Advertising and Ethics

Advertising

Open the website Yahoo.com and there are many types of advertisements that appear, some for car manufacturers, television shows, and prescription drugs. Today the first advertisement that displayed on Yahoo.com was for a drug called Vyvanse from a manufacturer called Shire, LLC. The advertisement states that Vyvanse helps control ADHD and shows a picture of a smiling young girl who is supposed to be a happy user of the drug. Is it possible that the drug is indeed a help for some people with ADHD but not for all? How many does it have to help in order for the manufacturer to be able to claim that it helps control ADHD? How does Shire advertise other medicines? A visit to http://www.shire.com shows more smiling happy people that are helped through many diseases by medications produced by Shire (Shire, 2013, n.p.).

Another advertisement that seems very similar but has been challenged is when Zales jewelry store advertised their diamonds as the most brilliant in the world. “Akron-based Sterling Jewelers Inc., a retailer that operates more than 1,300 stores under several brands that include Kay Jewelers and J.B. Robinson Jewelers, has sued rival Zale Corp., which operates about 1,870 stores under the Zales brand and others. Sterling says Zale’s claim that its Celebration Fire diamond is “the most brilliant diamond in the world” is false and misleading. “Fire diamonds are not the most brilliant in the world, and the research claimed to prove that Fire diamonds are the most brilliant in the world does not and cannot so prove,” Sterling alleges in the lawsuit, which was filed last Tuesday, Nov. 13, in U.S. District Court in Cleveland” (Park, 2012, p. 0003).

There is no way to react to advertising puffery or deceptive advertising since there is hardly an item that is advertised today that does not use one or the other kind of advertising. People do not react in any sort of way to advertising today. Most people see an advertisement for something and then check out reviews and comments online, so if there is some exaggeration in an advertisement but most people are still happy with the product or service that is OK, and if people are not happy with the product or service new customers will read the comments and reviews and not be duped. The discussion about ethics and advertising and how vulnerable consumers are reflects an outdated view of how consumers react to advertisements.

PARK, M. (2012). Sterling Jewelers goes to court over rival’s ‘most brilliant diamond’ claim. Crain’s Cleveland Business, 33(45), 0003.
Shire, llc. (2013). Retrieved online at: http://www.shire.com/shireplc/en/home

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The Rolex Marketing Mix: A Success Story

Advertising

The Rolex Marketing Mix

Marketing is the effort made by an organization to identify needs and wants of potential customers and then satisfying them.  The most successful organizations are those that are the most successful in first identifying and second satisfying customer’s needs.   Identifying needs and then meeting them does not happen by accident; it takes a concise plan.  The marketing mix for a product is made up of the controllable factors available to organizations.  A marketing manager has four tools to use when developing and executing a marketing plan: product; price; promotion; and place (Kerin, Hartley, & Rudelius, 2011, p. 11).  A careful examination of the marketing mix of a company yields insight into the health and direction of the company by indicating the market being pursued by the company.  There are many organizations that excel at marketing products and services but the greatest example of marketing genius is displayed by the Rolex watch company.

Rolex took a huge leap forward in “1914, just before the shooting of Archduke Ferdinand would throw the world into bloody conflict, the Bavarian Hans Wilsdorf was paying little attention to world events. Having established his London-based watch company Rolex in 1908, he had decided to test the accuracy of his products by sending them off to a Swiss observatory. It was a decision worth taking, as Rolex was rewarded with the world’s first timing certificate for a wristwatch” (Haig, 2004, p. 126).  Because the company had focused on wristwatches instead of the more popular pocket watch and had garnered such a reputation for accuracy they became common issue for soldiers during the First World War.  the First World War, as they were easier to use than pocket watches in the trenches.  Rolex focused on accuracy and innovation which led to features such as a self winding mechanism and an automatic day and date window.  The innovation and quality that Rolex built into each watch soon gave the company a clear advantage over the competition.

Considering Rolex’s positioning in view of the components of the marketing mix will show how the company positions its product in the marketplace.  The discussion of Rolex’s marketing genius is incomplete without including the pricing structure followed by them as well as the distribution channels employed.

Rolex has focused on the features that are important to its customer base since the company was founded in 1908.  The company has built a reputation of extreme accuracy and has been recognized as having a very accurate watch movement.  The second feature that is important to Rolex customers is the prestige associated with the brand.

The competition that Rolex faces comes from elite watchmakers and the companies that create replica watches that imitate the Rolex brand.  The competition from elite watchmakers is fierce and many companies make quality prestigious watches.  Audemars Piguet is a watch that is made in Switzerland that creates high quality watches that are often more modern in style than Rolex.  The Cartier Roadster watch is a direct competitor of Rolex and has an equally accurate movement and displays a much more artistic styling than the Rolex.
Consumers shop this category of watch by research and more importantly by word of mouth.  The specific types of watches carried by Rolex dictate how they are used.  The Rolex Yacht-master is built for timing and actions necessary on a boat specifically during a yacht race and so most customers use it for sailing.  The Rolex Submariner is a watch designed specifically for divers and was the first watch to be waterproof up to 100 meters and is now made to withstand depths of up to 300 meters (Rolex, 2011, np.).

The way that Rolex creates a brand image is unique and extremely effective.  Instead of relying on a complex brand image based on words or a complex picture Rolex relies on a simple single image of a crown for its branding.

The pricing strategy that the Rolex company employs is distinct in its conception and execution.  Rolex sets its prices with little regard to the competition and their pricing, choosing instead to price its timepieces as it sees fit and therefore setting the price point for others to follow.  The company does not offer any sort of discounts for customers or any sort of price reductions or sales although occasionally there are dealers that offer discounts because of financial difficulties.  Rolex does not offer discounts because consumers are willing to pay the prices set by the company as is evidenced by the fact that even during an economic downturn and faced with discounted other brands of watches the majority of luxury watch shoppers where looking for a Rolex, “’For every 10 clients interested in other brands, we have 50 looking for Rolex watches,’ Aurel Bacs, international co-head of Christie’s watch department, said from Geneva” (Lankarani, 2009, np.).

Rolex has a very exclusive distribution network consisting of only a limited number of fine jewelry stores.  A search of the area surrounding Columbia, South Carolina area reveals that only two jewelers are authorized Rolex dealers.  The limited availability of products lends itself to the high end exclusive pricing strategy employed by Rolex.  The locations selected are all in upscale areas and have an established reputation for quality.

Rolex does not have a company outlet on the internet.  The website http://www.rolex.com has information on the watch lineup and the information on dealers in the area but it does not have a location to purchase.  Some of the dealers do offer online sales but all encourage buyers to visit the retail locations.

The genius of Rolex is that they have narrowed the marketing communications message being sent to a simple one that is consistently conveyed across all mediums.  The company does not use many of the channels of mainstream advertising such as national television and radio advertisements that are not targeted to their market.  The broad strokes of advertising that are often used by large promotions such as purchasing time during large sporting events like the Super Bowl are not used by Rolex.

Rolex has focused in on events that attract the type of demographic that has the desire and ability to purchase a watch from $5,000 to $100,000.  The Rolex Sports Car Series and the Rolex 24 Hours at Daytona both attract not only race fans but sports car owners that spend large amounts of money to run vehicles in the series and so are perfect advertising opportunities for Rolex.  Rolex also advertises during golf tournaments and yachting events that attract patrons that can afford to purchase an item like an expensive watch.

Watching the commercials that Rolex has produced and aired in the past shows that they have a consistent message and a consistent presentation during the advertising they do air.  The commercials convey prestige and wealth by displaying images of large yachts and race cars racing.  The main message that is portrayed to consumers is that Rolex purchasers are wealthy, attractive, active, and lead interesting lives.  The image that is portrayed is that customers purchase Rolex as a statement and as a reward for success.

In response to the market and how people are reached Rolex created a page on Facebook in 2013. As of January 2015, they have over four million likes of their page. A quick review of what is posted on the Rolex page reveals that although they are reluctantly embracing the necessary use of social media they are not straying from the basic marketing strategy that has made them successful: post successful people doing amazing things wearing Rolex watches. Below is a picture of tennis star Roger Federer wearing his Rolex (www.facebook.com/rolex).

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The problem that Rolex faces is that as its popularity grows more and more of the standard watches that the company makes are being cloned by watchmakers in all parts of the world.  Some of the replicas are of similar quality and are almost identical in appearance as an original Rolex and so those that are willing to purchase copies are able to find them in greater supply than the original.  The limited distribution channels that have been authorized by Rolex allow a greater demand for the product but also allows dealers to set prices for sales and repairs that exclude many demographics.  It would be better for Rolex to not only authorize additional retail outlets for its products but also offer refurbished and remanufactured originals on a company website.  The company loses revenue to those that resell used watches that it could capture by controlling the value of the used market by trying to control the supply.

Rolex is one of the greatest marketers of its products in the market today.  Rolex achieves success by controlling the four main tools available to marketing managers to make up the market mix: price; product; promotion; and place.  Rolex has a firm grasp on the necessity to control retail pricing of its products by paying little attention to the pricing of competitive firms such as Cartier and Audemars Piguet but instead setting the price that others follow.  The product that Rolex offers is close to unmatched in several arenas such as timing watches for boating and diving watches for undersea diving.  The promotion of its watches through television and print advertising support the sports centered approach to Rolex’s advertising that follows closely to the sponsorship of yachting races, sports car racing, and other sponsorships such as skiing.  Unlike most manufacturers that try and obtain as many retail outlets for products as possible Rolex has decided to severely limit the number of outlets that can be authorized to sell the Rolex brand and those that are authorized are all required to be successful and high end jewelry stores.

The marketing mix of the Rolex watch company is an example of why not following the usual way to market products is often a good idea.  When the company was started if the founder had not taken the unusual step of gaining certification as to his watches accuracy the company and the hallmarks of the product would not be known.  It is important that successful marketing managers take advantage of the controllable tools of the marketing mix as they have done at Rolex.

References

Haig, M. (2004). Brand Royalty. London, , GBR: Kogan Page Ltd. http://site.ebrary.com/lib/ashford/Doc?id=10074922&ppg=132
Kerin, R. A., Hartley, S. W., & Rudelius, W. (2011). Marketing(10th ed.). Boston: McGraw-Hill/Irwin.
Lankarani, N. (2009). Special report: Watches. New York: New York Times Publishing.
Rolex. (2011). Rolex website submariner. http://www.rolex.com/en#/rolex-watches/submariner/introduction

Marketing: Good or Bad?

Advertising

Marketing has often been defined in terms of satisfying customers’ needs and wants; however, marketing critics argue that marketing can be unethical by creating needs and wants that did not exist before. Marketing can encourage customers to spend money on goods and services they really do not need or want. Take a position on the following ethical dilemma: Do you think marketing merely reflects the needs and wants of consumers, or that marketing creates unnecessary customers’ needs and wants?

Marketing is “delivering genuine benefits in the offerings of goods, services, and ideas marketed to customers” (Kerin, Hartley, & Rudelius, 2011, p. 69).  Inherent in true marketing is a fair exchange between buyer and seller that benefits both as well as society as a whole.  The idea that marketing creates unnecessary needs and wants and is detrimental to society is completely opposite to its true nature.

Society must change the attitude that bad things happen because of other’s actions.  Because a company advertises a product in such an effective manner that it creates a desire to own their product does not make the company bad.  Members of the public that choose to purchase a product do so willingly and in a free market entirely without coercion.  Those that blame marketers and companies for using effective advertising techniques are simply attempting to shift blame away from their own weakness.

Companies that advertise products that are harmful, such as cigarettes, are typically forced to include the dangers associated with their products.  Statements warning of cancer and heart disease are included in marketing and packaging of tobacco and yet when people who use those products get sick they blame the tobacco companies for their deceptive advertising.

Marketing is good.  Marketing is what drives the free economy.  Marketing does not create wants or needs in consumers; it only seeks to channel them to the advertised products.

Kerin, R. A., Hartley, S. W., & Rudelius, W. (2011). Marketing(10th ed.). Boston: McGraw-Hill/Irwin.