Posted by: itm2011 | May 17, 2011

The Perils of Imitation Age

I often encounter people who are waiting for to purchase iphone4 while they have existing cell phones. People who have broken cellphone wait for months in order to obtain iphone4. The worst of all is the owners of iphone3 who purchased them just several months ago and nervous about iphone4 being coming out. On the companies’ side, competitors of apple frantically make a new cell-phone which imitates the design and performance of iphone, and Apple has to create even better iphone series in order to get ahead of the industry. How many iphones should be come out to ever satisfy all these customers and companies? This phenomenon deeply underlies in humans desire to imitate.

I have paid attention to the fanatic reactions of people whenever every new iphones are coming out and the moment I saw the title ”The Perils of the Imitation Age” it was automatically translated into “The Perils of the (New) Iphone Age.” People want new iphone not because they need it but attempt to imitate other who has better cellphone than what they have. As long as new iphone continues to be made no one can be happy.

Imitation prevails all over the society even greater than we recognize from the counterfeit of Louis Vuitton purse to the mergers of corporation just because their competitors do the same. I wonder if imitating end up profit the entire society. Imitation, of course, has advantages such as learning from successful people or companies through imitating. However, indiscriminate imitation seems to confuse people’s self and companies’ originality and its directions.

We are obviously living in the age of the imitation than ever before. I have a curiosity how devastating effects the imitation behavior plays in our society and business; and what are the solutions to utilize the virtue of imitation without crossing the line. This is why I found interest in this article.

As I mentioned earlier, imitating is deeply rooted in human behaviors thus related to wide aspects of human activities. Our major, International trade and Marketing particularly related to fashion is highly interconnected with imitation as well. Fashion is the most obvious result of imitation. People imitate someone who they admire or want to be like them including their appearance. At the same time, people’s desire to be accepted by a certain group lead them to wear or behave like them. Understanding how imitation acts upon fashion helps us to predict customers’ behavior and further helps to set business strategic in fashion industries.

This article mentions that, in imitation networks, not everyone has same influence over others. Some people have much more influence over others and reaching them leads to reaching thousands. For example, Uggs which was originally meant to be in-door sleepers in Australia became huge trend all over the world as Kate Moss was seen in this pair of shoes.

Brand marketing is crucial in fashion industry and we have to understand how top brands such as Channel and Louis Vuitton keep their position in the highly volatile fashion industry. Both Channel and Louis Vuitton manufacture products that have quality and ageless that are rather being apart from imitation. While most of brands compete in their prices with markdown and promotions, those two companies maintain high-end brand image by never doing discounts on the products even during the harsh economy.

Imitation is one of fundamental natures human process. And imitation incredibly has influenced over society particularly in business and finance. With the enormously growing technology, almost everyone in the world can access to what others do, think, and predict with a single click. These knowledge we gain leads to even more outrageous fads and fashions, bubbles, and crashes.

There are four motivations why people imitate. Safety is the first reason. Going through the well-known path in the wood won’t make you a pioneer but you are less likely be lost. The second driver is conformity. People have desire to be surrounded by people who share similar thoughts, status, and appearance. This main factor drives fashion and fads. The third motivations is that people believes other people knows better. People want to avoid the responsibilities on their own decision, so relinquish their choices to other people. The final reason for imitation is greed. People imitate since they want what other people has.

Thanks to the technology, people know what other people buys, wear, think, or do ever more and faster than before. People also instantly respond to what they know. This creates proliferation of feedback loops, collecting, aggregating people’s thoughts or opinions and respond back to the public. Feedback loops is not a new concept. It has been around for more than hundred years influencing other people’s ideas through mass media, magazines, and newspapers. Best selling list is one of the examples.

In fact, the quality and quantity of feedback loops has been extraordinarily changed with the fast development of technology. The three greatest changes are its speed, customization, and individuation. SMS is one of the examples of drastically increased speed of feedback loop. Through exchanging SMS, people influence each other through exchanging their thoughts instantly. Customization is the concept of allowing people to imitate others who are mostly like them not the general public. Online websites suggest products that are purchased by customers who have similar purchasing history. The most significant characteristic of feedback loop is individuation that allows people to access individuals’ thoughts not anonymous public. Zagat restaurant survey is the most appropriate example of combination of customization and individuation. The ratings and reviews are not conducted by professional critics but ordinary diners who are like us.

The society possibly become homogenous and perfectly predictable if everyone imitates the lead of other, however, imprudent imitation creates even greater unpredictability and instability. Unpredictability is caused by different way people imitate. The problem is worsen as influence of traditional “beacons,” such as government leaders, the church, and celebrities, has faded by the loss of their credibility. People are getting more confused of whom to imitate and end up imitating wrong people.

What makes more destabilizing than imitation of wrong people is the self-referential nature of imitation it self. The self-reference leads to the infinite reproductions of reproductions of original sources thus the growing apart from fundamentals. For example, in the Democratic presidential primaries, people supported John Kerry not because changes in his position but people had seen others voting for him so they assumes that he was electable. People votes according to who could possible win the election.

Instability of system in which people predicts based on other’s action is often seen in our ordinary lives. People drive to a certain route without knowing traffic conditions. Even though their departing and arriving points are the same, they choose to drive certain time and direction based on what others do before. This attempt to imitate results in unpredictable outcomes while everyone’s goals are the same. Self-reference make the smallest difference possible to lead the dominance that is magnified by feedback mechanisms as word of mouth.

Imagine there are two exactly same cafés where carry the same quality, taste and price menu and one café has two customers while another one is empty. People who are passing by those two café likely to enter the one with two customers assuming it may have better taste. The increased customers inside of the café will induce more customers and it goes on and on. Another example is neighborhoods share similar racial and standard of living. Consider one wealthy person build a fancy house in a poor neighborhood. This will attracts other reaches to do the same in this neighbor and this random fluctuation would convert this poor neighborhoods into the wealthy neighborhood. People’s tendency to imitate what others do plays greater roll in finance markets.

People’s interdependent decision making results is millions of loss in speculative bubbles. When one or two huge traders make huge transactions by error the entire market will respond on it. People buys stock not it is the most attractive to them but based on other’s expectations that are the expectations of others. It shows the market’s vulnerability to destabilizing self-reference.

Mastering self-reference doesn’t guarantee expected outcomes, however, business who understand the imitative behavior can avoid its worst effects. There are some strategies to predict the possible result of imitative behavior and even creates opportunities in it. The fist is targeting the hubs of the imitative society. Through targeting few influential leaders it can reach thousands more customers. This is why designers are eager to give away their pieces to the celebrities. The second is keeping the ideas simple. Simple ideas are easily understood, remembered, and retransmitted. It other words, its more likely to be imitated. The third one is giving away. Since feedback loops are started by first few people giving away you product at first is worthy in order to have as many customers as possible in a short time. For the last and the best strategy for business is “be the kind of fundamental people can’t ignore.” While competitors pay little attention to the fundamentals and follow what other companies do, having a original and quality products will make the customers return to these products when there is no more products to follow.

The article is interestingly explain how imitation system works from the psychological motivations to imitation of human nature to the influence of imitation on the society in general, culture, business and finance market. Various phenomenon occur in our society or business is deeply based on people’s desire to imitate and this can put our society or business in jeopardy, on the other side, it can lead to the opportunities.

The most interesting part of this article is that how fast development of technology boosts rampant imitation that causes unpredictability and instability in the society. As there are too much information it is easier for people to imitate what others do, but the problems are they follow wrong people and follows expectations of other people’s expectations that makes impossible to predict outcomes.

The authors suggestion on how to build strategies in order to avoid the worst effects of imitation or how to create opportunities by using the nature of imitation was valuable information that further helps me to realize why some companies operates the business the way I would never do. For example, I assumed that the internet or cable companies just give away several months of free trials to simply increase the number of customers by making them to continue the service. However, what the companies were aiming was feedback loops. People may decide to choose Verizon internet not because it is better than other products but many others use Verizon internet. The article is relevant and viable information to understand business activities around us and use them in the future.

With the emerging size and importance of international businesses international corporations have to endlessly compete each other. Companies closely tracks what other companies are producing or doing and often imitate them just to compete disregarding the company’s business condition. For example, Vivendi has lost billions value of shareholders as they imitate merger and acquisition strategies of their competitors. I found this could be related to the Data Clear case study we went over in the class. Data Clear’s concern about international expansions is caused by attempts to imitate their competitor’s global expansion. It can put the company into a serious danger if they abruptly going into global without careful examination of the company’s circumstances.

As I consider working in finance industry, this article is closely related to my future career. Finance market is highly unpredictable due to the instability of self-reference system. Surprisingly, while speculation is the main force to move finance market, imitation is another cause that can swing the entire market. Understanding the core fundamentals of feature of finance market allows me to have more clear idea about this career.

The author’s conclusion implies that being original and true of their own business is a key to the success in this imitative society. It makes sense when the method of business is evaluated based on morality and some businesses are successful and ageless with their originality. However, I question isn’t imitating is another core strategy for certain companies like Pepsi and H&M. Their products are imitation of other products and people appreciate the imitation. I wonder if imitation eventually halters a company’s success when profits are only concerned.

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