Features of Markets and Marketing, Peculiarities of Product Placement - Coursework Example

PRODUCT PLACEMENT A CRITIQUE Table of Contents Page 3 2 Introduction 4 3 Marketing Strategies 4 4 Social Media 6 5 Product Placement 7 6 Critique 10 7 Conclusion 12 8 Bibliography 13 1 Abstract Marketing strategies have been discussed and explained in context of traditional media versus the new social media. Whereas the traditional media has not lost its audience but the newer generations are attracted more to the social media chiefly due to its interactive nature. A result of this advent of social media is product placement which began as a need of the media to support itself in its expressions. This need was capitalized upon by the need of the product owners initially for enhancing the exposure of their products and later to manipulate and influence the decisions of the target audience. Ethical values of product placement have been questioned but the conclusion is that product placement is here to stay and the consumer stays blissfully unaware of the latest marketing strategy. 2 Introduction Marketing of products and services has always been an innovative task. Over a period of time many theories have emerged about the methods to be adopted. Marketing is an essential requirement to sell a product or service and its exposure has been continuously experimented. Marketing has always been considered a commercial endeavour and the focus was to entice or excite the customer to buy a product or service by highlighting the features and benefits of the product/service. In the seventies it was pointed out by Philip Kotler and others that marketing could also be consumer centric instead of product centric. This gave birth to the concept of Social Marketing. 3 Marketing Strategies There are many approaches to addressing such an understanding of business customers or consumers, but one proposed by Dibb and Simkin has been widely adopted across consumer, business and service markets. Their Buying Proforma forces managers to put the customer first and identifies exactly what a company must provide or offer. It also reveals the influences the company in turn must strive to influence and offers a framework against which to compare competitors’ moves and marketing programmes. (Dibb, Simkin and Bradley) Four different reasons influence a buyers’ decision. They are also known as 4P. 1 Product. The buyer is greatly influence if the product is perceived as useful for him. Sometimes it may not be of immediate use but its uniqueness is the attraction. Future valuation is also a decision making factor. 2 Price. The price is not usually a stand-alone factor. It has to be comparable with other products or services but with weight given to factors like quality and after sale service. In case of tenders it has been seen that the highest and lowest bidders fail and the middle bidder is often successful. There is a play on the mind of the buyer that middle ground is best for him. 3 Promotion. Image plays a very important role. Whether it is the image of the product which enhances value or status or the image of the buyer when he acquires a product or service, both factors are extremely important for the buyer in arriving at a purchase decision. The importance of reaching the target market can be realized from the fact that marketers use various mediums of promotion to educate customers about their products. The use of advertising, sales promotions, direct sales, public relations etc are the various methods to reach the target audience. The relevance of this P assumes greatest importance among all other P’s. The media used can be print, television, radio or the internet. 4 Place or Time of offer. It is of great value to the buyer if a product or service is offered to him at a place and time that suits him. The importance of this can be gauged from the fact that often a deal is concluded at the most awkward time and place just because of the whim and fancy of the customer. This is more applicable when individual customers are involved for high value items or services. New ways of this P are use of mobile phones and the internet through which actual buying takes place these days. There is an however, an additional fifth factor that influences a buying decision and it is, 5 After sales service. In most cases a satisfied customer is a recurring customer and the best publicity a product or service can wish for. Lately another 3P’s have been added to the list and they are People, Process and Physical Evidence. (Chartered Institute of Marketing) The traditional mediums used to communicate these to the Target consumer are Newspapers, Magazines, Television, Radio, Books, Physical paper mail, catalogs and Yellow Pages. With the introduction of Internet a new media was introduced through which e-mails, banners and the websites are used for communication. The one common feature in this medium is that the intent is communication with the target audience but this communication is one way only. When this communication becomes a two way affair, it turns into Social Media. It becomes interactive. 4 Social Media This termed was coined by Philip Kotler and Roberto L.Eduardo (1971) and later redefined by Philip Kotler, Ned Roberto and Nancy Lee (2002). It is described as “A social change campaign is an organized effort conducted by one group (the change agent) which attempts to persuade others (the target adopters) to accept, modify, or abandon certain ideas, attitudes, practices or behaviour”. The planning and implementation of programs designed to bring about social change using concepts from commercial marketing is what social marketing all about. The latest entrants into this sphere are interactive blogs and media can be mixed. A post could contain text, audio, video, or photographs. Here the target audience gets the opportunity to communicate and even collaborate in the expansion of the idea. It is part of the word of mouth advertisement which is the most coveted marketing tool. This media is interactive as the receiver of the information or the targeted customer can actually interact by asking questions and getting answers on the same blog. In fact he can even leave his positive or negative comments for other readers to see. This media is also linkable to different formats. For instance a message can be on the net in print with a link to a video demonstration or an audio reference to enhance its value or to offer a larger view to the customer. This linkability is missing in the traditional media. One of the greatest advantages of the social media is that it has changed the perception of the customer. He is now involved, interacting and sometimes even interfering and more action means more publicity (positive and/or negative) and this brings vibrancy to the marketplace. The social media has now changed the way people now look at products and promotions. By far the greatest change the social media has brought about is B2B and B2C or business to business and business to customer sales. Actual transactions now take place on the web. For example sites like Amazon.com and e-bay.com are now selling a variety of products in billions of dollars. On a smaller scale stores and shops like MacDonald and Pizza Hut are doing a roaring business by taking orders via the net. Customers have the comfort of not only ordering put paying through the internet under secured environment. 5 Product Placement This interactive marketing gave birth to the idea of a new phenomenon in communication. It is collaborative in nature and innocuous in appearance. The latest trend in advertising is to make it appear normal and innocent. The product placement is often not disclosed at the time that the good or service is featured. The tendency is to move away from straightforward advertisements where the product is the main item, to movies, books, television, or radio where they appear in real life scenes, displayed either in the background or in use. This is product placement that is happening across the various media in a way that the emphasis shifts from the product to the scene but is so interlaced with the event that it becomes part of memory and recall of the scene automatically brings the recall of the product. This is indeed a very clever move. The product is never the focus but it is need, a prop, without which the scene, whether in a movie, book or television show, the scene would be incomplete. It is woven inconspicuously with the storyline, script, and even dialogue and sometime becomes a famous by-line by itself. This is a great leverage that appears most naturally. The impact is enormous. Millions get to see, feel, and experience the visual or written matter without realizing it to be an advertisement that they would avoid in the print media or television commercials. They would absorb its radiance willingly, often recalling it fondly; something they would not do if it was forced on them through another method. The Writers Guild of America have reported “Last year, the use of products in filmed entertainment increased 44 percent and generated revenues in excess of $1 billion. In television alone, product-related revenues skyrocketed a whopping 84 percent. For example, during the third season of The Apprentice, Burger King, Dove Body Wash, Sony PlayStation, Verizon Wireless, and Visa reportedly paid upwards of $2 million per episode to have their products incorporated into plotlines”. (Writers Guild of America) The Guild further points out the use of Burger Kings in the serial “The Apprentice” where "contestants wore Burger King Uniforms and flipped burgers as part of a challenge." Gannett is a very large media company that owns several radio stations. In Denver, Sacramento, Atlanta and Cleveland, radio stations owned by them have implemented "advertainment". This is a new programming format that consists of hybrid shows, which mix entertainment with commercial content. This is done besides regular commercial breaks. In Minneapolis, Gannett, KARE which is an affiliate, plans to "revamp its chatty mid-morning talk show Today, and put much of that happy talk up for sale," Advertisers will be asked to pay $2,000 to $2,500 for 5-minute segments on the show. Gannett’s Total Online Internet Audience in December 2005 was nearly 21 million unique visitors, reaching about 13.5% of the Internet audience, as measured by Nielsen//NetRatings. (Gannett) Basically, there are three ways product placement can occur: It happens by itself as products are required in scenario to support the act. For example a group of people drinking beer will naturally be using some brand or the other. This brand will get exposure in the scene, be it a film or book and will be seen by the audience. Its arranged, and a certain amount of the product serves as compensation. In this case the beer is supplied free and gets exposed to the audience casually. Its arranged, and there is financial compensation. In this case the beer is of a particular brand that has offered a price for it to be shown, with vantage angle to give a certain impression to the audience. Similarly arranged product placement deals fall into two categories: Trade-off of integration or placement for a supply of product. The arrangement is to supply a certain quantity of the product free of charge in lieu of the quantum of time the product will get exposure in the programme. Financial compensation for placement or integration. In this case a fee or charge is taken from the product owners and wither the products is woven into the story or by-lines or integrated into the whole scene as an important and inevitable component. This gives it star value alongside the characters. Brand awareness is considered an important milestone in Brand building exercises. As a result Brand managers are now actively attempting to appeal to the emotional side of the consumer. Traditional advertisement is getting a negative response as people are getting tired of being forced to see repeats of advertisement in the normal traditional media. This has made product placement a novel marketing tactic worldwide. Today this is the preferred medium to arouse consumer awareness without suspicion of it being conceived as a marketing gimmick. Therefore it has become a practice to have specialized agencies to organize the placements. 6 Critique The ultimate objective of marketing is to influence action. Action takes place when the target audience begins to believe that their benefit will be equal to or greater than the exchange value or price. If the programme is based on understanding of the target audience it will bring about action. More effective programmes create higher the perception of value and therefore generate action. Since perceptions are not uniform across the whole audience, segmentation is desirable to target the correct audience and get value for money. Marketing efforts must therefore incorporate all of the "4 P’s, i.e. the Product, Price, Place and Promotions. The need is to create an appealing "Product"; play down the "Price" the target audience believes it has to pay for the exchange; make the exchange available in "Places" suitable for the audience; and Promote the trade or exchange opportunity with creativity and through inventive channels and by new strategy to result in Action Traditional media which largely consisted of print, radio and television is now being stretched to add more interactive elements. The advent of product placement has brought in an exciting medium that is attractive, inoffensive and has high recall value. The consumer product companies are increasingly using product placement as a part of their overall marketing efforts. According to a recently released PQ Media study, worldwide paid product placement grew 37.2% to $3.36 billion in 2006 and is forecast to grow 30.3% to $4.38 billion in 2007 especially in the emerging Asian markets and in America. (Marketing Alternatives: Product Placement) A question of ethics has been raised by some people. They claim that product placement is an infringement of the level playing field. According to them when a placement is paid for, it influences the audience for that product, whereas the product that has not paid a fee is not getting equal chance of exposure. They further expound that this may also be used as a means to pressurize those not wanting to pay a fee to do so at the risk of being left out of the race for exposure. An example of this is the profile placement on Myspace.com that is a highly visible to consumers. Here they get to see the profiles that have paid a fee for this on a priority basis. They cannot judge which profile has been paid for and therefore is showing more features while other unpaid profiles get a back seat and fewer features are mentioned in their case. The following has been reported by Wall Street Journal On-line “Although anybody can create a MySpace profile for free, and fake ones abound, these pages are the result of paid advertising deals with News Corp. The arrangement allows marketers to add extras like longer videos -- including trailers for movies -- and more pictures than a free page has. But the real appeal to advertisers is the opportunity to create personal relationships with millions of actual young people. "What we really struck upon is the power of friendship," says Michael Barrett, chief revenue officer for News Corp.s Fox Interactive Media and overseer of these deals. And this is a big circle of friends. MySpace had nearly 45.7 million unique visitors in June alone, with users spending an average of nearly two hours on the site at a time, according to Nielsen//NetRatings.(The Wall Street Journal Online). 7 Conclusion Marketing strategies have always hovered around the 4P’s as expounded by Dibb, Simkin and Bradley, but have been adjusted to accommodate the new media opportunities. While the traditional media has not been reduced in terms of size but the growth has taken new avenues with interactive social media as well as product placements. The last has really taken off very well and has seen great positive audience response. Audiences and target consumers are identifying themselves with the scenarios and the characters, generally absorbing the subtle affects of products placed in them. Who can possibly forget the role played by the Harley Davidson bikes when they were portrayed in the classic film “Easy Rider”; Harley bikes carried beer drinking, freedom-seeking, rebellious characters across the West’s open roads. While its bad boy image has been diluted slightly the brand’s personality still resonates with connotations of freedom, adventure, non-conformity and passion which appeal to “pleasure” riders who are happy to pay premium prices to connect with this seductive brand. There are people in the social media that raise an issue that this is subversion but the cry is largely ignored and product placements are here to stay and prosper. 8 Bibliography Dibb, Simkin and Bradley) The Marketing Planning Workbook (Dibb, Simkin and Bradley), both originally published in 1996 by Thomson, London. Gannett available at: http://www.gannett.com/map/gan007.htm Kotler, Philip and Eduardo L. Roberto. Social Marketing, 1971. Kotler, Philip, Ned Roberto and Nancy Lee. Social Marketing: Improving the Quality of Life, SAGE, 2002 Marketing Alternatives: Product Placement available at: http://www.brandingstrategyinsider.com/2007/07/marketing-alter.html The Wall Street Journal Online available at: http://online.wsj.com/public/article/SB115490611980828259- XaeIPrNDJ_0JhpdEjxYgL1Cuzs0_20070806.html?mod=rss_free Writers Guild of America, "Entertainment Guilds Call for Industry Code of Conduct or FCC Regulation for Product Integration in Programming and Film: Guilds Issue White Paper Report on the Runaway Use of Stealth Advertising in Television and Film", Media Release, November 14, 2005 Available at: http://www.wga.org/subpage_newsevents.aspx?id=1422 Read More