Category: Marketing Essays

Our sample marketing essays will prove helpful in formulating your own dissertation topic, objectives, literature review, methodology and analyses. Our sample marketing essays are an ideal tool for any student struggling to start their own marketing essay.

Marketing is an essential part of any business and there are many elements of marketing. By browsing our collection of marketing essays, you will get ideas for your marketing essay through the following marketing subjects:

Relationship Marketing, Branding, Direct Marketing, Marketing Cultures, Advertising, Consumer Behaviour, Marketing Trends, International Marketing, Online Marketing, Social Media Marketing, Strategic Marketing and Marketing Ethics.

Marketing Essays

What is meant by the term Integrated Marketing Communications and how is it strategically implemented, and what are the perceived benefits to having a centralised, synthesised company message?

Integrated marketing communications has been defined as a management philosophy, an educational movement and a unifying business practice, among others. Cornelisson and Lock state that IMC is nothing but a management fad. This ambiguity in defining and measuring IMC has prevented the development of a cohesive research stream in this area. In order to build on and extend previous research, I have chosen to adopt the original definition of Duncan and Everett, who define IMC as “the strategic coordination of all messages and media used by an organization to influence its perceived brand value” (Beard, 1996).

While approaching this topic area, I came across several surveys that were conducted for IMC. In order to attain a greater understanding of IMC and to construct validity, I then decided to conduct my own survey. I contacted and interviewed 14 senior marketing managers, and asked them to give me their definition of integrated marketing communications These managers were employed by a representative mix of large and small companies, ranging from 15 to 90 employees, competing in industries including telecommunications, food and beverage manufacturing, and financial services.

All the managers I interviewed were responsible for planning and implementing marketing communications programs. Illustrative job titles of those interviewed included senior director of marketing, regional team manager of sales and marketing, senior product manager, and owner/general manager (for small businesses). All 14 managers interviewed defined integrated marketing communications as a management practice. The owners of the two smallest businesses, a restaurant and a local sports shop, had no real idea as to the understanding of IMC, however their marketing structure showed evidence of it in use.

Furthermore, the most common element of their responses was the coordination of marketing communications tools. This provided further support for adopting the Duncan and Everett definition of IMC. When I asked them to suggest ways as to create a coordinated marketing strategy, all 14 managers suggested four components that contribute to the coordination of marketing communications activities:

  1. Planning and developing different communications tools such as advertising, sales promotion, public relations, and direct mail as one integrated project.
  2. Assigning responsibility for the overall communications effort to a single manager.
  3. Ensuring that the various elements of the communications program have a common strategic objective such as reinforcing a particular positioning strategy or appealing to a key benefit sought by a target segment.
  4. Focusing on a common communications message.

These are similar ideas, yet each captures a slightly different aspect of the way senior managers coordinate diverse communications activities. They also reflect the three prevalent conceptualizations of IMC summarized by Nowak and Phelps -“one voice,” “integrated communications,” and “coordinated campaigns”–further strengthening the construct validity.

I followed the suggestions of Churchill to build and test a multi-item scale to measure IMC as perceived by senior marketing managers, since no such scale exists in the literature. Based on the definition of IMC and the input from senior managers discussed above (to ensure construct validity), I constructed the following four items for the Likert scale. Before I go on, the Likert technique presents a set of attitude statements.

Subjects are asked to express agreement or disagreement of a five-point scale. Each degree of agreement is given a numerical value from one to five. Thus, a total numerical value can be calculated from all the responses. The following statements were posed to the managers and their responses were recorded as a numerical value; a value of 1 was given if they absolutely disagreed and a value of 5 was given if they totally agreed.

  • When more than one marketing communications tool or activity is used for a product or service, they should be planned and executed as distinct, separate projects.
  • Different marketing communications tools for a product/service should be planned by the same manager.
  • The elements of the marketing communications program for a product/service should be strategically consistent.
  • I would say that the marketing communications tools used for a product/service focus on a common message.

Integrated marketing communications has been a worthwhile goal of marketing people for the past 30 years. When compared with uncoordinated approaches, IMC offers more relevancy and greater opportunities to achieve client objectives.

The real opportunities to serve clients with significant results, however, lie in areas outside typical demand/creation-driven communications. You cannot really integrate marketing communications without first integrating marketing and recognizing that demand fulfillment (service, delivery, etc.) is just as critical to success. And you cannot truly integrate marketing without first integrating the company (Burnett, 1998).

A recent case study showed banks in many parts of America recently began selling mutual funds. They needed a new profit center because of lower interest rates and the resulting loss of funds. But a focus solely on increased profit is behind the failure in integrated marketing of bank mutual fund products (Burnett, 1998).

For example, in New York, during the first six months of last year, 13 banks and savings and loans in New York spent $6 million advertising mutual funds and other investment products, up more than 500% from the previous year. This relatively high level of funding was spent on demand/creation activities with little consideration for demand fulfillment and how customers would actually come in contact with the bank.

So when prospective customers entered banks inquiring about mutual funds, they often encountered clerks who supplied only partial information, misinformation, or simply had no answers at all and did not even know where to find them. (Burnett, 1998) There is a unifying secret to integrated marketing communications, integrated marketing, and integrated companies. It is a concentrated focus on the customer and a recognition that every point of contact between the company and the customer; product packaging, advertising, or customer service–is an opportunity to create a positive synergy and a happy customer.

The real impetus behind integrated marketing is in realizing that a company’s products and services do not exist to increase profits and maximize shareholder value. They exist to benefit customers better than the competition; that is the way to advance profitability and expand shareholder value. It is a long-term view, and one held by many Japanese companies.

The change that integrated marketing calls for requires that organizations first test the waters by focusing on a particular business or product area, and following an approach. The first step, however, common to both, is an infrastructure, creating cross-functional teams of people who can recognise and represent the needs of the customers at every point of contact with the organisation. This group can include finance, sales, marketing channels, communications, etc. The next step is picking the approach (Burnett, 1998).

One approach may be to take existing products and services, communications, and infrastructure and focus on a particular business area. The cross-functional team redefines the marketing communications and operational aspects of that area. The team develops specific and measurable goals with regard to communications, relevancy, and productivity, and it creates specific plans to measure the achievement of those goals.

Integrated Marketing Communications Agencies

All of this suggests that the future of general advertising and direct marketing agencies is not in integrated communications but in integrated marketing. (Coen, 1998) The challenge before us is to move away from discipline-oriented solutions to integrated marketing solutions that address multiple dimensions of the client’s business situation. This change will require that advertising agencies play a hybrid role as consultants, communication experts, and process facilitators.

Most companies appear to be practicing IMC to some degree, supporting the observations from my previous survey, that IMC is important and is increasingly considered a marketing ‘best practice’. There is a strong relationship found between IMC and performance measures such as market share, sales, and profit further demonstrate the value of efforts to enhance IMC. Although IMC is becoming more popular, a survey showed that 12 percent of respondents implied that their communications programs were fully integrated, suggesting that 88 percent have room for improvement to some extent (Coen, 1998).

Of the three items used to measure IMC, respondents indicated that the area with the most room for improvement is the strategic consistency of the communications elements. This is consistent with Kitchen and Schultz’s notion of the most advanced ‘stage 4’ of IMC development; the financial and strategic integration of IMC synergies (Kitchen and Schultz, 1999). Therefore, managers should focus more on the strategic objectives of their communications programs and increasing the consistency of those objectives across individual program components.

For example, if the overall campaign strategy is to increase new users, this should be the focus of the media advertising, public relations effort, promotional programs, and website design. By focusing on the strategic use of IMC, managers will also be able to measure better the financial returns of communications programs as a whole.

One of the objectives of this study was to learn about factors, which enhance or reduce IMC. Based on the foundation laid here, advertising professionals should be able to make changes that may strengthen IMC in their firms. (Coen, 1998) My findings indicate that assigning managers with significant career experience the responsibility for marketing communications integration can enhance IMC.

The other factors associated with IMC may not be as actionable as increasing the experience of the lead manager; however, they may provide valuable insight to managers interested in encouraging IMC in other ways. For example, the results show that company size is negatively related to IMC. It is likely that marketing communications programs in large organizations are managed by a number of employees, departments, and functions, in various divisions.

This diverse responsibility makes coordination difficult and increases the likelihood that communicated messages will not be consistent. In order to enhance IMC in such situations, it may help to coordinate communications programs at the product or service level. A product or brand management structure where responsibilities for individual brands are assigned to one experienced manager may enhance IMC by reducing the “size” of the business as much as possible and encouraging coordination at the product/service level. Management efforts to organize the communications efforts appropriately would help address the apparent hurdles involved in increasing IMC in large companies. (Gonring, 1994)

The results of the study suggest a number of implications relative to client-agency relationships. The most obvious would be to assign a diverse set of communication responsibilities to a single agency to coordinate and implement. This would lower the complexity of large, diverse communications programs.

Integrated Marketing Communications Project
Integrated Marketing Communications Project

One way to achieve this would be to reorganize large agencies into product/service groups, designating account management, creative, media, sales promotion, public relations, and research professionals to integrated client groups (see Gronstedt and Thorson, 1996, for other ways agencies can organize to encourage IMC). Reorganizing in this way would go a long way toward enhancing the coordination of communications activities and toward increasing the strategic consistency of messages and media implemented on behalf of clients (Gonring, 1994).

The strong relationship between IMC and firm performance found in our study suggests that agencies should encourage IMC by their clients. Prior research clearly shows that clients are the drivers of IMC and that strong client-agency partnerships that produce integrated communications plans are critical to the success of IMC efforts. The scale developed in this study could be used by agencies to measure the degree of IMC of potential and current clients to determine the components of IMC that need the most improvement.

A final implication of these results for the client-advertising agency relationship is that the IMC scale developed here can be used to help define the role of the client and agency in developing and implementing integrated communications programs. Prior research has shown that one of the hurdles to IMC is the question of who should coordinate programs, client or agency. Each feels that IMC is their role, leading to problems in implementation.

Expectations may be unclear and, therefore, information not shared. Where does the responsibility for IMC lie? Who should be primarily responsible for it? The results, combined with results from prior research, suggest that clients should be responsible for the strategic direction and planning, which are the foundation of integrated communications programs (Gould, 1999).

Advertising agencies should be responsible for message consistency and coordination of communications programs. IMC should originate with client generally who see the “big picture” and recognise the role of communications efforts in their overall marketing strategies. Agencies, on the other hand, are best suited to coordinate and implement IMC programs across messages, media, products, services, divisions, and countries. The results suggest that clients have more room for IMC improvement in their strategic planning role than do agencies in their tactical implementation role and that advertising agencies are well positioned to be the “lead” communications agency in efforts to improve IMC. (Hutton, 1996)

Managers can cultivate a spirit of IMC in their organizations by creating sales message strategies that could be more carefully coordinated with other forms of communications in the planning and implementation stages in order to avoid the inconsistencies that are more likely to occur later on. Personal selling is a large part of the communications mix. In addition, prior research has found that business-to-business firms tend to rely more heavily on advertising agencies for IMC than do consumer-focused firms. This suggests that advertising agencies have a greater opportunity to help business-to-business firms more closely integrate their marketing communications programs.

 Imperial Tobacco Limited is an example of a company, which is Canada’s largest tobacco manufacturer, effectively employed three critical integrated marketing communication (IMC) practices: strategically consistent brand communication, cross-functional planning and monitoring, and data-driven targeting and communication. By utilizing in-depth consumer research and key IMC processes to construct brand and lifestyle imagery for its flagship cigarette trademark, Player’s, ITL achieved greater brand equity and greater shareholder value. (Dewhirst, 2005).

In conclusion, it is evident that having a centralized, synthesized company message is vital in order to bring about success. It is essential that companies realize the potential and the importance of this message. Integrated marketing communication is really about having a coordinated, organized structure in the way information is sent across. Organisation in every part of our lives is the key to building a successful empire. We have to remember that IMC is not a fundamental theory.

It is still very much at the developmental stages. There may be some areas where it may not work, so it is essential to see how IMC develops over longer periods of time, maybe through longitudinal studies. From this study we have also learnt that it is crucial to value the customer and stakeholder, if all we do is concentrate on integrating marketing communications and fitting it into the company structure, then it is possible to lose focus on the real target, the consumer. It may be wiser to start with the consumer and fitting IMC around the company structure in order to obtain the greatest benefit for the company and the consumer.

Bibliography

Beard, F. “Integrated Marketing Communications: New Role Expectations and Performance Issues in the Client-Ad Agency Relationship?” Journal of Business Research 37, 3 (1996): 207-15.

Burnett, J., and S. Moriarty. Introduction to Marketing Communication: An Integrated Approach. Upper Saddle River, NJ: Prentice-Hall, 1998.

Coen, R. J. Annual Advertising Spending Report. New York, McCann Erickson, 1998.

Gonring, M P. “Putting Integrated Marketing Communications to Work Today.” Public Relations Quarterly 39, 3 (1994): 45-48.

Gould, S. J., D. B. Lerman, and A. P. Grein. “Agency Perceptions and Practices on Global IMC.” Journal of Advertising Research 39, 1 (1999): 7-20.

 E. Thorson. “Five Approaches to Organize an Integrated Marketing Communications Agency.” Journal of Advertising Research 36, 2 (1996): 48-58.

Hutton, J. G. “Integrated Marketing Communications and the Evolution of Marketing Thought.” Journal of Business Research 37, 3 (1996): 155-62.

Kitchen, P. J., and D. E Schultz. “A Multi-Country Comparison of the Drive for IMC.” Journal of Advertising Research 39, 1 (1999): 21-38.

Low, G. S., and J. J. Mohr. “Setting Advertising and Promotion Budgets in Multi-Brand Companies.” Journal of Advertising Research 39, 1 (1999): 67-78.

Mand, A. “No Gamble: P&G Looking to Put More Brands Online.” Brandweek, 1999.

Neff, J., and P. Sloan. “P&G, No. 1 Again, Aims to Reinvent Marketing.” Advertising Age, 1996.

Nowak, G., and J. Phelps. “Conceptualizing the Integrated Marketing Communications Phenomenon: An Examination of Its Impact on Advertising Practices and Its Implications for Advertising Research.” Journal of Current Issue, and Research in Advertising 16, 1(1994):49-66.

Dewhirst and Davis. “Brand strategy and integrated marketing communication.” Journal of advertising 34, 4 (2005): 81-92.

Integrated Marketing Communications Relevant Posts

Marketing Dissertation Topics

Marketing Concepts Research Dissertations

What other integrated marketing communications strategies do you have for making sure your tweets last as long as possible? Let us know in the comments

Netflix Consumer Behavior

Netflix Consumer Behavior

Netflix consumer behavior – This assignment focuses on a branded service – Netflix on the basis of co-creating value. Netflix is the leading American brand known for streaming services. In this case, Netflix is the brand and streaming is the service. Therefore, of focus in this assignment is developing a brand-image – various brand associations; brand-congruency by determining the level of congruency between the typical user’s image and brand-image.

The assignment also focuses on explaining the brand attitude of Netflix’s target audience, social-cultural influences, identifying any artefacts and rituals associated with the branded service, and the recommendation of the various ways of creating value for the customer. In general, this assignment is a piece communication, which provides the service brand (Netflix) manager with information about their socio-cultural, brand, and normative influences affecting and co-creating value for the target audience.

Brand Image

To begin with, it is hard to imagine a living room or boardroom where Netflix (branded service) requires an introduction. Currently, the branded service boasts of over 70 million subscribers across over 40 countries worldwide. Netflix has spurred hundreds of cable cancellations every day. This kind of growth for Netflix in recent years is partly attributed to the brand service’s image out there. According to Park & Lee (2005, p. 40), the success of a company stems, partly, from delighting customers in margin-enhancing, customers in hard to replicate ways, which ended up creating the kind of brand-image that is unique.

When it comes to Netflix’s brand-image, what comes to mind is authenticity and sustainability. The brand image has been built with the human spirit, and not necessarily ad campaigns (Pittman & Sheehan, 2015, p. 1). To the management, what comes to the mind of the consumer in reference to Netflix is that it provides streaming services, and the branded service is largely known for its positioning model. Park et al. (1991, p. 186) pointed out that the brand image is the unique story, which consumers recall when they think of a brand (PowerPoint Presentation Week 5, n.d. Slide. 26).

To the management, therefore, Netflix’s brand-image has points of parity, which are also the same as other brands in the same industry or different industry (Pittman & Sheehan, 2015, p. 1). These points of parity include innovation (also associated with the car brand – Tesla), reliability – also the case with Honda, and convenience (similar to Amazon). On the other hand, the points of difference for Netflix include the streaming TV shows, original content, and movies.

Brand Congruency

Brand congruency is made up of product brands and user-image. Brand congruency refers to a scenario where all the elements and touch points of the brand, in this case, Netflix, appears to have been cut from the same cloth. According to Stach (2015, p. 675), the brand congruence between the self-image of the consumers and the attempt of the brand image to explore consumer choices, for example, purchase intentions, preference of the brand, and usage and loyalty.

The degree of congruency between the brand image and typical user’s image is based on the brand evaluation, which relates to promotion message. In this case, Dolich (1969, p.5) pointed out that reminding consumers of their self-images, under the promotion message, there are positive considerations of brand congruencies given by the same consumers.

Accordingly, the degree of congruency between your self-image and the typical brand-user image is based on how the consumer uses the brand as a symbol; in this case, consumers consider brands with images or personalities, which are congruent with their self-image or brand personality (Stach, 2015, p. 674). In summary, the brand-image congruency involves self-schema, and it comprises of brand personality that is measured in terms of brand attitudes.

Brand Attitudes and Consumer Behavior

The brand attitude of the customer comprises of two main components – the strength of positive or negative relation/association, which the experiences of the customer towards a specific brand as well as the conviction of the accuracy of the brand (Gonzalez-Jimenez, 2017, p. 69). In this case, there are various brand attitudes towards the branded service – Netflix. For instance, Netflix consumer behavior has succeeded in creating a positive attitude towards its brand.

Here, the branded service has created the belief that it can either succeed or fail based on its ability to maintain and drive subscriptions (Malcolm-Boulton, 2016, par. 7). When it comes to emotions, Netflix comes with a feeling from the consumer that exhibit dynamism, excitement, and modern enthusiasm of subscriptions other than cable services.

Accordingly, Netflix services also trigger nostalgia as the branded service has managed to revive nostalgic shows such as the Gilmore Girls that is no longer available in cable services (Gonzalez-Jimenez, 2017, p. 68). Therefore, the brand attitudes directed to Netflix comes with excitement, curiosity, nostalgia, and a sense of control of specific shows to subscribe.

The Social-Cultural Influences

Netflix did not focus more on the sociocultural influences their services would have on individuals. In this case, Netflix’s social influences have led to the reduction of jobs; for example, Roettgers (2015, p. 1) observed that Netflix beat competitors operating retail outlets by embracing streaming services. There is the issue of identification influence where consumers have been influenced by Netflix because of its modernity, convenience, unique services, and the confidence it projects to the public (Wang, 2014, par. 16).

Identification influence, in the case of Netflix, is based on what Pittman & Sheehan (2015, p. 1) termed as “binge-watching.” “Binge-watching” is a representation of a radical shift from the 21st-century media consumption. This kind of influence comes with the unique services of the branded service, which means it can also be associated with Netflix’s normative influence.

As a result, because of the continued evolution of various manners of accessing the content of the program and the soaring dependency on various Internet devices, it is evident that Netflix’s normative influence has since been felt, and is evident in the “New Golden Age.” Additionally, Netflix consumer behavior has had a massive impact on the television viewership culture, which can be identified as a normative influence – social influence resulting in conformity (Merikivi et al., 2018, p. 113).

The branded service’s revolutionary recommendation system has also influenced how consumers conform to the norm and, in turn, has seen consumers shift to the company’s streaming services (Sheinin, 1998, p. 138). These influences have, in turn, result in various ethical considerations related to job opportunities and increased levels of unemployment that the branded service had to consider.

Rituals and Artefacts

There are rituals associated with the branded service – Netflix. One of the rituals is getting the Netflix subscription. There are steps to be followed in this ritual. First, it is important to identify the right devices that are compatible or support Netflix. These devices range from Apple TV, PS3, PS4, Android, Kindle, Xbox, and Microsoft Windows, among others. This is followed up by clicking the button – Start Your Free Month, followed up by creating the account which often requires a viable email address.

Once the password is created, it is important to choose your plan identified as Regular, Standard, and Premium plans (Roettgers, 2015, p. 1). These plans vary in quality and are followed up by entering your billing information and, thus, requires a credit card and billing information. It is also important to rate the sample selection, which involves selecting the film titles. This means using the Netflix DVD website for set-ups of specific orders. Once this ritual is done, you can watch the Netflix streaming services.

Netflix Consumer Behavior Essay
Fig 1: Part of the Netflix’s subscription stages/rituals

There are artefacts associated with the branded service. First, there is compression artefact, making up the error code, involves an adverse effect of image degradation where the complexity of the image exceeds the necessary rate of recording. This artefact is associated with the branded service and is known for impacting the asset’s technical quality. In this case, Netflix, Inc. (2018, p. 1) noted that the customer experience is impacted negatively by the degraded image.

As a result, further downstream compression can massively exacerbate artefacts, which are found in the source. Accordingly, there are the artefacts under severity structure, and one of them is the News-Review – a minor blocking or artefact found at the sub-block or back region (Netflix, Inc., 2018, p. 1). Secondly, there is the Needs Fix, which is a macro-blocking or minor artefact, and normally appears as visible parts of the image. Therefore, these artefacts have negatively impacted the customer’s experience and perception of Netflix and are one of the issues the branded service is aware of.

Conclusion

Of focus in this study has been the branded service – Netflix, and is based on co-creating value. In this case, the study has determined the brand image of the streaming services company to be established by the human spirit, and not an ad campaign.

There is also the issue of brand congruency and has been on the basis of the distinct differences between the consumers’ self-image and image of the brand attempt to determine consumer choices namely purchase intentions, brand preference, and usage and loyalty. Accordingly, there are issues of brand attitudes, the socio-cultural differences such as normative influences, as well as the artefacts and rituals. Artefacts include compression artefact, Needs Review, and Needs Fix.

Recommendations

Following the above key elements of value regarding the branded service, Netflix, the manager should co-create value by understanding the various customer attitudes towards the brand. In turn, the manager should work towards modelling the values of the branded services to suit the customer preference and expectations. Secondly, the manager can co-create value by putting in place a team that can reduce the number of artefacts to improve the customers’ perception (Merikivi et al., 2018, p. 114).

Accordingly, the manager can co-create value by establishing a quirky customer service, which will give the branded service an edge; should focus more on being customer-centric, which will allow the company to fix search, browsing, and level of discoverability, and allow DVDs to fix its content gaps (Park & Lee, 2005, p. 44). Lastly, the manager can co-create value by ensuring that it informs its customer beforehand of the upcoming shows and films for better preparation on the side of the customer.

Bibliography

Dolich, I. J. (1969). Congruence Relationships between Self Images and Product Brands. Journal of Marketing Research, 6,1, 80.

Gonzalez-Jimenez, H. (2017). The self-concept life cycle and brand perceptions: An interdisciplinary perspective. Ams Review: Official Publication of the Academy of Marketing Science, 7, 67-84.

Malcolm-Boulton, C. (2016). The good, the bad and the binging: How Netflix has impacted on modern society.

Merikivi, J., Salovaara, A., Mäntymäki, M., & Zhang, L. (2018). On the way to understanding binge watching behavior: the over-estimated role of involvement. Electronic Markets, 28,1, 111-122.

Netflix, Inc. (2018). Compression Artificing.

Park, C.W, Jaworski, B.J. & MacInnis D.J. (1986). Strategic Brand Concept-Image Management. Journal of Marketing, 50, 135-145.

Park, C. W., Milberg, S. & Lawson, R. (1991). Evaluation of Brand Extensions: The Role of Product Feature Similarity and Brand Concept Consistency. Journal of Consumer Research, 18, 185-193.

Park, S. & Lee, E. M. (2005). Congruence between Brand Personality and Self-Image, and the Mediating Roles of Satisfaction and Consumer-Brand Relationship on Brand Loyalty. In AP – Asia Pacific Advances in Consumer Research Volume 6, eds. Yong-Uon Ha and Youjae Yi, Duluth, MN: Association for Consumer Research, Pages: 39-45.

Pittman, M., & Sheehan, K. (2015). Sprinting a media marathon: Uses and gratifications of binge-watching television through Netflix consumer behavior. First Monday, 20, 10.

Sheinin, D.A (1998). Positioning Brand Extensions: Implications for Beliefs and Attitudes. Journal of Product and Brand Management, 7(2), 137-149.

Stach, J. (2015). A conceptual framework for the assessment of brand congruent sensory modalities. Journal of Brand Management, 22, 8, 673-694.

Wang, U. (2014). How the Netflix model impacts the environment, economy and society.

Relevant Netflix Consumer Behavior Posts

Behavioural Analysis and Implications of Netflix Investments

Marketing Situation Analysis for Netflix UK

If you enjoyed reading this post on Netflix Consumer Behavior, I would be very grateful if you could help spread this knowledge by emailing this post to a friend, or sharing it on Twitter or Facebook. Thank you.

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.

Relevant Posts

Marketing Dissertations

Marketing Concepts Research Dissertations

Did you find any useful knowledge relating to consumerism and its effect on culture in this post? What are the key facts that grabbed your attention? Let us know in the comments. Thank you.

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.

Relevant Posts

Marketing Dissertation Topics

Consumer Behavior Decision Making L’Oreal

Luxury Goods Consumer Purchasing Behaviour

Did you find any useful knowledge relating to the effect of classical conditioning on consumer behaviour in this post? What are the key facts that grabbed your attention? Let us know in the comments. Thank you.

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.

Relevant Blog Posts

Marketing Essays | Marketing Projects

Global Branding and Integrated Marketing Communication