Marketing with an un-safe product

An important phrase, as written by Kotler & Armstrong (2010) is “Responsible marketers must consider whether their actions are sustainable in the longer run”. When faced with the dilemma of having marketed an unsafe product, you will need to consider the fact that if the product is already on the market and it is known to be unsafe – it is probably safe to assume that the fact that it is an unsafe product will come to surface and, in my opinion,  the aim should be to cope with the bad press in a way that curves the negative image and hopefully builds a sustainable result.

Kotler & Armstrong (2010, p.609) outline this exact dilemma with it’s example on McDonalds and the bad press received due to their food being cooked in oils filled with trans-fats. McDonalds in turn has found a new source of food oil that is trans-fat free and does not sacrifice the taste of their french-fries (Kotler & Armstrong, 2010). Along with this they have also released additional product lines that cater for healthy eating (salads, etc).

While we also have the example as outlined by Kotler & Armstrong (2010, p. 613) of Hardee’s, a fast food chain that, at the time of a particularly health conscious media age (with focus on obesity and fast foods), released a new, incredibly high in calories (1410 calories) burger – with the attitude that their target consumer is able to choose between right and wrong; I personally do not see this as being a wiser decision than that of McDonalds.

The development of the safer alternative should be marketed well, and if the “unsafe” product is not a consumable product, I would consider allocating some of the budget towards allowing a discounted or free trade in for owners of the older models. With the devleopment of the safer, newer alternative, improvements on its eco-friendliness above and beyond it’s safety improvement should also be considered; if not, I would also consider the option of going the CSR (corporate social responsibility) route and donating a percentage of profits to a cause. While this may hurt current profits, the positive and honest image portrayed as “caring for the consumer” should aide in improving long term relationships.

I do not think that trying to ignore the fact that an unsafe product was released to the market would be beneficial in the long term, as that comes across as being un-trustworthy/underhanded – and trust is an important facet of any relationship, which definitely includes business.

References

Kotler, P. & Armstrong, G. (2010) Principles of Marketing. 13th (Global) ed. Boston: Pearson Education, Inc.

Competition in the Global Market

There are a number of factors influencing todays global competition, both positive and negative. The global market has expanded tremendously in the past 20 odd years, according to Kotler & Armstrong (2010, p.578) the number of multinational corporations has grown from 30 000 to over 60 000.

One of the factors that contribute to the global competition is that of foreign legislation and taxes on entering their markets. A particularly extreme example is outlined by Kotler & Armstrong (2010, p.580) where China has imposed restrictions on foreign entities opening banking institutions in China. The Chinese government has put requirements on foreign entities only to have US$ 50 million in operating capital each year per branch as well as limiting the number of branches that are opened to one per year. These limitations have made the idea of expanding into the Chinese banking industry something that is not feasible for a foreign entity.

On the contrary to the above situation which is a negative implication on globalising one’s business, there are also a number of trade agreements that encourage cross-border trade by lowering or removing duties/taxes on import and export or the entry of foreign business into a local sector.

However, these are not considered positive by all; Global Exchange (2011) describes their fight against “bi-lateral trade agreements” as a move towards the vision of “global economic integration that values worker’s rights, fair trade, and environmental protection over corporate profits”. The trade agreements currently in place according to Global Exchange (2011) are:

NAFTA – North American Free Trade Agreement which includes Canada, Mexico and the United States

FTAA – Free Trade Area of the Americas; this is planned to expand NAFTA to include a new zone from Argentina to Alaska.

CAFTA – Central American Free Trade Agreement. This is the same model as NAFTA but for Central America.

AFTA – As above but for the Andean nations of South America.

With organizations trying to stop the free trade agreements due to their claims on job losses and a negative impact on the economy this also increases the risks of moving towards globalization, if the free trade zones are discontinued many globalized businesses will be adversely affected.

Another free trade zone is that of the European Union (EU), Kotler & Armstrong (2010) have described this union as reducing the barriers between member countries on products, services, finances and labour. Another positive movement for the EU has been the recent adoption of the Euro currency across numerous EU member states.

Other factors covered by Kotler & Armstrong (2010) are those of cultural barriers. Cultural barriers include language barriers and there have been a number of cultural and language faux pas from even the largest companies, for example: Nike’s depiction of a famous basketball player “crushing” a number of Chinese cultural figures (Kotler & Armstrong, 2010, p.585).

It is important to understand all of the markets you are entering into, cultural borders and language borders are often very important and firms that include this in their market research and product strategy are definitely intensifying the competition (such as LG distributing their brightly coloured fridges to the Indian public, Kotler & Armstrong (2010)).

References

Global Exchange (2011) Global Trade Agreements [Online]. Available from:  HYPERLINK “http://www.globalexchange.org/campaigns/globaltrade/”http://www.globalexchange.org/campaigns/globaltrade/ (Accessed: 16 July 2011).

Kotler, P. & Armstrong, G. (2010) Principles of Marketing. 13th (Global) ed. Boston: Pearson Education, Inc.

The Marketing Mix

Firstly, I would like to summarise what the Marketing Mix is, as explained by Kotler & Armstring (2010, p.36) “marketing mix: the set of marketing tools the form uses to implement its marketing strategy”. The tools that make up the marketing mix can be categorised into 4 major groups, also known as the “4 P’s of Marketing”, these are (Kotler & Armstrong, 2010):

  1. Product: This is the service/product/item that the firm is marketing to fulfill a specific need.
  2. Price: The value that the firm will be charging for the “Product”.
  3. Place: How will the firm make the “Product” available to it’s target consumers.
  4. Promotion: The method in which the firm will convince the target consumers to purchase the “Product”, what “validates” the purchase of this product?

The Marketing Mix is driven by the Marketing Strategy, as explained by Kotler & Armstrong (2010, p.72). The Marketing Strategy consists of identifying the target consumer/demographic for the product – this is known as “Market Segmentation” in which different groups of consumers are identified according to their needs (Kotler & Armstrong, 2010). Once the Market Segmentation has been performed the firm must perform Market Targeting; in which the Market Segments are evaluated and the most attractive market segments are identified. The final step is to decide on the Positioning. This is where the firm aims to position their product in a desirable place so that it will appeal to the target consumers needs (Kotler & Armstrong, 2010).

As we can more clearly see now, after the marketing strategy has been done the marketing mix is a much clearer objective to achieve; we, in essence, have roughly defined, or at least researched for grounds (price is often based on place), all 4 of our P’s. Boulding et al (1994) have researched the possibilities of advertising, promotion and sales force achieving differentiation in marketing; in their paper they introduce two conflicting views

  1. Marketing communications themselves “induce differentiation”, which in turn reduces price competition and raises the barriers to entry (introduced by Bain, 1956). This is said to be consistent with the belief that communications themselves help position and enhance a product and its features (Boulding et al, 1994).
  2. Marketing communications reduce the “research costs” of the consumer (between different brands) and therefore reduces differentiation (introduced by Nelson, 1974 – Boulding et al, 1994). This is said to curve the market towards price comparisons being the basis for product review.

Boulding et al’s (1994) research came to the conclusion that the uniqueness of your communications is what defines the success of the marketing strategy. Based on your marketing mix, if your price is a common ground with competitors, then it is not unique and should not be heavily conveyed otherwise differentiation will not be achieved. However, price is something that can definitely create differentiation if your prices are lower than your competitors. Boulding et al (1994) also concluded from their research that for firms pricing above the industry average, current promotion activities decreased future differentiation while increased future price competition whereas the current  sales activities increased future differentiation while they decreased future price competition.

Simply said, adjusting each of the 4 P’s to make your specific mix unique is the key to gaining differentiation, but, as Boulding et al (1994) have pointed out, the long term reactions to the current actions must be considered, not just the immediate spikes/drops in demand.

References

Boulding, W., Lee, E. & Staelin, R. (1994) ‘Mastering the mix: Do advertising, promotion, and sales force activities lead to differentiation?’, Journal of Marketing Research (JMR), 31, 2, pp. 159-172, EBSCOhost [Online]. Available from: http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=9411112937&site=eds-live&scope=site (Accessed: 9 July 2011).

Kotler, P. & Armstrong, G. (2010) Principles of Marketing. 13th (Global) ed. Boston: Pearson Education, Inc.

How cultural environment impacts the marketing of clothing

I would like to discuss how the cultural environment impacts the marketing of clothing.

Clothing is a large aspect of fashion and the fashion industry is one of the most prominent industries in the world, I think we can all agree on that. Although there are many different cultures in the world, we tend to generalise the global differences to eastern culture and western culture. Eastern culture has always tended to being the more modest, or conservative, when it comes to clothing while the West is renound for the “less is more” look amongst women mainly, and has a wide range of predominantly casual attire for men (of course, this is a vast generalisation).

Gökarıksel (2009) discusses in a paper on the Turkish fasion industry about how, after a fashion show, the designer (Tebkir, Turkey’s leading producer of women’s Islamic attire) was criticised by local tabloids for “seducing” the consumers “through the use of young, attractive models” (Gökarıksel, 2009). Gökarıksel goes on to talk about how many Islamic scholars and journalists have written about how “veiling-fashion” goes against the Islamic principles of “israf” (waste) and “frown upon the display involved in modelling and fashion”.

Another good example is in Brazil. Artigas & Calicchio (2007) did a study on the Brazillian consumer with regards to purchasing of clothing. Brazil poses itself a potential “dream” to any retailer according to Artigas & Colicchio (2007), but their study has shown that Brazillians are far more likely to buy from local suppliers than multinational “big brand suppliers”. In their study, Artigas & Colicchio (2007) asked Brazillian consumers whether they trusted local brands more than international and 81% of the respondents agreed that local is better, as well as being of a higher quality. Another question posed was whether or not they were ok with purchasing on credit, more than 60% of the respondents were in agreement that credit purchases are acceptablel; this contrasts to 30% in India, 24% in Russia and 13% in China (Artigas & Colicchio, 2007).

Another angle to look at is the culture that goes with a brand itself. Thinking locally, in South Africa (where I live), we have a number of brands that are themselves associated with a certain economic demographic (as described by Kotler & Armstrong, 2010, p41 in their Best Buy example). For example, we have PEP stores which is one of the lowest price clothing retailers and caters to the low-income consumers whereas there are shops like Levi’s which is more middle class and Diesel Clothing or Fabiani which caters to the high earning consumers.

Through all of these examples that have been outlined above, marketing the clothing products will potentially be completely different. Marketing to an Islamic, female culture will be very different than marketing to a high-incomed Fabiani customer in South Africa, which will also contrast when marketing to a credit-friendly, locally loyal consumer in Brazil. Whether or not the clothes are in-fact the same style and the same brand, the marketing of them must be carefully based around the culture and demographic; the “Place” P in the 4 P’s of Marketing – Product, price, place and promotion (Kotler & Armstrong, 2010, p.36).

References

Artigas, M, & Calicchio, N 2007, ‘Brazil: Fashion conscious, credit ready’, McKinsey Quarterly, 4, pp. 76-79, EBSCOhost [Online]. Available from: http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=27602588&site=ehost-live&scope=site (Accessed: 9 July 2011).

Gökarıksel, B. (2009) ‘New transnational geographies of Islamism, capitalism and subjectivity: the veiling-fashion industry in Turkey’, Area Mar2009, 41 (1), pp.6-13, EBSCOhost [Online]. Available from: http://search.ebscohost.com/login.aspx?direct=true&db=s3h&AN=36218720&site=ehost-live&scope=site (Accessed: 9 July 2011).

Kotler, P. & Armstrong, G. (2010) Principles of Marketing. 13th (Global) ed. Boston: Pearson Education, Inc.