The Importance of Marketing to Organizations in the Twenty-first Century - Coursework Example

The Importance of Marketing to Organizations in the Twenty-first Century Advances in technology in developed countries as well as the opening of markets in several developing countries in recent years have led to a worldwide trend toward globalization, increasing the importance of marketing to organizations in the new economy. ‘Globalization’ refers to “the movement of people, goods or ideas among countries and regions” (Coatsworth, 2004) as it happens on an accelerated rate and is used to apply primarily to the expansion of markets and the growth of corporate competition on a worldwide scale. There are usually several factors that determine whether a company decides to ‘go global’ or not. However, in order to remain competitive in today’s marketplace, companies must adjust marketing efforts to include global concerns, even if they wish to operate only in their own home sphere. For many companies in today’s business environment, the marketing process is largely centered upon the concept of brand building, which is employed through every phase of the marketing process. There are numerous challenges to be faced when a company determines to market in a global economy, even when they plan on conducting business on a strictly local level. One of the major challenges is trying to find a means of communicating to a variety of cultures through the means of a single message. Every society has its own standards and concepts of what is acceptable and what is motivational. While Americans seem to respond well and quickly to ads that celebrate individualism such as a Nike ad in which a soccer team disrupts normal activity at the airport (Nike Football Ad Airport Scene, 2006), Segal (April 2008) reveals the irresponsiveness of Chinese consumers to these kinds of appeals. For the Chinese, these ads only have an effect if, like McDonalds ads that capitalize on a Chinese cultural belief that beef acts as an aphrodisiac, it promises some kind of payoff (Segal, April 2008). Technology has assisted in these areas, though. As cultures begin to merge through closer connections, modifications to advertisements can be made with a few digital clicks. Technology makes it possible for advertisers to quickly modify the imagery used in their marketing campaigns (Rivera, 2008). More sophisticated means of managing merchandise are also available thanks to electronic tracking from production through consumer trends. As Serna (2008) reports, technology has dramatically improved corporations’ abilities to track and more appropriately understand consumer purchasing habits for everything from their favorite cereal to the types of financial services they require. While cultures such as that which exists in the United States and that of England are similar in many ways, profound differences have been found in styles of comedy and so forth that have only been breaking down recently with increased connection through film, media and the internet (Segal, December 2008). As people become more sensitive to the differences between cultures, they also become more appreciative of the ideas and beliefs as they are expressed in the other cultures with which they come in contact. Thus, today’s marketing is characterized by a complex combination of global and local appeals, technology-driven campaigns and, particularly, emphasis placed on the concept of ‘branding’. The image presented by the company has come to be referred to generally under the single word ‘branding.’ Branding has often been publicized as the best means of creating a loyal customer base and achieving instant worldwide recognition. “Corporate branding emerged as a key concept in the late 1990s” (Burt & Sparks, 2002, p. 194). The meaning of the term itself has undergone an extreme transformation in recent years. Although once considered to be simply the swoosh on the side of a Nike athletic shoe or the golden arches soaring over every McDonalds entrance, the term ‘branding’ has grown to encompass many aspects of a company. “Brands are not simply products or services. Brands are the sum totals of all the images that people have in their heads about a particular company and a particular mark. Brands absorb everything around them like Imelda Marcos in the shoe department at Nordstrom” (Scott Bedbury, CEO of Brandstream, a Seattle-based marketing consultancy, quoted in Kalin, 2001). The term has come to refer not only to the images a company produces in order to call their product or services to mind (the swoosh or the arches), but also to identification of the products sold, the services rendered, the building in which the company is headquartered or even the country in which it originated as well as the marketing methods used to project these ideas and images to the broader public. To remain competitive in the world today, just about anything can be identified with a brand if it is so chosen – companies, museums, hospitals, even individual people (look at Martha Stewart for a prime example). According to Aaker (1996), strong brands work for the company to help them establish their proper placement within the international and local marketplace as well as assisting in the development of a strong consumer base through broad recognition of the brand. This recognition further works for the company by serving as a weapon to counter growing competition in a shrinking market (Barwise & Robertson, 1992). Corporations can then further use this position to help launch new extensions, such as a line of athletic clothes for Nike or a new flavor for Toblerone (Aaker & Keller, 1990). It was through the first phase of the marketing process that the very successful international company Cadbury Chocolate first established its growth. Having started as a small family business in Birmingham, England in 1824, Cadbury Chocolate got its first taste of international trade with their move to the Bridge Street location. This location provided its “own private canal spur linking the factory via the Birmingham Navigation Canal to the major ports of Britain” (Cadbury Trebor Bassett, 2006), although this early introduction was primarily to obtain access to the ports where the cocoa beans were imported. To retain its market share in England as well as expand its interests in other European countries, Cadbury moved to what is now called Bournville in 1897, renaming the location as a further marketing ploy. “The name is derived from Bournbrook with the brook being replaced for the French word ‘ville’ meaning town. A shrewd move perhaps considering that French chocolate was regarded as the best in the world at the time” (Cadbury History, 2006). Even this early, the company realized the benefits of brand equity and identity by encouraging consumers to automatically associate the Cadbury name with the upscale quality of the French-sounding town name. Long-term marketing strategy included developing market partnerships with various chocolate makers in other countries as a means of expansion. While the exact method of the decision-making process is not available, a basic SWOT analysis demonstrates the company’s local strengths, foreign presence weaknesses, expansion opportunities through building and merging and competitive threats from other chocolate companies then attempting to expand. As a result, the company’s first method of expansion was through the simple means of placing a representative on foreign soil. “Cadbury accepted the first overseas order back in 1881 from the Cadbury representative in Australia – long before the world famous Cadbury’s Dairy Milk had been developed” (Tallyrand, 2005). Factories were opened in foreign countries such as Tasmania, New Zealand, Canada, Ireland and South Africa before World War I, franchises were established with Hershey’s in the US and further acquisitions allowed expansions into Malaysia, India, Indonesia, Japan and several countries throughout Africa (Cadbury Trebor Bassett, 2006). The company was an early but small international player in the confectioner’s market in its early years, contributing to Cadbury’s close call with extinction by their foreign competitors in the late 1800s. However, the company managed to hold on to their market share through the introduction of innovative new processing techniques, providing greater functional benefit to the brand as well as new marketing approaches that again focused on improving the concept of the brand. The company began packaging their chocolates in artistic collector’s item boxes throughout the Victorian era, giving the consumer an aesthetic reason for choosing their product over the competitors. “When Richard Cadbury started producing ‘fancy’ chocolate in the 1860s, he designed the boxes himself. The first one carried his portrait of his six-year-old daughter with a kitten, and others featured Swiss scenes he had painted while on holiday. The style remained familiar well into the 20th century” (Forrester, 2006). The logo developed for the brand consisted of a glass and a half of milk depicted on the package of one of their most popular products which has remained constant through much of the company’s history. “The Cadbury umbrella brand image consists of four icons namely the Cadbury script, the glass and a half, dark purple colour and the swirling chocolate image” (Brand Development, 2005). The brand equity has been fairly positive throughout most of its history with consumers easily associating the brand with the innovations and wholesome quality of its early years. This is conveyed through the optimistic emotional appeal of a glass half full and the emotions associated with that promise. “Cadbury is chocolate. [It] feels good i.e. positive, uplifting, mood enhancing, providing enjoyment and happiness” (Brand Development, 2005). However, a recent salmonella case in which the company was forced to recall one million chocolate bars could have a significant impact on consumer confidence. Reflecting the brand identity, representatives of the company apologized for any concern caused to consumers and promised to help work through any consumer complaints. Branding consultant William Grobel predicted the outbreak would have little lasting effect upon the company: “Brands are more resilient and it will take some doing to dislodge a brand that has been the nation’s favourite for 150 years” (2006). However, investigations into the incident indicated the salmonella was discovered as early as January with nothing reported until June, shaking some consumers’ faith in the dedication of the brand to its long-term commitments and ideals (Revill, 2006). This information points to the company’s lack of appropriate monitoring of their product and their marketing efforts, neglecting to address issues at the appropriate time and being forced to address through marketing what should have been addressed through quality control. Despite the small difficulties, the brand itself has expanded to include several product categories each designed differently to appeal to a different consumer base but all retaining their connection to the parent brand. This umbrella connection is used as a means of conveying the brand equity to varying consumers throughout the world as well as to allow consumers to grow into the product as their tastes change. “TimeOut, for example, is an ideal snack to have with a cup of tea” (Brand Development, 2005) and features a label design that utilises large spiky fonts and bold colours that convey a sense of urgency and activity, yet remain associated with the Cadbury line through the inclusion of the Cadbury logo in the corner. While this snack might be ideal in the UK, places such as the United States hold little market for such a snack as the term is more often associated with a method of punishment than a treat (Cartwright, 2006). As a result, different names are associated with essentially the same product designed to have a greater appeal to the U.S. market. Several brands are made available only in specific areas based upon taste, product proliferation and a variety of other reasons. The Butterkist brand, for instance, is only available in the UK while the Cadbury Crème Egg is available in several countries but only during specific times of the year (Cadbury Schwepps, 2006). Cadbury’s early market entry on the global scale provided the company with unique marketing opportunities, but did not guarantee it a world of no competition even just within England itself. As such, the company discovered it was necessary to adopt evolving marketing practices that would help identify their brand in a positive way with their potential consumer base. For Cadbury, this was done through a high quality product, aggressive investigation into new innovations and persistent attention to brand identity. By continuing to associate themselves with various elements of society, either by changing the appearance of their products or designing different products to more appropriately appeal to the tastes of their consumers, the company has managed to achieve significant growth and establish itself as a top brand for chocolate lovers the world over. The prominent display of the Cadbury logo on all of its packaging reflects the company’s continued efforts to develop their parent brand as offering upscale quality goods regardless of the specific sub-brand or product being offered. This dual marketing of the Cadbury parent logo along with sub-brands such as Time-Out enables the company to both convey the identity of the Cadbury brand while still individualizing the marketing campaigns for the individual product for the market that is being entered. By carefully ensuring that all marketing campaigns of all sub-brands promote the ideals of the parent brand even while focusing on the unique attributes of the sub-brand, Cadbury is able to capitalize on this solid image of the company and gain instant market recognition even in new market areas. Today’s marketing world is also complicated with the concept of IMC. IMC refers to a number of different forms of promotion and marketing there are available when attempting to launch a new product. These may include television commercials, print advertising in the form of magazine or newspaper ads, billboards or posters and electronic advertising that might include websites, podcasts, email or RSS. Television is an affirming advertising channel as consumers tend to believe what they see on television, but it can be expensive and is only effective on those consumers viewing the television at the time the ad airs. Print advertising can be less expensive, but is also less dynamic in reaching the consumer while also limited in audience. Online advertising can offer a tremendous return on investment as it costs a fraction of other methods of promotion, but it also presents certain dangers in the form of potential spam accusations and again depends upon further promotion to bring visitors to the site. When determining the marketing mix, Cadbury’s must weigh the various benefits of each of these marketing options with their relative expense and negative attributes in an increasingly changing marketplace. In the area of customer relationship management, a great deal of customer tracking today is conducted with the aid of CRM software such as Oracle. This type of software enables the company to remain up to date on billing and materials ordering as well as to provide insight into the trends and preferences of the ordering community. By tracking these trends, it is possible to ensure that popular products are always on hand in some form of the production process as well as suggest other customers who may be in line for new products that will build on their expressed preferences. Through the process of delivering and working directly with customers, it may also be possible to notate where the customer may have need of further related products in the future, tagging them for future sales efforts, promotions or simply requesting them to provide testimonials for the product. With a list of customers on file, large scale clients may be contacted directly when undergoing expansions or new product designs while smaller clients may be included in simple mailers or other promotional campaigns directly from the company headquarters. CRM is helpful, as well, in ensuring that customers are provided with the information they need to make the most of present technology in making sure the company is aware of their concerns and desires. Large-scale releases of new product developments can be sent directly to clients who have expressed interest in the company’s development while other electronic communications can ensure the company remains in touch with the local consumer. These recent technological advancements enable the company to establish a level of communication and interaction with its consumer base that has never been equaled, even when the problems of marketing were restricted to the company’s founder attempting to meet the needs of his neighbors and close friends. While there remain several methods through which companies can achieve international status, and while it is generally agreed that international status is essential for a company to survive in these globally competitive times, it is also true that just having a global brand does not ensure local success. While global brands such as Cadbury can provide a company, product or service with instant recognition and identity, this identity can also work against the local company as packaging or product type fail to meet a specific market niche. At the same time, companies that have developed a reputation for disreputable practices in a given market can suffer greatly from too strong a market identification and may find it beneficial to focus more upon marketing their smaller sub-brands individually. It is necessary, then, for these types of companies to retain a local brand that speaks to the consumer where he lives, works or travels. As studies have shown, it is through the local marketing efforts that people are able to get personally connected to a particular brand, leading to brand loyalty and long-term consumer use. This is built in a variety of ways depending upon the product offered and the various ways in which it meets the needs of the local marketplace, which will be different from one location to another. While the cola wars of the United States play a key role in the marketing of Virgin Cola in that country, the recognition of names such as Sofitel and Suitehotel are unreliable in North America. Although Americans might recognize Motel 6 as a quality, low-priced alternative to more expensive hotel rooms, Europeans will tend to gravitate more toward the Ibis brand as something reassuringly familiar in a strange place. Cadbury has managed to maintain a reputation and a name in both countries thanks to its ability to diversify its products and to re-orient packaging to appeal to the different markets while maintaining a connection to the parent brand. Thus, it is revealed that association with international brands is of vital importance if a local company wishes to capture the large market share represented by the traveling public. Familiarity again plays an important role here as consumers will tend to purchase those brands of which they have some recognition and knowledge. This globalization of products and services ensures customers are able to feel comfortable in settings that are foreign to them because of the familiarity of the packaging or brand label. This comfort translates into greater sales for that particular company as well as increased brand loyalty as the customer realizes they can find what they’re seeking regardless of their worldwide location. There remain significant concerns, however, regarding international branding as not all messages translate to all cultures in the same way. While the color yellow may indicate happiness and light-hearted fun to one country, it can communicate extreme anger or illness to another. While a particular phrase may indicate a product is fun and safe to use in one area, it may translate to something completely different in another language. Images, colors and phrases must all be carefully considered before being applied to new markets, which presents a significant marketing barrier to large global brands that cannot just change their image depending upon the country they enter. It also remains true that there is no single image, language or cultural heritage that applies to all people, all countries and all age groups. As a result, situation analysis will always play a significant role in the marketing process, as will marketing strategy. Constant monitoring is necessary to ensure the expected results are achieved and unexpected results are dealt with quickly and effectively even after implementation of the marketing mix. The main concern in the larger market thus becomes a question of how a company achieves international recognition without alienating a significant portion of the marketplace and maintaining wide-spread brand recognition with consumer loyalty. For many companies the answer has been found in the concept of the umbrella brand, a means by which several smaller local brands can be grouped under a single multi-national brand that remains attached yet diminished in the face of the local appeal. While the larger brand may prove to have significant branding issues that provide significant barriers to market entry for various reasons, such as a glut on the market for those particular products or services or a lack of local appeal in the face of already strong local brands, it can also provide significant advantages when attempting to appeal to a larger, more cosmopolitan market that would have difficulty recognizing the type of quality and service they expect for their business. By combining the local brand and the global brand in a single entity, the company retains the loyalty and familiarity of the smaller company, as well as the impression that the smaller company will be better able to meet the changing needs of the consumer, as well as allowing the company to capture and benefit from international recognition and marketing strategies that instantly associate it with a specific level of service and/or quality. 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