MPK732: Marketing Management Assessment Answer

Current Marketing Issues: Social Value of Brands

In the current marketing environment, there are several factors that impact businesses. As a result, the marketing scenario has become dynamic with the ever-changing needs and demands of the market. One of the recent changes is the emergence of the social value of brands (Nekhili 2017). With the increased importance of social interactions and social identity in the contemporary media environment, it has become crucial to consider this aspect in branding. This has led to the relevance of the concept of social brand value, which is founded on the idea of social capital and is defined as the perceived value received through exchange and interactions with other brand users within a community (Buchanan et al. 2018). 

The term "social value" describes how a company or organisation affects the community as a direct result of the actions they do to offer goods or services there. These actions can have economic, social, or environmental consequences. Since it is expected that the services offered by or paid for by local authorities will benefit the communities they serve, those who work in local government are typically aware of social value (Masciarelli 2011). However, this concept has recently become relevant for the private sector. Social values encompass factors that have an impact on individuals within the community, such as the economy, education, health and wellness, environment and carbon emissions (Grayson and Hodges 2017).

In addition, the crisis events in recent years, like the pandemic or the war in Ukraine, have caused consumers to begin appreciating the principle of value that underlies each product and service of the brand. In other words, customers are not only concerned with the benefits that a product or service could offer them but also concerned with whether a brand performs activities that relate to its social responsibility (Stobierski 2021). With the inclusion of social responsibility in every aspect of a firm’s strategy, the new product development carried out by a brand is also impacted by this aspect. Thus, when companies take up new product development, they should consider the use of recycled raw materials, biodegradable materials, and minimum carbon footprint to ensure that the new product provides social value in addition to the value offered by its usage (Stobierski 2021).

As a result, more and more brands have started to support social causes in order to increase their social value and enhance their brand image in the market. Examples include Airbnb's promise to provide interim lodging for 100,000 displaced Ukrainian refugees (Korn 2022). Additionally, consumers believe that brands can actually affect change on social media, leading to 66% of consumers believin that brands should take a stand (Wertz 2021). Moreover, a survey revealed that 55% of consumers are willing to pay more to brands committed to bring a positive change in society (Wertz 2021). According to another survey, "a brand being known for its social value" was cited by 56% of participants as a major purchasing motivation. Additionally, maintaining employees is a result of social responsibility. Employees who participate in corporate giving initiatives make up 75% of those who stay with the business longer (Wertz 2021).

COVID-19 sparked debates and news cycles that served as catalyst for consumer sentiment, with several social concerns like ethical employment, pay equity, racial justice, environmental protection and gender equality being social concerns that mattered most to customers. Therefore, brands pay attention to what matters to consumers. Recent events have demonstrated how closely a brand's social principles are related to other business objectives, particularly financial ones (Deloitte 2022). On the contrary, customers have demonstrated their willingness to transfer their purchasing power to businesses that share their values. About 53% of consumers are ready to spend more money on a product that supports their social values. With the inclusion of social responsibility in every aspect of a firm’s strategy, the new product development carried out by a brand is also impacted by this aspect (Raczkowski 2023). Thus, when companies take up new product development, they should consider the use of recycled raw materials, biodegradable materials, and minimum carbon footprint to ensure that the new product provides social value in addition to the value offered by its usage. On the contrary, only 8% of consumers claimed to be bothered about a company's social principles. These figures serve as just another example of how brand values have surpassed more traditional purchasing criteria in the eyes of consumers (Raczkowski 2023). However, consumers can easily identify companies using social brand marketing as a profit-making strategy when there is no real desire to help a cause or when a company's actions or principles conflict with the causes they publicly declared to support (Stobierski 2021). Therefore, there is a need for transparency and authenticity in the message that brands convey in addition to the alignment of their activities with their stated objectives and corporate social responsibility goals.

Current Marketing Issues: Integrated Marketing Communication

With advancements in communication technology, businesses have begun using new tools for marketing and promotion apart from traditional channels. This has led to the development of integrated marketing communication (IMC) for the purpose of advertising and promoting a brand and engaging the customers. IMC is the process of aligning a brand’s messages such that it is consistent across different media channels used by it to communicate with the target audience (Luxton et al. 2015). It is used to support the strategic decision-making that guides communication across all marketing channels. IMC makes use of several tools in the form of sales promotion, public relations and personal selling. The sales promotion is a demand stimulating activity with the help of advertisements and other promotional efforts. Moreover, the public relations aspect includes building a positive image of a brand among consumers and other stakeholders through publicity efforts on social media, television or other media. Furthermore, personal selling involves oral communication with potential buyers to persuade them to make a purchase (Luxton et al. 2015).

A combined usage of these tools can provide several benefits to firms. One of the benefits is that it helps in improving the efficiency of marketing efforts by unifying the strategies as well as promotional messages. Thus, a consistent messaging approach is more likely to be perceived by the audience when they are communicated with a significant amount of promotional messages on a daily basis (Finne and Grönroos 2017). In addition, the usage of a number of communication channels in IMC allows a firm to reach a larger target audience, thereby facilitating a higher chance of conversion. Moreover, a unified messaging approach reduces the effort of developing content and strategies for different communication channels, thereby, saving cost and time of a firm. Furthermore, consistent messaging across several channels towards the target audience helps in building trust among consumers towards particular brands (Luxton et al. 2015). 

A firm uses a variety of communication methods to reach its audience through curated messages to promote its products and services. However, in the current environment of digital technology, it could be difficult to keep track of all the media channels that can be used by a firm to contact its potential customers. But due to the relevance of using multiple marketing channels in the contemporary scenario, a strategic approach is required in the form of IMC to be successful in achieving marketing objectives (Percy 2023). However, there are several challenges that prevent the effective implementation of IMC among firms. One of the issues that organsiations face in the contemporary scenario is related to gauging the performance of IMC against the money spent on these efforts (Blakeman 2018).

The benefits of IMC make it a crucial strategy among firms to enhance their brand value and improve their sales in the market. As a result, they are ready to spend a significant amount of their budget in carrying out IMC efforts. Moreover, the expense on IMC is estimated to increase with an annual growth rate of 16% in 2023 (Moorman et al. 2022). On the other hand, the global coronavirus pandemic changed the perception and expectations of the consumers with 84% of the customers showing an increased openness towards digital communication. This factor further enhances the expense of firms on digital channels as part of their IMC efforts (Morton 2021). On the other hand, the subsequent economic slowdown after the pandemic provides firms with the issue of financial constraints to carry out their marketing efforts. This financial constraint makes it difficult for firms to carry out IMC (Balis 2021). Therefore, it has become crucial for firms to streamline their communication efforts in accordance with the available financial resources in order to generate maximum benefits from constrained marketing activities. As a result, return of investment (ROI) is an important aspect to consider when implementing IMC strategies and methods (Business Wire 2021).

Despite the relevance ROI in evaluating the effectiveness of IMC carried out by a firm, they face issues in measuring the ROI of their marketing efforts. A survey revealed that the inability of firms to calculate their ROI effectively has been impacting their ability to justify their marketing expenses and garner budget for further IMC efforts. The survey revealed that although 84% of the firms use ROI as a metric to justify their marketing budget, 61% of the marketers were not able to calculate their ROI accurately and efficiently (Business Wire 2021). This is due to the reason that the use of a number of tools and channels make it difficult for them to track ROI metrics, despite the availability of a significant amount of data across different channels (Business Wire 2021). Another reason is their strategies for marketing, sales and finance are not aligned, which makes it difficult for the marketing teams to implement and track ROI metrics (Rogers 2022). Therefore, there is need for improvement in the process to measure ROI in order to gauge the performance of IMC.

References

Buchanan, B., Cao, C.X. and Chen, C., 2018. Corporate social responsibility, firm value, and influential institutional ownership. Journal of Corporate Finance, 52, pp.73-95. https://doi.org/10.1016/j.jcorpfin.2018.07.004

Deloitte. 2022. Brands can benefit by taking stand on social issues, but risks exist. https://action.deloitte.com/insight/2023/brands-can-benefit-by-taking-stand-on-social-issues-but-risks-exist (Accessed: 29 April 2023)

Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make corporate social responsibility work for your business. Routledge.

Korn, J. 2022. Airbnb offering free temporary housing for up to 100,000 Ukrainian refugees. Available at: https://edition.cnn.com/2022/02/28/tech/airbnb-ukraine-refugees/index.html#:~:text=Airbnb%20is%20offering%20free%20short,from%20hosts%20on%20the%20platform (Accessed: 29 April 2023)

Masciarelli, F., 2011. The strategic value of social capital: How firms capitalize on social assets. Edward Elgar Publishing.

Nekhili, M., Nagati, H., Chtioui, T. and Rebolledo, C., 2017. Corporate social responsibility disclosure and market value: Family versus nonfamily firms. Journal of Business Research, 77, pp.41-52. https://doi.org/10.1016/j.jbusres.2017.04.001

Stobierski, T. 2021. 15 EYE-OPENING CORPORATE SOCIAL RESPONSIBILITY STATISTICS. Available at: https://online.hbs.edu/blog/post/corporate-social-responsibility-statistics (Accessed: 29 April 2023)

Wertz, J. 2021. How Social Values Drive Consumers To Brands. Available at: https://www.forbes.com/sites/jiawertz/2021/12/27/how-social-values-drive-consumers-to-brands/?sh=11dc58417425 (Accessed: 29 April 2023)

Balis, J. 2021. 10 Truths About Marketing After the Pandemic. Available at: https://hbr.org/2021/03/10-truths-about-marketing-after-the-pandemic (Accessed: 29 April 2023)

Blakeman, R., 2018. Integrated marketing communication: creative strategy from idea to implementation. Rowman & Littlefield.

Business Wire. 2021. New Survey Finds Marketers Are Still Struggling to Measure ROI. Available at: https://www.businesswire.com/news/home/20210826005363/en/New-Survey-Finds-Marketers-Are-Still-Struggling-to-Measure-ROI (Accessed: 29 April 2023)

Finne, Å. and Grönroos, C., 2017. Communication-in-use: customer-integrated marketing communication. European journal of marketing, 51(3), pp.445-463. https://doi.org/10.1108/EJM-08-2015-0553

Luxton, S., Reid, M. and Mavondo, F., 2015. Integrated marketing communication capability and brand performance. Journal of advertising, 44(1), pp.37-46. https://doi.org/10.1080/00913367.2014.934938

Moorman, C., Soli, J, and Cardoso, D. 2022. Closing the Gap Between Digital Marketing Spending and Performance. Available at: https://hbr.org/2022/07/closing-the-gap-between-digital-marketing-spending-and-performance (Accessed: 29 April 2023)

Morton, J. 2021. How COVID has changed integrated marketing. Available at: https://jackmorton.com/pov/how-covid-has-changed/how-covid-has-changed-integrated-marketing/ (Accessed: 29 April 2023)

Percy, L., 2023. Strategic integrated marketing communications. Taylor & Francis.

Rogers, C. 2022. Gaps in measurement and ROI obsession. Available at: https://www.marketingweek.com/measurement-roi-5-interesting-stats/ (Accessed: 29 April 2023)

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