An interview with Jaideep Sengupta specialized in Consumer Behaviour

Over a week ago, as a part of the 9th module of the SKOLKOVO Executive MBA programme, the second group studied a Consumer Behaviour course.

A complicated science of consumer behaviour was taught by Professor Jaideep SENGUPTA from the Hong Kong University of Science & Technology.

Professor Sengupta agreed to give an interview and discussed some professional subjects with us.

- You teach a very interesting subject at the interface of psychology and marketing. Does it help you in your everyday life to know the consumer behaviour model or the theory of consumer behaviour?
- Yes, I think it’s important because I spend a lot of my time studying all marketers trying to influence it. So if you’re aware of that, then to some extent when you are watching an ad, you can look at it itself and the influence it makes, and then you can guard against that a little bit. But there are so many things that are done, that marketers do and that we react to as consumers in a really unconscious way then even if you know about it, it’s very hard to guard against it. Well, I’ll give you one favourite example first. There’s a study that showed that if you’re in a wine store, I mean if you’re shopping for wine and they are playing classical music… When you’re hearing the classical music you’re more likely to buy more expensive wine, because it is in that state of mood. But if they’re playing this modern pop music, though you think of yourself as a sophisticated person, but then you kind of get down on your knees and buy the cheap wine. But that kind of thing you can’t even arrest. This is unconscious.

- You know that cultural differences have a direct impact on our behaviour, consumer behaviour. Can you give any striking examples?
- There are lots of them. I think one of the examples I actually use in my classes... You know about a Marlboro man? That was started in the US. Whenever you see the Marlboro man in the US typically or you used to see, because in these days he’s not popular any more, so back in the old days. All you see is one cowboy, just one man, because the US is very much about the power of the individuals standing out or doing their own thing. Now when Philip Morris, a parent company, took this label to Japan, it didn’t work at all. Japanese consumers felt sorry for him. The reaction was like to a poor man, he can’t be doing very well, he has to work alone. Then they showed several cowboys together. It’s the power of the group that is much more important in Japan. It’s a more collectivist culture. There are lots of other examples.

- Do you apply different approaches to teaching in different countries?
- To some extent, but I think it’s a basic theory. The consumer behaviour, the theory that I drop on the psychologist theory, that I drop on better about human behaviour, about human code. And the theory doesn’t change. Also in terms of how students interact in some countries. Now I’ve had a pleasure of teaching in many different countries. I’ll show an example when I teach in China. There’s a more reluctance of speak up, which I don’t see in Russia. So that’s why I encourage more group activity and so they speak at the group, which makes it easier for them to do that.

Professor Pierre Casse: Russian managers love challenges

We offer you an interview with Professor Pierre Casse in which he tells about his teaching experience and explains how SKOLKOVO students differ from students of other business schools

Pierre Casse was once a staff development specialist at the World Bank and one of the highest-paid business trainers in the world. He teaches courses on leadership at business schools in Germany, USA, Slovenia, and France, writes books, and consults multinational companies. Mr Casse has been a professor of leadership at SKOLKOVO since January 2009.

- Why did you accept the offer to teach at SKOLKOVO?
- When I was invited to Moscow, I thought—why not? I got here and I really liked it—the atmosphere, people’s reactions, their openness and thirst for knowledge. People are very warm here. And I appreciated the strong entrepreneurial spirit of the SKOLKOVO project itself. The creation of a Russian Harvard is a brilliant project, not only for Moscow but the world. It’s a very ambitious project, but not an easy one.

- I know that you love to learn about cross-cultural differences. What is your impression of Russian students?
- First of all, managers in Russia love challenges like no one else. They enjoy it when someone riles them up. Second, they love to discuss ideas and get very emotional doing so. Nowhere else in the world have I seen students pound their fists on the table while discussing case studies! They get carried away and shout while they are solving problems, making a big mess. But they get results. German students maintain perfect order in the auditorium, but they don't come up with any new ideas during discussions.

- And what don’t you like?
- I spend time with students and with managers of major companies for whom we conduct seminars. They are happy to raise their level of management expertise, but when the discussion turns to whether they will be able to apply their new knowledge, many of them begin to claim that they aren’t able to change their organisation. They often mention bureaucracy and corruption. The problem of how to apply education is not one that comes up only in Russian business schools—it also exists in the USA, but here it is more noticeable. A person is open to new ideas, but is not ready to put them into practice. That’s absurd. Perhaps this can be explained historically, since people in the Soviet Union were directed from above for so long—they were told what to do, what not to do. I tell my students—don't try to change your company or country all at once. Change the environment around you. Create a community of people like yourself. They say—yes, I can do that. But I want to say that the new generation of Russian managers is very different from the old one. They hungrily seize upon something new, ready to take the initiative, change, and take risks.

“Life Alert” - SKOLKOVO students' project

Students from the first SKOLKOVO MBA intake have been busy with their start-up projects: projects of all teams are to be presented before a strict expert jury as early as in December.

Today we will introduce you with one of the projects of our students called “Life Alert”. High techniques help to care about our health and health of our nearest and dearest. We talked with one of the members of team, Dmitry Yurchenko.

- Dima, please give details of what you are working at?
- It concerns a serious, really terrible problem that many of us face. Let’s imagine an elderly person; to make it more illustrative, let it be Santa Claus who is known to everyone from childhood. And now let’s reconstruct a critical situation. An early morning, he isn’t completely awake yet, he goes to the kitchen to make a cup of hot tea. Suddenly he loses balance that actually often happens to elderly people. Falls down. Statistically, when falling, unfortunately, elderly people don’t have time to react and protect vulnerable spots, so falls are very dangerous for them. That is what happened to Santa Claus – he started falling, hit himself hard, lost consciousness, bleeding began…

Some time later he came to consciousness, felt all his body aching and incredibly weak, so that he was incapable to turn on his own. Time went by; he couldn’t find strength to call for help and kept on lying on the cold floor. Two hours later his muscles started to decay (myoglobin decays), another four hours later his kidneys stopped. Santa Claus lay, suffered and knew that it was long till the next New Year, so no one was likely to come to see him…

Some hours later it was impossible to save Santa Claus at all. But to turn him over in order to suspend those terrible processes would be enough.
Just imaging how many elderly people, lonely or living separate from their relatives, face such critical situations…
What do you think could have saved a life of Santa Claus?

- If his grandchildren had learnt somehow what happened…
- Right! If Santa Claus had a chance to call for help, if there were a help call button within his reach – on his neck or wrist, for instance – his life would be saved. It is that we are working over now – we are developing a business plan for the life save button. Our project is called “Life Alert”. It can seem to sound simple that some single button can dramatically change the state of things, save a human life, but that’s what it is.

Let’s examine another scenario: let’s assume that Santa Claus didn’t come to consciousness after his fall and, consequently, was hypothetically unable to press the button. We have a solution for such cases too – a fall sensor. This is a device with a sensor which can distinguish daily actions from falling and send a warning signal of a possible fall to an emergency response console “Life Alert”. More advanced versions of this device can control a location of an elderly person by GPS, read an electrocardiogram, monitor an organism response to medicine taken, detect critical organism indications and inform a patient, a doctor and family members of a possible danger to health and life of the person.

- A story with Santa Claus is very sad. How often does it happen?
- Very often! There are more than 18 million elderly people over 65 years old in Russia. Over 7 million of them will statistically fall this year, with most of them falling again during the year with various severe consequences. About half of those who fall at this age cannot get up unassisted. Over 7% of falls result in fractures for the elderly. About 10% of falls end in severe head and internal injuries. It means that since you and I started talking (and you started reading this interview), several tens of the elderly have fallen, with many of them lying waiting for help.

Practical leadership course

Pierre Casse is one of the most outstanding lecturers at SKOLKOVO. We have written about him a lot in our blog, but he became even more popular, after his lecture read on the Open Day was published. Many people regretted missing his workshops. But now everyone has an opportunity to communicate with this outstanding man personally. Pierre Casse will hold a “People Leadership” programme.

This is one the most popular SKOLKOVO programme. It allows participants to take a look at sources and principles of leadership, to diagnose key aims of a leader, to improve leadership competences and find a personal way of a leader who will inspire other people.

Programme objectives:

• Define characteristic features of a leader in a turbulent environment
• Understand individual motivation under uncertainty
• Promote creativity and innovation in people and teams
• Acquire a selection of leadership skills to mobilize individuals, teams and organizations

The programme will be held on December 1-2 on the Campus of the School. You can find more details at our site

Pierre Casse will be accompanied by Professor Paul Claudel from Aix-en-Provence University Business School (France) who is also an independent consultant and holds corporate workshops all over the world. Key subjects of his courses are HR management, leadership and business philosophy.

Paul Claudel is an author of several books on leadership and philosophy. His recent book “Philosophy for Creative Leadership” was written together with SKOLKOVO Professor Pierre Casse.

SKOLKOVO MBA student Edward Khamaza: 3D projection as a new art form

We are offering you an amazing performance that brightened a Town Day in Kazan – a 3D projection show onto the building. This performance was prepared by Edward Khamaza, MBA SKOLKOVO student (first intake). An interview with Edward Khamaza about his project is coming soon!

We are offering you an amazing performance that brightened a Town Day in Kazan – a 3D projection show onto the building of the Tatar Academic Theatre of Opera and Ballet.
The best of all would be to see that type of show live, of course, but we are confident that a camera view won’t mar general effect.
You might have heard about 3D projections onto buildings, but it’s the first experience of that kind in Russia.

This performance was prepared by Edward Khamaza, MBA SKOLKOVO student (first intake). We suggest you watching a video first, and then reading an interview with Edward.

- Edward, how long have you been making projection shows?
- As regards production of 3D projections onto buildings, I didn’t start it until this year. It had occurred to me before, but while I studied, I wished to implement it.

- What was it that encouraged you during your studies at the School?
- At SKOLKOVO I found time for creative work and got eager to do something I had had no time for, when I did business at my company Smart&Bright Lighting. While studying, I managed to get beyond the limit, show a freedom of thought, let loose creativity to make something new. The atmosphere is appropriate: an entrepreneurial spirit at the School cannot but encourage you in experiments.

- Is there any connection between the area of projection shows and your company?
- A new company is called Smart&Bright Production. My company Smart&Bright Lighting is engaged in design and light design of architectural and indoor lighting at a highly professional level. We offer our customers interesting, non-typical but at the same time functional and economically sound solutions. So there is no direct connection. But my partners took part in implementing the first project and are supporting me now.

The Rise of the Emerging Market Global Middle Class - is a new research of SKOLKOVO

The economies of the emerging markets have made great strides in recent years and in some cases decades. Hundreds of millions have been lifted out of poverty in both China and India. For the first time in history, these economies are leading the world economic recovery. Collectively, their foreign exchange reserves amount to 20% of world GDP. Despite all this progress however, they still essentially lack a sizeable global middle class. While hundreds of millions may no longer be classified as living in poverty, as defined by the World Bank, relatively few have the purchasing power of the great middle classes in the rich, developed world.

This paper will examine what this rise might look like and some of its economic consequences for the global economy.

The highlights from this month’s brief include:

• This is history’s third great middle class surge, and this time, it is coming exclusively from the emerging markets
• China has at least 400 million people on the threshold of becoming globally middle class. It will lead the world in adding people to these ranks over the next 15 years
• India will replace China as the biggest contributor to the global middle class around 2027
• Asia, currently home to 28% of the world’s global middle class, is projected to account for two-thirds by 2030
• In terms of its impact on global economic growth, consumer spending between the emerging and developed market economies is now roughly equal.
• While income inequality may be rising rapidly within most countries, the distribution of global income among countries is rapidly becoming more equal.

An interview with Alexander Osterwalder

Lately we have told about a special master class on creation of business models given by Alexander Osterwalder to the MBA SKOLKOVO students. Below is an interview with Alexander after his lecture

-What is your general impression of the School and SKOLKOVO Campus?
-I think it’s great! And specifically what I liked is the work places - that’s the first thing that I noticed. It is a perfect environment for my work – these paint walls, you can use them to draw on, to stick up things. That’s actually pretty rare, either in schools or meeting rooms, you wouldn’t meet this kind of infrastructure which is necessary for creative thinking.
Besides the new building, which is nice too, but also having such comfortable classrooms that help you to do creative work - that's brilliant. These are my first impressions about the school.

- What else do you need for your creative work?
- Brilliant people (laughs). So the class is fine, there are many people from different countries. Some of them are entrepreneurs, they want to go to entrepreneurial career, some of them want to return to their companies. So the group of students is excellent to work with.

- Do you feel the cultural differences of students' learning?
- It is difficult to generalize. There are certain differences, but I can only speak from my experience, from the groups I worked with.
So, I would point out one common feature: it is difficult to the entrepreneurs to put themselves into the shoes of the customer before designing a new product or service or a new business model. In some countries, it becomes a kind of norm. In others it doesn’t. For example, in Europe I’m working with a pharmaceutical company on service innovation, and they can’t put themselves into customers’ shoes in different countries. So there are certain cultural differences from one country to another, and differences in one business area to another.

Advice on business literature from Helen Edwards

We are pleased to present you a regular fresh selection of books from Helen Edwards, a SKOLKOVO Library project manager. You can read her previous advice on business literature here.

1. Fault lines: how hidden fractures still threaten the world economy
Raghuram G. Rajan
Princeton University Press, 2010
259 pages
ISBN 9780691146836

Just announced as winner of Financial Times Business Book of the Year 2010, Fault lines was written by one of the few economists to see the financial crisis coming. The book shows how the collective effect of individual choices, in themselves a rational response to the prevailing economic order, had the effect of exacerbating flaws in the financial system, leading to meltdown. The author believes that the dangers from the economic crisis are far from over and outlines the steps he thinks necessary to avert them.

And see http://www.ft.com/indepth/business-book-award-2010 for details and excerpts from all the FT short listed books.

2. The Facebook effect: the inside story of the company that is connecting the world
David Kirkpatrick
Virgin books, 2010
372 pages
ISBN 9780753522745

With the film The Social Network http://www.thesocialnetwork-movie.com/site/ just out, the Mark Zuckerberg story is attracting even wider interest. This book, also shortlisted for the FT Business Book of the Year award, was written by a reporter with inside access to Facebook's founders and key executives including Zuckerberg himself. It describes how Facebook was created but also the company's business culture and beliefs, its use of engagement marketing and the concept of "gifts" as the "cool" approach to advertising, how it makes money and its extraordinary impact on global communications.

3. The coaching kaleidoscope: insights from the inside
Manfred F. R. Kets De Vries; Laura Guillen Ramo; Konstantin Korotov and Elizabeth Florent-Treacy
Palgrave Macmillan, 2010.
256 pages
ISBN 978-0230239982

The purpose of executive coaching is to develop the practice of reflection for the benefit of individuals and their organisations. This book, based on experience at the INSEAD Global Leadership Centre and the European School of Technology and Management, Berlin, describes the research methodologies, interventions and techniques used for leadership development. There are also contributions from those experiencing coaching giving their view of their personal development.