their wares inside the sacrosanct city walls after keeping them out as “the enemy” for all these years. According to the recent Business2.0 article I cited yesterday, the organization pulled the initial invitation for corporate participants off the website after only a few days, replacing it with a revised version that explicitly stated that

“no marketing whatsoever would be allowed at the event. Clean-tech companies can exhibit their technologiers, but their products can’t display a logo. No marketing materials will be allowed. Company reps can’t even demonstrate their wares in the pavilion: they have to turn them over to Burning Man, which will demonstrate the technologies in whatever artistic form it chooses” (Taylor 2007, p. 69).

As Alice might say, interestinger and interestinger. It’s apparent that Burning Man is walking a fine line, and experimenting yet again. The current statement says that this year marks a “quantum revolution” (strong words) in how Burning Man applies in the real world what happens on its remote and carefully demarcated playa.

In my initial exploration of the topic, I noted how Burning Man sought to keep some of the negative effects of the market at bay. These negative effects have been present at least since Ferdinand Tönnies theorized that communities could come in two idea forms: the caring and sharing variety, and a more transaction-oriented, distanced form of relationship.

As I talk about elsewhere, what resistant groups like Burning Man, fans, Open Source programmers, Mountain Men, and many other groups resist is not the market itself, but what Tönnies calls the Gesellschaft, the distanced, corrosive, exploitative social relations that people associate with the market. What seems to be important is not the actuality of total resistance to markets—which may be pragmatically impossible to achieve in an absolute way—but the appearance of it, its partial achievement.

That’s why this new development is so interesting. Burning Man is, pardon the pun, playing with fire. It is seeking to control the corporate relationship. And its cultural impact and import is so strong that is dictating the terms. And getting away with it, it seems.

The reason for the thawing of relations is also noteworthy. In its never-ending quest to be experimental and to try out pragmatic social solutions, Burning Man’s organizers realize that the utopian daydream is also in many ways an environmental nightmare. It is through its renewed emphasis on Green that it finds itself reaching out to Corporate Gold–and their proposed solutions. It seems very probable that the organizers of Burning Man have been bitten by the same environmental bug that is spreading its way around the world. I love these recent blog posts by Future Boy (the guy who also wrote the Burning Man article) about an eight year deadline for radical change in our environment, and another one about Venture Capitalist John Doerr’s environmental awakening and new mission.

What shocked me just as much as allowing physical corporations in, however, was the semantic use of corporate speak, genuine MBA-style marketing lingo being spouted by the head honchos of Burning Man. I’ve been researching and writing about Burning Man with the permission of great people like Larry Harvey, Marian Goodell, Jim Graham, Lee Gilmore, and Jess Bobier for almost a decade (my first burn was 1999). I have never heard them talk about Burning Man as a brand.

Ever.

In fact, a couple of years ago when I presented to the IEG Conference a little presentation called “What Marketers Need to Know About The Growing Anti-Consumption Movement: Illuminations from Burning Man” I was extremely careful to shy away from this topic. Burning Man is trademarked, yes, but it’s not a brand. We even got into a discussion about this topic, where I carefully avoided saying that Burning Man is a brand. Because it’s not. Um, it wasn’t.
But then I see Maid Marian in this Business2.0 article quoted as saying

“Branding’s important.”

What does this mean? Branding of Burning Man, the anti-brand brand? Is this going to be like the No Logo t-shirts, or the Black Spot Sneakers? Is it already like these hypocritical alt.brands? Can Burning Man now co-brand it’s anti-brands with big brands like Google to lend the, extra countercultural legitimacy and street cred?

It sure sounds like that’s what’s if you look at the sidebar in the article: Lessons from the Counterculture, which starts with a quip by Larry Harvey. The irony doesn’t quite make it into the page print:

“We like to joke that we may end up making money as business consultants.”

In print, this doesn’t sound very radical, countercultural, or utopian. Then the article proposes the Three Big Lessons from Burning Man. Are you ready for these?

1. Give your “customers” as sense of ownership (what customers?).
2. Let your “products” speak from themselves (what [products?).
3. Launch and learn as you go (um, what grassroots or small business would this not apply to?).

Along the way to becoming a Business mag article, a lot of what makes Burning Man special seems to have been lost in translation.

And as my old friend Lee Gilmore brought to my attention with her terrific comment yesterday, maybe the branding emphasis is coming from the legal battle launched by John Law over ownership of the Burning Man trademark (Lee, did you really see me on TV? that’s some strange synchro…). Currently, it is owned by Harvey & Company’s LLC, but Law and others would like to see it released into the public domain. The story is covered thoroughly here. Call it what you want, but that’s very much a battle over a brand in my opinion. And that’s likely to sensitize everyone to the fact that the Burning Man symbol, name, and event have come to carry considerable cultural cachet, and have attached to them significant social and thus economic value.

Burning Man opening its doors to corporations. Burning Man offering product demonstrations. Burning Man emphasizing and protecting its “brand”.

Has Burning Man sold out? What do you think?

Posted in Burning Man, Communities and Tribes, Green marketing | No Comments »