Article Archives

Journal of Marketing Research<\/a><\/em>, 52 (5), 726-735.<\/p>\n\n\n\nYakov Bart, Andrew Stephen, and Miklos Sarvary (2014), \u201c<a href=https://www.ama.org/"https:////doi.org//10.1509//jmr.13.0503/" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Which products are best suited to mobile advertising? A field study of mobile display advertising effects on consumer attitudes and intentions<\/a>,\u201d <a href=https://www.ama.org/"https:////www.ama.org//jmr/">Journal of Marketing Research<\/a><\/em>, 51(3), 270-285.<\/p>\n\n\n\nPeter Danaher, Michael Smith, Kulan Ranasinghe, and Tracey Danahe (2015), \u201c<a href=https://www.ama.org/"https:////doi.org//10.1509//jmr.13.0341/" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Where, When and How Long: Factors that Influence the Redemption of Mobile Phone Coupons<\/a>,\u201d <a href=https://www.ama.org/"https:////www.ama.org//jmr/">Journal of Marketing Research<\/a><\/em>, 52 (5), 710-725.<\/p>\n","post_title":"An Unprecedented Era of Mobile Marketing","post_excerpt":"As customers are engaged with smartphones, marketing is embracing an unprecedented era of ubiquitous mobile targeting opportunities. Branding and advertising managers can leverage mobile technologies to more effectively improve business performance by better understanding the new, connected, nonlinear consumer journey and contextual environment (location, time, weather, competition) of the digital and physical combined consumer experience.","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"an-unprecedented-era-of-mobile-marketing","to_ping":"","pinged":"","post_modified":"2024-01-08 15:16:05","post_modified_gmt":"2024-01-08 21:16:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.ama.org\/?p=27224","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":5226,"post_author":"19","post_date":"2015-12-03 05:29:04","post_date_gmt":"2015-12-03 05:29:04","post_content":"\nThe American Marketing Association is pleased to announce the selection of four extraordinary scholars to be inducted as AMA Fellows. The new Fellows will be honored at Winter AMA 2016 in Las Vegas on February 26, 2016 at a special reception. <\/p>\n\n\n\nRuth Bolton, Arizona State University<\/strong><\/p>\n\n\n\nDr. Bolton is Professor of Marketing at the W.P. Carey School of Business, Arizona State University and served as Executive Director of the Marketing Science Institute from 2009-11. She studies how organizations can improve business performance over time by creating, maintaining and enhancing relationships with customers. Her recent research has focused on high technology, interactive services sold in global business-to-business markets. Dr. Bolton has published articles in the Journal of Consumer Research, Journal of Marketing, Journal of Marketing Research, Journal of Service Research, Management Science, Marketing Science, and other leading journals. She previously served as editor of the Journal of Marketing (2002-2005) and Area Editor of the Journal of Marketing Research (2005-2007), as well as serving on the Editorial Review Boards of other leading marketing journals. She has also served on the Board of Trustees of the Marketing Science Institute and the Board of Directors of the American Marketing Association. She received Ph.D. from Carnegie-Mellon University and previously held academic positions at Vanderbilt University, the University of Oklahoma, Harvard University, University of Maryland, and the University of Alberta. <\/p>\n\n\n\nKatherine (Kay) Lemon, Boston College<\/strong><\/p>\n\n\n\nThe Accenture Professor and Chairperson of Boston College's Marketing Department, Professor Lemon's main areas of research expertise are customer management, customer equity, and the dynamics of customer-firm relationships. Her research appears in leading marketing journals including the Journal of Marketing, Journal of Marketing Research, Marketing Science, Management Science, and the Journal of Service Research. She received the Early Career Contributions to Marketing Strategy Research Award recognizing her contributions to marketing strategy, the Elsevier Research Scholar of the Year Award (2008), and has received several best article awards for her research, including the 2009 Sheth Foundation\/Journal of Marketing Award, given each year to the article that has made long-term contributions to the theory and practice of marketing. She currently serves as Executive Director of the Marketing Science Institute. Professor Lemon received her Ph.D. from the University of California, Berkeley and previously taught at Harvard University and Duke University. <\/p>\n\n\n\nA. Parsu Parasuraman, University of Miami<\/strong> <\/p>\n\n\n\nA. Parasuraman (\u201cParsu\u201d) is James W. McLamore Chair in Marketing, Professor, and Department Chair, Marketing at the University of Miami and an influential figure in the field of services marketing and service quality. He is widely known for his work on SERVQUAL, E-S-QUAL, and the Technology Readiness Index (TRI). He has published over one hundred articles in prestigious academic and management journals, including the Journal of Marketing, Journal of Marketing Research, and Journal of the Academy of Marketing Science. In addition to coauthoring Marketing Research, a college textbook, Dr. Parasuraman has co-authored books for management audiences including Delivering Quality Service: Balancing Customer Perceptions and Expectations, Marketing Services: Competing Through Quality, and Techno-Ready Marketing: How and Why Your Customers Adopt Technology (with Rockbridge president Charles Colby). Professor Parasuraman received his PhD from Indiana University and previously taught at Texas A&M University. <\/p>\n\n\n\nVithala Rao, Cornell University <\/strong><\/p>\n\n\n\nVithala Rao is the Deane Malott Professor of Management and Professor of Marketing and Quantitative Methods, Samuel Curtis Johnson Graduate School of Management, Cornell University. He has published over one hundred and twenty five papers on several topics including conjoint analysis and multidimensional scaling, pricing, bundle design, brand equity, market structure, corporate acquisition and linking branding strategies to financial performance. His current work includes competitive bundling, diffusion of attribute information for new products, and trade promotions. His papers have appeared in the Journal of Marketing Research, Marketing Science, Management Science, Journal of Marketing, and Journal of Consumer Research, among others. He received Johnson's 2000-01 Faculty Research Award and the 2005 Robert D. Buzzell Award for the Best Paper by the Marketing Science Institute. He recently received the 2008 Charles Coolidge Parlin Marketing Research Award presented by the American Marketing Association and the American Marketing Association Foundation recognizing his \u201coutstanding leadership and sustained impact on advancing the evolving profession of marketing research over an extended period of time\u201d. Professor Rao received his PhD from the Wharton School of the University of Pennsylvania and has taught at several other institutions including Duke University and Columbia University. <\/p>\n\n\n\nThe distinction of \u201cAMA Fellow\u201d is given to members in good standing of the AMA who have made significant contributions to the research, theory and practice of marketing, and\/or to the service and activities of the AMA over a prolonged period of time. The AMA Fellow designation is intended to recognize marketing academics\u2019 achievement, but it is also designed to create a space or fellowship, discussion, collaboration and continued contributions to the discipline. Each year a new cohort is nominated from the academic community, selected by a group of distinguished peers and honored at Winter AMA. Last year, in the program's first year, an inaugural cohort of 40 scholars was inducted as AMA Fellows. <\/p>\n\n\n\nNominations for new fellows are accepted on an annual basis. Learn more about the\u00a0<a label=\" (opens in a new tab)\" href=https://www.ama.org/"https:////www.ama.org//about-the-ama-fellows///" target=\"_blank\" rel=\"noreferrer noopener\">AMA Fellows and the nomination process\u200b<\/a>\u00a0today.\u00a0<\/p>\n\n\n\n<\/p>\n","post_title":"2016 AMA Fellow Inductees Announced","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"2016-ama-fellow-inductees-announced","to_ping":"","pinged":"","post_modified":"2024-01-08 15:16:06","post_modified_gmt":"2024-01-08 21:16:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.ama.org\/?p=5226","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":27220,"post_author":"63049","post_date":"2015-10-10 17:59:00","post_date_gmt":"2015-10-10 17:59:00","post_content":"\nThe management of quality is a critical component of business strategy. It is a key force leading to the creation of delighted customers, firm profitability, and the economic growth of nations. Unfortunately, quality is also a complex and multi-faceted concept that is often viewed differently by engineers and marketers. As a result of these disparate views, quality has been an elusive goal and business researchers have largely given up on a general definition and framework for quality. Consistent with this, notorious outside observers have exclaimed \u201c\u2026even though Quality cannot be defined, you know what Quality is!\u201d (Pirsig 1974, p. 260-1).<\/p>\n\n\n\nOur paper tackles these challenges (Golder, Mitra, and Moorman 2012). We build on prior work by merging marketing and engineering perspectives on quality to offer a comprehensive view of quality that bridges these disciplinary perspectives and generates a number of insights for managers. Our view of quality captures how firms and customers produce quality, how firms deliver and customers experience quality, and how customers evaluate quality, all for both products and services. We now highlight the key takeaways from our comprehensive quality framework.<\/p>\n\n\n\n<h2>Quality is a Comparative State, not an Absolute State<\/strong><\/h2>\n\n\n\nQuality is always a comparative state\u2014it does not exist on its own. There must be a comparison or reference standard by which performance is judged (Crosby 1979; Deming 1986; Juran 1981). For example, if an airplane cabin temperature is designed to be 72 degrees, the heating and cooling system\u2019s ability to maintain that temperature is one measure of quality. A second measure of quality is to compare the actual temperature with each customer\u2019s ideal temperature preference. The customer who prefers 72 degrees will experience higher quality than customers who prefer either a lower or higher temperature. Finally, a third measure of quality incorporates customers\u2019 ability to perceive the actual temperature delivered by the firm. This ability can be affected by individual and environmental factors, such as a customer\u2019s health, emotional state, clothing choice, surrounding passengers, and the behavior of service providers or the servicescape (Bitner 1992). Thus, the evaluation of the perceived temperature relative to the customer\u2019s temperature ideal may be enhanced or reduced by factors that are independent of the temperature actually being delivered by the firm.<\/p>\n\n\n\nBuilding on this insight, our framework proposes a novel view of quality as a set of three distinct states of quality that compare an offering\u2019s attributes\u2019 performance relative to comparison standards, which are used or preferred by the firm or its customers. This approach expands the gaps model, which examines a narrower set of differences (Parasuraman, Zeithaml, and Berry 1985).<\/p>\n\n\n\n<h2>First State of Quality: An Engineer\u2019s Perspective<\/h2>\n\n\n\nThe first state of quality is most under the firm\u2019s control. An engineer would describe this state as how well a product performs relative to its design specification. We call this state produced quality. This is the example of actual temperature on an airplane relative to the engineer\u2019s intended temperature. Other examples of produced attribute quality include the gap in a door frame or the response time from ordering food to its delivery at the customer\u2019s table. A product\u2019s overall produced quality aggregates produced attribute quality across all of a product\u2019s attributes. One problem with a firm emphasizing produced quality is that customers may not care about the same attributes that engineers care about.<\/p>\n\n\n\n<h2>Second State of Quality: A Marketer\u2019s Perspective<\/h2>\n\n\n\nThe second state of quality is most outside the control of firms; it resides entirely with customers and marketers must bring this customer perspective into the firm. A marketer might describe this second state of quality as the gap between what the customer perceives and what the customer wants. We call this state evaluated quality. Previous authors have used the term perceived quality to describe this same concept. We prefer the term evaluated quality because customers actually perceive attribute performance, not quality per se. When perceived performance is assessed relative to the customer\u2019s ideal performance, the resulting judgment is the customer\u2019s evaluation of quality. Since each state of quality is a comparative assessment, quality cannot be directly perceived. In the airplane temperature example, this quality state enables us to understand how a temperature of 72 degrees relates to customers\u2019 evaluations of an airline\u2019s quality. Indeed, customers may have very different preferences about an ideal temperature\u2014some might prefer 68 degrees while others prefer 78 degrees.<\/p>\n\n\n\n<h2>Third State of Quality: Bridging Engineering and Marketing Perspectives<\/h2>\n\n\n\nThe third state of quality resides at the transaction point in the marketplace where firms and customers interact. A manager bridging engineering and marketing perspectives could describe this third state of quality as the gap between what a firm delivers and what customers want. We call this state experienced quality. While an experience provides the opportunity for customers to perceive an attribute, they will not necessarily perceive each attribute accurately nor even perceive it at all. Customer characteristics influencing this perception process include emotions, expertise, motivation to use that expertise, and overall range in customer preferences. Product characteristics influencing this perception process include whether an attribute\u2019s performance can be measured objectively using instruments or only by customers\u2019 five senses, the latter of which make the experience harder to calibrate and explain to customers. In the airline temperature example, customers may perceive temperature differently due to their overall health or emotions that day. However, because temperature can be measured objectively, it will be easier for airlines to communicate and convince customers of the actual temperature being delivered.<\/p>\n\n\n\n<h2>Implications for Managers<\/h2>\n\n\n\nThe primary implication of our comprehensive framework is that managers should seek to measure and understand each of the three distinct states of quality. By understanding each state, along with its causes and consequences, actionable implications will result. For example, measuring produced temperature quality, experienced temperature quality, and evaluated temperature quality will help managers determine whether they should increase or decrease temperature specifications, whether they should educate customers so that delivered temperature is perceived accurately, or whether they should attempt to influence customer\u2019s ideal temperature.<\/p>\n\n\n\nAdditional implications of our framework touch on the roles of customer emotion and customer co-production. Customers bring their emotions to a consumption experience or emotions result from that experience. Emotion can be evoked by any attribute. Long waits can be frustrating, and attentive care can be heartwarming. While emotion may not be part of the engineer\u2019s view of quality, it has numerous implications for how firms deliver product attributes, how customers perceive attribute performance, and how customers form quality evaluations. Indeed entertainment companies like Disney understand the importance of emotion, but customer emotion plays a role in the consumption of all offerings, and can heavily influence product perceptions and quality evaluations.<\/p>\n\n\n\nWhen customers join a firm in co-producing a product (e.g., bagging groceries or providing goals to a financial planner), several benefits may ensue. For example, delivered attributes are more likely to approximate what customers want. Also, co-production enables firms to monitor customers\u2019 emotions, which allows managers to adjust produced attributes in real time. This may involve changing the level of an existing attribute (e.g., faster service) or adding new attributes (e.g., free wine with dinner) to accommodate a customer. In our example, providing customers the ability to fine-tune temperature may improve evaluated airline quality.<\/p>\n\n\n\nA final implication of our framework is to provide a better basis for understanding how quality and customer satisfaction are related, yet distinct, constructs. Similar to quality, customer satisfaction is also a comparative assessment. Here, evaluated quality (the second quality state) is compared with the quality that a customer expects. For example, a high quality hotel (room amenities and service closer to customers\u2019 ideal preferences) will lead to much higher customer satisfaction when experienced at a Motel 6 versus a Four Seasons. In our example, the same temperature may produce different effects on customer satisfaction when provided by a low-cost local carrier versus a national airline. Our overall framework can help managers understand why improving product or service attributes often has little or no effect on customer satisfaction. In contrast, our comprehensive quality framework yields 17 concrete strategies to improve customer satisfaction by managing evaluated quality. These strategies reflect the fact that, in some cases, companies are better off investing in managing their customers\u2019 expectations or influencing their emotions. Customers may not always evaluate quality accurately, but firms can influence customers\u2019 judgments of evaluated quality. In fact, of these 17 strategies, only four involve actual changes in product attributes. For example, our framework suggests two mechanisms that explain why Southwest Airlines\u2019 use of humor can increase customer satisfaction. Specifically, activating a positive emotional filter may lead customers to overweight favorable attributes and ignore unfavorable attributes in forming quality evaluations. Also, positive emotions may result in a higher level of social interaction co-produced by passengers and flight attendants. Overall, our comprehensive quality framework can bridge the perspectives of engineers and marketers, help firms improve their customers\u2019 quality evaluations and satisfaction, and generate repeat business for the firm. A win-win-win outcome for sure!<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\nRead the full Journal of Marketing article:<\/strong> Peter N. Golder, Debanjan Mitra, Christine Moorman (2012), \u201c<a href=https://www.ama.org/"https:////doi.org//10.1509//jm.09.0416/">What Is Quality? An Integrative Framework of Processes and States<\/a>,\u201d <a href=https://www.ama.org/"https:////www.ama.org//journal-of-marketing///">Journal of Marketing<\/em><\/a>, 76 (July), 1-23.<\/p>\n","post_title":"Defining and Managing Quality: A Guide for Business Leaders","post_excerpt":"The management of quality is a critical component of business strategy. It is a key force leading to the creation of delighted customers, firm profitability, and the economic growth of nations. Unfortunately, quality is also a complex and multi-faceted concept that is often viewed differently by engineers and marketers.","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"a-comprehensive-view-of-quality-and-its-implications-for-managers","to_ping":"","pinged":"","post_modified":"2024-07-10 10:06:07","post_modified_gmt":"2024-07-10 15:06:07","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.ama.org\/?p=27220","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":5207,"post_author":"19","post_date":"2015-02-14 04:41:48","post_date_gmt":"2015-02-14 04:41:48","post_content":"\nAdvertising is evolving rapidly in the new digital frontier. The AMA's regular coverage of major events, like the NFL's Super Bowl, offer some fun and timely way to incorporate advertising projects in the classroom. Here is a quick list of seven standby assignments and projects that many instructors have successfully executed. <\/p>\n\n\n\n<h2>1. Super Bowl or Large Television Event Assignment<\/h2>\n\n\n\nHave students analyze the advertising shown on the Superbowl or something equivalent like the World Cup or the final episode of a popular TV program. You can add analysis of historical trends.<\/p>\n\n\n\n<h2>2. Develop a Communications or Advertising Plan <\/h2>\n\n\n\nAn Advertising Plan assignment can be done as an individual or a group assignment. Students can choose the \"client\" or you can. You can restrict it by the size of the firm, or otherwise specify the nature of the plan.<\/p>\n\n\n\nTypical parts of the plan would be (but customize it according to your textbook)<\/em>:<\/p>\n\n\n\n<ul><li>Executive summary<\/li><li>Analysis of competition and previous advertising by this client<\/li><li>Description of the target audience<\/li><li>Concise statement of the objectives<\/li><li>Description of the advertisement creative strategy and execution<\/li><li>Complete description of the media plan<\/li><li>Estimated advertising budget<\/li><li>Description of research methods which can be used to assess the campaign's effectiveness.<\/li><li>Listing of the external sources used to learn about the client, its industry, and its advertising<\/li><\/ul>\n\n\n\nSome variations<\/em>:<\/p>\n\n\n\n<ul><li>Assume an organization seeks to build a relationship with a particular group or subculture market. The assignment would begin with a market profile including preferences, habits, and responses of the subculture markets. The assignment can also include a requirement for demographic and geographic information on the subculture, group identity factors such as beliefs, habits, attitudes, values, behaviors; as well as media habits.<\/li><li>Develop a program for a target market of children or the elderly. <\/li><li>Redesign a pre-existing advertisement. Change the copy, change the layout or format. Can the student improve it?<\/li><\/ul>\n\n\n\n<h2>3. Analyze an Advertisement or Communications Approach<\/h2>\n\n\n\nStudents look at a pre-existing campaign or ad. Students could write about any or all of the following:<\/p>\n\n\n\n<ul><li>The objectives<\/li><li>The audience<\/li><li>Effectiveness<\/li><li>Role in marketing mix<\/li><li>Image, product differentiation and branding<\/li><li>Other promotion mix factors<\/li><li>The unique selling proposition.<\/li><li>The basis for the appeal. <\/li><li>How would you make the improvements?<\/li><li>The creative philosophy<\/li><li>The slogan<\/li><li>Secondary or supporting copy points or claims<\/li><li>The tone or mood and manner<\/li><li>Type of presenter<\/li><li>The motivational appeal<\/li><li>Executional style<\/li><\/ul>\n\n\n\nVariation<\/em>: You pick or the students pick. Require various media or specify in other ways the ad to be chosen.<\/p>\n\n\n\nVariation<\/em>: Pick a successful\/unsuccessful recent campaign. What went right\/wrong? Have others done better\/worse?<\/p>\n\n\n\nVariation<\/em>: Focus on social or ethical aspects. What role does the ad play in the economy? Does it promote something that is socially desirable? Is the ad misleading? Is it targeted to a group that could be considered vulnerable?<\/p>\n\n\n\n<h2>4. Compare and Contrast Advertising Approaches<\/h2>\n\n\n\nPick two competitors or two firms in the same category with different target segments and have students compare communications approaches. <\/p>\n\n\n\nSome possibilities:<\/p>\n\n\n\n<ul><li>Pick a online versus brick & mortar retailer.<\/li><li>Pick a small company versus a large company.<\/li><li>Pick the same firm and compare its communications approaches in the local and a foreign version of the same magazine. Cosmetics and Cosmopolitan magazine would be one example. <\/li><li>Compare ads or commercials for some of the following types: manufacturer and retailer; goods firm and services firm; b2c and b2b; organizational ad, not-for-profit ad, commercial ad. <\/li><li>Compare ads for products at different stages of the product life cycle. Discussion questions could concern objectives, expenditures, target audiences, and effectivness.<\/li><li>Compare magazine ads from different decades. Discussion could center on gender roles, themes, creative execution, and language. Some magazines you might wish to use include:<\/li><\/ul>\n\n\n\n<ol><li>News publications<\/li><li>General Interest publications<\/li><li>Female-focused publications<\/li><li>Male-focused publications<\/li><\/ol>\n\n\n\n<h2>5. Analyze an Ad Agency<\/h2>\n\n\n\nAnalyze the output or style of a particular ad agency. Describe the agency and their portfolio and discuss commonalities.<\/p>\n\n\n\n<h2>6. Leverage Local Resources<\/h2>\n\n\n\nIf there is a nearby convention or trade show have students go and compare strategies for a set of exhibitors.<\/p>\n\n\n\nInterview a marketing communications professional (ad agency worker or person at a company responsible for advertising strategy, creatives, media planners, etc.)<\/p>\n\n\n\n<h2>7. Leverage the Internet<\/h2>\n\n\n\nVisit research services websites (Example: Simmons-Scarborough Research Services)<\/p>\n\n\n\n<ul><li>Describe the type of research services each provides, with a focus on advertising research. How might an advertiser or ad agency use these sites? What useful information for an advertiser or agency did you find on these sites?<\/li><li>Regarding an ad campaign for a specific product or organization, describe which of these services you would use and how, and describe other primary and secondary sources of information you would also use and the type of information they could yield for you.\u200b<\/li><\/ul>\n","post_title":"Teach Marketing Creatively: 7 Classroom Projects [Easy & Effective]","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"7-easy-advertising-and-communications-focused-classroom-projects","to_ping":"","pinged":"","post_modified":"2024-07-10 10:14:40","post_modified_gmt":"2024-07-10 15:14:40","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.ama.org\/?p=5207","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":1762,"post_author":"17","post_date":"2016-01-01 16:39:02","post_date_gmt":"2016-01-01 16:39:02","post_content":"\n<h4>Goal<\/strong><\/h4>\n\n\n\nGetting your first car was once an important, liberating milestone for teens, but now, just 54% bother to get their driver\u2019s licenses by age 18, according to the AAA Foundation for Traffic Safety. Today, members of the millennial and Gen Z generations express themselves through social media feeds and smartphones, not by the make and model of their rides. As a result, they\u2019re less inclined to buy, let alone work on, cars. Motor oil brand Pennzoil, headquartered in Elk Grove Village, Ill., and owned by Shell Oil Co., recognized a need to boost relevance among a demographic that\u2019s more into iTunes than tune-ups. \u201cWe\u2019re an oil brand, and it\u2019s a fairly low involvement category from a broad consumer perspective,\u201d says Doug Kooyman, global brand director at Pennzoil. \u201cWe\u2019re striving to change brand perception and drive brand preference in a very unique category.\u201d <\/p>\n\n\n\n<h4>Action<\/strong><\/h4>\n\n\n\nPennzoil, along with its New York-based agency of record MediaCom, partnered with Los Angeles-based music media and events company Live Nation Inc. to create a campaign called Backseat Pass, with the tagline \u201cMotor oil reimagined.\u201d The campaign, which included video, Web and experiential marketing elements, tapped recording artists like OK Go, Teagan and Sarah, Godsmack and Delta Spirit to create unique versions of their own hit songs and were filmed performing and recording in the back of a Pennzoil-branded Durango that drove around Los Angeles over the past year. The performances were filmed and lived on a Pennzoil-branded microsite, PennzoilBackseatPass.com, which also promoted a campaign sweepstakes in which one fan won a flight and VIP tickets to a Live Nation festival of their choice. <\/p>\n\n\n\n\u201cPennzoil is like most brands: looking at younger consumers, wanting to expand their audience and find new drivers,\u201d says Jeremy Levine, senior vice president of digital sales at Live Nation. \u201c[The campaign] is less about the old school gear head and more about Joe Smith, who drives to work every day and wants to be as efficient as possible.\u201d <\/p>\n\n\n\nLevine says they also wanted to make sure they hit the broadest base of \u201cyounger\u201d consumers as possible, so the team was very thoughtful about the types of musicians featured. \u201cWe wanted to have a wide enough appeal that you could be 17 or 40 and think it was interesting content.\u201d <\/p>\n\n\n\nThe campaign ran from October 2014 through October 2015, and coincided with the release of Pennzoil\u2019s Platinum with PurePlus Technology motor oil. The campaign\u2019s microsite featured videos of the performances, a photo gallery, and product information on the Platinum motor oil. Backseat Pass was created through Live Nation\u2019s content marketing arm, and was promoted through a mostly digital ad placement strategy, including social media mentions and ad buys, banner ads on Live Nation\u2019s website, and e-mail promotions. <\/p>\n\n\n\nPennzoil has been building a music-based marketing strategy for years, featuring country music star Tim McGraw as a brand ambassador. Kooyman says that while Pennzoil does do marketing in the motorsports space, as most of its competitors do, he sees music-based marketing as an opportunity to reach young, new consumers. \u201cWe wanted to play in a space that was an open territory. Data shows that our consumers are listening to a lot of music and going to concerts, so why not capitalize on that in a relevant way for the brand?\u201d<\/p>\n\n\n\n<h4>R<\/strong>esults<\/strong> <\/h4>\n\n\n\nBetween July and September 2015, the campaign garnered more than 90 million total impressions across all social media, more than 180,000 microsite impressions, more than a million views of the videos to date, and nearly 80,000 sweepstakes entries. The videos averaged a 27% action rate, meaning viewers clicked through to the campaign microsite or to a Live Nation site after viewing, which exceeded his team\u2019s 20% benchmark goal, according to Kooyman. <\/p>\n\n\n\n\u201cFrom a brand perception standpoint, aligning Pennzoil in this way and seeing how it resonated from a consumer and a retailer perspective, this was something that was building awareness for the Pennzoil brand name in the motor oil space,\u201d Levine says. \u201cWe\u2019re working with Pennzoil to see where we can take music marketing from here.\u201d <\/p>\n\n\n\nThe campaign is a success thanks to the obvious connection between cars and music, says Dominic Sandifer, president of ad agency and content production firm GreenLight Media & Marketing, where he\u2019s worked on experiential and video projects for clients including Under Armour and Verizon. \u201cI would look at Pennzoil in the automotive category, in general, rather than just motor oil because people who are car enthusiasts exist in every genre, and that goes for entertainers like musicians,\u201d Sandifer says. \u201cPennzoil is pivoting off of the relationship they have with Tim McGraw and trying to get a different audience to think about their brand and products. It\u2019s an easy jump. It\u2019s smart that Pennzoil is sticking with the music-focused marketing and has identified the fact that there\u2019s an audience that loves music and is interested in cars. They\u2019ve found a unique way to use music as a vehicle to help reach that audience with their message.\u201d <\/p>\n\n\n\nFor more on music in marketing, check out \u201cMusic: The Unsung Hero of Advertising\u201d from the October 2015 issue of Marketing News at <\/em>AMA.org\/MarketingNews\u200b<\/em>. <\/em> <\/p>\n","post_title":"Experiential Music Campaign Attracts Millennials","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"experiential-music-campaign-attracts-millennials","to_ping":"","pinged":"","post_modified":"2024-01-22 14:56:38","post_modified_gmt":"2024-01-22 20:56:38","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.ama.org\/?post_type=ama_marketing_news&p=1762","menu_order":0,"post_type":"ama_marketing_news","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":1760,"post_author":"51","post_date":"2016-01-01 16:23:12","post_date_gmt":"2016-01-01 16:23:12","post_content":"\nMacro changes in the international marketing environment affect marketing content, application, context and acceptance. Such changes can be traced from major geopolitical shifts in history, such as the dissolution of the Roman or Ottoman Empires, the Soviet Union, or the re-fusion of North and South Vietnam. You can track the medium and long-term futures of the two Chinas, North and South Korea, Cuba and Iran to prepare for upcoming market and marketing-oriented changes.<\/p>\n\n\n\nThe reunification of West and East Germany resulted in major political shifts in the German marketing world. The unique ability and willingness of Western Germany to invest grand sums in the market-based approach strongly encouraged the emergence of certain marketing perspectives. Twenty-five years later, an entire generation has been exposed to new market interactions, orientations and rules. There are now population groups with key differences in perspectives regarding migration policy, employment planning and education options.<\/p>\n\n\n\nThere is a link with the newly emergent \u201ccurative marketing\u201d approach, which advocates the fulfillment of the field\u2019s mission as a social science: to improve life and society by restoring economic and spiritual health for all. Here, we offer thoughts on the marketing environment, both as an influence on consumer behavior as well as context influenced by consumers, advertising and purchasing decisions.<\/p>\n\n\n\n<h4>Environment and Consumer Behavior<\/strong><\/h4>\n\n\n\nWhen the Berlin Wall suddenly collapsed in 1989, East German marketers were few, and their products faced a Herculean task to compete. Companies and products that had been protected by 60 years of state planning now faced global competition, particularly by West Germany. The companies that did not go bankrupt were often taken over by western companies. However, these new owners feared intra-company competition, and often terminated their East German products, even if they were better than their own. One example is the disappearance of the ecologically friendly Foron refrigerator from East Germany. <\/p>\n\n\n\nOften, East German products failed to be introduced in the purchasing plans of western supermarkets and retailers. Market shares of all East German products dropped after reunification, since people switched to West German products for their novelty and better quality. Today, the East German identity is again tied much more to products, with strong emotional connections leading erstwhile East Germans to consume products from their home region. The \u201cgood old things\u201d from the past are now considered fashionable or hip. Many producers are using this wave of eastern reminiscences to relaunch and expand their brands.<\/p>\n\n\n\n<h4>Typical Consumer Behavior Influences<\/strong><\/h4>\n\n\n\nGerman population statistics tell us that within 25 years, the five former East German states (excluding Berlin as a city-state) experienced a population decline of 4 million, with many young, female and educated citizens heading west. In 1991, every 10th citizen in the region was over 65 years old; it is now every fourth. Eastern unemployment figures improved from 18% to 12%\u2014still considerably higher than the 6% of the western provinces.<\/p>\n\n\n\nWhen marketing entered the Eastern German economy, some regions never recovered from the breakdown of the socialist system. With the exception of a few municipalities in Dresden, Leipzig and Berlin, most consumers in Eastern Germany still live with a unification treaty agreed upon average available income below $19,000, which compares to only 80% of the Western German average of $25,000. <\/p>\n\n\n\nThe relatively high unemployment rate and an aging population influence the consumption patterns in former East Germany by, for example, leading to the popularity of discounts. East Germans are also using a more differentiated pool of criteria when making purchasing decisions. In spite of the gap in consumption expenditure per capita, overall consumption patterns in East and West Germany are becoming increasingly similar, which indicates a lower price level in East Germany. Private households in both parts of Germany spend the biggest proportion of their income on housing (East: 34.2%; West: 34.5%). The next largest expenditure is on transportation (East: 13.9%; West: 14.3%). Only the food, beverages and tobacco category presents a slight difference of 1.1% (West: 13.6%; East: 14.7%).<\/p>\n\n\n\nThere are almost no differences in the frequency with which people go shopping for consumer goods. East and West Germany are similar in terms of shopping day and time preferences. Differences exist in how often consumers go to supermarkets: Eastern Germans usually prefer only one big purchase a week, while Western Germans prefer two in order to take advantage of the biweekly advertising cycle.<\/p>\n\n\n\n<h4>Consumption Behavior<\/strong> <\/h4>\n\n\n\nGermans in the former East Germany have a different attitude toward marketing in general and advertising, in particular. While most West Germans are used to the ubiquitous noise of sensational promises by product advertisement, East Germans were raised in a less glitzy environment. For them, advertisement had and still has primarily an informative component. East Germans use it to compare and explore options before going to the supermarket and making the purchase. Some were disillusioned and felt betrayed when the promises of a product\u2014such as looking like a model after eating chocolate bars\u2014did not materialize.<\/p>\n\n\n\n<h4>Promotion and Products<\/strong><\/h4>\n\n\n\nOn the product level, there are still visible differences, especially for large white and brown goods. Only every fifth household in the eastern provinces has a clothes dryer (22.2%), while 43.8% have one in West Germany. Less dramatic but still major is the difference in terms of refrigerators: 40.9% have them in the East, and 53.1% have them in the West, the German newspaper Die Zeit reports. For dishwashers, the numbers are 59.4% in the East and 69.5% in the West). Eastern German households have as many microwaves (71.8%) as their Western counterparts (72.7%), and have also caught up with telephones (West: 99.8%; East: 99.8%). Twenty years ago, only every second household in East Germany had a phone. At the same time, four out of five East German provinces are under the national average in terms of household Internet access. There is also a significant difference in Internet usage, where all five eastern provinces are far below the German average.<\/p>\n\n\n\n<h4>Buyers and Brands<\/strong><\/h4>\n\n\n\nToday, the overall popularity of brands from East Germany is increasing. However, there is only one product from the territory of the former German Democratic Republic: a fine sparkling wine called \u201cRotk\u00e4ppchen,\u201d which is one of the top 10 most popular German brands in both Western and Eastern Germany. In the field of alcoholic beverages, eastern products are becoming stronger and more recognized, such as Radeberger, Hasser\u00f6der and K\u00f6strizer. More important, eastern products are overcoming the old stereotypes of being of low quality and cheap. Nowadays, both Eastern and Western German consumers describe their local brands as being \u201ctrustworthy,\u201d \u201ciconic\/hip,\u201d and \u201clikable.\u201d<\/p>\n\n\n\nAt the same time, East German producers can count less on eastern German patriotism as a defining characteristic of customer behavior. Studies show that local patriotism is a much stronger factor for consumers older than 40 than for those who are younger. Half of the over-40 East German consumers would prefer Eastern German products, while this is only the case in a quarter of the 18- to 29-year-old age group. The producers need better marketing strategies to keep this younger generation of consumers close to their products.<\/p>\n\n\n\nWhat are some principal insights that we can observe after a major market disruption?<\/p>\n\n\n\nFirst, there is no shortcut for change and its acceptance. Eastern and Western Germany essentially presented optimal conditions in terms of available funding, ability to transfer funds, and willingness of the population to adapt. Nonetheless, one generation later we can still observe key differences from both a geographic perspective, where the East has remained more socialist in its orientation than the West, and also from an age perspective, where different age groups vary in their desire and success of leaving politics and socialism behind. <\/p>\n\n\n\nSecond, there seems to be less willingness to accept differences across former boundaries, which can lead to disagreements of a substantial nature. The current debate about substantially different migration policies may serve as an example. <\/p>\n\n\n\nObserving the often hesitating processes of realignment, we should prepare for delays and disagreements with nations such as Cuba or Iran. Even if there is significant goodwill on all sides, the adjustments are slow and tedious. There will be less exuberant enthusiasm, leading to more delays and conflicts.<\/p>\n\n\n\nIt is also noteworthy, however, that the success of a market orientation and of marketing thinking does, over time, typically improve lives and society. All this is likely to occur not by government fiat but by the choices devised and implemented by the private sector. Reduction of governme\u200bnt involvement in former socialist nations helps growth and innovation. An orientation in favor of competition, risk-taking, private property and profit can enhance life experience and lifestyle, supporting the belief that self actualization resulting from taking individual economic and marketing decisions can be the great reward for all.<\/p>\n","post_title":"International Marketing After Macro Disruption","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"international-marketing-after-macro-disruption","to_ping":"","pinged":"","post_modified":"2024-01-22 14:56:39","post_modified_gmt":"2024-01-22 20:56:39","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.ama.org\/?post_type=ama_marketing_news&p=1760","menu_order":0,"post_type":"ama_marketing_news","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":2619,"post_author":"56","post_date":"2015-05-01 16:56:42","post_date_gmt":"2015-05-01 16:56:42","post_content":"\n<h2>In one week, two directly conflicting studies were reported. That seems to summarize the situation advertising finds itself in today. Conflict, confusion and maybe a bit of concern. <\/h2>\n\n\n\nAt the American Academy of Advertising\u2019s annual convention in Seattle, <a href=https://www.ama.org/"http:////www.colorado.edu//cmci//people//advertising-pr-and-media-design//kelty-logan/" target=\"_blank\" rel=\"noreferrer noopener\">Professor Kelty Logan<\/a>, of the University of Colorado at Boulder, reported results of her updating of a previous study conducted in 1995 and 1996 by Robert Ducoffe. In the original study, Ducoffe hypothesized a model of advertising value. He argued that consumers determined the value of advertising based on the information and entertainment value provided, discounted by irritation. In 1996, Ducoffe extended his model to include consumer perceptions of internet advertising based on consumer\u2019s perceptions of value, again, discounted by irritation. Nineteen years ago, Ducoffe found the irritation factor of Internet advertising was only somewhat irritating. <\/p>\n\n\n\nLogan conducted her study in 2016 using essentially the same questions but with a larger online sample. She, however, got dramatically different results. Logan found today the internet is less informative, less entertaining and has significantly less advertising value. The only thing that grew was the irritation factor. We essentially have more advertising with less value and more irritation than we had 19 years ago. <\/p>\n\n\n\nAt the same time Logan was reporting her study update results, the <a href=https://www.ama.org/"http:////thearf.org///" target=\"_blank\" rel=\"noreferrer noopener\">Advertising Research Foundation (ARF)<\/a> was holding its annual <a href=https://www.ama.org/"http:////thearf.org//event//rethink-2016///" target=\"_blank\" rel=\"noreferrer noopener\">ReThink 2016<\/a> conference in New York. Based on the opposite results that were reported, it seems appropriate that the two groups were meeting at separate ends of the country. <\/p>\n\n\n\nThe study ARF released claimed to be the \u201cbiggest [advertising] study in a quarter century.\u201d In that study, the ARF researchers\u2014to quote the headline <a href=https://www.ama.org/"http:////adage.com//article//cmo-strategy//arf-brands-spend-31-billion//303113///" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"The study ARF released claimed to be the \u201cbiggest [advertising] study in a quarter century.\u201d In that study, the ARF researchers\u2014to quote the headline Ad Age used in reporting the event\u2014said: \u201cBrands should be spending $31 billion more this year than last.\u201d The reported ARF argument seemed to be that advertisers need to diversify their media spending; that is, not just spend more but spread that spending around in multiple media forms. In most cases, that means the internet. In other words, advertisers should be everywhere, meaning more messages in more media over more time periods, and probably more irritation based on Logan\u2019s findings. Excess or largesse? Your choice. (opens in a new tab)\">Ad Age<\/a><\/em><a href=https://www.ama.org/"http:////adage.com//article//cmo-strategy//arf-brands-spend-31-billion//303113///" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"The study ARF released claimed to be the \u201cbiggest [advertising] study in a quarter century.\u201d In that study, the ARF researchers\u2014to quote the headline Ad Age used in reporting the event\u2014said: \u201cBrands should be spending $31 billion more this year than last.\u201d The reported ARF argument seemed to be that advertisers need to diversify their media spending; that is, not just spend more but spread that spending around in multiple media forms. In most cases, that means the internet. In other words, advertisers should be everywhere, meaning more messages in more media over more time periods, and probably more irritation based on Logan\u2019s findings. Excess or largesse? Your choice. (opens in a new tab)\"> used in reporting the event<\/a>\u2014said: \u201cBrands should be spending $31 billion more this year than last.\u201d The reported ARF argument seemed to be that advertisers need to diversify their media spending; that is, not just spend more but spread that spending around in multiple media forms. In most cases, that means the internet. In other words, advertisers should be everywhere, meaning more messages in more media over more time periods, and probably more irritation based on Logan\u2019s findings. Excess or largesse? Your choice. <\/p>\n\n\n\nHolding these two studies side by side, one can only wonder what is going on. Consumers are saying advertising has less value and more irritation while the ARF is saying advertisers should generate more exposures in more media\u2014and spend more to do it. <\/p>\n\n\n\nWe have a conundrum. While advertisers are being encouraged to spend more on more media forms across the media spectrum, consumers are saying \u201clet up.\u201d Give up the bombardment. You can\u2019t spend your way to success. It\u2019s simply not possible for you (the advertisers) to irritate us into buying. <\/p>\n\n\n\nIn this uneven contest, who do you think is going to win? One would hope it will be the consumer. But that\u2019s not likely. Deep pockets make for big spending\u2014and increased saturation\u2014and the concomitant irritation which the ARF blithely ignores. <\/p>\n\n\n\nFor the advertisers, this situation reminds me of the old adage: \u201cIf all you have is a hammer, everything begins to look like a nail.\u201d Apparently, marketers have the hammer in the form of new media forms and dollars to purchase time and space. Consumers look like the nails to the marketer, or maybe it\u2019s the new media forms that look like nails. Whichever it is, marketers seem to believe that through increased use of media, consumers can be beaten into submission (made to buy what the marketer wants to sell) whether that be through irritation, excess or inanity. <\/p>\n\n\n\nWhat the ARF study really seems to be saying is that whenever and wherever there is a new \u201cthing\u201d that can be directed toward users or prospects or just innocent bystanders, the advertiser needs to spend in it or place ads on or around, or over, or under, or nearby, or within it. Leave no stone unturned. Irritate your way into the hearts and minds of consumers. <\/p>\n\n\n\nIn their defense, advertisers have always claimed that advertising exposure\u2014or in this case, seemingly overexposure\u2014is simply the fee consumers must pay to get free entertainment, internet access, Facebook pages or all of the other communication values U.S. consumers enjoy. And, up to a point, that may be a fair trade. But what happens if advertisers take the advice of the ARF and pony up another $31 billion in spending in an attempt to become ubiquitous? Will that still be a fair trade, or will that tip the scales in the other direction? <\/p>\n\n\n\nThere is increasing evidence that the balance between advertising exposure and consumer irritation is getting out of whack. Online ad blocking by consumers is growing since consumers perceive this as one way of fighting back. Media firms decry blocking and advertisers become irate, but what other alternative does the consumer have besides unplugging their access to the world through the internet? <\/p>\n\n\n\nAt some point, advertisers are going to have to come to grips with a concept which they have long ignored or avoided: reciprocity. Shared values. Shared benefits. Equal returns for equal inputs. That doesn\u2019t seem to be in the lexicon of the ARF, which in its report claimed that was \u201chow much the advertisers were leaving on the table\u201d by not taking their advice and bombarding consumers with even more exposures in more media over more periods of time. Sounds a lot like \u201ccarpet bombing with advertising\u201d doesn\u2019t work. <\/p>\n\n\n\nGranted, these two studies present the polar opposites of the advertising spending spectrum. And, most of us, advertisers and consumers alike, live somewhere in the middle. These two studies, however, also represent what is happening in the marketplace and we really can\u2019t ignore that. What to do? Is this something akin to the continuing search for world peace? Only time will tell.<\/p>\n\n\n","post_title":"Irritating Your Way into Consumers\u2019 Hearts","post_excerpt":"In one week, two directly conflicting studies were reported. That seems to summarize the situation advertising finds itself in today. Conflict, confusion and maybe a bit of concern. ","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"irritating-your-way-into-consumers-hearts","to_ping":"","pinged":"","post_modified":"2024-01-22 14:56:39","post_modified_gmt":"2024-01-22 20:56:39","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.ama.org\/?post_type=ama_marketing_news&p=2619","menu_order":0,"post_type":"ama_marketing_news","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":20841,"post_author":"43327","post_date":"2014-07-29 03:34:51","post_date_gmt":"2014-07-29 03:34:51","post_content":"\n<h2>Group buying is a relatively new idea that has had success but whose waning value calls for a different approach<\/h2>\n\n\n\nThe group buying concept started in China, where retailers provided discounts and special offers for customers to come in and purchase certain products and services. It was later adopted by sites such as Groupon, which offered the deals and discounts on merchants\u2019 behalf. At first, the approach was successful, and retailers capitalized on a surge of customers to their stores to buy the specially promoted products. Offers on group buying sites started to go viral, further increasing the returns on these one-time sales.<\/p>\n\n\n\nBefore long, however, the concept began to dilute brands into homogeneous offerings. Customers made their purchasing decisions based on the price and timing of the offers more than any brand differentiation or loyalty. Group buying deals became like dime-a-dozen flyers that no one paid attention to anymore. Why?<\/p>\n\n\n\nRetailers adopted the idea without understanding the nature and needs of their customers. Mass offerings were created with no customization, aiming simply to reach as many people as possible to increase store or website visits and purchases. For many, this ate up their marketing budget, leaving no room for targeted outreach efforts.<\/p>\n\n\n\nHowever, with the right approach, group buying can be successful in not only creating leads, but also in generating revenue. Here are a few recommended tactics:<\/p>\n\n\n\n<h3>1. Customize It<\/h3>\n\n\n\nCustomer behavior is key in crafting any offer. What type of group do you aim to attract? Do you target customers with specific cultural backgrounds, genders, style preferences, lifestyles? Do you sell a product or service that friends might purchase together? Groups of friends are the most conscious about the purchases they make; a friend has more influence over a choice than a family member, for example. Or perhaps a special offer combining one product or service with another would have the most appeal. Retailers who control the type of visitors when planning a group buying offer typically have better sales. Mass selling doesn\u2019t work; customer preference is what builds customer loyalty and frequency.<\/p>\n\n\n\n<h3>2. Strike at the Right Time<\/h3>\n\n\n\nDaily\u2014or even weekly or monthly\u2014deals do not always work. The day one customer looking for a deal on a specific product or service is often different from the day another customer is searching for the same product or service. When retailers started the concept of group buying, it was to generate sales during slow seasons. But those times aren\u2019t necessarily when the customer is looking. Customers can be very fickle, and retailers\u2014whether brick-and-mortar or online\u2014must understand the right timing for their customers and extend deals accordingly.<\/p>\n\n\n\n<h3>3. Make It Mobile<\/h3>\n\n\n\nThe best way to reach today\u2019s customers is through their mobile phones. Apps and social media sites are part of their daily lives, so using this technology is a great way to boost engagement and sales. Inviting different groups of individuals to socialize through your app and meet in your store can be an innovative way to sell products. Customizing offers and sending them at the time the customer requests or prefers can also have successful results.<\/p>\n\n\n\n<h3>4. Promote a Cause<\/h3>\n\n\n\nAnother way to make group buying more profitable is to tie offers to something that benefits the community. The more good you do, the more your sales will increase and the stronger your brand will become. Donating a portion of the sale of a product for a social cause will encourage your customers to visit your store or website beyond a special offer\u2014they will want to be part of that cause and will feel good when buying your products. This approach also distinguishes you from other retailers; it shows you are a real part of the community. Reaping the benefits of that is a win-win.<\/p>\n\n\n","post_title":"Group Buying: Rethinking an Idea with Potential","post_excerpt":"Group buying is a relatively new idea that has had success but whose waning value calls for a different approach.","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"group-buying-rethinking-an-idea-with-potential","to_ping":"","pinged":"","post_modified":"2024-01-22 14:56:40","post_modified_gmt":"2024-01-22 20:56:40","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.ama.org\/?post_type=ama_marketing_news&p=20841","menu_order":0,"post_type":"ama_marketing_news","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":20968,"post_author":"43327","post_date":"2014-07-03 15:50:56","post_date_gmt":"2014-07-03 15:50:56","post_content":"\nWhen trying to analyze the marketing activities of a given organization, we can understand that it is all about communication; the marketing department continuously tries to communicate the brand image, the products\/services, and the mission and objectives of the organization.<\/p>\n\n\n\nHowever, the communication approach might produce different marketing tones affected by the structure of the organization and how the different departments are allocated. For example, in centralized organizations there is only one marketing department which controls the marketing activities, responsible for producing the different marketing initiatives, and creating a unified brand image.<\/p>\n\n\n\nIn decentralized organizations however, there is more freedom and autonomy where there are multiple marketing departments responsible for promoting the products\/services of the different BU\u2019s (Business Units) of the organization.<\/p>\n\n\n\nEvery marketing approach has its own advantages and disadvantages; a shift in focus might occur if the strategy the company working with is not effective when conversing with the customers \u2013 that takes us to the important question: when companies should centralize or decentralize their marketing?<\/p>\n\n\n\n<h3>When to Centralize or Decentralize Your Marketing<\/h3>\n\n\n\nUsually, the decision of centralizing or decentralizing the marketing activities comes by default based on how the company is structured. Decentralized organizations offer multiple products\/services with no much similarity between what is offered, thus requiring different managing teams each having their own customers, marketing approaches and initiatives, and pricing strategies.<\/p>\n\n\n\nCentralized organizations on the other hand, have a unified brand image, with great similarity between the products\/services and the core brand\u2014the main brand has the power over the different BU\u2019s (Business Units).<\/p>\n\n\n\neAnother factor which might affect the decision for centralization is the nature of what is offered. Service oriented organizations have the tendency for using a mix-strategy of centralizing and decentralizing marketing activities; providing the freedom for each Business Unit to operate independently but the ultimate decision is in the hand of the central marketing department.<\/p>\n\n\n\nProduct-oriented organizations have the tendency to go for a centralized marketing approach, where customer communication inaugurates at the brand level and customer feedback is also received at such level.<\/p>\n\n\n\nOther contributing factor towards centralization and decentralization is the type of the product. FMCG\u2019s (Fast Moving Consumer Goods) depend mainly on decentralization of marketing activities to communicate the (SBU\u2019s) Strategic Business Units independently from the main brand. As for CPG\u2019s (Consumer Packaged Goods), organizations tend to utilize the centralized marketing approach to communicate the brand rather than the product\/service by itself.<\/p>\n\n\n\n<h3>Advantages and Disadvantages<\/h3>\n\n\n\nMarketing departments typically have a mix of centralized and decentralized operations, but sometimes it is better to decentralize operations to serve the organization when communicating the core benefits of each of its products\/services independently to preserve the identity and individuality and to make sure customers are clearly communicated the core benefits of the products\/services without the disruption of the main brand.<\/p>\n\n\n\nFor example, Unilever offers different Strategic Business Units varying from personal hygiene products, refreshments, to detergents. If Unilever imposed the brand image of the main brand on each Strategic Business Unit, the customers might be confused as of comparing between the products used and the producing company.<\/p>\n\n\n\nThus, in its recent ads and as they were aware of the diminishing power of the main brand \u201cUnilever\u201d they started displaying the \u201cUnilever\u201d logo at the end of each TV ad, to create a reminding association without directly connecting the SBU\u2019s with the brand.<\/p>\n\n\n\nAnother great example from a different industry would be MasterCard, which offers payment solutions through partnering banks. The organization offers credit, debit, and prepaid cards through a B2B relationship with banks where the MasterCard brand has the power over the products\/services offered over the identity of the products\/services themselves.<\/p>\n\n\n\nThe MasterCard logo is the main differentiators between its products\/services and its main rivalries: Visa and American Express \u2013 with a centralized marketing and operational-regional marketing departments.<\/p>\n\n\n\nCompanies that use a mix-strategy of centralized and decentralized marketing approach would be like Al Futtaim. The organization owns different organizations under which there are a variety of Business Units operating in different industries \u2013 such as the automotive industry, the fashion industry, real estate and construction, and other joint venture operations locally and oversees.<\/p>\n\n\n\nAl Futtaim has a centralized \/ decentralized approach for marketing where such is required to highlight both the brand image of the main company and the Business Units each giving the power to one another.<\/p>\n\n\n\nAnother point of view when viewing the advantages and disadvantages of centralization versus decentralization would be in the operations related to both approaches. Organizations that chooses centralization over decentralization would refer such an option as decentralizing marketing operations has many drawbacks, which includes the duplication of efforts, deviation of goals, and failing to see the bigger picture of the market situation and competition for the organization as a whole and not for a specific product\/service offered.<\/p>\n\n\n\nAdditionally, centralizing the marketing approach puts budgets, marketing initiatives, and marketing talents closer to the customers where marketing strategies are linked with ROI (Return on Investment) and there is more accountability towards fulfilling the sales objectives of the organization \u2013 making a profit.<\/p>\n\n\n\nAt the end, all depends on the customers, the market the company operates in, the nature of the product\/service, and other unforeseen elements which are only vigilant to decision-makers when making such decisions. Yahoo!, for example, has been going back and forth between <a rel=\"noreferrer noopener\" aria-label=\"centralized and decentralized marketing approaches (opens in a new tab)\" href=https://www.ama.org/"https:////www.youtube.com//watch?v=0QWdi4oJ994\%22 target=\"_blank\">centralized and decentralized marketing approaches<\/a> successfully.<\/p>\n\n\n\n<h3>Evaluating Your Marketing Approach<\/h3>\n\n\n\nThe degree of relevance by which choosing a specific marketing approach is of no importance, as long as the organization communicate its products\/services effectively to the customers \u2013 internal communication as well is coordinated towards such an objective.<\/p>\n\n\n\nBut, it is important to restructure the strategic marketing approach if the brand started to lose the strategic alignment that should occur around the decision making frame-work \u2013 which allows all the Business \/ Strategic Business Units to be represented clearly to the customers. Moreover, another determining factor would be the dilution of scope of work and the fragmentation of such \u2013 where deliverable of work can\u2019t be achieved, and business outcomes are not fulfilled.<\/p>\n\n\n\nEvaluating the focus of the organization towards implementing a different strategic marketing approach becomes inevitable, where marketing activities can put the organization at stake of either establishing itself in the market or losing customers and ultimately its business.<\/p>\n\n\n\nA classical example of diminishing the power of marketing and losing the opportunity of choosing a strategic marketing approach for centralizing or decentralizing activities is to confuse marketing with sales \u2013 where the core activities becomes associated with selling a service\/product rather than communicating the brand, the core benefits of the services\/products, and ultimately creating a cohesive framework with aligned objectives towards a clearly defined marketing-mix.<\/p>\n\n\n\nThe main deliverable of any organization should be the focus on the brand(s) that sells, and not selling what should be sold. At the end, what makes any organization different from another in the customer\u2019s perspective is how it communicates its products\/services and not merely the benefits associated with purchasing a service\/product.<\/p>\n\n\n","post_title":"To Centralize or Decentralize Your Marketing","post_excerpt":"When trying to analyze the marketing activities of a given organization, we can understand that it is all about communication; the marketing department continuously tries to communicate the brand image, the products\/services, and the mission and objectives of the organization.","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"to-centralize-or-decentralize-your-marketing","to_ping":"","pinged":"","post_modified":"2024-01-22 14:56:41","post_modified_gmt":"2024-01-22 20:56:41","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.ama.org\/?post_type=ama_marketing_news&p=20968","menu_order":0,"post_type":"ama_marketing_news","post_mime_type":"","comment_count":"0","filter":"raw"}]" />

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