Consumerism Effect on Culture

Consumerism and its Effect on Culture

Consumerism is the human culture that encourages consumers to purchase and acquire products in a bid to keep the trade alive (Apecsadmin, 2016). In a society that operates by consumerism culture, there are more adverts and competitive prices that are aimed to make the consumers purchase more products and create existent demand. Currently, the resources’ consumption is alarming. “About 59% of the world’s resources are consumed by 10% of the population” (Greentumble Editorial Team, 2016). This culture comes with a range of pros and cons. It makes the community to perceive purchasing and acquisition of materials as happiness rather than satisfaction of needs. The members can easily judge their colleagues on their materials such as fashion and automotive.

As a result, there is increased unnecessary purchase by those who have which in turn increases pressure on the existing natural resources. The consumerism behavior is more rampant in the US and the United Arab Emirates. Research has shown that if everyone’s consumption scale was equivalent to that of an average American, we would require 4 planets to sustain our lifestyle (Greentumble Editorial Team, 2016). As per this research, the consumerism causes more cultural harms than benefits (Shah, 2005).

Consumerism causes destruction to the environment in the long run. The human population has insatiable cravings for resources which makes increases the pressure on the natural and man-made resources. Whether the required resources are natural or man-made, there is a direct or indirect impact on the world resources. In case of food products, they are mostly derived from farms and where they are manufactured; there is environmental degradation that results from disposal of industrial waste.

There is increased cultivation of land to satisfy the demands and in the process sustainable farming methods are not practiced since the aim of the farmers is to make profit. Farming is accompanied by expansion and land clearance which is achieved via deforestation therefor causing climate changes. Other farming practices like livestock and poultry farming has also been associated with environmental degradation which also have negative cultural effects (Shah, 2005).

Consumerism Demand

Since some plants are more demanded than others, those whose demand is high are cultivated in expense of others leading to loss of plants diversity. It also leads to cultivation of non-food crops such as sisal and flowers which are in demand and therefore hunger is the long run outcome. Another example is where these animals consume a lot of water and also cause pollution to the water sources.

Most interestingly is the finding that some of these animals are fed with more grains while some poor persons are starving in some part of the world.The poor lacks any otherwise than to believe that money brings happiness making them to be willing to do anything to acquire financial properties. There is communal disintegration and loss of unity where some animals are valued by their owners, more than fellow human beings (Shah, 2005).

The culture is also one of the leading causes of poverty. The gap between the rich and the poor is widening as time goes by. The population now perceives and judges their colleagues on their material possession which is very evident from the dressing to gadgets possession. There is this mindset that exists to those who ‘have’ that the poor can use the resources to be rich too.

However, this is not applicable as there is resources inequalities between different regions and individuals. The widening gap between the rich and poor is so wide that when the rich are disposing the leftovers some have nothing to eat. A saddening case is where some spend their cash on relatively useless products such as ice cream while others cannot afford a basic lunch. However, this is perceived to be normal particularly in the US (Shah, 2005).

Cultural effects are also a function of health issues, joblessness and rural-urban migration. Consumerism causes health problem to the poor due to malnutrition and to the rich due to over consumption. Over-consumption health issues are those related to obesity and dormant lifestyle. The rich have a tendency of eating at wish and driving right from their door-step to their different destination. As a result, they have high chances of contracting lifestyle diseases such as diabetes and heart diseases. The rate of joblessness may increase due to reduced compensation rates and increased workloads as the poor compete for these opportunities to make their ends meet.

There is also increased rural-urban migration as most people move to the urban places to try their luck. This causes labor imbalance in the rural areas where there are productive farms as most people travel to the urban area. Food shortage is the outcome and as the law of supply and demand indicates, food prices rise as a multiplier effect of consumerism (Shah, 2005). To neutralize this effect, the people have to have a means of buying and acquiring these foods for their survival.

The rich got some high purchasing powers and may displace the poor from their native land. The likely outcome is that the rich may not use the land on productive manner such as food production but instead build an expensive home causing food shortage. On the side of the minority, they will be forced to migrate to other unfavorable places such as near wildlife increasing the cases of human wildlife conflict (Shah, 2005).

Consumerism Marketing Dissertations
Consumerism Marketing Dissertations

Environmental degradation and cultural effects are also caused by mineral and fuel excavation. Consumerism causes increased demand on automotive and electronics. With the emergence of industrious countries such as China, there is increased excavation to meet the demand for metals. Research has indicated that the current generation has broken the past consumption. Sustainability calls for use of resources without compromising the ability of future generations to meet their needs.

It is however clear that with the current consumption rates, the future generations’ abilities to meet their future needs are compromised by the consumerism and capitalism culture. One of the fueling factors of this culture is that the developed countries are the ones advocating for sustainability and minimal use of resources. These efforts are seen as neocolonialism as these developed nations already used resources to develop their states but they want to regulate other states. Worse still is the case of European countries who amassed resources from other countries to attain their status (Shah, 2005).

Consumerism culture has also led to exporting pollution from the developed states to the developing countries. Excessive consumption has increased the pollution rates from industrial wastes. Regulations are in place to regulate pollution where the firms are required to develop more efficient ways of processing their products when their emission exceeds a certain limit. Instead of improving their systems, some firms are opting to move some of their manufacturing branches to the developing countries where there are fewer regulations and lower pollution impacts.

Due to this, the developing countries manage to maintain serene environment in the expense of poorer states in the name of foreign investment. The culture also promotes some inhumane activities such as exporting potentially dangerous materials to be recycled in the poorer states such as computer monitors. These activities are hazardous to the local community and may lead to health problems. However, these countries of origin do not care about these as they are not concerned by the needs of others (Shah, 2005).

Consumerism has also triggered social injustices revolving around poverty, land control and ownership. The ideology has increased desire for wealth which causes some sort of jealous. Individuals want to be rich while others are poor so that they can control them. They are willing to make money even via unethical means. For instance, instead of preventing a disease outbreak, some want it to occur so that they can supply medicine to the affected region and make money in their private healthcare facilities. In all these cases the developed nations’ population is to blame (Shah, 2005).

Consumerism and Purchase Power

The emergence of purchase driven economy has also presented a risk to the consumers. The marketer already know that the consumers are purchase driven and therefore they want to come up with affordable products. In the process they may compromise quality for example in the health sector. The low quality electronics may cause health problems or disasters such as fire while poor quality health services may cause drug resistant form of diseases or deaths (Logan, 2016). The ideology is also associated with moral implications. This occur where the population perceive money as the source of happiness while this is not the case always.

Money is good but may not buy sleep, good health among other valuables (Apecsadmin, 2016). Poor working environment and compensation scale may arise as company owners attempt to lower the prices of they products to attract a bigger market. “The culture undermines the social cohesion due to internalization of highly destructive values of replacing everything with money” (Logan, 2016).

The common trend with this ideology is based on human psychology and sociology studies. Human beings are insatiable in their desires and therefore it is believed that demand will exist in the presence of supply. “Consumers were acting unwisely that consumer behavior perhaps did not solve to advance their standards of living or more general goals was generally dismissed as paternalist” (Goodwin, Nelson and Ackerman, 2008).

The extreme desire of acquiring properties will cause the consumers to go against some doctrines such as that that requires people to avoid coveting in the Christianity religion. Covetousness a may encourage some criminal activities such as robbery and interfere with the existing cultures. As a result, the moral standards are eroded and decay and turmoil of families, neighborhoods and the society (Teshome, 2017).

With all the above mentioned cons of consumerism, it also has some few pros. When correctly implemented, it may cause the consumers to purchase more and this is an advantage to businesses. It may reduce the costs of living due to the drop of commodity prices in the market. The increased demand will also call for more manpower and this may leads to increased employment opportunities. For these pros to be realized, consumerism has to be managed as contrary may happen for example increase of workloads instead of employing more personnel (Apecsadmin, 2016).

In my opinion, consumerism is not a good idea as its cons exceeds its cons. It leads to perceiving money as the source of happiness. It has contributed to the widening gap between the rich and the poor. There is significant degradation of environment due to inappropriate consumption of use of resources. It has caused rural urban migration as people move to try their luck.

Researchers have clearly indicated that our consumption exceeds the historical records and should we continue in the same way, we’ll definitely compromise the ability of the future generations to meet their own need. The ideology has also increased the health issues from malnutrition and over consumption. It also causes unfair competition where the rich continues to rich while the poor continues to be poor.

The possession own money among other resources make the owners feel a kind of superiority and despises the less fortunate. The ideology causes corruption of morals as the desire for wealth exceeds and the poor attempt to look for alternative means of acquiring wealth. There is resources inequality between the developed and the developing countries. The developed countries takes advantage of their position to transfer their waste to the developing countries.

References

Apecsadmin. “6 Pros and Cons of Consumerism.” (2016). This articles has been written   organization site’s admin. It covers the various pros and cons of consumerism though in brief and therefore facilitated writing of this paper.

Goodwin, Neva, et al. “Consumption and the Consumer Society.” (2008). This reference is relevant as it elaborates the relationship between consumption and the consumer society. It reveals the rationale behind different consumption patterns. The paper’s subject is also covered by this source and from the fact that it is an academic article, its information is reliable.

Logan, T. Collins. “What are the advantages and disadvantages of consumerism?” (2016). This reference is very brief but direct to the point. In this source source, you will find the pros of consumerism.

Shah, Anup. “Effects of Consumerism.” Glabal Issues (2005). This article by Shah is a scholarly article that is very wide in scope. For instance, it has been cited in most parts of this paper. It has provided solution to various dimensions of this paper.

Team, Greentumble Editorial. “The Negative Effects of Consumerism.” (2016). This reference by the Greentumble editors is very relevant. It has concentrated on the negative effects of consumerism supporting the paper’s thesis statement. Compared to the other sources, this particular source is focused to the main topic.

Teshome, Mengisteab. “Culture of Consumerism Effects and Society.” (2017). This article by the Ethiopian Government Press takes a new perspective on the subject matter. It has analyzed the effects of consumerism in the society and how it is being utilized by marketers.

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Classical Conditioning on Consumer Behaviour

The Effect of Classical Conditioning on Consumer Behaviour

Classical conditioning is a source of learning that influences an individual’s behaviour psychologically, habitually and perceptually. The concept of classical conditioning is discovered by Ivan Pavlon and is defined as a learning process that is created by crafting a connection between a neutral stimulus and an environmental or physical stimulus. However, it emphasises on placing neutral stimuli before the naturally occurring reflex.

The very well-known example of classical conditioning is of a dog, where the dog was exposed to a sound as neutral stimuli which triggered salivation as the reflex in anticipation of food (Cherry, 2017). Nevertheless, a study by Pornpitakpan (2012) states that there is no significant evidence that classical conditioning have any effect on consumer behaviour and its use in the advertisement is a waste. Therefore, this report will analyse the impact of Classical Conditioning on Consumer behaviour through Coca Cola’s advertisement in United Kingdom.

Classical Conditioning at Coca Cola

Coca Cola is among the top selling and manufacturing soft drink Companies in the world, it was established by John Pemberton in the 19th century. Perhaps it is run by Asa Griggs Candler, an extraordinary marketer who has got Coca Cola to this dominating position. Coca Cola is a Global brand but this report talks about its Coca-Cola Great Britain (CCGB) division, which manages 20 different brands and 80 or so drinks. Its brands in the United Kingdom include a variety of still and sparkling drinks, four colas, herbal teas, sports drinks, waters, juices and also no calories, caffeine and sugar drinks in the range of flavours (Coca-cola, 2017). Nonetheless, the advertisement of Coca Cola is a great choice to demonstrate the impact classical conditioning on consumer buying behaviour.

Coca Cola’s Advertisement History

Coca Cola has a unique way of marketing its drinks ever since it’s first on-screen advertisement in 1950, where it associated its brand to festive occasions from red trucks in Christmas holidays to hilltop singers by creating an association. Similarly, in another advertisement in the 1950s featuring Julie Reaby and Alf Davies (the winners of British Ballroom Dancing Open Championship of 1956) with the slogan “Coca‑Cola puts you at your sparkling best!”. Coca Cola has been seen to create its brand image as the source of happiness.

Like most of the well-known brands in the 1960s, Coca Cola featured celebrities in its advertisement to air in the UK because it tends to influence consumer’s buying behaviour. Then there were also some ads where it introduced cartoons to show how characters call truce using a bottle of Coca Cola. Furthermore, it uses appealing jingles like “Only Coke will do when you’re thirstiest”, “Coca‑Cola refreshes you best!”. Likewise, Coca Cola has evolved tremendously by associating coke with appealing notions and trends like it introduced can opener named Churchkey in the mid-1970s with the demonstration of how to open cans. The Coca Cola ads at times introduce its campaigns, to help a cause or demonstrate a new idea but with the aim to attract more and more consumers (Coca Cola, 2017).

Use of Classical Conditioning in Coca Cola’s Advertisement

Understanding the consumer behaviour is a crucial aspect of today’s market, especially for effective marketing and branding of the products. In fact, when a new product is launched the consumer behaviour changes and its psychological understanding becomes important because it requires new association. Under classical conditioning, many brand use liked or disliked music in their advertisement to affect consumer’s product preference (Gorn, 1982). However, Coca Cola uses classical conditioning in its advertisements very effectively for creating an association of its products with a likeable factor.

As thirst is an unconditioned response of the consumers in a hot season and it is triggered by many physical and environmental factors like sports, heat, dehydration, workout etc. which are used by Coca Cola as unconditioned stimuli in its marketing and branding functions very strategically. Moreover, the keywords of these unconditioned stimuli are used in slogans to appeal consumers and influence their purchase decision such as “Thirst Knows No Season”, The Pause That Refreshes”, Open Happiness etc. (Ryan, 2017).

Nonetheless, Coca Cola products are used as conditioned stimulus by placing along with the unconditioned stimuli in every advertisement. As a result, Coca Cola drinks become a signal of unconditioned stimulus like heat and dehydration for the consumers and they feel thirsty by seeing the ad without actually experiencing the environmental factors. This impact of classical conditioning compels consumers to buy Coca Cola by making them feel thirsty when they actually may or may not be thirsty. In addition to that, Coca Cola also uses festivals to create its pairing with the festive period and influence people to buy coke (Oakley, 2013).

Impact of Advertisement Characteristics on Consumer Behaviour and Pepsi (Rival Brand)

There are numerous characteristics of Advertisement including the use of media, tools, communications means etc. which basically make the brand image. As the brand image is the core driver of the brand equity and it influences consumer perception and choice regarding a product by driving the consumer behaviour. Regardless of the marketing strategies of the companies, the main objective of every organisation is to effect consumer’s perception and buying behaviour towards the brand. Coca Cola establishes its brand image of happiness and refresher in consumer’s mind and stimulates their purchasing decision of the brand (Zhang, 2015).

The first ever print advertisement published by Coca Cola in 1886 had slogan “Delicious and Refreshing” and was marketed on every merchandise including trays, clocks etc. until 1920 to create its brand image as a very refreshing beverage. Which positively influenced consumer behaviour and increased its market share, as a result many similar slogans were used in ads like “Coca Cola is a Delicious Beverage, Delightfully in Harmony with the Spirit of All Outings”, “Coca Cola Revives and Sustains” and “The Great National Temperance Drink” using classical conditioning to create a distinct brand image in consumer mind (Ryan, 2017).

For example, a very well-known and highly anticipated Christmas ad by Coca cola that was aired in 2013 used the traditional factors or view of advertisement to compel consumers to buy that product. In the human mind, events like Christmas are the unconditioned stimulus that tends to bring a positive vibe or sense of happiness, excitement and togetherness as an unconditioned response.

Before the implementation of the classical conditioning, the neutral stimulus or Coca Cola drinks do not trigger any emotion in consumers because of no brand association. Nevertheless, when the same neutral stimulus (Coca cola) is advertised with the unconditioned stimulus (Christmas) in an advertisement, it generates positive feelings among consumers, the emotions of excitement and family re-emergence when they see Coca Cola. These emotions then become the conditioned response of consumers due to the association of Coca Cola with Christmas. Perhaps, the effectiveness of the advertisement cannot be directly measured but the recorded sales of Coca Cola during the Christmas season exceeded to £185m, which shows its very positive impact on consumer buying behaviour (Oakley, 2013).

Furthermore, Oakley (2013) shows the impact of Coca Cola’s same advertisement on Pepsi by highlighting the AIDA (Awareness, Interest, Desire, Action) tool used by Coca Cola in the ad. The tool is discovered by Elmo Lewis and proposes a view of effective advertisement which affects Pepsi’s sales. The tool first grasps consumer attention by awareness, then interests or appeals them to learn about it and consequently convinces them to desire the product. Eventually, it influences their purchasing decision making or consumer buying behaviour and they take action to buy Coca cola. Which perhaps decrease Pepsi’s sales than Coca Cola.

The rivalry between Coca Cola and Pepsi is quite interesting as both have somewhat similar in chemical composition but their advertisement creates preference among their consumers. However, Coca Cola is known as the most popular beverage with 18.6% global market share, whereas Pepsi has 11.9%.

The advertisements of Coca Cola like its 2013 Halloween ad maybe a cheap advertisement tactic (shown in the figure below) as a competition but it is an example of classical conditioning that created the brand association. The advertisement may have worked in favour of Coca Cola but badly affected Pepsi (Oakley, 2013). Not just that the other advertisement characteristics of Coca Cola like media and communication tools also badly affect Pepsi as they both have the same target audience.

Classical Conditioning Consumer Behaviour Dissertation
Classical Conditioning Consumer Behaviour Dissertation

Conclusion

After the above thorough analysis of Classical Conditioning and its effect on consumer behaviour in advertisement using Coca Cola’s Great Britain advertisement, it is proved to be quite evident. There are many brands like Coca Cola who use the unconditioned stimulus along with neutral stimulus to create conditioned response by associating the brand or product with an emotion. 

The effect is proven significant using various Coca Cola’s advertisement examples, from its first ever print ad to on-screen advertisements that create its association with freshness, happiness, togetherness etc. and Influence its consumer’s buying behaviour and increases its sales. The example of its Christmas ad is used to show the effect of classical conditioning on Coke’s consumers and their purchase decision which show an immense increase in sales during Christmas period.

Furthermore, the effect of advertisement characteristics on its rival brands is also significant. Which is proved using its 2013 Halloween advertisement that created the brand association (using classical conditioning) and through AIDA communication tool, which anticipates and influenced most of the cola consumer market at the time.

The effect of classical conditioning on consumer behaviour is noticed because of the association that this theory help creates, condition human brain to respond similarly to the unconditioned response (heat, dehydration or thirst) at the sight of a neutral stimulus (Coca Cola). A study by Till, Stanley and Priluck (2008) states that the celebrity enforcement used to condition consumer behaviour is very effective. For example, when a celebrity endorses a brand, his followers are likely to buy that brand to create a sense of belongingness.

Classical Conditioning Recommendations

According to the above analysis Coca Cola uses Classical Conditioning to influence its consumer behaviour, perhaps there are numerous other ways of influencing consumer behaviour. Few of them are as follows:

As nowadays consumers are flooded with the information than the last decade which gave them the power to switch brand due to excessive sugar or any other property of the product. Moreover, there are the variety of substitute brands using same classical conditioning factors.

In fact, Conlon (2021) states that four out of five customers don’t come back if they do not like a single thing about the product. Therefore, it is recommended to onboard technologies and personally engage with the consumers to influence their buying behaviour and offering the personalised experience. There are latest technologies like social intelligence and customer analytics that would assist in delivering the premium experience.

As technology has empowered the brands, it has also empowered consumers to disengage and unsubscribe, which means that Coca Cola cannot merely rely on its festive and refreshing drinks advertisement. Some consumers demand ‘boosting drinks’ or the healthy drinks that do not increase their sugar intake and obesity level. Thus, it is recommended to create smaller consumer segments to cater all consumer preferences and influence them by targeting their insecurities like weight, health consciousness, energy etc.

Furthermore, Redsicker (2014) say that today’s consumers are super connected, thus understanding individual groups that tend to influence each other’s buying behaviour must be studied to anticipate their purchasing decision. By learning about their cultural aspects or latest trends or celebrity hype, is likely to alter consumer behaviour.

Another recommendation is to use the ‘on rader’ issues or social causes instead of festivals because these factors resonate more than anything. The issues like recycling, animal welfare, personal energy source etc. tend to attract young people to use those brands that support human welfare. It is also likely to create loyal customers by accessing more and more consumer insight to influence them and anticipate their demand or decision making (Lee, 2011).

References

Cherry, K. (2017). How Classical Conditioning Works: An Overview With Examples. [online] Verywell.

Coca Cola. (2021). Coca‑Cola adverts from our archives.

Coca Cola. (2021). Coca-Cola GB.

Conlon, G. (2021). What Change in Customer Behavior Will Impact Marketing Most in 2020?

Gorn, G.J., 1982. The effects of music in advertising on choice behavior: A classical conditioning approach. The Journal of Marketing, pp.94-101.

Lee, S. (2011). Influencing Consumer Behaviour Sustainability.

Oakley, T. (2013). Why do Coca-Cola advertise?

Pornpitakpan, C., 2012. A critical review of classical conditioning effects on consumer behaviour. Australasian Marketing Journal (AMJ), 20(4), pp.282-296.

Redsicker, P. (2014). 5 Ways You Can Influence Consumer Purchasing Decisions: New Research : Social Media Examiner.

Ryan, T. (2017). Coca-Cola Slogans History.

Till, B.D., Stanley, S.M. and Priluck, R., 2008. Classical conditioning and celebrity endorsers: An examination of belongingness and resistance to extinction. Psychology & Marketing, 25(2), pp.179-196.

Zhang, Y., 2015. The Impact of Brand Image on Consumer Behaviour: A Literature Review. Open journal of business and management, 3(01), p.58.

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Audi Global Marketing Communication

Title: Audi Global Marketing and Communication Strategy. Audi is an automobile manufacturer based in Germany that distributes, markets, produces, engineers, and designs luxurious vehicles. The manufacturer was founded in Ingolstadt, Bavaria, Germany and is part of the Volkswagen Group. Throughout the globe, vehicles that are Audi-branded are manufactured in nine production facilities. The organisation’s origin dates back to the early 20th-century when engineer August Horch teamed with two other manufacturers in 1932 to form Auto Union. The mid-20th century (the 1960s) saw the commencement of the modern day Audi when Volkswagen acquired Auto Union from Daimler-Benz (Audi, 2019). The Audi brand was relaunched in 1965 by introducing the Audi F103 series to the market. After the relaunch, Volkswagen decided to merge NSU Motorenwerke with Auto Union in 1969 to form the modern day structure of the organisation.

The organisation’s name is a German translation of founder’s surname – Horch. The Audi logo has four rings that signify each of the four automobile manufacturers who merged to establish the organisation’s predecessor, Auto Union. The company’s slogan “Advancement through Technology” implies that the organisation uses the latest technology to manufacture its car (Audi, 2019). In the United States, the organisation’s slogan was “Truth in Engineering” up to the year 2016 from the year 2007. Together with the Mercedes-Benz and the BMW, Audi is among the world’s most sold luxurious automobile brand. The key intent of this report is to look into the global, local and glocal strategies of Audi with regard to price and distribution; additionally, the report will select and discuss the primary target market of the organisation.

Audi marketing mix

Due to the element of globalisation, the concept of marketing has evolved immensely over time, and if companies are not able to keep up with the dynamism, they risk being overtaken by their competitors. One of the major dynamics in the marketing concept evolution is the Marketing Mix strategy that an organisation chooses to adopt (Svend, 2017). Audi being a major player in the automobile industry has managed to keep up with the dynamics in marketing by adopting different strategies in the local, international, and glocal market. It is vital to note that as Audi customers look for relevant and consistent experiences in the organisation’s products whenever and wherever they interact with them, the company is under pressure to find creative and innovative methods of marketing. Additionally, these marketing strategies are supposed to remain relevant locally while they maintain a sense of consistency in owning a global brand.

Glocal pricing and distribution at Audi

Audi recognises the fact that the digital marketing landscape is being taken over by glocalisation. As a result, the organisation has undertaken the initiative of strengthening the global brand of its products with a customised approach and flavour for the global market. However, the organisation faces a major challenge of ensuring that the global marketing campaigns of the organisation are in sync with the tastes and preferences of the local audience (Awan, 2014). In setting the prices for its products and choosing the distribution strategies as relates to glocalisation, the organisation acknowledges the fact that the major customer priorities with regards to these aspects differ from one market to another. Therefore, it is critical that these priorities are taken into consideration to establish an effective pricing and distribution strategy in the glocal market. To effectively penetrate the glocal market, Audi has incorporated hyperlocal and social geo-targeting in its overall marketing strategy.

In employing social geo-targeting in its pricing and distribution strategy, Audi can develop a deeper engagement with its customers, and it can get speedy feedback on its services, releases, and ideas. Through hyperlocal geo-targeting, the organisation can use the most recent mapping and communication technology to deliver the relevant content to their clients across the world. Therefore, this form of geo-targeting has opened up a new world for the organisation’s product pricing and distribution strategies. To ensure that the company’s brand identity is relevant while making certain of the effectiveness and relevance of the local campaigns, the organisation assesses its brand from the customer’s viewpoint, (Feurer, Schuhmacher & Kuester, 2018). This helps in ascertaining whether the company cars and other automobiles are in sync with the local demands. When the brand identity does not resonate with the local demands, the organisation takes the initiative to incorporate these demands in the local brand identity.

In ensuring that the glocal pricing distribution strategy of the organisation is successful, their staffs, working in both the local and the international sphere, has created a close association with the customers and the vision of the brand (Hinterhuber, 2017). The senior leadership of Audi is elevated within the automobile industry, and they are recognised as the face of the brand. Additionally, the staff of the organisation ensures that the local communities get the global concept of the demand, hence, making sure that they recognise with it. This way, Audi creates essential relationships with major local markets in the industry. The Audi brand has done a tremendous job in synching its global brand with local demands by using local ambassadors, sponsorships, and local partners.

Global pricing and distribution

In the global market, Audi cars are considered luxurious by all of its clients. Hence, in cashing its brand in the international market, the organisation uses the premium price strategy. Note that the automobile industry is quite competitive with Audi getting major competition from brands such as BMW and Mercedes-Benz (Sonderegger, 2011). Therefore, the pricing in the company’s marketing mix strategy is majorly founded on the competitive pricing of other manufacturers of premium cars. The company has high brand equity, and all its showrooms are filled with a variety of high-quality automobiles.

To enable customers to buy their products with ease, the organisation has a global and innovative financing option referred to as Audi Finance. Here, the clients pay for the cars using debt financing but at a cheaper rate. Additionally, the organisation has optional pricing strategies whereby its existing clients in the international market can purchase car accessories such as navigation and sound systems, and Audi Bang separately. Note that, the global prices of the organisation are also depended on the economic conditions of a particular country and geographic locations of certain markets.

In understanding the distribution and placement strategy of the organisation, it is vital to note that Audi is one of the largest automobile brands that provide luxurious cars in the world. Although the headquarters of the organisation are in Germany, its production facilities are situated in nine places across the globe. In distributing its products, the organisation explores other markets that have not been discovered by other major players to increase its customer base. As a result, the organisation has made major investments in countries such as India and its market presence in Asia has grown exponentially over time.

The brand’s presence has been established and maintained by putting up an exclusive dealership network and centres that provide after sale services (Steenkamp, 2017). The distribution channel used by Audi in the international market involves producers who supply to distributors who sell to wholesalers than to dealers and finally to the customer. Since the organisation is driven by the urge to satisfy the requirements of the customers, its production proves uses the latest forms of technology. The global vision of the organisation is to become the most successful premium brand.

Local pricing and distribution

In the UK a new Audi A1 costs roughly 14,000 GBP whereas the same car costs 19lac rupees in India; this indicates that the local pricing strategy employed by Audi is the skimming price strategy. Although the price is high, it is justified by the quality of the cars manufactured and the organisation’s brand image. This pricing strategy in local markets is particularly important for effective brand positioning of Audi (Svend, 2017). The reputation of the organisation is good in the international market, and it is reflected on by the number of cars that are produced annually. However, in recent years, the company has experienced poor performance in some local markets, and this is majorly attributed to the increase in rates of foreign exchange.

Audi Global Marketing Communication
Audi Global Marketing Communication

The local distribution strategy of the organisation is to establish dealerships in various locations. Taking the case of India, Audi has twenty-eight dealerships in eleven states, and this has increased its sales exponentially over the years (Talke, Müller, & Wieringa, 2017). For instance, there was an increase in sales by 81% in 2014 in comparison to 2013. By establishing connections with local dealers, the organisation can push its brand to local customers, and this has enabled it to achieve some of the set long-term objectives.

Audi Target Market

Of the four common bases of market segmentation, Audi utilises three of them, and they include psychographic, demographic, and geographic segmentation. In geographic segmentation, the organisation’s decisions are based on which cars to sell and in which location (Xia, Xiao & Zhang, 2012). For instance, the organisation’s market research shows that Canadians drive larger cars as compared to Europeans. Thus, the cars sold in Europe are smaller in size as compared to those sold in Canada. With regards to countries like India, the organisation geographically segments the market into urban and rural areas. People in rural areas are more likely to purchase the Audi A3 model more than the new Audi A8.

With regards to demographics, the organisation segments its market into age, gender and income. With regards to age, the younger generation is more likely to buy the Audi A8 because it is flashy while the older generation gives little concern to the make or level of technology used in manufacturing the car.

By gender, some Audi models are more preferred by either gender because of their make or design. Income is a major determinant of whether one can afford an Audi car or not due to its prices that are considered to be high; therefore, the organisation has taken the initiative to produce cars for various individuals of different income classes (Xia, Xiao & Zhang, 2012). Finally, psychographic segmentation groups buyers according to personality traits, lifestyle and social status. As an organisation, Audi acknowledges the impact of these aspects on the purchasing decisions that are made by individuals. Since the organisation is famed for making luxurious cars, the major target market based on psychographic segmentation is the upper middle class to high-class individuals.

Conclusion

This report aimed to look into the global, local and glocal strategies of Audi with regard to price and distribution. Also, the report intended to select and discuss the primary target market of the organisation. From the essay, it has been established that Audi was founded in Ingolstadt, Bavaria, Germany and is part of the Volkswagen Group and its slogan is “Advancement through Technology.” Being a major player in the automobile industry, Audi has managed to keep up with the dynamics in marketing by adopting different strategies in the local, international, and glocal market. To effectively penetrate the glocal market, Audi has incorporated hyperlocal and social geo-targeting in its overall marketing strategy.

In the global market, the organisation uses the premium price strategy to keep up to speed with the competitive pricing set by its key competitors. The distribution strategy of the organisation in the global market involves producers who supply to distributors who sell to wholesalers than to dealers and finally to the customer. In the local markets, the organisation uses the price skimming strategy. This strategy helps the organisation in growing and establishing its brand in the market. Locally, the organisation distributes its cars by establishing dealerships in various locations. Finally, with regards to target marketing, the organisation segments its market into psychographic, demographic, and geographic groups.

References

Audi. (2019). About Us.

Awan, M. (2014). International Market Segmentation: Exploring automobile Market of Young Adults. International Journal Of Trade, Economics And Finance, 5(2), 151-154.

Feurer, S., Schuhmacher, M., & Kuester, S. (2018). How Pricing Teams Develop Effective Pricing Strategies for New Products. Journal Of Product Innovation Management. http://dx.doi.org/10.1111/jpim.12444

Hinterhuber, A. (2017). Implementing pricing strategies. Journal Of Revenue And Pricing Management, 17(1), 1-2.

Sonderegger, S. (2011). Market Segmentation with Nonlinear Pricing*. The Journal Of Industrial Economics, 59(1), 38-62.

Steenkamp, J. B. (2017). Global Brand Equity. In Global Brand Strategy (pp. 243-273). Palgrave Macmillan, London.

Svend, H. (2017). Global Marketing. England: Pearson Education M.U.A..

Talke, K., Müller, S., & Wieringa, J. E. (2017). A matter of perspective: Design newness and its performance effects. International Journal of Research in Marketing, 34(2), 399-413.

Xia, Y., Xiao, T., & Zhang, G. (2012). Distribution Channel Strategies for a Manufacturer with Complementary Products. Decision Sciences, 44(1), 39-56.

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Marketing Situation Analysis for Netflix UK

A Situation Analysis for Netflix UK

This report has completed a situation analysis on Video on Demand provider Netflix. Through doing so, digital marketing objectives have been constructed. To perform the situation analysis, four primary areas have been explored; the overview of business, the industry, competitors and the target market. Findings suggest that Netflix is a highly successful company based upon both financial success and brand recognition.

With few competitors, Netflix has established a business model which allows them to offer a high quality product at a competitive price. With various revenue streams, the business is profitable and has displayed abilities to adapt to technological change. However, a lingering threat of piracy persists with the potential to adversely affect profitability. This is particularly prevalent as Netflix’s target market has been identified to primarily consist of students, of whom have lower levels of disposable income.

Situation Analysis for Netflix UK
Situation Analysis for Netflix UK

Despite this, Netflix has grown in popularity across both males and females, with users across age ranges. The popularity can be attributed to the variety of content, but also the user’s ability to access it from almost any internet enabled device. Research further highlighted that almost all those living in the UK have a form of internet access. This emphasised the potential Netflix has to grow their brand and product.

Based upon the analysis, the following five objectives have been constructed:

  1. Increase revenue within the UK by 15%, by March 2017 (12 Months)
  2. To Increase Facebook engagement by 20%, by September 2016 (6 Months)
  3. Increase use of Netflix on mobile platforms (smart phones and tablets) by 35% amongst existing users, by September 2016 (6 Months)
  4. Increase traffic to the website by 25%, by March 2017, through paid for and organic means (12 Months)
  5. Increase market share within the UK by 10%, by March 2017 (12 Months)

Marketing Assignment Contents

Executive Summary

Overview of Business
Brand, Domain Name and URL
Business Scope
Product and Services
Unique Value Proposition (UVP)
Competitive Advantages
Revenue Streams

The Industry
Business Environment
Opportunities & Threats
Key Success Factors
Stakeholders

Competitor Analysis
Amazon Prime
Sky Go
WatchSeries
Strategic Grouping

Target Market
Demographic
Age
Income & Social Grade
Gender
Geographical
Psychographic
Product Usage
Usage Rate
Usage Barriers

Objectives

References

Appendix
Competitor Analysis

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Marketing Management SWOT Analysis Toyota

Strategic Management: SWOT Analysis

Strategic management is a technique used by managers to give a firm a long-term direction and involves a systematic analysis of decisions, actions that create a competitive advantage. It involves the analysis of strategic goals, vision, and mission and the internal and external environmental factors in a firm. SWOT is an acronym standing for strengths, weaknesses, opportunities, and threats. SWOT analysis involves the assessment of a firm’s internal strengths, weaknesses and the external opportunities and threats (Henry, 2008). This analysis helps to identify the strengths and capabilities to minimize weaknesses, along with identifying opportunities to overcome threats. In reference to Toyota Company, leading automobile firm, a SWOT analysis on the company’s Strengths, weaknesses, threats and opportunities are as follows.

The Toyota Corporation is a leading automobile manufacturing in the world among other companies such as Ford. It has a strong production process that is effective and efficient in saving costs, this creates a competitive advantage. Cost savings helps to set affordable prices of their products to end users, over the competitors. The firm utilizes resources and eliminates unwanted costs in the production process. This strategy creates a competitive edge for Toyota, by reducing costs and increasing the production capabilities and efficiency

Toyota has strong horizontal integration merge verses the competitors who have vertical integration relationships. Strong relationship with supplier creates a competitive advantage, and it informs of updates or any developing changes (Henry, 2008) Horizontal merge proves to be cost effective, reduce risks and increase benefits. Merging helps to pool together resources of the combining companies, creating a favorable business environment. Synergy is one of the benefits of combining companies, and sharing of resources e.g. distribution channels. Toyota opts for best suppliers in Japan.

Toyota has a strong culture advantage, employees’ devotion in their jobs, performance and desire to improvement. It treats it employees with legitimate sense of respect and loyalty. The Japanese value work differently from competitors for instance the Americans this is reflected in their quality products they offer to the market. Toyota in invests more its employees empowers them to be creative and innovative (Hino, 2012).  A strong sense of respect of hierarchal authority enables fast decision-making and implementing Strategic plan.

A weakness is something or a condition that hinders a firm from achieving it objectives. It is a competitive deficiency (Henry, 2008) Toyota offers financial services such as insurance, credit cards. These services report low profits to the firm than other segments. Such financial services can render a competitive edge as well as a deficiency in for firms the financial strength.

Toyota use the just in time system which gives Toyota a competitive advantage, but too much dependency of this system can lead to malfunction if the supplier provision does not meet the requirements of the firm. Failure to meet these requirements affects the products quality in addition, to the manufacturing system.

Toyota capitalizes on the strengths to meet its threat and take advantage of the external opportunities. Toyota has a strong cultural advantage that enhances the organization structure, focuses on teamwork rather than individual efforts. It inspires creativity and innovativeness to employees to improve the quality of its products. Loyalty when dealing with employees and a unfailing sense of respect of the authority. Top managers make decisions, the employees respect their high figures, and this enables quick decision-making. It internal leadership and management helps Toyota to dominate the automobile industry. Toyota depends too much on its suppliers, this leads to a strong reliable relationship with it suppliers (Hino, (2012). Although this could be a weakness but it gives Toyota a competitive advantage over the competitors such as General Motors.

SWOT Analysis Toyota
SWOT Analysis Toyota

Toyota is a dominating automobile firm, its produces affordable cars and other automobile related products. A SWOT analysis identifies Toyotas strengths, weaknesses, threats and opportunities. Internal analysis involves the assessment of the firm’s internal environment factors such as the organization structure, leadership and management among others. Toyota has a stable structure and principled leadership design (Hino, 2012).  The quality of the products and employees loyalty dictates the strengths of the firm. Toyota is loyal to employees and produces quality products.

However, Toyota faces threats such as competition from existing and emerging firm in the automobile industry. It takes advantage of the internal strengths to take advantage of opportunities and minimize threats. Toyota Company has a strong relationship with its suppliers. This helps to fight the upcoming firms and the existing firms in the industry. A complex distribution channel discourages competitor’s efforts. Toyota uses it strengths to take advantage of opportunities, it has high producing capacity at minimum costs. They produce quality and affordable cars in the market (Hino, 2012).  They differentiate their products to meet the consumers emerging desires. Toyota has incentives and discount programs that help improve the profitability of its financial services segment.

Conclusion

In Strategic, management SWOT analysis is a continuous process since the environment is changing. Toyota needs inspires its employees to continuously think of strategic changes that enhance improvement in quality of products in the future. It requires strong strategic plans difficult to duplicate, corrective actions to maintainable a competitive position of a leading automobile in the world.

References

Henry, A. (2008). Understanding strategic management. Oxford: Oxford University Press.

Hino, S. (2012). Inside the mind of Toyota: Management principles for enduring growth. New York, N.Y: Productivity Press.

Pearce, J. A., & Robinson, R. B. (2004). Strategic management: Formulation, implementation, and control. Boston, Mass: McGraw-Hill.

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