How much of our behavior is governed by popular social norms? That's what Dan Ariely, a behavorial economist, at Fuqua, North Carolina had told us when we discussed about the popularity of free digital music downloads, and budget airlines in our last term while finishing MBA.
We are irrational in making our preferences, and an analytical tool can give us only that much of an answer. A data software can give cues into a decision, but accuracy comes in when we view numbers with behavior sciences, emotions, or social norms that help us choose our preference- that's why the best way to decide on a data design, is to understand social norms that are popular- Why people buy a designer watch from 1970 vintage collection? Why people follow reality shows on television such as MasterChef, when they don't like to cook at home? Why people like to drink Cola? Can we answer these by relying on DATA alone- No. Whilst working with PepsiCo, I realized that the reason to be cool stays as the biggest reason for people to drink a cola, and young audience follow this proposition. That coolness comes from following a sport, or watching Beyonce sing on TV.
Social norms that are popular across consumers in all markets- India, China, SE Asia, and US.
- Music Downloads: Napster(AND other such old websites) were used for music downloads using internet years back; Apple learnt about this social norm, and they lauched ITunes and asked users to add music to their playlist. It was a social norm that was familiar to consumer, and Apple went ahead to engage on this norm. Soon tech companies started charging users for the music download at 0.99 cents. Today the mobile operators follow this norm- Did you not hear 'Born this Way' from Lady Gaga, and its magic on your friend's phone, that made the mobile operator earn $$.
- Travel for Pleasure: Another similar social norm that has been widely accepted in so many places has been flying budget airlines for pleasure. Several years back flying the low-cost budget airlines was a given NORM for students, entreprenurs and families in United States. Yes- there were several costs associated with these airlines such as long waiting queue on the airport, no-snack, additional fare for check-in luggage, very limited hand luggage etc. However the benefits trumped the costs, and there was a way of creating a win-win for the consumer by offering a value that could not be matched by any other airlines.
It was an opportunity, and passengers waited on the airport, as they still knew that no station wagon, or a road trip could make up for the travel.
Having worked in KL, one of my highlight has been to understand the travel motivation of consumers who seem to be well placed in a country that is close to Singapore, and so many others- and what it means for them- Understanding this is about following why they travel and also understanding success of Air Asia a budget airlines- and their story as they grow from strength-to-strength, and market-to market.
Air Asia is a roaring success if we see their turnover, publicity, and their brand awareness. How Air Asia has spread its wings, and is running on the similar concept of creating value, and offering benefit in a very American fashion. They are giving customized, tailor made travel experience at a value. Also-surprisingly there is very little waiting time on the airport, or excessive delay, as one could see with a similar airline in United States.
Whats going on with them? --- The answer does not lie in just the economics or the math around the value, or the price they offer. Sure- it is a motivating price point that they offer. Price, or the number is just one piece of the equation. The other piece of the value is really the service, efficiency, time slots, reputation, management, and the culture of the staff. They offer business friendly routes, and connectivity with a hub- Changi Airport at Singapore
Their success is all about the culture of giving, and the love for offering good airline hospitality, and services that one can see whilst interacting with service providers in KL or Singapore. The culture of efficiency, and discipline in offering services is a well-known fact that SE Asia epitomizes.
Everything works with clockwork precision, and that shows with the services industry- the media services industry, the brand launches, the mobile innovation, and the retail mania. Things might delay, but things happen. Partially this is because the scale is much less compared to the scale of business in India, and as a result there are few travelers, fewer consumers, and less room for crisis, and less reasons to fail for a low-cost airline, or for an upstart consumer company, or a retail brand. While implementing a marketing program in India, one has to go through a fool proof execution plan, as the consumers are three times more than those in SE Asia. The big myth is that value is less to do about price, and more to do about the way its communicated, and shared with a smaller, and perhaps an audience that accepts all the messages, promotions, and is willing to spend.
In times of recession the pricing of an airline is determined by the consumer's willingness to pay. Often when the service norms are really high , the willingness to pay improves, and as a result consumers pay come what may.
So Yes-There is a market for a no-frill not fancy airline as it fulfills the need for people to travel for pleasure. What are the reasons for traveling?- The top reasons are going to places for conference (such as Vietnam), shopping trip, holiday with friends, or availing tickets received as gift. They would travel to HK to buy a 1970 Breitling if it gives them some vintage value that cannot be summed up in a number, or go for a wedding or a social party to Bali.
All these are social reasons for traveling- The illustration below shows this trend. These reasons are social norms, and they will stay. Those that understand these norms would perhaps make a quick buck or two. Those who don't might just lose out on a thing called 'opportunity'. It comes when we are looking elsewhere, and it goes when we are thinking of something else. DAMN!
On a lighter note, every time I make an Asian friend, I do it because I like to do it. The cultures, and the backgrounds seem to connect with me, and sometimes the association is more about a spiritual connection, and their understanding of an Indian, as its about my understanding of them, and their food, and their likes/dislikes. So next time we go for Chicken rice with them, we need to think of any opportunity that we can look at beyond our normal business hours- the opportunity of sharing cultures, and understanding social norms that are deep rooted in the gods we worship, clothes we wear, and icons we follow or on ways in which we could travel with them to explore all that. That's giving a global twist to our local tastes, or making us collaborative marketers. This is a picture with Dan Ariely, and a section member from BKK in 2010! Another Social norm is to click pictures, and create a story around those! Cheers to more such occassions that make us understand the global yet local norms!
