Co-Authored with Delphine Dion

Chanel may be the most famous French brand in the world. Coco Chanel, its founder, is one of France’s most recognizable icons—its perfume, No. 5, the world’s best-selling scent ever. And Karl Lagerfeld, its designer of 19 years, is perhaps the most quoted personality in the fashion business. (…) Lagerfeld was hired in 1983… His mandate was to resurrect the label. And while, season after season, he continues to design contemporary clothes, the root of each collection is the cardigan jacket suit that Chanel herself created in 1925. In the last decade, Chanel has continued to grow, introducing new perfumes, a sports collection, a watch line and a fine jewelry collection. (…) Designers will come and go, and Chanel will always be Chanel.[i] (New York Times, February, 2002; emphasis added.)

What is the implicit marketing strategy driving Chanel’s success? Behind this question lies another, about the management of a human brand, that is, a brand created around a person, here Coco Chanel. Marketers face two distinct strategic challenges linked to the corporality that distinguishes human from product brands. First, the people who anchor the human brand inevitably die; the loss of the founding human presence threatens the brand’s continuity. Second, the humans who personify brands may lose the performative edge (charisma, skill, creative spark) that produces their success (Luo et al. 2010). Therefore, two questions arise about the human brand. How should a human brand be managed over time, and in particular, how should it be managed as a human brand beyond the founder’s lifetime? These questions resonate with concerns about how to manage the succession of charismatic leaders. The latter, unresolved problem is noted in marketing and research about family companies (see Del Giudice 2017; Mehrotra, et al. 2011). In this study, we draw on medieval political theory and performativity theory to address the question of how to manage human brands over time.

Drawing on extensive ethnographic work, we examine human brand management in luxury, services, and mass-market goods. First, we extend the theory on branding by providing a new understanding of human brands and their management. Our conceptualization of human brands goes beyond the conventional marketing interest in celebrities whose lifestyles and biographies are mass mediatized. We redefine a human brand as one where the brand identity is a narrative construction developed around a charismatic person. We extend branding theory by investigating how management may prolong a human brand over time and transcend its founder’s lifespan. Theorizing human brand management as a temporal challenge extends existing branding theory. We show that, similar to monarchies, firms configure brand dynasties that enable firms to overcome the constraints of the human lifespan. A brand dynasty consists of a brand persona, a narrativized and mythologized construct built around the founder, and brand heir, who performs the brand, a couple whose performances are repeatedly  validated by qualified cultural intermediaries.

Second, we contribute to the literature on branding in a more comprehensive way by investigating brand performativity. Similar to the performative turn in strategy (Mintzberg and Waters 1985) we promote the concept of “brand as performance.” The performativity concept can help researchers develop a dynamic view of how brands are produced and performed in context. That is, we show that the brand heir performs the brand drawing on the cultural and material resources associated with the brand persona and while introducing meaningful variation into profile of the brand. This is a citational practice, to employ the language of performativity theory.

Finally, this research identifies new ways to manage human-centered brands at the strategic and operational levels. We highlight the contingencies governing success and failure in managing human brands. All the details  available on demand:

Eric Arnould, Aalto University Business School, eric.arnould@aalto.fi

[i]http://www.nytimes.com/2002/02/24/magazine/the-power-behind-the-cologne.html. Accessed November 10, 2016.

The exceptional personal quality, the capacity to inspire a following, and the charismatic
‘aura’ characteristic of charismatic leaders are well known (Weber, 1915/1947). This
‘quality’ charismatics embody is of course ‘socially inscribed’ (Wieser et al., 2021, p. 8).
Following Weber, Kallis (2006) remarks charismatic legitimacy is based on followers’
voluntary subscription to a mobilising myth, that is, an ‘emotional belief in the leader’s
capacity to epitomise, further and pursue it’ (p. 31). Charisma is thus a relational concept,
an emotional attachment of followers to a persuasive figure, which Wieser et al. (2021)
term ‘entrainment’. Through the performance of charismatic authority, some charismatic
person brands induce ‘awe and inspiration’ (Fleck et al., 2014, p. 87) and a communal
relationship based on a high degree of entrainment (Dion & Arnould, 2011; Loroz & Braig,
2015; Wieser et al., 2021; Wohlfeil et al., 2019).

Like Wieser et al. (2021), Reh et al. (2017, p. 500) show that charismatic aura is
a synergistic effect of leaders’ behavioural signals. They also argue that ‘individuals
may . . . develop specific prototypes [persona] of charismatic leaders. In general, such
a prototype could encompass not only rhetorical qualities, but also physical characteristics
(i.e. embodied signals)’. In this vein, Hackley et al. (2012) analysed Simon Cowell’s
‘trickster’ persona. Similarly, Dion and Arnould (2011) showed that creative directors’
charismatic persona resides in a combination of qualities associated with the magician
(self-sacrifice, discipline, shape shifting, transformative capabilities) and modern artist
persona (aesthetic innovation, code-breaking capabilities), to which Parmentier and
Fischer (2021) add that creative directors are assessed on commercial effectiveness.
Unlike other forms of legitimacy, charismatic legitimacy depends upon the charismatic
person’s serial performances (Conger, 1993; Weber, 1915/1947; Wieser et al., 2021).
Consequently, prior research points to routinisation, hubris or narcissism, and overcommercialisation
as sources of charisma’s fragility (Cocker & Cronin, 2017; Fournier &
Eckhardt, 2019; Parmentier et al., 2013; Weber 1922/1978).


Most research on charismatic leadership and person branding focuses on individuals
where idiosyncrasy and instability are well documented (e.g. Carruthers, 2006; Fournier &
Eckhardt, 2019; Knittel & Stango, 2014). However, as Parmentier and Fischer (2021) also note
some luxury brands feature successful successions of charismatic brand heirs. Consider Dior,
Chanel, Gucci, Lanvin, St Laurent or Balenciaga to name a few. Dion and Arnould (2011,
p. 2014) showed that some (but not all) luxury brand strategies stand or fall on charismatic
creative directors’ legitimacy. But previous research on charismatic person brands has not
investigated whether and how firms manage to sustain the charismatic legitimacy of
successive charismatic heirs after death or loss of distinction.

Our analysis identifies three general managerial practices that together transfer
and sustain brand charismatic legitimacy (see Figure 1).
First, managing brand charismatic legitimacy over time entails crafting the brand
persona, that is, the cluster of symbols, objects, images, meanings, and myths created
around the brand founder. Management transforms the brand founder’s biography into
a web of specific cultural representations related to the brand founder. Management and
brand heirs actively craft the founder’s brand persona.

Second, the brand persona is reiterated and reinterpreted over time through brand
heirs’ repetitive performance of the brand persona. This position parallels Kantorowicz
(1957/1997 arguments about the challenges facing the royal dignitas, the living heir to
the monarchy. To maintain charismatic legitimacy, heirs perform the brand persona
creatively rather than routinely reproducing the founding brand persona’s style.

Third, brand dynasties rely on what Wickert and Schaefer (2015) term the ‘microengagement’
of myriad brand stewards who certify and promote the performance and
spread emotional commitment. In contrast to Suchman’s (1995) perspective, we maintain
that charismatic legitimacy is an institutional process requiring management to craft the
founder’s persona, guide brand heirs’ performances, and manage brand stewards’ assessment
of brand heirs’ performances. Consistent with previous research (Becker, 1982;
Hewer et al., 2013; Wieser et al., 2021), we argue that performance evaluation is intrinsic
to charismatic legitimacy.

Our analysis revisits the brand persona concept. Some recent research critiques the perspective that the human brand is a narrative construct. For instance, Wieser et al. (2021, pp. 10–11) argue that human brands ‘are real persons with human abilities and challenges’. Our position is that the concept of persona is crucial to understanding the intergenerational transmission of charismatic legitimacy from a brand founder to a brand heir. While brand founders were real living persons, previous scholarship makes it
clear that the myths build up around person brands like Picasso, Warhol, Heini Staudinger, or Martha Stewart were crucial to their legitimacy. Similarly, the myths built up around a deceased founder are as critical to the brand heir’s performances as is the assertion of the latter’s artistic and magical credibility (Dion & Arnould, 2011, p. 2014; Parmentier & Fischer, 2021). The charismatic legitimacy of the brand heir and the founder is a cocreated performance.

In sum, the charsimatic human brand persona like other brands is a performance in which material manifestations, stakeholder performances, and myths are combined through active agencies.

Co-authored with Delphine Dion.

.

From its origins in 2011, the world’s largest food carnival, Restaurant Day, has spread to more than 70 countries. RD is a consumer movement that aimed to provoke market change. Researchers from Emlyon business school, Lyon, and Aalto University, Finland believe it was so successful because it operated in a completely different way from new social movements in general. Usually, the leaders of a movement determine what a movement is and does, and then try to convert others to their cause. Restaurant Day, however, invited everyone to take part in an opportunity to be as creative as they wanted, say the researchers.

The original aim of the carnival was to revolutionize restaurant culture by cutting unnecessary, bureaucratic red tape. The idea behind the original event was that anyone could set up a restaurant of their liking anywhere for one day without acquiring the necessary permits. According to the organisers, Restaurant Day was a protest against the constraining regulation of restaurants and a way to let off steam regarding the effects of regulation on gastronomic exploration.

‘The participants found setting up a restaurant of their own a personally meaningful and ambitious project. It inspired people to participate and try something new each time the event was held. The movement’s leaders were not essential – instead, every participant was. Moreover, many participants in Restaurant Day did not see their involvement as political activism, which further lowered the threshold for participation’, says Henri Weijo, Assistant Professor in Marketing from the Aalto University School of Business.

‘What started as a small hipster movement rapidly grew into a popular festival where everyone, both old and young people as well as native Finns and immigrants, prepared food in perfect harmony,’ Weijo explains.

Restaurant Day invited people to test the limits of their creativity, regardless of their age and background. This attracted all different kinds of people to the movement with widely varying agendas from immigrants keen to share their cultural pride, to girl scouts funding a field trip.

Originating in Helsinki, Finland, the carnival celebrated restaurant culture and gastronomy in over 2,000 pop-up restaurants in some 75 countries, on average four times a year.

Researchers at Aalto University and EMLYON say that the revolution was carried out in a very Nordic way.

“Nordic societies tend to consensual political processes that espouse societal change through dialogue among civic group interests. Protest movements end up marginalised if they fail to capture ideas of inclusivity or popular benefit, and with that the support or sympathies of the political parties. In the beginning, political authorities, the press, and restaurant industry vocally opposed Restaurant Day. However, in the end it attracted such a wide range of participants and became a significant tourist attraction, such that opposition turned to support”, says Eric Arnould, Adjunct Professor in Marketing at EMLYON.

Organisers decided to discontinue Restaurant Day in its original form last year in 2017. However, the movement for pop-up restaurants that can be set up anywhere, without permits will be celebrated on the anniversary of the first event, which is the third Saturday in May.

The study in question has just been published in the Journal of Consumer Research, the world’s most important scientific journal on consumer research. The study on Restaurant Day is the first article in the publication based entirely on Finnish material.

For more information:
Eric Arnould
Visiting Professor in Marketing
Aalto University  Business School
eric.arnould@aalto.fi

Article:
Weijo, Henri A.; Martin, Diane M.; Arnould, Eric J.: Consumer Movements and Collective Creativity: The Case of Restaurant Day. Journal of Consumer 2018. DOI: 10.1093/jcr/ucy003

Thinking about sustainability in the B2B space evokes a key word, engagement. This word translates the systemic nature of the sustainability journey into a more human term. A lot of case studies show that sustainability happens through engagement of actors at different levels in the organization, such as executives and production experts “on the shop floor”, across departments such as those responsible for HVAC, water, and waste management and engineering, and between internal actors and really diverse sets of external stakeholders such as NGOS, activist groups, and certifying institutions.  In the context of the sustainability journey, competitors may also become collaborators particularly when trying to set and or meet new industry standards. Engagement is effective when it endures over time. Engagement is empowering especially when it is linked to small incentives for useful innovations. Engagement thrives when low hanging fruit, medium and long term goals are achieved and celebrated.  Because sustainability is a systemic journey with multiple cascading effects, it is empowering to celebrate what appear to be even small steps in a more sustainable direction. In the B2B space, there is a lot of process design, dashboarding, messaging, and applied social science to be done

When considering B2C markets, sustainability products, services and messaging need to mobilize myth markets and symbols as with any branding. But to make these products, services, and message resonate we need to make use of the cultural resources that figure into ongoing life projects.  Too much of the sustainability marketing has targeted middle and upper middle class consumers with an aspirational future oriented discourse steeped in the ideology of modernity and paternalistic ideas about our relationships to nature. Think charismatic mega fauna (whales, polar bears pandas, etc) and the cultural construction of nature as a fragile web of life. Farmers in Nebraska and Wyoming, for example, are keen to adopt organic techniques and agricultural inputs if they can be positioned around tradition, stewardship, independence (from creditors & debt), hard work, preserving the family farm, science, “sound” business sense.  Ranchers generally have no trouble with installing large wind turbines on their ranches as they enable ranchers to exploit a previously unexploited natural resource, the turbines, don’t bother the cows, and the income helps to preserve the integrity of the ranch. Spoiling the view or disrupting the birds is not their concern. Working class people in Wyoming are keen to adopt energy saving technologies such as insulation and windows and lightbulbs if they are positioned around ideas of protecting the family and everyday frugality, the waste-not, want-not, DIY ideology they grew up on in farms, ranching and mining communities. Middle class rural Wyomingites are very keen to adopt small scale solar and wind power if it promises freedom and independence, not to mention the just in case notion that an apocalypse may be coming.  In the B2C space, there is a lot of NPD, design, messaging, and applied social science to be done.Fehringer11

Find my publications on ResearchGate:  https://www.researchgate.net/profile/Eric_Arnould2

Image result for zinder Mur Birney

I was looking at this image of the old wall around the Sultan’s citadel in Zinder. This was a big wall that went right round the old “birni” at least where it didnt rely on a natural granite outcropping for protection.  This wall, which sadly has almost melted back into the land more than 115 years after the conquest of Zinder by the French in 1899, was built entirely by hand.  And it was certainly not entirely through slave labor.  But of course, if slave labor was involved this was not the chattel slavery of the Americas but the Islamic variety with rights, responsibilities and gradations..

And I was thinking about the problem of value. Use value, exchange value, symbolic value, sign value, Marx, Mauss, Malinowski, Gell, Strathern, Weiner, Graeber, Baudrillard and so on.  I was also thinking about Jane Guyer’s book on among many other things nominal value, Marginal Gains, Monetary Transaction in Atlantic Africa.  And of course, I was thinking about “Against the Implicit Politics of Service-Dominant Logic,” from Marketing Theory by Hietanen and Bradshaw.

All this made me think about the distinction made in Hausa between arzikin kud’i and arzikin mutane. As best as I can understand the former, money wealth, was not embedded in the MCM logic but more in the CMC logic even if there were and are renowned merchants who amassed significant fortunes in both M and C. But the second, is of interest; because it is both twinned with and separated from the former.  Arzikin mutane means wealth in persons in severality. But what it really means is the ability to mobilize a constituency, a web of variously obliged persons. The forms of this obligation were quite many in pre-colonial Hausaland. And these obligations were in fact animated by flows of both M and C.

So when I was writing about value a couple of years ago for Marketing Theory, I wrote, “value is neither in a thing nor in perceptions of a thing. Instead we can think of value to consumers – as distinct from other kinds of human subjects–as consisting in meaningful differences following Baudrillard, and more broadly as meaningful distinctions that refine identities and ‘count’ as significant achievements following Bourdieu. This value emerges from what people do; that is to say, the social pursuit of those meaningful distinctions typically through the exchange of resources between actors” (2014), Rudiments of a value praxeology, Marketing Theory, 13 (4, November), 129–133.DOI: 10.1177/1470593113500384.

I had in mind the contemporary context, and I could be taken to ask for neglecting the capitalist CMC context in which these kinds of value producing practices are embedded per the Hietanen and Bradshaw paper.  But I wonder whether in the new digital environments is there not something else: According to some of the prophets like Henry Jenkins and Rob Kozinets there is enormous scope for value creation as we have later demonstrated, e:g:;

2009, How Brand Communities Create Value, Journal of Marketing, 73 (September), 30-51, with Hope Jensen Schau and Albert Muniz, Jr.

2015 Practice Consumption and Value Creation: Advancing the Practice Theoretical Ontology of Consumption Community, Psychology and Marketing, 32(3, March): 319–340, Benjamin Hartmann, Caroline Wiertz and Eric Arnould, DOI: 10.1002/mar.20782.

Can we see in platforms, hubs, gameified environments, social media feeds, the nugget of post-capitalist modes of value creation. After all, capitalism arose out of precapitalist economic formations. Cant post capitalist economic formations arise out iof capitalism?

 

 

 

 

 

 

 

 

 

So I made a speech about consumer creativity a couple of years ago at ESCP Europe. You can find it here:

I have since been working on a couple of paper about consumer creativity. One paper is

Mobilizing Collective Creativity To Change Market Dynamics: The Emergence of Restaurant Day Under Nordic Governance of Food Culture

Henri Weijo (Bentley University) and Diane Martin (RMIT Melbourne) are the prime movers on this one.

Creativity is known to play an important role in politicized consumer collectives struggles for change, but few previous works have elaborated on the precursors for and evolving nature of creativity. Previous creativity research also has a heavy individualist slant. This study develops a model of collective consumer creativity for market change. Using ethnographic methods and a Deleuzian theoretical framework of creativity, we chronicle the evolution of the Restaurant Day food carnival that originally emerged as a collective response to political tensions relating to strict food culture regulation in Finland. Findings illuminate a process of collectively sensed tensions turning into a precursor for creativity, in turn enabling novel expressions that challenge established marketplace truths. Creative expressions are further accentuated through the emergence of creative rules, support structures, and growing expressive heterogeneity that entice consumer participation but also help warding off multisided contestation from actors affected by the ongoing market changes.  We are able to show how RD mananged to enlist participants in an ongoing unfolding of Deleuzean creative expressivity before a routinisation process descended.

 

The other paper is

Socializing Consumer Creativity

The prime moves on this one are Gry Høngsmark Knudsen, Mario Campana and Kat Duffy

In this paper we contribute to the literature on consumer creativity by developing a collective concept of creativity along three active dimensions and in terms of three practices. The paper is inspired by recent theoretical discussions of context, collectivity, and assemblage in interpretive consumer research. So inspired, the paper advances an understanding of creativity as emerging through socialization and interaction between three dimensions: consumers, artefacts, and spaces, each with their own world-shaping potentialities. We argue that creativity evolves where consumers, artefacts, and spaces come together in combinations that transform cultural routines into novel, yet comprehensible configurations, hence creative ones.  Thus, we contradict the perspective current in consumer research that argues that creativity is a personal attribute or an outcome of the behavior of a gifted individual. We dimensionalize creativity as a process that encompasses collective practices of specialization, co-constitution, and valorization. Through these crucial practices consumers identify and legitimate creative acts. By demonstrating processes of legitimation, we also add dimensions of power to the discussion of how creativity is stifled; thereby we demonstrate how creativity ends. That is, we develop a holistic perspective on creative events, where we outline both the emergence and finality of creativity. Through a novel method in qualitative consumer research of triangulation across quite different empirical contexts, we demonstrate commonalities of creativity as an emergent, contingent property of assemblages of entities and practices. Finally, we thus provide a theoretically motivated sociological model of the social and processual character of creativity.

 

 

 

 

Thought I would post this preface I worte for a new book from France that adopts a cultural perspective, at least most of the authros do, on retailing practice. Maybe you will like my preface and want to look at the book too. Hope so:
2014 Repenser le Commerce : vers une perspective socioculturelle de la distribution, sous la direction de Isabelle Collin-Lachaud, Cormelles-Le-Royal, France : Editions Management & Société.
Preface, E. Arnould

Avec ce livre on revient aux observations primordiales envers la distribution nous offertes pars des grands d’un siècle passé. Je parle de Marcel Mauss et de Walter Benjamin. Du premier on retient l’idée que la distribution figure parmi les instances du système d’échange moral en se rendant compte du rôle de la grand distribution dans les circuits du don, les cadeaux de Noel, de maman, de l’anniversaire, des noces, ainsi que des noces d’argent, de l’or, et etc. N’oublions pas aussi la possibilité de rendre le don manqué à la boutique le cas échéant ainsi le fait que l’achat et le retour eux aussi sont accompagnés des gestes de mutualité entre prestataires et récipients de service. Du deuxième on retient la notion que la distribution est une zone identitaire de loisirs et du plaisir ou on se reconnait et se construit à travers le reflet du soi dans des univers de potentialités matérielles. On est très éloigné alors de la logistique compris comme une fonction éparse de gestion rationaliste.
Dans la première partie on abord des questions ontologique. Ontologie-distribution un couple curieuse n’est-ce pas ? Mais non, parce que Remy et Cléret nous montre clariement que le commerce est un champ d’action et d’interprétation social parmi d‘autres concurrentiels ou sont réalisés des valeurs, des identités, des rôles, et des projets politiques et civiques. Et ses auteurs aussi bien que Dion nous montre que la distribution, ses formules et ses marques sont des lieux de contestation ou des questions de légitimité, et avec la légitimité la reconnaissance de soi est en jeu. Elle ne le dit pas mais il se ressort de son interrogation que toute stratégie de marque est aussi une proposition idéologique et toute idéologie exige un processus de légitimation. Bref, l’organisation de la distribution touche aux questions existentielles. Des marques de la grande distribution ont elles un destin, une finalité? Et comment doit-on comprendre le rapport entre le destin des marques et celui de la société dans laquelle elles se sont enfoncées? Pour en finir ces deux articles inspirent un réflexion sur les modalités de la concurrence basé sur des codes de legitimation ou des Grands Mondes.
On assiste aussi a un retour au bazaar –comme on l’appelle la pousse timide de la distribution dite ethnique en Danemark– justement en face des mouvements massifs des segments de la population de la terre d’un endroit à un autre. Facteur de croissance de la distribution certes, mais on jouit du retour de l’esprit et le fonction des marches hebdomadaires que je connaissait en Afrique de l’ouest. Ces marches sont des lieux de paix, le fameux « paix du marché », les zones de rencontres entre des ethnies détenteurs des monopoles commerciaux ou des métiers spécialisés, ainsi que des machines à maintenir des zonages écologiques et tribales.
Au même temps dans les fêtes expérientielles et non marchandes du type « flash mob » ou « journée sans achat », actions qui peuvent être perçues comme « extravagantes », mais qui ne peuvent plus être considérées comme ponctuelles on retrouve le potlatch actes destructives voues a l’anéantissement de l’honneur du cible ainsi que le remontage en honneur de ceux qui ont la capacité d’en détruire. Par ces actes on exprime son méprise et son rejet de reconnaissance et de l’honneur de la grande distribution. On sait qu’au fond c’est un jeu de théâtre parce que comment va t on s’approvisionner autrement que par un système de distribution aussi complexe que le nôtre. Pourtant ces actes de « résistance » reflètent des sérieux faux pas de la part des grosses sociétés de distribution de masse quant à l’environnement (on ne doit jamais oublier les exigences du « hau » du foret) et l’éthique d’emploi des ouvriers « ailleurs ». Et dans le rejet de la grande distribution qu’est qu’on aperçoit, que les AMAP ne sont rien d’autres que des systèmes ou le principe du don reprend son place prioritaire dans la distribution. Leçon à tirer par la grande distribution des militants, nous sommes aussi les arrières petits-enfants de J-J Rousseau ; respectons nous tous le contrat social.

Avec Peñaloza et Badot et Lemoine on se souvient du fait que la grand distribution aussitôt que la petite ainsi que les pratiques d’approvisionnement est toujours une cristallisation momentanée d’un réseau conjoncturels d’acteurs y compris le consommateur. La crise de la fréquentation ainsi que des nombreuses faillites des vieilles maison de distribution ont fait la preuve. Ceci dit, maintenant il y a de maints formats compétitifs possibles grâce à la double transformation de l’économie, de plus en plus globalisée et de plus en plus plate et simultanée, due à l’effet de digitation et liquéfaction du monde matériel y compris le commerce. D’un cote, une réponse ritualisée au client zapper qui exige la fonctionnalité, la rapidité et la nouveauté par une distribution multi canaux. De l’autre la spectacularisation de parcours rituel de client en mettant beaucoup accent sur une expérience client toujours quelques peu inédites visant à pérenniser la relation avec l’enseigne à travers l’insertion des pratiques du don au sein du rapport marchand. Et de coup on est confronté par cette effervescence produit par la conjoncture de deux principes apparemment opposés mais en fait complémentaire, l’utilitariste et l’hédoniste, présents aussi bien au sein du kula mélanésien et à la foire médiévale ou au bazar maghrébin, tous rencontres aussi ritualisés que la distribution réussie d’aujourd’hui.

Me and  M.D. Press

Research Orientation

A five-year project funded by USAID is called SANREM (Sustainable Agriculture and Natural Resource Management); the east African component, one of five worldwide. The focus of this project within which we conducted our marketing assessment is Conservation Agriculture (CA), an agricultural production system that uses the application of three principles, minimal soil disturbance, permanent soil cover, and crop rotations, to improve soil fertility and prevent soil erosion.. In addition the project aims to improve and conserve the soil of very poor smallholder farmers, reducing their workload on the farm while increasing their yield over time through soil improvement.

Introduction

Scholars of public policy and marketing, macromarketers and even some scholars of international marketing have argued for the importance of marketing as a requisite element of grassroots development in underdeveloped countries including subSaharan Africa (Arnould 2001; Arnould and Mohr 2007; Joy and Ross 1989). Layton (2009) has argued strongly for the relationship between marketing, economic development and quality of life, a relationship shown in some empirical research (Oneto and Arnould 2012).  There is mixed evidence however, and some hotly contest the ability of alternative marketing channels to deliver either development or improved quality of life (Dolan 2008; Lyon 2006). There is also limited evidence that colleagues in agricultural science have assimilated the importance of marketing for the success of agricultural development projects, since in our experience input and output marketing appears mostly as an afterthought in agricultural development. This thus reinforces the urgency of the call others have made for more research involving marketers in development contexts (Schulz, Rahtz and Speece 2004).  In this report, we highlight some findings from a multidisciplinary agricultural research project below, and conclude with some implications for outreach.

Selected Emergent Findings

We turn first to a policy issue that was not among those that guided our work but that emerged during our field studies. There are issues with the current state of NGO funding in Kenya and Uganda that threaten the success of projects such as the SANREM project and other similar projects in support of more sustainable agriculture sector. This is a pity since we frequently collected data testifying to participant enthusiasm and support not only for the SANREM project but for other now terminated initiatives in the study zone. The current funding structure is such that NGOs are constantly searching for donor money from varied sources, but there often exists a mismatch between changing donor goals and country needs or slippage in the timing of projects and participant needs. These are expressed in a few different ways. First, projects that donors sponsor often do not take into account a realistic assessment of the challenges presented by the state of basic infrastructure of Kenya and Uganda. Second, a USD$2.5mil. (the size of the SANREM grant), or even USD$10mil. spend on certain projects that in themselves are often excellent, helpful and needed, is terminated after only a few years and then no more support for these programs is available. This reflects unrealistic expectations for enterprise success and institutional self-sufficiency. Thus, we learned of a grant program that effectively supported micro-loans to farmers so they could purchase inputs at the beginning of their planting season. It ended abruptly when the grant ran out leaving farmers and input suppliers rather high and dry. A few years of support is not enough time to build stability into fragile local marketing systems so that local organizations are able to maintain such lending systems. While we believe that more effective local systems of input supply and agricultural credit could be developed, it will take more oversight, aid and capacity building than can be administered in the present 3 or 5 year grant cycles (Arnould 1989).

Second is an issue related to supposition 5 reported above (actually discussed in a full paper elsewhere). We were struck by the pervasive self-interest and lack of trust between and among market actors. Significant market actors in the study zone included farmer groups, family members of farmer groups, local middlemen, NGO staff, input dealers, mobile money providers, local political authorities, and millers. As Singh, et al. (2005, 41) develop

low trust–low value market relationships that neither foster and sustain trust nor deliver value are eventually doomed. However, as dynamic systems, trust and value contributions may rarely be in perfect balance.

Our research finds that market actors struggle to develop the high trust-high market value relationships that Singh, et al. (2005) argue are key to economic growth and wellbeing. Below a certain level of economic activity we have testimony that even family members cannot be trusted to represent the interests of fellow community members.  For example, farmer groups are encouraged to start collective savings programs to assist with the micro-loans that are so hard to get, and are also encouraged to do collective input purchasing and marketing. Prior research shows that collective action can give farmers an advantage relative to bulking agents in the marketplace. However, trust and recourse for instances of self-interested behavior are relatively absent from this system and often prevent it from working. For example, a farmer group in Bungoma, Kenya tells a heartbreaking story about the demise of a thriving nascent marketing cooperative they had organized. Fifty-two members in this farmer group had organized themselves to the point where they were not only selling farmer crops as a collective, but they also had grain storage where they sold maize, soy beans, other dry beans, ground nuts, and finger millet. They were able to stock these items when prices were low (during harvest time) and sell them a few months later when the price was high. They sold as far as a market town 180km away, and when they brought their products there they used the return trip to bring products such as fish, which was not available in their local area, back for sale. The member who went with the truck to the market town brought back receipts from sales to show the group he had brought the correct amount of money. It is hard to underestimate the achievement that this business represents among smallholder farmer groups. However, the treasurer and other leaders of the group ran off with 2 million KSh (about USD$23,700), a huge amount of money for poor farmers (GDP, $1,720 per capita in PPP dollars). The farmer group members said they just had to “forgive and forget” because there was no recourse for them to take. But, “things disintegrated…we backslid.” By this they refer to an absence of effective governance above the village level that can adjudicate such problems.

Third is a set of findings also related to ideas advanced under Supposition 5 above. As we know “middlemen” perform many critical tasks in agricultural marketing. Unfortunately in the study zone, their linkage specializations come at a significant cost for farmers and consumers. Unfortunately, most middlemen are relatively small-scale operators themselves and must transfer their product to yet other middlemen in most agricultural marketing channels before product may reach processors or end consumers due to the shoddy state of transport (including both roads and rolling stock), limited storage capacity, restricted market information, and intensive competition (Anonymous 2010).  In addition, middle men can easily prey on small farmers’ economic vulnerability. For example, farmers may wait for middlemen to approach them in the villages, a not uncommon marketing practice, during which time their maize can rot if it is not properly dried. They wait because they fear that if they take the maize to the middlemen in local market towns, the latter will use the leverage of high transport costs to extract deep cuts on purchase prices. Moreover, farmers often are in such dire need for money because of the annual cycle of school fee payments that corresponds with price lows of the harvest season that they again sell to middlemen at a steep discount to annual market price rises.

Fourth, in evaluating the agricultural value chains that we encountered, our experience dovetails with that reported in other recent research. These findings relate to suppositions 3 and 4 outline above. Thus, as Mugisha (2011) perceptively writes:

Key issues in the maize value chain are the huge post- harvest losses at farm level, poor quality maize in the market, very low prices farmers get and a big informal market…. Much value is created at farm /producer level and this means that value chain intervention for upgrading is critical at this point. This can be through ensuring the use of more inputs on the farmer plots that have generally decreased in fertility. Farmers also need to be supported to produce and market in groups so as to increase their bargaining power. There should be a deliberate effort to educate all the actors in the chain to ensure that quality maize is transferred to another chain. Value chain actors along the chain need to be supported with credit facilities at affordable interest rates since, as revealed from literature; they play a crucial role in the chain (Mugisha 2011, xii-xiii).

What Mugisha says of the maize value chain is true of other major food crops such as beans, and oil crops in the study zone. The other value chain actors he refers to should include input dealers and cooperative buyers in particular who face credit constraints and contend with shortages of quality stocking and reliable transport. Middlemen also need support in learning improved crop handling, not merely financial support, particularly of high value perishables.

Fifth, is an emergent problem that has the effect of eroding economic-trust relationships (Singh, et al. 2005) in local markets, but which is related to issues of input supply that we discuss under the heading of supposition 3. We had tended to think of this in terms of material shortages or in terms of inadaptation of inputs to customers’ requirements. While issues of supply and adaptation are indeed market system issues, in some ways more pernicious is the proliferation of counterfeit agricultural inputs. All market actors we interviewed recognize counterfeit inputs as a significant problem. Consumers of inputs try to protect themselves by purchasing only from recognized sources, especially from Kenya Seed, which enjoys a very favorable brand reputation in the research zones. However, rebagging of counterfeit seed in Kenya Seed packaging is beginning to erode trust in the brand in some regions. And all have reported incidents of counterfeit fertilizers (dyed sand), seed (dyed grain to simulate seed treated with antiviral agents), and herbicides, especially from off-brand suppliers. Some Ugandan seed producers have compounded problems by producing seed, marketed as Kenya seed, in agronomic circumstances that do not produce quality seed. Here again systems governance emerges as a significant dimension of concern.

A sixth point is directly related to supposition 4. A well-developed agricultural market landscapes in developed countries are dotted with storage facilities. In the US agricultural bulk storage is handled by a mix of independent and vertically integrated grain elevators and the like. By contrast, the agricultural landscapes in Kenya and Uganda are marked by isolated, large (by local standards) centralized warehouses, often empty and derelict, and a paucity of local storage and processing infrastructure above the farm level. It appears that a systemwide liquidity crisis, coupled with a lack of small scale and low costs moisture monitoring and drying technology, constrains the development of a storage market player. An informant from a significant cooperative organization argued against the establishment of decentralized stocking facilities in favor of rapid evacuation of stocks from rural points to a central warehouse, assuming development of the rural road network, an unlikely occurrence in our view. Another informant spoke of initiatives with the World Food Program (WFP) to establish large warehouse facilities in another part of the study zone. But at the muddy farmgate level or even that of rural bulking markets, what appears to the observer are the paucity of secure drying, grading, and storage facilities, forcing farmers to dry their grain on the road verge, and bulking agents to spill grain all over the roadside as they rebag and load farmers’ maize, barley, beans and rice.

Seventh, and most crucially to the assessment of supposition 3 is the quality of the distribution infrastructure, i.e., roads, stocking and storage points. For example, a 5km (three mile) drive to a study site outside Kitale, Kenya took 20 minutes; the last kilometer on a heavily carved out dirt road easily consumed half of that time. Worse, a 24km (15 mile) drive from Kapchorwa to Kwosir, Uganda, another one of our study sites took one hour and a lot of stamina (especially if seated in the back of an SUV) and courage. During our visit, it had rained heavily during the night (not of course an uncommon occurrence in this high altitude zone) and the dirt roads were muddy with slippery clay film. We hired a local professional driver to drive our 4wd Toyota SUV up the mountain because many experienced Ugandan drivers have failed to make it. Our colleagues in the car jokingly have named certain hills, summits and corners after various colleagues who have gotten stuck on them. The main commercial artery we climbed up to the Kwosir study site would be more aptly described as a rocky, washed out trail with steep cliffs on one side. While our story is anecdotal, the more systemic situation is that farmers who live on this mountain side are virtually cut off from Kapchorwa during the rains. This is a city that has developed greatly in the past few years including a very large new cooperative warehouse that both buys grain and stores grain on credit. It is arduous and expensive for farmers to take their products to this town even though they can get the best prices at the cooperative warehouse. Thus, something somewhat overlooked in recent value chain analyses that would really benefit the mass of smallholder farmers in Kenya and Uganda is paved and maintained rural roads.

Finally to end on a more positive note, there is much positive to report about the evolution of banking especially in Kenya, but increasingly in Uganda as well. Cell phone banking is a stunning if uneven success. M-PESA and other such services in Kenya; mobile money and other such services in Uganda have dramatically increased security and convenience and decreased delays in making money transfers between exchange partners even in remote areas. Imagine that one has to pay school fees of 100,000 KSh but the cost of transport is 15,000 KSh in each direction plus another 5000KSh for meals, not to mention the opportunity cost of lost time standing in line at one of the understaffed local bank branches to pay these fees. Mobile money cuts these costs to 50KSh.  We found rural women who bear the brunt of agricultural work are often the beneficiaries of remittance transfers from urban family members. Informants among input dealers reported that mobile banking permitted easier payment of suppliers, while farmers reported the benefit of relief from the burden of carrying cash from markets to their homes. The increase in financial privacy was similarly appealing.

Further, Centenary and Equity Banks in Kenya and Uganda respectively have found a formula that allows them to loan money for agricultural inputs to small farmers based on assessments of their land and other assets. A minority of the most progressive farmers we interviewed access these services, but fear, lack of understanding, and in some cases unclear traditional land title hampers further access to bank loans. The biggest obstacles however may be interest rates on loans of 18-22% on the balance. Of course, these are dramatically better than the 100% middlemen in the informal sector may charge, but the banks are not nearly so agile nor so close to their customers as are the middlemen. We are not blind to the dangers of expropriation associated with expanded loan practices, but merely point to encouraging evidence of new suppleness in the financial infrastructures in agricultural banking. Reinforcement of ethical lending practices seems high on a list of priorities.

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