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The yardstics blog is discussing issues related to marketing and marketing communication. It is to be used as an tool for learning and sharing of information in the mentioned areas. Scroll your way through the blog and find information related to your current course. Ask your lecturer for a password if you want to add material. Enjoy your stay!

Chinese Branding

Marcom Posted on Sat, April 19, 2008 22:41:38

What is unfolding this spring is indeed unique. You will seldom, if ever, see a country wreck its own image at a faster pace than Communist China of 2008.

As China entered into 2008 expectations were high that this year would be a glorious year. It would be the year when China brought the Olympics to the world. To a world in awe. But things have gotten out of hand. Four months into the year China has been part in no less than three international scandals. An unprecedented record! The first crisis was the crackdown on the opposition in Tibet, the second was the export of weapons to Sudan and the third was also related to export of weapons but this time to Zimbabwe’s dictator Robert Mugabe.

It is such a pity that a great nation such as China is jeopardizing its image in this way and worse, that they are jeopardizing their “once in a lifetime” chance as host for the Olympic Games, just to sell weapons to Robert Mugabe. The logic behind the Chinese strategy to market their country towards the western world is not easy to comprehend.

To save the brand of China takes some serious change in how things are being done. Perhaps the Chinese leadership should study how western corporations have acted (and sometimes failed to act) in connection to scandals such as the Brent Spar (Royal Dutch Shell), child labour (H&M, Nike, Reebok), breast milk substitution (Nestlé), asbestos (ABB), oil spills (Exxon). Greater openness, transparency and respect for the human rights would do wonders to the Chinese brand, no question about it. The question is whether they are ready to take these steps towards a better China. A China that would be embraced by the rest of the world.
Stockholm Institute of Communication Science – Stics
© Copyright 2008: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science.

How would you do?

Consumer Speaker's Corner Posted on Sun, April 13, 2008 01:39:48

Charlotte, Senior business developer at a medium sized Swedish manufacturing company came back to the hotel after a hectic day of meetings and interviews. The hotel where Lotta was staying belonged to one of the major hotel chains in Sweden. She had stayed at the hotel before and considered it to be a nice place with reasonable prices.

At around 11:00 p.m., after a late supper, Charlotte crashed into bed and fell asleep instantly. Later, at 3:54 a.m. she was awakened little by litte by the peculiar and unwanted sound of water dripping and tapping inside of a water radiator next to the bedroom window. After a few agonising minutes she finally understood that there would be no more sleep this night, or at least not now. Consequently she got up, ran down to the reception desk where she found no one else than a piccolo to talk to. She gave him a brief description of the problem in her room and asked him to leave a note at the reception for the hotel staff. She headed back to her room and decided to work since she didn’t expect to catch any more sleep that night anyhow.

Four hours later Charlotte rang the bell at the reception. In a rather polite way she explained what had happened. The receptionist listened to her story and then went on to call the hotel manager to get further instructions on how to handle the delicate issue. A minute later she came back to Charlotte and offered a 16,7% discount on the price for the stay. Lotta was supposed to pay 1795 SEK (€ 195) for the room but was offered a discount of 300 SEK (€ 33) as compensation for the unpleasant experience during the night.

Now, the question is, what would you do and how would you react? Please share your thoughts with us. We would really appreciate your valuable viewpoints.

The case above is based on a real story from late spring 2008. It was documented and translated into this mini-case with the consent of the person who is the main character in the case.

From the negative point of view

Marcom Posted on Tue, March 18, 2008 22:50:56

Communication is everything in the process of electing a new Commander in chief. Who will finally be inaugurated as the forty fourth President on the 20th January 2009 is still very much an open issue. In the race for the presidency, the contestants are relying heavily on Marcom as a means to bring their messages across the nation.

On the battleground there are two democratic combattants. This since the Republican candidate John McCain already has won more than the 1191 delegates needed to secure the Republican nomination. Who he will meet in the final contest is yet to be decided. So far, democrat senator Barack Obama has been more successful in raising funds and consequently he has been able to use more advertising than his democrat opponent Hillary Clinton. Clinton has thereby been forced to use less expensive means of communication such as PR. And in order to achieve maximum effect out of their PR efforts, Clinton’s campaign strategists have finally started using negative campaigning. One may wonder what kept them from using it before, a wish to loose?

The powers of negative campaigning are well documented so it should be considered as just one tool among many others. Becoming the nominee of your party calls for extraordinary skills in marketing communication and winning the presidential election demands even more. Therefore a modern president candidate cannot afford to not use the entire arsenal of communication strategies and techniques when taking on an opponent. In light of this the positive properties of negative campaigning becomes very appealing. Negative campaigning has the potential advantage of inducing doubt, disbelief and uncertainty in the voters’ perception of the opponent. Moreover, if conducted properly the subject of the attack will have a hard time defending him/herself. On the other hand, carried out in a sloppy way it will most definitely backfire at you.

One recent example of negative campaigning that backfired was when the conservatives in Spain wrongly blamed ETA for the terrorist attack in 2004, just three days before the election. The conservatives who were in power at the time continued blaming ETA even as evidence mounted that Islamic militants in some way were involved. Blaming ETA was more favourable from a conservative perspective. Pointing out Islamic militants as the perpetrators would have been to acknowledge that Spain had become a target for al-Qaida becasue of the government’s support of the Iraq war. Though, the conservatives failed to induce doubt, disbelief and uncertainty since it became rather obvious that ETA was not involved in the attack. The conservatives was slightly ahead in some polls but this major mistake was more than enough to expeditiously hand over the victory to the Socialists.

A few years ago I had the opportunity to discuss around negative campaigning and in particular how to counterargue negative statements with Merrie Spaeth, Director of Media Relations during President Ronald Reagan’s administration. We both shared the same view that in order to reduce the damage of negative campaigning one ought to avoid using words, phrases or the like that the opponent is trying to “stick” on to you. Instead the one under attack should attempt to turn the entire issue around and to one’s own advantage. Now, this doesn’t even sound easy so you may just understand the full complexity of mastering this technique. One vital point is to have your own communication strategy prepared and have it ready to be used towards the “opponent”, preferably at a time of your choosing. Furthermore, flexibility is another crucial factor. One has to be flexible enough to act upon opinions, questions or statements that the opponent is firing back and integrate that into one’s own communication.
/Carl Patrik
Stics – Stockholm Institute of Communication Science 2008

The Swedish Central Bank & Communication

Marcom Posted on Sun, February 10, 2008 19:23:35

Central Banks have often, and rightfully, been criticized for obscuring information to the financial markets. The Swedish Central Bank is no exception. Though, as the Swedish Central Bank has become increasingly independent steps have been taken to improve communication towards the market actors. In line with these ambitions the bank’s communication strategy was recently changed. The new strategy stipulates, among other things, that the economical situation should not be commented upon, in between the regular board meetings, by the members of the board unless there is an extraordinary event that needs to be addressed.

This new strategy is somewhat contradicting considering that one of the main objectives of the Central Bank is to create stability. The chosen communication strategy is actually counteracting on stability and instead amplifies volatility. A few points show the essence of the problem.

a) The members of the board should not, under normal circumstances, comment upon the current economical situation.
b) There will, every now and then, be events that have to be commented upon by the members of the board.
c) When such an aforementioned “communication intervention” (like in b) occurs it will at the same time also be a direct signal to the market actors that there is an extraordinary (negative (or positive)) situation of some kind.
d) Hence, if the market actors haven’t understood the significance of a certain situation then the Central Bank’s communication strategy will do the job, since their communication (when it finally occurs) will work as the final and decisive alarm signal to the market actors. In plain words; the market actors will soon learn (through basic Pavlovian conditioning) that when the bank communicates things are really bad.
d) Stability and predictability will not be the result of such a communication strategy, on the contrary. Especially in situations of enhanced turmoil on the financial markets.

Time to formulate a new strategy?
Stockholm Institute of Communication Science – Stics
© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science.

Marketers can create needs!?

Myths and misinterpretations Posted on Fri, December 28, 2007 19:44:22

Is it part of the marketer’s job description to create needs? Can needs be created by marketers? The latter of these two questions is often and uncritically answered with a yes by most non-marketing educated consumers. Believing that marketers can create needs is however a serious misconception of what a need is and moreover, what marketing is all about.

A need is a state of felt deprivation. This means that the organism experiencing the need has a deficit of some kind. For instance, as human beings we are every now and then experiencing hunger. Hunger is a need and can by no means be created by marketers no matter how skilled they are. The fact that we become hungry and that we exhibit this particular need every now and then is a consequence of being a living organism and not the creation of marketers. However, we, being humans, use what we call food to satisfy our hunger and here marketers can affect and influence what kind of food we want in order to satisfy our needs. As a matter of fact, marketers can create new wants and influence what we want by innovating and marketing new kinds of food stuff. The average person is most likely confusing the creation of wants with creating needs. Needs cannot be created and we only have a few of them, for example needs such as hunger, thirst, social needs such as belonging, esteem needs and self actualization. These needs do not have to be created, they are already there and are part of the human make up.

If I am hungry I may want to satisfy my need with a sausage, a meatball, a bowl of rice or any other food stuff available and there are millions of them. Obviously I can express an infinite number of different wants that can satisfy the same basic need – hunger.

So when Charlie Nagreen or Fletcher Davis invented the hamburger (both have been accredited as inventors) and sold it to customers they didn’t create a new need, they merely created a new kind of product that could satisfy the very same basic need that humans have had since the dawn of mankind. However, the hamburger was something new that customers could want in order to satisfy their hunger. It is important to be able to distinguish between needs and wants since marketers can create wants but not needs.

Other popular examples of “created needs” that people are frequently pointing at are mobile phones or micro wave ovens. A mobile phone is just a tool for communication, in the same way as stationary phones, fax machines or smoke signals are means of communication. Since the human being is a social creature communication is an inherent part of maintaining social relations. Inventing the mobile phone and selling it to consumers does not create a new need. The need to communicate is already there, it is just giving the customer a new possibility to communicate with others in case he or she wants to communicate in this new way.

The same thing can be said about the micro wave oven, it is a tool to heat up food. Food can be heated in many ways such as over open fire, on the stove or in the micro wave. The micro wave is a new and convenient way to heat up food and does not in any way constitute a new need. However, the customer may want to prepare his/her food using a micro wave.

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science.

How to Price Web Advertising?

Measurement Posted on Sat, October 27, 2007 23:42:13

Some are wondering what pricing method is the best for Web advertising? Is it the CPC (Cost Per Click), the CPV (Cost Per View) the CPTU (Cost Per Time Unit) or some other method like HPM (Hybrid Pricing Method)?

The answer to the question is actually depending upon who you are. If you are an advertiser you can always try to influence the company publishing your ads to use a method that suits your “interests”. For instance, an advertiser could benefit from using CPC in at least two ways. The standard way and the standard argumentation is that you are only paying for those who are really interested in your product or company (read more about this inadequate idea in the “Measurement” Category). Another less common line of argumentation is that companies pursuing image communication can benefit from the CPC since fewer customers will click on such an ad and thereby the campaign will be less expensive.

CPV (sometimes called CPM, cost per thousand views) is a pricing method where the advertiser pays for the number of customers that have been exposed to the ad. The price per “view” is usually lower than the price per “click” but here you are paying for everyone that are exposed to the ad, including those that are not interested in the advertisement. Publishers are using this method to a greater extent today than what they have done in the past, perhaps since they, when using the CPV, can get revenue even though web surfers are not clicking on ads.

The CPTU pricing model for the Web is similar to what is used in print media. It is basically like when you are paying rent for your apartment, a hotel room or the like. You pay for the time that you are using the space, if you use it for a day you pay for a day etc. This pricing method is also gaining in popularity, just like the CPV.

The HPM – Hybrid Pricing Method can comprise of a mix of the previously mentioned pricing methods and future ones not yet established. One frequently used hybrid is that the advertiser pays for every “view” and pays extra for every “click”. This can even be combined with a “fee” for the number of days or weeks that the campaign is running.

A serious downside with the non-time based methods is fraudulent behavior from actors on the market. So called “Click-Fraud” may be a threat to the advertisers’ budgets, the publishers’ credibility and also for search engines such as Yahoo, Google, Altavista, MSN and the like. A lot of effort is put in to battle Click-Fraud but still it is an open battle between the search engines and their “enemies”. Who will win the battle is yet to be determined.

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science.

Marketing & Communication

Marcom Posted on Sat, October 27, 2007 22:08:10

Yesterday I was asked “to what extent communication is part of marketing communication and marketing” but since I had to rush away I promised to put an answer to the question here on the blog. More can of course be said about the issue but here is a brief answer.

Duncan & Moriarty (1998) argue that marketing theory and communication theory share common roots and thereby they are enriching each other. Amalgamating marketing and communication consequently forms the area of marketing communication. In a marketing communication context, information is distributed to inform, persuade, motivate and to make potential customers aware of an organization’s offering (Keller, 2001).

Marketing communication comprises of a variety of activities aiming at communicating with the company’s customers. Marketing communication tools are typically divided into four or more defined areas and these tools or sub functions are often referred to as the promotional mix. The tools in the promotional mix are advertising, personal selling, sales promotion, public relations and can also be extended with for instance direct marketing, packaging, point of purchase display and event marketing.

In summary; Communication is an intrinsic part of Marketing as well as Marketing Communication.

Duncan, Tom and Sandra E. Moriarty (1998), “A Communication-Based Marketing Model for Managing Relationships”, Journal of Marketing, 62 (2), 1 – 13

Keller, Kevin Lane (2001), “Mastering the Marketing Communications Mix: Micro and Macro Perspectives on Integrated Marketing Communication Programs”, Journal of Marketing Management, 17 (Sept), 819 – 847

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science.

Marketing communication is marketing

Marcom Posted on Sat, October 13, 2007 23:26:59

To enlightened marketers the headline may sound very odd. However, every now and then I meet marketers who have the most peculiar notions. Like for instance that Marketing communication is something else or different than Marketing. Or that selling is one thing and marketing something else.

I do not know the origin of these ideas. Nonetheless; here is a brief summary of how it is;

Marketing communication is an important part of marketing with the purpose to communicate with companies’ target markets [1]. Keller (2001, p. 823) describes marketing communication as representing “…the voice of a brand and the means by which companies can establish a dialogue with consumers concerning their product offerings”. The reasons why companies communicate to their markets vary but often the purpose is to bring to customers’ attention information regarding new goods and services, to change attitudes toward a product or to remind consumers about products (Keller, 2001). The companies’ communication activities can furthermore be part of an information exchange between company and customer with the intention to maintain and develop customer relationships (Reid, Luxton & Mavondo, 2005). No matter the purpose, communication is an integral part of the marketing function and is executed by staff and functions within the organization and/or together with external organizations specialized in the area of communication.

Marketing communication, frequently called promotion and being one of the four P’s, is a broad concept that covers the sub areas of advertising, personal selling, public relations, sales promotion, direct marketing and areas connected to these (Duncan & Moriarty, 1998). The various areas are serving different purposes and aiming at achieving different goals. For instance, sales promotion is short term incentives to stimulate purchase whereas advertising can be used to build a brand image or to create a presence on a new market. Common for these sub areas is that they all include an element of communication that is directed towards the market. Communicating with the market and the consumers is important since it over-bridges the gap between companies and customers. At a basic level, communication will make it possible to inform and make potential customers aware of a company’s business, its offering or to persuade customers to enter into an exchange relationship.

[1] The communication aspect of marketing is explicitly formulated in the AMA definition of marketing, “Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” (The AMA definition as reported by Keefe, 2004, p. 17 – 18)

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science.

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