Missouri State University
College of Business News
"Think Bigger and Bolder"

Bears Business Brief – People, places and things: no longer just nouns but tools

By Amy Stokes, Ph.D.

Amy Stokes
Amy Stokes

In my last article, I talked about the three levels of brand awareness. In this article I will discuss leveraging, a useful and cost-effective way to increase the awareness of your brand. Leveraging is when a brand uses already established people, places and things (events, other brands, causes, ingredients) and the familiarity consumers have with them to make an association with their own brand. While leveraging is enticing because it can significantly reduce the costs needed to move a brand from unawareness to a recognizable name, it is not without risks. As with all branding decisions, the choice to leverage existing entities requires strategic planning and alignment in target audience, positioning and goals. Without the proper leveraging strategy, your brand will likely be forgotten or overshadowed by the more dominant and familiar brand. Without proper alignment, even if you successfully create awareness it may be to the wrong target audience or may communicate the wrong message. This can ultimately dilute your brand value and long-term profitability by causing confusion in consumers’ minds regarding what your brand symbolizes, what problem it solves or need it fills, and for whom it is intended. A little forethought will go a long way toward maximizing the benefits of leveraging while minimizing its risks. Next, I’ll explain the most common leveraging categories and provide useful tips for each.

People: This can include the owner or family name, employees, paid spokespersons or characters and third-party endorsements. Leveraging people works really well when consumers are both familiar with the person and, through that familiarity, have come to trust them: A perfect example of this is local newscasters or radio personalities. Even though we do not know them personally, years of watching/listening to them day after day breeds trust. The pitfall here is that the familiarity with their employing agency may overshadow your brand. If not done properly, you might remember Lisa Rose from KY3, but not remember the product she was talking about. In order to reduce the likelihood of this happening, when using spokespersons, take them out of the environment in which consumers are used to seeing them and place them in an environment that matches the consumption scenario of your brand.

Places: Some places have become known for either competencies or climates that produce the best of the best in certain product categories. For example, we want our cheese from Wisconsin, watches from Switzerland and leather from Italy. As such, if you import goods or have received training in an area known for being the market leader, leverage that. Furthermore, there has been a cultural trend for locally sourced and produced goods, as consumers desire to support their local economy and reduce their impact on the environment. Use this consumer preference to your advantage in your communications. This information should not be buried in the “About Us” section of your website, but should instead be in your Facebook profile picture and cover photo, in your logo or tagline, and on the front page of your website.

Things: This is a broad category that covers everything from events, to charitable or social causes, to other brands or ingredients. PFI Western Wear is one local company that does a good job leveraging events and other brands. Their partnership with Professional Bull Riders allows them to host larger events than they could afford with their operating budget alone. The PBR/PFI Party in the Parking Lot is a marketing success as it not only puts the PFI name in front of consumers in their target audience, but it literally brings customers to their store for both ticket sales and the concert itself. Getting consumers used to visiting the store and its website for entertainment purposes creates not only familiarity, but also a positive association where the brand invokes memories of fun and excitement. While this event is a for-profit business venture, local businesses are often asked to sponsor charitable events in exchange for some sort of brand placement either on advertisements or during the event. While this can be very effective at driving brand awareness, it can also just be a nice business tax write-off. In order to get both benefits, sponsor at a high enough level that you are a presenting sponsor and your brand is either included in the event name or is associated with it in all communications. Secondly, make sure the charitable organization and the hosted event is one that your target audience cares about and would likely attend whether or not your brand was associated with it. Lastly, plan on it being a long-term relationship rather than a one-night event. In order for your association with a charitable or social cause to be memorable, consumers need to be exposed to it more than once. Rather than choose a new organization/event to sponsor each year, decide on one that meets both your philanthropic and strategic business needs and then consider it an investment rather than a deduction. Also, when leveraging charitable or social causes, it is important that your association be perceived by consumers as more than just a marketing ploy. Consumers respond best to this type of leveraging when they feel the social cause or charity is being furthered by the partnership as much as or more than your brand is. It falls flat to see brands turning everything pink during the month of October in order to garner goodwill and possibly increased sales, without ever actually providing financial or other types of support to breast cancer research, victims or survivors.

Feel free to combine across categories. For example, if you are a local milk producer like Memory Lane Dairy, you could use both place and people to leverage attention for your brand. The fact that they partner with farmers in a 50-mile radius of Fordland would give them automatic name recognition in several communities where those farming families live and work and often have good reputations as longtime community members. If you are a local java joint that sources your beans from Costa Rica but only from fair-trade farms, you could leverage both the reputation of the place from which your product originates and the social consciousness with which it is sourced.

This article appeared in the May 23, 2015 issue of the Springfield News-Leader.  It is available online here.

Amy Stokes, Ph.D., is an assistant professor of marketing at Missouri State University and has experience as a media coordinator in private industry. Stokes has a specialty in advertising and media issues and writes about those areas as well as general consumer behavior. Email: amystokes @missouristate.edu.

Posted in Bears Business Brief, College of Business | Leave a comment

Bears Business Brief – Optimism, or lack thereof, can affect job performance

By Elizabeth Rozell, Ph.D.

Elizabeth Rozell
Elizabeth Rozell

How do you respond when your job becomes extremely discouraging and you just want to give up? Do you stop trying and become depressed? Or do you push on despite obstacles? From a managerial perspective, what can you do with pessimistic subordinates?

The central characteristic of a pessimist is that they believe unfortunate circumstances will endure, undermine everything they do, and are their own fault. Optimists, on the other hand, perceive setbacks as temporary, specifically confined to one occurrence, and are not their fault. The resulting behavior from these very different thought processes is compelling: The pessimist gives up and the optimist keeps trying.

Martin Seligman, author ofLearned Optimism,” contends that this mindset can affect everything a person does. In fact, Seligman has spent 25 years researching people’s attributional styles and how optimism or the lack thereof can impact performance at work and even relationships at home. One of his major findings is that individuals with “pessimistic” attributional styles (i.e., those who attribute negative events to personal causes) are much more likely to give up when they encounter obstacles and become depressed. A pessimistic employee in the workplace is likely to experience motivational problems quite easily.

There are real costs to motivational problems in the workplace. A lack of motivation can lead to performance issues that can cost a business thousands of dollars in losses each year.

As a manager, how can you make your organization more optimistic?

Provide a mentor. As a supervisor, it can be helpful to note those workers with tendencies for negative thoughts. One way to work with these types of workers is to use a modeling approach. That is, the worker should be given a model or a mentor to watch and observe. In this way, the employee may gain confidence and knowledge that he, too, may perform at the expected level.

Offer attributional training. Another technique that can be used to help the pessimistic worker is called attributional training. This strategy is used to change an individual’s negative thought processes and encourages the worker to look at all possibilities for inadequate performance. The strategy attempts to train the individual to stop negative thoughts and to look at possible environmental causes. In essence, individuals must learn to dispute their own reasoning and adopt more objective, accurate and optimistic explanations. Workers should imagine themselves as their own defense attorney and re-examine evidence, challenge assumptions, consider other possibilities and offer alternative explanations.

Strategic selection and placement. Your company can select optimistic people to fill vacant positions. Many organizations test for optimism in the selection process so that modeling and training are not needed. Selecting for optimism reduces manpower waste, improves productivity and increases job satisfaction. Certainly, some jobs call for a dose of pessimism. Research provides evidence that pessimists can also be realists. In high-risk industries (safety and health, for example), moderate pessimists can be desirable.

Overall, the benefits of being an optimist outweigh those of being a pessimist. Optimists experience more success in life and better overall health. Your organization can benefit from positive thinking, and you can be the person to advocate for flexible optimism — optimism with eyes wide open. Flexible optimism ensures that personal responsibility is taken for mistakes when warranted. Bottom line: use a dose of realism when necessary, but focus on the sunny side when at all possible.

This article appeared in the May 15, 2015 issue of the Springfield News-Leader.  It is available online here.

Elizabeth Rozell, Ph.D., is a professor of management and associate dean of the College of Business at Missouri State University. Rozell also holds the Kenneth E. Meyer Professorship and is director of the MBA program. Her specialties include organizational behavior, leadership and emotional intelligence. Email: erozell@missouristate.edu.

Posted in Bears Business Brief, College of Business | Leave a comment

Bears Business Brief – Never too soon to provide a last letter of instructions

By Dr. James Philpot

James Philpot
James Philpot

When you die, will your survivors know your immediate wishes? They will if you have provided them an estate document called a last letter of instructions.

A last letter of instructions (sometimes called a side letter or a letter of intent) is an informal guide to your estate and your final wishes. The last letter allows us to relegate many small details of estate settlement to a separate document, thus avoiding a cluttered last will and testament. This separate document also guides survivors regarding funeral arrangements and other items that must be handled quickly, before the last will and testament begins to direct the probate process.

A last letter is not a legally binding document and is not a substitute for a properly executed last will and testament or other estate legal documents. However, because it is not a legal document, there are no legal requirements for a last letter, and it can be prepared and updated easily without an attorney. Last letters commonly include an estate explanation, funeral wishes, guardian instructions and last words or instructions to survivors.

The last letter can serve as a “plain English” explanation of your estate plans to your executor. Your estate’s legal documents (will, tangible property list, living will, etc.) will give the legally binding instructions, but you can fill in details in your last letter. For example, you can explain unequal treatment of beneficiaries, or you can suggest how you would like to see your daughter manage the land she has received as an inheritance. Sometimes the last letter will include a full financial inventory.

The clear expression of final disposition wishes is an important part of a last letter, because it can spare survivors much decision making while they are still grieving. In your last letter you can discuss whether and what type of funeral you want, including such items as: songs, officiant(s), charities to receive memorial gifts, choice of wardrobe, pallbearers and desired disposition of remains. If you have already pre-planned your funeral and/or already own a burial plot, this should also be mentioned.

How do you want the guardian of your minor children to raise them? You likely have already named in your will a trusted person with values similar to yours. In your last letter, you can discuss your general parenting style and desires for your child(ren) as well as alert your child(ren)’s guardian to any important information about your child(ren). You can also address such issues as your preferences for the child’s religious participation, education and other activities This can provide invaluable comfort and guidance to survivors. Final statements should be made with much caution, however. This is not the place for confession, contempt or revenge. Sometimes final statements are put into separate letters to the intended recipients, to be delivered by the estate’s executor.

When you have prepared your last letter(s), they should be delivered to your executor to be kept with your other estate documents. Like any other part of your financial plan, you should also review your last letter(s) periodically to ensure they continue to fit your situation.

This article appeared in the May 9, 2015 issue of the Springfield News-Leader.  It is available online here.

Dr. James Philpot, CFP is associate professor of finance at Missouri State University. Views expressed in this article reflect those of the author, have been distributed for educational and informational use only, and are not to be construed as legal advice.

Posted in Bears Business Brief, College of Business | Leave a comment

Bears Business Brief – Individual Taxpayers and the ACA

By Kerri L. Tassin, J.D., CPA

Kerri Tassin
Kerri Tassin

Tax season 2015 brings with it some considerations resulting from recent additions to the Internal Revenue Code. New considerations include new forms, and changes to the Form 1040, created in response to the Affordable Care Act. While many taxpayers will simply check a box in response to the new requirements, others may need to make calculations and complete new tax forms.

The “Affordable Care Act” encompasses provisions from both the Patient Protection and Affordable Care Act (Public Law 111-148), as well as provisions from the Health Care and Education Reconciliation Act (Public Law 111-152). Both statutes were passed in 2010, but taxpayers will see changes to Form 1040, as well as new tax forms, incorporated into the 2014 tax return. These changes are in response to the creation of the Health Insurance Marketplace (“Marketplace”), and the requirement that nonexempt individuals maintain minimum essential health care coverage in compliance with Internal Revenue Code Section 5000A.

Taxpayers who maintained minimum essential coverage for themselves and their dependents throughout the entire year will check the box “Full-year coverage” on line 61 of Form 1040. Treasury Regulation Section 1.5000A-2 lists the types of coverage that qualify as minimum essential coverage. Minimum essential coverage may be obtained through certain government-sponsored programs, eligible employer-sponsored programs, individual market plans, and other health coverage plans.

Other taxpayers who purchased coverage through the Marketplace may qualify for a premium tax credit under Internal Revenue Code Section 36B. These taxpayers need to reconcile any advance credit payments received with the actual premium tax credit. Some taxpayers may have chosen to wait and claim any premium tax credit in its entirety on the tax return. Applicable taxpayers will calculate any premium tax credit and reconcile that calculation with any advance credit payments made to the taxpayer’s insurance company. The calculation and the reconciliation will be reported on Form 8962, Premium Tax Credit (PTC). In order to properly make the calculations related to the premium tax credit, taxpayers must use the information they will receive from the Marketplace on Form 1095-A, Health Insurance Marketplace Statement. Any excess advance premium tax credits received must be repaid, within certain limits for taxpayers whose household income is below 400 percent of the Federal Poverty Lines. Taxpayers who may have qualified for a higher premium tax credit may receive a refund.

Certain taxpayers may be exempt from the requirement to maintain minimum essential coverage. Taxpayers will use Form 8965, Health Coverage Exemptions, to indicate the appropriate exemptions. For example, taxpayers whose household income is less than their tax return filing threshold may claim an exemption. Other taxpayers may qualify for exemptions for unaffordable coverage, short coverage gaps, and certain hardships, to name a few. Some exemptions will be granted through the Marketplace, so taxpayers need to report the exemption certificate number for these exemptions on Form 8965.

IRC Section 5000A requires that taxpayers who did not maintain minimum essential coverage, and did not qualify for an exemption, calculate an individual shared responsibility payment. The penalty will be phased in over a three-year period, beginning with 2014. The penalty will increase for 2015, and again for 2016.

The material in this article is for informational purposes only and does not constitute written tax or legal advice. Please consult with your own tax adviser regarding your personal tax situation.

This article appeared in the April 18, 2015 issue of the Springfield News-Leader.  It is available online here.

Kerri Tassin, J.D., CPA, teaches tax accounting classes in the School of Accountancy at Missouri State University. She also serves as director of the MSU Public Service Tax Clinics. Email: kerritassin@missouristate.edu.

Posted in Bears Business Brief, College of Business | Leave a comment

Bears Business Brief – Climbing the ladder from brand unawareness to customer loyalty

By Amy Stokes, Ph.D.

Amy Stokes
Amy Stokes

Every brand desires loyal consumers who will, year after year and during periods of economic uncertainty or prosperity, continue to do business with them. The question, especially for new or smaller businesses, is how does a brand move from relative unawareness to having a loyal customer base? While it is imperative to begin with the fundamentals I have already written about (brand positioning, target marketing, message source), the next step comes from understanding the hierarchy of marketing communication effects. I’ll detail each of the rungs on the ladder and the steps you can take to reach each rung.

The lowest rung on the ladder, and consequently the least desirable point, is brand unawareness. That shouldn’t really take much explaining; it means consumers do not know your brand exists. While this is obviously a problem, if this is where you believe your brand currently resides in consumers’ minds, do not despair. There can actually be a benefit to this position upon which you can capitalize. If consumers know nothing about your brand, then you have a clean slate from which to begin consumer education about your brand position. You do not have to fight any preconceived notions or negative word-of-mouth, or try to overcome inaccurate assumptions. What you communicate with consumers is what they will know about you. So proceed from here with a defined purpose and a clear plan of what you want them to think about when they hear your brand mentioned.

The second rung on the ladder is brand awareness, which has three levels. Top-of-mind awareness is the pinnacle of brand awareness. Only one brand in a product category attains this status, and the first brand that comes to mind is the brand that holds this spot. For example, if I say “bank” and you say “Commerce,” then Commerce Bank is the one bank that has earned TOMA for you. The next level of awareness is brand recall. At this level, consumers think of your brand, when they think about the product category, without having to do any research or receive any prompts. The lowest form of awareness is brand recognition. This level requires either research or a prompt of some sort in order to jog consumers’ memories. Once the logo or the name is mentioned, consumers recognize it but they would not have been able to recall it of their own accord. The level of your brand’s awareness matters because it determines whether or not you make it into consumers’ consideration set when they are deciding among alternatives. A perfect example of this happened last year when my fiancé and I were in an accident that totaled our vehicle and required a tow truck. I had never had to use a towing company before, but when the responding officer asked which company we would like them to call, the company that held TOMA in the towing product category was the one I said. So Henry’s got the business.

Moving from awareness to the third rung, expectations, is considered the sweet spot of advertising. This is where consumers begin to understand how your brand will help them solve a problem, fulfill a need or bring them pleasure. An expectation of your brand is the result of successful awareness building and the necessary precursor to achieving the fourth rung, which is trial. Most consumers will not try a product or service unless they have an expectation of what that product is going to do for them. Ideal Image Laser Hair Removal has done a great job of generating an expectation in consumers’ minds while creating awareness. The expectation is so strong that consumers can envision what life would be like if they did not have to shave or worry about hair removal and maintenance on a daily basis. It is this expectation that leads them to trial. Achieving this rung is when your branding efforts begin to produce a return on your advertising investment because product/service trial means product/service purchase.

What happens after your new customers try the product is critical. Remember, they purchased it to try it because they had an expectation of it. If the product/service meets or exceeds their expectations, the positive attitudes and beliefs they had about it (based on their awareness) have now been reinforced or cemented based on personal experience. However, if their trial fails to meet their expectations, they now have a negative attitude (based on personal experience) that future advertising will be unable to reverse. This is why managing product/service failure and addressing customer feedback on social media is so important. Consumers trust their personal experience the most, followed closely by the recommendations from friends, family and other consumers.

The continued reinforcement of consumers’ positive attitudes and beliefs about your brand turns first-time or trial purchases into repeat purchases. Repeat purchases become habitual and before you know it your consumers are brand loyal and you have earned TOMA. As you are thinking about your brand’s position in this hierarchy, strategically plan how you can better communicate your brand position to create consumer expectations on which you can deliver. This plan will help you climb the ladder.

On a side note, I would like to thank those readers who have taken the time to write with positive feedback and questions. I appreciate your time and attention.

This article appeared in the April 11, 2015 issue of the Springfield News-Leader.  It is available online here.

Amy Stokes, Ph.D., is an assistant professor of marketing at Missouri State University and has experience as a media coordinator in private industry. Stokes has a specialty in advertising and media issues and writes about those areas as well as general consumer behavior. Email: amystokes@missouristate.edu.

Posted in Bears Business Brief, College of Business | Leave a comment