Advertising and Pricing Practices of Sony Corporation in Britain and US - Essay Example

? Critically analyse how ethical factors affect the communications mix in an organisation of your choice. The organisation should market its products/services on an international basis. Advertising and pricing practices of Sony Corporation in Britain and US 1. Introduction The survival of the firms in the modern market is depended on their ability to incorporate strategic plans, which can support their increase of these firms’ competitiveness towards their rivals. Marketing has been proved as a strategic framework that can serve two different organizational needs: the increase of the firm’s profitability and the improvement of the firm’s communication with its customers; the second target, if achieved, can support the long-term organizational growth. Current paper focuses on the examination of particular aspect of marketing, the marketing communications process – known also as marketing communications mix; emphasis is given on two specific elements of the marketing communication mix: advertising and pricing. At the next level, the ethical aspects of advertising and pricing are examined specifically in regard to the international market; in order to make clearer the relationship between ethics and advertising/ pricing strategies in the global market, a firm operating in this market has been chosen: Sony. It should be noted that reference is made to the advertising policies of the firm in two specific markets: the British and the US market. It is revealed that the firm’s current advertising and pricing policies in Britain and US need to be reviewed and updated in order to fully meet the ethics held in the particular field. 2. How ethical factors affect the the communications mix in Sony Corporation - advertising and pricing practices of the firm in Britain and US One of the most crucial requirements for the success of any marketing plan is its alignment with the characteristics and the expectations of the targeted market. In practice, the needs and the preferences of consumers in the targeted market can be identified more effectively using appropriate marketing techniques known as communications mix, a framework incorporating the policies that a firm can develop in order to improve the quality of the communication with its customers. In accordance with Kotler et al. (2010) the communications mix framework refers to the following activities: ‘advertising, publicity, personal selling, sales promotion, direct marketing and online marketing’ (Kotler et al 2010, p. 512). A graphical representation of the marketing communications mix is presented in the Appendix section (Figure 1). It is clear that the development of effective communications channels with the customers is related with specific activities, such as advertising, public relations and sales. It is assumed that the failure of a firm to succeed in one or more of the sectors included in the marketing communications mix can cause delays in the firm’s marketing projects. In the literature, different approaches have been used in order to describe the criteria used by marketers in order to develop effective marketing communications schemes. A model of the marketing communications process is presented in the study of Sandhusen (2000); it is explained that the specific model has been developed by Merton Electronics in order to support the promotion of the firm’s products; in the context of this model, the main parts of a successful marketing communications process should be the following ones: ‘a) the design of the advertising campaign, b) the proposition of the campaign to the media, c) the presentation of the advertising through the media, d) the decoding of the advertising campaign’s messages, e) the response of the public to the advertising campaign’ (Sandhusen 2000, p. 437). In any case, the effectiveness of marketing communications schemes is depended on the ability of marketers to use the appropriate type of media for the promotion of a firm’s products/ services to the public (Kurtz et al. 2009). Through the same point of view, Meek et al. (2007) note that the priority of marketers when having to develop a marketing communications scheme is ‘to ensure the scheme’s effectiveness and efficiency’ (Meek et al. 2007, p.199). In any case, it is necessary for marketers to understand the role and the priorities of marketing as part of business operations. McDonald (2007) states that the main role of marketing communications mix is to improve the communication between a firm and its ‘existing and potential customers’ (McDonald 2007, p. 331). From another point of view, Gronroos (1996) note that marketing, in its traditional form, is not able to respond to the market needs and demands; in fact, it is made clear that traditional marketing plans suffer from lack of integration. It is proposed by Gronroos (1996) that an alternative form of marketing is developed which will emphasize on the relationship management – referring to the relationship between firms and customers. It is further explained that the above marketing plan would be based on ‘the mutual exchange and fulfillment of promises’ (Gronroos, 1996 in Parker 1998, p. 186). Through the above view, the following assumptions can be derived: a) the need for the development of marketing communications scheme is emergent; b) the use of ethical criteria would be a standard practice when developing marketing communications schemes; the ethical criteria that could be most appropriate for a particular marketing communications plan would be selected by referring both to the market and the social conditions of the targeted market – in the context described in the next section. The marketing communications plans developed by firms worldwide need to be aligned with the market ethics. However, the level of interaction between marketing and ethics in the context of international market cannot be easily identified especially because apart from the market ethics there are also ethical criteria of different nature, such as cultural and social ethics, that are expected to be taken into consideration when developing marketing schemes which will be promoted globally. This issue is highlighted in the study of Kumar et al. (1998); the above researchers note that in the context of the international market, marketing projects need to be aligned not just to the ethics related to each particular element of the marketing plans, for instance the advertising campaigns, but also to the ‘global ethical criteria’ (Kumar et al. 1998, p. 230). In accordance with Kumar et al. (1998) the benefit of such initiatives is that the marketing plans, which meet the above standards, are expected to help towards ‘the exchange of ethics in countries with different social and cultural characteristics and traditions’ (Kumar et al. 1998, p. 230). In practice, this means that the relevant marketing plans would have more chances to be well accepted by the locals; then, the targets set by marketers in regard to the particular market will be easier achieved. On the other hand, Lamb et al. (2008) note that the promotion of ethical behaviour in regard to the marketing plans promoted internationally is a challenging task. The reason is that, according to Lamb et al. (2008), the development of marketing schemes internationally is mainly attempted through the Internet; however, the monitoring of the ethical standards of marketing schemes promoted through the Internet is quite difficult, taking into consideration the number of visitors and the number of transactions developed through the WWW on a daily basis (Lamb et al. 2008); reference is made to the potential role of an effective anti-spam legislation in the control of the ethical standards of advertising promoted through the Internet (Lamb et al. 2008). The difficulty in promoting ethics through the international marketing plans is also highlighted in the study of Keillor (2007); a particular aspect of the relationship between ethics and international marketing is explained in the above study: it is noted that the level at which ethics are used for the development of international marketing schemes is depended on the geographical characteristics of the targeted market; it is explained that in developing countries, using ethical criteria and principles when promoting marketing strategies is rather impossible – due to the different perceptions of locals on law and legal behaviour. For this reason, it is suggested that marketers who are interested in being involved in the promotion of international marketing schemes ‘should neglect their ethical and moral development’ (Keillor 2007, 221); otherwise he will not be able to complete the particular project. The above problem is analyzed in the study of Kline (2010); in the above study it is made clear that marketing projects which are based on specific ethical standards and which are effectively promoted across developed countries would not be successfully developed in developing countries. In accordance with Kline (2010) this failure would be explained by the fact that ‘in developing countries the governments avoid in taking initiatives for the protection of consumer rights’ (Kline 2010, p. 146); moreover, in these countries ‘the average educational level of the population is low’ (Kline 2010, p. 146) a fact that further prohibits the promotion of law regarding the quality of marketing schemes developed in the particular countries. At the next level, Delener (1995) notes that the difficulty in promoting ethics through the international marketing strategies is derived not because of the geographical and economic characteristics of the targeted markets but because of the existence of differences between the interests of each organization and the interests of its customers; in the context of the international market, such difference may be extremely high (Delener 1995). On the other hand, Beamish et al. (2007) note that the promotion of ethical standards through international marketing schemes is feasible by following a specific methodology: instead of trying to impose a specific product/ service, marketers should try to explain to the targeted customers the ethical aspects of the particular product/ service. O’Guinn et al. (2008) use a similar approach in order to explain the role of ethics in international marketing strategies; in accordance with the above researchers, ethics need to be used in all phases of international marketing plans, not just in specific parts of these plans (O’Guinn et al. 2008). In accordance with the issue discussed above, ethics are expected to be involved - more or less - in all marketing communications plans. In Sony Corporation – firm used for highlighting this study’s key issues – ethics have been used in the development of the firm’s advertising campaign but also in its pricing practices – sectors under examination; however, it seems that the role of ethics in the firm’s advertising and pricing schemes has been often ignored or, at least, it was not adequately supported. This fact is made clear by referring to the ethical issues that appeared in regard to the firm’s advertising campaigns and pricing policies in Britain and US. The promotion of the firm’s products in Britain and USA is based on similar advertising practices: Internet, media and the press. The features included in the relevant advertising campaigns can be characterized as rather common – compared to those used by other firms operating in this industry; scenes bases on the strong oppositions – in terms of themes and colours – and messages that aim to highlight the firm’s advantages towards its rivals characterize the firm’s advertising schemes in Britain and USA (BBC News, October 2006). The effectiveness and the quality of these schemes have been strongly criticized (Barrett 2009, McGouldrick, 2007, BBC News, August 2000). Apart from the common forms of advertising campaigns – as described above – the promotion of the firm in the USA market is supported by an advertising schemes which is based on the following concept: the firm urges the public to use graffiti in open areas (especially open walls) in order to show their support to a firm’s product – the play-station (Atlanta News, 2005). The above advertising campaign has not been used for the promotion of the firm’s products in the British market. The above campaign has caused strong reactions by the local communities at the level that the activity initiated is not aligned with the existing laws (Atlanta News, 2005). This ‘stealth marketing’ scheme has been promoted in the US market and has been one of the firm’s advertising campaigns which have been strongly criticized as of their opposition with market and social ethics – as explained below. The ethical aspects of the firm’s advertising campaign could be made clear by referring to the advertisements included in the particular campaign – referring to the advertisements used for the promotion of the firm’s products in the British and the USA markets. Ethics are an important element of the firm’s advertising campaign. The advertisements developed by the firm’s marketers for the promotion of PlayStation are indicative examples of the level at which innovation and ethical standards are promoted through the firm’s marketing scheme (Barrett, 2009); however, this is not the rule regarding the advertising campaigns used by Sony. More specifically, certain of the firm’s advertising practices in Britain and USA have been strongly criticized as being opposite the market and social ethical standards. An indicative example is the advertisement presented in the Appendix section (Figure 2); the opposition in the race of the participants is considered not as a tool for promoting the firm’s marketing messages but rather as a tool for supporting racism (Adpunch, 2006, The Guardian, 2006). The specific advertisement has been introduced in both the British and the US markets and involves in the promotion of the firm’s play-station. The above advertising caused strong oppositions of the public and the media both in UK (The Guardian, 2006) and the USA (Adpunch, 2006). Additionally, in regard to the US market, the firm has developed a ‘stealth marketing’ practice which has caused strong reactions by the local communities and the media; more specifically, the firm’s marketers urged people in large cities across USA to use graffiti (see Figure 3, Appendix) in order to design the characters of the firm’s play-station on open walls (Atlanta News, 2005); the above marketing campaign has been considered as violating the market ethics but also the social ethical standards (Atlanta News, 2005, Ethics Scoreboard, 2006, Marrone, 2006). In a relevant report, the reactions of the people in Philadelphia are presented; when being asked for the particular marketing scheme one of the locals answered that ‘it's extremely egregious for them to come into Philadelphia and ignore our laws’ (Marrone, 2006). A similar marketing campaign – in terms of its opposition to the existing ethics – has been the one used by the firm for the promotion of its Play-Station ‘God of War II’ (McGouldrick, 2007); in the context of the above advertising campaign ‘a goat was slaughtered in Athens Greece only to draw attention at a party featuring the launch of Sony PlayStation's "God of War II"’ (McGouldrick, 2007). This marketing practice has been also negatively criticized – considered as opposed to the market and the social ethics (McGouldrick, 2007). It should be noted that the above advertisement has been promoted online – being accessible by consumers in both the British and the USA markets. On the other hand, the reference to the living conditions and challenges of a particular family – as part of the firm’s marketing campaign – could be also criticized as being partially opposed with the social ethics; however, no particular damage seems to be caused to the participants (two brothers); the specific marketing campaign – launched in USA – could be therefore accepted at the level that it is not set as common practice for the promotion of the firm’s products (Dydzuhn, 2010). Moreover, the advertising practices used for the promotion of Sony Bravia in USA is another example of the trend of the firm’s marketers to confront with the social ethics; for the needs of the specific advertising campaign, a whole estate in San Francisco, the ‘Queen's Court in Glasgow's Toryglen estate’ (BBC News, October 2006), was painted using different colours (see Figure 4, Appendix). The firm’s marketers preferred to avoid using computer-based graphics for producing the advertisement; this resulted to the use of about ‘70,000 litres of paint’ (BBC News, October 2006) and the engagement of 60 people in the cleaning process – after the end of the filming. However, the particular advertisement could have been produced using relevant computer graphics; the intervention in a whole estate at such level for filming an advertisement is another indication of the firm’s trend to ignore the ethical rules when having to develop its advertising campaigns. The opposition of the firm’s marketing practices towards the market ethics can be identified in another aspect of the firm’s marketing communications mix: the pricing policies of the firm – reference is made to the British and the USA markets. In Britain, Sony has been accused for price – fixing; in accordance with ‘the complaint filled by online retailers with the Office of Fair Trading (OFT), Sony has used dual-price practices pressing online retailers to sell Play-Station at higher prices’ (Miller, 2005) – in order to keep a balance between their profit and the cost of the product. The above strategy of the firm is clearly opposed to the market ethics; measures should be taken by legislators in Britain – as in all countries in the international market – so that the phenomena of price-fixing to be eliminated. A similar problem has been identified in regard to the firm’s pricing practices in the USA market; in fact, the extension of price-fixing policies used by the firm has been such that the firm ‘has been accused for conspiracy along with other firms – Samsung, Toshiba and LG – in order for the prices of disc drives to be kept at high levels’ (Mearian, 2010). 4. Conclusion The development of marketing campaigns for the promotion of specific products/ services need to be set within particular limits; the above need has been made clear to British legislators who decided ‘to make the false representation of brands as consumers a criminal offense’ (Hall 2008). In the case of Sony, the scope of the firm’s advertising and pricing policies has been often opposed to the existing market and social ethics – as described above. Of course, it would be supported that this is not the view of all consumers and that it is an issue of personal perceptions. However, when the reactions caused have the support of the community and the media, it is assumed that there is a logical reasoning for the opposition to particular advertising or pricing policy. Ethics are still important in the business sector even if they are, sometimes, opposed to the business goals (Sunderland, 2008). The hierarchy of values should be clear in all social and economic activities, including the marketing schemes involved in the promotion of products/ services in the international market. The fact that the conditions in the international market may set more challenges for the promotion of ethics (as explained above) should lead to the increase of the support of ethics in the context of international business projects. References Beamish, K., Ashford, R. (2007) Marketing planning, 2007-2008. Butterworth-Heinemann Delener, N. (1995) Ethical issues in international marketing. Routledge Keillor, B. (2007) Marketing in the 21st Century: New world marketing. Greenwood Publishing Group Kline, J. (2010) Ethics for International Business: Decision Making in a Global Political Economy. Taylor & Francis Kotler, P., Armstrong, G. (2010) Principles of marketing. Pearson Education Kumar, B., Steinmann, H. (1998) Ethics in international management. 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International Marketing Review, Vol 22, No 5, pp. 578-600 Online Sources Adpunch (2006) Racist Playstation ad by Sony? http://www.adpunch.org/entry/racist-playstation-ad-by-sony/ Atlanta news, December 29, 2005, Sony to vandalize Atlanta, available from http://atlanta.metblogs.com/2005/12/29/sony-to-vandalize-atlanta/ Barrett, L., 2009, Blue ocean' thinking can create waves, available from http://www.guardian.co.uk/media/2009/feb/02/advertising-industry-news BBC News, October 20, 2006, Purple rain, available from http://news.bbc.co.uk/2/hi/6069784.stm?lsm Dydzuhn, K., June 28, 2010, Capitol Photo and Sons featured in Sony advertising campaign, available from http://www.fairfieldcitizenonline.com/news/article/Capitol-Photo-and-Sons-featured-in-Sony-535528.php Ethics Scoreboard, January 2, 2006, Sony's Unethical Advertising Innovation, available from http://www.ethicsscoreboard.com/list/sony2.html Guardian, UK, 2006, Sony ad provokes race accusations, available from http://www.guardian.co.uk/technology/gamesblog/2006/jul/05/sonyadcasues Hall, E., April 28, 2008, U.K. Cracks Down on Word-of-Mouth With Tough Restrictions, available from http://adage.com/digital/article?article_id=126667 Hickman, M., September 16, 2010, Britain the loser as Coca-Cola triumphs in battle of the brands, available from http://www.independent.co.uk/news/media/advertising/britain-the-loser-as-cocacola-triumphs-in-battle-of-the-brands-2080383.html Marrone, B., January 24, 2006, Sony draws criticism for graffiti ad campaign, available from http://www.dailypennsylvanian.com/node/48055 McGouldrick, J., May 4, 2007, Sony's Dead Goat Fiasco Draws Ethical Criticism, available from http://www.associatedcontent.com/article/230981/sonys_dead_goat_fiasco_draws_ethical.html?cat=19 Mearian, L. 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(2005) Sony accused of price-fixing in the UK, available from http://www.joystiq.com/2005/11/15/sony-accused-of-price-fixing-in-the-uk/ Segan, S., September 9, 2002, Few Sites Reject Unusual $10M Sony 'Advertorial' Campaign, available from http://www.consumerwebwatch.org/dynamic/online-advertising-investigation-sony-campaign.cfm Sony Corporation, 2011, Corporate Website, available from http://www.sony.net/SonyInfo/ Sunderland, R., Wood, Z., 16 November 2008, The Observer, Ethics still matter in hard times, available from http://www.guardian.co.uk/business/2008/nov/16/observer-good-companies-guide-1 Winterman, D., March 26, 2007, The (sponsored) word on the street, available from http://news.bbc.co.uk/2/hi/uk_news/magazine/6478889.stm Appendix Figure 1 – Marketing Communications Mix (Source: http://www.davedolak.com/promix.htm) Figure 2 – The advertisement of Sony which has been criticized for promoting racism (source: http://www.adpunch.org/entry/racist-playstation-ad-by-sony/) Figure 3 – Graffiti developed by consumers responding to the Sony’s call to represent the characters of its play-station in open walls (source: http://www.dailypennsylvanian.com/node/48055) Figure 4 – Estate painted for the needs of Sony Bravia advertising campaign (source: http://news.bbc.co.uk/2/hi/6069784.stm?lsm) Read More