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KENSINGTON COLLEGE OF BUSINESS

MARKETING COMMUNICATIONS

CASE STUDY OF HONEST TEA COMPANY

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TABLE of CONTENTS

ABSTRACT......................................................................................................................1

INTRODUCTION..............................................................................................................2

CHAPTER 1

1. Legal and Voluntary controls of Marketing Communications ...............................3

1.2 Legal and Voluntary Control Analysis..................................................................3

1.3 Comment Part 1...................................................................................................3

CHAPTER 2

2. Opinion formers and Opinion leaders in Marketing Communications..................4

2.1 Opinion formers and opinion leaders......................................................................4

2.2 Comment of Part 2..................................................................................................4

CHAPTER 3

3. The Role of Research in Marketing Communications.............................................5

2.1.1. Pre- testing Method..........................................................................................5

2.1.2. Comment of Part 3............................................................................................5

CHAPTER 4

4. The impact of change on Marketing Communications............................................6

4.1. Traditional Media..................................................................................................6

4.2. New Media.........................................................................................................6

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5. CONCLUSION...............................................................................................................7

6. REFERENCES...............................................................................................................8

ABSTRACT

This assignment covers a research of marketing communications subjects to apply

on Honest Tea Company. This assignment’s goal is to show the effects of marketing
communications to organisation’s behaviour .This assignment are composed of four
parts.

In the first part of the assignment is mentioned about how the legal and voluntary
control have influenced on the marketing communications of the organisations.

In the second part of the assignment is explained about how opinion formers and
opinion leaders is used by the marketers to get the advantage among the
competitors in the market.

In the third part of the assignment is clarified about the role of research and
discussing about pretesting research method’s effectiveness in advertising.

In the fourth part of the case study is mentioned about analysing the impact of
change on marketing communications.

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INTRODUCTION

Marketing communications are advertising and promotion when explaining how

companies present theirself and their brands to their audince.

Advertising is a program or a several activities essential to provide mmessage and

bring it to the target consumers.
Organisations and their marketing communication strategy are affected by
environmental factors. Legal and voluntary control is massively effective on
organisations behaviour.
There have been increasing efforts to defend the public attention by regulating the
content and the contact of advertising. Some examples are the ban on television
tobacco advertising required in many countries. Legal and Voluntary control are
performed by all organizations to provide healthy communications with consumers
and avoid unjust competition within companies.
All marketing communication success depends on the reaching target audiences
effectively.
Most of organisations are using opinion formers and leaders to get well-known,
honest brand image.
In according to Fill, Organisations can interract with several target consumers simply
by variying the message and the type and frequency of channels used. The mass
media do not have direct and strong impact on their target group .Two step flow of
communications refer the messages using particular parts of people to other
member of audiences by media channel .

Market research is an important tool of marketing communications to use

analytically show advertisement success forecasting. Companies apply some market
research testing to increase effectiveness of advertisement before they come out the
market. It helps to improve advertising performance.

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Technology is an effective subject in marketing communication which is directly
influenced it.

Technology affect marketing communications dramatically.Organisations should be

adaptable with new technology to protect their self against competitors. This makes
organisations be aware about changing media environment and take protection its
warnings.

New technology and media have good and bad news that spread quickly in a very
short time. Organisations, their product and services are affected by both good and
bad news. Thoughts of opinion formers and leaders can overspread all around the
world in a second. (Huges,Fill,2007-2008) Because , technology increase media
opportunities.

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CHAPTER 1

LEGAL AND VOLUNTARY CONTROLS OF MARKETING

COMMUNICATIONS

CONTROL

Control over the message is essential to guarantee that the planned message is
transmitted to and received by the objective audience. Additionally, this message
must be capable of being understood in order that the receiver can perform
correctly .Message control is complicated by interference or negative noise that can
corrupt and distort messages. For example an airlines advertising may be
discredited by a major news story about safety checks or even an accident.

Nowadays , advertising has been accused with a number of accusations ;

• Advertising supports materialism ( if product are associated with good life)

• Advertising misuses resources (adding cost to charge more from customer)
• Advertising produces unwanted needs (creating unnecessary products and
services)
• Advertising carries on stereotyping ( doing gender and ethnic stereotyping)
• Advertising creates consumers to use harmful products.
• Advertising supports unethical brands (producing sweat-shops)
• Advertising holds media coverage
• Advertising points vulnerable groups (Children,Young Person )
• Advertising carries subliminal messages

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LEGAL CONTROL

UK legislation makes available laws that basically support the ideology of being
honest and truthful .The laws are supported by self-regulatory codes that include the
same set of basic business principles. The lifetime customer concept is a long term
winning strategy that aims selling the same customer for a long –term. The other
words, it costs five times as much to sell to a new customer as it to does an existing
customer. The truth is you could only cheat a consumer once. The fact that, breaking
laws and legislations limit a business to a short –term vision. Companies should
build long term strategies .There are many laws that affect business, and marketing
communications in particular.UK television advertising alone has at least 150
statutes and regulations that influence it.
There are a number of different forms of regulations which attempt to control
marketing communications.

The 1968 Trade Descriptions Act: Making fake or misleading declarations about the
supplies or services are prohibited.

The 1979 Sale of Goods Act: Goods have to match their descriptions.
The Control of Misleading Advertisement Regulations 1988: This rule makes
available the safety net of the Office of Fair Trading.

The Data Protection Act 1984: Organisations have to register their addresses,
names or data.

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The Trade Marks Act 1994: It is adapted UK trade mark law to fit European
legislation.
Also there are other laws and legislations, both national and international that
influence a business and its marketing communications. For example the EU
telecommunications data Protection Directive makes it illegal for companies to fax
homes or businesses that have opted out.

According to Egan, there are a number of areas of general concern to the legislators
which fall into two areas; those connected to marketing tools and those product
categories where likely l mistreat would be most harmful.

1 Marketing Practices

•Comparative Advertising
• Pricing Claims
• Trademarks and Passing Off
• Product Descriptions
• Promotions
• International Law
• Data Protection
• Marketing to Children

2 Product Categories

• Financial Products and Services

• Food and Drink
• Medicines
• Cigarettes and Alcohol
• Products Associated with Children

Legal codes enforced by government and have to perform all companies in UK.
Legal control influences organisations both national and international.

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Centralised EU legislation influence all european companies in same way.The single
European Currency is a basic example. Many organisations are joinning the new
european environment. EU countries prefer legal control than voluntary control.

VOLUNTARY CONTROL

On 1 November 2004, the Advertising Standards Authority (ASA) implicit task for all
advertising values and consumer criticisms, both broadcast and non-broadcast. It
performs voluntarily because it is a non- statutory and it is not founded by British
Government. However, ASA has several specialised codes which have been
provided for acceptable products and services in marketing communications and
affect legislation strongly.

ASA is a self-regulatory organisation of the advertisement which performs to control

and regulate the content of advertisements; direct marketing and sales promotions in
UK.They make investigation about complaints for ads, sales promotion or direct
marketing. They have to right about an advertisement ,sales promotion or direct
marketing to be banned if they do not match code of conduct.

The codes also include comprehensive guidance on specific marketing

communications contexts, such as; alcoholic drinks, children, tobacco, health and
beauty products
ASA makes available to get into the full-text versions of these codes in its website.
(www.asa.org.uk). First two codes explain general meaning of all principles which
are;

1. Marketing communications in all fields should be legal, decent, honest and

truthful.
2. Marketing communications in all fields should be arranged with a sense of
responsibility to customers and to the public.

There are some key rules of these codes to show operating aim ;

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• Mislead Advertise : Advertisements are not permited to mislead consumers. This
means that advertisers must cary evidence to affairs that they make about their
products or services before the advertisement comes out.
• Offensive Advertise : Advertisements are not allowed to create serious or
widespread offence (ASA 2005).Extraordinary care is taken considering the
portrayal of gender, race, religion, sexuality and disability .

These codes which are to help providing welcomed and trusted marketing
communications aimed at providing clear agreements for consumers. (Fill, 2007).

For example for misleading advertising is that One of Burger King advert was
banned in the UK after two customers complained that the Chicken Tendercrisps
they were given were significantly smaller than the one shown in the advert.(ASA ,
2010)

PART 1 COMMENT

Both Legal and Voluntary control should use in marketing communications.

Both Legal and voluntary control have to perform in all organizations for protecting
consumers against the unfair businesses in against the rapidly changing marketing
environment.
According to Fill, The legal and voluntary control should match each other very well
for acceptable advertising and society concern. (2007)
Legal controls are able to avoid trade war between countries and organizations
which work internationally. For example, The United States and Japan accept trading
terms to avoid trade war. Legal controls are not only affect product and services
they are also affect social issues of customers so affect organization ^s social
responsibilities. For example, Shell apply new emission restrictions rule to using
less oil and more natural gas.
Voluntary control provides to avoid unjust competition .It is also provides protection
of customers unjust business activities such as misleading or unjust advertising and

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packaging. It is also keep safe of interest of the society against violent business
competition.
I think that act of parliament, codes of associations and consumers views, all of them
together can construct a strong and permanent protection environment for marketing
communications.

CHAPTER 2

OPINION FORMERS AND OPINION LEADERS

OPINION LEADERS

Marketers have been taraditionally interested in the role of interpersonal

communication in consumers choice and consumption behaviour.

According to Katz and Lazerfeld (1995), Opinion leaders are individuals who were
disposed to perceive information and then reprocessing it to affect others. (Fill,2007)

According to Hellevik and Bjorklund, Opinion leaders create‘effectiveness on the

opinions of others within a particular field through personal communication’ (1991),
and who are becoming awareness in that field (Weimann, 1994). Because opinion
leaders in one area are not automatically opinion leaders in another (Hellevik and
Bjorklund, 1991).

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Opinion leaders is a vehicle that increase credibility of products and services.

OPINION FORMERS

Opinion formers have personal influence to affect consumers behaviour when the
product or service is offered .Because their status,education,authority is connected
to these products and services which is already given.People need to get information
from ^expert witnesses^ to take a decision. The role of opinion formers is to maintain
positive influence upon in a company. That positive influence affects
customers,supporters and even their friends.Therefore, Companies can be getting to
highly a competitive advantage among their competitors.

According to Zafer Erdogan, there are some advantages and disadvantages of using
celebreties to endorse brands.

The former may incluede increasing attention ,image polishing,new brand launch
support,as part of repoistioning strategies and the underpinning of global campaigns.

On the other hand,The company may overshadow by the former,potential

contoversy and image change or loss of public recognition.

According to Sony PR Manager, the most powerful way of telling someone that
something is a nice product is if someone who is credible says to you it is
(Goodman,1997)

PART 2 COMMENT

The Honest Tea Company should use Opinion leaders and formers;

The first thing is that before making a considered purchase decision, many people
seek advice or are influenced by the opinions of others. Barack Obama is well-
known and honest political leadership who is followed many others.

Mass communication messages from branded manufacturers are sent and received
directly, but are also diffused by opinion formers and opinion leaders. Targets of the

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communication can be very much influenced by both opinion formers and leaders as
they seek advice.
Opinion formers have influence because they are considered to be formal experts.
People seek out their opinions because of their expertise. Barack Obama is known
as an expert in political and social area that people are expecting to seek advice
from him.

Opinion leaders (can also be known as style leaders) are not experts in the formal
sense, but they have influence because other people note and admire the choices
they make.
Most of people note and admire Barack Obama in UK.

Potential consumers also speak to each other. Thus, the influence of an opinion
former or leader extends further if it is passed from one purchaser to another.
The other words, Word o mouth, using the influence of opinion formers and leaders,
wom communications support increasing credibility and free of media and production
costs.

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CHAPTER 3

MARKET RESEARCH

Market research plays important rule for forecasting in marketing communications.

Market research is the organised collection of information on existing or potential

markets,for research and subsuquent action.

In according to Green and Tull "Marketing research is the systematic and objective search
for, and analysis of, information relevant to the identification and solution of any problem in
the field of marketing."

"Marketing research does not make decisions and it does not guarantee success"

PRE-TESTING

Pre- testing presenting an advertisement to a sample of the target consumers

during its improvement to control whether it is communicating the desired message
in the desired way with the desired effect.

Pre testing is testing an advert before it is shown the media .The purpose of this
test is to decide whether or not one advert or different advets they can achieve the
ailms for which they are designed.

Pre test is about stimulated a several different of methods and bring forth
controversy ,to compare with post-test.

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The main advantage of using pretesting method is that provides to show unfinished
advertisements to selected target groups therefore you can refine the commercial to
increase effectiveness.in According to Reid (2000) pretesting could back up
campaign development, predict likely customers response, mainly to improve
advertising performance.

There are two methods which available for pretesting method ; qualitative and
quantitative.

The most commons are concept testing,consumer juries,focus groups ext.

The first purpose of pretesting during the development stage is to guarantee that
final creative advertisement will provide the advertising objectives.

The practical objective of pretesting creative are to maintain oppourtinies to optimise

advertisement before appearance in media and also bring to an end an
advertisement costs too much ,commitment too final.

Changing advertisement is hard because of sunk cost and wasting time.In

according to a pretesting result which put forward by the newspaper marketing
ageny (NMA) pretesting newspaper advertisements are found more than double
advertisement recognition levels.(Fill,2007)

High costs of pretesting and the low numbers of respondents restricted overall
effectiveness of final work that all give pretesting method a little value.(Fill,2007)

COMMENT PART 3

The company should NOT use pretesting for decision-making.

Why advertisement testing systems cannot for all time forecast real-world
achievement? It is impossible to repeat in a research condition how somebody will
react to an advert on a Saturday morning while sitting in their sofa and watching the
TV.

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When people are invited to join in market research, whether it’s an online review, a
center group, or even an in-home study, the conditions will change the peoples'
behavior. People know they’re being watched, and they may even think their job is to
be serious.

Marsha Lindsay, a member of the executive committee of the American Association

of Advertising Agencies, clarified the issue that way: "pre testing and other
research based on clear learning cannot exactly forecast advertisements success
because customers can't say to us 'the truth' about how advertisement affect
them. That learning often lies buried in their subconscious."

According to Robert Zajonc, the more people see the same thing ,the more they like
it however people frequently do not like unfamiliar things., "If brands are to
succeed, they need to be based on differentiated, unknown brand strategies. Sadly,
these are the similar ideas that people do not like .That's why quantitative testing of
alternative positioning dreams will likely methodically kill the more original ideas,
and people will like better the ones that are closest to what they already know.

According to Scott Bedbury, (the advertising director at Nike) "We never pretested
anything we did at Nike, none of the ads.

Wieden & Kennedy said that we had a contract that as long as our hearts beat, we
would never pretest a word of copy. It makes you boring. It makes you banal. It
makes you safe.
Research can tell you a lot of things, but it cannot forecast the future. Because
"Statistical credibility is not the same thing as the truth."

We need research as a scale, not a chart. Marketers do it to realize, not to make a

decision. We would adore nothing more than to find out a way to confirm in advance
of time how an ad is going to be accepted in the market place. But the science just
isn't there yet.

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CHAPTER 4

TRADITIONAL MEDIA

According to Krugman (1965), print media motivated relatively greater participation

than broadcast media, such as radio and television. One of advantages of print
advertisements is that it is possible for customers to check the duration of the
presentation (consumers can read the advertisement as quick as they want to), how
many times they would like to read or study the advertisement.
Print advertisements give the receiver with a reasonable opportunity to detailed
attribute-specific information about the advertised product.

MODERN MEDIA

Internet advertising offers the user parallel information-processing opportunities to

print advertising. However, compared to print advertising, internet advertising gives
additional
flexibility to the receiver in provisions of choosing presentation form, such as
enhanced chances to center on particularly attractive parts and the possibility of
joining elements from other media, such as video and radio.

Internet has taken television as the major advertising segment by market share (IAB,
2009b) in United Kingdom. (Preiffer, Zinbauer, 2010)

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Social networking websites (SNWs) is a progressively more powerful media platform.

90 million dynamic viewers on Facebook and 110 million dynamic viewers on
MySpace .All show to us the successful popularity of social network websites (SNW)
in 2007.

When we match up to traditional media to SNW, SNWs are user-centered and user-
generated. SNWs produce a center for customers by giving permit them to "build a
public or semi-public shape within a surrounded system," set up connections and
maintain communications with others in the system extensively (Boyd and Ellison
2007).

THIRD PERSON EFFECT

According to Davisons (1983), third person effect (TPE) theory explains that
persons have a tendency to anticipate mass media to have a greater reflect on
others than on themselves. In other words, persons may anticipate that the media
will make the smallest amount impact on "me" (the first individual) a reasonable
impact on "you" (the second individual) and the greatest impact on "them" (the third
one far-away relatives or common friends) (Wan,Faber, and Fung 2003). (Zhang J;
Daugherty, T.)

COMMENT OF PART 4

The Honest Tea should use New Media.

Publications are struggling with the profound disruption brought on by the internet
and the rising costs of newsprint and transportation. In according to The Pew
Research Center ,percentage of Americans who read newspapers regularly
,decreased %6 between 2006-2008.New media got four challenges to traditional

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media ; decreasing in readership, decreasing revenue, inability to produce real time
updates rise of social websites.
Basically the internet is really even better than print for reaching huge audiences at
very small cost.
The Modern Media are creation, social, distributed. People want to create not just
consume, people want to share and it is all about the network effect.
Internet include more content than, its information’s quicker and more transparent
than traditional media. Modern Media produces using social websites quickly ’ word
of mouth ’ which is most effective marketing communications tool.
Hones Tea Company should use new media to get competitive advantages in
among the others. Also, company is able to create something and share the
consumers and society as soon as possible.

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CONCLUSION

Customer is searching for value in a different form. Organizations should

connect with customer via authentic way and provide not superficial but
powerful relationships with them to get effective communications. Your
message should be authentic and shows who your company really is.

There are several principles of authenticity; organizations have to strong

relationship with their customer and transparency. Honest Tea is one of the
authentic companies which have environmental, social responsibility and maximum
transparency.

Ethical principles are relevant to social well being as link with marketing communications.
Honest Tea have to perform legal and voluntary control in UK. In addition the company has
social and environmental responsibilites to being honest to consumers and society.

Important of Opinion Leaders and formers that they have influence on brands to get
attention from consumers and society. Honest Tea should use them to provide competitive
advantages in mass market.

The last thing is that organisations should be aware of changing media .Also,They have to
perform new media tools to instruct effective marketing communications .

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