SD#8: price increases, Pythagoras, and meditation
March 06, 2022
Hi friends,
It is difficult to keep your head up in light of events happening in the world right now. Nevertheless, welcome to the eight edition of Seven Dawns, weekly newsletter on marketing, psychology, productivity, and more.
Our seven ideas this week:
1. (Marketing) Before the current crisis in Ukraine has captured our hearts and souls, the main story in the news was that of inflation. With inflation, businesses have a tough decision to make – do you swallow the cost increase like a pelican trying to eat a capybara or do you pass it on to the consumer by increasing your product price? Most businesses hate the idea of price increase as it is usually met with a negative reaction from their customers, trade partners and everyone in the supply chain. Equally, not raising the price means the business could erode most (if not all) of its profits. Marketers usually stand in the middle of this lose-lose situation. However, there are some steps marketers can take to navigate this. Most importantly, don’t try to hide your price increase in size reductions or hazy alterations to the product. Instead, be crystal clear about the change, explain when, well ahead of time, the increase that will occur and why. When you do communicate it, be incredibly open, where possible link the price increase to customer value. Here is a great example from Pret recently from the legendary Mark Ritson article on the topic. I recommend reading the full article if you’re going through it now. |
2. (Philosophy) Growing up in Eastern Europe, the notion of philosophy had quite negative connotations. There was a widespread belief that only a certain type of people could be interested in philosophy and thus I never dabbled in it at young age nor was taught it at school. After I had the privilege to live in the UK and be exposed to a completely different understanding of philosophy and great writers referencing it, I feel I was missing out my entire life. I decided to give homage to the early Greek thinkers and start with Pythagoras. I knew him only through his math equations, now I am astounded by how Pythagorean philosophy led to the foundation of many things we count today as basics of philosophy. From those days, no one could argue that mathematical knowledge appeared to be certain and applicable to the world. Math could also be obtained by mere thinking, without the need for observation. This reasoning lead to think that thought alone could give us ideas that everyday senses could not, thought started to be regarded as superior to observation. It started with Pythagoras. |
3. (Career) The more time I spend within my profession the more I realise how many things can be transferred not only between industries or professions but even ways of life. As a marketer, I recently learned that focusing on big bets over small ones will lead to significantly higher returns. The same can be applied say within the film industry. Big budget titles do significantly better over small distributed investments. In the mid-2000s Warner Bros with Alan Horn behind was the fourth leading brand in the entertainment industry. Alan and Warner Bros adopted a ‘big bets’ strategy. On the other hand, NBC Universal and Jeff Zucker were market leaders in the entertainment industry at the time and decided to adopt ‘small bets’. The result? Warner Bros’ strategy became the wildly profitable franchise movie strategy we’re now familiar with, whereas Jeff Zucker eventually got fired from NBC. A similar philosophy could be applied to your career, doing big things simply and well could accelerate your impact as opposed to small, distributed actions. |
4. (Meditation) Have you ever tried meditation? If so, you probably encountered your mind wandering off and the feeling of guilt/anxiety from doing so, just like the guilt of spending your Sunday watching Netflix but it does not stop you from pressing next episode. It bothered me when I tried meditating. The thing is, a wandering mind is a human mind I later learned. It gave us as a species an evolutionary advantage (and in my above excerpt about Pythagoras lead to a whole new field). It also made us go over and over again on what happened in a meeting yesterday or how the party next week might turn into a disaster. I learned that meditation is not about stopping these through sheer force of will. It’s only to spot when your mind has wandered off one way or another, and then bring it back to here and now. |
5. (Psychology) ‘Our conscious mind likes to think that it is the oval office when in reality it is the press office’ – Jonathan Haidt, author of The Righteous Mind. I cannot get over how brilliant this quote is. I’ve previously discussed how we usually have no clue why we made one purchasing choice over another, this quote encapsulates much more than that. If you ever read ‘Thinking, Fast and Slow’ by Daniel Kahneman, you know our brain makes an overwhelming percentage of unconscious decisions or shortcuts that we are not aware of. Our conscious mind likes to think that it is in charge at all times, but in reality, it serves more of a communications function: trying to explain why we made certain decisions and hoping it’s the truth. |
6. (Marketing) One of the first things you learn in marketing is the 4Ps (product, price, place, promotion). Around 70 years ago it accurately described most of what marketing was about. What you sell, for how much, where, and how. Sadly over the decades marketing control of the 4Ps has been decreasing. Many departments are reduced to nursing just one of them – promotion. While one could argue that is the natural evolution of the discipline, the reality is that it reduced the voice of marketing in most organisations. If you leave marketing out of pricing, then you’re robbed of insight into consumer needs (as discussed in our first insight). Remove influence over place, and you risk decisions being made based on cost rather than customer experience. Remove marketing from product, and you get innovation for the sake of innovation. Marketers should not sit idly and prove their value in each of these areas. |
7. (Business) Businesses use marketing to jump on bandwagons without realising their actions are opposite to their doing. VR, AR, blockchain, crypto, smart glasses, now metaverse –business world crazes that come and go. More often than not, marketing is employed to figure out how the business could present itself within these platforms. Usually to detrimental results. One should stop whether these channels have their customers (in large numbers), how it fits within their overall strategy, and the type of message it would send. Strategy before tactics. |
Fun things to click on:
Could it be possible to create a machine that makes any drink in your home at the press of a button? Well, apparently it is real and it’s called the “molecular drink printer”. Web3 is gaining a lot of coverage these days, here’s Ian Bogost’s take.
Thanks for reading! If you have any learnings you’d like to share with me, or disagree with any of the ones above then do drop me a message.
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Speak soon,
Tom