Café 976 Develops Customer Experiences the Green Way

Cafes are a natural part of the urban landscape but Café 976 takes this idea to a higher level. The establishment offers a colorful servicescape brighter than what you might find in your grandmother’s garden. As a converted home Café 976 is retro, trendy, and environmentally friendly. Located a few blocks from Pacific Beach the café acts as a stopping point for locals and students. 

The foliage provides enough cover for a little privacy but not so much to restrict interaction with others. The furniture is old and brightly colored similar to what you might find in a garden but much more functional. The yard is sectioned off into little interaction areas around a tree, a courtyard, or deck. If you don’t like the company in one area move over to the next. 

A positive experience encourages customers to engage in word of mouth advertising. A study of coffee shops showed that managing customer experiences in the functional and emotional domains led to higher customer satisfaction and post purchase behavior (Nadiri & Gunay, 2013). Customer experiences will determine whether they will come back, invite their friends or say positive things about the establishment. 

Café 976 takes particular care over their environment and stands as an example of positive experience management. It is unique enough to create a brand that stands out but not so niched as to limit new customers. Offering a variety of soups, sandwiches and beverages you can take your items and relax in the garden. They balance unique and functional in a way that develops a stronger business model. 

Café 976

976 Felspar St,

San Diego, CA 92109
http://www.cafe976.com/

 

How Online Media Will Change Marketing Strategies

Is the world of marketing changing? The advent of online marketing has adjusted the basic assumptions of marketing and the way in which companies reach potential customers. A longitudinal study by Valos, et. al. (2010) looks at the perceptions of 40 senior marketing executives and attempts to understand how things have evolved. The study provides implications for future marketing strategies.

No doubt the Internet has changed the very way in which people obtain information from their environment and how they make choices between different types of products. Each purchase is based upon a range factors that includes social impression, product understanding, ease of purchase, information attainment, benefits vs. costs, and consumer personality.  

The Internet has become a new catalyst in putting these factors together in a way that leads to positive purchase decisions. Today’s advertisers are moving away from mass marketing approaches and seeking to be more exact with their marketing dollars to increase conversion rates. 

Why spend a fortune canvassing a large market when you can focus on those customers most likely to purchase? The Internet is offering the ability to customize marketing directly to motivate buyers based upon specific customer profiles. Messages are becoming more focused to appeal to core consumers.

Related research indicates that marketing will become more akin to engineering through database-driven decisions (Peltier, et. al. 2006). As marketing becomes increasingly interactive and able to reach specific subgroups it will require higher levels of analysis and development. 

The way in which companies put together their marketing mix will evolve to maximize emerging technologies. Imagine how a highly motivated market segment may be attracted to specific videos, language, graphics, key words, and displays. The way in which companies develop their marketing mix will naturally have an influence on attracting the selective attention of their most lucrative customers. 

The authors conclude that the increase in niches will make marketing increasingly complex. It will be beneficial to coordinate diverse media, marketing objectives, and marketing metrics. Personalization of marketing will likely grow and emerging technology needs to be incorporated into a company’s marketing mix. As customer touch points increases a greater emphasis is placed on using behavioral data and attitudinal data to fine tune marketing components. Mass marketing that serviced the mass manufacturing systems of the past are likely to become more expensive and be viable for certain types of businesses.

Peltier, J., et. al. (2006). Interactive IMC: The relational-transactional continuum and the synergistic use of customer data. Journal of Advertising Research, 46(2), 21-28.

Valos, et. al. (2010). Practitioner prognostications on the future of online marketing. Journal of Marketing Management, 26 (3/4).

Developing Strategy through the Creative Process

Creativity is an important component of strategic thinking. Those who are able to imagine and think through varying scenarios are capable of predicting the end game.  Research by Larson and Angus helps shed light on the process of creative learning and its association with developing critical strategies (2011). This learning can start in high school and move into the early college years. Creative learning may continue through one’s lifetime.

The development of agency is an important tool for achieving goals and ensuring the ability to move through a changing environment.  Projects in young adulthood and early college can help to develop the mental faculty of seeing projects to their completion as well as thinking creatively about solving problems. Education should have a level of creative faculty to develop these skills to match concrete content learning.

Agency skills also develop the ability to have executive control over one’s own thoughts, learn new cognitive tools, develop creative problem solving, learn the action skills to achieve goals and move into higher order thinking. These skills and abilities further create a platform for strategic thinking.  Without the ability to think creatively, it is doubtful that new methods and paths will be found.

Programs often use the “arc of work” approach which includes the concepts of planning, monitoring, adjusting existing plans and receiving feedback. When projects span of a period of weeks and months it requires students to be reflective of their creative process. When the situation changes the students can find ways of adapting to those changes. It is this thinking about and reflection on methods that helps students find new ways to complete their projects in meaningful ways.

When people are engaged in projects and own the results they invest themselves into the process more deeply. It is an investment that helps create higher order thinking and strategic planning. The creation of a long-term project helps to connect the many different work methods and strategies students use to navigate their environment. It helps solidify successful methods from unsuccessful ones.  They are likely to use these later in their working life.

The researchers used 11 different programs to assess the results of subject creative process. They worked back into the creative process and conducted in-depth research to assess how such projects foster creative strategic thinking.  A few years later, they interviewed the participants again to create a longitudinal approach. They looked at artistic programs, social activism, media arts, political action, and leadership programs. An in-depth review of plans, thought processes, and perceptions were particularly important.

The participants reported that they learned how to mobilize their efforts and regulate their time. They gained the long-term perspective that allowed them to create strategies to complete their projects. Their plans were broken down into action steps. Steps are seen as sequential actions that lead to project completion. 

Most remarkably, participants learned that strategic thinking requires the ability to adjust with changing circumstances, understand how others respond, and think through the alternatives, and have backup plans. They were able to think through how human systems operate and what cognitive models others use to respond to their various actions. Most importantly, they were able to transfer the skills learned to other areas in life including prediction of events and determining alternative actions.

The report connects the concepts of creative thinking and analytic analysis to determine the potential scenarios.  The authors come to a definition of strategic thinking as ‘Use of advanced executive skills to anticipate possible scenarios in the steps to achieving goals and to formulate flexible courses of action that take these possibilities into account.’’ Strategy is a process of first envisioning the possibilities and then systematically thinking through the likely outcomes of results. It is both a freethinking and analytical process where possibilities are explored and the most likely ones chosen. When the environment changes, so does the strategies.

Larson, R. & Angus, R. (2011). Adolescents’ development of skills for agency in youth programs: learning to think strategically. Child Development, 82 (1). 

The Development of Strategy in Small and Medium Organizations

Strategy formation may be one of the most important aspects of managing a company. Without a proper strategy the ship bounces around the sea in hopes of finding fruitful land. How that strategy is formed is often a difficult question to answer. Research by Pop and Borza, (2013) helps to determine how strategy works within small and medium organizations (SME). This helps further solidify the concept that strategy is based   upon the environment and resources available that help to make companies more competitive.

In developing strategic decisions it is important for managers to interpret the signals coming from the internal and external environment appropriately. Doing so creates an opportunity to formulate strategies not only for their daily operations but also for long term corporate interests. It is this strategy that will act as a guide to regeneration and renewal that leads to corporate achievement. 

Successful strategies are developed, implemented and then re-evaluated. Companies that are static and unable to change are the ones that will eventually suffer economic decline.  Renewing products, procedures, marketing campaigns, distribution methods, financial resources, and human capital components are just some of the overall process that should be revisited and improved on a continual basis. 

To help determine how strategy is evaluated, formulated and implemented at Romanian SMEs the researchers conducted a number of case studies. They utilized five companies and formulated their approaches into concepts such as the definition of strategy, implementation, development, references, evaluation, and information in the strategic process.  The study helps highlight the process of strategic development as well as the thought processes that are applied. 

Understanding the environment and moving through a systematic evaluation of strengths and weaknesses was beneficial. The process of environmental and competitive understanding was seen as “keeping an eye on the market”. The decision makers used exact data to make their strategies but maintained a level of flexibility to mitigate risk. They adjusted their strategy when the market called for it. 

When companies were developing the mission and the management team’s personal values were extremely important in developing appropriate statements and policies. Missions and processes have changed overtime making strategy a fluid endeavor. There wasn’t a specific point at which the companies made changes but they did so based upon their understanding of their environment. 

When change was needed it was typically the manager or the executive that made the decision. They focused on changing processes in order to adjust the internal workings of the organization to the newly adopted strategies. At times these changes created a positive or negative chain reaction throughout an organization. When these changes were dysfunctional they changed the strategy or processes again. 

Since many new companies within their market went bankrupt the managers tried to maintain an entrepreneurial stance and use strategy to ensure they are meeting their longer term objectives. This included trying new products and services when they create an opportunity. Yet despite their interest, the new opportunities needed to fit within their strategic needs to be considered relevant. 

Each company used their own specific approaches to formulating a strategy. The report doesn’t go into these concepts in depth but it is possible to see some trends that include 1.) understanding environmental needs, 2.) understanding internal resources, 3.) developing the strategy, 4.) changing processes to match the strategy, 5.) being open to new opportunities within the strategy and, 6.) changing the strategy when the market changes.  As such, strategy is a constant fluid evaluation of one’s internal and environmental factors. It is a process of seeing the trends and meeting those trends in ways that maximize financial growth and organizational sustainability. 

Pop, Z. & Borza, A. (2013). Summarizing the crucial steps of the strategic management process through the eyes of Romanian managers of SMES. Review of Economic Studies & Research Virgil Madgearu, 6 (1).

The Strategy of Level-K Decisions-Outside Bounded Rationality

Art Dr. Murad Abel

Reviewing a number of game theory results the authors Crawford, Costa-Gomes, and Iriberri (2013) discuss why people often deviate systematically from equilibrium in game theory. By understanding why some choices appear irrational (level-k) it is possible to better determine under what circumstances such behavior is prevalent. Their paper reviews and analyzes a large swath of game theory results to make some conclusions. 

Strategic thinking is a natural part of everyone’s life and influences everything from school choice to business decisions. In game theory each person seeks to maximize their payoffs based upon predicting the choices of others by assuming the rationality of the other players. This is called bounded rationality as all players work under the same assumptions. 

There is also something called level-k responses. It is an assumption that all players actions will improve in an attempt to take the dominant stance that eventually leads to equilibrium. A level-k response would indicate that a person is making decisions outside of shared understandings of “rational” choice. This indicates the person’s cognitive model and assumptions of the game may be different than other players. 

Because there is a lack of information when a game starts, some players recognize this ambiguity and avoid dominant positions that often fit within the equilibrium model. Each person responds to the game with a personality type that impacts the types of decisions they make. It is their personal beliefs that help them develop a strategy for dealing with the components of a game and choosing certain patterns. 

Equilibrium is seen as rationality with a common belief among players. The more evidence a person obtains from the game the more accurate and rational their decisions. Players often make larger and wilder maneuvers in the beginning of a game and then move to define choices toward the later part of the game as they begin to understand the rules. 

Using a concept called level-k models it is possible to see how certain behaviors move away from equilibrium choices and under what circumstances such behavior can be expected. Many poor decisions may be made from a lack of time, information, or cognitive deficiencies.  Yet it is possible to find that level-k decision-making may have some advantages in resolving games and conflict. 

In a level–k decision it is believed that the player is making decisions regardless of the other players within the game. Level-1 players have higher cognitive hierarchies than Level-0 players and believe others are playing at a lower level. So and so forth up the chain of complexity. Higher level thinkers (i.e. L3 players) may come to the conclusion that the game takes into account many different levels of strategic thinkers and their actions are based upon the aspects of their complex environment.

Expanding on the concepts within the paper it is important to make a distinction between irrational behavior and perceived irrational behavior. In small games with clearly defined rules the rational choices are obvious. In larger games without restrictions, what is seen by one as irrational choice may yet be the most rational choice. These choices may depend on objective, environmental testing behavior, countering limited thinking of other players, or even drawing in the behavior of other players. 

Strategic thinking is important as organizations seek to move from local to global marketplaces where the environment has many more options and choices. The perception of rationality is based upon the abilities of those who are doing the judging and their ability to understand the environment or the behavior.  As cognitive complexity rises so does the ability of individuals to make choices where the strategic purpose of the decisions are not immediately apparent to lower level thinkers. This could be an advantage in and of itself.

Crawford, V., et. al. (2013) Structural models of nonequilibrium strategic thinking: theory, evidence and applications. Journal of Economic Literature, 51 (1).