Is Made in Italy forever?

As more Countries promote the quality of their products and destinations, some essential sectors of the Italian industry are facing with a hard question: is the “Made in Italy” brand still competitive? And how can it guarantee a competitive advantage for our country in the long term?

 

Filippo Renga, Junior Assistant Professor of Production Plants and Business Organization
School of Management Politecnico di Milano

 

“Is Made in Italy forever?”: that’s the question that emerged during the 2018 Research of our Smart Agrifood and Digital Innovation in Tourism Observatories.

Beyond the slogan, an important doubt emerged about the competitiveness of some essential sectors of the country’s industry: can the “Paese Italia” brand – identified with the “Made in Italy” and frequently used in many sectors (food, tourism, clothing, music, design, art, etc.) to underline the Italian identity of a product or a service to increase its value on the market – survive intact in the long term and guarantee a competitive advantage for our country?
This is a question we will try to answer through the upcoming research, but which has already found confirmation in some phenomena we are recording.

 

Food quality is not only Made in Italy

Starting from food, we all know that any product with the “Made in Italy” mark receives special attention by a large part of the international consumers. This gives origin to frauds linked to the “Italian Sounding” (that is the use of images, brands and denominations recalling Italy to market products that are not related to our country in any way. Just think to the well-known “Parmesan”).

However, through our experience we realized that more and more countries promote the quality of their food products, thereby dispelling the myth of the “quality food” as a prerogative of Italy. For example, it is interesting to notice that in extremely attended international events dedicated to quality food – such as in London or Berlin – there isn’t a significant presence of Italian companies. Furthermore, food trends often originate outside our country (e.g. organic food). Even though a Google search it is possible to see that, if you insert the words “quality food” in the local language of many countries, no Italian product emerges. Finally, many TV formats about the restaurant industry were born abroad and are therefore imported by us.

This also happens because the concept of quality is anything but unequivocal, as shown by the model of the Food Quality Heptagon (see the Slide Booklet “Quality and sustainability with the digital traceability”) we developed. Many recent successful innovations in the food industry weren’t born in Italy, although they relate to products that have always been considered our “feuds”, as was the case of the coffee with Nespresso and Starbucks; or in the case of tomatoes, of which Holland is one of the first exporters in the world thanks to high-tech indoor farming systems, that made it possible not only to increase the production but also to improve the taste compared to the past.

 

What happens in tourism

On the other hand, in Tourism the weaknesses of the “Italia Brand” are clearly shown by an analysis of the international tourist flows coming to our country: if in 1970 Italy was in the first place in terms of attraction, in 2017 – according to the UNWTO data – Italy is fifth behind France, Spain, USA and China. You may think that the focus was more on the quality and less on the quantity (and therefore the expense) of the tourists, but numbers say that this did not happen in a significant way more than in other destinations.

The reasons are instead related to different fields, but fundamentally there is a strategic weakness about Tourism and the industries linked to it. If you take for example the Chinese market, among the most interesting both for the number and for the average receipt, Italy is behind the main European competitors for attractiveness. As underlined by Giuliano Noci (Vice Rector of the Chinese campus of the Politecnico di Milano) on the occasion of the Conference of the Digital Innovation in Tourism Observatory of 24 January (download the documents and videos of the Conference “The Italian Digital Way for the future of Tourism”), there was and there still is a lack of a medium/long-term strategy linked to different factors, among which:

  • the inability to give value to our brands (there is no evidence that one of our museums has been able to promote its brand like, for example, the Louvre in Paris did);
  • a structural deficit on connections (especially the aerial ones: Chinese people comes to Italy through other European cities)
  • the storytelling that promotes the territory through the audio-visual industry (mainly the cinema industry) primary vehicle of knowledge and learning for the Chinese (Swiss tourist resorts are the sets of some TV series distributed in China).

If there is a risk that Italy may lose its competitiveness, it could also happen that, due to the extraordinary assets available in our country, the Chinese will start to considerably invest to offer experiences and products to the millions of tourists and consumers looking for Italian contents. Nevertheless, this is already happening in other fields with the clothing or the sports industry.

And then we should add another question to the opening one (“Is Made in Italy forever?”), an equally concerning question: “Made in Italy… by whom?

Going from an MBA to a marketing job at British American Tobacco

Katarzyna Majewska understands the concerns you might have about working in the tobacco industry. Marketing cigarettes is tough, but she says the industry is changing

 

 

Consulting, finance…tobacco? The tobacco industry might not be your industry of choice.
Tobacco firms face severe restrictions in some countries, with high taxes, packaging regulations, and tough laws on advertising.
There’s the obvious public concern over tobacco’s health implications. And there’s disruption from cigarette alternatives like vaping.
But for Katarzyna Majewska, the tobacco industry represented an exciting challenge.

Katarzyna worked for a small, local government-run cultural center in her native Poland before she decided to do an MBA. Keen to study in Italy, she chose MIP Politecnico di Milano School of Management over its city rival Bocconi, for its focus on innovation.

When she returned home after graduation, she got a job at British American Tobacco (BAT) in Warsaw, starting as a marketing intern before joining its global graduate program, rotating across different functions.

Right now, she’s working in the brand department, on flagship tobacco heating product (THP) glo. THPs are devices that heat, rather than burn, tobacco to produce a nicotine-containing aerosol with a tobacco taste which the user inhales.

Katarzyna says she understands the concerns people have about working in tobacco. But she says the industry is changing, offering lower-risk alternatives to traditional cigarettes.

BusinessBecause caught up with Katarzyna to find out more.

How did your MBA help you land a job at British American Tobacco?

Before the MBA, I did not have any experience in international corporations. Without it, it would have been extremely difficult to find a job at such a big corporation.

At British American Tobacco, Poland is part of the North Central Europe Area cluster, and there are many foreign nationals in the office. During the recruitment process, international experience was also vital.

Moreover, the MBA helped me realize what I wanted to focus on. Marketing classes with Professor Carsten Bartsch not only provided me with helpful knowledge but also motivated and encouraged me to develop my marketing path.

I also have an amazing boot camp with Professor Emre Soyer, a behavioural scientist who showed us research on the decision-making process, which is vital in marketing.

These two classes pointed me the way I want to follow in my professional and educational life.

What challenges do you face in your current role?

In every country, restrictions are different. There are some with a plain packaging policy, such as Australia or France, but this policy has not yet been implemented in Poland.

However, as part of the EU, we need to follow the TPD (Tobacco Products Directive), which places limits on the sale and merchandising of tobacco and tobacco-related products in the EU.

Tobacco products are not easy to market, but that is what makes my job interesting.

What would you say to people who have concerns about working in the tobacco industry?

At BAT, we’re providing a range of potentially reduced-risk products, including vapour, tobacco heating products (THPs), modern oral products, as well as traditional oral products.

For me, the most valuable thing is the freedom of choice we provide. You can quit using tobacco products altogether, which we support. You can switch your habit to a potentially reduced-risk product.

Finally, you can smoke cigarettes while being fully aware of the consequences.

We do not encourage people to smoke, we educate them about possibilities they have.

How are you applying your MBA learnings in your everyday work?

My MBA taught me the ability to work in groups of totally different people, representing diverse cultures and approaches. Dealing with such situations was challenging, but extremely satisfying. We needed to find one common solution, while everyone had a dissimilar point of view. This experience definitely helps me today.

Why did you decide to pursue an MBA at MIP?

First of all, the location. I wanted to improve my Italian skills, as I love Italy for the language, people, food, atmosphere and landscape.

I then needed to choose between MIP and Bocconi. This decision was not easy and required deep research about both MBA programs.

It transpired that MIP is focused more on innovation, new approaches, and solutions for business. On the other hand, Bocconi is more suited to students interested in law and finance, areas that appeal to me less.
So in the end choice was easy—MIP suited my interests better.

 

Originally published on

 

From e-commerce to omnichannel marketing

 

Customer needs and business opportunities
Manuela Balli, Adjunct Professor at MIP, and Giulio Lampugnani, Head of FBA seller services for Amazon, explain why the integration of online and physical sales channels is a winning strategy.

The time of conflict between digital and brick-and-mortar stores has passed. The future of e-commerce is omnichannel. If properly developed, it a virtuous model, but also one of notable complexity, emerging as a response to the recent trend toward multichannel purchasing behaviours by customers. One figure stands out clearly: according to a survey by the Osservatorio Multicanalità of the Politecnico di Milano, 67% of Italians above the age of 14 have adopted a multichannel buying approach.

Digital and retail: a necessary alliance

«Today, for example, customers have learned to seek product information in brick-and-mortar stores and then complete the purchase online, or vice versa: generally speaking, the two channels are used in a seamless manner, depending on specific needs», explains Manuela Balli, Adjunct Professor at MIP. «In such a scenario, company synergy and consistency become key factors. The omnichannel approach demands a cooperative, collaborative model. There might initially be conflicts between digital and retail, perhaps caused by pricing, advertising, or responses to various external stimuli. But we have to find a solution in line with the overall company strategy. Companies’ competitive edge will be determined by the response to this challenge».
The goal is to create an impeccable buying experience at every step of the way. As Manuela explains, luxury companies provide an excellent example: «In this sector, the logic behind customer experience is enhanced. The consumer has strong expectations all along the process. To meet them, it is necessary to analyze consumer behaviour, identify the rationales behind new buying behaviours, and focus on customer relationship management».

The Amazon model

New strategies based on new tools – namely, digital channels – are actually grounded on a proven principle: the key importance of the customer and their satisfaction. Amazon is certainly an example of success here. According to Manuela, «Amazon is an example of reverse business development. They started in the digital and then decided to develop brick-and-mortar stores in an omnichannel orientation».
Giulio Lampugnani, Head of FBA seller services for Amazon, also confirms this approach. «To grasp exactly why our company has set out to develop physical stores, it is important to understand the three tenets that have guided our company since its birth: the first is to offer customers the broadest selection of products possible; the second is to offer them at the lowest price possible, and the third is to provide the most convenient service possible».
It was this last tenet that led to Amazon’s decision to develop brick-and-mortar stores. «We realized that it was better for customers to have the choice of purchasing some products in person», explains Giulio. «We started with Amazon Books and Amazon Go, two chains where we have sought to replicate some of our most distinctive online mechanisms. In the bookstores, for example, we have paired each book with a display showing customer reviews, this being one of the most disruptive elements introduced by Amazon. In Amazon Go outlets, on the other hand, we chose to replicate the simplicity of online shopping: no cash registers, no lines. The customer makes the purchase with one click».

More digital, more Made in Italy

Giulio Lampugnani goes on to explain that Amazon also generates momentum for companies that would like to implement an omnichannel strategy abroad. «Amazon is an international showcase that can be leveraged as a development channel to generate brand visibility while working toward a second stage that may involve opening a brick-and-mortar channel».
This is a great opportunity for Italian businesses, as well as one of the reasons that prompted Giulio to accept an invitation to be guest lecturer in the course led by Manuela Balli titled “Developing e-Commerce Revenues through Omnichannel Marketing”, which will be held at MIP on October 29, 2019. Giulio closes by saying, «We care about the growth of Italian companies. The level of penetration of e-commerce in the retail market in Italy is still around 7%, whereas in the United Kingdom the figure has already reached 19%. Once we have bridged this gap, Italy will be able to showcase a much more powerful commodity, that is, the Made in Italy brand».

The three I’s of excellence: identity, ideas, innovation

The ability to innovate without losing sight of tradition, combined with the highest expressions of design and industry. These are the crucial elements that characterise the excellence of Italian business in the world, as emerged in the Italian Way module, which took place in May and is part of the International Master in Marketing Management, Omnichannel and Consumer Analytics programme of Politecnico di Milano’s School of Management. Numerous companies took part, telling students about their own experiences, in a wide variety of fields, and surprisingly similar global challenges.

Growing without losing your identity

One of the common challenges that was illustrated during the Italian Way module is the necessity of growing, while not losing one’s identity.

«In Alessi (a well-known Piedmont-based producer of design objects) we undertook an internationalization strategy that aims at expansion in the US and Asian markets», explains chief executive Marco Pozzo. «We want to grow, but also during this process our priority is preserving our Italian DNA. Adapting to the needs expressed by the different geographical areas doesn’t mean distorting the brand, not at all. We want Alessi to preserve its own identity, embracing approaches to the table that are different like the Asian one, but also democratizing the approach to design products. In the United States, for example, there are several of our objects that are part of the permanent collection of the MoMA in New York. But we want design objects to become an integral part of everyone’s daily life».

The courage to risk

From the table to the street, the distance is shorter than you think. Indeed, in the MoMA in New York, we also find the Vespa.

«Our philosophy is clear: to maintain a strong   coherence with the past, but always focussing on innovation, both technological and design», says Davide Zanolini, executive vice president for marketing and communication at Piaggio. «What distinguishes us in the world is the courage to risk a bit more than others. We were the first to present a three-wheel scooters, the first to experiment with hybrid. In this we recognize our Italian character, as well as in a very strong engineering-technological vocation that is displayed to the public with elements of iconic design».

The team spirit  

Innovation, technology and design are also three of the characteristics on which Ferrari concentrates to consolidate its brand identity in the world. «We are proud to represent Italian excellence», explains Dennis de Munck, head of employer branding. «Above all, we want to focus on team spirit. Just as Ferrari is the racing team that all Italians and millions of people in the world root for, in the same way we want whoever works with us to feel they are part of a great team, whose goal is to respond to challenges with the strength of ideas and innovation. Excellence is what sets us apart, on and off the racetrack, and will continue to deliver it. For this reason, we are always on the lookout for top talent».

Welcoming diversity

Openness to the world and to diversity is therefore another characteristic on which Italian companies focus.

«To be international we try to open ourselves to different cultures», stresses Laura Salviati, training and communication manager at Artemide, a leading company in the lighting sector. «In the world, the approach to light varies greatly from one country to another. In industrial production, however, Italian excellence must be recognized. Abroad it’s much more difficult to find industries able to support us in productive processes. In Italy we have at our disposition know-how that succeeds in putting together craftmanship and industry. We’re not interested in producing at the lowest possible cost, but in quality».

 

Local taste, global excellence

If Artemide values territorial know-how, there are those who focus on other resources and a completely different type of raw materials, this time in the food sector. One such person is Tancredi Alemagna, founder and chief executive of T’a Milano:
«We take the best chocolate on the market and we combine it with almonds from Avola, lemons from Sorrento, Sicilian pistachios. We feature, when possible, the food specialties of our country, proposing a real Italian journey of taste. From the chocolate bar to packaging, everything must reflect our values: Italianness, quality and design».

 

 

 

 

MSc Marketing Programs Get a Digital Reboot

Neuroscience, artificial intelligence and data analytics are reshaping the work of marketeers (and marketing degrees)

Creativity and innovation have always been at the core of marketing. The function used to depend on one’s talent to dazzle the audience, like Mad Men’s Don Draper. Creativity and innovation are still very important, but are being enhanced by data and technology. Marketing is one of the fastest-changing professions of the 21st century, with neuroscience, artificial intelligence and data analytics reshaping the work.
“Marketers are increasingly expected to make evidence-based and accountable decisions leveraging on vast data generated in the inter-connected world,” says Shan Chen, Director of the International Master in Marketing Management, Omnichannel and Consumer Analytics course at MIP in Milan. The program is one of many that are being given a digital reboot as technology transforms every facet of marketing.
“We continuously innovate and update the program with technological progress,” says Chen. For example, the applications of neuroscience in consumer research have been recently introduced — essentially using brain science to appeal to customers on an emotional level. […]

Career prospects for MSc Marketing grads

Those who have this magic mixture of technological prowess, creativity and ability to innovate, are in high demand among a wide array of employers.[…] MIP’s graduates find career opportunities in three main areas. The first is the in-house marketing department, usually in larger corporations, with responsibilities such as product management, communication and promotion, PR, marketing intelligence, CRM or strategy.

The second is consultancy, which helps clients to analyze the marketing condition, to define strategy, to develop marketing tools, and to make project execution plans. The third is various specialized marketing agencies, such as advertising, digital marketing, design and content production. They execute the respective marketing activities on a daily basis for their clients.

The wide array of career opportunities is reflected in the diversity of the cohorts. At MIP, candidates can come from any discipline, provided they have a proven passion for all aspects of marketing. Cass says participants learn from students from chemistry, physics, fashion design, architecture, engineering, sociology, philosophy and other backgrounds.
Given such impressive career opportunities, it may be competitive to secure a place on a top marketing master’s program. Entry requirements at MIP include a motivation letter, reference letters, university transcripts and a motivational interview, which is all done in English. […]

Fluid, integrated and mixed: here’s the publishing industry of the future

The New York Times recently reported 700 million dollars in revenue just for its digital business. On the other hand, at a global level, revenue for the information industry is down in many countries, including Italy, as news publications struggle to interpret the current communication context in an economically sustainable way. How is the market for information evolving?

«This situation doesn’t surprise me and has very deep roots – says Giuliano Noci, professor of Strategy & Marketing at Politecnico di Milano’s School of Management and Vice Rector for China at the same university –. In the past some people thought that advertising alone could sustain an online business, a prediction that was proved wrong. At the same time, twenty years ago many publishers responded to the arrival of digital by cutting costs and lowering quality as a result. That turned out to be a mistake, because news today has become a commodity: news alone has no value, anyone can provide it. It was and is necessary to offer depth of analysis, the ability to interpret phenomena in the medium and long term. In the United States they have moved in this direction, increasingly strengthening the component of interpretation with respect to reporting of pure and simple current events and leveraging off the reputation that comes from the prestige of their brands».

The web hasn’t led to a lowering of quality, rather to a polarization between those who care only about price, and so look for free contents, and those who instead are looking for quality and are ready to pay for it.

 «Then there’s also an organizational aspect, on which Italy is particularly late – continues Professor Noci –. Delivering information today doesn’t only mean producing texts, but working from a multimedia perspective, which means centralized newsrooms instead of newsrooms separated from web activities».

At the base of the success of some publishing models there’s therefore also a rethinking of the relationship between digital means and “traditional” journalism, with an eye on greater integration between the two components.

In addition, we are witnessing a reversal in some workflows, with news that is produced directly for digital channels and the paper versions of newspapers that serve as a collection or “best of” the contents that appeared digitally even several days earlier.

Thus it’s not surprising that some iconic newspapers have been purchased and relaunched by big web entrepreneurs. Recently Marc Benioff, founder and CEO of Salesforce (the world’s leading CRM platform), and his wife announced the acquisition of the famous Time weekly. And behind the revival of The Washington Post there’s Jeff Bezos, founder of the famous e-commerce portal Amazon, who in 2013 took it over, full of debt, from the Graham family. And to those who asked him the reason for this purchase, Bezos answered that Internet destroyed most of the advantages that dailies had built up over time but offered them a gift: free global distribution. To benefit from that gift, Bezos implemented a new business model no longer based solely on high revenue per reader, but on the acquisition of a greater number of readers.

But does English language information also benefit from the large size of the audience and its different cultural predisposition?  «No – answers Giuliano Noci –. If Italian media survived twenty years ago, there’s no reason it can’t in the current environment, in which instead, if you know how to exploit it, there are prospects for greater growth. My experience with omnichannel sales leads may to say that the presumed immaturity of consumers is instead an inadequate offering, which over time ends up also negatively impacting demand.
If many publishers in Italy and in Europe are in trouble, it’s because they are not up to manoeuvring the changes underway in society and don’t offer something that is perceived as being of value».

Digital is growing, but according to R&S Mediobanca data, 91.6% of worldwide publishing turnover still comes from print media.  What’s more, publishers that are solely digital like Buzzfeed have announced cuts, while many new publishing products are born in a mixed print-digital form.  Professor Giuliano Noci comments: «Today the mixed model prevails, because people prefer to use media in a mixed manner.
Both digital and print fundamentalists are wrong. All the most recent studies tell us that consumption behaviours must be segmented not based on individuals, but on the life context in which they’ve found themselves. So, there’s not the person who under all conditions prefers to be informed by the radio, TV, web or by reading a newspaper, but everyone, depending on the moment of the day or the situation in which they find themselves, favours one or the other means. Behaviours are very fluid and can be intercepted only by an equally fluid offering».