September 19, 2020
16 Apr

Market Norms versus Social Norms

Market Norms versus Social Norms

Dear Mom,

 

Thank you for having us over for dinner Sunday afternoon. The meal was fantastic and your storytelling about the days when nonnie (Italian for grandmother) cooked big Sunday meals when everyone came over was entertaining.

 

Enclosed is a check for $250 dollars as compensation for the wonderful afternoon.

 

Your loving son,

Gary

 

Later on the same week, I went over a friend’s house to enjoy dinner and a movie and when I was leaving I said “thank you for the wonderful evening”. I then left and was astonished later on that evening when the police arrived at my home. My friend had called them and said I had left without paying for the meal and the movie. The police wanted to slap the bracelets on me (not a true story).

Market Norms versus Social Norms

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We live simultaneously in two different worlds – one where social norms govern, and the other where market norms define the rules. Social norms are usually warm and fuzzy.

Market norms are very different. The exchanges are typically well defined (or should be) when it comes to market norms.

 

Market norms are associated with:

 

  • Wages
  • Prices
  • Rents
  • Interest on loans
  • Contracts
  • Costs and benefits

 

When humans understand the boundaries of social norms and market norms and keep them separate things move along relatively smoothly. We need to be careful to ensure that conflicts are not created by mixing social and market norms. This can spell trouble. Perhaps even land you in jail!

 

Here is another story based on the well-known quote by Woody Allen – “The most expensive sex is free sex.

 

Market Norms vs Social Norm DangersIn this example, a nice young man, we’ll call him William Robinson, takes a wonderful girl out for dinner on three occasions to very nice restaurants and pays for the meal every time. On the fourth date, he casually mentions how much this romance is costing him.

Danger Will Robinson! – danger!” For this charming young girl this is a violation! It does not compute. Indeed, she calls him a beast and they never have another lovely evening together. Where was Woody Allen when you needed him?

 

The social norms are the actions among friends that are not based on money. It is socially unacceptable to keep track of favors given and received when these are done based on friendship.

 

The business marketing world is the opposite. Here we only deal with people who can provide something to us and our measurement system is based on money. Actions are based on how much money is involved and everyone is clear on this. We try to keep these worlds separate and we act differently in them.

 

When we market our business and business value using social media we have to be extra careful. Facebook for example is more social in nature and friends share items that are not specifically related to business. LinkedIn, in contrast, is a business platform and some things which would be fine to present on facebook would be way out of line on LinkedIn.

UGG Marketing on facebook

Let’s look at an example where facebook and business work well together. First, note that UGG defines its ideal customer as:

 

  • 25-45 years old women
  • High earners
  • Trend-followers (this one certainly suits facebook marketing well)

They also want to have a message that is lifestyle-based (relates well to facebook). They want their potential customers to understand the luxury, comfort, quality and fashion status power of UGGs. They also fully realize that their customers are loyal (also relates well to facebook).

Market Norms and Social Norms - UGGs - 250A traditional-only approach would be to introduce the brand to consumers in high-end department stores and specialty retailers. Facebook is a good way to introduce the brand to more people. Facebook marketing can result in more exposure. A more traditional sales strategy (selling in shops) maintains exclusivity but brand exposure would be lower. The “traditional” approach would not reach a portion of the potential market that never enters a specialty retailer or high-end department store.

 

With facebook they not only can expand globally but do not have to rely on specialty shops and high-end retailers. UGG has control of the facebook brand exposure channel. The facebook channel also makes it easier for people to shop as from facebook people can quickly and easily go to their website and make a purchase.

 

Now UGG can be even more specific on facebook which is appropriate for this channel. It can also use facebook to gain exposure and tie this exposure to a nice holiday for couples. Moreover it can help to expand their brand recognition into the men’s footwear market. Here is a specific example based on a Valentines Day promotion.

 

It started with a question.

 

Don’t know what to get for your valentine? There are three easy steps to take:

  1. Know her size
  2. Come to UGG store
  3. We’ll do the rest, including free gift wrapping

This is simple and can attract attention on facebook with men who are often confused about what to get their valentine and how. It also helps solve a problem for men and it will help gain exposure with women who may want a pair of UGGs. The facebook exposure helps solve a problem with these women.

 

Here are the two main take-aways:

1. Do not blur the boundaries when it comes to marketing your business online and on social media platforms. Know the etiquette of the platform well. Do not push business too hard on some platforms while on others this may be perfectly acceptable.

2. If you have a product or service that lends itself well to a particular platform then get to know that platform well and use it to market your product or service in a way suitable for that platform.