Вы находитесь на странице: 1из 64

ACADEMIA DE STUDII ECONOMICE FACULTATEA DE RELAŢII INTERNATIONALE MASTER ÎN COMUNICAREA DE AFACERI ÎN LIMBI STRĂINE

The Language of Marketing and Advertising

Conf. univ. dr. Cristina Prelipceanu

An universitar 2006 – 2007

Contents

Syllabus

3

Lecture1 The marketing concept

5

Lecture 2

Market research

8

Lecture 3

Consumer behaviour – its cultural dimension

11

Lecture 4

The marketing mix

15

Lecture 5 The promotional mix

19

Lecture 6

Trends in advertising

23

Lecture 7

Present-day trends in marketing

28

Case studies

33

Readings

41

Glossary

44

Appendix

61

2

ACADEMY OF ECONOMIC STUDIES FACULTY OF INTERNATIONAL BUSINESS AND ECONOMICS MASTER OF BUSINESS COMMUNICATION IN FOREIGN LANGUAGES University year 2006 – 2007

Subject: The Language of Marketing and Advertising

Time allotment: 7 lectures (14 hours) Number of academic credits: 4 Course leader: associate professor Cristina Prelipceanu, Ph. D.

1. Course objective: presenting the most important concepts and language aspects in marketing and advertising supported by practical examples and case studies; improving communication skills in the field; raising awareness to cross-cultural aspects and problems.

2. Course outline:

Dates

 

Course content

1.

Defining marketing; the marketing concept; principles; the marketing environment, its characteristics

2.

Market research; market research instruments; marketing information systems

3.

Consumer behaviour; its cultural dimension; cross-cultural problems

4.

The marketing mix; the four P’s; the international marketing mix

5.

The promotion mix:

advertising, public relations, personal selling and sales

promotion

6.

Trends in advertising; standardization vs. modification, global advertising, pattern advertising; creative challenges – cross cultural aspects

7.

Present-day trends in marketing: green marketing, marketing ethics, etc.

3.

Course requirements and final grading:

 

Seminar assignment (participation in debates or a case study)

40%

Final individual examination

50%

Course and seminar participation

10%

4.

Bibliography

 

Anghel, L.

Balaure, V. (coord.) - Marketing, Bucureşti, Uranus, 2000

Bennett, P. (ed) - Dictionary of Marketing Terms, 2nd ed., AMA, 1995

Cateora, Ph. – International Marketing, Illinois, Irwin, 1987

Comfort, J., Brieger, N.

Cotton, D. et al

Cotton, D., Robbins, S. - Business Class, Harlow, Longman, 2000

Dayan, A. et al

- Business to Business, Bucureşti, Uranus, 2002

- Marketing, New York, Prentice Hall, 1992

- Market Leader – Course Book, Harlow, Longman, 2000

- Engleza pentru marketing şi publicitate, Bucureşti, Teora,

2000

3

x x x

- Marketing – Ghid propus de The Economist, Bucureşti, Nemira, 1997

Frone, F.

- Dicţionar de Marketing, Bucureşti, Oscar Print, 1999

 

Gauster, Ch.

- Study Guide to English Lecture – Introduction to

International

Trade

and

Marketing,

Viena,

Universitätsverlag, 2000

 

Hugget,R

-Business Case Studies,Cambridge,CUP,1990

 

Jenkins-Murphy, A.

Jones, L., Alexander, R.

-The Language of Marketing in English, New Jersey, Prentice – Hall, 1982

- New International Business English, Cambridge, CUP,

1996

Kotler, P., Armstrong, G.

- Principles of Marketing, Prentice Hall, 1988

Kotler, P.

- Marketing Management, Prentice Hall, 1988

Levinson, J. C.

- Guerilla Advertising, Bucureşti, Business Tech International, 1996

Mackenzie, I.

- Management and Marketing, Language Teaching Publications, 1997

Olteanu, V.

- Marketingul serviciilor, Bucureşti, Uranus, 2002

Powell, M.

- Business Matters, Hove, LT Publications, 1996

Rein, D.

- Marketing - English for Professionals, Washington, International Communication Agency, 1982

Rein, D.

- The Language of Advertising and Merchandising in English, New York, Regents Publishing Company

St John, M

- Advertising and the Promotion Industry, New York, Prentice Hall, 1994

4

LECTURE 1

THE MARKETING CONCEPT

Marketing - had the original meaning of bringing what one wants to sell or exchange to a market, or to sell it. Many people today misuse the word marketing to equal selling. As we will discuss, marketing = sales + (sales plus more)

1.

What is marketing?

1.1.

There are many definitions of marketing, such as:

- It is the social and managerial process by which individuals and groups get what they need and want

through creating and exchanging products and value with others (Kotler).

- Marketing is the performance of business activities that direct the flow of goods and services from

producer to use.

- Marketing is getting the right goods and services to the right people at the right place at the right time with the right communication and promotion.

- Marketing is the creation and delivery of a standard of living.

- Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals (AMA - The American Marketing Association)

Each of the above is certainly a true definition. Every organization has its own way to market itself and its products. It also has its own unique corporate objectives, which marketing may help to achieve. The Museum of Art History, for example, "markets" itself to get more visitors, to earn money with shirts, ties, cards, etc.

1.2. Marketing has evolved over the years:

1. The production era - the period from the Industrial Revolution (18 th Century) to the late 1920's.

Companies focused on better ways to produce goods. A seller's market - demand exceeded supply. People were simply happy to be able to buy the products.

2. The sales era - the period from about 1930 to 1950's. Companies emphasized selling their products.

Advertising took on special importance.

3. The marketing era - the period that began in the 1950's and continues today. With all the

competition and choices the consumer has today in a society/economy with free or open competition, companies must pay attention to customer wants and needs. A buyer's market - supply exceeds demand. Most organizations today follow the marketing concept.

2. The marketing concept

An organization will achieve its goals only by determining the needs and wants of target markets and then delivering the desired satisfactions of these wants and needs more effectively and efficiently than competitors do. This is the concept most organizations use today. Marketing is the business function that:

5

- determines which target markets the organization can serve best

- identifies customers' needs and wants

- designs appropriate products, service and programs to serve these markets

- calls upon everyone in the organization to "think and serve customers" ("The customer is the king").

Note that to a great extent, marketing does not involve the art of selling what you make as much as it

does knowing what to make.

3. The exchange process

A central part of any definition of marketing is the exchange, which is giving something of value in

return for something of value. When you buy a pair of Nike shoes, you make the fundamental marketing exchange: giving value (money) to get something of value (the benefits provided by shoes). The shoes are valuable to you, and you're willing to pay the retail price to own them. A product is anything customers will exchange something of value for, usually because it satisfies a need or a want. Marketers divide products into three categories: (1) goods, or physical items; (2) services, or activities

that provide some value to the recipient; and (3) ideas, or concepts that provide intellectual or spiritual benefits to the customer. Bicycles and books are goods. Housekeeping, hairstyling, and tax preparation are services. Publishers and broadcasters also provide a service when they sell advertising space and time. Ideas include musical compositions and lyrics, visual images, fictional characters and plots, computer software, business plans, and other creative works. Religious and political beliefs are also ideas. Evangelists try

to sell you on salvation, and political groups market ideas ranging from animal right to anarchy.

Clothing, carrots, pencils, and other goods are tangible products. This means you can touch, see, measure, or otherwise sense them. Services and ideas, on the other hand, are intangible products - they don't have a physical dimension. It's easy to show people the attractive appearance of a blouse or the smooth drive of a car. But you can't test to drive a movie. Marketers of intangibles must convey the product's benefits without a physical example of the product. Because of this, tangible and intangible products usually demand different marketing approaches. To sell a vacation package, for example, travel agents can't physically display the product because travel is intangible. They can, however, describe the island's friendly residents, its beautiful beaches and sunsets, the food and music, and other attractions. Likewise, when a university markets its educational service to students, it may emphasize the quality of its faculty and the prestige of earning a degree from that particular school. Alternative approaches include promoting campus size or beauty and the help the school offers graduates who are hunting for jobs.

4. Needs and wants

Marketing exchanges work, in part, because customers have needs and wants they are trying to fulfil and companies produce the goods and services to meet them. A need represents some fundamental requirement for continuing our lives, such as food, water, or shelter. A want, on the other hand, might

be a desire for a stereo system or for a trip to the Cayman Islands. It's important to understand whether

your product fulfils a need or a want because the way the two types of products are marketed can be

quite different. You don't have to convince most people to eat; the basic motivation is already there. But you might have to convince people to visit your island paradise. Some people might think it would

be boring or too expensive or too hot, and because they don't really need your product, you'll have to

persuade them to buy it. Some marketers consider wants as specific fulfilment of general needs. For example, you need to wear shoes, but you may or may not want to purchase Nikes or Reeboks to meet that need. The focus of the shoe company's marketing program, then, is to convert your general need for shoes into a specific want for a certain brand. Regardless of the way you choose to view needs and wants, remember that you must always appeal to the customer's motivation for considering your type of product in the first place. The marketer's challenge is to influence the customer's needs and wants through pricing and promotion, through new or enhanced products, and through various ways of distributing products.

5. Marketing environment

6

Marketing plans, decisions and strategies are not determined unilaterally by the business. Rather, they are strongly influenced by powerful outside forces. Any marketing program must recognize the outside factors that comprise a company's external environment. We describe five of these environmental factors: the political-legal, social-cultural, technological, economic, and competitive environments. Political and legal environment. Political activities, both foreign and domestic, have profound effects on business. For example, congressional hearings on tobacco, legislation on the use of cell phones in cars, and enactment of the Clean Air Act have substantially determined the destinies of entire industries. E-commerce activities are changing because of expected increases in federal and state taxes for sales on the Internet. To help shape their company's futures, marketing managers try to maintain favourable political-legal environments. Social and cultural environment. More people are working in home offices, the number of single- parent families is increasing, food preferences and physical activities reflect the growing concern for healthful lifestyle, violent crimes are on the decrease, and the growing recognition of cultural diversity continues. The need to recognize social values stimulates marketers to take fresh looks at the ways they conduct their business by developing and promoting new products for both consumers and industrial customers. Technological environment. New technologies affect marketing in several ways. They create new goods (the satellite dish) and services (home television shopping). New products make some existing products obsolete (compact disks are replacing audiotapes), and many of them change our values and lifestyles. In turn, they often stimulate new goods and service not directly related to the new technology itself. Cellular phones, for example, not only facilitate business communication but free up time for recreation and leisure. New communications technologies have blazed entirely new paths for marketers to travel. Internet accessibility, for example, provides a new medium for selling, buying, and even distributing products from your own home to customers around the world. Economic environment. Economic conditions determine spending patterns by consumers, businesses, and governments. Thus, they influence every marketer's plans for product offerings, pricing, and promotional strategies. Among the more significant economic variables, marketers are concerned with inflation, interest rates, recession, and recovery. In other words, they must monitor the general business cycle, which typically features a pattern of transition from periods of prosperity to recession to recovery (return to prosperity). Not surprisingly, consumer spending increases as consumer confidence in economic conditions grows during periods of prosperity. Spending decreases during low-growth periods, when unemployment rises and purchasing power declines. Competitive environment. In a competitive environment, marketers must convince buyers that they purchase their products rather than those of some other seller. Because both consumers and commercial buyers have limited resources, every dollar spent on one product is no longer available for other purchases. Each marketing programme seeks to make its product the most attractive.

DISCUSSION POINTS

1. Provide your own definition of marketing and give your reasons why you think it is more

appropriate.

2. Why has the marketing concept changed with the passage of time?

3. If you were starting your own small business (say, marketing a consumer good that you already

know something about), which of the forces in the external marketing environment would you believe to have the greatest potential impact on your success?

7

LECTURE 2

MARKETING RESEARCH

"To manage a business well is to manage its future; and to manage its future, is to manage information" Ph. Kotler

1. Marketing research provides many of the answers a marketer must have to develop and apply

marketing strategies. The purpose of marketing research is to provide the most accurate and reliable data possible within the limits imposed by time, cost, and the present state of the art. Marketing research is the systematic gathering, recording and analysing of data to provide information useful in marketing decision making. Marketing research is very important both for product development and design. The need for thorough

information in international marketing is as important as in domestic marketing. The tools and techniques for research remain the same, but the environments within which they are applied are different, this creating difficulties. A basic difference between domestic and international marketing research is the broader scope necessary for foreign research.

2. Who conducts marketing research? For whom?

2.1. Kotler defines the marketing information system (M.I.S.) as a continuing and interacting structure

of people, equipment and procedures to gather, sort, analyse, evaluate and distribute pertinent, time-by

and accurate information for use by marketing decision markers to improve their marketing, planning, execution and control. The system:

▪ interacts with information user to assess his needs

▪ develop the needed information through internal records, marketing intelligence and market

research activities

▪ processes and evaluates the information

▪ distributes information to managers in the right form and at the right time to help them in marketing planning, execution and control.

2.2. Market research staff. Larger companies have at least a market research director and more people

on a market research staff that usually serve as internal consultants to other members of the marketing department to help them design their market research work. To support this effort, the market research director or the marketing manager may hire a market research agency on a consultant basis.

3. The research process

A key to successful research is a systematic and orderly approach to the collection and analysis of

data. The research process should always proceed along the following steps:

1. Define the research problem and establish research objectives

2. Determine the sources of information to fulfil the research objectives

3. Gather the data from secondary and/or primary sources

4. Analyse, interpret, and present the results

The researcher's task is to execute all these steps with maximum objectivity and accuracy.

3.1. Defining the problem and establishing specific research objectives is often difficult because it

requires translating the business problem into a research problem. This step is even more critical in foreign markets as an unfamiliar environment tends to blur the real problem (s).

The researcher should also set limits broad enough to include all relevant variables.

3.2. Sources of information. The information may come from primary research or field research and

from secondary research.

8

3.2.1.

Research is done 'first hand' for a particular project. Usually field research is conducted to find

out what customers think by asking them directly. Some methods of primary research:

▪ interviews (survey) by telephone, in person or in writing (questionnaires)

▪ observation

▪ consumer panel

▪ focus group

▪ pretest (sample and check periodically)

▪ ghost shopper or mystery shopper (retailers have unidentified people make purchases at their own store and/or competitors’ to see how customers are treated)

The most significant factor affecting the success of a survey is the willingness of the respondent to provide the desired information, or the ability to articulate what he or she knows, that is the ability of the researcher to get an unwilling respondent to provide correct information. Consumer attitudes about providing information to a researcher are culturally conditioned. Foreign market information surveys must be carefully designed to elicit data and at the same time not offend the respondent's sense of privacy.

3.2.2. Secondary research data. This is information available from published reference sources. For

almost any marketing research project, an analysis of available secondary information is a useful and inexpensive first step. Although there are information gaps, particularly for detailed market information, the situation on data availability and reliability has improved. Industrial marketing in USA, the Standard Industrial classification (SIC) system contains 79 major groups and 976 detailed industry categories, which are combined with detailed breakdown from the US Government Census of Manufacturers and County Business Patterns. Through the SIC system, one can purchase mailing lists for each industry category with information on every company and the name of its purchasing agent. One can start up a direct mail campaign with product brochures and samples for companies on the list. Private publications are also useful, such as many Dun and Bradstreet publications (USA). These provide financial statistics and information on the companies' products. Credit inquiry firms - also known as credit bureaus - provide books or on-line data service whereby subscribers are able to find information on an individual company or on companies by SIC code or a variation of SIC. Perhaps the most useful secondary information is competitors' brochures and catalogues, annual reports and any other information noticed in the general and trade press. Market studies can be: a) "off-the-shelf"/off-the-peg options (using existing data rather than a fresh investigation of a market also called desk research); b) "made-to-order" options. The leading international market research companies are: A.C.Nielsen, part of Dun+Bradstreet Corporation and Information Resources. Inc. (IRI).

3.3. After developing meaningful sources of information, the problem is not a lack of information, but too much information. Some information may conflict - which information to rely on? Therefore, the final steps are the analysis and interpretation of findings in the light of the research problem. Both secondary and primary data collected by the market researcher are subject to many limitations. In any final analysis, the researcher must take into considerations these factors and, despite their limitations, produce meaningful guides for management. The meaning of words, the consumer's attitude toward a product, the interviewer's attitude, or the interview situation can distort research findings. Culture and tradition may influence the willingness to give information, as well as the information given. Accepting information at face value is an imprudent practice. Newspaper circulation figures and sales volume can be distorted through local business practice. To cope with such disparities, the domestic and the foreign market researcher must possess three talents to generate meaningful marketing information:

▪ a high degree of cultural understanding of the market in which research is being conducted

▪ a creative talent for adapting research findings even if they conflict with popular opinion or prior assumptions

▪ a skeptical attitude in handling both primary and secondary data.

9

DISCUSSION POINTS

1. Discuss the scope of marketing research. Why is international marketing research generally broader

in scope than domestic marketing research?

2. The measure of a competent researcher is the ability to use the most sophisticated and adequate

techniques and methods available within the limits of time, cost, and present state of the art. Comment.

3. Discuss the stages of the research process in relation to the problems encountered.

4. What are some problems created by language in collecting primary data?

5. Select a country. From secondary sources compile the following information for at least a 10-year

period:

▪ main imports

▪ main exports

▪ GDP and GNP

▪ chief of state

▪ major cities and population

▪ principal agricultural crop

10

LECTURE 3

CONSUMER BEHAVIOUR. ITS CULTURAL DIMENSION

1. The cultural dimension of consumer behaviour The manner in which people consume, the priority of needs and the wants they attempt to satisfy, and the manner in which they satisfy them are functions of their culture which temper, mould, and dictate their style of living. Culture is the human-made part of human environment - the sum total of knowledge, beliefs, art, morals, laws, customs, and any other capabilities and habits acquired by humans as members of society. Culture is the "distinctive way of life of a group of people, their complete design for living" - mosaic of human life. Since culture deals with a group's design for living, it is pertinent to the study of marketing, especially foreign marketing. If you consider for a moment the scope of the marketing concept - the satisfaction of consumer needs and wants at a profit - it becomes apparent that the marketer must be a student of culture. What is constantly being dealt with when operating as a marketer but the culture of the people, the market? When a promotional message is written, symbols recognizable and meaningful to the market (the culture) must be used. When designing a product, the style, uses, and other related marketing activities must be made culturally acceptable (i.e., acceptable to the present society) if they are to be operative and meaningful. In fact, culture is pervasive in all marketing activities - in pricing, promotion, channels of distribution, product, packaging, and styling - and the marketer's efforts actually become a part of the fabric of culture. The marketer's efforts are judged in a cultural context for acceptance, resistance, or rejection. How such efforts interact with a culture determines the degree

of success of failure of the marketing effort.

The marketer's frame of reference must be that markets are not (static), they become (change); they are not static but change, expand, and contract in response to marketing effort, economic conditions, and other cultural influences. Markets and market behaviour are part of a country's culture. One cannot truly understand how markets evolve or how they react to a marketer's effort without appreciating that markets are a result of culture. Markets are dynamic not only in response to economic change but also in response to changes in other aspects of the culture as well. Markets are living phenomena, expanding and contracting in response to cultural change. Markets are the result of the triune interaction of a marketer's efforts, economic conditions, and all other elements of the culture. Marketers are constantly in the process of adjusting their efforts to cultural demands of the market, but they are also acting as agents of change whenever the product or idea being marketed is innovative. Whatever the degree of acceptance in whatever level of culture, the use of something new is the beginning of cultural change and the marketer becomes a change agent.

1.1. Cultural knowledge

There are two classifications of knowledge about cultures a marketer must possess in order to cope with a different culture. One is factual knowledge about a culture that is usually obvious and must be learned. Different meanings of colour, different taster, and other traits indigenous to a culture are facts that a marketer can anticipate, study, and learn. The other is interpretative knowledge, an ability to understand and to appreciate fully the nuances of different cultural traits and patterns. The meaning of time, attitudes toward other people and certain objects, the understanding of one's role in society, and meanings of life illustrate aspects of a culture that can differ considerably from one culture to another and which require more than factual knowledge to be fully appreciated. The successful foreign marketer must become culturally sensitive - attuned to the nuances of culture so the other culture can be objectively seen, evaluated, and appreciated. Cultural empathy must be cultivated; perhaps the most important steps toward cultural empathy and objectivity are the recognition of the need for empathy and the acquisition of knowledge of a culture. Further, marketers may find it necessary to investigate the assumption on which they base their judgements, especially if these frames of reference are strictly different from their own culture.

1.2. Culture and its elements

A point of departure in the study of cultural dynamics for assessing world markets is a brief discussion

of the concept of culture. To many, the term culture implies a value judgement of another's way of

11

life, knowledge, or social manners. A person is either cultured or uncultured, the difference being that the cultured person has acquired a certain ability in specialized fields of knowledge - usually in art, music, or literature plus good manners. Historians often use culture to mean those specific features of

a civilization in which one society may have excelled; for example, Greek culture is associated with its

art and literature. For the foreign marketer, these meanings of culture are much too narrow. The student of foreign marketing should approach an understanding of culture from the viewpoint of the anthropologist. Every group of people or society has a culture since culture is the entire social heritage of the human race - "the totality of the knowledge and practices, both intellectual and material of

society … [it] embraces everything from food to dress, from household techniques to industrial techniques, from forms of politeness to mass media, from work rhythms to the learning of familiar rules". Culture exists in New York, London, and Moscow just as it does among the Navahos, the South Sea Islanders, or the aborigines of Australia.

It is imperative for foreign marketers to learn the intricacies of cultures different from their own if they

are to be effective in a foreign market. A place to begin is a careful study of the elements of culture.

Elements of culture The anthropologist studying culture as a science must investigate every aspect of a culture as an accurate, total picture is to emerge. To implement this goal, there has evolved a cultural scheme that defines the part of culture. For the marketer, the same thoroughness is necessary if the marketing consequences of cultural differences within a foreign market are to be accurately assessed.

Culture includes every part of life. The scope of the term culture to the anthropologist is illustrated by the elements included within the meaning of the term. They are:

1. Material culture Technology Economics

2. Social institutions Social organization Education Political structures

3. Human and the universe Belief systems

4. Aesthetics Graphic and plastic arts Folklore Music, drama, and dance

5. Language

Foreign marketers may find such a cultural scheme a useful framework in evaluating a marketing plan or in studying the potential of foreign markets. All the elements are instrumental to some extent in the success or failure of a marketing effort since they constitute the environment within which the marketer operates. Furthermore, because we automatically react to many of these factors in our native

culture, we must purposely learn them in another. Finally, these are the factors with which marketing efforts interact and that are basic in the understanding of the character of the marketing system of any society. Since the dimensions of culture influence the marketing process, it is necessary to study the implications of the differences of each one in any analysis of a specific foreign market. A brief examination of these elements will illustrate the variety of ways marketing and culture are interwoven.

1.2.1. Material culture Material culture is divided into two parts, technology and economics. Technology includes the techniques used in the creation of material goods; it is the technical know-how possessed by the people of a society. Material culture affects the level of demand, the quality and types of products demanded, and their functional features, as well as the means of production of these goods and their distribution. The marketing implications of the material culture of a country are obviously many. Electrical appliances will sell in England or France but have few buyers in countries where less than 1 percent of the homes have electricity.

12

1.2.2.

Social institutions

Social organization, education, and political structures are concerned with the ways in which people relate to one another, organize their activities in order to live in harmony with one another, teach acceptable behaviour to succeeding generations, and govern themselves. The position of men and women in society, the family, social classes, group behaviour, and age groups are interpreted differently within every culture. Each institution has an effect on marketing because each influences behaviour, values, and the overall patterns of life. In culture where the social organizations result in close-knit family units, for example, it is more effective to aim a promotional campaign at the family unit than at an individual family member. Travel advertising in culturally divided Canada pictures a wife alone for the English audience but a man and wife together for the French segments of the population since the French are traditionally more closely bound by family ties. The social institution of education affects literacy which affects marketing promotion. In countries with low literacy rates, conventional forms of printed promotion cannot be used successfully, therefore, more radio and movie advertising are employed in promotional strategy. Certain types of political institutions hinder development of marketing organizations as well as the marketing of politically vulnerable products. Legal structures differ, too; certain business activities permitted in some European countries are forbidden in others.

1.2.3. Humanity and the Universe. Within this category are religion, belief systems, superstitions, and

their related power structures. The impact of religion on the value systems of a society and the effect

of value systems on marketing must not be underestimated. Religion has considerable influence on

people's habits, their outlook on life, the products they buy, the way they buy them, even the newspaper they read. Superstition plays a much larger role in a society's belief system in some parts of the world.

1.2.4. Aesthetics. Closely interwoven with the effect of people and the universe are a culture's aesthetics, i.e., the arts, folklore, music, drama, and dance. Aesthetics are of particular interest to the marketer because of their role in interpreting the symbolic meanings of various methods of artistic expression, colour, and standards of beauty in each culture. Tshe uniqueness of a culture can be spotted quickly in symbols having distinct meanings. Without a culturally correct interpretation of a country' aesthetic values, a whole host of marketing problems can arise. Product styling must be aesthetically pleasing to be successful, as must advertisements and package design. Insensitivity to aesthetic values can offend, create a negative impression, and, in general, render marketing efforts ineffective.

1.2.5. Language. (The name is the game)

The importance of understanding the language of a country cannot be overestimated. The successful marketer must achieve expert communication; this requires a thorough understanding of the language as well as the ability to speak it. Advertising copywriters should be concerned less with obvious differences between languages and more with the idiomatic meanings expressed.

A dictionary translation is not the same as an idiomatic interpretation, and seldom will the dictionary

translation suffice. "A national producer of soft drinks had the company's brand name impressed in Chinese characters which were phonetically accurate. It was discovered later, however, that the translation's literal meaning was 'female horse fattened with wax', hardly the image the company sought to portray". Pepsi's familiar "Come alive with Pepsi" translated into German conveyed the idea

of coming alive from the grave, again not the intention of the original statement. Schweppes was not

pleased with its tonic water translation into Italian: "Il Water", idiomatically means the bathroom. Carelessly translated advertising statements not only lose their intended meaning but can suggest something very different including something obscene, offensive, or just plain ridiculous. For example, in French-speaking countries, the trademark toothpaste brand name, "Cue", was a crude slang expression for derierre. The intent of a major fountain pen company advertising in Latin America suffered in translation when the new ink was promoted to "help prevent unwanted pregnancies". The poster of an engineering company at a Russian Trade Show did not mean to promise that its oil well completion equipment was dandy for "improving a person's sex life". Of all cultural elements a marketer should study to gain some degree of empathy, language may be one of the most difficult to master. Many believe that to appreciate fully the true meaning of a language it is necessary to live with the language for years. Whether or not this is the case, foreign

13

marketers should never take it for granted that they are effectively communicating in another language. Until a marketer can master the vernacular, the aid of a national within the foreign country should be enlisted; even the problem of effective communications may still exist. One authority suggests a cultural translator, a person who translates not only among languages but also among different ways of thinking, among different cultures, as a means of overcoming the problem. In an analysis of potential market, it is advisable to consider the elements of the culture and evaluate each in light of how it could affect a proposed marketing program. Although some may not have a direct impact, others may be totally involved. As a broad generalization, it could be said that the more complete the marketing involvement or the more unique the product, the more need there is for a thorough study of each cultural element. If a company is simply marketing an existing product in an already developed market, the need for studying the total culture is certainly less crucial than for the marketer involved in total marketing - from product development, through promotion, to the final selling. While the analysis of each cultural element vis-à-vis a marketing program is a practical approach to ensure that each facet of a culture is included, it should not be forgotten that culture is a total picture, not a group of unrelated elements. Culture cannot be divided into separate parts and be fully understood. The exibit below illustrates one approach to crosscultural analysis of consumer behaviour which should identify those aspects of a culture that are critical in developing an effective marketing strategy.

EXIBIT: Outline of Crosscultural Analysis of Consumer Behaviour

1. Determine relevant motivations in the culture:

What needs are fulfilled with this product in the minds of members of the culture? How are these needs presently fulfilled? Do members of this culture readily recognize these needs?

2. Determine characteristic behaviour patterns:

What patterns are characteristic of purchasing behaviour? What forms of division of labour exist

within the family structure? How frequently are products of this type purchased? What size packages are normally purchased? Do any of these characteristic behaviours conflict with behaviour expected for this product? How strongly ingrained are the behaviour patterns that conflict with those needed for distribution of this product?

3. Determine what broad cultural values are relevant to this product:

Are there strong values about work, morality, religion, family relations, and so on that relate to this product? Does this product connote attributes that are in conflict with these cultural values? Can conflicts with values be avoided by changing the product? Are there positive values in this culture with which the product can be identified?

4. Determine characteristic form of decision making:

Do members of the culture display a studied approach to decisions concerning innovations or an impulsive approach? What is the form of the decision process? Upon what information sources do members of the culture rely? Do members of the culture tend to be rigid or flexible in the acceptance

of new ideas? What criteria do they use in evaluating alternatives?

5. Evaluate promotion methods appropriate to the culture:

What role does advertising occupy in the culture? What themes, words, or illustrations are taboo? What language problems exist in present markets that cannot be translated into this culture? Are such salesmen available?

6. Determine appropriate institutions for this product in the minds of the consumers:

What types of retailers and intermediary institutions are available? What services do these institutions offer that are expected by the consumer? What alternatives are available for obtaining service needed for the product but not offered by existing institutions? How are various types of retailers regarded by consumers? Will change in distribution structure be readily accepted? SOURCE: James, F. Engel, Roger D., Blackwell, and Paul W. Miniard, Consumer behaviour, 5ZH ED. (Hinsdale, III: Dryden Press, 1986), p. 399.

14

LECTURE 4

THE MARKETING MIX

Once you've identified your target market, the next step is to create the marketing mix, which is a set of four elements: product, price, distribution, and promotion. You have a lot of control over the elements in your marketing mix, but you have very little control over the environment in which you're operating. For example, Porche can decide which cars it will make, but it can't decide what the pollution control laws will be or what competitors will do. Because of the amount of influence these external forces have, marketers think about the marketing mix in the context of their overall business environment.

1. Product

Products are integral to the exchange process; without them, there is no marketing. As pointed out earlier, a product can be a good, a service, or an idea. Astute marketers realize that a product is actually a "bundle of value" that meets customers' expectations. For example, when you buy a pair of Nike shoes endorsed by basketball star Michael Jordan, you get more than leather, rubber, and laces. You buy a little piece of the Michael Jordan image. The value that companies deliver to their customers often encompasses more than just the basic product. It can include consulting, training, manuals, installation, and other tangible and intangible components. As competition in many industries grows more intense, and as products start to look more and more alike, these extra features and benefits become important criteria for customers deciding which product to buy. Although marketing people usually don't design or manufacture products, they should be intimately involved with the process to make sure customers' needs will be met. The marketing department often becomes the focal point for information flowing from customers back to the people doing the actual design work. And identifying these needs is sometime a daunting task. For example, when developing desktop publishing software for the Japanese market Quark faced many unfamiliar customer requirements. The product needed to be compatible with the Japanese language, and it had to meet Japanese printing standards. The company worked with its Japanese distributor to develop software that could accommodate the Japanese style of writing not only horizontally across the page but top-to-bottom as well. The product can also handle thousands of the kanji characters used in written Japanese. To meet the high Japanese standards for print quality, Quark used a high-resolution printer. The result was a product tailored to the needs of Japan's emerging desktop publishing market. Developing products that meet the needs of target markets is also important for marketers of intangibles. An example of intangible-product development and target marketing comes from Cirque du Soleil, a Canadian circus that tailors its productions for adults, customers most other circuses ignore. Cirque's shows have plots that adults can relate to, such as the story of a insurance salesman who magically becomes a ringmaster. However, Cirque is careful not to make the production too adult. Like its competitors, Cirque uses clowns, acrobats, trapezists, dancers, and gymnasts, and there are plenty of special effects and colourful costumes. The final product is a sophisticated production that children and their parents can both enjoy. Product development is an intriguing aspect of the marketing job because you get involved with so many aspects of the total business operation, including sales, services, research and development, package design, finance, and manufacturing.

2. Price

The second element of the marketing mix is price, the amount a firm charges for its product. A powerful component of the marketing mix, price is often expected to do more than just generate revenue. For example, a high price helps build an exclusive image for a product. A low price can take sales away from competitors, increase overall demand in a market, and create an image of good value. Carefully managed prices help airlines keep a certain percentage of passengers in the more expensive business and first-class seats. Temporary price reductions help movie theatres shift demand from busy

15

times of the week to slower times. The thought process behind pricing covers a wide spectrum, from black-and-white financial analysis to complex and uncertain buyer emotions. Setting prices is one of the most difficult tasks facing the marketing professional. To start with,

competitors and customer expectation can put a ceiling on the range of possible prices, which limits your flexibility. Customers won't buy the product if they don't believe it's worth the price. And you have to offer something really special if your prices are significantly higher than those of the competition.

A manufacturer must also consider its costs to buy raw materials, to convert them into products, and to

put the finished goods in customer's hands. Service providers need to track the amount of time it takes

to perform services, as well as materials and equipment that may be required. A product's price usually

covers these costs, but products may be priced at a loss. One objective of such a strategy could be to build market acceptance for the product; however, underpricing can also happen by accident. Government regulation and ethical standards also affect pricing decisions. Regulatory commissions preside over utility rates, and the government limits marketer's authority over their own product prices. Pricing and product image are closely related. If the same grape juice were packaged in two bottles,

one with a generic label and one with the Welch's label, the latter could command a higher price. Customers will pay a higher price for a well-known, well-regarded product, partly because of the image created through advertising and other promotions. High prices can help create a top-of-the-line image. Some marketers of luxury products even advertise their high prices. A Piaget ad campaign touted the product as "the most expensive watch in the world". The same approach can be used to position a relatively inexpensive product at the high end of its category. L'Oreal promotes its Preference hair products by emphasizing their high For some marketers, low price is the focal point of the marketing strategy. Companies that vigorously promote their low price are typically out to undercut the competition with lower prices while keeping operating costs at a minimum. Amstrad, an English computer and consumer electronics company, sell on price. Alan Sugar, the firm's founder, has summarized the Amstrad philosophy as "pile 'em high sell' em cheap".

3. Distribution/Placing

The third marketing mix component, distribution, refers to the methods used to move products from the producer to the customer. This involves the selection of marketing channels, which are the people and organizations, including wholesalers and retailers, who help get products to customers. Managing

product transportation and storage, processing orders, and keeping track of finished-product inventory are also distribution activities.

A poorly conceived distribution strategy can spell disaster. When Etak first went to market with its

innovative electronic roadmap in the mid - 1980s, it made the mistake of trying to sell the $1,430 product to consumers through car-stereo shops. The strategy flopped because the product's sophistication and price didn't mesh with the distribution channel. Etak Finally retrenched, focusing on the industrial market. It began selling its product in volume to organizations such as Coca-Cola, Frito- Lay, Herth, and The Los Angeles Times. By 1988 the new strategy had helped propel the company into profitability for the first time. Compaq Computer Corporation has been successful with a distribution strategy that seemed out of place when the microcomputer market was first emerging. From its founding, the firm sold only through dealers. Most of its competitors, in contrast, used their own sales forces in addition to dealers. Eventually the competitor's aggressive direct-sales reps started selling to big corporate customers, taking business away from the dealers; some of those dealers felt so betrayed that they stopped pushing the manufacturer's products. Meanwhile, Compaq purposely and consistently made all sales through its authorized dealers. In so doing, it earned the respect and loyalty of the dealers, a channel that is now crucial to successful microcomputer marketing.

4. Promotion

The final element of the marketing mix is promotion, which encompasses a wide variety of techniques you can use to communicate with your target market. The main categories of promotion are advertising, personal selling, public relations, and sales promotion. You are certainly aware of advertising; you are exposed to hundreds of advertising messages every day, on everything from TV to T-shirts. Personal selling plays a big role in many major purchases, ranging from automobiles to airliners. Marketers use public relations in a variety of ways, including press conferences and support

16

for cultural events. And sales promotion is a major force in marketing today; coupons, rebates, and free samples are some of the techniques that fall into this category. Marketers combine the various elements of promotion to effectively communicate aspects of their companies and products to customers, employees, shareholders, and other important audiences. For example, the promotional strategy for a new cake mix from General Mills might include such diverse elements as advertising, coupons, a consumer sweepstakes, and premium in every box of product. General Mills might use a press tour featuring a home economist spokesperson. On the other hand, Nike might rely heavily on the endorsement of a popular professional athlete to promote a new shoe in television commercials.

Common promotional techniques

Category

Example

Advertising

Radio Television Internet Billboards Stadium signs Coupons Sweepstakes Frequent flyer programs Free samples Press conference Press releases Sponsorship of sporting events Corporate sales Door-to-door sales Telemarketing Seminars

Sales promotion

Public relations

Personal selling

Marketers can choose from a range of promotional vehicles to reach various audiences. Each method has advantages and disadvantages; in many cases, you’ll want to use more than one method.

Industrial marketers also rely heavily on promotion. A machine tool marketer can use magazine advertising, a dealer sales-incentive contest, trade shows, and press releases to promote products. IBM, Apple, Compaq, and other computer suppliers combine extensive personal selling with advertising and public relation. For expensive, complex products and systems, close interaction between buyer and seller is often required, which leads to a lot of personal selling in such markets. In the service area, some family therapists use personal selling to get on the referral lists of health maintenance organizations. Others use direct-mail advertising to bring themselves to the attention of divorce lawyers and thus gain patient referrals. Some group therapists even offer prospective patients a free trial session. All of these activities – sales calls, advertising, and free sessions – are elements of promotion. Marketers’ selection of advertising media reflects their overall promotional strategy for a product. For instance, to create an image for Nutri-Grain as a health-enchancing product, Kellogg’s first advertising campaign for the cereal relied heavily on health-conscious “life-style magazines” rather than on the company’s traditional use of television. When Black & Decker wanted to reach younger consumers, it advertised on the late-night television programs they are known to watch. Industrial marketers may advertise in a range of specialized and general-interest business magazines. To reach potential buyers, building-supplies marketers advertise their products in Professional Builder, Building Design & Construction, Qualified Remodeler, and a score of other magazines. Meanwhile, to advertise its image as a good corporate citizen, the same company might choose TV programs like “Nightline” and publications such as Business Week and The Wall Street Journal. Marketers in many other industries enjoy a similar range of media options.

4.1. Advertising. Advertising is any form of paid nonpersonal communication used by an identified sponsor to persuade or inform potential buyers about a product. For example, The MontyGroup, a

17

financial adviser that provides investment and securities products, reaches its customer audience by advertising its services in Fortune magazine.

4.2. Personal selling. Many products (for example, insurance, clothing, and real estate) are best

promoted through personal selling, or person-to-person sale. Industrial goods receive the bulk of personal selling. When companies buy from other companies, purchasing agents and others who need technical and detailed information are usually referred to the selling company’s sale representative.

4.3. Sales promotions. Relatively inexpensive items are often marketed through sales promotions,

which involve one-time direct inducements to buyers. Premiums (usually free gifts), coupons, and

package inserts are all sales promotions meant to tempt consumers to buy products.

4.4. Public relations. Public relations include all communication efforts directed at building goodwill. It seeks to build favourable attitudes toward the organization and its products. Ronald McDoland Houses are a famous example of public relations. Publicity also refers to a firm’s efforts to communicate to the public, usually through mass media. Publicity, however, is not paid for by the firm, nor does the firm control its content. Publicity, therefore, can sometimes hurt a business. In 2000, for example, Firestone suffered a severe downturn in sales after the widely publicized tire failure on Ford Explorer SUVs.

DISCUSSION POINTS

1. Select a product made by a foreign company and sold in Romania. Compare it with a similar

domestically made product in terms of product features, price, promotion, and distribution. Which of

the two do you think is more successful with the Romanian buyers and why?

2. Interview the marketing manager of a local business. Identify the degree to which this person's job

is oriented toward each element in the marketing mix.

3. How much do you think novelty contributes to the success of a product, and how well do you think

it would be received abroad? What elements of the marketing mix might need to be adjusted for

international consumers?

18

LECTURE 5

THE PROMOTION MIX

Promotion is considered to be comprised of four elements: advertising, personal selling, sales promotion and public relations.

Industries and organisations vary greatly with respect to the relative importance they place on the different elements in the promotion mix. For instance, in the cosmetics world Avon Products Inc. emphasises personal selling while Revlon Inc. emphasises advertising.

In deciding whether to buy or make regular use of a product, a prospective buyer moves through five stages: awareness, interest, evaluation, trial and adoption. Promotion seeks to move prospective buyers through this process by informing, reminding and persuading customers about an organisation and its products.

It is important to keep in mind that the elements in the promotion mix must be co-ordinated and linked together in such a way that they will complement and reinforce each other's particular role in achieving the promotion objectives. For example, advertising may be the best way to create awareness of a new product, while sales promotion such as free samples may be effective in encouraging trial of the product. Answering prospective buyer's queries, however, requires personal selling. The relative importance of the promotion mix elements can vary over time and certain forms of advertising or sales promotion may come in and out of vogue.

The following is a brief presentation of each element in the promotion mix.

1. Advertising

Any paid form of nonpersonal communication through the mass media about a product by an identified sponsor is advertising. The mass media used include magazines, direct mail, radio, television, billboards, newspapers and Internet. Sponsors may be a non-profit organization, a political candidate, a company or an individual. Advertising differs from news and publicity in that an identified sponsor pays for placing the message in the media. Advertising is used when sponsors want to communicate with a number of people who cannot be reached economically and effectively through personal means.

Advertisements are persuasive communication. Advertisers must therefore understand how people learn in order to "teach" them to respond to their advertising strategies. Learning takes place when the consumer alters a response or behaviour as result of some experience. Learning is made up of there components: motivation, experience, and repetition. Every time we see a commercial on television for a refreshing drink of iced tea, pop, beer, or powdered drink mix on a hot summer evening, there is a strong motivation to learn so that our thirst can be satisfied. It is also easier to have our message learned for hot chocolate when the weather turns cold. If the commercial presents the message so that it provides for a strongly perceived experience, learning is more likely to take place. Thus, when Nestea shows a hot and thirsty person drinking iced tea and then falling backward into cooling refreshing water, the viewer can experience the brand benefit and is more likely to learn it. But even with good commercials, the experience can only be vicarious and is therefore weak in comparison to being able to have the announcer hand a glass of iced tea through the picture tube to the hot and thirsty viewer. Therefore, if advertisements are to be learned, there is a need for substantial repetition. It should be noted, however, that too much repetition can result in consumer fatigue as the message falls on "deaf ears". The advertiser can avoid this problem, however, by eventually changing the message.

Consumers learn to generalise from originally learned ideas. Therefore, advertisers will sometimes copy a highly successful campaign idea that has been well learned by consumers. The highly successful "Marlboro Country" advertising for cigarettes has led to "Ford Country" for automobile

19

dealers and "Cadbury Country" for chocolate bars. Or the advertising that has successfully sold one product under a family brand may be used to sell additional products.

2. Personal selling

Personal, face-to-face contact between a seller's representative and those people with whom the seller wants to communicate is personal selling. Nonprofit organizations, political candidate's companies, and individuals use personal selling to communicate with their publics.

Personal selling is the oldest type of promotional effort. Nevertheless, it too is being impacted by modern technology. Today it is more important for salespeople and sales managers to be well-

organized. Computers and specialized software are helping to improve the effectiveness and efficiency

of salespeople by helping them do a better job of organizing the personal selling effort.

An organization's salespeople provide the most direct link to its customers; in fact, to many customers, the salespeople is the organization. In such cases, the customer's image of the organization is formulated on the quality of the personal selling effort. Because of their direct contact with the market, salespeople are a valuable source of feedback concerning the company’s products, competitors and their products, and customer requirements. They also play a pivotal role in implementing marketing

strategies.

Everybody engages in personal selling. College students use it to get dates, to get more money from their parents, and to market themselves to prospective employers. Politicians use it to win votes, and college football coaches use it to recruit outstanding players. Physicians use it to persuade their patients to begin a regular program of exercise.

Objectives of personal selling The basic objectives of personal selling are: (1) to find prospective customers, (2) to convert these prospects to customers, and (3) to keep them as satisfied customers. The importance of each objective

to a marketing organization depends largely on the role personal selling plays in the overall promotion

mix.

 

Finding

 

Converting

 

Maintain customer

prospects

prospects to

satisfaction

customers

3.

Sales promotion

 

Sales promotion communicates with targeted receivers in a way that is not feasible by using other

elements of the promotion mix. It involves any activity that offers an incentive to induce a desired response by sales persons, intermediaries, and/or final customers. Sales promotion activities add value

to the product because the incentives ordinarily do not accompany the product. For example, consumer

contests add value for consumers while sales contests and value for salespersons.

Most incentives, like consumer contests and sales contests, are short-term in nature. But some incentives are part of a long-term effort to inform target customers at the point of purchase. Sales promotion may be a firm's primary promotional effort or it may supplement and complement personal selling, advertising, and public relations.

Basic principles of sales promotion

Description and role

Sales promotion means immediate or delayed incentives to purchase, expressed in cash or in kind. It has a temporary and short-term duration only, but can affect brand image in the longer-terms.

A promotion has only there targets and two modes. The targets are the trade, the consumer and

company employees. The modes are the immediate incentive and the delayed incentive to purchase. Incentives are immediate when they can be obtained concurrently with purchase, and straight price-

20

cuts are the simplest example. Incentives are delayed when the purchaser has to take additional action (like mailing in an application leaflet) or has to await the outcome of chance (as in a competition). In general, the purpose of advertising is to create awareness and improve attitudes towards a brand, while the objective of promotions is to translate favourable attitudes into actual purchase. Usage or experience of a brand also strongly influences attitudes.

No promotion is an island unto itself

Sales promotion is often viewed in isolation from the other elements in the marketing plan and is sometimes utilized as a desperate measure to prop up sagging products.

Companies may also attempt to use sales promotion as a solution to problems of a more radical nature - like inferior performance - without recognizing that such a task is beyond its capabilities. In such situations, it only fulfils the function of heart massage and may render a disservice by temporarily obscuring the patient's serious condition.

The limited yet important role of sales promotion is not widely recognized. The objective of a promotion is to achieve a specific number of new or additional purchases during its currency. If it a accomplishes this objective, it has fully completed its task. Whether or not the brand continues to grow and prosper after the promotion is over says little about the quality of the promotion - it is mainly a function of the brand's performance, pricing and advertising.

4. Public relations

Modern organizations are also concerned about the effects of their actions on people outside their target markets. These people may have little contact with the organization but feel in affects their welfare in some way. Unless the organization understands their concerns and communicates its goals and interests, they may misinterpret, distort, or be openly hostile to the organization's actions. Communication to correct erroneous impressions, maintain the goodwill of the organization's many publics, and explain the organization's goals and purposes is called public relations (PR).

Public relations (PR) is communication designed to correct erroneous impressions, maintain the goodwill of the organization's many publics, and explain the organization's goals and purposes. Some types of institutional advertising, as indicated earlier, are a part of public relations. These ads mainly attempt to create or enhance a positive image for the organization. The discussions that follow focus on two other approaches to conducting PR: direct contact and publicity.

Direct contact public relations

Direct contact with public includes letters, plant tours, visits by public relations personnel, and company-sponsored events. Employers who recruit on college campuses may write personal letters to professors explaining their management philosophy and required qualifications for student interviewees. Plant tours often are scheduled by breweries and soft drink bottles. Visits by PR personnel include speakers at civic and service club meetings to explain their firm's goals and policies.

Publicity is the core of public relations. It is news carried in the mass media about an organization - its products, policies, personnel, or actions - at no charge to the organization for media time and space. The marketers must bear the costs of preparing such items as news releases and including media editors to print or broadcast them; therefore, publicity is not free advertising.

Publicity offers several advantages as a promotion tool. First, it may reach people who ordinarily do no pay attention to advertising, sales promotion, and sales people. Second, it has greater credibility than advertising. Third, it is relatively inexpensive and provides coverage that would cost much more money in advertising.

On the other hand, publicity has its limitations. The marketer has very little control over the publicity materials, the content, the schedule of the materials appearance in the media, etc.

Great care should be given to preparing the publicity materials to help ensure that they will be used by the media.

21

The main publicity tools are:

the news releases, usually one typewritten page, containing information that the organization wants disseminated, along with the name, address, and phone number of the person, whom media personnel should contact for more information

feature articles are longer and prepared for specific publications

▪ media representatives are invited to press conferences to hear about an upcoming major event

letters to the editor are sent to newspapers and magazines, perhaps in response to articles that appeared in those media

▪ radio and TV stations are given tapes and films for broadcasting.

DISCUSSION POINTS

1.What is similar about marketing mix and the promotion mix?

2.State one way in which:

advertising is different from public relations

advertising is similar to public relations

public relations is different from the other promotion elements.

3.Which element of the promotion mix would you highlight in each of the following situations:

a) to stimulate and motivate consumers to try a product

b) to provide widespread knowledge of a new product

c) to provide very specific information about a product.

22

LECTURE 6

TRENDS IN ADVERTISING

Promotional activities are basically a communications process. Advertisements are persuasive communication. Advertisers must understand how people communicate and learn in order to teach them to respond to their advertising strategies.

1. Trends in advertising

The increasing sophistication of foreign consumers and the presence of competition from many countries place great emphasis on the role of advertising. Concurrent with the internationalization of world business has been the growth and development of advertising media and services through the world. Media availability and its quality have improved over the last two decades. While there are major differences among countries, the multinational firm has access to an expanding variety of commercial media, and improved support services from local as well as world-wide advertising agencies.

Among the more significant trends in advertising is the creation of privately owned commercial radio and television stations in many European countries. The addition of satellite broadcasting has led to the growth of cable networks making the possibility of pan-European advertising a reality. Improved broadcasting technology, including satellite transmission, has stimulated the growth of mass communications in other parts of the world as well. With China now permitting commercial advertising, more world markets are accessible to the international advertiser today than ever before in history.

Advertising is changing communication customs and habits in nearly all countries. In localities where television and other commercial media are not available, there is continuing demand for the development of such media. The development of mass communications broadens local concepts of the world and of political affairs and may prove to be of major importance in influencing and speeding cultural, political, and economic integration.

The development of mass advertising media is also important in the development of international markets. In many areas of the world, people have the income to buy products, but they are not a part of world markets because they lack information about available products.

Although mass communications have improved markedly in the past decade, advertisers are still without adequate media alternatives in many parts of the world.

2.Standardization vs. modification of advertising

One of the most widely debated areas of policy pertains to the degree of advertising variation from country to country. One view sees advertising customized for each individual country or region because every country is a special problem. Executives in such companies argue that the only way to achieve adequate and relevant advertising is to develop separate campaigns for each country. At the other extreme are those who suggest that advertising can be standardized for all markets of the world. The benefits are a common appeal in all markets and better co-ordination and cost savings which can be substantial.

2.1. Global advertising

Debate on the merits of standardization or modification of international advertising has taken an added emphasis in recent years as a result of Theodore Levitt's article, "The Globalization of Markets". Levitt contends there are global markets for standardized consumer products. He advocates that international marketers learn to operate as if the world were one large market, ignoring superficial regional and national differences. A global marketing strategy would mean a global advertising program, global brands, and global or standardized products. Without discussing the merits of Levitt's arguments, there is evidence that companies may overemphasize the need to modify advertising and marketing programs for each national market. Indeed, many assume the need to modify without exploring the

23

possibilities of a world-wide, standardized marketing mix. A case in point may be the Gillette company that sells 800 products in more than 200 countries. Most are sold under different brand names.

The experienced international advertiser realizes the question of standardization or modification depends more on motivational patterns than geography. Advertising must relate to motivation; if people in different markets buy similar products for significantly different reasons, advertising campaigns need to focus on these differences. On the other hand, when markets react to similar stimuli, it is unnecessary to vary advertising messages for the sake of variation.

While the need to control costs and to coordinate worldwide promotional programs places emphasis on global advertising, there is strong evidence that country market differences often require some adaptation for effective promotional programs. Because there are few situations in multinational advertising where either position is clearly the best, most companies seek some compromise with pattern advertising.

2.2. Pattern advertising

As discussed earlier a product is more than a physical item; it is a bundle of satisfactions the buyer receives. This package of satisfactions or utilities includes the primary function of the product along with many other benefits imputed by the values and customs of the culture. Different cultures often seek the same value or benefits from the primary function of a product.

Many companies follow a strategy of pattern standardization, a global advertising strategy which standardizes the basic message but allows some degree of modification to meet local situation. In this way, some economies of standardization can be realized while specific cultural differences are accommodated.

For example, Seven-Up advertises in dozens of countries with a policy that allows variation in specific detail to suit local market conditions. Certain elements of Seven-Up advertising remain constant in every country; the Seven-Up logotype; the basic colour combination; the Seven-Up bottle crown; and fundamental point-of-purchase units such as illuminated plastic signs, metal tackers, and brand signs.

The debate between advocates of global or standardized advertising and those who support locally modified promotions will doubtlessly continue. Some products in particular countries can be promoted most effectively with a global approach while others require a localized program to be successful. The world is still far from being a homogenous market with common needs and wants for all products. Myriad obstacles to standardization remain.

3. Creative challenges

The growing intensity of international competition coupled with the complexity of marketing multinational demand that the international advertiser function at the absolute highest creative level. Advertisers from around the world have developed their skills and abilities to the point that advertisements from different countries reveal basic similarities and a growing level of sophistication. To complicate matters further, boundaries are placed on creativity by legal, language, cultural, media, production, and cost limitations.

3.1. Legal and tax considerations

Some countries regulate advertising more closely than others, which requires modification of the creative approach from country to country. Laws pertaining to advertising may restrict the amount spent on advertising, media used, type of product advertised, manner in which price may be advertised, type of copy and illustration material used, and other aspects of the advertising program. In Germany, for example, it is against the law to use comparative terminology. An advertiser cannot say that one soap gets clothes cleaner than another because the statement implies the other products do not get clothes clean. Similar restrictions exist in most European countries.

In Kuwait, the government-controlled TV network allows only 21 minutes of advertising per day and this in the evenings. Commercials are controlled to exclude superlative descriptions, indecent words, fearful or shocking shots, indecent clothing or dancing, contests, hatred or revenge shots, or attacks on

24

competition. It is also illegal to advertise cigarettes, lighters, pharmaceuticals, alcohol, airlines, chocolates, and other candy.

Some countries have special taxes that apply to advertising and which might restrict creative freedom in media selection.

The variation between countries in interpreting what constitutes acceptable, honest advertising causes most problems. What is acceptable in one country may be deemed false and misleading in another. Legal and tax considerations are a major deterrent to complete standardization of advertising.

3.2. Language limitations

Language is one of the major barriers to effective communication through advertising. The problem involves the different languages in different countries, different languages or dialects within one country, and the subtler problems of linguistic nuance and vernacular.

Incautious handling of language has created problems in nearly every country. Market research showed that American Motor's Matador name meant virility and excitement, but when the car was introduced in Puerto Rico it was discovered that the word meant "Killer" - "an unfortunate choice for Puerto Rico, which has an unusually high traffic fatality rate". One Middle Eastern country advertisement featured an automobile's new suspension system that, in translation, said the car was "suspended from the ceiling". Since there are at least 30 dialects among Arab countries, there is ample room for error. What may appear as the most obvious translation can come out wrong. "A whole new range of products" in a German advertisement came out as "a whole new stove of products".

Low literacy in many countries seriously impedes communications and calls for greater creativity and use of verbal media. Multiple languages within a country of advertising area provide another problem

for the advertiser, e.g

Language translation encounters innumerable barriers that impede effective, idiomatic translation and thereby hamper communication. This is especially apparent in advertising materials. Abstraction, terse writing, and word economy, the most effective tools of the advertiser, pose problems for translators. Communication is impeded by the great diversity of cultural heritage and education which exists within countries and which cause varying interpretations of even single sentences and simple concepts. Some companies have tried to solve the translation problem by hiring foreign translators, but this usually is not satisfactory; both the language and the translator change so the expatriate is out of touch after a few years. Everyday words have different meanings in different cultures. Even pronunciation causes problems.

Switzerland has three separate languages.

3.3. Cultural diversity

The problem of communicating to people in diverse cultures is one of the great creative challenges in advertising. Communications is more difficult because cultural factors largely determine the way various phenomena will be perceived. If the perceptual framework is different, perception of the message itself will differ.

International marketers are becoming accustomed to the problems of adapting from culture to culture. Knowledge of differing symbolism of colours is a basic part of the international marketer's encyclopaedia. An astute marketer knows that white in Europe is associated with purity but in Asia it is commonly associated with death. The marketer must also be sophisticated enough to know that the presence of black in the West or white in Eastern countries does not automatically connote death. Colour is a small part of the communications package, but if the symbolism in each culture is understood, the marketer will have an educatedl choice of using or not using various colours.

Knowledge of cultural diversity must encompass the total advertising project.

Existing perceptions based on tradition and heritage are often hard to overcome. The concept of cooling and heating the body is important in Chinese thinking; malted milk is considered heating, while fresh milk is cooling; brandy is sustaining, whiskey harmful.

25

As though it were not enough for advertisers to be concerned with differences among nations, they find subculture within a country requires attention as well. In Hong Kong, for example, there are 10 different patterns of breakfast eating.

3.4. Media limitations

Media limitations may diminish the role of advertising in the promotional program and may force marketers to emphasize other elements of the marketing mix.

A marketer's creativity is certainly challenged when a television commercial is limited to 10 showings a year with no two exposures closer than 10 days, as is the case in Italy. Creative advertisers in some countries have even developed their own media for overcoming media limitations. In some African countries, advertisers run boats up and down the rivers playing popular music and broadcasting commercials into the bush as they travel.

3.5. Production and cost limitations

Creativity is especially important when a budget is small or where there are severe production limitations; poor quality printing and the lack of high-grade paper are simple examples. The necessity for low cost reproduction in small markets poses another's problem in many countries. For example, hand-painted billboards must me used instead of printed sheets because the limited number of billboards does not warrant the production of printed sheets.

The cost of reaching different market segments can become almost prohibitive in some instances. In Hong Kong, for example, it is imperative that ads run in both English and Chinese.

The various restrictions to advertising creativity can be seen as insurmountable impediments to a standardized worldwide promotional campaign. Or, as the ultimate creative challenge for an advertiser: i.e., develop a promotional campaign that communicates across country markets, is informative, and persuasive. There are many internationally known advertising agencies that feel they can successfully surmount the obstacles encountered when creating a standardized, global advertising campaign.

4. Media planning and analysis

4.1. Tactical considerations

Although nearly every sizeable nation essentially has the same kinds of media, there are a number of specific considerations, problems, and differences encountered from one nation to another. The primary areas an advertiser must consider in international advertising are the availability, cost and coverage of the media.

4.1.1. Availability

One of the contrasts of international advertising is that some countries have too few advertising media and others have too many. In some countries, certain advertising media are forbidden by government edict to accept some advertising materials. Such restrictions are most prevalent in radio and television broadcasting. In many countries there are too few magazines and newspapers to run all the advertising offered to them. Conversely, some nations segment the market with so many newspapers that the advertiser cannot gain effective coverage at a reasonable cost.

4.1.2. Cost

Media prices are susceptible to negotiation in most countries. Agency space discounts are often split with the client in order to bring down the cost of media. The advertiser may find the cost of reaching a prospect through advertising is dependent on the agent's bargaining ability. The per-contract cost will vary widely from country to country. A recent five-year study of advertising costs in nine major foreign markets indicated that costs were increasing at a rate of 10 to 15 percent each year, a rate considerably higher than the cost increases in U.S. media. In some markets, because of the shortage of advertising time on commercial television, prices have increased substantially more.

26

4.1.3. Coverage Closely akin to the cost dilemma is the problem of coverage. Two points are particularly important:

one relates to the difficulty of reaching certain sectors of the population with advertising and the other to the lack of information on coverage. In many world marketplaces, a wide variety of media must be used to reach the majority of the market. In some countries, large numbers of separate media have divided markets into uneconomical advertising segments.

Lack of market data Even where advertising coverage can be measured with some accuracy, there are still questions about the composition of the market reached. Lack of available market data seems to characterize most international markets; advertisers should have information on income, age, and geographic distribution, but even such basic data seems chronically elusive. If adequate market data were available, they would show no only the great variation in the audiences of different periodicals and broadcast media, but also the great diversity and variations that exist from country to country. Often even a small nation will have a dozen or more subcultures within its borders. The advertiser is confronted with the problem of selecting media to provide coverage for an entire market.

DISCUSSON POINTS

1."Perhaps advertising is the side of international marketing with the greatest similarities from country to country throughout the world".

2. Discuss if advertising can be standardized for all countries.

3. Outline some of the major problems confronting an international advertiser.

4. Compare German and Romanian beer advertising considering the cultural variables (cultural values,

rhetorical style, advertising appeals and the occasion for product usage).

27

LECTURE 7

NEW TRENDS IN MARKETING

Green marketing

Green or Environmental Marketing consists of all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs, with minimal detrimental impact on the natural environment.

The marketplace is greener now than ever before–and will become even more responsive to products and services promising environmental responsibility well into the 21st century. The reasons are many.

People are worried

In the 1980s environmental calamities dominated the news. Almost daily, headlines trumpeted oil spills, toxic waste dumps, and nuclear meltdowns. A hole punctured the ozone layer, a garbage barge searched in vain for a dumpsite, apples were not considered safe to eat. The issues were no longer in someone else’s backyard faraway, but in our own.

The environment rose to the top of the public’s worry list. Children picketed the United Nations with "Ronald McToxic" in effigy. The twentieth anniversary celebration of Earth Day in 1990 attracted 100 million participants around the world, and Time magazine named spaceship Earth, "Planet of the Year."

Government responded. Fueled by voters’ fears of discarded eggshells, pantyhose, and other trash creeping up the back step, municipalities banned fast-food cartons from landfills and tried to tax disposable diapers. In Maine, aseptic juice boxes were swept from grocery shelves because they were not broadly recycled. To preserve its markets and safeguard its reputation, industry quickly greened up its products and issued environmental communiqués and ads asserting its commitment to a cleaner Earth.

Consumers felt listened to. They began to recycle their Pepsi cans and aluminum foils cut down on disposables, and take other environmental steps that gave them a sense of control over their day-to-day lives.

The environment-related hysteria of the late 1980s and early 1990s is now behind us, but consumers’ desires to quell their concerns is actually higher now than at the peak of the eco-craze. Their motivation: trepidation for what they see as a very shaky future.

Since the 1980s, the headlines have shifted away from wandering garbage barges and medical waste washing up on the New Jersey shore to genetic breakthroughs and Hollywood murders. However, people still worry about any number of such specific environmental issues as industrial air and water pollution, ozone layer depletion, radiation from nuclear power plants, and destruction of rainforests.

We are not alone. Pessimism over the state of the environment reigns in virtually every corner of the world. A 1995 Roper/International Research Associates poll of over 35,000 adults in 40 countries on five continents–one of the most comprehensive global surveys conducted to date–found that three times as many people worldwide think their country’s environmental situation is close to or is the worst possible as opposed to the best possible (25% versus 8%). At 17%, North America has its share of adults who believe the environmental situation will be worse or near the worst possible state in five years. However, and most likely due to North America's relatively cleaner environment it pales in comparison to the acute pessimism that prevails in the former USSR countries, Latin America, and the Middle East.

Count on things to get worse. No corner of the globe escapes the by-products of the one-two punch of rapid global industrialization and burgeoning population growth. Such ills as contaminated water, filthy air, and a decrease in the biological diversity that keeps Earth's ecosystem in balance are more

28

prominent in areas without a history of environmental protection such as Eastern Europe and Asia. Just over the millennial horizon lurks the specter of global climate change and a stratospheric ozone layer that may be thin to shield the planet from the sun's cancer-causing, crop-depleting UV A and B rays. No wonder that around the world almost two in three people (64%) believe "protecting the environment is the most important concern, even at the expense of economic growth," and pro- environment sentiment is mirrored in every region of the world.

Environmentalism is a core societal value

Environmental consumerism is driven by the largest demographic group in the history of America: the now maturing Baby Boom population. Representing nearly one-third of the US population, and spanning in age from 30 to 50, the Baby Boomers–Bill Clinton, Bill Gates, and Fred Krupp of the Environmental Defense Fund among them–now dominate society. The deep-rooted values established in their youth shape their lifestyles and decisions.

Recall that the Baby Boomers were the first health and fitness conscious generation. They were the first recipients of President John F. Kennedy’s Presidential Awards for Physical Fitness. That consciousness now merges with their reignited environmental concerns to create a more holistic "wellness" philosophy that emphasizes overall quality of life.

The eldest Boomers led the activist movements of the late 1960’s and early 1970’s–anti-war, anti-big business, and pro-environment. With Harvard Law School dropout Dennis Hayes in charge, it was the Baby Boomers who created the first Earth Day in 1970. The Endangered Species Act of 1966, the Clean Air Act of 1970 and Clean Water Act of 1972, all sprang from their demonstrated concern.

It is no coincidence that the Baby Boomer-led Clinton Administration has put the environment on its

priority list. Although its environmental record is not perfect, like Al Gore’s book, Earth in the Balance, such efforts as the EPA’s Common Sense Initiative, and the Global Climate Change Action Plan demonstrate a desire to balance environmental cleanup with sound economics.

Citizens are responding

There’s a sense of betrayal in the air. Citizens acknowledge government’s and industry’s greener hands, but still feel that all too often politics and profits get in the way of all-out efforts to purify the environment. However, they are not content to stand aside, individuals know their materialistic consumption contributes to the mess; activist to the core, the Baby Boomer-led citizenry has decided to put their leaders on notice and take things into their own hands.

Nearly half of all U.S. adults now recycle their Coke bottles and morning newspapers. Although not always for altruistic reasons, many Americans pick up after litterbugs, compost yard trimmings or take their used motor oil to recycling centers. In 1995, more than one-quarter of U.S. voters (27%) pulled the lever for candidates based completely or in part on their track records for environmental responsibility, up from 21% in 1994, and a similar number (26%, up from 18% in 1993) say they have done volunteer work for the environment.

Peter D. Hart Associates, the Washington, D.C., polling firm, finds that despite a growing impetus for

a balanced legislative approach, more voters than not believe current laws and regulations do not go

far enough and are prepared to vote for stiff environmental laws if necessary. Such attitudes predominate–particularly among women, voters age 18 to 34, minorities, and urban dwellers–despite the greater concern they have about such issues as the economy, jobs, taxes and the cost of living.

Green product sales soar

America's environmental ethic makes emission-control gasoline, water-saving washing machines and dishwashers, phosphate-free laundry powder, and mercury-free and rechargeable batteries the new gold standards in their respective product categories. As detailed throughout this book, America's love affair with recycling has created markets for recycled building products, packaging, stationary, and even sweaters and sneakers. The solid waste crisis fuels sales of backyard composts, mulches, and

29

yard-waste bags, while a raised energy consciousness spurs the growth of more efficient appliances, lighting, and heating and cooling systems in homes and offices. Health-conscious consumers fuel markets for organic foods, natural cleaning and personal-care products, air- and water-filtration devices, water-based paints (low-fume) and stains, bottled water, and organic fertilizers and integrated pest management systems that do not rely on man-made chemicals at all. Given current developments, consumers in the early years of the 21 st century will be snapping up cars run on electricity or natural gas and home power systems fueled by solar or geothermal energy.

Thanks to new product introductions and more generous allocations of retail space, sales in natural- products outlets of such greener products as environmentally preferable cleaners, "tree-free" paper products, and natural personal care products are skyrocketing Gone are the dimly lit general-type stores with cluttered aisles, bulk bins, and limp organic vegetables. In their place are scores of cheery health-food and specialty stores that carry a dizzying array of natural foods and green general merchandise.

In 1991, In Business magazine, the handbook of eco-entrepreneurs, counted 11 green retailers in the United States. Five years later, at least 400 environmental-product emporiums with such names as Earth General and Ozone Brothers thrive from Boston to Sausalito and dozens of cities in between, and virtual counterparts pop up on the World Wide Web. Gleaming natural foods supermarkets dominated by the Whole Foods and Fresh Fields chains with estimated sales of $500 million and $200 million each in 1995, compete with Alfalfa's, Wild Oats, and other stores and nearly 5000 mostly small independent operators for an estimated $7.5 billion in yearly sales.

Riding high on this current buoyant wave of green shopping, Seventh Generation has branched out from a direct mail catalog serving the needs of the most ardent green shoppers to a mass marketer of nationally distributed green goods dubbed, "Products for a Healthy Planet." Propelled by the wider range of customers that now purchases green products, their sales were $5.1 million, up 62% over 1995. As suggested by surveys of specialty green stores, these include the parents of elementary school children, older customers, and people with environment-related health problems looking for alternative products.

Children are green

No parent or teacher would deny that the environment weighs heavy on the minds of America's naturally idealistic youth. Indeed, the environment is of higher priority to children than to adults. A nationwide research study commissioned by the National Environmental Education Training Foundation in December 1994 found that youngsters placed the environment third in a list of 10 issues behind AIDS and kidnapping, in contrast to adults, for whom the economy, crime, and drugs hold greater sway. Children in particular fret over long-term issues such as damage to the ozone layer and destruction of the rainforest.

Ninety-nine percent of America's children now have access to environmental classes in school, and 31 states require schools to incorporate environmental concepts into virtually every subject in all grade levels. 6 Education breeds concern and action, particularly among preteens who pitch in on neighborhood cleanups and do their best to skew family grocery-shopping budgets - now upward of $30 billion - towards greener goods. Parents change their shopping habits because their children say certain products are better or worse for the environment than others. The opportunities for greener products will grow as ecologically vigilant children and teens replace the less-green elderly in the workplaces, voting booths, and supermarket checkout lines in the years and decades ahead.

Trading partners are green

In the 1980s, the accidental release of toxic chemicals into the Rhine River, the spread of a nuclear cloud from Chernobyl across Eastern Europe, and countless other ecological disasters, rocketed awareness of environmental issues into the headlines and onto the political agendas of nations around the world. Such incidents as French nuclear testing in the South Pacific, growing widespread environmental degradation, and mounting solid waste issues such as those that continue to plague Germany, Switzerland, the Netherlands, and the United Kingdom keep it there in the 1990s.

30

The European Directive on Packaging and Packaging Waste passed in late 1994 has already spawned a flurry of stiff recycling and waste management laws and initiatives with implications around the globe. Germany’s experiment with "extended producer responsibility" laws requiring manufacturers to assume control of their products' eventual recycling or responsible disposal has spread far beyond Europe. The potential for such laws in the U.S. and the economic benefits they provide has made "product take-back" and design for disassembling and recycling a top priority for Xerox, IBM, Hewlett-Packard and other electronics and appliance manufacturers worldwide.

All over the world, manufacturers gear up to become certified with ISO 14001, the first of a series of international voluntary environmental-quality standards that promise to forever change the way business is conducted 7 Eco-labels sponsored by governmental or quasi-governmental agencies decorate products and packages in Germany, Japan, Canada, and 25 other countries.

packages in Germany, Japan, Canada, and 25 other countries. Green marketing opportunities Equipped with a better
packages in Germany, Japan, Canada, and 25 other countries. Green marketing opportunities Equipped with a better
packages in Germany, Japan, Canada, and 25 other countries. Green marketing opportunities Equipped with a better
packages in Germany, Japan, Canada, and 25 other countries. Green marketing opportunities Equipped with a better
packages in Germany, Japan, Canada, and 25 other countries. Green marketing opportunities Equipped with a better
packages in Germany, Japan, Canada, and 25 other countries. Green marketing opportunities Equipped with a better

Green marketing opportunities

Equipped with a better grasp of ecological issues, enlightened businesspeople voluntarily adopt environmentally responsible business practices. A growing number of CEOs now appreciate the link between environmental responsibility and more efficient - and profitable - business practices. And more and more business communicators know how to use green marketing strategies to take advantage of opportunities to boost their corporate environmental images.

More profits. Many companies, and especially those in such highly polluting industries as chemicals, oil, and electrical power generation, now have management systems in place to make sure corporate environmental profiles and products exceed consumers’ expectations. Today, major corporations conduct environmental audits and recycle their waste. Countless others upgrade their facilities with energy-efficient technologies. Such steps reduce operating costs and liability while boosting profits.

Producing eco-efficient products creates less waste, uses fewer raw materials and saves energy, too. Thanks to innovative manufacturing processes suggested by highly motivated and environmentally trained employees, Interface, the world's largest producer of commercial carpeting, projects a savings of more than $35 million by the end of 1997.

The changes required to make and market environmentally sensitive products enhances employee morale and productivity with a payoff in improved customer relations and overall returns on investment. Enhanced corporate imagery ensues, and this can help attract investors and top talent.

Competitive advantage. Many marketers now know that being the first to the shelf with an environmental innovation brings competitive advantage. For instance, Rayovac introduced Renewal brand reusable alkaline batteries and redefined the market for rechargeables. With 50% of the production capacity for phosphate detergents, German-based Henkel pioneered the market for zeolites and claimed market leadership when their consumers shifted to phosphate-free detergents. Philips Lighting, inventors of compact fluorescent lighting technology, stood ready when businesses and electric power utilities came calling for replacements for energy-guzzling incandescents. Wellman, Inc., has expanded its business definition from plastics recycler to pioneers in the market for branded polyester fiber made from used Coke bottles.

Many of these leaders have been showered with any number of eco-accolades now offered by industry, media, government or environmental groups. One example is the Special Edison Award for Environmental Achievement bestowed by the American Marketing Association. It has been won by Fortune 1000 firms including 3M and Procter and Gamble as well as by a raft of up-and-coming firms with a deep-green orientation like Natural Cotton Colours, Patagonia, and Tom’s of Maine.

31

Young, aggressive competitors adept at capturing the imaginations and winning the hearts of highly desirable environmentally and socially conscious customers are introducing some of the most exciting green products. The success of Patagonia outerwear, Stonyfield Farm Yogurt, and Tom’s of Maine toothpaste suggest that consumers now have higher expectations for the products they buy and that quality is an image that no longer stands apart from environmental impact.

Looking to cash in on the potential for future green-oriented sales, well-established mass marketers now shop for green companies with promising green brands; recent acquisitions include Earth’s Best Baby Foods (by Heinz), Murphy’s Oil Soap (Colgate- Palmolive), EarthRite Cleaning Products (Reckitt & Colman). After nearly two decades of compromising on quality –and languishing on once- dusty health food store shelves as a result–today’s crop of green products finally embody all that consumers demand: an opportunity to clean up the mess without having to give up price or quality. With the deepened consumer confidence in green products that results, the market becomes legitimized.

Increased market share. Times are tough for marketers of branded products. Brand loyalty is near all time lows, and the percentage of Americans who feel that some brands are worth paying more for is declining. In this tough, competitive climate, environmental compatibility breaks ties at the shelf. Pragmatic consumers skew purchases to those products and packages that must be recycled or otherwise safely disposed of in their communities. All else being equal, many consumers look to do their bit by happily switching brands, or "buycotting" those companies and products deemed environmentally sound and boycotting the brands of companies with disappointing environmental track records.

Theses growth opportunities have not been lost on such market leaders as Procter & Gamble, McDonald's, and Compaq. They offer the greenest of mainstream products and take pains to project environmentally appropriate corporate images. Pick up a bottle of Tide laundry detergent and learn how it is "phosphate-free," contains "biodegradable cleaning agents," and is packaged in a "recycled- content" bottle. Check out the basic brown paper carry-out bags and speckled (recycled) napkins at McDonald's (they tested "Earth Shell" compostable food wraps), and buy a Compaq PC emblazoned with the Energy Star energy-saving designation.

Many executives would be shocked to discover just how many consumers are aware of - and act upon - their knowledge of corporations’ track records for environmental, and also social, responsibility. In one poll conducted by the Porter Novelli public relations firm, for example, consumers were five times more apt to believe that a company’s record on the environment was an "important" factor in their purchasing decisions than corporate executives believed.

Better products. While much brand switching is conducted in the name of altruism, what attracts many consumers to greener products is quite simply the prospect of higher quality: water-saving showerheads slash energy bills, concentrated laundry detergents are easier to carry and store, and nontoxic garden products are safer for children. Except these enhanced primary benefits–of performance, convenience, price, and safety, for example–that accompany environmental improvements to continue to propel the market for environmentally preferable products in the years and decades ahead. The notion of a "typical green consumer" continues to be elusive. Unlike discreet target groups such as Hispanic women or college-aged men, green consumers are hard to define demographically. Greenness extends throughout the population to varying degrees, and because green concerns are extremely diverse, encompassing a wide range of issues from global climate change and gritty smokestacks, to graffiti or lawnmower noise on Saturday mornings.

However, research into recent buyers of green products and empirical evidence suggests those consumers most receptive to environmentally oriented marketing appeals are educated women, 30-44, with $30,000-plus household incomes. They are motivated by a desire to keep their loved ones free from harm and to make sure their children’s future is secure. Influential in their community, they rally support for local environmental clubs and social causes. Their buying power and their potential to influence their peers makes them a highly desirable marketing target.

32

The fact that women are in the forefront of green purchasing cannot be underestimated. They do most of the shopping and although it sounds sexist, they may naturally exhibit a maternal consideration for the health and welfare of the next generation. Poll after poll shows that women place a higher importance on environmental and social purchasing criteria than men. This may reflect differences in feelings of vulnerability and control between the sexes, leading men to feel relatively less threatened by environmental ills. However, not all green consumers are as "deep green" or as active as the women discussed here – there is a host of more passive green consumers as well.

CASE STUDY 1

STRATEGIES TO ENTER A NEW MARKET

Mr. Michael Quint has recently taken over the family-owned, independent producer of quality wines in German's picturesque Mosel River Valley. With the enthusiastic support of his wife and the continuing support of his parents, he is developing new strategies for the winery to remain successful in the face of increasing competition. These strategies include new products, new packaging, and changing emphasis in marketing. In all of these developments, Mr. Quint's objective is to retain the traditional and individual character of the company while increasing productivity, sales, and profitability. The rapid growth of the wine market in Japan, with its increasing emphasis on imports from countries around the world, may provide an additional opportunity for Quint Winery.

Background The Mosel River Valley has been a producer of high quality wines since Roman times. The river has a series of low-rise dams that provide a road, smooth surface reflecting the summer sunshine on the hale-laden soil of the valley's steep slopes. Both the hale and the water itself absorb heat during the day, releasing it during the night. The result is a micro climate, in the valley alone, ideal for the production of high quality wine grapes. The suitability of the region for growing grapes was recognized by the Romans. They introduced viniculture, and wines have been the specialty of the river valley ever since. The steep valley walls require that in some places winches and cables be used to move platforms from which cultivation and harvesting are carried out. This, together with the unsuitability of the climate above the valley walls for growing grapes, has resulted in a pattern of small, independently owned vineyards. In order to make the small-scale operations economically feasible, each family grows its own grapes, makes the wines, bottles them, and does the marketing themselves. Many small German wineries market their wines directly to consumers. One of the major tools for attracting customers is the holding of "wine tasting parties" ion a traditional cellar bar close to the winery. For a low package price, the participants have the opportunity to sample a variety of the winery's products along with a steak dinner. The owner of the winery additionally provides a tour to the vineyard and the winery itself. The participants in such parties often buy bottles of wine on the spot, sometimes become long-term customers, and may recommended the parties to friends. This type of marketing approach has worked well in the past for small wineries with very limited funds available for promotion. European integration and the move toward a single market have intensified competition. As a consequence, there are limits in the range of prices the wineries can charge for their wines, even if they are of high quality and unique. A number of wineries have experienced greater than desired carryover of stock from one year to the next, indicating that additional marketing efforts are required.

Strategies Quint Winery specializes in higher quality wines with individuality in taste and flavour. The target market is people in the upper middle class, particularly those who appreciate excellent wines and are interested in information about wine, culture, and history. With his own background in the formal study of wine engineering, Michael Quint has a wealth of information that he enjoys sharing with others. The overall strategy is to remain small, and use traditional recipes and processes. However, it is increasing productivity by outsourcing specialized bottling to others that have machinery which Quint cannot economically purchase. In adding to its product lines, the winery is working with others that

33

have core competencies which cannot be economically developed by Quint. These co-operative activities have allowed the winery to enjoy benefits of being both small and large at the same time. Until the 1990s, a regulation issued by an archbishop several centuries earlier had prohibited the production of red wines in the region. Many vintners in the area still produce only white wines. However, when the restriction was removed, Quint winery began to produce some red wines whose production proved to the very successful and increased the range of their offerings. It subsequently

began to produce sparkling wines, based on its white wines, in co-operation with a small subcontractor

in the village. In the 2000s, it began to produce brandy, again with the assistance of friends who had

technical expertise. The company has also been developing and experimenting with new bottle designs that will stress the Quint Winery brand while linking it to the traditions of the house. Quint Winery's major marketing effort is still the holding of traditional wine tasting parties. Michael

has added the family imprint by showing remarkable generosity in serving wines and food, and by providing interesting and informative presentations on the history, culture, and processes of wine making. He firmly believes in avoiding any sort of pressure to buy, letting the quality and individuality

of the wines inspire a desire to purchase. In an unusual addition to typical service, he also offers to

personally deliver the wines to his customers anywhere in Germany.

This approach has been working well. People attending the wine tasting events usually buy a number

of bottles of the wines, and subsequently recommend both the events and the wines to their friends

back home. In spite of the increase in customers generated by these activities, additional markets are desired.

A

Japanese visitor, brought to a wine tasting by German friends, commented on the excellent quality

of

the wines. She believed that they might prove sable in Japan. If properly marketed, this should

allow both increased sales and possibly greater margins. An initial step for Michael Quint would be to

contact the Japan External Trade Organization (JETRO) office in Dusseldorf.

Information on marketing in Japan There is much information available from JETRO on the wine market and wine marketing in Japan. Their Japan Trade Directory 2001-2002 lists 14 companies that import wine into Japan, and their offices stand ready to assist potential exporters with information, contacts, and opportunities for participation in trade shows. Wine consumption in Japan has almost tripled during the last 10 years, and a shift from white to red wines has occurred. A red wine boom, which began in Japan after research associated the drinking of

red wine with a lowered incidence of cardiovascular disease, has continued into the 2000s. Germany is

a major supplier of wine to the Japanese market, coming in second behind France in value of

shipments, and third in volume of shipments behind France and Italy. Imports from other countries, especially from South America and Australia, are gaining increased acceptance. There are a number of channels available for selling wine to the Japanese market: direct sales to department stores and mass merchandisers, direct sales to wholesalers and discounters, sales to large trading companies, sales through joint venture projects, and sales in bulk or in bottles to domestic liquor producers. A number of small trading companies, specializing in or emphasizing wine, have opened. These small trading companies supply stores or restaurants which do not import directly, or that wish to supplement their own imports with small amounts from other producers. Together, these changes have substantially increased opportunities for small exporters abroad. The market in Japan has become increasingly sophisticated. Larger department stores carry a wide variety of wines and may hold special promotions and displays. An increasing number of wine speciality stores have been opened. Several Internet wine shops are now serving the Japanese market, offering a very wide range of wines. According to JETRO, price is a key factor in wine purchase decisions, followed by taste, colour, and brand. However, consumers have little interest in poorer quality wine. JETRO offers several types of assistance to prospective exporters in foreign countries. It can help in arranging participation in government-sponsored trade shows of consumer goods. These allow potential foreign exporters to introduce their products to a wide range of Japanese consumers and companies. JETRO offices abroad provide information on markets and methods of penetration. JETRO Business Support Centers in Japan provide office space at no charge for up to two months to foreign business people seeking to export to or invest in Japan.

34

The possibility of marketing to Japan Sales to a small Japanese trading firm or directly to a Japanese chain store might offer two advantages to Quint Winery. First, it could provide an outlet for current surplus production. Second, away from the intense competition in the domestic market, it might be possible to obtain a higher price for the unique and high quality wines, particularly if there were some way to inform the Japanese public of the history, romance, and culture of the Mosel River Valley vintners. It does not appear that Quint Winery could supply a whole container load of their own wine, nor could a smaller chain purchase a whole container load of one vintner's wine. What should Michael Quint do next? (This case study was written by Prof. Dr. Alfred Joepen, Fachhochschule Aachen, Germany, and Dr. Neil Evans, San Francisco State University, USA)

References httm://www.jetro.go.jp JETRO (2001) Japan Trade Directory 2001-2002, B.-129 JETRO (2002) Pier J: Opportunities in Japan, 'Fine wine club: global offerings for the Japanese dining table', 3-4 (February)

Questions:

1. Does the Japanese market appear to offer enough potential for Quint Winery to export to Japan?

Explain why or why not.

2. How can Quint Winery locate potential Japanese purchasers?

3. Should the winery owner visit Japan, or should he attempt to attract company representatives to

come to his winery? Is your answer influenced by specific aspects of Japanese culture? Explain.

4. Should Quint Winery work by itself in any attempts to enter the Japanese market, or should it

attempt to work with other local wineries in a type of cooperative effort?

5. What kind of market (ing) research should be done with respect to potential Japanese consumers?

6. What other questions should the owner ask? What problems may he expect to encounter?

35

CASE STUDY 2

DAYS OUT

 

HOW FAMILIES SPEND LEISURE TIME Attractions visited in a six-month period

 

Location

Sept.

Ian

Location

Sept.

Ian.

2000

2004

2000

2004

%

%

%

%

Shopping, garden centre Seaside resort Museum Stately home, castle Theme, leisure park National park Sports event

 

41

58

Zoo Large exhibition Country show Wildlife, safari park Art gallery Special interest Activity centre

 

7

15

42

50

7

15

14

24

8

12

14

23

10

11

8

20

n/a

9

16

20

5

9

17

19

4

7

A big tobacco company has decided to branch out into the leisure industry. It has carried out a market-

research survey to find out which kinds of leisure activities are most popular.

It is also studying the results of other surveys like one carried out by the market-research firm Mintel

(shown above). This was based on a sample of 884 adults who were asked about their leisure activities

in the six months up to January 2004. The results were then compared with a previous survey carried

out in 2000.

ACTIVITIES

Questions

1. Would it be a good idea for the tobacco company to go into the leisure industry?

2. Which activity has shown the biggest percentage rise in the period?

Report

Write a report recommending which kind, or kinds, of leisure business the company should go into, stating all your reasons.

Discussion If you were carrying out a market-research survey into leisure activities, what essential questions would you have to ask? Team Work Design a market-research questionnaire which would provide information like that in the table

above.

(adapted from R. Huggett Business Case Studies)

36

CASE STUDY 3

CHANGING THE IMAGE

The comparative image of the potato

The image of the potato as compared with other food was examined. The potato is seen to be reliable, dependable, and part of the British way of life. However, the potato is seen to be a necessity rather than something that is exciting or particularly modern. In addition, despite its healthy image, it is also seen as somewhat fattening. The jacket potato, however, is nearer to the image of rice and pasta. It is seen as young, healthy, fun and even exciting. People were asked about different types of food which are high in carbohydrate. Potatoes were considered to be natural (91 per cent) and traditional (91 per cent). They were also seen to be nutritious (81 per cent) and versatile, or capable of being used in different ways (81 per cent). They were seen to be less fattening than pasta or bread, but not less fattening than rice. There were some differences in the image of potatoes amongst different class groups. In particular ABC1s were significantly more likely than C2D Es to say that potatoes 'are particularly high in fibre', have 'a good balance of vitamins', and that they 'are not particularly fattening'.

Source: Potato Marketing Board, Potatoes (adapted)

ASSOCIATED ADVERTISING PLC

MEMORANDUM

To: Daniel Downton

Date: 2 August

From: Beth Mills

Reference: bm/ka

Subject: Potato Image

Please let me have a report on how we can create a better image for potatoes, particularly among young people.

ACTIVITIES

Questions

1. What are the main rival foods to potatoes?

2. What are the main difference in attitudes to potatoes between different class groups?

3. Which way of serving potatoes has the most modern image? In your view, what are the

main reasons?

Report

Write a report explaining how you would improve the image of potatoes among young people.

Discussion If you were in charge of a £1 million advertising budget for potatoes, how much, if any, would you spend on advertising in the following media:

Television Radio Sunday newspapers Daily newspapers Magazines Cinema screens Street posters

Team Work Design an advertisement for a tabloid newspaper, such as the Sun, to improve the image of potatoes (In your team, you will

37

need someone to write the copy, or the words, for the advertisement; someone to plan the layout and design; someone to draw the illustrations; and a team leader).

(adapted from R. Huggett Business Case Studies)

38

CASE STUDY 4

A GRAND OPENING

John Porter is opening a sports shop and wants to get his business off to a good start. In his business plan, he has budgeted £1,000 for a grand opening. He has jotted down some ideas about publicity for the launch of his business - and their costs.

 

Cost

A. Opening sales offer with 10 per cent off all prices. Estimated sales £4,000

£400

B. Thirty-second spots in off-peak time on local radio. Each spot:

£100

C. Opening ceremony by local mayor, who is also chairman of the local cricket team

Free

D. Display advertisement in local newspaper. Each advertisement:

£200

E. Karate demonstration by a local man, who has represented England, and his students

£100

F. Opening of the shop by a famous footballer

£1,000

G. Door-to-door leaflet drop at £35 per thousand, plus A5 colour leaflets at:

£130 per 1,000 £140 per 2,000 £165 per 5,000 £250 per.10,000

Cost according to quantity

John has decided that if he uses a door-to-door drop of leaflets, he wants blanket coverage of the area, so he will have 10,000 leaflets delivered.

ACTIVITIES

Questions

1.

What would be the total cost of printing and delivering 10,000 leaflets?

2.

Draw up a publicity budget showing how you think John should spend his £1,000 (You can include any number of radio spots or display advertisements, so long as the total budget does not exceed £1,000).

3.

Explain in full why you have chosen to spend the money in that way, and why you did not choose the other methods.

4.

What other kinds of publicity might John have used for the launch of this shop? What would have been their main advantages?

(adapted from R. Huggett Business Case Studies)

39

40

40

READING MATERIALS

A. Database Mining

Marketing once had a personal touch. Customers shopped in small stores where their tastes and preferences were known, and shopkeepers would do what they could to suit them.

But by the time the multiple chains had taken hold in the 1960s and 1970s, shops had relinquished their individual relationships with customers in favour of mass marketing techniques. Cheaper and more sophisticated database technologies are now encouraging marketers to try to get the best of both worlds. At well as benefiting from economies of scale that allow them to offer variety and low prices, they are developing a detailed picture of their customer's needs that allows them to offer a better service. This insight into customer behaviour has been made possible by more sophisticated methods of storing and exploring information. Increasingly, marketing experts can sift, slice and manipulate huge amounts of data in ways that give them new insights into their customers and new marketing options. These insights are exploited in a variety of ways by banks, retailers and manufacturers. For example:

● Supermarket chains analyse cash register data to discover what items customers typically buy at the same time.

This information can then be used to devise better floor and shelf layouts. For example, when Wal-Mart, one of the US pioneers of data warehousing, crunched the sales figures in its stores it found that nappy and beer sales

both rose on Friday evenings. That insight - stemming from the shopping habits of men with young children - encouraged it to place nappies close to the beer.

Organisations can discriminate between valued customers whom they want to retain and those who are likely

to

be less valuable over the long term. Some airlines use records stored on their databases to upgrade frequent

customers to first class in preference to occasional travellers.

● Companies can improve their planning. British Airways, for example, uses a data warehouse to help it make decisions on issues such as what mix of fares should be used on which routes.

● Companies can improve the response rate to direct mail campaigns by being more discriminating about the

households mail is sent to. Currently, direct mail is the single biggest application for data-base marketing, according to 500 UK businesses surveyed in a recent study on "data culture" by the London-based Henley Center. The perceived importance of this application is immense, according to a recent survey of 100 UK companies by the Manchester School of Management. Nearly all the respondents plan to use IT-driven direct marketing within the next five years; over half of them expect it to become their most common promotional method. Findings like this support the Henley Center's assertion that "database marketing is one of the hottest topics in the marketing community". Yet enthusiasm is often tempered by scepticism. A third of the respondents to the

Henley Centre survey agreed that "database marketing is fine in theory but less good in practice". Some companies are put off by the speed at which technology is moving. They have had bad experiences of investing in technology that proved obsolete. Many organisations own outdated database systems left over from the 1980s. Among the wary, there is some scepticism about "data warehouses", one of the latest developments in information management. For others, there is immense enthusiasm for the flexibility and rapid access to data they allow.

A data warehouse is a collection of information from many different sources, such as electronic point of sale,

billing, sales and customer services. This body of data is organised specifically to make it easy to perform on- line queries. The idea is that just as products stored in warehouses can be easily accessed, so can information be extracted from a data warehouse. The popularity of data warehouses is fuelling demand for "parallel processors", computers that put tens or hundreds of processors to work on the same problem. Problems that would take days to analyse can now be done

in minutes.

Dunn Humby Associated, a consultancy that analyses data for companies such as Tesco, says that its £500,000 investment in a massively parallel processor means it is able to analyse very large amounts of data, such as that

from Epos systems, up to 100 times faster than before. Even with very fast analysis, it is important to simplify data by classifying it into segments that describe the behaviour of particular groups of customers, according to Clive Humby, strategy director of Dunn Humby Associates. "At the outset of working with Tesco, there was criticism that there would be too much detail. But once you build segment strategies, it becomes manageable", he says.

A marketer might slice the data into segments using any of a raft of different "data mining" techniques that can

sift, collate and dig into the database. These techniques, some of which have come out of artificial intelligence,

include "neural networks", "genetic algorithms", "rule induction", "decision trees" and "data visualisation". For example, a retailer might divide its customers into 16 different groups or market segments depending on issues such as their potential to spend more money, whether they use the store for their principal or top-up

41

purchases and whether they are more sensitive to price or promotions. It could then adopt different marketing strategies to suit their different needs. Marketing specialists are often torn between admiration for the analytical power that these techniques bring to their desktop and regret that technology is displacing creativity and judgement. A quarter of the respondents to the Manchester survey thought that "an increased reliance on IT for analysis has been at the expense of intuition and judgement". Yet the caution is, perhaps, a measure of the enthusiasm currently surrounding database marketing. The Henley report points to the huge scope for disappointment among those who fail to address potential pitfalls. As the technology becomes cheaper and more flexible, the interest in the potential benefits of database marketing has become "overwhelming", it says.

(adapted from Financial Times)

B. Many Shades of Green

In conventional marketing, demographics are often a key determinant of intent to buy specific products. But in green marketing, what seems to determine willingness to purchase environmentally conscious products - more than demographics or even levels of concern for a specific environmental issue - are consumers' feelings of being able to act on these issues, or empowerment.

After all, consumers may be concerned about a specific issue like fumes emanating from the local power plant or protecting a local wildlife sanctuary and have the time or money to act - but if they do not believe they can make a difference, they will likely not act.

Research has corroborated that the most accurate predictor of individuals willing to pay a premium for renewable energy was not education or income, but membership in - or prior contributions to -environmental groups. Supporters of such utility "green pricing" programs are "surprisingly diverse, including both urban professionals and rural families."

Levels of concern and feelings of empowerment, not surprisingly, vary among the population. A segmentation of consumers isolated by Roper ranges from a 15 % core of educated, upscale individuals who say they are willing to pay a premium or forego certain conveniences to ensure a cleaner environment, to 37 % of the public who are doggedly non-environmentalist, characterized more by indifference than by anti-environmentalist leanings. The in-betweeners are more or less pro-environmental–they label themselves "environmentalists" when pollsters ask, but for various reasons are not fully acting on their concerns

Roper has tracked these segments of consumers since 1990. As of 1996, the five segments, which have exhibited only modest movement overall since first identified, break out as in the following.

True Blues. This 10 % of the population hold strong environmental beliefs and live them. The most ardent of environmentalists, they believe they can personally make a difference in curing environmental ills. Politically and socially active, they dedicate time and energy to environmentally safe practices themselves and they attempt to influence others to do the same. True Blues are six times more apt to contribute money to environmental groups and over four times more likely to shun products made by companies that are not environmentally responsible. Among the most educated of the five groups, these people are likely to be white females living in the Midwest or South. Almost one-third of them hold executive or professional jobs.

Greenbacks. Greenbacks, representing just 5 % of the US population, are so named because of their willingness to pay extra for environmentally preferable products. They make up that small group of consumers who say they will pay up to 22 % more for green. They worry about the environment and support environmentalism, yet feel too busy to change their lifestyles. Although Greenbacks are generally not politically active, they are happy and eager to express their beliefs with their wallets; green purchasing within this group is very high.

Like the True-Blues, they are more likely than the average American to purchase any number of green products such as environmentally preferable cleaning products, and products and packages that are made from recycled material or that can be refilled. Moreover, at 22 %, they are twice as likely as the average American to avoid buying products from companies they perceive as environmentally irresponsible. Greenbacks are likely to be married white males living in the Midwest (35 %) and West (24 %). They are well educated, young (median age 37), and are more likely than any of the other groups to hold white-collar jobs.

Sprouts. One-third of the US population is classified as Sprouts. They are willing to engage in environmental activities from time to time but only when it requires little effort. Thus, recycling, which is curbside in many communities, is their main green activity. They read labels for greenness - although less often than the True- Blues and Greenbacks neighbors. Their greenness ends at the supermarket check-out: even though Sprouts and

42

Greenbacks have similar median incomes, Sprouts generally won’t choose a green product if it is more expensive than others on the shelf. When they do, they are only willing to pay up to 4 % extra. More than half (56 %) are female and at 43, they have the highest median age of any of the five groups. Sprouts are distributed evenly across the country. They are well educated, and just under two-thirds of them are married. They comprise the swing group that can go either way on any environmental issue. With more education, they are often the source for new Greenbacks and True-Blues.

Grousers. Fifteen percent of the U.S. population are Grousers. These people do not believe that individuals play any significant part in protecting the environment. Instead, they feel the responsibility belongs to the government and large corporations. Often confused and uninformed about environmental problems, 45 % of Grousers recycle bottles and cans regularly, but grudgingly; they do so to comply with local laws rather than to contribute to a better environment. They are far more likely than any other group, including the Basic Browns, to use excuses to rationalize their lax environmental behavior. True to their name, Grousers complain that they are too busy, that it is hard to get involved, that green products cost too much and don’t work as well, and, finally, that everything they do will be inconsequential in the whole scheme of things. Their overall attitude is that it is someone else’s problem, so why bother. Demographically, Grousers are similar to the national average, although with a somewhat higher proportion of African-American members.

Basic Browns. Representing 37 % of the population, Basic Browns are not tuned in or turned onto the environment. They are simply not convinced that environmental problems are all that serious. Basic Browns do not make excuses for their inactivity; they just don’t care. The indifference of this group makes them less than half as likely as the average American to recycle and only 1 % boycott products for environmental reasons as opposed to the 11 % national average. Three percent buy recycled goods compared to 18 % nationally. The largest of the five groups, Basic Browns have the lowest median income, the lowest level of education, and live disproportionately in the South. For the Basic Browns, there are just too many other things to worry about.

As noted in, environmental behavior varies significantly across these segments, suggesting that not all categories of products or individual brands are affected equally by consumers’ environmental concerns. A close look at the behavior of the most active segment, the True Blues, demonstrates the relative depth of their commitment. Given their societal influence, this suggests the types of behavior that can be expected from a much bigger group of consumers in the future. More than half of the True Blues return glass bottles, look for green messages on packages, recycle newspapers, and do the laundry with "biodegradable" detergents. As social and style leaders, their forceful presence can be expected to exert increasing pressure particularly on the Greenback Greens and the Sprouts–underscoring the opportunities of marketers who can win over these influential True-Blues.

Three Deep Green Sub-Segments. Not all deep green activists are alike. It is possible to further segment them into three groups mirroring the major types of environmental issues and causes: Planet Passionates, Health Fanatics, and Animal Lovers.

With the goals of protecting wildlife and keeping the environment pristine for recreational purposes, Planet Passionates focus on issues relating to land, air, and water. They recycle bottles and cans, avoid overpackaged products, clean up bays and rivers, and boycott tropical hardwood.

As implied by their name, Health Fanatics focus on the health consequences of environmental problems. They worry about getting cancer from too much exposure to the sun, genetic defects from radiation and toxic waste, and the long term impacts on their children’s health of pesticides on fruit. Health fanatics frequent natural food stores, buy bottled water, and eat organic foods. Animal Lovers, the third major group of deep greens, protect animal rights. They boycott tuna and fur, and their favorite causes include manatees and spotted owls. Animal Lovers check to see if products are "cruelty-free." They are likely to be vegetarians.

43

GLOSSARY

A

access (n) available entry; access to the market account executive (n) an advertising executive who looks after a particular client acquire (v) to buy; to acquire a company acquisition (n) act of buying; acquisition of a company across-the-board (adj) running an ad for five days advertise (v) to announce that something is for sale ad (n informal) short for advertisement advertisement (n) notice or announcement that something is for sale advertiser (n) person or company which advertises advertising (n) business of announcing that something is for sale advertorial (n) an editorial advertisement age group (n) category by which target consumers are classified according to age agent (n) person who represents a company AIDA Attention, Interest, Desire, Action air time (n) time given to advertising on TV or radio appeal (n) (1) being attractive; (2) argument area (n) a region art director (n) person responsible for creative work in an advertising agency artwork (n) drawings, photographs, etc. used for an advertisement, brochure, publicity material, etc assortment (n) combination or range of goods; the wholesaler's assortment is too wide audience (n) people who watch or listen to a TV or radio programme; this ad will not reach its target audience awareness (n) being conscious of something: the advertisement increased customer awareness

B

baby boom (n) high demographic growth baby boomer (n) a person born during a period of baby boom baby shark (n) a small shop practising an aggressive selling strategy banner (n) material on which an advertising message is printed; there were banners stretched between the houses advertising the festival bargain (n) 1. agreement on price; he strikes a hard bargain; 2. something cheaper than usual; that car is a real bargain battle (n) fight; there's a circulation battle between the two newspapers behaviour (n) people's habits and customs; we must analyse consumer behaviour

44

below-the-line (adj.) below-the-line advertising; advertising which is not paid for (BTL) in store (displays,

merchandising, free samples), on pack (coupons, competitions, joint promotions, tarpeted mailongs) benefit (n) the advantage that a product brings to the consumer; the main product benefit was a reduction in time bias (n) prejudice, lack of objectivity; focus interviews are subject to interviewer bias bleed 1. (n) print that runs to the edge of the page; 2 (v) to run print to the edge of the page body copy (n) main part of an advertising text Boston Matrix (n) type of product portfolio analysis invented by the Boston Consulting Group bottleneck (n) a restriction in normal flow; we've got a bottleneck in our supply operations bottom 1 (n) lowest point; rock-bottom price 2 (v) to bottom out; to reach the lowest point brand (n) a product which can be recognised by a name brand awareness (n) consumer knowledge of the existence of a brand brand equity (n) the value of a brand

brand image

branding (n) the process of giving brand names to products brand leader (n) brand with the biggest market share brand loyalty (n) customer desire to continue buying the same brand brand management (n) responsibility for a particular brand brand reputation (n) the reputation of a brand brand stretching (n) the extension of a brand towards either end of the market brand switching (n) showing no loyalty to a particular brand butterfly customer (n) customer who easily switches brands break even (v) to balance costs, not to make a profit or a loss; we only just broke even breakeven point (n) point at which sales balance costs bridge (v) to print an ad across the centre of a double-page spread brief 1. (n) objectives for a campaign given by an advertiser to an agency; 2. (v) to explain to people before an assignment; the sales force were briefed about the campaign broadsheet (n) large sized newspaper (as opposed to tabloid) brochure (n) publicity booklet; they asked for a brochure about our services budget 1 (n) plan of forecast income and expenditure; we drew up a pessimistic budget for the next six months 2 (v) to plan forecast income and expenditure bundling (n) offering a group of products or services together at a special price burst (n) a large number of ads over a short period; we could advertise in a burst of take it more slowly by-product (n) product which results from manufacturing a main product break into a market (v) enter a market

(n) the public’s beliefs and perceptions about a particular product

C

call 1. (v) visit; the salesman plans to make seven calls; 2. (v) to call on someone; to visit; 3. (v) to call someone; to telephone call bird (n) a low-priced product used in retailing to attract people into store cannibalism (n) a process when one product reduces the sales of another produced by the same company canvass (v) to visit people to seek their opinions; we canvassed our customers about the proposed new product

caption (n) short description attached to a photograph or illustration

45

captive (adj) not free; the patients in the waiting room are a captive audience for advertisements capture (v) to take; we captured 20 per cent of the market cartel (n) group of companies that get together to fix price or control the market cash cow (n) low-growth, high-share products, they need less investment to hold their market share; they produce a lot of cash that the company uses to pay bills and to support other products that need investment catalogue (US: catalog) (n) a sales publication which lists products and prices cater for (v) to be equipped to deal with; we can only cater for twenty people ceiling (n) highest level; we are going to have to agree a price ceiling chain (n) series of shops belonging to one company challenger (n) company which enters a market where others are already established channel (n) means by which goods pass from one place to another; the main distribution channel is through supermarkets charge (n) payment for a service; there is no service charge included in the bill - it is at your discretion chart (n) diagram which visually displays information bar chart (n) uses column height to show variation flow chart (n) shows process from first to last step pie chart (n) shows data in a circle cut up into segments checkout (n) place where goods are paid for in a shop cherry picker (n) person who goes from store to store to buy loss leaders, often only loss leaders c.i.f. cost, insurance and freight circular (n) a copied leaflet which is sent do many people circulation (n) number of copies of a newspaper sold classify (b) to put into categories classified ads (n) advertisements which are grouped together under certain headings, e.g. property, personal client (n) person or company that buys a service close (v) to bring to an end; to close a sale cold (adj) not approached before; a cold call colour supplement (n) glossy magazine which accompanies a newspaper commercialise (v) to make something make money; they have a good research reputation but they find it difficult to commercialise their products commission (n) money paid to the seller, a percentage of the sales made; we offered the agent a 10 per cent commission commodity (n) goods sold in very large quantities, such as metals, foodstuffs, etc compete (v) to try to do better than another person/company; it's difficult to compete with low-priced imports competition (n) process of trying to do better; the competition is very fierce competitor (n) person/company which competes competitive (adj) of a product which competes well; it's important to keep a competitive edge competitiveness (process) of being competitive complementary (adj) completing, adding to or extending; toothbrushes and toothpaste are complementary products complimentary (adj) given as a gift; we received two complimentary tickets for Wimbledon concentrated marketing (n) marketing directed to one segment of the market

46

concept (n) business idea; What is the concept which lies behind the product? consign (v) to send goods to a particular buyer consignment (n) a group of goods sent in one load consortium (n) a group of companies which work together consumer durables (n) expensive items which last a number of years, e.g. washing machines consumer goods (n) goods bought by consumers as opposed to industry consumerism (n) process of protecting the rights of consumers contract (n) legal agreement between two or more parties contract manufacturing (n) agreement which allows an overseas manufacturer to make your goods copy (n) text of an advertisement copywriter (n) person who writes copy for advertisements corporate (adj) referring to the whole company; corporate advertising sells the company not its products counter (n) flat surface in a shop used for displaying goods and serving customers over-the-counter drugs retail sales as opposed to prescription sales under-the-counter illegal coupon (n) price of paper used instead of money; as part of the promotion we are offering prepaid coupons coverage (n) proportion of a market which is reached; we achieved very good coverage with the evening TV ads creaming (n) fixing a high price to get high, short-term profits credit (n) time given between receiving goods and paying for them; we should give them only three months' credit creditworthy (adj) able to buy goods on credit customer (n) person/company that buys goods customise (v) to adapt a product for a particular customer cut-price (adj) sold at a lower price than usual cut-throat (adj.) fierce, intense; cut-throat competition cycle (n) a regularly repeated sequence; this is our normal selling cycle - it's always quiet after Christmas

D

dead (ad) no longer active; a dead account deadline (n) date by which something has to be done; we set up a deal with an agent in Houston deal (n) business agreement or arrangement; we set up a deal with an agent in Huston dealer (n) person/company who buys and sells; the manufacturer has dealers throughout the country dealership (n) right to buy and sell certain products deal with (b) 1. to organise; I'll deal with that order. 2. to do business with; we don't deal with middlemen delete (v) to remove from the range; the range is too wide, we'll have to delete some products deliver (v) to transport goods to a customer demand (n) need for goods there's not much demand for these products depot (n) a warehouse; (Amer.) goods’ railway station depth (n) different form in a product line design (n) drawing of a product/advertisement before it goes to production differentiation (n) making sure that a product has distinguishing features

47

direct export (n) selling direct to an overseas customer direct mail (n) selling a product by sending information through the post direct selling (n) selling direct to a customer without going through any middlemen directory (n) reference book containing listings; a telephone directory, a trade directory discount 1 (n) percentage reduction from the full price; 2 (v) to reduce prices quantity discount (n) discount for large quantities trade discount (n) discount to wholesaler or other middleman discretionary (adj) which can be done if you want; discretionary income is what is left after you have made all your essential payments dispenser (n) machine which automatically provides food, drink and other items display 1 (n) showing or exhibiting goods; there was a display of the latest research at the trade fair in Frankfurt 2. (v) to show exhibits display advertisement (n) ad which stands out from other ads because of typeface, border etc. distribute (v) to send out goods from the manufacturer to the end-user diversify (v) to extend into new business areas; although we are a chemical company, we diversified into publishing, to branch out diversification (n) act of diversifying divestment (n) the selling of product lines or companies dog (n) term used in Boston Matrix to describe a product with low market growth and low market share, pietre de moară domestic (adj) refering to the home market door-to-door (adj) going from house to house; a door-to-door salesman dormant (adj) not active at the moment, sleeping; I'm sure we can awaken some dormant accounts down-market (adj/adv) cheap, low end of the market; to go down market duopoly (n) only two competitors in a market dinkie (n) acronym for an affluent married couple able to make extensive purchases of consumer goods; formed from double-income no- kids

E

editing (n) correcting, modifying a text or a film edition (n) an issue of a publication; this month's edition has an article about roses editorial (adj) referring to the editor; sometimes editorial publicity is much more effective than advertising

elastic (adj) can change easily; demand is very elastic - it will not hold up if we increase the price end-user (n) person who actually uses a product or service endorse (v) to say that a product is good; a professor endorsed our new drug endorsement advertising (n) advertising which uses famous people to endorse products entrepreneur (n) person who starts and runs a company business environment (n) area which surrounds a company (both physically and commercially) escalate (v) to increase rapidly; prices have escalated recently excess (n) amount which is more than permitted excess capacity more production capacity than is needed for current demand

48

exhibit 1. (n) thing which is shown at a trade fair or show 2 .(v) to display products at a show exhibition (n) show of goods expand (v) to get bigger, the market is expanding expansion (n) increase in size expertise (n) specialist knowledge

exposure (n) 1. publicity given to a product or a company 2. total number of audience reached by an

advertisement

empty nesters (n) families whose children have deserted the family house

F

face-lift (n) improvement in the look of a product or a company, suggests the change is only on the surface; the company has had a corporate face-lift but nothing radical has changed facing (adj) opposite; we'd like the ad put on the facing page factor (n) an aspect which must be considered; price is an important factor when deciding our strategy fad (n) a fashion, usually short-lived family (n) group of products linked by name or packaging feasibility study (n) investigation of a project to see if it is worth pursuing feature (n) 1. an article in a publication that deals with a certain subject 2. an aspect of a product, e.g. an alarm system on a car field (n) outside the office; the salesmen are in the field firm (n) a business or partnership fix (v) to agree or set something; the price was fixed at $25 flagship (n) the main or most successful product in a range flier (n) a promotional leaflet (flyer) flood 1 (n) large quantity; a flood of orders 2. (v) to fill with a large quantity; the market was flooded with cheap imitation flop (n) failure; the product was a flop focus group (n) a small group of potential consumers who form part of a market survey follower (n) company which follows others into a market forecast 1 (n) an estimate of what will happen in the future 2 (v) to estimate what will happen format (n) layout of a page four Ps Product, Price, Place, Promotion fragment (v) to break into small parts; the market has fragmented since the competition reduced price franchise 1 (n) licence to sell under a brand name 2. (v) to give a licence to someone franchisee (n) person who pays a royalty for a franchise franchiser (n) person who receives the royalty freebie (n informal) a give away, a free promotional product freesheet (n) a newspaper for which there is no cover charge advertising freeze (n) a period when nothing changes; a price freeze freeze out (v) to prevent other companies from entering or staying in a market

49

frequency (n) how often something happens; we plan to spend more on the ads but use them with lower frequency

G

galley (n) first proof before a text is made into pages gap (n) a hole, an unfilled space; there's a gap in the market generic (adj) belonging to a type or class; it's cheaper to buy generic products rather than branded ones gimmick (n) an attractive and clever idea; the agency thought of a publicity gimmick giveway (n) a free PR gift glut (n) over supply of a product; there is a glut of oil going rate (n) the market price for a product goods (n) products, items for sale goodwill (n) reputation of a business, an intangible asset gross (adj) total, with no reductions gross profit (n) sales minus direct costs grow (v) get bigger growth (n) increase in size gutter (n) where two pages meet in the middle of a book or magazine

H

hawk (v) to peddle or offer for sale by calling aloud or going handle (v) to deal with something: we can easily handle more business hard sell (n) aggressive selling hire purchase (n) method of buying something by paying over an extended period hit (v) to reach a target; we hit the target audience hype (n,v) exaggerated statements in advertising. In never believe all the hype hot (adj) to be hot, to be very fashionable

I

imitate (v) to copy; me-too products imitate their competitors impact (n) strong effect; the ad had tremendous impact impulse (n) sudden decision; if we want to reach the impulse buyers we need good point-of-sale promotion incentive (n) something which motivates; we need to offer incentives to people joining the company indent (v) to start a line of type several spaces in from the left-hand margin; an order index (n) a statistical analysis of a collection of figures, especially average prices industrial (adj) referring to manufacturing work; industrial marketing is very different from consumer marketing inelastic (adj) not easily changed; demand is very inelastic so we can increase prices considerably infomercial (n) information commercial informant (n) person who answers questions in a market survey

50

inhouse (adj) within a company; all our advertising is done inhouse insert (n) something which is put inside something else; the brochure included a price insert introduce (v) to bring a product onto the market, to launch a new product introductory offer a special low price to introduce a new product issue (n) edition or number of a publication: Have you seen the latest issue of Newsweek? itinerary (n) places to be visited on a journey; his itinerary took him all over the world

J

jingle (n) a catchy tune used in advertising journal (n) a professional publication junk mail (n) direct mail advertising which is unrequested and usually unwanted

K

key (adj) important, main; this client is a key account knock (v) to criticise; knocking other people's products is never a good way to sell your own knockdown (adj) very low; these knockdown prices are unbeatable knocking copy (n) an advertisement that presents the advantages of a product over its competitors know-how (n) knowledge about how something works

L

label (n) a small piece of card or material attached to product to show name, price etc laggards (n) category of customers in product life cycle who are very slow to buy latent (adj) dormant, hidden, waiting to appear; latent demand lateral (adj) to the side; lateral diversification launch 1 (v) to introduce a new product on the market. 2. (n) introduction of new product; the launch was very successful layout (n) arrangement of text and illustrations on the page lead (v) to be the first or the best; the company leads the world in design leader (n) market leader leaflet (n) small sheet of printed paper used to advertise letterhead (n) name and address of a company printed on correspondence paper licence (US: licence) (n) official permission to do something under licence (adv) manufactured only with permission licensee (n) person who has permission to sell, manufacture etc licensor (n) person who gives the licence life cycle (n) concept of showing the different stages in a product's life: growth is the first stage in the cycle lineage (n) way of measuring cost of classified ads by number of lines literature (n) written information; please find enclosed our literature about the product livery (n) a company's own designed used on vehicles, buildings, uniforms

51

logo (n) design group of letters used by a company as a distinguishing mark loyalty (n) sense of belonging and trusting; customer loyalty loyals (n) loyal customers loyalty discount (n) a price reduction given to loyal customers

M

magalog (n) magazine and catalogue magazine (n) regular news or special interest publication printed on glossy paper with many photographs mailshot (n) sending of one campaign of direct mailing make (n) brand or type of product manage (v) control and be in charge of; to manage a sales office management (n) controlling and running a business or part of business; management by objectives managerial (adj) referring to managers; at a managerial level manufacture (v) to make a product using machines manufacturer (n) company which makes products manufacturing (n) process of producing; manufacturing industry margin (n) difference between sale price and cost price gross margin (n) difference between total cost (including overheads) and sale price market (n) 1. place where a product can be sold. 2 possible sales of a product down-market (adj, adv) cheap end of the market market leader (n) dominant company or product in the market market niche (n) small part of specialised market market penetration (n) amount a product sells in a market market segmentation (n) division of the market into consumer groups market share (n) percentage of a total market which one company or product holds market survey (n) an investigation into a market mass-marketing (n) marketing aimed at a large undifferentiated customer group up-market (adj/adv) luxury end of the market mark up (v) to add an amount to the cost price to reach the sale price mark-up (n) amount added to the cost price to reach the sale price; the retailer's mark-up mature (adj) fully developed; mature stage in a product life cycle media (n) means of communicating a message mass media (n) means of communicating to general public; e.g. TV, radio newspapers media buyer (n) person who places advertisements on TV, radio and in a newspaper media coverage (n) reports about an event in the media; we need good media coverage for the launch of this product media planning (n) decisions about which type and how much merchandising (n) managing the display and promotion of goods in shops middleman (n) person/company who acts as an intermediate step between manufacturer and customer; a wholesaler is an middleman milk (v) to make as much profit as possible; we should milk the product at this stage in its life

52

mission (n) long-term objectives and philosophy of a company; mission statement mix (n) combination of different things; the marketing mix consists of many elements such as price, promotion, product etc monopoly (n) market situation where a company is the only provider of a product or service MRP manufacturer's recommended price

N

net (adj) after deductions have been made; net profit network (n) system which links different parts together; a distribution network niche (n) small segment of specialised market NYLON - New York - London

O

observation method (n) market research method based on watching consumers obsolescent (adj) going out of date because of advances in technology or changes in taste obsolete (adj) no longer used; the product is now obsolete offer (n) statement that you are willing to pay something; we are always open to offers offer (v) to say you are willing to pay/help off-season (adj) in the cheap, less busy season operate (v) to run or work machine/business operating profits (n.pl.) profits which result from day-to-day business opportunity (n) chance to do something; there are opportunities and threats in this market organise (v) to plan and operate something so that it works efficiently organisation chart (n) diagram of position of people in a company orientation (n) direction or main area of interest; market-oriented company outdoor advertising (n) advertising in the open air outlet (n) a place where something can be sold; a retail outlet overheads (US: overhead) (n) non-attributable day-to-day costs of running a business own-label (adj) term used to describe goods specially produced for a retailer

P

package (n) a quantity of goods wrapped and sent by mail packaging (material) used to wrap goods for display or for mailing page (n) one side of a sheet of printed page full-page advertisement (n) advertisement taking up a full page half-page advertisement (n) advertisement taking up half a page pamphlet (n) small booklet of advertising information parcel (n) quantity usually small of goods wrapped and sent by mail

patent (n) official registration of a new invention

53

patented (adj) protected by a patent peak (n) highest point peg (v) to fix prices at a certain level penetrate (v) to get into a market penetration (n) percentage of a target market that is reached periodical (n) serious (often scientific or academic) publication which appears regularly pilot (n) a test which will be extended if successful; a pilot project pipeline (n) channel of flow; Are there any new products in the pipeline? pirate (n) person who illegally copies an invention or a copyright product; a pirate copy of the compact disc pitch (n) salesperson's talk to persuade a prospective buyer ploy (n) strategy point of sale, POS (n) place where a product is sold policy (n) way of doing something; What is the company policy on discounts? poll (n) survey of sample group; an opinion poll portfolio (n) collection; a product portfolio - range of company products position (n) place or way a product is perceived in a market positioning (n) creating an image for a product in a particular sector of a market poster (n) large notice/advertisement pasted on building or billboard PR Public Relations premium (n) 1. amount added to price for a prestige product; 2 amount paid for insurance press (n) newspapers and magazines local press (n) regional newspapers national press (n) nationally distributed newspapers press relations (n) PR activity aimed at building good contacts with journalists, etc price (n) money paid for a product market price (n) price which people are willing to pay pricing policy (n) policy for setting a price retail price (n) price paid by final customer primary data (n) data which must be obtained by active research; raw data upon which no analysis has been performed prime (ad) most important; advertisements are most expensive at prime times print run (n) number of copies printed; the longer the print run the cheaper the unit price product (n) thing which is made/manufactured; both tangibles and intangibles (services) products portfolio (n) collection of products offered by the same company productivity (n) measurement of output per worker profile (n) characteristics; customer or market profile profit (n) money made from the sale of a product or service profit margin (n) percentage difference between costs of sales and income profitability (n) amount of profit made as a percentage of costs profit centre (n) part of a company which is considered separately when calculating profit projected (adj) planned/forecast promote (v) to advertise

54

promotion (n) all means of communicating a message about a product or service promotional (adj) used in a sales or advertising campaign; a promotional price has been set 20 per cent lower propaganda (n) use of the media to convey a biased political message prospectus (n) sales document which tries to convince the customer, usually taking a serious approach, e.g. for private schools prototype (n) first model of a new product public (adj) referring to people in general publics (n) groups of people categorised for PR purposes; the company has many different publics including the local community, the press and their customers publication (n) thing which has been published - a book, magazine etc publicity (n) the process of attracting the attention of the general public to products or services publicise (v) to attract people's attention by informing them; the audience was small because the concert had not been publicised pull strategy (n) a process of persuading end-users to buy so that middlemen must stock your goods purchase 1 (n) something which has been bought; to make a purchase. 2 (v) to buy purchaser (n) person who buys for a company purchasing department (n) part of the company responsible for buying raw materials and other goods push strategy (n) a process of persuading middlemen to stock your good and to help in the selling of the product to the end-user

Q

quality (n) the value/worth of a product/service quality control (n) checking that the quality is high enough qualitative (adj) referring to quality; qualitative research is based on opinions rather than facts quantitative (adj) referring to quantity; quantitative research is based on measurable data quarterly (n) a magazine which is published four times a year question marks (n) products in the top-right quadrant of the Boston Matrix which have a low market share in a rapidly growing market quota (n) a limit on the amount of goods which can be imported/exported quote (v) to estimate the costs; we were asked to quote for the contract quotation (n) estimate of how much something will cost

R

R&D Research and Development random (adj) done without any system; we used a random sample for testing range (n) a series of products from which the customer can choose rapport (n) good understanding between people; there is a good rapport between the marketing and sales managers rate (n) money charged for a certain time or at a certain percentage fixed rate (n) charge which cannot be changed

55

going rate (n) the usual rate of payment rating (n) value given to something compared with its competitors; I'd give them a high rating ratings (n) lists of TV or radio programmes according to the size of audience rationalisation (n) process of streamlining a company's operations to gain greater efficiency and scale economics rationalise (v) to make more efficient, to streamline raw (adj) in this original, unprocessed state raw materials (n) substances used as a base for manufacturing reach 1 (n) the number of people who see an advertisement once 2. (v) to get to an audience readership (n) the quantity of people who read a publication readvertise (v) to advertise again; we had to readvertise the job real (adj) true in real terms actually; prices have gone up 5 per cent in real terms recall (n) ability to remember an advertisement receipt (n) a piece of paper showing that money has been paid or something received; a receipt for items purchased recognise (v) to know somebody or something by sight or voice recognition (n) brand recognition - ability of a consumer to recognise a brand recommended retail price, RRP (n) price at which the manufacturer recommends a product is sold to the end- customer red herring (n) a distractor refund 1 (n) money paid back 2 (v) to pay back money; the money will be refunded if the goods are faulty register (v) to record officially registration (n) process of recording on an official list; product registration rep (n) short for a representative repeat (v) to do something again repeat orders (n) order from a customer for more of the same goods over a period of time repositioning (n) changing the consumer's perception of a product or a service represent (v) to act on behalf of a company representative (n) a salesperson resale (n) selling goods which have been bought once already research (n) finding facts and information; market research resistance (n) a negative feeling towards a product or service; we encountered a lot of resistance in the market respond (v) to reply respondent (n) a person who answers questions in a survey response (n) answer to a question; reaction retail 1. (n) sale of goods to the end customer 2. (v) to sell goods direct to customers retailer(n) person who sells goods direct return (n) the profit gained from an investment; we can expect a good return on this project; return on investment revenue (n) income received from sales risk (n) chance of failure

56

risky (adj) dangerous rival (n) a competitor rocket (v) to raise rapidly ROI return on investment rough (n) a sketch of an advertisement royalty (n) money paid to an inventor/creator/writer by the licensee or publisher

S

sale (n) act of selling salesperson (n) person whose job is to sell the company's good or services sample 1 (n) a specimen of a product used to show what it is like 2. (v) to try out something; we sampled the whiskey before buying it 3. (v) to test a product on a small group of a target audience saturate (v) to fill something completely; the market is saturated (glutted) saturation (n) a stage in a market's development where there is no room for further growth

scale (n) system of grading; the scale of the horizontal axis is from 1 to 20 scale up/down (v) to increase/decrease size scarce (adj) not common, rare screening (n) evaluating, shortlisting seasonal (adj) only happens in certain seasons; ice cream sales are very seasonal secondary data (n) research data which have already been collected and are available on data banks etc sector (n) part of the economy or industry; the high-tech sector is growing fast segment 1. (n) a section of the market 2. (v) to divide a market into different parts segmentation (n) division of the market into segments sell-by date (n) date on a food packet indicating last date that the food is guaranteed to be good service 1 (n) the work of dealing with customers; the service is excellent, we never have to wait 2. (n) maintaining a machine in good working order; the photocopier is due for a service services (n) benefits which do not involve production, e.g. training, transportation settle (v) to agree; we settled on a price of $400 share (n) market share percentage of a market held by a company or a product shelf-life (n) length of time a product can be displayed for sale skimming (n) setting a high price in order to maximise profits in the short term slash (v) to cut sharply slogan (n) a phrase which is used to sell a product; A Mars a day helps you work, rest and play slot (n) time for a TV or radio commercial; we booked five 30-second slots slump (n) rapid decrease; a slump in sales societal (adj) referring to society; societal marketing soft-sell (n) selling by argument and encouragement rather than strong pressure to buy sole (adj) only; sole distributor sourcing (n) obtain goods from suppliers; dual sourcing is more secure than single sourcing space (n) advertising space; space in a publication for advertising speciality (n) particular interest; you will only find certain items in a speciality store

57

spending power (n) having money to spend on goods spin-off (n) a product or service which is developed as a result of a main product; a secondary product sponsor (n) person or company which pays for an event (sports, culture etc) in return for advertising sponsorship (n) act of sponsoring spot (n) a time on TV which is used for advertising spread (n) two facing pages of a publication used for an advertisement stagnation (n) not making progress, remaining constant stand (n) an area for display at an exhibition sticker (n) piece of gummed paper to be stuck onto articles as an advertisement storyboard (n) drawings which illustrate a TV advertisement in its planning stage strategy (n) future action to achieve objectives strategic (adj) referring to a plan of action subcontract (v) to arrange with another company to do some work subcontractor (n) company which does work for main contractor subliminal advertising (n) advertising which conveys a message using subconscious impressions subscribe (v) to pay in advance for a number of issues of a publication or for membership to a society or club subscriber (n) person who subscribes subsidiary (n) a company which is at least 51 per cent owned by a parent company subsidise (v) to support financially; the government has subsidised nationalised industry subsidy (n) money given to support a company/organisation supplement (n) special additional part of a magazine or newspaper star (n) a leading product supply 1 (n) providing products service; supply and demand 2 (v) to provide a service or product supplier (n) person or company that provides products or services surcharge (n) extra charge surplus (n) having more stock than needed survey (n) an investigation of a particular market SWOT analysis (n) analysing a company or project by its strengths, weaknesses, opportunity and threats synergy (n) producing better results by working together rather than separately swatch - Swiss watch

T

tactic (n) step taken as part of carrying out a strategy tailor (v) to design something for a special purpose; tailor-made products target 1 (n) figure or point to aim at; our sales targets are high 2 (v) to aim at; we have targeted the 30-45 age group tariff (n) tax or charge paid to enter a market; the EU tariff barriers teaser (n) advertisement which attracts by giving very little information - it makes the audience curious telesales (n) selling over the telephone tender 1 (n) selling over the telephone tender 1 (n) offer for a certain price; we have submitted a tender for the project 2 (v) to offer a price

58

territory (n) sales or business area testimonial (n) statement praising a product or service; testimonial advertising uses statements from satisfied customers track record (n) experience and results of a company or person over a number of years; his track record speaks for itself trade in (v) to give back an old product in part payment for a new product; I traded in my BMW for a Mercedes trade mark (n) registered name or design which cannot be used by another company trend (n) general development or direction; there is a downward trend in sales

U

undifferentiated (adj) having no unique feature undifferentiated marketing (n) appealing to all sectors of the market unique (adj) having no imitations; unique selling proposition (USP) unstructured interview (n) an interview with no planned structure/questions

up-to-date (adj.) current, modern update (v) to bring up to date up-market (adj/adv) expensive, targeted at luxury end of the market upturn (n) a movement upwards, where has been a market upturn in sales

V

value (n) how much something is worth variable (n) factor which will change results; there are too many variables to take into account variation (n) amount by which something changes; seasonal variations account for much of the drop in sales

variety (n) a range of things; the wholesaler stocks a variety of products vending (n) selling vendor (n) person or company who sells venue (n) place where an event takes place; we have chosen an out-of-town venue for the conference

vertical (adj) straight up and down, vertical marketing systems involve integrated systems from manufacturer to

retailer

viewer (n) person who watches television voice-over (n) spoken comments during a TV commercial given by a person not appearing in the advertisement

voucher (n) paper coupon given instead of money

W

warehouse (n) building where goods are stored weekly (n) publication which appears once a week weighting (n) process of giving more importance to one factor when analysing figures white goods (n) products such as refrigerators and washing machines used in the kitchen

59

wholesale (n/adv) buying goods from a manufacturer and selling on to retailers wholesaler (n) person (company) that buys from manufacturers and sells to retailers word-of-mouth advertising (n) oral advertising wrapper (n) material which wraps a product webzine (n) Internet magazine yuppie (n) an acronym for a successful and ambitious young person; the word is formed from young upwardly- mobile professional

60

APPENDIX

LIST OF USUAL ABBREVIATIONS

AAAA - American Association of Advertising Agencies AA - Advertising Association ACORN – classification of residential neighborhoods ACV - All - commodity volume ADSPEND – the total amount spend on advertising by a company AD/ADVERT - advertisement

AEs - account executives

AIDA - Attention, interest, desire, action AMA - American Marketing Association AMSO - Association of Market Survey Organizations

A&P - advertising and promotion

APT - Analysis power Tool

AOL America on line A&P - advertising and promotion APC - average propensity to consume ASA - Advertising Standards Authority ATL - above-the-line advertising ATM - automatic teller machine

ATR - awareness, trial, reinforcement BCAP - British Code of Advertising Practice BCG - Boston Consulting Group

BDI - Brand development index

BOTB - British Overseas Board of Trade

BDI

- brand development index

B2B

- Business-to-Business

B2C

- Business to Consumer

BTL

- below-the-line advertising

CAT - computer assisted trading

CBO - Chicago Board of Trade

CDI - category development index

CEO - Chief Executive Officer CMIS - Country Marketing Information System

CMR - Creative Marketing Research COLA - cost of living adjustment

CPI

- Continuous Product Improvement

CIO

- Chief info officer

CPI

- consumer price index

61

COMO - Committee of Marketing Organization CPM - cost per thousand COD - cash on delivery

CPSC - Consumer Products Safety Commission DAGMAR - Defining Advertising Goals for Measured Advertising Results DAR - day after recall

DI - disposable income

DIY - Do-it-yourself DMU - decision making unit DPS - double page spread DRTV - direct response television (a method of direct marketing) D2D - Design to Distribution EDMA - European Direct marketing Association EFTPOS - Electronic fund transfer at Point of sale ERP - enterprise resource planning EU - European Union FDA - Food and Drug Administration FDI - foreign direct investment fmcg - fast-moving consumer goods

FP - foreign policy

FRAC - frequency, recency, amount and category 4Ps - product, price, place, promotion GDP - gross domestic product GNP - gross national product GARP - growth at a rational pace GATT - General Agreement on Tariffs and Trade GRPs - gross rating points HDTV - High definition television HR - human resources HTML - hypertext marked up language HTTP -hypertext transfer/terminal protocol HUT - homes using television ISO - International Standard Organization ISP - Internet service provider JIT - just in time Ltd - Limited Liability Company LCA - Life-cycle analysis MBO - Management buy-out MINTELL - Marketing Intelligence MIS -Marketing Information System MMIS - Multinational Marketing Information System MNC - multinational corporation

62

MORI opinion poll

MRP - manufacturer's recommended price

MSN - Microsoft Network

NPD - new product development

PEEST - Politics, Economy, Environment, Society, Technology

PIMS - Profit Impact of Market Strategy

P&G - Procter and Gamble

POS - point of sale

PR - product relations

PPI - producer price index PPP - purchasing power parity

PEEST - politics, economy, environment, society, technology

PLC - Public Limited Liability Company

PLC - product life cycle

PM - Push money (a commission to retail salespeople for personally encouraging consumers to buy a product)

PR - public relations

POP - point-of-purchase

POS - point-of-sale

PRO - public relations officer

Pty - Proprietary Company

QC - quality certificate

QSC&V - quality, service, cleanliness, value

R&D - Research and Development

ROM - Read only memory

ROP - run-of-paper (programmes)

ROS - run-of-station programmes

RPI - retail price index

RPM - retail price maintenance

ROP - run-of-paper

RPI - retail price index

RPM - resale price maintenance

ROS - run-of-station

RRP - recommended retail price

SBA - Small Business Administration

SBU - strategic business unit

SNA - system of national accounts

SOV - share of voice

STAR - situation task action result

STP - segmenting, targeting, positioning

SWOT - strengths, weaknesses, opportunities, threats

ROI - return of investment

TGI - target group index

63

RPM - resale price maintenance TM - training manager TQM - Top Quality Management/Marketing TUC - Trade Union Congress UCSE - unsolicited commercial e-mail UFOCS - Uniform Franchise Offering Circulars USP - Unique selling proposition VALS - Values and life style VMS - Vertical Marketing System WIPO - World Intellectual Property Organization WTC - Works test certificate WWW- Worldwide web