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Marketing Dissertation Literature Review
Advertising Of The UK Car Industry And Its Effects Upon The Buyer Behaviour Of The Consumer
This review consists of five sections. The first section explores the marketing concept and its key components. The next section presents information on the different types of advertising which can be utilised by car manufacturers to promote their products and services. Section three investigates consumer behaviour, section four examines the attributes of marketing models and the final section provides an overview of advertising strategies in the UK car industry
Marketing was once defined by Alderson (1957) as an exchange process between company and consumer (Cited from Brassington and Pettitt, p.5). This definition gives no reference to the aspects of marketing that occur before products or services are even produced or the post exchanged behaviour of both company and consumer or even an elementary aspect of commercial life: competition, Jobber, (2000).
Successful marketing is far from simple. Brassington and Pettitt (2003, p.3) state marketing does, in fact, cover a very wide range of absolutely essential business activities that bring you the products you do want, when you want them, but at prices you can afford, and with all the information you need to make informed and satisfying consumer choices.
In order to analyse the marketing activities of firms within an industry, it is necessary to first define and explain some of the critical marketing concepts and their importance to the organisations.
These concepts are:
- Simple Marketing System
- The Marketing Mix or 4 P’s
- 1.2 Kotler’s Simple Marketing Concept
In Kotler’s model there is a clear exchange between company and consumer. The model describes the exchange being goods and services one way and money in return (Kotler, 2000). Exchange of communication and information from buyer to seller is also an integral part of successful marketing.
Communication of the product or brand from company to consumer will be the result of a successful advertising campaign whereas information from consumer back to the company will provide the seller with an insight into the success of the product of service.
1.3 The Marketing Mix or 4 P’s
McCarthy (1960) introduced the 4 P’s into the marketing mix as an easy to remember acronym. McCarthy penned the thought that the influences that will determine the demand for the product can be placed within four groups. The marketing mix consists of four elements: Product, Price, Place and Promotion (Baker, 1999).
- Product - This area covers everything to do with the creation, development and management of products (Brassington and Pettitt, 2003, p.25). This also covers non-physical aspects of the product such as after sales service, guarantees etc.
- Price - The pricing of a product or service is an important part of the marketing mix. Price represents on a unit base what the company receives for the product or service which is being marketed (Jobber, 2001, p. 12). The price of the product or service may portray it being a quality item or a desirable one (Brassington and Pettitt, 2003, p.26). It may also be used to give a company an edge in a competitive market.
- Place - Place is concerned with distribution channels and consumer service levels (Baker, 1999). The objective of companies when dealing with this aspect of the marketing mix is to make sure that products are available in the right quantities, in the right place to the people who want it (Jobber, 2001, p. 15).
- Promotion - Promotion is concerned with how the product of service is made available to its target audience (Jobber, 2001, p. 15).
Advertising is a major part of the promotional side of the marketing mix. Advertising is a powerful tool which aims to influence consumer decisions and thus behaviour. One definition of advertising by Ann Burgess cited in Hart, 1990, p. 101, is the action of calling something to the attention of the public, especially by paid announcements.
Advertising enables the consumer to become an active member of the economic cycle rather than a passive agent (Burgess cited in Hart, 1990). It is this freedom of choice for the consumer that means companies’ advertising strategy must portray the correct advertising message and select the correct advertising media (Kotler & Armstrong, 2005, p. 47).
2.2 Types Of Advertising
The variety of different advertising media enables marketers to reach far and wide with their messages. The most common of these advertising media being:
Television - Below are the strengths and limitations for television as a form of advertising media.
Flexible format, uses sight, movement and sound
High level of repetition necessary
Short message life
High absolute costs
Low relative cost - very efficient
Increasing level of fragmentation (potentially)
(Source: Fill, 2002, p. 536)
In September 2005, figures produced by Ofcom stated that there were over 25 million television viewing households in the UK. Therefore, the viewing capacity for television advertising is immense.
- Press (Newspaper, magazines etc) - One major advantage of press advertising is that information can presented and then examined selectively at the consumer’s leisure (Brassington and Pettitt, 2003). The benefit of this is that because the consumer chooses what they read it will give them a feeling of control over the situation.
- Poster - Poster advertising is also a very efficient form of advertising media (Brassington and Pettitt, 2003). The location and the content of the poster are vital. The aim is simply: to provide a quick, digestible message to the passer-by (Brassington and Pettitt, 2003, p629).
- Cinema - This provides advertisers with the opportunity to benefit from the all-involving escapist environment that this medium delivers. The audio and visual capabilities of the cinema environment deliver the greatest impact available to advertisers.
- Radio - This medium provides the opportunity to contact a large percentage of the target audience within a specified geographical area at relatively low cost.
3.1 Consumer Behaviour
Consumer behaviour is defined by Blackwell, Miniard and Angel (2001) as activities people undertake when obtaining, consuming, and disposing of products and services (p. 6). It is this behaviour, and how it can be influenced that will be analysed in this section.
The primary objective is to find out how potential customers respond to different advertising techniques. This is because, a company in order to achieve its marketing and advertising goals needs to create and promote a USP (Unique Selling Point) to its target audience. To maximum its return on marketing and advertising it must understand consumer behaviour.
A company will therefore, design their marketing strategies around the factors that will, ultimately, influence consumer behaviour. According to the model of consumer behaviour devised by Assael, 1992, the consumer’s buying decision is influenced by a number of factors i.e. the individual’s previous buying experiences, their current desires, environmental influences (e.g. culture, social class) and the impact of various marketing and advertising campaigns.
The individual consumer’s choice is determined by such things as age, occupation, demographics, personality and lifestyle. Also, brand loyalty, preconceived thoughts about the products and services and competitors also contribute to this factor. The environmental issues that may affect consumer decisions can include culture. According to Kotler culture is the most fundamental determinant of a person’s wants and behaviours (p. 124) and embodies the norms, beliefs, artefacts and customs that are learned from society and that constitute its values (Fill, 2002, p. 83).
3.2 Psychological Factors Affecting Consumer Decisions
Consumer decisions are influenced further by four psychological factors:
- Motivation - One of the most popular theories about motivation was devised by Abraham Maslow. His theory bases human motivation upon a hierarchy of needs a person faces. Ranging from basic needs such hunger, thirst and sex all the way through to self-actualisation. Maslow sought to explain why people are driven by particular needs at particular times (Kotler, 2000, p. 101).
- Perception - We define perception as the selection, organisation, and interpretation of marketing and environmental stimuli into a coherent picture (Assael, 1998, p. 205). In marketing, perceptions are more important than reality, as it is perceptions that will affect the consumer’s actual behaviour (Kotler and Keller, 2006, p. 186).
- Learning - Assael (1998) describes consumer learning as a change in behaviour occurring as a result of past experience. In other words, should a person have good experience with a certain brand/product then he or she will be more likely to purchase the same product in the future. Bad experiences lead to negative feelings towards the product or service involved.
- Attitude - Attitudes as stated by Fill (2002) are predispositions, shaped through experience, to respond in an anticipated way to an object or situation (p. 75). Attitudes are the result of the learning stated previously. They are shaped by experiences and form part of why and how we act as a result of these experiences (Fill, 2002).
4.1 Marketing Process Models
There are many models to explain the stages a potential customer will go through from the initial awareness of the product to desire for the product (Brassington and Pettitt, 2003, p. 580). Many of these models amount to more or less the same sequence. Each potential consumer must pass through three simple stages.
The Cognitive stage - this is where the consumer will become aware of the existence of a certain product or service.
The Affective stage involves the changing of the attitude towards a product or service.
Finally the Behaviour stage involves the action that results from the change in attitude towards the product (Brassington and Pettitt, 2003, p. 580).
4.2 AIDA Model
The AIDA model developed by Edward Strong (1925) breaks down the sequence of events to
- A - Attention
- I - Interest
- D - Desire
- A - Action
These stages describe how advertising can be successful in reaching out to its audience by firstly grabbing their attention (Fill, 2002). Secondly, by interesting them with the idea of the product or service, then making the product / service desirable to the potential customer. The final stage that Strong (1925) penned was getting the consumer to take action as a result of their desire for the product (Fill, 2002).
4.3 DAGMAR Model
- D - Defining
- A - Advertising
- G - Goals
- M - Measuring
- A - Advertising
- R - Results
This model was devised by Russell Colley (1961) and it offers useful approach to understanding how advertising works (Copley, 2004, p. 105). This model is used to measure the result of a specific communication task in terms of the cognitive-affective-behavioural hierarchy impact on a defined audience (Copley, 2004, p. 83). An example of this model may be:
- To make 70% of the target audience aware of the product
- To achieve a 50% understanding of the proposition
- Finally to make 20% of the target audience purchase the product / service
(Copley, 2004, p.83)
However, these models have their drawbacks. Sandra Moriarty (1983) noted that the drawbacks lay in their reliance on the concept of a linear process (Moriarty taken from Huey, 1999). Moriarty (1983) and Kristian Palda (1966) both agree that these models were oversimplifying the process. They state that the stages of AIDA do not necessarily repeat in the same sequence. Sometimes an advert will result in the product being desired, other times it will result in interest etc (Huey, 1999).
4.4 The FCB Grid
There is however, a model used by a large number of advertising agencies worldwide (Fill, 2002). The FCB (Foote, Cone and Belding) Grid presented by Richard Vaughn (1980). The FCB model classifies products into two dimensions: Level of involvement (High vs Low) and motives for purchasing (Think vs Feel) (Assael, 1998).
Learn - Feel - Do
Ex. Economy cars, appliances, and insurance.
Feel - Learn - Do
Ex. Sports cars, cosmetics, and jewellery.
Do - Learn - Feel
Ex. Consumer goods, petrol etc.
Do - Feel - Learn
Ex. Life’s little pleasures such as beer, cigarettes, and candy / sweets.
(Assael, 1998, p. 164; Peter and Olson, 2005, p. 444; Fill, 2002, p. 289).
Think Products (or cognitive products) are utilitarian and are related to product performance (i.e. mpg figures for fuel consumption or cost of insurance quotes) whereas Feel Products (or affective products) are more to do with fashions or image (Assael, 1998; Feel, 2002). Involvement, shown along the vertical axis of the matrix, is the level of perceived personal importance and / or interest evoked by a stimulus within a specific situation (Antil, cited from Blackwell et al, 2001, p. 91). There are various levels of involvement a consumer will have for a product whether this is high or low (Assael, 1998; Peter and Olson, 2005).
Products that require low levels of involvement will involve such things as petrol and alcohol whereas products requiring high levels of involvement tend to be more expensive, riskier products such as cars, insurance etc. This model suggested by Vaughn is a useful tool for advertising agencies and department to appreciate the consumer / product relationship and as a result can plan relevant and appropriate communication strategies (Fill, 2002). A study by Brian Ratchford (1987) concluded that this model is both reliable and valid as a tool to analyse consumer / product relationships (Ratchford, 1987).
5.1 The UK Car Market
With almost 60 million people living in the UK, car manufacturers have a massive potential target audience for their advertising campaigns. The major players within the UK car market are Ford and Vauxhall with a market share of 14.3% and 12.7% respectively (27% total) (Keynote, UK Motor Industry, 2005). The popularity of the smaller cars such as the Ford Fiesta range and the Vauxhall Corsa consolidated their positions at the top of this list. The small style of car, like the Corsa and Fiesta, accounted for 32.7% of total UK new cars in 2004 (Keynote, 2005).
The current buoyancy of the UK economy means that the demand for cars are high (Keynote, 2005). With a base rate of 4.5% (Bank of Scotland, 2006), the UK population are borrowing more than ever. Therefore, the UK car manufacturers are taking advantage of this situation and are heavily involved in promoting their products. As a result of the booming economy, competition is very intense between the manufacturers. Such offers as 1,000 cash-back and free extra deals are the means by which these companies hope to gain a competitive advantage.
5.2 Advertising Within The UK Car Industry
In the year to September 2004, main media advertising in the UK by car manufacturers totalled 656.9m. Amongst the largest spenders were Renault with 7.7% of the total), Vauxhall (7.5%) and Fiat (6.8%). (Keynote, UK Motor Industry, 2005).
Much of the advertising expenditure was spent on television advertising campaigns. However, UK car manufacturers also advertise heavily in press advertising such as newspapers and magazines. Over recent years, advertising campaigns of car manufacturers have made the news themselves with their clever adverts or catchy themes. Among recent successes have been Honda’s Cog advertising campaign which won national acclaim winning the IPA Advertising Effectiveness Gold Award in 2004 (2004 ANDY Awards - www.adforum.com - accessed on 15/11/06) and many other accolades (Wilson, 2004).
With a booming economy, and sales of cars increasing year-on-year in the UK the need for more and more eye-catching adverts will always be at the forefront for the UK car manufacturers. Whether it is to sell more cars or change their brand image, as Honda has achieved with its marketing strategy in recent years (Wilson, 2004), the need for successful advertising is paramount for introducing new models and retaining sales in older models.
- 2004 ANDY Awards - http://www.adforum.com_archive/2004/AW37_ANDY/simglist.asp - Accessed 15/11/06
- Assael, H (1992), Consumer behaviour and marketing action, 4th ed, Cincinnati, Ohio, South-Western College Pub
- Assael, H (1998), Consumer behaviour and marketing action, 6th ed, Cincinnati, Ohio, South-Western College Pub
- Baker, M (1999), The Marketing Book, 4th Edition, UK, Elsevier, Butterworth-Heinemann
- Blackwell, R. Miniard, P. and Engel, J (2001), Consumer Behaviour, 9th Edition, Prentice Hall, London.
- Brassington, F. and Pettitt, S. (2003), Principles Of Marketing, 3rd Edition, Prentice Hall, London
- Copley, P. (2002), Marketing Communications Management, UK, Elsevier Butterworth-Heinemann.
- Fill, C. (2002), Marketing Communications - Contexts, Strategies and Applications, 3rd Edition, UK, Prentice Hall.
- Hart, N. (1990), The Practice of Advertising, 3rd Ed, Oxford, Elsevier Butterworth-Heinemann.
- Huey, B. (1999), Advertising double Helix: A proposed new process model, Journal of Advertising Research.
- Jobber, D. (1995), Principles and Practice of Marketing, UK, McGraw-Hill.
- Jobber, D. (2000), Principles and Practice of Marketing, 3rd Edition, UK, McGraw-Hill.
- Keynote report (2005), UK Motor Industry, 2005.
- Kotler, P. and Armstrong, G. (2000), Marketing: An Introduction, 5th Edition, Upper Saddle River, NJ: Pearson Prentice Hall.
- Kotler, P. and Armstrong, G. (2006), Principles of Marketing, 11th Edition, Upper Saddle River, NJ: Pearson Prentice Hall.
- Kotler, P. (2006), Marketing Management, 12th Edition, Englewood Cliffs, NJ: Prentice Hall.
- Moriarty, S. taken from Huey, B. (1999), Advertising’s double Helix: A proposed new process model, Journal of Advertising Research.
- Palda, K. (1966), The Hypothesis of a Hierarchy of Effects: A partial evaluation, Journal of Advertising Research, Vol. 3, p. 13 - 24.
- Peter, J. and Olson, J. (2005), Consumer Behaviour and Marketing Strategy, 7th Edition, UK, McGraw-Hill.
- Ratchford, B. (1987), New Insights About The FCB Grid, Journal of Advertising Research.
- Wilson, R. (2004), Which Brand has the Best Advertising? Honda, Creative Review.
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