UNETHICAL MARKETING

I was in the TV room of my hostel watching cricket. Waiting eagerly for Sachin to complete his 49^th century and just when we thought nothing could go wrong he lost his wicket. The room fell silent. The milieu resembled that of a graveyard and everybody started expressing their disdain. As soon as Sachin began his long walk towards the pavilion he was replaced by a much jovial Version of him selling insurance and cement, stressing on its dependability. It was ironic and funny at the same time. It was followed by several other advertisements making tall claims. They were all very neatly done, attention grabbing, entertaining, funny, excessive and larger than life. In short effective.

We marveled at their creativity. It was a perfect setting for a long and interesting discussion among the budding management students that we were. While many appreciated the advertisement there were some who criticized it. They carefully dissected the whole plot and educated others on how advertisers and marketers manipulate our psychological needs and play with our emotions. The room overflowed with management jargons in no time. Terms like product mix, POD, POP, marketing mix and communication channels started floating in the air. The conversation evolved into a heated debate and both parties countered other’s argument. Some one questioned fair and lovely’s fairness cream ad’s ethical rationale; others quoted examples like Axe deo-spray, nimarose soap and what not. The argument leapt from psychological exploitation, Unethical practices, irritable, irrational pricing to being informative, creative and scientific.

Although the debate wasn’t conclusive there was a general agreement that at least some advertisements are exaggerated and even misleading. The history of marketing and advertising as a tool of marketing is filled with such examples and the line between advertisement and entertainment are becoming nonexistent. Perhaps the Most common unethical practices include guerilla marketing, stealth or ambush marketing. For example- the Sony-Ericsson company invented a new cellular phone with a built in camera. They hired a group of actors to walk around Times Square in New York City posing as tourist acting as newlywed couples on a honeymoon. They would go up to strangers and ask them to take their picture as a part of Sony’s stealth marketing practice.

The Internet is one big place that seems to have the most of this kind of advertising hosting misleading ads about how to make millions. Even Wikipedia popularly known as people’s encyclopedia has been used to create misleading articles and has generated the need for corrective applications like wiki-scanners.

The sprite-mountain dew feud and pepsi-coke war are perhaps the most memorable instances. Advertising isn't just about the things we buy. It's about how we feel about things, including ourselves. That's what makes it interesting but as it seems in the grand scheme of things marketers fighting for every inch of ad-space and consumer attention in order to fulfill the soul purpose of maximizing return on investment have chosen to overlook minor things like ethics.

From using children for advertising to making people practice self medication they have used every Trick in the book to sell their products.

In more ways than imaginable the work of a marketer commands more responsibility than what is observed. In an attempt to lure the customer one has to make sure that one does not dupe those who offer themselves to our advice and judgment.

On the part of the consumer, as the famous advertisement issued by the ministry of consumer affairs says ‘jago grahak jago’. It is perhaps time that the consumer takes a heads up and uses all the tools at his disposal like the consumer court and referring dedicated media to make an educated decision about his purchase. It is time that he literally imbibes the following words – ‘dikhavo pe na jao ,apni akal ladao ‘ ( sprite tagline).

Contributed by

Gaurav Dhama

FT 2010-2012, Section A

SOCIAL NETWORKING SITES.....NOT JUST FUN..!!

Social networking sites on the Internet are now regarded as one of the most important tools of communication. People have recognized social networking as the fastest and most trusted means of spreading news and making people aware of the facts and information. People have begun joining networking groups even as a status symbol. Being on a networking site is now considered as one of the best ways to get recognized. Being part of an online social network helps people to stay connected with their friends and families, and also to develop business links.

Companies recognized the marketing opportunity offered by social networking sites, and saw a huge potential for creating brand awareness, promoting their products, buying and selling products/services and also for developing business networks. A new marketing concept-Viral Marketing- has provided momentum for creating awareness about brands and products.

Many companies have embraced social media formats as part of their integrated marketing and communication strategies. This involves creating an online message that is entertaining and interesting enough to pass it on to others, thereby spreading the message across web like virus, at no incremental cost to advertiser. Viral marketing basically creates a word-of-mouth referral by using existing customers and contacts. The message is passed around and passed around repeatedly creating an exponential reach for the Company. People like to talk about their involvement with products and services for a variety of reasons. These include prestige and status that may arise through ownership, or an inclination to share their purchase experiences in order to help others. Viral promotions may take the form of Video Clips, interactive flash games, e-books, brand-able software, images or even text messages.

Viral marketing depends on a high pass-along rate from person to person. If a large percentage of recipients forward something to a large number of friends, the overall multiplier effect would be quite phenomenal and also the message would travel very quickly. This means that each person one reaches, one is also reaching a group of his /her friends as well. Then those friends tell other friends, leading to rapid increase in reaching down the line, which is in some way similar to what happens in many network marketing companies.

Few Examples:-

In 2007, Cadbury’s dairy milk chocolate launched a viral marketing campaign, which was much popularized on YouTube. During same year, World Wrestling Entertainment promoted the return of wrestler, Chris Jericho, with 15 a viral marketing campaign using 15-second cryptic binary video.

Recently Pepsi astonished the advertising industry by its move to ignore Super Bowl football matches and instead focus on Social Media. Pepsi, in an effort to leverage on social media, opted for the “Pepsi Refresh Project” which was rolled out in January 2010, to fund refreshing ideas that could change the world. Numerous individuals and organization visit the “Refresh Project” website via several social media platforms, and submit ideas for projects that could refresh their community. The next process involves public voting. The amount of money ($20 mn) saved by not advertising through Super Bowl is being diverted to supporting various selected projects every month ranging from $5000 to $250000 per project. Apart from serving as a promotional tool, social networking sites can also provide a platform to conduct product surveys, undertake research, build the brand, manage one’s online reputation, engage employees t know each other better, and recruit potential candidates for the company.

Contributed by

Manpreet Singh Nagi

FT 2010-2012 Section C

Nexus over the Net!

A couple of months back, Google announced discontinuation of online sales for Nexus1.
A couple of years ago, DELL did something similar for its laptop, though Dell did not stop online sales of its Laptops, it moved into a kiosk model in which customers could visit a kiosk, have a look and feel of the laptop they are interested in buying and then make the final choice.
Dell with its unique selling and distribution channels, was enjoying the second position in the market for a very long time (first being HP with 18% market share), but after the economic meltdown of 2009, as people started looking for cheaper products, Acer- a company based out of Taiwan had a 30% increase in sales making it the number two player in market with a 13% Market share.
Dell lost its USP (Unique Selling Preposition) of low price for high quality products. As more big players emerged, Dell found it difficult to maintain the unique bargaining power with the suppliers.
A zero inventory for Dell adds pressure to the suppliers as they are not certain of the sales volume. As a supplier, you would have less bargaining power if you have a fixed order than to have serve a customer with a JIT (Just In Time) Inventory system. As a result, Dell lost its competitive advantage.
Very soon, Acer with similar quality as that of Dell (most of the internal components are made by other manufacturer’s, example: Intel for processors, Nvidia for graphics etc) gave stiff price war to Dell.
Secondly, as the buyer is exploited by choice, he does not see sense in waiting for about a week for the product to be shipped. Acer is available at retail outlets and a buyer can always negotiate a deal with the local seller and also ask for ad-on gifts such as back-pack, pen-drive etc.
Let us have a look at Nexus One
Google's decision to discontinue direct sales, which comes less than six months after launching the online store, is fairly striking.
There is nothing wrong with the product (it has received a higher rating than the IPhone and the Motorola Droid by all tech forum and I have myself used the IPhone, Droid and the Nexus1) , there is enough publicity done, the price is very competitive, it has HTC and Google brand associated with it, but still the product isn’t selling.
Now, if we combine (have a nexus) of the issue faced by Dell and Google, we can see that there seems to be a change in which internet markets are going to operate in the future.
It seems, the shift would very soon be from B2C (Business to Consumer) to a more B2B (Business to Business) model.
Today, the consumer wants to have a touch and feel of the product before making a purchase decision. Internet and online sites are mostly used for doing a product research and comparing between different products, but the final purchase decision is made only after the “demo” is done.
As in the Dell case, the kiosks do not sell the laptop (they accept payment, but the order is still placed online), still, the consumer can have a look and feel of what he is buying, this avoids an uncertainty, thus removing the psychic price that the consumer might have to pay.
In the case of Nexus1, the consumer is not sure how the product is going to look and feel, even the most interactive website cannot replicate the look and feel of the product completely.
Internet market for B2C is promising if the companies are ready to re-innovate the business model and provide additional flexibility to the consumer.
For example, www.bigshoebazaar.com is a portal which enables consumers to order two shoes at a time in case the customer is not sure about the size, pay cash on delivery and when the shoe is returned, they reimburse the full amount of the shoe along with the shipping charges incurred by the customer.
Another example could be of companies into online gifting solutions, customers do not require the feel element while purchase from FernsNpetals (www.fnp.com), they would look for prompt delivery and payment security.
In case of B2B markets, since the goods sold are either raw-materials or have an option of being customized as per the buyers requirements, the need for touch and feel for the product is not strong, moreover, in such markets, it is feasible for the seller to send a sample to the buyer as the magnitude of order is generally big enough to cost the free-sample cost to each buyer.
So, we see that B2C channels are not very promising as the customer’s buying decision is based on the look and feel of the product.B2B and C2C (consumer to consumer) seem to be more sustainable business models over the internet.
Companies must remember that no matter how good your product is, you can’t see it unless the consumer wants to buy it.
Remember:
“The consumer isn’t a moron. She is your wife.” -David Ogilvy.

Contributed by:
Sanket Agrawal