SCHMITTblog

Experiential Pricing Nonsense

Some luxury hotels have found a new way to charge you double for (roughly) the same thing: they simply rename their offer.  When I stayed in a Hyatt on my latest Asia trip, I discovered that the hotel had recently built a spa area next to the fitness center.  They now offer massages in two places – the quiet massage room adjacent to the fitness center, and the “spa room”; both are virtually identical but the massage in the spa costs twice as much (more than USD160).

How can you justify that price premium?  I guess you could call it “segmentation”: let the the zen-desperate pay for their “spa experience” massage with a scented candle added.  Even more preposterous, they are charged another USD 30 if they want to stay in the same room after the massage, to “meditate.”  Serenity-seeking couples can pay a USD 50 markup if they want to enjoy their massages next to each other in the same room.  They really charge you big for "experience." But I guess I may be to blame, in part, for this sort of experiential pricing nonsense.  Didn’t I write in my books over and over again that “experiences have value”?

Chinese Brands Going Global

Branding is become a hot topic in mainland China.  Everyone’s asking: How can Chinese companies turn their brands into global brands? What does it take? When will we see the first few global brands coming out of the P.R.C.? And so on. Well, there are already Lenovo and Haier, and if you define a brand a bit more broadly, you can count in the Beijing Olympics and Shanghai, the city, as well.  But surely, the Chinese government and Chinese businesses have larger aspirations. So what’s holding them back? What are the constraints?

These were the issues debated at the inaugural Shanghai branding conference held today at Jiatong University, as part of the Center on Global Brand Leadership network that I have created over the last few years. The consensus: Chinese businesses know all about branding. What’s holding them back is not a lack of know-how, but financial and organizational issues. Plus, a huge local market--over a billion consumers in mainland China--that still offers significant growth without facing the challenges of entering new markets.  By comparison, Taiwan (a much smaller local market) is further along in pursuing global branding.  (Same reason that the Dutch speak better English than the Germans.)

However, as I witnessed at the Shanghai Auto Show (see picture above), certain Chinese industries – like automobiles – are fully geared toward international expansion.  Several Chinese car manufacturers are creating products for overseas markets, and some have already shown their brands at international car shows as well.

(Incidentally, the conference was a wild success, with an array of prominent speakers, some of whom appeared on Shanghai TV's hot Brainstorm show,  and attended by hundreds of invited guests; I’ll post a link soon to our official conference report.)

I Don't Want to Be a Famous Man, I Want To Be Useful

Jerry--multi-talented Chinese taxi driver/interpreter/licensed guide for executives of Bosch, Siemens, and Nokia--explains to me how he markets himself.

Train Melody Paradise

For years, I have been a HUGE FAN of the Train Station Music in Tokyo (the digitized tunes they play when a train stops at a station), and now have finally found the web site to further explore my obsession:

http://nekocha.sakura.ne.jp/top/melody/index.html

Great stuff, and a tribute to the new SCHMITTmultimedia approach on this blog. (Since the new Bond movie just launched, let me put Mahler aside for today and challenge you for the name of the station that plays a theme from a spy thriller set in Vienna. Answer coming soon on this blog!)

BTW, I am  hanging out here in Tokyo to do some lifestyle immersion research on trends in Tokyo (and some work for my ad agency client ADK).  Harajuku continues to be a good source for that! Aside from Harajuku, I discovered the Berry Cafe (yes: berry = belly here unfortunately) between Omotesando and Shibuya.  They have turned the cafe into an all-out Xmas Strawberry Experience, complete with Snowwhite costumes of the service staff! Ah, those Japanese, they know tackiness ... along those lines, enjoy the station tunes.

Hair/No Hair as a Competitive Advantage

Busy day yesterday. I am manically finishing my new book; so that takes out lots of time from my day, starting in the very early morning hours. 

Headed to the World Business Forum to catch a speech by Wynton Marsalis on how to make corporations “swing.” Also loved Malcolm Gladwell. In guru speeches lots of hair (Gladwell) or no hair (Godin) is definitely a competitive advantage. I must discuss that with my Afghan hairdresser this weekend in Munich.

Listened to part of Bill Clinton’s gig and then had to go to my MBA/EMBA class at 5:45 pm. Rushed to  Yoshi Yamamoto’s Adidas Y-3 fashion show afterwards. (I had even changed between Bill and Yoshi to look proper. I explained my jeans outfit – bought in a tiny place in Rome four months ago – to the students by saying “Look, it’s fashion week.”)

But I was late. The show entrance was at 8pm, and I arrived at 9:15. They had built the stage on one of the piers, and the audience had to cross the stage over a bridge to get to their seats. They had already removed the bridge. “Yoshi would not like it,” I was told by the usher who turned me away. 

But what if my hair had been big?

Those Embarrassing European Five Stars

When you have just come from Asia, the difference in hotels is stark. Sure, you get high ceilings with moldings. But everything else in many European five-star hotels is not up to par with Asian hotels. The service is incompetent and negligent. Internet access usually a gamble. In the five-star in Rome where I am currently staying for a client event, there was an unpleasant exchange between the front desk and the customers who had been waiting endlessly for their luggage. In my room, the LAN cable is on the marble sideboard, far away from the desk. The TV is circa 1970. Low bandwidth made my Voice-over-IP phone calls a garbled mess. Alright, I will stop complaining, and will head for the splendid plaza.

Strike, Again

I am stopping in Munich for a day. For the second time in three months I have tickets for Maria Stuart, the Schiller play. For the second time I show up at the theater and they only have a limited performance because of strike. (See my prior blog). And the same union is threatening strikes of the public transportation system during the soccer Worldcup.

Why not? When the world visits Germany, let it be known that the world’s highest paid workforce with the lowest work hours is on strike!

Asia's coolest city? (part 3)

I have arrived in Shanghai.  Taipei, Hong Kong … Berlin, Paris … move over!

THIS is the city of the future. Buzz all around. No lazy people. Infrastructure Big Think. Shanghai will clearly be the commercial center of Asia.

Asia's coolest city? (part 2)

On the way to Shanghai from Taiwan, I stop by in Hong Kong for a brand conference. Now, before I get to the question of Shanghai cool, what are we supposed to make of this city of Hong Kong – now and in the future? First, when the future of a city becomes a conversation topic, then the future of a city is an issue, and it is usually a bad omen.

Here are three comments that I collected during two days of conversations: 

“Hong Kong is much better than Shanghai. The legal infrastructure. The estate tax is gone. Investors love it again.”

“In a couple of decades, Hong Kong will be like Monaco. A place of former splendor, now just a strip of land of historical importance.” 

“Hong Kong?"

Asia's Coolest City? (Part 1)

I am on a quick and intense Asia trip (you know, 4 cities in 6 days) for consulting, speaking, meeting, experiencing. The last 2 days I was in Tokyo, now I am spending a day in Taiwan where I have not been in a few years.

A recent lifestyle article from New York Magazine that I have brought along says: “For some, Shanghai is already over -- Next up?” You guessed it: Taipei.

Well, not really, I must say – or maybe it is too subtle for me to notice. Sure, there is Taipei 101, currently the tallest building on earth (see picture). And new hotels and new restaurants. It's a really good city now. But I am not sure it can compare to the excitement and “gold rush” mentality of Shanghai. In fact, not only Taipei, also other Asian cities, and cities elsewhere in the world, will have a tough time keeping up with the pace of Shanghai in the future as far as I can tell. in a few days, I can compare again when I will be in Shanghai again (I go there a lot).

So shall I say, “we’ll see”?