Cassandra Voices

Tag: Glocal

  • Circular Economy: ‘Make-Use-Return’

    The Stone Age didn’t come to an end because they ran out of stones. Similarly, we should be building an economy where we ‘use’ resources rather than ‘use them up’. The human species must change its profligate ways, and radically reduce the level of extraction required to fuel our needs and desires.

    The economy is a part of society, and society is inextricably bound to the environment. In the living world there is no landfill; instead, materials simply flow. The waste of one species is food for another. Things grow, fade in time, and nutrients safely return to the soil. We, humans, however, generally ‘Take-Make-Dispose’.

    With increasing consumer demand, we continue to eat into finite resources and waste more and more. It begs the question: how can we turn waste into capital?

    The idea of the circular economy is move to ‘Make-Use-Return’, both in mindset and practice, and for this to become natural. A circular world economy would marry resourcefulness, design thinking for products built to last and be recyclable, retrieve raw materials, and alter current ownership models.

    We have a waste problem. Globally, we generate about 1.3 billion tons of trash per year, leading to environmental atrocities like ocean plastic pollution. This may even become a source of future conflicts, as countries search for new places to stash their trash.

    The UN International Resources Panel projects that our use of natural resources will double by 2050. A study by the OECD shows that the flow of materials through acquisition, transportation, processing, use and disposal accounts for about fifty per cent of greenhouse gas emissions.

    What is the Circular Economy?

    The European Parliament offered the following definition in 2021:

    The circular economy is a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible. In this way, the life cycle of products is extended.

    This helpful definition should make us consider how we reduce waste to a minimum, and disassemble raw materials after a product reaches the end of its life cycle.

    The World Economic Forum’s definition is more comprehensive:

    A circular economy is an industrial system that is restorative or regenerative by intention and design. It replaces the end-of-life concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse and return to the biosphere, and aims for the elimination of waste through the superior design of materials, products, systems, and business.

    The challenge is to change our mindsets: how we think, behave, and consume collectively and individually.

    Can the goods of today become the resources of tomorrow? This could involve, for example, changing the way we recycle valuable alloys, polymers and metals so that they maintain their quality and continue to be useful beyond the shelf life of an individual product. It would certainly make a lot of commercial sense.

    We must move away from the ‘use and throw’ culture that operates today, consciously pivoting towards a more ‘return and renew’ approach, where products can be easily disassembled and regenerated.

    The circular economy isn’t about one manufacturer changing one product, it is about all of the interconnected companies that form our infrastructure and economy coming together.

    Therefore, across industries, the idea is to design products that can be disassembled systematically once the consumer has finished using them, re-manufacture and offer them out again.

    The focus then moves to ‘cradle to cradle’ rather than ‘cradle to grave’ and the production cost should decrease drastically. For example, in the clothing industry, instead of garments lying as waste in a landfill, clothing companies could collect them and reuse them to make new products; potentially profiting out of the waste.

    Everything is healthy food for something else. Everyday products from shoes to mattresses can be manufactured in a way that could be fully recyclable. For example, the fast-fashion brand H&M has made a commitment to use 100% sustainably sourced material.

    The circular economy is an inevitability. It is not simply about fixing a particular problem, but redesigning an entire system to address the interconnected challenges of climate change, pollution and waste.

    Sustainability vs Circular Economy

    The concept of ‘sustainability’ is often used interchangeably with the Circular Economy. This is rather misleading. Although both of the concepts address issues around decarbonization, energy transition, and the waste minimization narrative – amongst other points that include local and ‘glocal’ actions and strategies – the two concepts remain quite distinct.

    Sustainability, to a large extent, is a systems-level approach that encompasses environmental, social, and economic factors and assesses how they interact.

    We can also include the concept of the Triple Bottom Line (i.e., people, planet, profit) in the context of business organisations, and how this can contribute to the cause of sustainability.

    The concept of sustainability also helps us to evaluate the risks, trade-offs and externalities (positive or negative), from a life-cycle perspective, across the entire value chain. This is what leads to long-term system balance.

    Fundamentally, however, sustainability is an umbrella term addressing a wide range of scenarios and issues, and not only focusing on conservation, choosing eco-friendly options, or switching to renewable energy.

    Research by the MacArthur Foundation argues that sustainability does not have a singular focus on any individual part of the chain; rather the concept helps us to understand how the parts interrelate to enable effective overall outcomes.

    In other words, ‘individual parts cannot be optimized without optimizing the whole’. Thus, an electric vehicle is not sustainable if we factor in the unquantified and unaccounted for social and environmental externalities that span the lifecycle of the lithium-ion battery that powers the vehicle, from mining, processing, smelting, trade, and transportation across the globally networked supply chain to the lack of recycling and reuse options for the battery at its end-of-life.

    The Circular Economy in Action

    Certain industries have taken the lead in terms of rethinking and redesigning how they manufacture; choice of raw materials; and how they recollect products once consumers have stopped using them.

    BSH sells home appliances-as-a-service promoted reuse, repair and extend product lifecycles. It now offers a full service, delivering, installing, repairing, moving, adjusting and picking up the appliances again at the end of the contract.

    In the agriculture sector, there is growing availability of affordable bio-based solutions for recycling nutrients from agriculture. Using Hybrid Biofilter is a scalable solution that prevents nutrient leakage from fields, thereby improving local water quality. At their end-of-life, the biofilters can also be reused in several applications to release the captured nutrients back to their natural cycle.

    Similarly, Nike launched the recycled-content version of the Converse Chuck Taylor All-Star series and introduced ‘exploratory footwear collection’ made from factor and post-consumer waste. At the Tokyo Olympics, the athletes representing US, France, and Brazil used Nike-sponsored uniforms made with 100 per cent recycled polyester.

    Another closely related example would be Adidas, which has rolled out fully recyclable version of the Ultraboost running shoe collection made from a single material without glue. Similar initiatives are going on in Puma and Timberland.

    Likewise, IKEA launched a buy back programme where customers can receive up to 50% of an item’s original price in the form of a store voucher. Also, unsold items are recycled or donated to local community projects.

    Philips design products for hospitals, including medical equipment such as MRIs and CT Scanners. They are currently offering trade-ins on their old equipment for a discount on new systems. The company disassembles the collected equipment, refurbishing and upgrading them to sell these again.

    This is a ‘win-win’ model since hospitals get financial returns from their older equipment, while also efficiently upgrading to the latest technology. This also addresses the e-waste recycling challenge that we face today.

    H&M, the leading fast-fashion brand, now encourages customers to return used clothing to stores, who receive discount vouchers for future purchases at the store. The company classifies the collected used clothing into a) Rewear; b) Reuse; and c) Recycle categories, and they work across partners to continue with their sustainability measures.

    Costs of the ‘Make, Use, Return’ Model

    In 2015, the Ellen MacArthur Foundation demonstrated that a circular economy could boost Europe’s resource productivity by 3 per cent by 2030, generating cost savings of €600 billion a year.

    The following are three sector specific examples:

    (a) Clothing businesses have actively taken steps towards embracing circular economy practices. Some firms in the apparels industry have formed coalitions to promote nontoxic chemicals, improve cotton farming. Others are developing standards for garments that are reused or recycled. There is great scope in investing in the development of new fibres that lower the environmental impacts of production.

    (b) Recovering the material value of bottles, from mixed recyclables or bottle-to-bottle recycling, could lead to a much higher pay out. Metals, meanwhile, are commonly extracted from tires in open backyard fires – at great cost to both human health and the environment. Aggregating tires for use as industrial fuel could increase their value almost tenfold, while crumbling them to make road-paving material yields even higher returns.

    (c) Dell has incorporated recycled plastics into its products, using the world’s largest takeback program for used electronics. Their cloud service lines provide customers with computing capabilities, while eliminating the need for physical assets, reducing costs and carbon footprints. All these practices, as mentioned above, can help companies extract additional value from leakages or waste in the production process.

    Barriers to Circularity

    A study by the World Resources Institute (WRI) identifies certain operational barriers in the functioning of the circular economy.

    Creating a changed mindset is a major challenge. Thus, for example, we use twenty times as much plastic as we did just fifty years ago. This is despite a strong push from the market to use linen as the material for shopping bags.

    Unfortunately, shoppers still choose single-use plastic bags and packages that often wind up at the bottom of the ocean. This requires a change in consumer attitude as well as a more stringent regulatory push on this matter.

    Another related aspect to this is how we understand the ‘expiry date’ of a food product. Expiration dates are designed to protect the consumer, but it is not contingent on how a particular foodstuff is stored. Thus, the expiration date on eggs in India may be labelled for pantry storage, but these will last longer when refrigerated.

    So, while an expiry date can mean that a food is inedible in certain circumstances, it may still be safe to eat while not necessarily meeting the manufacturer’s quality standards. This is currently being addressed in several markets.

    Waste management and recycling infrastructure differ from country to country, which is another difficult factor to control. For example, studies project that there could be more plastics than fish in the ocean by 2050.

    There are certain limitations in how plastics are sorted by chemical composition and cleaned of additives. Better technology can maintain quality and purity so that product manufacturers are willing to use recycled plastics.

    Once there is some incentive, companies and users will be more inclined to act responsibly. This is an area where nations can work together during international conferences on partnerships and share research and development.

    The global population is projected to reach 9.5 billion by 2050, with far fewer living in poverty than today. Emerging countries such as the BRICs (Brazil, Russia, India, China, South Africa) have an expanding middle class – with increasing purchasing power.

    Clothing and apparel sector needs to lessen their environmental externalities by using non-toxic dyes and recycling cloth scraps.

    As discussed earlier, the ‘rental and resale’ model has to succeed against fast fashion preferences which produce far more waste. Also, with increasing demand for electric cars, lithium-ion battery manufacturers must design products with a similar mixtures of chemicals, allowing more processed recycling possibilities.

    From ‘Cradle to Cradle’

    A Harvard study reviewing the manufacturing sector, in particular the clothing and furnishing sectors, provides an understanding of the different strategies that embed a functioning circularity.

    First, the study suggests that companies should consider leasing products instead of selling them. This would retain the continuity or circularity.

    Moreover, from a stakeholder perspective, this would mean that the companies remain responsible for the products, even after consumers are finished with them.

    Xerox, for example, over the years have followed a model where they lease their printers and photocopiers to corporate clients rather than selling them. It entails after-sales and repair costs but is still more sustainable than replacing the devices after their life cycle ends.

    Since time immemorial the robes used at graduation ceremonies have been rented rather than sold. Similarly, the company ‘Rent the Runway’ also leases designer clothes for one-off events’

    The second example follows from the first: companies designing products that have a longer product life cycle. A longer life span means there are fewer repeat purchases and, at the same time, companies can leverage ‘durability’ as a competitive advantage over rivals.

    This can also give them access to new markets and price their products higher given the premium nature of the offering.

    For example, Bosch Power Tools extends the life of its used tools by remanufacturing them. This enables them to compete with cheaper products from competitors.

    Thirdly, companies can embed the recycling aspect during the product development stages and planning process. The idea here is to maximise the recoverability of materials used in products.

    For example, Adidas partners with Parley. The latter company makes textile thread using plastic waste from which Adidas manufactures its shoes and apparel. The end result is less plastic at the bottom of the ocean.

    Role of the State and Users

    In a world where approximately 3781 litres of water is used in the manufacturing of single pair of jeans, some choices are controllable.

    The question is do we want more plastic than fish in the world’s oceans? Are we going to allow nitrates and phosphates to leach from fertilised fields indefinitely?

    We urgently require innovative public-private partnerships, where companies, investors, governments and academia offer the intellectual, financial, and operational assets to solve big problems

    We also require a mindset shift to dream of ‘prosperity in a world of finite resources’, and where over a third of all food is wasted, even as the Amazon is deforested to produce more.

    We have to move to a situation where we are ‘users’ of services, rather than ‘consumers’; to pay-for-use (like we do in the Gig and Sharing economy) rather than ‘owning’ a service.

    The choice is as much individual as it is collective, as the Dalai Lama once put it: ‘if you think you are too small to make a difference, try sleeping with a mosquito.’

    Feature Image: Shade-grown coffee, a form of polyculture (an example of sustainable agriculture) in imitation of natural ecosystems. Trees provide resources for the coffee plants such as shade, nutrients, and soil structure; the farmers harvest coffee and timber.

  • The Fight for Water in a Thirsty World

    La Soif Du Monde (‘A Thirsty World’) and ‘The Fight for Water: A Farm Worker Struggle’ were two 2012 documentaries based on true stories, anticipating further struggles for water, or lack thereof.

    Environmentalist Erik Stokstad once remarked that ‘H2O – is there any other molecule so vital, and so problematic, for people?

    The UN estimates that around 1.2 billion people, or 20 per cent of the world’s population, live in areas where the limits of sustainable water use have already either been reached, or breached. It is high time the issue sits as a priority on the global agenda. There may still be enough for us all, if only we can keep it clean and share it.

    WHO Report

    Below are a few takeaways from a World Health Organization report on the global water scenario:

    • In 2017, 5.3 billion people used a safely managed drinking-water service (i.e., one located on-premises and free from contamination)
    • 6.8 billion people used at least a basic service. Basic service is an improved drinking-water source, within a round trip of 30 minutes, to collect water.
    • 785 million people lack even a basic drinking-water service, including 144 million people who are dependent on surface water.
    • About 2 billion people use a drinking water source contaminated with faeces.
    • Contaminated water can transmit diseases such as diarrhea, cholera, dysentery, typhoid, and polio. Contaminated drinking water is estimated to cause 485 000 diarrheal deaths each year.
    • By 2025, half of the world’s population will be living in water-stressed areas.
    • In the least developed countries, 22% of health care facilities have no water service, 21% no sanitation service, and 22% no waste management service.

    Water use has been increasing globally by about 1% every year since the 1980s. This is due to population growth, socio-economic development and changing consumption patterns. Global water demand is set to rise at a similar pace until 2050, accounting for an increase of 20-30% above the current level of use with increased demand from both industrial and domestic sectors.

    About two billion people live in countries experiencing high water stress, and four billion people experience severe water scarcity for at least a month every year.

    Water stress is defined as the ratio between water withdrawals (i.e., domestic, agricultural, and industrial water uses) and available renewable water supplies.

    Water scarcity means scarce availability (i.e., physical shortage) due to the failure of institutions to ensure a regular supply or due to a lack of adequate infrastructure. Safe drinking water and sanitation are basic human rights, indispensable to sustaining healthy livelihoods and fundamental to maintaining the dignity of all human beings.

    International Human Rights law obliges states to work towards achieving universal access to water and sanitation for all, without discrimination, while prioritizing those most in need. Fulfilment requires that services be safely available, physically accessible, equitably affordable. Water availability depends upon the amount of water physically available, and also how it is stored, managed and allocated to various users.

    It, therefore, relates to surface water and groundwater management, alongside water recycling and reuse. Water management for smallholder family farmers needs to consider both rainfed and irrigated agriculture. Approximately 80% of global cropland is rainfed, and 60% of the world’s food is produced on rainfed land.

    The 2019 UN-Water initiative called ‘Leaving No One Behind’ suggested how improvements in water resources management and access to water supply and sanitation services are essential to addressing various social and economic inequities. Water scarcity is entwined with environmental protection, poverty alleviation and promoting development; globally more than 2.5 billion people live in the most abysmal standards of hygiene and sanitation.

    Wastage of water and absence of regular clean water supply is evident not only in burgeoning metropolises but also in huge rural regions. The mighty Colorado river, North America, seldom meets the sea. One-third of the US and one-fifth of Spain still suffer from water stress. Central Africa’s Lake Chad, supporting thirty million-plus people has already shrunk to one-tenth of its former size, the negative contributory factors include inter alia climate change, drought, poor management and overuse.

    South Asian woman carrying water on her head, 2016.

    India

    In India accessibility to drinking water has increased considerably over the last decade in particular. However, around 10 per cent of the rural and urban populations still don’t have access to regular safe drinking water.

    The available annual utilizable water in the country (surface as well as ground) stands at 1100b cubic meters.

    World Bank data shows that the total cost of environmental damage in India amounts to 4.5 per cent of GDP and of this 59 per cent results from the health impact of water pollution!

    Another cause of anxiety is that unsatisfactory availability of safe drinking water. Though water contains organic and inorganic impurities, the main source of diseases are the organic impurities that enter into the water through the soil from cesspools, through manure, or through sewers emptying their contents into the rivers – from which many cities, in particular, get their drinking water supply.

    Additionally, inadequate home piping systems including unclean water tanks, improper drainage, and waste disposal systems, also contribute to impure or contaminated water. Again, the presence of excessive inorganic matters (iron, lead salts, etc.) leads to diseases like constipation, dyspepsia, colic, paralysis, and kidney disease, sometimes resulting in death. Dangerous bacteria produce deadly diseases of jaundice, cholera, typhoid, diphtheria, kidney problems, nervous system problems and even lead to an increased risk of cancer.

    Contrary to popular perception, the hardness of water is not a risk to health so long it does not contain disease-causing pathogens and bacteria. Especially, during summer and rainy seasons, the position goes from bad to worse, as water-borne diseases become rampant. The extreme heat and humid environments are favourable to bacteria. The immediate need is thus to invest in timely, reliable, proven and advanced water purification systems[xiv] that guarantees the public safe and pure drinking water at all times.

    Efforts to enhance drinking water supply must move at a greater speed so as to cover all of the villages in the developing bloc with adequate potable water connection and supply.

    Technology plays a vital role in terms of meeting people’s basic needs in a sustained manner. Naturally, protecting freshwater reserves, watershed development, chemical treatments following the safety norms, tackling the arsenic and fluoride contamination, among others, could offer rich dividends.

    Strategies for Managing Water

    The former Secretary-General of the United Nations Ban Ki-moon once said:

    we need to begin thinking about better strategies for managing water – for using it efficiently and sharing it fairly. This means partnerships involving not just governments but civil society groups, individuals and businesses.

    This is a realistic approach, which is not achieved by hiding in conference rooms and observing world water day.

    Responsibility lies with both government and the private sector, and involves: checking the unrestricted exploitation of groundwater; encouraging planned urbanization; optimisation of use; restricting the flow of effluents from industrial units to the rivers, with stricter governance.

    We must nurture new scientific knowledge in order to understand the evolution of water systems that involve the relationship between man and nature. But also integrate local knowledge into scientific research to address user needs, and put in place more effective mechanisms to translate scientific knowledge into societal action.

    The challenges of addressing the water-food-climate-change-nexus could be mitigated if collaborative approaches are taken up, which depend on political will, market mechanisms and innovative technology.

    For example, market forces could work well under a cap-and-trade approach similar to those applied to carbon dioxide. Creating mechanisms for market forces to play a role in the management of scarce water could be a major leap forward.

    Developing an inclusive institutional structure to establish multi-stakeholder dialogue and cooperation is essential to ensuring equitable access to sustainable water supply and sanitation services.

    When governments’ roles are geared towards policy setting and regulation, the actual provision of services is carried out by non-state actors or independent departments. Well-functioning accountability mechanisms help institutions with sufficient capacity fulfil their mandates to monitor and enforce the obligations of the service providers.[xvi]

    Girls of squatter settlement in Dharan collect water from river.

    Towards a Sustainable and Efficient Water Resource Strategy

    Every year, several millions of people die from drinking contaminated water. To help address these challenges related to freshwater, scientists in many disciplines are applying new tools and techniques. One way has been to understand the impact of climate change on water quantity and quality and predict future needs and threats. Another way has been to explore making use of water—for drinking or industrial purposes—from sources that are otherwise considered unusable.

    An emerging area is the ecological impact of activities related to the energy industry such as fracking or carbon sequestration. Other researchers are trying to increase the efficiency of farms and factories – the biggest consumers. Water scarcity already poses a great threat to economic growth, human rights and national security.

    Deforestation of the Madagascar Highland Plateau has led to extensive siltation and unstable flows.

    A Global Phenomenon requiring Local action – a ‘Glocal’ focus for the road ahead!

    Water recycling and finding better ways to remove salt from seawater could be of key importance. Population growth could cause global demand for water to outpace supply by mid-century if current levels of consumption continue, according to a recent study.

    Periods of increased demand for water – often coinciding with population growth or other major demographic and social changes – were followed by periods of rapid innovation of new water technologies that helped end or ease any shortages.

    Using a delayed-feedback mathematical model that analyses historic data to help project future trends, some studies have identified a regularly recurring pattern of global water use in recent centuries. Based on this recurring pattern, researchers from Duke University predict a similar period of innovation could occur in the coming decades.

    There is thus an immediate need to invest in a reliable, proven and advanced water purification system that guarantees the public – in both rural and urban areas – safe and pure drinking water at all times.

    State of the art technology must be extensively made use of in a time-bound manner to protect the triple bottom (planet, people, profit)[i] from threats emanating from various forms of pollution.

    PROACTIVE over REACTIVE use of water technologies

    It is worth noting that companies are proactively taking initiatives and are stepping up steadily. One company called Ecolab intends to further leverage lot and machine learning to enhance its proactive services to ensure water is conserved and available to both businesses and the communities they operate in.

    They have provided their service to about 40,000 customers in more than 170 countries around the world to maximize available resources. There is a positive impact on process efficiency too.

    Hopefully, the next-generation 3D TRASAR technology reduces reuses and recycles water. The technology can not only monitor the water usage at a customer’s site and alert us should it get out of control, but it can also take remedial actions based on the stress levels on the systems, and induce chemicals or reduce water usage to maximize the life of the asset and minimize usage.

    People collect clean drinking water from a tapstand in the town of Ghari Kharo, in western Sindh Province in Pakistan.

    Population Growth

    Population growth puts strain on the per capita availability of water. In the developing world, efforts to enhance drinking water supply must move at a greater speed so as to cover all of the villages with adequate potable water connection/supply.

    New technology should play a bigger role in such a context to meet people’s basic needs in a sustainable manner. Naturally, protecting freshwater reserves, watershed development, chemical treatments following the safety norms, tackling the arsenic and fluoride contamination, among others, could also offer rich dividends for private companies.

    Water limits are close to being breached in several countries, while food output has to increase by up to 100 per cent by 2050 to sustain a growing world population, according to the United Nations.

    We must holistically manage water and energy usage. Further efforts must be intensified to maximize the use of technology in order to proactively conserve water and improve performance in water-intensive industries.

    A progressive, realistic plan should therefore focus on:

    (A) improving data collection on the location and types of water resources.

    (B) promoting water-saving farming technologies.

    (C) developing sewage treatment facilities alongside water projects.

    (D) establishing a national monitoring body and a new legal framework for the sector.

    As we can’t expand in a quantitative sense, we have to expand by using our water more carefully.

    Feature Image: Abandoned ship near Aral, Kazakhstan.

  • Post-Pandemic Marketing Strategies

    Contemporary marketers must simultaneously think global, local, and glocal factors in order to stay ahead of the curve, or just keep up, given evolving market conditions and a growing attention to ‘bespoke’ needs.

    The IT revolution – plus the possibilities that AI, deep and machine learning have to offer – have washed away static approaches to marketing.

    Moreover, although it is widely known that internationalisation is a process of firm expansion into new markets, the importance of marketing is often overlooked. There are cultural, regional norms, leadership and change, and also cross-cultural branding amongst others that need to be prioritised while planning.

    International business essentially covers international transaction of economic resources as well as international production of goods and services, and, as such, the broad forms of business internationalization cover trade, technical collaboration and investment.

    While in the past, trade was undoubtedly conducted internationally, never before has it had the broad and simultaneous impact on nations, firms and individual households as today. What is more, global trade has been consistently outperforming domestic transactions over the past few decades. As a result many new countries and firms, especially in emerging markets, now prioritise international markets.

    Internationalisation of trade has been accelerated and facilitated by rapid technological advances through 2G to 3G to 4G, and now 5G.  In many respects, this has reduced the world to a Global Village where producers, customers and other stakeholders can all engage collaboratively.

    Global Village, Dubai.

    Differentiating global, international, and glocal marketing…

    ‘The international market goes beyond the export marketer and becomes more involved in the marketing environment in the countries in which it is doing business.’

    There is a crossover between what is commonly referred to as international marketing and global marketing, which are terms often used interchangably. International marketing is simply the application of marketing principles to more than one country. That is to say, International marketing is a simple extension of exporting, whereby the marketing mix is simply adapted in some way to take into account differences in consumers and market segments.

    Global marketing, on the other hand, takes a more standardised approach to world markets and focuses upon sameness, in other words, commonalities in consumers and market segments.

    Evidently, international business expanded at lightning speed over the past decade. The reasons for this rapid growth can mainly be found in new technologies, but also supportive institutions, the openness of many economies, as well as intensified competition in many sectors.

    Myanmar, for example, is now making a foray into the energy sector; while Bangladesh has emerged as a tough competitor to India in the field of ready-made garments, a sector that Russia is now also interested to participate in internationally.

    Finally, a significant difference between domestic marketing and international marketing is that in the former case business remains confined to the political region’s jurisdiction, where government rules and regulations are generally consistent; while in the latter case, once cross-border trade begins it is subject to the rules and regulation of the host country, making the situation far more complex.

    When marketing domestically, a company can have the same policies and strategies, while international marketing calls for varying strategies when promoting products and services.

    As every country has distinct laws, firms must develop an awareness of the codes, practices and norms that apply. Moreover, consumer tastes and preferences may also differ, so marketing strategies should be formulated with different consumers in mind.

    Cabbage market by Václav Malý.

    The Customer Remains King

    Both globalization and glocalisation have led to more companies pursuing the same customers, while at the same time, customers have become more sophisticated (often seeking whatever is ‘bespoke’), while information technology enables analysis of competing products, allowing consumers to make informed (and sometimes ‘rational’) choices.

    No doubt, the discovery of online alternatives by consumers has brough greater comparison of offers. Furthermore, many products have become virtual commodities, while rapid changes in technology have dramatically shortened product life cycles.

    Often similarities between offerings make it quite difficult for firms to differentiate themselves from  competitors, which, in turn, further empower customers. That is to say: a decisive shift from supplier-dominated economies towards ones dictated by customers.

    Adapting to the ‘New Normal’

    Historically, during any crisis such as the pandemic today, consumers expect proactive action, not only from their government, civil society, and local neighbourhood, but also the brands they purchase.

    For a business aiming to remain financially successful, and sustain a good reputation it is often not about the products and services, but more importantly: a corporate identity.

    Thus, one of the key ones is to keep the customers ‘informed’. Thus companies balance financial responsibility with the need to keep consumers engaged, especially during periods of long term uncertainty.

    Thus research by the American Association of Advertising Agencies indicated that 43% of consumers find it reassuring to hear from brands during lockdowns. In addition, 56% said they like learning how brands are helping their communities during the pandemic. Only 15% said they’d rather not hear from companies.

    During the pandemic, certain global companies invested heavily in new market analytics in order to adapt rapidly to new trends. A COVID-19-ready ‘client-agency’ relationship is the new norm for customer relationship managers and marketing teams.

    In the second quarter of 2020, Amazon recorded high growth in the face of COVID-19, with profits reaching a staggering $89 billion. Following that trend, companies such as P&G and GSK have also doubled their investment in the e-commerce sphere more than ever before.

    New Trends in Post-Pandemic Marketing

    Once again, recalibration is required through innovative product design, packaging and also pricing models to survive in the ‘new normal.’ Among the new ‘differentiators’ for brands is ‘health and safety’ protocols, offering bookable shopping times, fully sanitised delivery, and at-home ‘make-up’ experiences. This phase of marketing innovation is, however, costly for firms.

    Firms will surely be able to operate once against under radiant blue skies, after the dense clouds of masks and hand-sanitisers slowly fade over time.

    COVID-19 didn’t bring an end to competition; and any forthcoming slump seems likely to accentuate it. Most firms, particularly those with an established ‘brand’, will need to have multiple plans ready to go.

    They must, however, be willing to let go of an existing idea of what is ‘the right way to go’ and devise innovative ways to reach customers, suppliers, civil society, and others. This should lead to the prioritisation of people, planet and profit.

    Over the course of the crisis we have been bombarded with video ads, emails and other digital outreach initiatives. But with all the noise, especially on social media, consumers seem likely to be drawn towards a softer, more subtle, tone.

    Some brands have opted to move slowly as markets reopen, ‘playing it safe’ on the path towards reactivity. Then there are those who remain conservative, considering the sensible choice to be unadventurous, amidst continuing uncertainties around how long the crisis will last. Although the show must go on, many entrepreneurs have slowed down on marketing and PR activities.

    Leveraging #workfromhome

    Little fresh content is being created in this phase, notwithstanding how many creative ‘zoom’ screens appear in the ‘lockdown creativity’ slots on popular news channels. Most creative companies and marketers are spending the time building new campaign narratives, initial creative, copy, and baseline graphics.

    This can be a fertile period during which creative staff from media, R&D, marketing and sales are encouraged to engage in ‘blue sky thinking’ – brainstorming without limits – so as to deliver consequential output when the right time arrives. Executing new campaigns post-pandemic will demand muscle memory, not mental horsepower.

    Business marketing over the years has demonstrated that leveraging genuine empathy can be a real asset. Think of the 90s ads for Nescafe and the story building ads of ‘a lot can happen over coffee.’

    During the pandemic some companies have appealed directly to the issue. In the automobile sector for example Jeep released positive messages to encourage social distancing and ‘stay at home’ practices. It also says in online commercial that ‘with a little patience, the views will get better.’

    Company databases retain the customer feedback and other date from research programs. This is an opportune time to develop an understanding of the emotions underlying people’s shifting attitudes and behaviours in the market.

    Instead of repeating adverts, companies need to ensure they understand the process of customer engagement. The cultural and cognitive connection is equally important.

    Best Practices Shared? Further examples…

    There are some prominent examples to share in light of the above. Thus Dove created a slot shining a light on the courage of health care workers.

    Also, companies like Budweiser and Burger King are focusing on social distancing and encouraging people to play their part by staying home. While Apple quickly mobilized their resources to produce much-needed PPEs, and Nike has temporarily removed its subscription fees for its health and exercise app to help people stay fit under quarantine.

    Also, in some developed countries, there is growing appreciation that the ‘retail heroes’ who have often been working around the clock during the period of lockdown – a period that has strangled the capacity and also ability of the supply chain to function effectively.

    While regrettably severe job cuts have already happened all over the planet, big-box retailers in Canada such as Loblaw and Save-on-Food have been paying extra wages to their front-line staff as a gesture of appreciation for their efforts. And they are certainly ensuring customers are up to date with these initiatives.

    It is a good time to take stock and recalibrate. This is a period of inaction in many sectors, which at least gives a space for businesses to rethink their messages in newsletters, and how ‘new content’ on social media can be created; along with considering how all the adverts, emails, webinars and podcasts may be overhauled in light of current consumer priorities.

    Marketing campaigns are known to have solid long-term goals, especially in the case of brand management. This pandemic has asked us to rethink some of our fundamentals afresh. For example, short term planning and incremental innovation may work wonders in the immediate post-pandemic stage.

    Therefore, there will be new markets created, and new products introduced factoring in new demand amidst altered consumer patterns and long-term behavioural changes. Relying on detailed long-range planning may actually hurt an institution.

    With rapidly changing market dynamics survival may become the priority rather than turnover (of profit and not of employees) to ensure a firm’s viability. As markets, and the nature of markets, evolve with e-tails (Amazon, Alibaba, etc.), AI-driven SMEs, green supply chain etc., the essence of marketing and its channels must realign with company goals and values. They cannot simply rely on on flooding inboxes and other ways of dominating our screens.

    Feature Image: Daniele Idini

  • Cross-Cultural Branding: ‘Glocalisation’

    Much (reasonable) Ado about Branding and its components

    HSBC. The world’s local bank. Clever.

    Pepsi brings you back to life. Not a smart one, since in Chinese this translates as “Pepsi brings your ancestors back from the grave[1]”

    Mercedes Benz branded itself as ‘Bensi’[2]. Blunder. “rush to die” is what ‘Bensi’ sounds like Chinese.

    A brand can be a name, term, sign, symbol or design, or a mix of them all[3], which are used to identify goods or services of one or a group of sellers. Branding helps in differentiation and enables consumers to recall memories, thereby facilitating the initial buying process, or perhaps triggering frequent purchases which brings customer loyalty.

    Historically, branding was pursued via effective advertising, both above and below the line. In the East and South Asian markets, however, word-of-mouth remains a key channel of marketing communication, leading to changes in the way branding has come about.

    The 3Es of Business Branding are Efficiency, Effectiveness and Experience[4]. It can be argued that although a business needs all three of them to sustain a successful brand, increasingly it’s the ‘experience’ component that differentiates one brand from another. Thus, it is not always about what makes you different, but more importantly, what differentiates you from others.

    Enrique Iglesias

    It’s increasingly difficult to have an efficiency advantage, or even an effectiveness advantage. Take for example, Enrique Iglesias – performing a selected list of his all-time hits and going live in a large music stadium. The auditorium is packed with two thousand people and even the cheap seats went for about $100 a pop. At the end of the performance the whole auditorium erupts in ecstatic applause.

    Later on, Enrique ran a social experiment (as he often does) to test what would happen if he took the same ‘product’ and placed it in a different context. So, he decides to go into a subway station in New York city (which had great acoustics). He dresses up as a busker, posing as a random musician on the street trying to earn a crust.

    Iglesias sang the same hits with the same gust one weekday morning. There is security around, nonetheless. You can imagine what happened next. A crowd gathered and everybody was hushed and mesmerized, and it all ended with a big applause at the end.

    No, it didn’t go that way.

    Only a few people stopped. Few gave him money and a thousand people simply passed by without paying the least bit of attention to a busker playing a few hit songs.

    So, what was different in this situation? Well, everything really – maybe it wasn’t the right audience. It was not the right time. They weren’t in the right state of mind or mood. They weren’t expecting it; they didn’t desire to hear this music.

    Or they simply couldn’t appreciate it without the branding; without the context; the stage; the auditorium; the advertising, and maybe the ticket prices they paid in the first place also led them to appreciate the pieces more. It was just not the same experience when he played for free.

    Substance over Style

    Between 1900 and the 1950s, the whole idea about business was efficiency[5]. It was about having access to the supply. It was about controlling the supply. Demand was far in excess of supply at that time.

    Among the famous products from that time was the Ford Model T. The famous car available in any colour as long as it was black.

    Ford Model T.

    The major innovation of that time was the assembly line. And the assembly line was all about efficiency. The objective was to try and get a certain level of output with diminished input to achieve economies of scale. And management of the time was all about the ergonomics of reducing waste in that sense. Their objective was to reduce waste by maintaining the same or reducing input with time, and increase the output – then finally to increase the value at the end of the day.

    Efficiency is alive and well today. Recently, Price Waterhouse Cooper interviewed a handful of CEOs, and asked them what were some of the major projects they were launching. 70% said a major cost cutting initiative[6].

    Does cost cutting actually work? There’s a recent report in the Harvard Business Review that looked at companies within their sector with below average costs, versus those who had above average costs[7]. It shows that very few of the companies with below average costs had above average profits. those with above average costs had above average profits. i.e., if one did have above average profits, it was typically because one also invested with higher attendant costs.

    So, when it comes to cost cutting, it’s okay to cut the bad costs, and not cut the good costs.

    Effectiveness

    Our next concept is effectiveness, at the industry level, whether a firm is into making automobiles, or maintaining a green supply chain, the focus is largely on value creation. As mentioned earlier, efficiency was all about having a certain level of output with less input – but value chain is quite different.

    This approach demands to know: how do you get more out of limited inputs? For example, if you think about it from a people perspective, one aspect of this is about: can I achieve the same end with fewer labour inputs? Basically, would firing people be a good option? Or from a value perspective effectiveness, can you train them?

    At a product level, we can look at something like a razor from the perspective of effectiveness. Think of Gillette’s original safety razor? It was a single blade and the idea was that you wouldn’t cut yourself.

    The next big innovation was the second blade. The first blade gently lifts the hair out of the follicle. The second one swoops in and cuts it off, giving your face the feel of a baby’s skin.

    Gillette Mach 3 razor, circa 2015.

    The next innovation was the MACH3, three blades – so, what’s the third blade for? Maybe it exfoliates your skin? Within six months, the competition came in with four blades. Then a few years later, Gillette came out with the Fusion which has five blades. And today, we are aware of MACH14 with 14 blades.[8]

    This idea of effectiveness leads to a race in terms of performance. But all of these competitions lead to diminishing returns. The second blade adds a lot over the first blade, the third a little less, and so on. The more and more blades you get the greater the diminishing returns.

    When it comes to computers or smartphones companies are competing with diminishing functional benefits. Most people don’t even know what the RAM is on their PCs anymore.

    Now do we choose our Mac or iPhone based primarily on its quality? Do we really get a better battery life, higher screen resolution? If we did, we might have chosen an HTC or a Samsung. Therefore, the value chain missed out on a critical component, and that is the consumer of that value chain. Consumers pay over good money for what the companies have created, but they’re not part of the value creation process in any way.

    If we consider value within the chain, experience is where the real focus should be. The argument is that no value is created outside of the customer or consumer experience.

    Attention to ‘the three Es’

    Therefore, a few questions to be asked when working on your brand development. First, how much effort and attention are the top management paying to each of these three Es?

    Does the product or service actually have efficiency advantages? If they do, are they actually trading at a lower price compared to the competition? Is that their only differential advantage? Or are they similar to the competitors on the functional and utility benefits? And maybe, whether the firm knows it or not, the experience is actually what is differentiating them from the competition.

    A really important question is: if it really is about experience, how are you going to design and deliver experiences? This includes examination of how that experience is different to the design of the product or service itself. There have to be real and radical changes in the way firms design and deliver value to their consumers depending on the market.

    For effective cross-cultural branding, go ‘Glocal’ while still staying Global

    Word-of-mouth and virtual marketing are also extremely powerful tools in convincing us[9] to transactions frequently with specific businesses over a period of time. Advertising on social media and other channels has also proved effective in establishing brand names.

    For example, you may recognise Nike from its symbol or slogan (‘Just Do it’) faster than you would identify Adidas from theirs; Mercedes, BMW and Suzuki are most identifiable through their logos in their sectors, along with Coca Cola or McDonalds in theirs.

    Rear light of a Mercedes-Benz C-Klasse.

    Companies have continued to leverage these brand assets for decades now. At the same time, they have gone global, and through that internationalization arrived an understanding of the importance of global branding, but also a nuanced awareness of local factors, a phenomenon referred to as glocalization.

    Just think of HSBC’s slogan for example: ‘the world’s local bank. Local banks staffed by local peoples,’ which highlights the importance of local knowledge and inclusiveness.

    Marketing localization involves taking the source content and adapting it to meet the cultural environment of the target location. [10]. Transcreation on the other hand, is taking the message and recreating it.[11] From language to imagery, the original message and the ‘transcreated’ version can look very different.

    Lux Lessons

    Let us look at how cross-cultural branding may work in favour or contrary to the interests of companies who adopt it. Lux, a popular name in beauty-healthcare and toiletries, translates as ‘strong man’ in Chinese.[12] This fundamentally contradicts the image of a young lady on its package!

    Lux Soap.

    Lux entered the Chinese market in the 1980s and a popular Hollywood actress did their TV commercials then. While bathing herself in a large bathtub (certainly an exotic scene to the Chinese viewers at the time), she said seductively “I only use Strong Man. How about you?” Lux became a household name within a few weeks!

    However, given that the Chinese use characters based on ideograms and the majority of people are unfamiliar with the Roman alphabet, international brands have to be careful in choosing an appropriate Chinese name.

    In Taiwan, Lux means ‘beauty,’ which matches the packaging and how the image of Lux is projected in adverts. Marketing localization focuses on expressing a culturally appropriate message, whereas transcreation creatively transforms the message in order to maximize cultural resonance.

    As a language and culture loaded with symbolism and imagery, a direct translation can often lead to comical or negative results. A brand name that has some meaning to the consumer will be more easily recalled. In addition to linguistic cues, other factors that affect the translation/naming process are identified as follows: a) Reflecting product benefits or industry characteristics; b) Quality and brand positioning; c) Links to logo or packaging; d) Country of origin effect, and finally; e) Traditional values, Beliefs and customs.[13]

    The social standards of customers differ from culture to culture; one wo/man’s meat is another wo/man’s poison. The ethical values of an organisation determines its corporate image, and ultimately its brand identity.

    The company’s culture, heroes, stories and beliefs play a significant role in shaping how its brand and related components are built. An example is how innovation and knowledge inform the different themes or logos owned or used in the Google search engine every day.

    Google’s glocal initiatives gives it a secure, trusted and all-encompassing image around the world. Albeit, there are privacy concerns now leading to serious accusation of wrongdoing. In addition to privacy issues, Google has also been a bad boy when it comes to paying taxes and exploiting tax loopholes. Such factors detract from a company’s brand image.

    Another example of a ‘glocal’ initiative is with how local level managerial delegation works for Microsoft. Similarly, in order to celebrate its long-term market share and participation, Coca Cola in Turkey briefly renamed itself Koka-Kola[14].

    Other examples from the fast-food market include how McDonalds serve dishes and meals that are specific to country contexts and diets. Thus, a meal in the Middle East would have very different ingredients (reflecting local tastes and taboos) from one served in India and China. Similarly, KFC in China serves rice with most orders.

    Cultural and cognitive connections are also crucial in international marketing initiatives as companies compete for market dominance. Marketing should establish immediate, cultural bonds with target audiences. Equally important, however, is to guard against over-indulgence in some markets. There may be a danger of patronising a culture when a brand is obviously trying to localise its offering.

    Waning Faith in Brands

    In 2015, The Economist presented the results of several surveys that warned about waning faith in brands.[15] In North America, consumers said they trusted only about one-fifth of brands. In Europe the proportion barely reached a third.

    In a world in which brands ruled for more than a century (e.g. Coca-Colonization, and Tesco-ization, or McDonaldization as presented in research on Globalization), what explains this trend? The ease of accessing information should theoretically make consumer-choice processes easier. Of course, even in the virtual world, full information is not possible.

    For brands striving to maintain ‘global-ness’ in their adverts and action, some suggestions would include effective communication of goals, messaging and brand values to stakeholders. This involves explaining, developing and encouraging your vision with employees as much as with customers.

    Another important approach is to make use of advanced Translation Management Systems (TMS) that can be used for storing industry-specific and company-specific terminologies such as a tagline or product features. This is mainly to get the tone of your advertisements right!

    The next issue is to increase communication with your transcreation team, throughout a project timeline. You should be on hand to to answer questions, discuss disparities, and offer support.

    Finally, it is necessary to spend time building trust in your team, by asking generic as well as specific questions, such as will the translation of a German slogan work as well in Canada or another European market? Will your imagery convey the same meaning in China as it does in the US?

    A well-established content in one market may not be appropriate for the new market and you have to trust that your transcreation team knows what is the best move. Thus, it is vital to choose a localisation or transcreation team that are aware of cultures and customs.

    Featured Image: Enrique Iglesias, Vilnius, Lithuania 2007.11.29 by Kapeksas

    [1] Zakkour, Michael (2014). China’s Golden Week – A Good Time To Make Sure You Don’t ‘Bite The Wax Tadpole, Forbes https://www.forbes.com/sites/michaelzakkour/2014/10/02/chinas-national-day-golden-week-a-good-time-to-make-sure-you-dont-bite-the-wax-tadpole/?sh=5ab534f8560f

    [2] Etymax (2014). Creating the right name for your brand to prosper in China, https://www.etymax.com/blog/creating-the-right-name-for-your-brand-to-prosper-in-china/

    [3] Academy of Management, AOM, https://www.ama.org/the-definition-of-marketing-what-is-marketing/

    [4] Wetzlinger, W. et al (2014). Comparing Effectiveness, Efficiency, Ease of Use, Usability and User Experience When Using Tablets and Laptops https://link.springer.com/chapter/10.1007/978-3-319-07668-3_39

    [5] Mukhopadhyay, B.R. and Mukhopadhyay, B.K. (2020) Efficiency, effectiveness, experience: Building Business Branding, https://www.sentinelassam.com/editorial/efficiency-effectiveness-experience-building-business-branding-504297

    [6] PWC (2015). 18th Annual Global CEO Survey, A marketplace without boundaries? Responding to disruption, https://www.pwc.com/gx/en/ceo-survey/2015/assets/pwc-18th-annual-global-ceo-survey-jan-2015.pdf

    [7] Kumar, N. (2006). Strategies to Fight Low-Cost Rivals, Harvard Business Review, https://hbr.org/2006/12/strategies-to-fight-low-cost-rivals

    [8] Burns, N. (2006). Shaving With Five Blades When Maybe Two Will Do, New York Times, available at https://www.nytimes.com/2006/01/19/fashion/thursdaystyles/shaving-with-five-blades-when-maybe-two-will-do.html

    [9] Whitler, K. (2014). Why Word Of Mouth Marketing Is The Most Important Social Media, Forbes https://www.forbes.com/sites/kimberlywhitler/2014/07/17/why-word-of-mouth-marketing-is-the-most-important-social-media/?sh=6e86aa5054a8

    [10]  Johnson, J. (2017). Localization vs. Translation: What’s the Difference and Why Does It Matter? Forrester, https://go.forrester.com/blogs/localizationvstranslationwhatsthedifferenceandwhydoesitmatter/

    [11] Wolfestone (2016). What is Transcreation and how is it different from translation? https://wolfestone.co.uk/insights/blogs/transcreation-different-translation

    [12] Mukhopadhyay, B.R. and Mukhopadhyay, B.K. (2020). Corporate ‘glocalization’ through cross-cultural branding, The Sentinel, https://m.dailyhunt.in/news/india/english/the+sentinel-epaper-senteng/corporate+glocalization+through+cross+cultural+branding-newsid-n185737912

    [13] Kimbarovsky, R. (2020). How To Create a Unique and Memorable Brand Identity in 2020, https://www.crowdspring.com/blog/brand-identity/

    [14] Mukhopadhyay, B.R. and Mukhopadhyay, B.K. (2020). Corporate ‘glocalisation’ through cross-cultural branding, The Sentinel, https://www.sentinelassam.com/editorial/corporate-glocalization-through-cross-cultural-branding-477722

    [15] The Economist (2015). It’s the real thing, https://www.economist.com/business/2015/11/14/its-the-real-thing