Socially Responsible Marketing C omin uriica tion

Whoever is in charge, people at all levels of the organization must be aware of the growing body of legal and ethical issues surrounding marketing communications. Most marketers work hard to communicate openly and honestly with consumers and resellers. Still, abuses may occur, and public policy makers have developed a substantial body of laws and regulations to govern advertising, personal selling, sales promotion and direct marketing activities.

By law, companies must avoid false or deceptive advertising. Advertisers must not make false claims, such as suggesting that a product cures something when it does not. They must avoid ads that have the capacity to deceive, even though no one may actually be deceived. A car cannot be advertised as getting 32 miles per gallon unless it does so under typical conditions, and a diet bread eannot be advertised as having fewer calories simply becaxise its slices are thinner.

Sellers must avoid bait-and-switch advertising or deceptive sales promotions that attract buyers under false pretences. For example, a large retailer advertised a dishwashing machine at £179. However, when consumers tried to buy the advertised machine, the seller downplayed its features, placed faulty machines on showroom floors, understated the machine's performance and took other actions in an attempt to switch buyers to a more expensive machine. Such actions are both unethic al and illegal.

International advertisers must also observe local rules. For example, in the United States, direct-to-consumer advertising is allowed for prescription drugs. Pharmaceutical firm EliLilly uses magazine advertisements to boost public awareness of its $2.4 bilhon-a-year anti-depressant, Prozac. Heavy consumer promotion of cholesterol -lower ing drugs, such as Bristol-Myers Squibb's Pravachol, Warner-Lambert's Lipitor and Merck's Zocor, pushed up sales by 30 per eent in 1996."' In Europe, such advertisements are illegal. Prescription drugs ean be promoted only in medical journals and other publications where qualified physicians are presumed to browse.

A company's trade promotion activities are also closely regulated. For example, in some countries, sellers cannot favour certain customers through their use of trade promotions. They must make promotional allowances and services available to all resellers on proportionately equal terms.

Beyond simply avoiding legal pitfalls, such as deceptive or bait-and-switch advertising, companies ean invest in communications to encourage and promote socially responsible programmes -and actions. For example, earth-moving equipment manufacturer Caterpillar is one of several companies and environmental groups forming the Tropical Forest Foundation, which is working to save the great Amazon rain forest. It uses advertising to promote the cause and its involvement. British Telecom's sponsorship of Swimaihou, Europe's largest participatory sporting event in 1996, combined a swimming challenge with charity fund raising - the 46,000 swimmers who registered for the event raised £1.39 million.17

A company's salespeople must follow the. rules of 'fair competition'. Some countries Kave enacted deceptive sales acts that spell out what is not allowed For example, salespeople may not lie to consumers or mislead them about [lie advantages of buying a product. To avoid bait-and-switch practices, salespeople's statements must match advertising claims. In bus in ess-to-business selling, salespeople may not offer bribes to purchasing agents or to others who can influence a sale. They may not obtain or use technical or trade seDrets of competitors through bribery or industrial espionage. And salespeople must not disparage competitors or competing products by suggesting things that are not true. No doubt, the laws governing sales and marketing practices differ across countries. Thus, international marketers must be fully aware of the laws and regulations governing sales and marketing communications practices, and how they differ across the countries in which they operate, when designing cross-border communications programmes. Beyond understanding and abiding by these laws and regulations, companies should ensure that they communicate honestly and fairly with consumers and resellers.

Summary

Modern marketing calls for more than just developing a good product, pricing it attractively and making it available to target customers. Companies must also communicate with current and prospective customers, and what they communicate should not be left to chance. For most companies, the question is not whether to communicate, but how much to spend and in what ways.

In this chapter, we firstly defined the company's total marketing communications mix - also called promotion mix - as the specific blend of advertising, personal stilling, sales promotion, public relations and direct marketing tools that the company uses to pursue its advertising and marketing objectives. Advertising includes any paid form of non-persona! presentation and promotion of ideas, goods or services by an identified sponsor. In contrast, public relations focuses on building good relations with the company's various publics by obtaining favourable unpaid publicity. Firms use sales promotion to provide short-term incentives to encourage the purchase or sale of a product or service. Personal selling is any form of personal presentation by the firm's sales force for the purpose of making sales and building customer relationships. Finally, firms seeking immediate response from targeted individual customers use non-personal direct marketing tools to communic ate with customers.

Next we looked at the nine elements of the communication process and how the process works: the sender and receiver are the two main parties in a communication; the message and media are the major communication tools; encoding, decoding, response and feedback are the major functions performed; and noise is die unplanned distortion during the process.

Then we examined the steps involved in developing effective marketing" communication. In preparing marketing communications, the communicator's first task is to identify the target audience and its characteristics. Next, the communicator has to define the response sought, whether it be awareness, knowledge, liking, preference, conviction or purchase. Then a message should be constructed with an effective content and structure. Media must be selected, tor both personal and non- personal communication. Finally, the communicator must cotteztfeedback by watching how much of the market becomes aware, tries the product and is satisfied in the process.

We moved on to explain the methods that marketers use for setting the promotion budget and factors that affect the design of the promotion mix. The most popular approaches are to spend what the company can afford, to use a percentage of sales, to base promotion on competitors' spending or to base it on an analysis and costing of the communication objectives and tasks.

The company has to divide the promotion budget among the major tools to create the promotion mix. Companies can pursue a push or a pull promotional strategy, or a combination of the two. The best blend of promotion tools depends on the type of product/market, the desirability of the buyer's readiness stage and the product life-cycle stage.

This chapter also identified the major factors that are changing today's marketing communications environment. First, recent shifts in marketing strategy from mass marketing to targeted or one-on-one marketing, coupled with advances in computers and information technology, have had a dramatic impact on marketing communications. Although still important, the mass media arc giving way to a profusion of smaller, more focused media. Companies are doing less broadcasting and more narrawcasting,

Secondly, people at all levels of the organization must be aware of the many l and ethical issues surrounding marketing communications today. Companies must work hard and proactively at communicating openly, honestly and agreeably with their intermediaries and consumers.

Finally, we discussed the process and advantages of integrated marketing communications. As marketing communicators adopt richer but more fragmented media and promotion mixes to reach their diverse markets, they prevent the danger of creating a communications hodgepodge for consumers by adopting integrated marketing communications. This calls for carefully integrating all sources of company communication to deliver a clear and consistent message to target markets. To integrate its external communications effectively, die company must first integrate its internal communications activities. The company then works out the roles that the various promotional tools will play and the extent to which each will be used. It carefully co-ordinates the promotional activities and the timing of when major campaigns take place. Finally, to help implement its integrated marketing strategy, the company appoints a marketing communications director who has overall responsibility for the company's communications efforts.

Key Terms

Advertising 756 Affordable method 770 Atmospheres 769 Buyer-readiness stages 760 Competitive-parity method 772 Direct marketing 757 Emotional appeals 762 Events 769

Integrated marketing communications 781

Media 769

Message source 765 Moral appeals 763 Non-personal communication channels 769 Objectivc-and-task method 772 Pcrcentagc-of-sales method 771 Personal communication channels 768

Personal selling 756

Promotion mix 756 Public relations 756 Pull strategy 777 Push strategy 777 Rational appeals 762 Sales promotion 756 Word-of-mouth influence 768

Discussing the Issues

Which forms of marketing communications could be used for each of the following?

• Pop group Spice Girls' world tour.

• The launch of Nokia's new mobile communications system.

• A university's Business Studies department seeking to attract more overseas students on a master's degree programme.

• Ilaagen-Dazs' new line of icecream and desserts.

• Marks & Spencer opening a new store in an edge-of-town retail park

2. Linda McCartney (wife of Paul McCartney, pop star and former member of the legendary 'Beatles') had been used to endorse a line of reduced caloric, health-food products. Her name was a key selling feature on the packaging- of these products. Was she a credible source for the product? Was she chosen for her credibility as a spokesperson or for some other reason?

3. How does an organization get feedback on the effects of its communication efforts? You may discuss the question using the examples on sales promotion campaigns outlined in Marketing Highlight 18.2.

4. Consider a consumer-goods company that has historically set the promotion budget as a percentage of anticipated sales. Make out a case for changing the method, indicating your preferred method, and explain why.

5. Companies spend a huge amount of money on advertising to build a quality image for their products. Refer to the examples of misleading and 'bad taste' ads in Marketing Highlight 18.1 To what extent do you think such advertisements help to raise a brand's image?

What conimijnication objectives might they achieve in the short term? What might be the effects on product sales in the short term, and over the lonj> term?

Chanty Projects, the organization behind Comic Relief, most notable for the initiation of Red Nose Day, is planning a new fund-raising campaign to raise millions of pounds to support development and emergency projects in Asia and eastern Europe. Outline a communication plan to achieve this objective.

Applying the Concepts

Think of a nationally advertised product or service that has been running an advertising message for a while. Go to a bookshop, newsagent and/or the library and seek out magazines and other relevant print media that may contain print advertising for the brand you have selected. Where possible, copy examples of the ads from current and ba<jk issues of the magazines and the printed material you have accessed. Now examine the ads closely.

• How consistent are the message content, structure and format?

Which response(s) do you think the campaign is seeking: awareness, knowledge, liking, preference, conviction or purchase?

• Do you think the ad campaign is successful in achieving the desired response? Why or why not?

Consider a car brand yon are familiar with.

• List examples of how this brand uses the range of promotional tools to communicate with its target audience. (Public relations examples may be difficult to spot, although you could consider how uars arc used in films and television programmes, or as celebrity vehicles for sports tournaments or public events.)

• Does this car maker use the communication tools in a co-ordinated way that builds a consistent brand image, or are the efforts fragmented? Explain.

References

Diane Summers, 'From nuutral to high gear', Times (21 July 1994), p. 17.

For these and other definitions, see Peter D. Bennett, Dictionary fif Marketing Terms (Chicago, IL: American Marketing Association, 1988).

For more on fear appeals, see Punarn Anand Keller and Lauren Goldberg Block, 'Increasing the persuasiveness of fear appeals: the effect of arousal and elaboration', Journal of Consumer Research (Mareh 1996), pp. 448-59. 'Repent, ye sinners, repent', The Economist (24 April 1993), pp. 87-8; Financial Times (16 March 1992), p. 9. For more on message content and structure, see Leon G. Schiffman and Leslie Lazar Kanuk, Consumer Behavior, 6th edn (Upper Saddle River, NJ: Prentice Hall, 1997), oh. 10. 12; Alan G. Sawyer and Daniel J. Howard, 'Effects of omitting eonelusions in advertisements to involved and uninvolved audiences'. Journal ofMarketing Research (November 1991), pp. 467-74; Cornelia Peehmann. 'Predicting when two-sided ads will be more effective than one-sided ads; the role of correlational and correspondent inferences", Journal of Mariteting (November 1992), pp. 441-53. David Short, 'Rival shows mean business'. The European (23-9 September, 1994), p. 25. See K. Michael Haywood, 'Managing word of mouth communications', .lournctl of Services Marketing (Spring 1989). pp. 55-67.

Schifl'man and Kanuk, Consume?'Behacior, pp. 571-2. For a more comprehensive discussion on setting promotion budgets, see J. Thomas Russell and W. Ronald Lane, Meppner's Advertising Procedure (Englewood Cliffs: Prentice Hall, 1996), ch 6.

10. David Allen, 'Excessive use of the mirror", Mrsnagemenl Accounting (June 1996), p. 12; Laura Petrecea, '4A's will study financial returns on ad spending', Advertising Age (April 1997), pp. 3, 52.

11. Louis Therrien, Brands on the run', Business Week (April 1993), pp. 26-9; Karen Herther, 'Survey reveals implications of promotion trends for the 9()'s', Marketing A'escs (1 March 1993), p. 7; David Short, 'Advertisers come out to spend again', The European (12-18 August, 1994), p. 21.

12. See Don li. Sehultss, Stanley I. Tannenbaum and Robert R Lauterborn, Integrated Marketing Communication (Chicago, IL: NTC Publishing, 1992), pp. 11,17.

13. Miehael Kubin, 'Simple days of retailing on TV are long gone', Marketing News (17 February 1997), pp. 2, 13.

14. Judann Pollack, 'Trade promotion luster dims for marketers, retailers', Advertizing Age (7 April 1997), p. 18.

15. Sohults, Tannenbaum and Lauterborn, Integrated Marketing Communication, op. cit., chs. 3 and 4; Don E. Sehultz, 'The inevitability of integrated communications', Journal of Business Research (November 1996), pp. 139-46; John F. Yarborough, 'Putting the pieces together'. Sales and Marketing Management (September 1996), pp. 69-77.

16 'Pill pushers'. The Economist (9August 1997), pp. 62-3.

17. 'The ESCA Pan-European award nominations: corporate sponsorship', Marketing Week (14 February 1997).

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