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The quest for higher efficiency of the internal combustion engine will always be pursued. Increasingly stringent emission regulations are forcing the manufacturers to downsize on engine displacement and increase the specific power. By adding the turbocharger, the air flows through the engine and hence specific power can be increased.

The advantage of a small turbocharged engine over a naturally aspirated (NA) engine of a similar power is that it is lighter, having better part load efficiency when operating at the same load, while producing less emission.

The objective in this study is to investigate a turbocharger in a naturally aspirated engine and testing the engine before the installation of the turbocharger.

Boost refers to the increase in the manifold pressure that is generated by the turbocharger in the intake path or specifically that exceeds the normal atmospheric pressure. This study also aims to develop a strategy for the control of boost for the engine.

1.0 Introduction
1.1 Background

Turbocharged spark ignition engines have been around since the 1970s, but their popularity outside the motorsport sector has been small until the recent advances in engine control. The lack of popularity could partly be due to the drivability issues associated with early turbocharged engines. The engine’s response to a sudden increase in driver’s demand was delayed due to a turbocharger lag.

The lag was then usually followed by a rapid increase of power which resulted in loss of traction and possible loss of control over the car. The developments made in the electronic control and management of internal combustion engine made it possible to overcome most of these drivability limitations. Passenger vehicles with turbocharged SI engines are now becoming more common. A number of companies such as Audi and Volvo now offer different passenger vehicle models with turbocharged SI engine whereas Mercedes offers supercharged and turbocharged engines.

The operating principle of the turbocharger is to use the energy recovered from the exhaust gases to force more air into the combustion chamber. This increases the amount of oxygen in the combustion chamber and hence more fuel can be burned and more power can be produced. Therefore a turbocharged engine can produce more power than a similar sized naturally aspirated engine. It is claimed that the displacement of the turbocharged engine can be reduced by up to 40% relative to NA engine, without compromising power output. Thus the turbocharged engine could be smaller, lighter and more fuel efficient as well as produce less emissions.

1.2 Aim

To design and specify turbocharger in a Vauxhall 2.2 litre engine

1.3 Objectives:

Critical literature review of the project.

To investigate turbo system, develop a system for the Vauxhall 2.2, produce drawings and design.

Testing the engine before installation of turbocharger

To investigate and develop strategy for control of boost for the engine over a wide range of condition.

2.0 Initial Critical Review of Literature

This project is related to the turbocharging of a four stroke petrol engine. In this discussion a turbocharged four stroke diesel engine will also be discussed briefly and the differences will be highlighted. However, it omits to discuss two stroke engines due to their different gas exchange processes.

Supercharging

The term supercharging refers to increasing the air density by increasing its pressure prior to entering the cylinder. This allows a proportional increase in the fuel that can be burned and hence raises the potential power output. Three basics categories are used to accomplish this.

The first is mechanical supercharging where a separate pump or compressor, usually driven by power taken from the engine, provides the compressed air. The second method is turbocharging, where a turbocharger, a compressor and turbine on a single shaft is used to boost the inlet air density. The third method is pressure wave supercharging which uses wave action in the intake and exhaust systems to compress the intake mixture.

The main advantage of turbocharging as opposed to supercharging is that turbocharging uses the energy in the exhaust gas that would have been lost. Supercharging uses power from the engine’s crank shaft and thus less power is available for propulsion

Turbocharging

The author acknowledges that the theory represented in this section is extracted from Watson and Janota (1982).

The exhaust driven turbocharger was invented by a Swiss engineer named Alfred Buchi, his patent applied to a diesel engine in 1905. It took a very long time to establishe a turbocharger, but it is now proved that their characteristics are suited to the diesel engine, the reason being that only air is compressed, and no throttling is used.

A turbocharger consists basically of a compressor and turbine coupled on a common shaft. The exhaust gases from the engine are directed by the turbine inlet casing on the blades of the turbine and subsequently discharged to atmosphere through a turbine outlet casing. The exhaust gases are utilized in the turbine to drive the compressor, which compresses the air and directs it to the engine induction manifold, to supply the engine cylinder with air of higher density than is available to a naturally aspirated engine.

Figure1: Automotive Turbocharger

Since diesel engines having no knock limitations, the maximum allowable boost on CI engines depends only on the mechanical strength of the engine. On an SI engine, the boost pressure is limited by knock. Thus if boost pressure is high on SI engines, the compression pressure must be low, high octane number fuel must be used or ignition timing must be retarded.

Turbocharger Theory

The operating characteristics of turbo machines such as turbines and compressors are totally different from the reciprocating internal combustion engine. The most common turbocharging assembly used in the automotive industry is made up of radial compressor coupled to radial turbine. Between the two is a wide supporting plain journal bearing, because an ordinary roller bearing would not survive the high rotational speed of up to 25000 rev/min of which a small turbine is capable. For racing application, ceramic ball bearings are being used more frequently.

Axial turbine coupled with a radial compressor is a common configuration. Axial turbines are preferred for their superior efficiency to those of a radial turbine, but according to manufacturer’s radial flow turbines are simpler and cheaper to manufacture and also the operating range of radial flow compressors are limited to certain pressure ratios, because a high pressure ratio will cause the supersonic flow and cause shockwaves at the inlet, this will impair the efficiency of compressor.

Turbocharging Diesel (CI) or Petrol (SI) engines

Today turbocharged diesel engines are common but turbocharged petrol engines are rare. There are sound reasons, both technical and economic for this situation. The principal reasons stem from the difference between the combustion systems of petrol and diesel engines. The petrol engine uses a carburettor or fuel injection system to mix air and fuel in the inlet manifold so that a homogeneous mixture is compressed in the cylinder.

A spark is used to control the initiation of combustion which then spreads throughout the mixture. This is because the mixture temperature during the compression must be kept below the self-ignition temperature of the fuel. Once the combustion has started it takes time for the flame front to move across the combustion chamber burning the fuel. During this time unburnt ‘end gas’ is heated by further compression and the radiation from the flame front.

If it reaches the self-ignition temperature before the flame front arrives, a large quantity of mixture may burn extremely rapidly producing severe pressure waves in the combustion chamber. This situation is commonly referred to as ‘knock’ and may result in severe cylinder head and piston damage. This is due to the fact that the compression ratio of the engine must be low enough to prevent knock occurring.

In the CI engine cylinder, air alone is compressed. Fuel is sprayed directly into the combustion chamber from an injector only when combustion is required. This fuel self-ignites as in a diesel engine the compression ratio must be high enough for the air temperature on compression to exceed the self-ignition temperature of the fuel. As injection takes time, only some of the fuel is in the combustion chamber when ignition starts, and since much of this fuel is not as damaging as the knocking situation in a petrol engine.

The maximum CR of the petrol engine, but not the diesel engine, is therefore limited by the ignition properties of the fuel. The minimum CR is limited by resulting low efficiency. Turbocharging results not only give a higher boost pressure, but a higher temperature. Unless the compression ratio of a petrol engine is reduced the temperature at the end of compression stroke will be too high and the engine will knock.

The engine may remain knock free under mild boost – but only because there should be a sufficient safe knock free margin, or a fuel of higher self-ignition temperature/octane number has been used. Thus the potential power output of a turbocharged petrol engine is limited. The diesel engine has no such a limitation and can therefore use a much higher boost pressure.

Petrol engines cost substantially less to produce than diesel engines of equivalent power output. The cost of the turbocharger on a diesel engine is more than offset by reduced engine size required for a specified power output (with the exception of very small engines). This situation will rarely occur in the case of petrol engine.

Energy Available In the Exhaust Gas:

Figure 2 shows the ideal limited pressure engine cycle in terms of pressure/volume diagram for the naturally aspirated engine. Superimposed is a line representing isentropic expansion from point 5, at which the exhaust valve opens, down to the ambient pressure (Pa) which could be obtained by further expansion if the piston were allowed to move to point 6. The maximum theoretical energy that could be extracted from the exhaust system is represented by the shaded area 1-5-6. This energy is called as ‘blow-down’ energy.

Figure2: Naturally Aspirated Ideal Pressure Limited Cycle (Watson and Janota,1982)

Considering the supercharged engine, the ideal four stroke pressure/volume diagram would appear as shown in figure, where P1 is the supercharging pressure and P7 is the engine back pressure in the exhaust manifold. Process 12-1 is the induction stroke, during which fresh charge at the compressor delivery pressure enters the cylinder. Process 5-1-13-11 represents the exhaust process.

When the exhaust valve first opens (point 5) some of the gas in the cylinder escapes to the exhaust manifold expanding along line 5-7 if the expansion is isentropic. Thus the remaining gas in the cylinder is at P7, when the piston moves towards the TDC, displacing the cylinder contents through the exhaust valve into the exhaust pipe against the back pressure.

At the end of the exhaust stroke the cylinder retains a volume (Vcl) of residual combustion products, which for simplicity can be assumed to remain there. The maximum possible energy that could be extracted during the expulsion stroke will be represented by area 7-8-10-11, where 7-8 represents isentropic expansion down to the ambient pressure.

Figure3: Turbocharged Ideal Pressure Limited cycle (Watson and Janota, 1982)

There are two distinct areas in figure 3 representing energy available from the exhaust gas, the blow down energy (area 5-8-9) and the work done by the piston (area 13-9-10-11). The maximum possible energy available to drive a turbocharger turbine will clearly be the sum of these two areas. Although the energy associated with one area is easier to harness than the other, it is difficult to devise a system that will harness all of the energy.

To achieve that, the turbine inlet pressure must rise instantaneously to P5 when the exhaust valve opens, followed by isentropic expansion of the exhaust gas through P7 to the ambient pressure (P8=Pa). During the displacement part of the exhaust process, the turbine inlet pressure must be held at P7. Such a series of process is impracticable.

Considering the simpler process in which a large chamber is fitted between the engine and the turbine inlet in order to damp down the pulsating exhaust gas flow. By forming a restriction to the flow, the turbine may maintain its inlet pressure at P7 for the whole cycle. The available work at the turbine will then be given by area 7-8-10-11. This is the ideal constant pressure system. Next consider an alternative system, in which a turbine wheel is placed directly downstream of the engine close to the exhaust valve.

If there were no losses in the port, the gas would expand directly out through the turbine along line 5-6-7-8, assuming isentropic expansion. If the turbine area were sufficiently large, both cylinders and the turbine inlet pressure would drop to P9 before the piston had moved significantly up the bore.

Hence the available energy at the turbine would be given by area 5-8-9. This can be considered the ideal pulse system. The system commonly used and referred to as ‘constant pressure’ and ‘pulse’ are based on the above principles but in practice they differ from these ideals.

Constant Pressure Turbocharging

In constant pressure turbocharging exhaust ports from all the cylinders are connected to a single exhaust manifold, whose volume is sufficiently large to dampen down the unsteady flow entering from each cylinder. When the exhaust valve of a cylinder opens, the gas expands down to the (constant) pressure in the exhaust manifold without doing useful work.

However, not all of the pulse energy is lost. From the law of conservation of energy, the only energy actually lost between the cylinder and turbine will be due to heat transfer. With a well-insulated manifold, this loss will be very small and can be neglected.

Consider what happens to the gas leaving the cylinder, expanding down into the exhaust manifold, and then flowing through the turbine. At the moment of the exhaust valve opening, the cylinder pressure will be much higher than the exhaust manifold pressure. During the early stages of valve opening (when the effective throat area of the valve is very small) the pressure ratio across the valve will be above the choked value.

Hence gas flow will accelerate to sonic velocity in the throat followed by the shock wave at the valve throat and sudden expansion to the exhaust manifold pressure. Due to the turbulent mixing and throttling, no pressure recovery occurs. The stagnation enthalpy remains unchanged and hence flow from the valve to turbine is accompanied by an increase in entropy.

As the valve continues to open the cylinder pressure will fall and flow through the valve which becomes subsonic. The flow will continue to accelerate to the valve throat and then expand to a pressure in the exhaust manifold. The energy available to useful work in the turbine is given by isentropic enthalpy change across the turbine, whereas the actual energy recovered is given by the enthalpy change across the turbine.

Clearly it is a lack of recovery of the kinetic energy leaving the valve throat and throttling gases that lead to poor exhaust gas energy utilization with the constant pressure system.

If the exhaust manifold is not sufficiently large, the blow down or the first part of the exhaust pulse from the cylinder will raise the general pressure in the manifold. If the engine has more than three cylinders, it is inevitable that at the moment when the blow down pulse from the cylinder arrives in the manifold, another cylinder is nearing the end of its exhaust process.

The pressure in the latter cylinder will be low; hence any increase in exhaust manifold pressure will impede or even reverse its exhaust processes. This will be particularly important where the cylinder has both intake and exhaust valves partially open and is relying on a through-flow of air for scavenging of the burnt combustion products.

There are some advantages and disadvantages of using a constant pressure system:

Conditions at the turbine entry are steady with time. Therefore losses in the turbine that result from unsteady flow are absent.

A single entry turbine may be used, eliminating ‘end of sector losses’.

Single turbocharger can be used on all multi-cylinder engines, it will be a large turbocharger unit and since it is a large unit it will have low leakage losses and hence have higher efficiency. Turbines designed for constant pressure turbocharging have a high degree of reaction (50%) which, coupled with exhaust diffuser, brings additional gains in efficiency.

From a practical point of view, exhaust manifold is simple to construct although it may be rather bulky, particularly relative to small engines with few cylinders.

Transient response of the system is poor. Due to the large volume of gas in the exhaust manifold, the pressure is slow to rise, resulting in poor engine response and making it unsuitable for applications with frequent load or speed changes.

Pulse turbocharging

Although the constant pressure system is commonly used on certain types of engines, the vast majority of turbocharged engines in Europe use a pulse turbocharging system. In the practical pulse system an attempt is made to utilize the energy represented by both pulse and constant pressure areas of figure 2.

The objective is to make the maximum use of high pressure and temperature exist in the cylinder at the moment of exhaust valve opening, even at the expense of the creating highly unsteady flow through the turbine. In most cases the benefit from increasing the available energy will more than offset the loss in the turbine efficiency due to the unsteady flow.

Now consider small exhaust manifold as shown in figure. Due to the small volume of exhaust manifold, a pressure build up will occur during the exhaust blow-down period. This results from a flow rate of gases entering the manifold through the valve exceeding that of gas through the turbine.

At the moment the exhaust valve starts to open, the pressure in the cylinder will be 6 to 10 times more than the atmospheric pressure, whereas the pressure in the exhaust manifold will be close to atmospheric. Therefore the initial pressure drop across the valve is above the critical value at which choking occurs and the flow will be sonic.

Further expansion of the gas to the exhaust manifold pressure occurs by sudden expansion at the exhaust manifold recovery occurs due to turbulent mixing. The stagnation enthalpy remains constant hence the flow from the valve throat is accompanied by an increase in entropy.

Finally the gas expands through the turbine to atmospheric pressure, doing useful work. The out-flowing gas from the cylinder loses a very large part of its available energy in throttling and turbulence after passing the minimum section of the exhaust valve. If the ratio of valve throat area to manifold cross section area is very small then throttling losses are very large and pressure drop across the valve is very large, during the initial stages of valve opening.

Following further opening of the exhaust valve the cylinder pressure increases, reducing the throttling losses across the valve. The pressure drop across the turbine is now much larger, transferring the available energy to the turbine, which represents a much larger proportion of the available energy in the cylinder.

At the end position of the valve opening the flow is sub-sonic and the throttling loss is reduced and is equivalent to the kinetic energy at the entry to the exhaust manifold. During the exhaust stroke, the flow process follows approximately the constant pressure pattern as described in the previous section. At the exhaust valve, the pressure in the exhaust manifold approaches atmospheric value.

With pulse operation, a much larger portion of the exhaust energy can be made available to the turbine by considerably reducing throttling losses across the exhaust valve. The speed at which the exhaust valve opens to its full area and the size of the exhaust manifold become important factors as far as energy concerned. If the exhaust valve can be made to open faster, the throttling losses become smaller during the initial exhaust period.

Furthermore, if the area of exhaust manifold is smaller than the rise in pressure of exhaust manifold will be faster, contributing to a further reduction in throttling losses in the early stages of the blow-down period. A small exhaust manifold also causes a much more rapid fall in pressure towards the end of the exhaust process improving scavenging and reducing pumping work. This discussion has therefore focused on the single cylinder engine connected to the exhaust manifold.

However, in the case of a multi-cylinder engine this problem becomes more complicated. Because the turbocharger may be located at the one end of the engine, narrow pipes are used to connect the cylinders to the turbine to keep the exhaust manifold size as small as possible. By using the narrow pipes the area increase following the valve throat is greatly reduced, keeping throttling losses to a minimum.

Scan dig7.2

Consider again a single cylinder engine, connected to a turbine by a long narrow pipe as shown in figure. Since the large quantity of exhaust energy becomes available in the form of a pressure wave, which travels along the pipe to the turbine at sonic velocity, the conditions at the exhaust valve and the turbine are not the same at a given time.

Therefore the flow process at the exhaust pipe and at the turbine end, have to be presented separately as shown in figure. For simplicity, pressure wave reflections in the pipe are ignored. During the first part of the exhaust process, in the choked region of flow through the valve, the gas is accelerated to sonic velocity at the throat. Since the contents of the pipe are initially at rest at atmospheric pressure, sudden expansion takes place across the valve throat. However some of the kinetic energy is retained as dependent on the valve throat area to pipe cross-section area.

As the valve opens further the pressure at the exhaust pipe entry rises rapidly. This is firstly because a certain amount of time is required for the acceleration of the outgoing gases, and secondly because the gases enter the exhaust pipe from the cylinder at a higher rate than they are leaving the exhaust pipe at the turbine end.

The sudden pressure rise at the pipe entry is transmitted along the pipe in the form of a pressure wave and will arrive at the turbine displaced in time. This displacement is a function of length of pipe and properties of gas. The pressure drop across the valve is noticeably reduced due to the rapid drop in cylinder pressure and the rise in the pipe pressure and also because the valve throat area to pipe area ratio has increased. Both effects considerably reduce throttling losses. The velocity at the turbine end of the pipe is greater than velocity after the valve, due to the arrival of high pressure wave at the turbine end.

In the subcritical flow region of blow down period, the pressure in the exhaust falls at the same time as that in the cylinder. The velocity at the valve throat is equal to the velocity in the pipe, since the valve is fully open. At the turbine exhaust gas expands to atmospheric pressure, doing useful work in the turbine.

It has been established that the pulse turbocharging system results in greater energy availability at the turbine. As the pressure wave travels through the pipe, it carries a large portion of pressure energy and small portion of kinetic energy, which is affected by friction. The gain obtained through the use of a narrow exhaust pipe is achieved partly by reducing throttling losses at the early stages of the blow down period and partly by preserving kinetic energy.

Thus the small diameter exhaust pipe is essential because this will preserve high gas velocity from the valve to the turbine. However if pipes are made too narrow, viscous friction at the pipe wall will become excessive. The optimum exhaust manifold pipe diameter will be a compromise, but the cross sectional area should not be significantly greater than the geometric valve area at full lift.

The actual flow through a pulse exhaust system is highly unsteady and is affected by pulse reflections from the turbine and closed exhaust valves. It will be evident that effective time of arrival of a reflected pulse changes as per the engine speed. Hence the exhaust pipe length is critical and must be optimized to suit the speed range of the engine.

The interference of reflected pressure waves with the scavenging process is the most critical aspect of a pulse turbocharging system, particularly on the engine with a very long valve overlap. Because of this phenomenon it is impossible to connect an engine with more than three cylinders to the same turbine without using a twin-entry turbine or introducing losses on the intake or exhaust processes.

The advantage of pulse over the constant pressure turbocharging is that the energy available for conversion to useful work in the turbine is greater. The ideal pulse turbocharging must have following characteristics:

The peak of blow-down pulse must occur just before the bottom dead centre of the cylinder, followed by a rapid pressure drop to below boost pressure.

The boost pressure must be above the exhaust manifold pressure to aid the scavenging process during the valve overlap.

The effectiveness of pulse system is governed by the gas exchange process and overall efficiency of the turbocharger under unsteady flow conditions.

Pulse converters in turbocharging

The pulse turbocharging system has been found to be superior as compared to the constant pressure system on the majority of today’s diesel engines. In the previous section it is made clear that the pulse turbocharging is most effective when groups of three cylinders are connected to the turbine entry.

When one or two cylinders are connected to a turbine the average turbine efficiency and expansion ratio tend to fall due to the wide spacing of exhaust gases pulses. To overcome some of these advantages ‘pulse converter’ has been developed.

Birmann was the first to use the term ‘pulse converter’. His main objective was to design a device that preserved the unsteady flow of gases from the cylinder during the exhaust and valve overlap periods, yet to maintain a steady flow at the turbine, so that it might be possible to achieve good scavenging and high turbine efficiency. For good scavenging he proposed a ‘jet pump system’, by using high velocity of gas issuing from a central nozzle to decrease the pressure in short pipes at the exhaust valves.

The system shown in figure 8.1 has some disadvantages as following:

Each nozzle must be larger than last which results in high manufacturing cost.

The whole installation is bulky and complex.

Because much of exhaust gases will pass through several ejectors and diffusers, the frictional and diffusion losses will be high.

There is insufficient length between exhaust ports to permits efficient pressure recovery in the diffusers.

The majority of pulse converters in use today are based on the concept of minimum energy loss, even if this means not only a loss of all suction effect, but also some pressure wave difference during scavenging. To avoid high mixing losses at the junction, the area reduction in the inlet nozzles is usually small (junction area >50% of pipe area), while the mixing length and plenum and often even the diffuser are omitted completely, as suggested by Petak (as cited in Watson and Janota, 1982).

These simple pulse converters have the added advantage of adding little over-all length to the exhaust system. A typical example from a four stroke engine is shown in figure 8.4. The pulse converter is specified by the nozzle and throat area ratios. Clearly such a pulse converter will generate no suction, but the flow losses through it will be very much less than in more complex designs.

Tests on a model pulse converters by Watson and Janota (1971) have shown that the area reduction at nozzles has to be severe to reduce pulse propagation substantially. The penalty accompanying large area reductions in the inlet nozzles is higher internal losses and hence reduces the amount of energy available for useful expansion through the turbine. In practice this means that the minimum possible area reduction is used, consistent with reasonable scavenging.

It follows that the design of the pulse converter is a compromise between minimum losses and reduction of the pulse interaction between the inlet branches. The compromise adopted may vary from one engine design to another, depending on the amount of pulse interference, etc.

8.0 References

Watson, N and Janota, M, 1982, Turbocharging the Internal Combustion Engine, MacMilan, Great Britain.

Heywood, John, B, 1988,Internal Combustion Engine Fundamentals, McGraw-Hill

Stone, R, 1992, Introduction To Internal Combustion Engine, MacMilan,

Great Britain.

Azzoni, P, Moro, D, Ponti, F & Rizzoni, G, 1998, Engine and load torque estimation with application to electronic throttle control, SAE paper No. 980795, Society of Automotive Engineers.

9.0 Bibliography

Notes posted by Dr Les Mitchell on studynet

‘Report Writing guide’ posted by Dr. Rodney Day on studynet

This work was produced by one of our professional writers as a learning aid to help you with your studies

Introduction

This study uncovered that the field of consumer behaviour represents a broad ranging category where marketers seek to understand individual and group motivations, reactions and responses to varied product and service situations (Solomon et al, 2009). It found the processes and activities undertaken by consumers regarding the stages and steps of the decision and buying process (Gupta et al, 2004).

The cognitive approach was found to look at consumer perceptions in processing information that acknowledges social and environmental experiences (Watson and Spence, 2007). Humanistic models delve into behavioural perspectives as opposed to the perception aspects of the cognitive approach.

The above summary of the two major consumer categories represented the basis for understanding how they guide the differing models and theories under each. It was ascertained that in terms of cognitive and humanistic, the varied theories and models under them all have special attributes. These represent the basis for the selection of the theory or model suited to individual product or service categories.

Cognitive Models

Bray (2008) explained that the cognitive approach is credited to Hebb’s Stimulus Organism Response model that was introduced in the early 1950s. Hebb’s model states that there is a linear relationship concerning the impact of stimuli. This concept has been criticised by Kahle and Close (2006) along with Tyagi and Kumar (2004), who state that the Hebb’s model lacks the capacity to account for past experiences as its shortcoming.

Bray (2008) explains that people usually respond to the cognitive aspects of their environments, and that these cognitive areas are related to the parameters and processes of learning. He adds that feelings, behaviours and thoughts are connected in a casual manner. Regarding behavioural facets, it emphasises processes connected to human behaviour such as environmental stimuli and their behavioural responses (Zimmerman, 2008).

Cognitive Model – Consumer Decision

Consumer decisions under the cognitive designation consist of three models (Bauer et al, 2006). These represent the utility, satisficing, and prospect theories (Steel and Konig, 2006). The utility theory proposes that people make their decisions based upon expected outcomes (Steel and Konig, 2006). It also views consumers as actors that are rational and able to foresee or estimate the potential outcomes of decisions they make that include the potential for uncertainty. This is a flaw in the utility theory as the unknown end utility functionality of a purchase is debatable at best.

Cognitive Model – Satisficing Model

The satisficing model is a newer alternative to the utility model that was first proposed in the 1700s by Nicholas Bernoulli (Richrme, 2005). It represents larger and longer term consumer decisions. In many cases, good enough is the explanation for this type of decision process (Richrme, 2005). Elements of the utility theory are included in the satisficing model, but since the decision is made less often, consumers tend to accept a different basis for purchase or decision making then those products that are replaced more often (Richrme, 2005).

The limitations of funds to purchase exactly what one prefers is a constraint under this consumer behavioural model that in most cases causes consumers to settle as opposed to optimising their decision to meet all of their wants and desires (Bray, 2008). Bray (2008) argues that in many causes the optimal purchase cannot be determined, and that consumers tend to lack the capacity to find the best purchase option.

Cognitive Model – Prospect Theory

The prospect theory was developed in the mid 1970s by Amos Tversky and Daniel Kahneman (Sirakaya and Woodside, 2005). It added value to replace utility. Value represents a point of reference that consumers can use to determine the gains or losses from a purchase (Camerer et al, 2011).

The prospect theory helps to explain aspects of consumer behaviour that are not completely explained under the utility theory. These represent the emotional connection and the potential that the extent of a problem is not fully understood (Sirakaya and Woodside, 2005). These are strengths of the prospect theory over the utility and satisficing theories. Camerer et al (2011) found that the prospect theory might predict outcomes that are not accurate due to the fact it does not consider the characteristics of decision makers regarding their past history, and the context of the decision areas represented by the type of purchase (large versus small ticket items in terms of price or frequency).

Cognitive Models – Theory of Buyer Behaviour

The theory of buyer behaviour represents an approach to analyse and predict the method that consumers use in making their purchase decisions (Pickton and Broderick, 2005). In many cases, a consumer will use a generic decision making model (Pickton and Broderick, 2005). The first step generally represents them conducting research on varied products and prices. In most cases the process is prompted by replacing a product the consumer already owns that has become outdated or no longer works (Calonius, 2006). In order to understand the considerations in the process, the following provides an illustration of the factors:

Figure 1 – Model of Consumer Buying Considerations Affecting the Buying Process

(Friesner, 2014, p. 1)

Friesner (2014) adds that understanding consumer buyer behaviour entails how it links to the marketing mix represented by price, place, promotion and product. He advises that marketers and consumers are intertwined as the former modify their approaches to create a climate for consumer action, and that that the reaction of consumers causes continued modifications to the 4Ps. The above explains the strength and weakness of buying behaviour as it is based on the parameters of past and current consumer motivations, and actions. This same strength also represents a weakness as new products; better information availability (such as the Internet) and shifting product reputations mean that buying behaviour patterns and rationales are consistently changing (Calonius, 2006).

Cognitive Models – Theory of Reasoned Action

The theory of reasoned action is a method to predict behaviour, attitude and intention (Cooke and French, 2006). It separates intention from behavioural aspects that provide the framework to explain the impact of attitude (Hale et al, 2002). The main tenets are based on attitude, behavioural intention and subjective norm (Cooke and French, 2006). Attitude represents the beliefs formed by a consumer concerning a behavioural approach that include the assessment of what the consequences might be. Behavioural intention looks at the strength of an individual’s intention in performing a behaviour, with the subjective norm representing perceived expectations based on other people or groups, and how a person measures up to these norms (Cooke and French, 2006). The weakness of reasoned action is that the sum of the comparison group forms the basis for measurement. If the intentions, subjective norms or attitude are improperly gathered, it negatively affects the outcome.

Cognitive Models – Theory of Planned Behaviour

The theory of planned behaviour connects behaviour and beliefs (Ajzen, 2011). It is an improvement on the theory of reasoned action as it adds perceived behavioural control to attitude, behavioural intention and subjective norm (Ajzen, 2011). The addition of perceived behavioural control looks into the perceptions individuals carry regarding their capability to perform a type of behaviour (Kraft et al, 2005). This is the strength of the theory as it delves into the potential presence of factors that may impede or aid behaviour performance. Conversely, it also represents a weakness because if the perception does not accurately reflect actual behavioural control, it can cause incorrect conclusions or assumptions (Kraft et al, 2005).

Humanistic Models

Humanistic models of consumer behaviour are close to the behavioural perspective with some key differences (Wong, 2006). It is defined by Davis and Palladino (2010) as focusing on areas that can be observed and emphasises the learned nature of such behaviours. The humanistic model places emphasis on the individual and their psychodynamic determinants that consist of behaviours that can be observed and their reaction to external stimuli (Wong, 2006).

Humanistic models also take into account the psychology represented by Maslow’s hierarchy of needs that observed people tend to be motivated by rewards or unconscious desires (Koltko-Rivera, 2006).

Figure 2 – Maslow’s Hierarchy of Needs

(Burton, 2012, p. 1)

Maslow refers to the four bottom tiers as representing deficiency needs (Anderson, 2014). He explains that individuals become anxious when these needs are not met or if they are under threat. The top tier represents growth as it permits individuals to employ self-actualisation that include independence, objectivity, awareness, creativity and honesty (Anderson, 2014). Bourdieu (Trigg, 2004) along with Rouse (2004) and others have criticised Maslow’s hierarchy of needs as being too schematic (meaning too planned or structured) and as lacking in scientific principles. Others such as Oleson (2004) and Dye et al (2005) state it provides a useful theory and intuitive guide to understand aspects of human motivation.

The humanistic approach and its models represent that people have the capacity to guide and shape their destiny and thinking to design courses of action they can follow or amend as circumstances or situations change (Davis and Palladino, 2010).

Humanistic Models – Theory of Trying

The theory of trying represents a consumer seeking to act on a particular thought or series of thoughts connected to a potential purchase (Ahuja and Thatcher, 2005). Carsrud et al (2009, p. 155) explain it as “an attitude toward a reasoned action is replaced by an attitude toward trying and an intention is restricted to an intention to try”. The theory integrates hierarchical goals into a behavioural context that people use to work toward a decision (Ahuja and Thatcher, 2005). It delves into the processes individuals work through in attempting to solve a selection problem that includes looking at the varied options that are available.

Figure 3 – The Theory of Trying

(Bray, 2008, p. 27)

As shown by the above, the stages contributing to the theory channel into intention to try before being considered or actualised.

The issue with the theory is that it represents a subjective process that seeks to identify a switch in consumer intention from attitude to trying (Ahuja and Thatcher, 2005). This entails opinions based on the recorded intentions or attitudes of individuals that might have been perceived incorrectly. The other aspect that represents a weakness is that it is skewed toward the evaluation of the potential consumption patterns of individuals as opposed to their buying behaviour (Ahuja and Thatcher, 2005).

Humanistic Models – Model of Goal Directed Behaviour

The model of goal-directed behaviour was build on the tenets of the theory of planned behaviour as it advances the aspect of goals as its main foundation rather than behaviours (Hagger and Chatzisarantis, 2007). Desire is a critical component as its represents a driving force:

Figure 4 – Model of Goal Directed Behaviour

(Bray, 2008, p. 28)

The model of goal-directed behaviour is complex due to attitude, positive and negative anticipated emotions and subjective norms contributing to desires. As shown in the above figure, desire is a critical component that also represents a potential source of misunderstanding as it is a subjective area that can easily be misconstrued concerning consumer behaviour.

Conclusion

This exploration of cognitive and humanistic models uncovered that the varied theories and approaches under each has their own unique attributes. It was also found that each tends to have specific attributes that fit varied situations or circumstances based on what marketers are seeking to uncover to utilise in the development of campaigns and approaches to generating sales.

The cognitive approach seeks to uncover experiences, feelings, values, expectations and thoughts consumers develop and use as a part of their decision, and reasons for action. The three approaches under consumer decision making primarily represent rational (utility), expectations (satisficing) and value (prospect) approaches. The theory of buyer behaviour is a complex process that is influenced by marketing (the 4Ps), along with purchase considerations and psychological aspects that include perception and learning. The deeper a marketer elects to explore the above leads to using the theory of reasoned action that seeks to separate intention from behavioural aspects. This can thus be used to delve into the theory of planned behaviour that adds attitude and perceived behavioural aspects.

Whilst the humanistic models concerning consumer behaviour have a close affinity to behavioural perspectives, they place more emphasis on psychodynamic aspects and individuals using phenomenon that is observable and learned from such behaviours. Maslow’s hierarchy of needs explained that the self actualisation phase as the top tier was applicable under the humanistic approach as it represents the stage where base needs no longer control decisions. The theory of trying demonstrates the above as it represents a consumer seeking to act on a particular thought as the means to decide on a selection using hierarchical goals. Goal directed behaviour is more personally motivated as it utilises desires as a core component in the process.

It was found that each of the theories and models examined under cognitive and humanistic approaches had their strengths and shortcomings. This is because each of these models are based on differing approaches such as uncovering experiences, feelings, values, expectations and thoughts under cognitive, compared to psychodynamic and individuals observable phenomenon for humanistic. This study brought out that no one model or theory adequately explores or explains consumer decision making or behaviour, but that through combinations, marketers can arrive at more comprehensive understandings.

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Introduction

A service is “any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product (Kotler, 2000, p. 200)”. Furthermore, service marketing can be defined as “the marketing of activities and processes rather than objects” (Solomon, et al., 1985, p. 106). As services are mainly intangible products, they “face a host of services marketing problems that are not always adequately solved by traditional goods-related marketing solutions” (Hoffman & Bateson, 2010, p. 5).

Service quality is “a measure of how well the service level delivered matches customer expectations. Delivering quality service means conforming to customer expectations on a consistent basis” (Parasuraman, et al., 1985, p. 42). Due to these problems, there are a variety of new conceptual frameworks to monitor service quality. Some of these methods are completely new creations, whereas other good-based frameworks were merely extended to be applicable towards service quality.

This report will explore several service marketing and quality frameworks, including; service marketing mix (7Ps), SERVQUAL the services marketing triangle and service dominant logic. These different methods of measuring service marketing and quality will be critically evaluated using a variety of academic theory.

7Ps and Service Marketing Mix

The 7Ps and service marketing mix is a great framework used to analyse the performance of service marketing and the quality that a company has to offer. The service marketing mix used to consist of the 4Ps (Gronroos, 1994). These were (Booms & Bitner, 1981):

Product: Quality, brand name, service line, warranty, capabilities, facilitating goods, tangible clues, price, personnel, physical environment and process of service delivery.
Price: Level, discounts and allowances, payment terms, customers own perceived value, quality/price interaction and differentiation.
Place: Location, accessibility, distribution channels and distribution coverage.
Promotion: Advertisements, personal selling, sales promotion, publicity, personnel, physical environment, facilitating goods, tangible clues and process of service delivery.

However, this was later expanded on to form the 7Ps. This is because there was a higher degree of interdependence between buyers and sellers, meaning the marketing mix had to take into account buyer-seller relationships (Webster, 1984). The three extra factors to conclude the service marketing mix are (Booms & Bitner, 1981):

Participants: Personnel training, discretion, commitment, incentives, appearance, interpersonal behaviour, attitudes and customer behaviour/degree of involvement.
Process: Policies, procedures, mechanisation, employee discretion, customer involvement, customer direction and flow of activities.
Physical Evidence: Environment, furnishings, colour, layout, noise level, facilitating goods and tangible clues.

The addition of these extra three factors helped make the 7Ps a much more comprehensive framework for service marketing. Furthermore, it offers a broader perspective of service marketing, with more refined results. However, all frameworks come with some weaknesses, and the service marketing mix can sometimes be too complicated to companies or marketers. Furthermore, some academics will suggest that the extra elements can already be covered by the 4Ps, thus making them redundant, and also that it is hard to control and monitor the additional elements (Rafiq & Ahmed, 1995).

The original four factors of the marketing mix are widely known and used throughout all facets of marketing, but the modern additions give a new flavour to service marketing. This pays particular attention to ‘participants’ as it includes all employees and consumers that have an effect on service quality. However, processes and physical environment still have a big influence, as they monitor the environment and the ways in which an employee or company deliver service.

Service Dominant Logic

Service dominant (S-D) logic “superordinate’s service (the process of providing benefit) to products (units of output that are sometimes used in the process)” (Lusch, et al., 2007, p. 6). Furthermore, service dominant logic is thought to be grounded by nine fundamental factors.

Figure 1 – (Vargo & Lusch, 2006)

The presiding view of S-D logic is that customers should be viewed as an “operate resource”, which is a resource that can act with other resources, thus co-creating value (Lusch, et al., 2007, p. 6). Furthermore, collaboration between the organisation and their consumers allows for a strong bond to form between S-D logic and the 7Ps.

S-D logic was formed to recognise the importance of service marketing, and lay a new foundation over the outdated goods-dominated logic. With value being created in new ways, and consumers valuing the service encounter, organisations must create value for their services. Furthermore, there is no goods vs services in S-D logic, as it recognises goods as an ‘appliance’ used in the service encounter (Lusch & Vargo, 2006).

Although S-D logic provides many benefits for an organisation, there have been a variety of academics that criticise the approach. The majority of scholars (Groonos, 2006; Achrol & Kotler, 2006) point out that interaction and networks play a more imperative role in value creation, something that S-D logic does not take into account. However, Lusch & Vargo (2006) insist that S-D logic does take into account interaction and networks, as it believe value creation is the process of integrating and transforming resources which implies interaction between networks.

SERVQUAL

SERVQUAL is a service quality framework developed to measure the scale of quality provided by a service a company has to offer. It was composed by Parasuraman, Zeithaml & Berry through a series of publications in the 1980s and early 1990s (Buttle, 1995). Its aim was to compare customer’s perceptions with their expectations of a service. It its original formulation, SERVQUAL was composed of ten factors for analysing service quality. These were; reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding and tangibles (Parasuraman, et al., 1985). However, they collapsed these components into five main factors, which would constitute the modern understanding of SERVQUAL or RATER. These factors are (Iwaardan, et al., 2003):

Reliability: Doing what is promised and doing it at the right time.
Assurance: One of the most significant factors of assurance, is a company that has the required knowledge to answer questions.
Tangibles: Up to date equipment, physical facilities and materials are visually appealing.
Empathy: A company’s communication with consumers, usually in the form of human interactions. Giving care to each individually personally.
Responsiveness: Most significant part of responsiveness is giving a prompt service.

There have been many criticisms about the long-term stability of the results that SERVQUAL can provide (Lam & Woo, 1997; Crosby & LeMay, 1998). This is in special attention to the applicability of all of the five factors mentioned above. Furthermore, Cronin & Taylor (1994) argue that service quality should not be strictly categorised into five different factors, but should be measured using whatever means are applicable to the situation. On top of this, Buttle (1995, p. 10) states that “SERVQUAL has been subjected to a number of theoretical and operational criticisms”. These are;

Theoretical:

SERVQUAL is based on a disconfirmation paradigm, and not an attitudinal paradigm.
Little evidence that consumers assess service quality using the five factors.
Focus heavily on the process of service quality, and not the outcomes

Operational:

Consumers generally use standards instead of expectations to measure service quality.
The five factors cannot cover the variability of service quality.
Consumer quality perceptions are very versatile, and can change quickly.

Although SERVQUAL does have several criticisms, it also has many practical applications. Wisniewski (2001) outlines some of the applications where SERVQUAL can be used. Understanding current service quality is the predominant use of SERVQUAL. This is because it allows managers to assess the current service, and monitor any gaps that exist. SERVQUAL can also highlight how different consumers perceive quality for the different services a company has to offer. Overall, it is a comprehensive framework that helps a company analyse the gap in service quality, and can help a manager decide on appropriate strategies to increase service quality.

Furthermore, SERVQUAL supplements the 7Ps service marketing mix well. This is because it allows the company to gather data from consumers, which they can tailor specifically to one of more of the 7Ps. Measuring the 7Ps through a SERVQUAL framework will allow a company to monitor where they are offering positive service quality, and where their service quality is lacking.

Services Marketing Triangle

Similarly to the services marketing mix, the services marketing triangle was created to handle the complexity that service marketers face when dealing with intangible products. The service marketing triangle highlights three key players, these are (Groonos, 1996);

Firm: The management of a company, including full-time marketers and sales personnel. This is enabled through continuous development and internal marketing with their employees.
Employees: This includes anyone that is working within close contact of the consumer. They play an integral role within the interactive marketing of service marketing.
Customers: Anyone that purchases the service of a company. They are also heavily exposed to the external marketing of a firm.

For marketing to be successful, a marketer should ensure that there is positive interaction between these three players. Furthermore, for this success to be accomplished, three types of marketing must be conducted. These are (Strydom, 2005);

External Marketing – Making Promises: Involves communication by a company towards their consumer. This form of communication allows the company to offer their services, and set the expectation of service quality that the client can expect. In service marketing this pays particular attention to physical evidence, such as the appearance of the place of business or appearance of staff.
Interactive Marketing – Keeping Promises: Interactive marketing is revolved around the communication that occurs between the client and the service delivery personnel. This is one of the most important parts of successfully utilising the services marketing triangle, as it is the only time that the client will have face-to-face experience with the company, via the providers.
Internal Marketing – Enabling Promises: A more modern addition to the services marketing triangle, internal marketing centres on training employees to the highest standards so they can deliver exceptional service. Without internal marketing, there is a high chance that the client will receive sub-standard service.

For the service marketing triangle to be implemented successfully, all departments of a company must work together to deliver the highest quality of service that is possible. All members of an organisation must be conscious of their role in delivering service quality, and understand what their marketing function is. (Alvesson, 1995).

Furthermore, the advancements in technology are having a huge impact on service quality and marketing frameworks. This is because the changes in technology are allowing companies to communicate with customers in a non-physical environment, such as through the internet. This is transforming the services marketing triangle into a services marketing pyramid, as all three factors can be bought together through the clever use of technology (Zeithaml & Bitner, 2000).

One of the most significant downfalls to the service marketing triangle is that firms often do not implement it as a triangle. Instead they will focus on one point of the triangle, and neglect the others. This is particularly true to internal marketing, as many organisations believe that if employees are treating correctly, then it will naturally pass through into the external environment (Li, 2010). However, the fact that all three points are woven together, and influence by each other, does present opportunities’ for organisations to conduct their marketing efficiently and at a cheap cost (Eric, 2014).

Another criticism of the service marketing triangle is that it takes into account to many marketing activities. Marketing is used merely as a tool to coerce a consumer to purchase a good or service (Kotler & Armstrong, 2010), and an organisation shouldn’t have to focus on all three aspects of triangle. As service quality is impacted by each individual point of the triangle, an organisation could, theoretically, only focus on one point (Yadav & Dabhade, 2013; Lings & Greenley, 2009). However, as previously mentioned, this can have unintended impacts on other facets of the triangle, meaning that an organisation should strive to monitor and implement all three points of the triangle, instead of focusing on only one.

Conclusion

It becomes quickly apparent that service marketing is an imperative factor for a company to conduct proficiently. This is because service marketing has positive links with service quality and customer satisfaction, which in turn has strong ties to a company’s overall financial performance. Conducting negative service marketing can result in a consumer experiencing negative service quality, and thus taking their business elsewhere and potentially spreading bad press.

Furthermore, because of the significance that service marketing and service quality has on a company, there have been a variety of frameworks that have been developed. The most proficient for service marketing is the 7Ps, whereas SERVQUAL is a great framework for service quality. However, the services marketing triangle somewhat combines these two factors into a comprehensive framework that outlines both service marketing (internal, external and interactive) and mediums through which service quality can be delivered (firm, employees, customers). The services marketing triangle is become the modern approach to service quality and marketing, especially as it is not including the advancements in technology. This further highlights the importance of service marketing and quality, as a variety of academics are consistently improving upon existing frameworks, so that companies can deliver the greatest amount of service quality through success service marketing.

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INTRODUCTION

The marketing concept is all about achieving corporate goals by meeting and exceeding customer needs better than the competition. The way to do this is for companies to consider what value they are proposing to offer to their customers and once this decision is made, decide how to communicate this message to their customers/marketplace (Fahy & Jobber, 2012).

It is considered that there are 3 main elements to the marketing communication mix: tools, media and messages (Baines & Fill, 2014). This essay is concerned with the outline and critique of the first two of these, tools and media.

TOOLS

The range of techniques or tools for communication is called the promotional mix: advertising, sales promotion, public relations, personal selling, direct marketing and online promotion (Jobber & Ellis-Chadwick, 2013). Whilst marketing as a subject places a lot of emphasis on the promotional mix, research looking at the influence of promotional mix on the sales turnover of an organisation faced with strong competitors indicated that promotional mix only influenced sales by 25% of the change And other factors such as the product itself, pricing and distribution accounted for the larger 75% (Sunday & Bayode, 2011).

Advertising

‘A paid form of non-personal communication about an organisation and its products’ (Dibb, et al., 2012, p. 495). Advertising is generally a mass marketing communication technique as its non -personalised message means that it can be aimed at a wide audience.

Its key characteristics are that it can help build awareness because it can reach a wide audience. Also, depending upon the media used to advertise, it can create a strong brand position and it can support the sales effort because it raises awareness. However, by its very nature it is impersonal and as such cannot answer specific questions. Further to this, it has limited ability to close a sale as this normally requires an additional interaction over and above the ad itself.

There are strong and weak theories of advertising (Baines & Fill, 2014). The strong theory assumes that advertising can increase sales for a brand and for a product within that brand, and the weak theory assumes that consumers are driven by habit rather than exposure to advertising communications. Clearly these are two extremes and the reality is that the effectiveness or otherwise of advertising lies somewhere along the scale and is influenced by other factors apart from simply brand or habit.

In marketing, it is considered that advertising decisions are those that are most affected by cultural differences and as such it can be extremely challenging to get the right blend of advertising and sales promotion effort (Ghauri & Cateora, 2014).

Sponsorship and celebrity endorsements are also forms of advertising. Growing interest in celebrities today has led to an increasing use of celebrities in brand and product advertising. Some target markets look to identify closely with their celebrity idols and as such many companies believe that celebrities are particularly useful for targeting a specific market. Evidence suggests however, that campaigns featuring celebrities are not necessarily any more successful than those which use some other form of creativity to capture a consumer but that the use of celebrities can have an impact on brand and reputation based on their own behaviours (Pringle, 2004), so whilst some research suggests that they do not create as much value as might be thought, other research certainly points to the damage that can be caused by negative publicity surrounding celebrities (Thwaites, et al., 2012).

Sales Promotions

Sales promotions offer incentives such as competitions and special offers to consumers to try to stimulate a purchase (Fahy & Jobber, 2012). These can provide a quick boost to sales but the effects may only last for a short while during the promotional activity and overuse may damage brand image as it can create quality concerns or leave the consumer not believing in the value of the product.

Public Relations

Public relations provides the opportunity to communicate information without paying for it directly. It is considered to be highly credible because the message is coming from a third party. Depending upon where the publicity is, it can result in higher readership than advertising placements but it does mean that there is loss of control of the content (Jobber & Ellis-Chadwick, 2013).

In research looking at the use of public relations in FMCG businesses in the UK which traditionally utilise advertising and sales promotion using publicity rather than public relations, it was found that public relations appeared to be gaining in emphasis and expenditure in the firms interviewed for the research (Kitchen, 1993). The research however, was unclear as to the effectiveness of the increased use.

Personal Selling

This is oral selling directly with the purchaser (Fahy & Jobber, 2012). The key characteristics of this type of communication is that it is interactive so questions can be answered and concerns addressed immediately. Because it is a verbal communication, the approach can be adapted depending upon the customer needs. This personal aspect also means that relationships can be established and as such it can have longer lasting effects in regards to follow on sales and complimentary items. Personal selling obviously lead to sales closure but it is costly and time consuming.

Direct Marketing

Direct marketing ‘encompasses all the communications tools that enable a marketer to deal directly with targeted customers’ (Dibb, et al., 2012, p. 501). This includes direct mail, telemarketing, responsive TV, door to door and the internet. This is deemed to be the fastest growing communication tool largely as a result of the internet growth (Dibb, et al., 2012).

Direct marketing communication can be personalised and its effectiveness can be easily and quickly measured. It is possible to build a relationship through contact and therefore ensure ongoing sales and it is not visible to competitors. However, it is slow and the response rates are often low and it can create annoyance and frustration in consumers if it is incorrectly targeted.

Online Promotion/Digital Promotions

This is ‘the promotion of products to consumers and businesses through digital media channels’ (Jobber & Ellis-Chadwick, 2013, p. 514). It offers the following key characteristics: ability to reach global audiences with ease, highly measurable, interactive and although not quite as quick as personal selling as it can nonetheless be very rapid and it is easy to adapt, change and react.

It can however, be a significant cost to develop an appropriate website and there are security risks to consider. It is also transparent for competitors to see but most companies today however, do have a website that is a key element in their marketing efforts (Mohr, et al., 2010).

MEDIA

There are a number of classes of media including broadcast which encompasses television and radio, print which is the press and magazines and digital such as the internet. There are other classes such as out-of-home, in-store and other such as cinema and exhibitions but these other classes are secondary in nature as they are more limited in the audience they reach or are able to target (Baines & Fill, 2014).

Broadcast

Television and radio offer the opportunity to reach mass audiences. It is often considered to be expensive but due to the large mass that can be reached it is a relatively low cost and given that it is visual and/or sound based the communications can be effectively brought to life in order to convey the marketing message. Both television and radio can tell stories and appeal to emotions which is more difficult to do with print based media. Broadcast television can demonstrate the product in use but once advertised it cannot be referred to again by the consumer unlike print which can be kept.

There are increasing threats to the effectiveness of television advertising today as people are able to use their recording technologies to avoid watching ads. At the same time improvements in digital technologies mean that costs are falling and so even television broadcast can begin to be tailored to smaller audiences who can be targeted by geographical area or special interest groups (Jobber & Ellis-Chadwick, 2013).

There are clear signs that television networks are beginning to pay more attention to the viewer complaints about the extent of advertising with many networks such as CBS, Fox, MTV and cable TV in general now showing either lower minutes per hour in ads or the growth in minutes per hour slowing down. This will increase the cost of advertising as there will be less time and space available but it may improve the effectiveness of the ads as the reduced volume may allow consumers to consider those that they do see more thoroughly (Wall Street Journal, 2007).

Radio broadcast is clearly sound limited but as such is most effective in communicating factual information and it can be targeted by paying for advertising at specific times of the day. Furthermore, its effectiveness has increased with digital technology which can now allow listeners to view some limited information in their digital displays while the ad is running.

Print

Print consists largely of newspapers and magazines and is considered to be effective at delivering messages to target audiences (Baines & Fill, 2014). Pictures can help show off a product or demonstrate its use as well as words to describe the product and its benefits. It does give control to the consumer in that they can determine how long they want to read the information for. Again though, this is a changing medium as the increase in tablet use means that press is now also delivered digitally allowing for some of the printed information to then be developed into full digital marketing using click through technologies (Jobber & Ellis-Chadwick, 2013).

Digital

Digital media includes the internet, online marketing, wireless, mobile and interactive television. Digital media allows the opportunity for a two way communication. It allows a business to gain feedback and interact with the customer. Digital interactions are high speed, low cost and usually have great clarity. Because space and time in other media channels such as television or print are limited, cost can increase as demand for the space and time increases but space is unlimited on the internet and as such costs per contact with customers actually falls as more and more customers are reached.

Within each type of media, the decision on which tool to utilise still needs to be determined. Advertising can clearly use all 3 but they each offer different advantages and disadvantages from a marketing perspective. Digital is relatively cheap compared to broadcast and print as well as being more flexible in that it is easier to update quickly to respond to changes. Internet adverts can also incorporate games and entertainment which is more difficult with regular broadcast and not possible with print. Because internet adverts can be interactive they can also be more personalised and they can be location based. They can advertise something by accessing the location of consumers and targeting them very specifically. Many companies already do this by ‘pinging’ to mobile phones in the area that the customer is in.

The biggest setback to internet advertising is that consumers can view them as intrusive. Pop-ups suffer more consumer complaints than other types of advertising, internet or other (Baines & Fill, 2014). Furthermore, research comparing old and new media channels in respect of their attributes and to determine effectiveness found that the traditional broadcast and print channels were still perceived by consumers, including younger consumers, as more reliable and trustworthy in their messaging (Danaher & Rossiter, 2011).

Further research supports that by Danaher & Rossiter referred to above, in concluding that the most effective advertising channels are the traditional media of television and direct mail and that although these are still the most expensive, the expense appeared to be worthwhile. Radio was found to be consistently effective whereas online display ads were consistently ineffective (Danaher & Dagger, 2013).

CONCLUSION

This is a rapidly changing environment for businesses and their consumers. Some believe that ‘successful companies will engage customers through “omnichannel” retailing: a mashup of digital and physical experiences’ (Rigby, 2011). The world today is an offers a wide range of easily accessible information for consumers and businesses and it is easy to imagine how ideas and interactions can lead to greater success for businesses if they can find the right balance to address the consumers and deliver to their expectations.

Each marketing tool and media channel has advantages and disadvantages and the reality is that effective marketing should look to an appropriate combination of the promotional mix delivered via a range of media to ensure that it makes the right offer to consumers using the most effective method to deliver its message.

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Introduction

The spectacular development of the internet has triggered much interest in different areas such as marketing. Businesses are experimenting with this new type of technology to support their commercial activities. There are various e-marketing tools available to e-marketers. The purpose of this paper is to compare and contrast various e-marketing tools currently being used by e-marketers. In order to achieve this objective, this paper will discuss the following four e-marketing tools that are being used widely: search engine optimisation, pay per-click, Web 2.0, and online social networks. Finally this paper will draw conclusions from the discussions.

Search Engine Optimisation (SEO)

SEO is a way of building traffic via organic search results. The content will rank higher in the search engines if it is better and more popular (Suarez, 2005). Hard work and dedication are required for this type of online marketing, because it’s a long and arduous process to position the website and its content at the top of the search engine page (Palmer and Koenig-Lewis, 2009). No website really ventures past the first page of any search engine, but if the website is optimised for SEO, then it will begin to appear more obviously on the first page of search engines like Google (Whitla, 2009).

Consumers respect and trust organic results more as sources of information than paid search results; consequently they are more likely to click on an organic result compared to a paid search result (Trusov et al., 2009). A study showed that 95% of search engine users chose to click on organic results, while only 6% clicked on paid results (Wang and Zhang, 2012). This divergence can be explained by the fact that many search engine users have selective blindness towards paid search results (Jobber, 2010). The mind of a search engine user considers organic results that appear at the top of the search engine results page as credible. This depicted credibility gives the user faith in the content, products and services (Pang and Lee, 2008).

If the content is relevant even after a long period of time and a search engine still ranks it high because of optimisation, then the content will stay at the top of the search engine results page for a very long time (Armbrust et al., 2010). Therefore, SEO is a means to keep the content pertinent and at the forefront of the company’s target audience long after they were created. This is why, SEO is better than Pay-Per Click (PPC), because PPC will fall off the radar engines once the payment of fees is stopped (Armbrust et al., 2010). Armbrust et al. (2010) argue that the return on investment of the website will continue to rise with SEO, whereas with PPC it will reach a certain point and then become stagnant. This is because SEO pages’ click through-rates continue for an extended period of time, whereas PPC only has the ability to funnel clicks and convert them to sales for a short period of time. Once the payment of fees for PPC is stopped, the click through-rates will fall and the return on investment will drop proportionately. Boa-Ventura and Zagalo (2010) suggest that start-up businesses with shoestring budgets should go for SEO to promote their contents, because SEO is free of charge.

Pay-Per Click

PPC is a way of presenting the content to the target audience by paying for advertising space in the sponsored results section of search engine results page (Bruns, 2008). The company pays a fee for the click, once a viewer clicks on the advert and arrives on the web page. PPC can be done through various advertising networks like Google AdWords, Yahoo Advertising Marketing, Google AdSense and infolinks.

PPC produces instant results, whereas SEO takes time and commitment before results begin to appear (Bampo et al., 2008). This is because, once the fees for PPC is paid, the link to the website will appear on the first page of the search engine. If a company wants to promote time sensitive contents such as product and service offers, the PPC is the most effective way of diverting consumers to the company’s website (Clarke, 2008). Moreover, PPC enables a company to get its content out when the market is full of authority websites that even the most effective SEO cannot displace (Bampo et al., 2008).

The conversion rates of PPC are higher than SEO, because search engine users who click on paid advertisement have the intention to make a purchase (Cook, 2008). This means visitors who arrive at the website through a paid advertisement are more likely to buy the company’s products than those arriving through organic results. Also, calculation of the return on investment of the website is easier with PPC than with SEO (Armbrust et al., 2010). PPC allows the website to be promoted only to target segments. With PPC, it is possible for a company to market its products or services to people based on their gender, age, education level, income bracket and marital status (Easley and Kleinberg, 2010). Therefore, the company’s financial resources are not wasted advertising on the website to visitors who are uninterested in the products and have no intention to make a purchase. With SEO, a website can lose its ranking if the SEO algorithms used by search engines are updated (Cook, 2008). Cook (2008) claims that PPC is not in any way affected by SEO algorithm updates. He goes on to argue that companies using PPC do not need to worry about losing traffic and the revenue that is generated by that traffic.

Web 2.0

Blogs, wikis, RSS and social references are examples of internet technology and applications that are referred to as Web 2.0 (Turban et al., 2008). Web 2.0 expands social users’ and business participants’ experience, knowledge and market intelligence (Mata and Quesada, 2014). It does so through online applications that are open-source, interactive and user controlled. Web 2.0 supports informal user networks’ creation through the facilitation of ideas and knowledge flows, thus allowing generation and dissemination of market intelligence (Constantinides and Fountain, 2008).

Various Web 2.0 applications are used to allow the exchange of information between users (Constantinides and Fountain, 2008). For example, websites allow the presentation of information, blogs allow various authors to post items or texts in chronological order on the same website, wikis allow collaborative creation and editing of web pages, chats allow synchronous conversation over the internet, RSS or atom syndication mechanisms allow retransmission of web information sources, podcasts allow distribution multimedia files, and mashups allow amalgamation of content from various websites (Mata and Quesada, 2014). Examples of websites using Web 2.0 applications include: Blogger, Facebook, Flickr, Google Docs, LinkedIn, Picasa, Skype, Twitter, Wikipedia, WordPress, and YouTube. These sites allow users to directly create and share information in various forms such as text, photos, and videos, hence facilitating communication and interaction between users (Mata and Quesada, 2014).

Surowiecki (2004) describes collective intelligence as people’s knowledge and experience that those people gain and share within social contexts. The exploitation of collective intelligence is the most important aspects of Web 2.0 applications. Companies which exploited collective intelligence survived the dot-com bubble and now lead the Web 2.0 era (O’Reilly, 2007). However, Turban et al. (2008) question the collective intelligence in Web 2.0 applications due to lack of ability to verify the quality of the content and integrity of the users. Turban et al. (2008) argue that there is a risk that Web 2.0 applications may harness some poor quality information created and shared by its users. The above argument derives from the reality that maintaining editorial control over information created and shared on the internet is extremely difficult. Mata and Quesada (2014) argue that despite the lack of editorial control, the risk of poor quality information is manageable, especially in Web 2.0 sites that have high volume of users and specialise in providing information services. A study carried out by Giles (2005) established that the quality of information posted on Wikipedia is as good as those of the Encyclopaedia Britannica’s. Moore (2009) echoes with this conclusion and reports that the Encyclopaedia Britannica has decided to let the public write articles in its online edition because of the success and popularity of Wikipedia.

Online Social Networks

An online social network is a web-based service that allows users to: 1) create a personal profile, 2) connect their profiles with other individuals’ profiles with whom they have formed social relationships both online and offline, and 3) view profiles linked to their connections, recursively (Boyd and Ellison, 2007). Boyd and Ellison (2007) state that an online social network’s aim is to enable its users to articulate and make clear their existing offline social networks online, not the possibility to meet new people. Therefore, online social networks’ main purpose is to facilitate communication and relation among their users who are part of those social contexts (Mata and Quesada, 2014). Online social networks have received much attention because they have made the real social networks more visible and quantifiable, and also they have been accepted as important tools of mass communication, especially to influence others, create and disseminate news (Constantinides and Fountain, 2008; Boyd and Ellison, 2007).

Web 2.0 has already demonstrated that its consequences are beyond technology and it has an effect on consumers, which affects strategy and marketing (Constantinides and Fountain, 2008). Therefore, from a marketing point of view, it is important to analyse online social networks’ effect on businesses. McAfee (2009) states that groupware or CSCW (computer-supported collaborative work) is a common perspective that relates to the use of online social networks in business. Ellis et al. (1991) claim that groupware enables communication, collaboration, and co-ordination, which is called the 3C model. To explain the use of online social networks for marketing, the following two perspectives are useful: market perspective and community perspective. This paper will only discuss market perspective because community perspective is not as evident in e-marketing as market perspective these days.

The market perspective considers the number of users on high traffic online social networks as a potential market. Several such networks have tremendous amount of users, which presents valuable opportunities for businesses to promote their brands and products (Mata and Quesada, 2014). An analysis of 47 Web 2.0 case studies carried out by Dooley et al. (2012) concluded that market perspective related principles, such as behaviour change, segmentation and targeting, are evident in those cases. Therefore, the market perspective seems to be in widespread use when considering Web 2.0 applications for marketing.

However, it is very important to recognise that not all consumers have accepted online social networks. Young consumers are the main users of online social networks, followed by mainstream online consumers and professionals who have realised that Web 2.0 applications empower them (Constantinides and Fountain, 2008). Furthermore, most existing online social networks have target segments and they still attend to those segments despite all the changes that they have gone through in recent times (Rysdam, 2010). Target segments of Facebook and LinkedIn are university students and professionals, whereas target segment of MySpace is young people which are music fans (Boyd and Ellison, 2007). Therefore, it is very important to understand the target demographics of online social networks in order to properly use them according to the market perspective (Mata and Quesada, 2014).

Conclusion

This paper suggests that start-up businesses with shoestring budgets should choose SEO to promote their products and services. However, companies which have financial resources and want to carry out highly targeted campaigns should go for PPC. SEO offers long term search marketing on a budget, while PPC generates quick traffic streams that are required for high converting products. This paper finds that Web 2.0 is only useful if it exploits collective intelligence that is of good quality. This paper warns that marketing through an online social network can only be successful if the company’s target segment matches with that of the online social network. Therefore, this paper recommends that a company should combine these marketing tools and use each tool according to the current needs of the company.

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Constantinides, E. and Fountain, S. (2008) “Web 2.0: Conceptual foundations and marketing issues”, Journal of Direct, Data and Digital Marketing Practice, vol. 9, no. 3, pp. 231-244.

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Dooley, J., Jones, S.C. and Iverson, D. (2012) “Web 2.0: an assessment of social marketing principles”, Journal of Social Marketing, vol. 2, no. 3, pp. 207-221.

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1.0 Introduction

Porter (2004) established the concept of the value chain, the model broadly addresses the question as to where value is added to a product or service through both primary activities which physically add value to a product or service and secondary activities which support the primary activities as shown in the popular visualisation below:

The objective of this portfolio is to identify were value from both the product and customer perspective and then consider how these identified values have an impact on the value chain activities for the company and product in question. Conducting the research the portfolio will use a mixture of both primary and secondary research to establish the relevant information. Whilst the results of the research may be found in the relevant areas of the Pro-forma’s the detailed research methods may be found in the appendix at the end of the portfolio.

2.0 Product value – Pro-forma A

2.1 Name of company:

Apple is the manufacturer of the product in question, distribution ranges through a variety of third party retailers from high street electrical stores such as Curry’s through to online sales channels such as Amazon.

2.2 Name and description of product/service:

The product being considered for the purpose of this research is the Apple I-Pod. The I-Pod is a portable music playing devise and replaces older models of similar devise such as the Walkman and portable CD players. The fundamental difference between the I-Pod and pervious models of portable music player is that the I-Pod is digitally based relying on Apple’s I-Tunes system of music downloads rather than conventional formats such as a CD or Cassette (Lynch 2008 p 795-798).

2.3 Value of the product/service to the customer:

Value for the customer may be seen as falling into two key areas namely that of the physical features and benefits of the product and the intangible benefits associated with such marketing considerations as image. Both of these areas would appear to be supported both in the literature (Brassington and Pettitt 2007, Kottler et al 2009) as well as the results of the primary research.

Specifically research revealed that the key value of the I-Pod as a physical product was generated from firstly the user friendly nature of the product in comparison to other electronic “gadgets” this would be a pattern which is highlighted in the literature as one of Apple’s key success factors in the industry as a whole (Visionary Marketing 2008). Respondents also highlighted that the quality of the musical experience was also a key value especially when compared with previous non-digital versions. Durability was a repeated factor in interviewing with respondents raising the issue of poor experience with portable CD players due to scratches which the I-Pod has managed to eliminate. Finally from a physical perspective the small size and light weight nature of the product was seen as a key value for many especially for those who stated that they used there I-Pod or were intending to use such a devise in conjunction with another activity such as none team based sports.

From the perspective of intangible elements of value there were several considerations highlighted. In the first instance respondents stated that the I-Pod was seen as almost a fashion accessory as much as it was a music devise, owning an I-Pod is seen as a “cool” piece of technology to own rather than a more obscure and specialist product (Weisbein 2008). Secondly there was a high level of importance attached to the I-Tunes service which may be seen as an integral part of the product, here respondents stated that value was added from the wide range of music available and the instant availability. It was stated that in many cases searching for a track in a traditional format without the I-Pod may have taken a considerable amount of time, in addition there was also the consideration that value was added for the consumer due to the ability to buy single tracks rather than having to pay for a whole album as is often the case in traditional formats.

2.4 What are the key product and service attributes:

Light weight and small physical construction

Durability of both the product and the consumers music collection

High end digital music technology

Fully integrated download service in the form of I-Tunes

Instant availability of a wide range of music

Fashion value of product ownership

Ability to use the product in conjunction with other activities such as sports

2.5 Type of research undertake:

This project has undertaken both primary and secondary research in reaching the results as highlighted in the relevant pro-forma’s. Primary research has included a set of 50 questionnaires in order to gain largely quantitative data whilst the project has also benefited from a number of interviews which were conducted with actual or potential consumers of the product in order to gain in depth qualitative data. The specific methods and techniques used may be found in the appendix of research.

2.6 Purpose of research:

The purpose of the research undertaken is to establish firstly what adds value for the consumer in relation to Apple’s I-Pod offering. Secondly to consider how well Apple has managed to address the perceived values of the consumer in practise. The research should finally address the level of interaction between perceived values of both the product and the consumer and Apple’s internal value chain.

2.7 Post research review:

On the whole the research carried out has provided a valuable insight into the values of both the I-Pod as a product and the perceived values of the consumer in relation to the product thus making a valuable contribution in the field. If the researcher were to carry out the project again it is felt that it would be beneficial to spend a greater level of time researching Apple’s value chain in greater detail given the high level of research which has been spend on the consumer side of the project in this portfolio.

2.8 Conclusions:

There are many conclusions that may be drawn from the research conducted however the points may be surmised in the consideration that whilst the I-Pod as a physical product offers a portable music player this is not the sole value of the product. The value of the I-Pod may be seen as largely linked to the intangible benefits associated with the product which include a general consideration that the product doubles up as a fashion accessory as well as the way in which the product is integrated into Apple’s wider value chain including the I-Tunes concept which is key to the success of the product. As such one may consider that whilst the I-Pod in its self is a physical product much of the value added comes from the service and supporting activities of the value chain and that without these elements the product would not be a success.

3.0 Customer value – Pro-forma B

3.1 How customer value is understood and met by product/service provider

In many ways the success of Apple in general may be seen as owing to the company’s understanding and interpretation of consumer values in a way which is different to that of its competitors. In the first instance previous to the launch of the Apple I-Pod and I-Tunes service Apple had little experience in the music sector. At the same time incumbent players in the market may be seen as focusing on the wrong consumer values. For instance Lynch (2008) indicates those in the traditional recorded sector had focused on the protection of intellectual property and distribution through traditional outlets and distribution channels such as high street music stores. On the other hand those offering what may be seen as competitor products to the I-Pod in the form of the MP3 player also adopted a different interpretation of value to that of Apple. In this instance other producers of MP3 players interpreted consumer value as being associated with a reduction in price and improvements in quality (Weisbein 2008).

Apple on the other hand has taken a different approach to the interpretation of customer values, in the first instance apple has recognised that the consumer values the MP3 product only partially as a music offering and that a large proportion of the value derived for the consumer is due to the consideration of the product as a fashion accessory. In delivering on this core value Apple has constantly updated the product with frequent innovations from basic cosmetic alternations through to the ability to update software and applications (Frith 2007).

Another consideration in the way in which Apple has interpreted consumer value is to consider that of how the I-Pod fits into the wider value chain. Despite the fact that Apple was not the first company to offer an MP3 product there is the consideration that previous to the I-Pod and I-Tunes offering consumers had very few choices in obtaining digitally based music in a legal context (Lynch 2009). As such one of the key ways in which Apple has managed to interpret consumer values is to integrate the physical product the I-Pod with into the wider value chain which consists of the I-Tunes offering allowing the consumer to legally download a wide verity of music for instant consumption, elements which were considered as key value adding considerations for the consumer.

3.2 Is consumer value considered in product material/service elements?

This may be seen as the defining feature of the I-Pod over rival MP3 systems, whilst other companies such as Sony have introduced similar physical products in the from of the NWHD1 (BBC News 2004) which encompass may of the same consumer values in the physical product such as small size and durable shock resistant technology they have failed to consider the wider value chain which has a strong emphasis on the distribution channel which directly adds value to the physical product.

It is notable that were competitors have began to make progress the companies involved have tended to see the service and supporting elements associated with the distribution channel as the key success rather than the physical product such as in the case of the potential My Space offering and Microsoft’s rival “Zune” (Marketing Week 2008, Wray 2006).

3.3 Presentation

The presentation of the I-Pod may be seen as largely representative of the consumer values of the product. The I-Pod comes in a contemporary style white minimalistic style of box packaging which may be seen as communicating to the consumer both the contemporary nature of the product but also the simple user friendly nature. The box contains a limited amount of information on the technical specifications of the product however the consumer is not bombarded by a plethora or irrelevant technical jargon. See appendix for graphical representation fig 1.

3.4 Customer satisfaction measures and support

In gauging the overall level of customer satisfaction Apple has a number of mechanisms. According to those interviewed the I-Pod comes with a standardised customer satisfaction card with the option to register one view online. In addition users are able to register for a number of services on Apple’s main web site (Apple 2010) which offers an array of options aimed at enhancing customer satisfaction from the provision of advice and technical support through to repairs and bolt on sales designed to enhance the experience.

3.5 Considerations not met by the product/service

On of the key success factors of the I-Pod as has been highlighted is the distribution channel which the I-Pod is automatically linked into in the form of I-Tunes. Despite the success of the product in relation to this model the I-pod not only allows the consumer to use the I-Tunes offering but effectively locks the consumer into Apple’s distribution network. Whilst one can see the benefits of such a strategy there is also the consideration that such a lack of flexibility detracts from the value of the product as consumers value the flexibility of being able to purchase their music from multiple sources (Smith 2006).

Further more as with many successful products the company and its product often come under a higher level of scrutiny than less successful alternatives. Apple’s I-Pod despite its success may be seen as facing a wave of criticisms which detract from consumer value as highlighted by Prigg (2006) who points out that many consumers have criticised the product for poor physical quality in areas such as battery life and manufacturing conditions which use unethical practises in the Far-East. Finally there is the consideration that since the launch of the I-Pod Apple has since developed the I-Phone which combines the technology of both the mobile phone and the portable music player into a single devise. This development may suggest that the original I-Pod as discussed in this report did not address all of the elements of value considered by the consumer in the first instance. This view may be supported by the reported wide uptake of the I-Phone from telecoms companies (Frommer 2007, Lomas 2008).

4.0 Impact upon value chain activities – Pro-forma C

4.1 Sales

As a mass market consumer product sales of the I-Pod are driven through two main channels the traditional retail channel in high street chains such as Curry’s, PC World and HMV. Secondly Apple also markets through what may be seen as an alternative distribution channel in the form of the web (Jobber 2007), in such instances Apple uses established web marketers such as Amazon as well as offering its own direct sales via the companies online store apple.com. As such the company’s sales activities may be seen as largely those processes which are aimed at persuading retailers to give the product shelf space in greater proportion than is given to rival products (Sullivan and Adcock 2002).

4.2 Billing and accounts

In most instances the impact of the customer values on Apple in relation to billing and accounts are minimal given that a large volume of sales will go through retail chancels for which Apple will have standardised trade terms and conditions with the relevant retailer which may be a high street or online distributor. The exception to this comes firstly in the direct sales for which Apple engages from its online store for which the company must adapt to be able to make sales in single unit format thus having a fragmented cash collection system in relation to larger block retail sales. There is the consideration that such single unit sales add significant costs in banking and transactional costs (Business Link 2010) for Apple were such sales take place however this may be offset by the ability to charge at the full retail rather than a trade price.

In addition whilst this portfolio is specially concerned with the I-Pod as a product there has to be the recognition that the I-Tunes offering is an integral part of the product for which the impact of billing and accounts has a stronger direct link between Apple and the consumer. In relation to I-Tunes Apple has adapted its value chain to function on a pre-paid account basis. The consumer is able to set up an account directly with Apple online for which there are then a number of pre-paid options including uploading credit directly via a card or buy purchasing a pre-paid credit from a store which is then activated similarly to those used in the pre-paid phone market. Such a system may be seen as beneficial to both Apple and the consumer, in using such a pre-paid option Apple ensures a higher level of cash flow than the company might have otherwise experienced under another model. From a customer value perspective Apple’s deployment of a system similar to pre-paid mobile phone top ups gives the consumer a payment method for which they already have a great level of familiarity with this adding value in the form of reducing transactional complexity.

4.3 Customer information

Apple may be seen as facing a dilemma on the level of consumer information which the company needs to provide in relation to its product. As a technical product the I-Pod needs to give consumers a minimum level of information so as to ensure that the sale of a product meets their needs. Despite this need there is also the consideration that providing too much technical information could lead to an information overload for the consumer thus detracting value and ultimately losing Apple sales in the long run. As such Apple may be seen as managing the distribution of such information in a relatively effective way by issuing what may be seen as the minimum requirements on marketing materials such as the web store and packaging and then entering greater detailed information in the relevant product documents which accompany the product for those who need it.

4.4 Procurement and production

Procurement and production may be seen as one of the significant failings of the I-Pod in relation to the relationship between consumer values and Apple’s value chain. Whilst on the one hand consumers have demonstrated a desire for attributes in the product which are not related to price Apple has non the less used production and procurement techniques which are largely aimed at lowering the companies costs as far as possible. As such the company has been criticised for the use of overseas labour in unacceptable conditions (Business Week 2009) and the use of poor quality materials (MACNN 2006). As a product which is marketed as a premium product with high prices passed on to the consumer for contemporary theology this would appear to be a poor strategic decision on the behalf of Apple for which the only motive may be seen as the consideration of short term profits.

4.5 Customer support

As a high value purchase customer support may be seen as an integral part of any such offering so as to reduce the prospect of post purchase dissonance (Brassington and Pettitt 2007, Jobber 2007). Apple may be seen as offering support for the I-Pod product in a number of ways. In the first instance there company offers the traditional considerations associated with customer support, the Apple main web page offers access to a number of levels of support. At the first stage Apple offers what may be seen as “self service” support in which the consumer is able to access frequently asked questions, tutorials and download replacement manuals. At the next level of valued added support the company offers a telephone service which is charged at a standard call rate. Finally there are the full value adds support services and include extended warranties as well as exchange and repair possibilities.

Whilst customer support is often considered as having an association with problems be they related to problems with the actual product or the consumers technical inability to work the product there should also be a consideration of how a company supports a consumer in getting the most out of their product. A key value adding area when such levels of support are considered are the bolt on extras which come in the form of the I-Tunes system and downloadable upgrades thus adding significant value for the consumer from a support perspective.

Appendix of research

Research methods:

This section will now outline the research methods which were used in the project before going on to give the relevant samples.

Interviews:

A series of five interviews were used to gather highly qualitative data to be used in the project. The researcher is presented with a number of methods of interviewing ranging from the fully structured interview with a set series of questions to the informal interview with little structure. The advantages of the first method are that the researcher is assured of having answers to a predetermined set of questions at the end of the interview. Despite this is there is the consideration that such an approach is inflexible and does not allow the interviewer to explore areas of interest which may arise during the process. On the other hand the completely informal interview may be seen as having the opposite qualities, the advantage of such a method is the broad flexibility of approach which allows the interviewer and interviewee to explore any number of possibilities. Despite such flexibility there is the consideration that such a method may lead to the gathering of a large amount of irrelevant data thus creating a wasted opportunity for the researcher. As such the researcher in this case has opted for a hybrid method using the semi-structured interview, as such the interviewees were given a series of themes rather than questions to discuses thus allowing both flexibility but giving an overall structure to the interview.

The themes for the interviews were largely based upon the Pro-forma’s and consisted of the following discussions:

What is the nature of value for any product?

What are the physical attributes of value for a portable music player/I-pod?

What are the non-physical attributes of value for a portable music player/I-Pod? (Prompt brand, lifestyle etc if unsure)

The value of service/support

The value of business ethics on a product

General discussion about rival and substitute products and there values

Interviews were conducted in a public place and lasted around 15 minutes in duration each.

Questionnaires:

Questionnaires were used in this research project so as to ascertain information in a quantitative format, whilst qualitative data allows the researcher to explore a given area of interest at an in depth level quantitative data is much more useful in identifying statistical trends over a wider sample of people than could be achieved from the use of interviewing in the time scales involved. In constructing the questionnaires the relevant pro-former’s were used again as the basis for the division of the questions as this was the same method used in the analysis of the themes to be explored in the interview section the researcher has been able to validate the research further by comparing the results of both the questionnaires and the interviews which largely highlighted similar themes and trends in relation to consumer values. Each questioner was issued and completed on the spot by willing participants after confirming the qualification of either owning or intending to own an I-Pod or competitor product in the next 12 months.

Questionnaire example:

1. When considering “value” which of the following are important (pick up to 2):

Price Physical Attributes Reputation Brand Perception of others

2. When considering “value” in relation to a portable music devise what are the important factors (Tick all that apply):

Price Lightweight construction Durability User-friendly technology Storage capacity Street creditability Compatibility with other systems Ability to use as part of another activity eg running Customer support Other (Please state)______________

3. When considering “value” in relation specify to the I-Pod please indicate which elements you believe the product delivers value on (Tick all that apply):

Price Lightweight construction Durability User-friendly technology Storage capacity Street creditability Compatibility with other systems Ability to use as part of another activity eg running Customer support Other (Please state)______________

4. When considering “value” in relation specify to the I-Pod please indicate which elements you believe the product fails to deliver value on (Tick all that apply):

Price Lightweight construction Durability User-friendly technology Storage capacity Street creditability Compatibility with other systems Ability to use as part of another activity eg running Customer support Other (Please state)______________

5. Please give any other comments you feel relevant to the value for which you perceive in relation to either the I-Pod or a rival portable music product offering.

_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Sampling techniques:

Having constructed the relevant questionnaires and interviews it is necessary to consider whom to distribute the questionnaires amongst and whom would be a relevant candidate for interviewing. As such those to be included in the research may be referred to as a sample, the fairest way to gain unbiased data may be to conduct a random sample. In a random sample is one in which a selection of the population at large is used for the purpose of the research method regardless of any qualification or demographic consideration such as age, gender or ethnic background. However since this project is specifically associated with a given product the I-Pod in this case there is the consideration that the data collected from such a wide proportion of the population including many who may have no interaction with the product may produce irrelevant data thus skewing the results further down the line. As such the researcher has decided to limit the sample using a random sample but with the qualification that the participant must either own an I-Pod or similar product or be considering the purchase of an I-Pod or similar product within the next 12 months. This method of sampling will be used for both the issue of the questionnaires as well as the selection of candidates for the interview process. In addition so as to aid the process of achieving a random sample the issue of questionnaires will be carried out at three different locations at three different times of day.

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Introduction

The five core concepts of marketing are; consumer needs/wants/demands, products and services, value/satisfaction/quality, exchanges/transactions/relationships and markets (Kotler, et al., 2008). To be able to understand and cater to all these factors, an organisation can use a variety of marketing theories. This report will outline and critique the various principles of marketing, noting the advantages and disadvantages of each. The theories that will be covered are; 4Ps, marketing, ambush marketing, buzz marketing, market segmentation, targeting and positioning, Ansoffs matrix, PESTEL analysis, porters’ five forces and micro-environment factors.

4Ps

Successful marketing is based upon addressing some very basic, key issues. The 4Ps aims to address these issues, and allows a company to understand some very important aspects of their internal operations. The 4Ps are comprised of; product, price, place and promotion (CIM, 2009). Analysing these factors allows an organisation to put their customers at the centre of their marketing, and the company must do everything in their power to deliver the upmost quality and service to all of their customers.

Booms & Bitner (1981) provide a list of attributes that each of the 4Ps may include. Although an old model, it is still very much applicable to today’s business environment.

Product: Quality, brand name, service line, warranty, capabilities, facilitating goods, tangible clues, price, personnel, physical environment and process of service delivery.
Price: Level, discounts and allowances, payment terms, customers own perceived value, quality/price interaction and differentiation.
Place: Location, accessibility, distribution channels and distribution coverage.
Promotion: Advertisements, personal selling, sales promotion, publicity, personnel, physical environment, facilitating goods, tangible clues and process of service delivery.

Furthermore, for the service industry, the 4Ps was extended to the 7Ps. This was mainly due to the higher degree of collaboration between the organisation and the consumer, which the original 4Ps were not taking into consideration(Webster, 1984). This resulted in the framework being extended, to take into account the variety of service attributes that come into play when devising marketing strategies. Service quality is becoming more significant to an organisation, as they can no longer only rely on the benefit of a good to attain and retain consumers (Lusch, et al., 2007). Booms & Bitner (1981) provide many of the attributes that the extra 3Ps encompass. These are;

Participants: Personnel training, discretion, commitment, incentives, appearance, interpersonal behaviour, attitudes and customer behaviour/degree of involvement.
Process: Policies, procedures, mechanisation, employee discretion, customer involvement, customer direction and flow of activities.
Physical Evidence: Environment, furnishings, colour, layout, noise level, facilitating goods and tangible clues.
Ambush Marketing

There is a lot of moral uncertainty surrounding the use of ambush marketing. It is predominantly related to big events and sponsorship deals. Ambush marketing became such a prominent strategy because of the increase in sponsorship deals. This mainly happened because event owners wanted higher returns and it made advertising more effective (Meenaghan, 1998). Furthermore, Meenaghan (1994, p. 79) defined ambush marketing as “”the practice whereby another company, often a competitor, intrudes upon public attention surrounding the event, thereby deflecting attention toward themselves and away from the sponsor”.

Although ambush marketing would appear to hold many benefits for a company, at basically no cost, there have been many academics that criticise its uses. Payne (1998) believes ambush marketing jeopardises one of the fundamental facets of business activity, namely truth in advertising and business interactions. On the other hand, other academics criticise the weak-minded view that competitors have a moral obligation to step back and allow an official sponsor to reap all the benefits from a special event (Meenaghan, 1996). In general, ambush marketing comes down the moral perceptions of the marketing manager. As the majority of companies are in business to make profits, then capitalising on any means necessary will be acceptable, and ambush marketing will be a prominent strategy for them to use.

Buzz Marketing

Word-of-mouth marketing and buzz marketing are very similar, and is a “marketer’s dream” (Balter & Butman, 2005, p. 161) if successfully implemented. However, it is incredibly difficult to define and implement buzz marketing, as “everyday word of mouth conversations tend to be random and spontaneous in nature, occurring in a natural, unpredictable pattern of communication” (Ahuja, et al., 2007, p. 152).

Buzz marketing is usually implemented through building suspense and tensions around the release of a new product, thus causing media and consumers to constantly talk about the product. It is a relatively free way of marketing, and can reap incredible benefits for the company. The only negative for buzz marketing is the fact that it cannot really be controlled in any way, as it is heavily reliant on consumers spreading the message on behalf of the organisation.

The intentions of buzz marketing is obviously meant to be positive, by generating effectively free advertising for an organisation or their products (Ahuja, et al., 2007). However, word-of-mouth works in both a positive and negative manner, as a bad PR story can quickly be spread across the globe. Furthermore, it is most effective across a young audience, meaning that the message will be spread amongst a certain demographic, but not everyone the organisation was hoping for (Leila & Abderrazak, 2013). It is the inability to measure the reach of this type of marketing that makes buzz marketing very risky for an organisation. The message could easily be misinterpreted, there is little control over the direction of the campaign, and it may actually end up causing negative impact on organisation performance (Bloomberg, 2001). Market Segmentation, Targeting and Positioning

Market segmentation has become an essential element of marketing, especially in developed countries. This is because goods can no longer be sold without considering the specific needs of consumers, and who is likely to purchase the product (Wedel & Kamakura, 2000). The main use for market segmentation is to provide guidance on which marketing analysis or strategy an organisation should pursue. Furthermore, Wedel & Kamakura (2000) provide a classification of different market segmentation groups that companies should aim to cater to. This is in regards to a general and product-specific view.

Combining segmentation with targeting and positioning allows an organisation to learn information about their target markets, consumer preferences, competitor’s strengths and customer segments (Natter, et al., 2006). Furthermore, the process of STP should be completed in order, with a segmentation analysis being used as the basis of targeting, which can then be used for positioning. Unfortunately, this can make the process long-winded, as an organisation may want to identify only who they target, or where they should position their product (Kotler, et al., 2006). There is also a great need for behavioural profiling throughout STP, forcing an organisation to conduct even more analysis than they may actually want to (Dholakia & Dholakia, 2001; Kotler, et al., 2002). Although and STP analysis can be time-consuming, it does provide an organisation with a comprehensive overlook on a variety of factors that are intrinsic to an organisations success.

Ansoffs’ Matrix

In a 1957 report, Ansoff provided a comprehensive definition for product marketing as “a joint statement of a product line and the corresponding set of missions which the products are designed to fulfil” (Ansoff, 1957, p. 114). This resulted in the creation of the Ansoff Matrix (1965), which is a comprehensive marketing theory to help guide a company’s strategic growth decisions. It is comprised of four quadrants, with each giving a general direction as to how a company should proceed with their desired growth. The four quadrants of Ansoffs Matrix are (AM, 2015);

Market Penetration: This is about further exploiting a product that exists in an already functioning market. Market penetration is usually made possible through the clever use of promotions, or increasing the attractiveness of a product
Product Development: The product development growth strategy focuses on introducing new products into existing markets. This can either be in the form of a complete new product, or the modification of an existing product.
Market Development: Sometimes referred to as market extension, this factor of the Ansoff Matrix involves an organisations selling its existing products in a new market. This can be aided by market segmentation, which can help identify potential new markets. Some approaches to this strategy include, new geographical markets or distribution channels.
Diversification: Generally known as the most risky growth strategy, diversification involves an organisation developing new products into new markets. There is a lot of risk in this strategy because an organisation will not be knowledgeable on either the product or the market they are entering. Heavy planning and research are vital for a diversification strategy to be successful.

Different organisations benefit from different strategies. For example, a study conducted by Watts, et al., (1998) concluded that the most appropriate strategies for small and medium sized enterprises (SMEs) would be product development or market development. This is because most of these organisations would not have the resources to successfully implement a diversification strategy, and the growth from market penetration would be too slow. A larger organisation may well be more successful in diversification, as they have more expendable resources.

Macro Environment Marketing
PESTEL

PESTEL stands for Political, Economic, Social, Technological, Environmental and Legal. Furthermore, it is a comprehensive framework used by organisations to help analyse the macro-environment factors that are affecting daily operations. A PESTLE analysis “is in effect an audit of an organisation’s environmental influences with the purpose of using this information to guide strategic decision-making” (CIPD, 2015, p. n.p.). After a company has conducted a PESTLE analysis, they should use their findings to help guide any strategic decision making to minimise the impact of external forces.

Political: The main political factors of PEST deals with the effects government can impose on an organisation. This can include things such as, new legislation, changes in taxation, minimum wages, and employee benefits.
Economic: Some of the most important economic factors that a PESTEL analysis will investigate are “the economy systems and structures, resource status, the level of economy developing…” (Yingfa & Hong, 2010, p. 563). If an economy strengthens, then it would usually have a positive effect on the majority of companies performance, however this can be largely dependent on what areas of the economy strengthen.
Social: One of the most significant factors of the PESTEL is the socio-culture factor. The socio-culture factors are usually in continuous change, and “have a massive impact on how organisations are managed, and how leaders have to behave if they want any followers” (Hussey, 1998).
Technology: One of the fastest growing and most rapidly changing factors of the PESTEL analysis is the technological environment (Henry, 2008). Some examples of technological factors include; R&D activity, Automation and Technological Developments (NetMBA, 2015). A company must ensure they are maintaining top quality equipment to produce the most competitive products.
Environmental: The main environmental factors that a company will look at through a PESTEL analysis are, ‘green’ issues that affect the environment, renewable energy sources and waste/disposal (App Rao, et al., 2008). Consumers are becoming more concerned with their environmental impact, thus affecting their purchasing choices.
Legal: Similar to political, legal factors look at how legislation affects a company. This can include, competition law and government policy, employment law and safety law. It is of vital importance for a company to keep up-to-date with all relevant legislation (App Rao, et al., 2008).
Porters Five Forces

Porters Five Forces model can have a huge impact on the direction and shape of an organisations decision making. If conducted successfully it is a great tool to guide all strategic marketing activities. The five components of Porters Five Forces are:

Threat of new Entrants: “New entrants to an industry bring new capacity, the desire to gain market share, and often substantial resources” (Porter, 2000, p. 138).
Threat of Substitutes: “A substitute performs the same or a similar function as an industry’s product by a different means” (Porter, 2008, p. 17).
Bargaining Power of Customers: “Powerful customers can capture more value by forcing down prices, demanding better quality or more service, and generally playing industry participants off against one another, all at the expense of industry profitability” (Porter, 2008, p. 14).
Bargaining Power of Suppliers: “Suppliers can exert bargaining power over participants in an industry by threatening to raise prices or reduce the quality of purchased goods and services” (Porter, 1998, p. 27).
Rivalry among Existing Competitors: “Rivalry among existing competitors takes many familiar forms, including price discounting, new product introductions, advertising campaigns and service improvements” (Porter, 2008, p. 18).
Micro Environment Marketing

One of the most widely used and comprehensive frameworks for analysing the micro-environment is the SWOT analysis. This analysis measures the internal strengths and weaknesses of an organisation, and the external opportunities and threats. Having identified these factors, an organisation should build strategies which may build on the strengths, negate the weaknesses, exploit the opportunities or counter the threats (Dyson, 2004). These strategies can be further guided by the use of the macro-environment analysis, and can supplement the variety of different marketing techniques mentioned above, such as ambush marketing or market segmentation. Furthermore, these strategies can be generated through the use of a TOWS matrix, with forms relationships between the different variable to draw up a variety of strategies that the firm can utilise.

Conclusion

Overall there are a variety of methods that an organisation can utilise in order to successfully analyse the market, and market their products. It is imperative that an organisation knows how to implement both of these methods, as it will have a huge impact on the overall success of the organisation. The 4Ps is a great analysis for a company to conduct first, as it outlines all the fundamental aspects that effect an organisation.

Furthermore, an external analysis should always be conducted, especially the PESTEL and Porters Five Forces analysis. This is because it outlines all important external factors, such as competitions activities or new legislation. Understanding these factors will shape the marketing strategy that a company wishes to pursue. Depending on what the external analysis shows to a competitor, they can then choose which market strategy they wish to pursue. This could involve using an Ansoff Matrix, or just pursuing an ambush, buzz, push and pull or market segmentation strategy. One strategy cannot be anchored to a certain industry or company, as it is only through extensive analysis that a company will know which the optimum strategy is.

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This work was produced by one of our professional writers as a learning aid to help you with your studies

Introduction

The on-going technological advancements in the electronic devices industry make it very competitive (DeGusta, 2012). Companies, therefore, need to be very strategic in their marketing activities. Being among the market leaders in such an industry, Apple lays the emphasis of its strategy on innovation (Lyons, 2010). While it has the advantages of its strong financial position (Johnson et al., 2012), brand name (O’Reilly, 2014a) and excellent data access manager (Webster, 1991), it also has the disadvantages of changing management (Myslewski, 2013) and ineffective use of the cloud (Frommer, 2011). In the external environment, its loyal customer base (Elmer-DeWitt, 2012) and the growing use of smartphones (Gibbs, 2014) may prove to be beneficial for the company, while it may need to beware of the competitive rivalry arising out of technological advancements (DeGusta, 2012), impact of uncertain economic conditions (Reardon, 2009) and pressure from regulatory bodies (Kaynak and Jain, 2012). Based on its concept of differentiation (Nielson, 2014a), it designs and implements its strategies which form the marketing mix. Apple management thus needs to consider the different viewpoints about its strategies in its decision making process.

Situational Analysis
Strengths

Apple leads the worldwide capital market, which makes its strong financial position its valuable asset (Johnson et al., 2012). The closing financial statement of Apple in December 2014 reported a net income which was the largest in the history of public limited companies (Bradshaw and Platt, 2015), making its cash in hand the highest as well (Yoffie and Rossano, 2012). Another advantage that Apple enjoys is its operating system with data access manager, which is superior to that of Windows (Webster, 1991). The $118.9bn brand name of the company is also a strategic strength as it tops the list of the world’s most valuable brands (O’Reilly, 2014a).

Weaknesses

Apple experienced the greatest loss in its history in 2011 when Steve Jobs, the genius mind behind Apple’s innovation, creativity and success passed away (Griggs, 2011). After his death the Chief Operating Officer Tim Cook took over as the CEO of the company (AppleInsider, 2011). This change in management turned out to be a major weakness as Tim is skilled in operational excellence, while Apple is famous for its innovation (Myslewski, 2013). This weakness was most significantly portrayed with the failure in customer experience from the newly launched iPhone5, when complaints were registered about scratches on the phones, spotty maps app replacing Google Maps, leaking light and screen issues (Gross, 2012). Moreover, Apple also has not been able to make effective use of the cloud; it bragged about the iPad 2 as being a ‘Post-PC’ devise, whereas it still needed to be connected to a computer to access or transfer files (Frommer, 2011: 1).

Opportunities

One of the greatest opportunities Apple has in the market is its strong customer base; its customers are more seen like followers of the company. The strategy that Apple may follow is to keep the customers happy and their willingness to pay a premium price will increase (Anon., 2014). In a survey conducted, about 94% of the iOS users stated that they will only consider Apple when buying their new tablet or smartphone (Elmer-DeWitt, 2012). Farber (2013) argues that Google and Microsoft have the potential to manufacture the finest quality products on which Apple boasts, but they lack the potential to manufacture the long queues of people waiting in anticipation of buying their new iPad or iPhone. Smartphone has replaced many devices which people used to carry; watch, pocket calculator, camera and walkman are just a few examples (Gibbs, 2014). This fact creates opportunities for smartphone companies to come up with more innovative applications and features which would be well accepted and used by customers.

Threats

The rapid advancement in technology can be seen as a threat for Apple as all the competing organisations are always in the look-out for options to progress. Research suggests that the use of smartphones has increased like no other technological device (DeGusta, 2012). This automatically puts a pressure on the electronic gadgets producers to be a step ahead of the competition at all times. The unpredictable economic situations also pose to be a threat to electronic device producers like Apple (Reardon, 2009). During the financial crisis, the unemployment levels were high and because of lowering disposable incomes of consumers, luxury items like electronic gadgets were among the first items to be removed from their budget lists, thus shrinking the market for smartphones, tablets etc. (Fawzy and Dworski, 2011). Many smartphone companies are now approaching developing countries to carry out their manufacturing process in anticipation of hiring low-wage workers (Chu, 2014). As a result, there may be a threat of increased pressure from regulatory bodies and social groups regarding the working environment in factories, which may eat up the high profit margins generated by this strategy (Kaynak and Jain, 2012).

Understanding Customers

Some experts believe that if one understands the customers of a brand, he almost understands the brand itself (Clifton, 2009). Some companies like to associate the personality of their brand with the user characteristics, while there are others who would associate the elements of their brand personality with that of their spokesperson (Brengman and Willems, 2009). Apple seems to use the former strategy as it serves its ‘socioeconomically elite’ customers by elite devices (MetaFacts, 2009: 1). Research suggests that Apple owners are economically more sound that those without Apple devices (MetaFacts, 2009 – Appendix Graph 1).

Unique Selling Proposition

The differentiated products of Apple are a source of its competitive advantage (Johnson et al., 2012). Lyons (2010) argues that no company has a better spirit of innovation than Apple. In such a highly competitive market, it is able to ensure that no other company is able to imitate its unique capabilities (Terwiesch and Ulrich, 2013). Although Sony is also able to produce high-tech products, the design and integration of Apple are still not easy to replicate (Rothaermel, 2013). Hestad (2013) identifies the level of intricacy that is taken care of while designing Apple products; even the white colour of the iPod was finalised with the mutual consent of the chief designer Jonathan and Steve Jobs himself. Furthermore, other companies are trying to catch up to Apple’s vertical integration system, but they find it difficult to do so because Apple owns just the right chip manufacturers, standards and controls, whereby all its devices sync easily with each other (Nielson, 2014b).

Segmentation, Targeting and Positioning

The market for smartphone is growing at a fast pace (Visions, 2012), which depicts how important it has become for people where they cannot imagine their lives without their phone (Duerson, 2012). There are different views and ongoing debates about Apple’s target market. There is some evidence about Apple focussing on the tech-savvy youth, mostly students (Appleyard, 2008), however, Apple devices are also widely used by affluent business professionals for their work (Apple Inc., 2015a). Considering the media habits of Apple customers, research suggests that they prefer reading Big Guardian or Grazia and spare about 1-5 hours watching TV per week (O’Reilly, 2014b). They are also seen as being status and brand conscious (O’Murchu, 2015). Because its competitive advantage lies in its design, Apple’s most loyal customers include graphics designers, editors, artists and digital video producers (Franzen and Moriarty, 2015).

Carmi Levi, the VP of marketing at a multinational agency, believes that the marketing of Apple creates a differentiating factor by positioning it as a solutions company, as opposed to a tech company (O’Murchu, 2015). Its easy-to-use technology and user-friendly nature goes with the tagline it introduced for Macintosh: ‘The computer for the rest of us’ (Gartenberg, 2010: 1). The brand position has evolved throughout its journey, but Apple management claims that the brand promise is still the same (Marketing Minds, 2015). However there are controversies about this statement after the documentary “Apple’s broken promises” by BBC Panorama (Thomas, 2014: 1).

The Marketing Mix
Product

The strategy Apple follows is to create the best product which generates a better user experience with every new launch, which is why their focus is not on producing products needed by customers, but desired by them (Bulik, 2008). ‘Simplicity’ and ‘intuitiveness’ are the two major characteristics of its products (DeMers, 2014: 2). The Mac Computer was the first launch by Apple, which was then considered overpriced and was perceived to be targeting only a niche market (Wouters, 2014). The company outstood in the industry for the first time after launching its portable music player, the iPod (Khan, Alam and Alam, 2015). The other products by the company namely the iPhone, iPad and Apple TV further strengthened the company and helped build its brand image (Bulik, 2008).

While Apple’s management states that its product strategy revolves around peoples’ feelings of excitement and pride have when they own Apple products (M2 Presswire, 1998), there are criticisms about its strategy, pointed specifically at the Apple Watch. Critics state that Apple has lost its focus after this launch, as watches have nothing to do with the smartphone or tablet business (Benzinga, 2014). On the other hand, supporters of the Apple Watch think it is a great innovative step, whereby the concept of smartwatches will be introduced in the mass market. It is also considered to be ideal for software developers, who can create innovative apps by using it (Bajarin, 2014).

Promotion

Apple also incorporates its concept of simplicity in its promotion, as it believes that flashy messages, giving too much information are too mainstream and not appreciated by the people (DeMers, 2014). It therefore prefers a simple white background in its commercials with light, catchy music (Wouters, 2014). The communication messages revolve around the emotions aroused by the brand; these include one’s desire and dreams, hopes for the future and urge to be socially superior (Azzawi and Ezeh, 2012).

At the time when iPod was launched, Jobs realised that a conventional form of advertising was required in order to inform the customers about its features. It revolved around the brand’s social acceptability concept, whereby owners would feel proud of owning such a devise (Marketing Minds, 2015). On the other hand, Apple’s promotional alliance in UK and Germany was greatly criticised with assertions that it had probably lost other means of promotion. Through this alliance, Coke was to link its website with that of iTunes and millions of free downloads were offered to music lovers on purchase of Coke bottles (Ward, 2006).

Price

Due to its differentiated products, Apple focusses on premium pricing strategy (Nielson, 2014a). It gives the company an advantage, whereby it does not have to get into price wars with competing organisations. Steve Jobs strategised to give higher priority to profits instead of market share, which resulted in production of high-end products and pricing them accordingly (Nielson, 2014a). Wouters (2014) stresses that Apple has never competed on price, and because of its brand recognition created over time, customers are willing to pay the higher price it charges.

Critics argue that Apple will soon face challenges related to its pricing strategy as other companies may give it a tough competition through their low-priced products (Nielson, 2014a). An example is the case of iPads; research indicates that most of iPad users are not very loyal Apple customers and they may switch to tablets from other companies if they get them at cheaper prices (Anon., 2010b). It is therefore predicted that due to its premium pricing approach, Apple may lose the tablet market to competitors (Anon., 2010b). Chulkov and Nizovtsev (2014) further strengthen the argument by using the iPhone example. After two months of the launch, the company abruptly reduced the price by $200, which resulted in the loss of confidence of the early adopters, who had waited in long queues at the launch time to buy their iPhones. Due to this price change, Apple’s share price also dropped and some analysts predicted that the company would not be able to keep up with the competition if it continues with the same pricing strategy (Wingfield, 2007).

Place and Distribution Strategy

By introducing its own retail outlets and online store along with dealership with other mobile stores, Apple’s approach was to adopt a hybrid distribution strategy (Wouters, 2014). In 2002, there were concerns about the customer service provided by small-scale dealers of technology devices and since Apple did not want its image to be jeopardised, it reduced its number of small-scale dealers to only 1% (Viardot, 2004). Apple’s strong supply chain can be considered as one of the reasons behind its success because outsourcing is also done strategically (SupplyChain 24/7, 2015). It relies on many suppliers all over the world for the same raw materials, so that if one company is not able to provide the material on time, another one can help to keep up with the rising demand (SupplyChain 24/7, 2015).

There are, however, allegations about ethical dealing regarding Apple’s Supply chain as portrayed in the documentary by BBC Panorama, which shows that Apple factories are provided in from dangerous and illegal mines (Thomas, 2014). Although Apple management did claim that those accusations were false (BBC News, 2014), there is no source to prove the truth of those statements as yet.

People

According to Borison (2014), Apple takes pride in its workers who become a source of inspiration for their peers and customers. This example was set forward by Steve Jobs himself, who was said to be the most influential figure in the top 100 list by the MediaGuardian (Anon., 2010a). Employees at Apple state that they feel great about being a catalyst to change because of working in an organisation that emphasises on innovation (Hughes, 2010). Apple claims to provide the best employee working conditions in the technology industry (Nuttall, 2012), however, the investigation by BBC Panorama portrayed long working hours, poor living conditions and intimidating work culture in factories where Apple products were manufactured (Thomas, 2014). In the same documentary, there were also concerns revealed about the suicides at another factory supplying Apple products.

Process

The strategy behind production of Apple’s innovative devices remains mysterious as it is mostly considered as a secret recipe (Panzarino, 2012). All of the devices undergo standard process guidelines set by the company, which include product design, testing, polishing, packaging etc. (Satariano, 2013). Initially there is an idea generation stage, after which a dummy device is created which is tested and after being reviewed by the team of experts, a standard process is devised for its production (Elmansy, 2014). Analysing Apple’s design and creative strategy, one may say that it is not an abrupt plan to invent novel solutions, but it takes an excellent team work, driven by enthusiasm (Elmansy, 2014).

Physical Evidence

According to Gmoser (2014), all the space in an Apple retail store is designed in such an attractive way that it interests people to buy their devices. Singh, Katiyar and Verma (2014) emphasise the importance of store layout and design in creating great customer experience, which helps in translating the desire to a final purchase decision. Due to this reason, the store design strategy was slightly tweaked for Apple Watch. While Apple Stores are normally seen without carpeted floors, the specific design for Apple watches included carpeting on the floor because the store designers overheard a conversation between some customers mentioning that they would not be likely to buy a watch from a carpet-less store (Hughes, 2015).

Relationship Marketing

According to Kotler and Keller (2012), exceptional value creation by organisations does not only result in customer satisfaction, but is raised to the level of customer delight. It is perhaps this customer delight which Apple intends to create through its enhanced user experience (Johnson et al., 2012). The iPad has a CRM tool specifically designed for business users who would need to have customer information such as meeting with clients and the like. This imparts that Apple is not only concerned about understanding its own customers, but it is also thoughtful about coming up with a better solutions whereby they can also deal well with their customers (Apple Inc., 2011). According to Temkin Experience Ratings 2015, Apple is ranked the highest along with Amazon in providing valuable customer experience (Close-Up, 2015). It goes so deep into delivering exceptional value to its customers that it organized a training session, whereby Mac users were given an opportunity to learn different functions of the computer in which they had problems. It was led by expert tutors who ensured that the customer experience was worth the effort and the money they were paying for it (Boudreau, 2008).

Sustainability

Apple claims to be involved in responsible management practices to benefit the environment (MH, 2015). The management plans to employ renewable energy to run its operations worldwide, introducing a new product packaging made from virgin paper (MH, 2015). In order to create such types of forests from which virgin paper would be prepared, Apple formed a partnership with the Conservation Fund (Apple Inc., 2015b). A 2014 report indicates that Apple tops the technology companies list as being most environmental friendly, as it is the only organisation which avoids usage of detrimental chemicals in all its products, thus protecting human health (Ritchie, 2014). Apple also has regulations for its suppliers to be environmentally responsible. On the contrary, the BBC Panorama investigation depicted that Apple suppliers owned mining ships which endangered the marine life and the environment (Thomas, 2014). Where analysts criticise Apple’s aggressive strategies of high-scale production to stay ahead of competition as being hazardous to the environment (Bradshaw and Platt, 2015), Apple claims to have preventive measures to support its high-scale production by using energy obtained from cleaner sources to protect the environment (Apple Inc., 2015b).

Conclusion

Like every company, Apple also plans its strategies and implements them considering its own perspective. In the environment, however, there are different views about understanding the initiatives taken by the company. Positive aspects of these opinions will further strengthen Apple as a brand, however, the negative opinions need to be tactfully handled, as they may do serious harm to the company. Critical evaluation of each aspect of their marketing strategy would make them sustain their strengths and overcome their weaknesses.

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This work was produced by one of our professional writers as a learning aid to help you with your studies

The marketing communication process represents varied disciplines and tools that are composed of five elements (Finne and Gronroos, 2009). These represent advertising, personal selling, sales promotion, direct marketing and public relations. The above were examined and explored in this discussion where each was found to have individual and specialised use and contribution to the marketing communication process. The process is an interdependent series of marketing efforts that require companies and marketers to take stock of the attributes and shortcomings of their product or service to construct a plan that achieves successful outcomes.

The application of the marketing communication process is not a dogmatic discipline, but rather one that requires an understanding of the relative strengths and weaknesses of each component. This provides the basis for understanding how components can work together to address differing product and service demands.

Understanding Marketing Communication and Advertising

The mass media benefits of advertising is a key component as it offers the means to reach and influence the broadest cross section of consumers in a highly cost effective manner (Gilbody et al, 2005). The mediums employed represent television, broadcast, print and online techniques along with billboards, signs, posters and other forms that put the product message in front of the public. One of the challenges is waste and targeting. The mass media approach means that whilst the ad placements can be positioned to meet certain demographic and psychological aspects of the target audience, the imprecise approaches of television, broadcast and varied print mediums means that the advertising efforts will be either seen by non-target profiles or potentially lost in a sea of what is termed as advertising clutter (Rotfeld, 2006).

Advertising clutter is defined as a large amount of advertising messages that bombard a consumer during television programs, the pages of magazines or in other print or broadcast mediums (Rotfeld, 2006). The number of ads tends to cause consumers to either ignore these efforts or to tune them out unless the creativity used in the messages specially appeals to a consumer need (Fill, 2005).

The above are distinct challenges faced by marketers in the use of advertising that are highly difficult and complex to execute. Whilst consumers can be classified and grouped into general categories, the differing stages represented by their decision making process in terms of readiness and intent to purchase poses additional hurdles faced by using mass media advertising (Chan et al, 2009). Frequency and repetitiveness represent the general tool used to address the above, however, depending on the medium used, such as television and magazines, these measures (frequency) can be highly expensive (Kelly and Jugenheimer, 2008; Fill, 2005).

Overcoming the above costs aspects as well as clutter and the tendency to ignore ads represents a distinct challenge for marketers. The solution lies in crafting a mixture of advertising, personal selling, sales promotion, direct marketing and public relations that provide enough frequency and exposure to counteract the indicated clutter and tendency to ignore ads, whilst meeting the dictates of a cost effective budget.

Contribution of Personal Selling to Marketing Communications

Depending on the nature of the business, the products being offered and the size of the company, personal selling can represent either an efficient or highly costly mode of marketing communication (Baker and Hart, 2008). Whilst in most cases the sales personal are paid by commission, the percentage of the sale that needs to be devoted to this approach has to be high enough to induce top flight personnel to participate (Ross et al, 2005). The potential to sell enough units to enable them to earn a good wage is a critical factor in attracting better qualified individuals (Ross et al, 2005). More importantly, the product has to be suited to this type of approach.

Other challenges include being able to develop suitable potential sales prospects that represent lead generation created by advertising, offers, website visits, promotions and in some cases cold canvassing techniques (Smith et al, 2006). The challenges are to reduce the per unit sales expense low enough to justify its use and the payment of commissions. In terms of an example of the above, this means that the item must be highly suited for direct selling. Insurance, brokerage services, real estate and cars are prime examples (Hendershott and Zhang, 2006). This is due to the complexity of choices in terms of product types where explaining and establishing a rapport with the consumer is a key part of the process (Hendershott and Zhang, 2006; Fill, 2005). The built in margins in these products and services is high enough to absorb the commission and sales administration costs that include hiring better quality personnel.

As pointed, personal selling, in lieu of mass product distribution in stores, chains or using the Internet is not suited to many types of products or services. Typically, companies such as electronics (computers, home appliances, banking and other products or services) utilise amended customer service call in centres where operators are trained to refer customer to a sales department when it is discovered a new or replacement product is either needed or desired (Piercy and Rich, 2009). This is a form of personal selling that is organised as part of normal business functions, in order to aid in generating sales whilst keeping costs low. As is the case with the marketing communications process, in order to address the varied challenges faced by targeting and reaching the right prospects in a cost effective manner, a combination of various segments of the five marketing communications process elements needs to be used that suits the individual situations, products and other aspects of each company. Apple is a key example of a company that uses all forms of the five elements in conjunction with personal selling that consists of the Apple Store outlets, service and the Internet (Muniz and Schau, 2007). It also utilises varied forms of sales promotion, direct marketing and public relations in a multi-pronged effort to reach as broad a potential audience combined with frequency and exposure to create the conditions to generate sales (Shimp and Andrews, 2013). This is an example also employed by automotive and other companies (insurance, banking, etc.).

Benefits of Sales Promotion in Marketing Communications

This is a form that in most cases uses purchase incentives to lure customers to buy based on varied reasons (Gronroos, 2004). It can be seen in supermarkets where varied products and produce carry two for one offers to generate sales using savings as the lure. Other inducements represent discounts during off seasonality buying lows such as January for cars, or May and June price discounts for computer equipment that usually spikes in August, as part of back to school specials (Alawadi et al, 2006). Basically, all companies use some form of sales promotion to generate sales based on seasonality or competitive factors that are used in conjunction with other marketing communication processes.

The key challenge that marketers face in terms of the use of this method is not devalue the perceived worth of their products by using too many sales promotions that customers are quick to see as efforts to gain sales (Alawadi et al, 2006). Apple is a prime example of a company that makes limited use of sales promotions, and when they do, it primarily consists of adding additional memory or other features as part of the normal sales price (Muniz and Schau, 2007). Apple has maintained a high price point for its products by avoiding sales promotions that offer price discounts. The automotive discount wars of the late 1990 and early 2000 showed automotive companies that discounting prices actually hinder bottom line revenues (Baily et al, 2005).

Uses of Direct Marketing in Marketing Communication

This process represents one that includes mailing special offers and inducements to customers and target audiences that are an important generator of sales (Fill, 2005). Huge customer relationship data bases are compiled using point of sale information from dealers and stores, Internet sale websites, customer service intake calls and other methods (Tapp. 2008). It aids in understanding purchase patterns, demographics, and frequency of purchase that are used to put together special mailings. Insurance companies, banks, supermarket chains and many service type industries make extensive use of this method. Today’s electronic mediums such as the Internet, and smartphones have expanded the effectiveness and efficiency of direct marketing (Persaud and Azhar, 2012).

The challenge that marketers face today is that the compiling of these customer relationship databases, along with purchase and contact records has become common practice for large firms (Neslin et al, 2006). The increased competitiveness of firms within varied industry classifications, along with new affordable database software and storage systems means this field of marketing communications has undergone a transformation process (Wilson, 2011). This means that mid-sized and smaller forms are able to effectively use the sales generation benefits of direct marketing in their overall efforts. The new challenge thus represents the creative crafting of customised approached using printed materials (mail) and electronic distribution devised to appeal to customers and target audience using more specialised parameters (Palmer and Loenig-Lewis, 2009). Knowing when customers might seek to replace a product or upgrade their insurance, are keys to effectiveness under direct marketing that helps to generate leads and inquiries.

The challenge that faces marketers is knowing how and when to prospect for sales and customers to induce them to take action, and purchase. The modern interconnected nature of physical locations, Internet websites, emails, online customer service and other areas represents a highly proactive customer environment for every phase of the direct marketing experience (Palmer and Loenig-Lewis, 2009). The understanding of the increased immediacy in reaching and providing consumers ways to receive, or get answers to questions is key to all of the marketing communication process mentioned herein.

How Public Relations Contribute to the Marketing Communications Process

This represents an underutilised form for most firms as they fail to understand the importance of keeping the public informed of developments (Krimsky, 2007). The Internet age has given rise to increased scrutiny concerning all aspects of company operations, products and shortcomings (Krimsky, 2007). Curtin and Gaither (2009) define public relations as the process of supplying stakeholders and the general public with information regarding its operations. However, in today’s information age, company’s face new challenges represented by the increased availability of positive and negative comments by bloggers, product reviewers, and comparative product sites (Droge et al, 2009). The avenue to address these areas represents public relations releases in print, the Internet along with video chats, video conferences and other means highly successful marketing companies such as Apple use public relations to introduce new product innovations, releases, information on upcoming developments and other aspects of operations and products to keep the company’s name and activities in front of the public (Cornelissen, 2014). The challenge faced by marketers is to take advantage of the climate for increased information consumers crave, use this as a positive vehicle that works in consort with other marketing communications processes. This approach represents a highly sophisticated and coordinated approach that looks at marketing communications as a whole, as opposed to piece meal operations.

Subject Conclusions

Whilst it is convenient to think of the marketing communication process in terms of large companies, this does not necessarily provide the needed examples to understand the best approaches. There are countless examples of large companies that have spent huge sums on marketing, only to be out manoeuvred by smaller companies that established a more focused and connected approach to engage consumers.

The main message that was uncovered throughout this examination is that each potential to communicate with the public represents a selling opportunity using the most cost effective and attention getting means available. Today’s Internet and varied approaches to aid in the coordination of advertising (using Internet banner ads), personal selling (using customer service), sales promotion, direct marketing (using email and mobile technologies, along with carefully crafted public relations are examples. The hallmark of successful marketing communications is a consistent theme and message delivery that utilises all of the processes. The challenge faced by marketers is not the size of budgets, but how to obtain maximum exposure, message delivery and consistency that combats competitive efforts and strikes an accord with consumers. This entails the use of all of the processes using memorable messages that consumers can connect and relate to, and then delivering on these promises.

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It can be said that advertising is a subset “promotions” in the marketing mix decisions and promotions put simply involves the mass communication of the product offering to the target market (Jobber and Ellis-Chadwick, 2013). Other than the obvious reason of persuading customers to make purchases, it is imperative to promote the product offering in order to create an image of the product which becomes one of its differentiating factors (Doyle and Stern, 2006). Furthermore the promotion of a product offering is important to reinforce the information the customers already have about the product (Doyle and Stern, 2006). As mentioned earlier, advertising is one of the components of promoting a product offering and thus it is defined as “the paid presentation and promotion of products or services through mass media such as television, radio, newspapers and the internet”(Doyle and Stern, 2006).

Traditionally, advertising is carried out on the television, radio and in newspapers however disruptive technology like the internet and the phenomena it has made possible has changed advertising and the effect it can have on consumers particularly where it concerns their purchasing decisions (Jobber and Ellis-Chadwick, 2013). Illustrating this point, Google and Facebook have created new environments which are part of the networks to which the planet belongs and which operate at break-neck speed (Jobber and Ellis-Chadwick, 2013). Furthermore, the internet and social networks have also changed the way individuals communicate such that advertisements do not inherently have to be paid – a good review from one consumer to a group of others can be all the advertisement that a company would need (Jobber and Ellis-Chadwick, 2013). In addition to this, advertisements can now be interactive in such a way that the information on the product passed on to the consumer is more targeted and customised (Jobber and Ellis-Chadwick, 2013). Thus this paper will be exploring the impact of online advertisements on consumer purchasing behavior first by outlining the theories of how advertising works, then examining the effects online advertisements on consumer purchasing behaviour .

How Does Advertising Work?

There has been considerable debate on how advertising works however the general consensus has been that there can be no single all embracing theory that explains how all advertising works because they have varied tasks (Jobber and Ellis-Chadwick, 2013). For example advertising that attempts to make an instant sale by incorporating a return coupon that can be used to order a product is very different from corporate image advertisements that is aimed at reinforcing attitudes (Jobber and Ellis-Chadwick, 2013). Nevertheless, the competing views on how advertising works are the strong theory of advertising and the weak theory of advertising (Jobber and Ellis-Chadwick, 2013)– both theories are based on how they affect customers and their end results.

The strong theory follows that a customer passes through the stages of AIDA – awareness, interest, desire and action. This theory argues that advertising is strong enough to increase public’s knowledge and change their attitude and as a result it is capable of persuading new customers to purchase a brand (Jobber and Ellis-Chadwick, 2013)). This is called the conversion theory of advertising: non-buying customers are converted to buyers(Jobber and Ellis-Chadwick, 2013). The product has been criticised on two grounds; one there is little evidence that consumers experience a strong desire before making a purchase because in cases of inexpensive product a customer could very well purchase a brand on a trial basis without any strong conviction that the brand is superior (Jobber and Ellis-Chadwick, 2013). The second criticism is that the theory ignores what happens after action as advertisements in mature markets also targets already established customers of the brand (Jobber and Ellis-Chadwick, 2013).

The weak theory follows that a customer passes through awareness, trial and reinforcement – ATR (Jobber and Ellis-Chadwick, 2013). This ATR model or theory is widely supported in Europe with Ehrenberg (cited by Jobber and Ellis-Chadwick, 2013) explaining that advertising can work exactly the way the ATR model theorises as there is no need for strong emotions like desire and conviction before a first purchase is made. It could simply be a purchase for trial followed by reinforcements.

Consumer Purchase Behavior Theory

“Consumer behavior is the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires” (Solomon and Bamossey, 2006, p6). Schiffman and Kanuk (2007, p3) also take a similar approach defining consumer behaviour as the “behavior that customers display in searching for, purchasing, using, evaluating and disposing of goods and services they expect will satisy them”.

Early economists led by Nicholas Bellouni, John von Neumann and Oskar Morgenstern started to scrutinise the foundation of consumer making decisions (Richarme 2007). They approached the topic from an economic standpoint and focused only on the act of purchase and the most predominant model from this viewpoint is the “Utility Theory” (Richarme, 2007). The Utility Theory viewed consumers as entirely rational and self interested making their purchase decisions based upon the ability to maximise their use of their desired product whilst expending minimum effort (Richarme 2007). Another approach to consumer purchase theory is the psychodynamic approach which; the key tenet is that consumer behavior is determined by biological drivers rather than individual cognition or environmental stimuli (Bray 2008). Perhaps the most widely cited is the cognitive approach which views the consumer as an information procession (Ribeaux and Poppleton, 1978) who actively seeks and recieves environmental and social stimuli as informational inputs which subsequently aids decision making (Bray 2015).

Sheth et al (1991) propose that there are five consumption values influencing consumer purchase choices. The values are functional value, conditional value, social value, emotional value and epistemic value (Sheth et al, 1991). Three fundamental propositions are obvious in the proposed theory and these are:

Consumer choice is a function of multiple consumption values (Sheth et al, 1991).
The consumption values make different contributions in any given consumer purchase choice (Sheth et al, 1991).
The consumption values are independent (Sheth et al, 1991).
Online Advertisements and Its Impact on Consumer Purchasing Behavior

The beginning on online advertising was in 1994 when Hot Wire sold the first ad banner on their company’s website (Bakshi and Gupta, 2013). By year 2000 online advertising spending in the United States had reached $8.2 billion dollars with these numbers increasing to $12.7 billion as more people are connected to the internet and spend more time online (Bakshi and Gupta, 2013). This is a clear sign that online advertising has developed quickly in the last decade. Some of examples of online advertisements includes floating ads, expanding ads, wallpaper ads, trick banners, pop-ups and pop-unders (Bakshi and Gupta, 2013). Now these are the ones instigated by marketers or producers themselves. This paper however puts forward that if advertising (online advertising being no different) is a method of mass-communicating product benefits then online word of mouth or reviews may be considered as an additional method of online advertising albeit the marketers or producers would have very little control as to how such reviews are presented.

Online Reviews

Research has shown that consumer opinion and recommendations actually count towards purchase decision because product review allows consumers to get a feel for the product without making a trial purchase (Murphy, 2015). Recommendation sources according to Andreasen (1968) have a typology as follows: impersonal advocate (mass media), impersonal independent (consumer reports), impersonal advocates (sales clerk) and personal independents (friends) (Senecal and Nantel, 2004). Sencal and Nantel (2004) also report that consumers indicated that for their next purchase of durable goods they would be using first their personal independents as sources of recommendation.

This plays directly to customers’ need for information. Whilst customers could research products through search engines such as Google and Bing. It is never quite like having a first hand account from an unbiased user of the product. Statistics have shown that 80% of online shoppers would change their minds based on online reviews (Murphy, 2015). Supporting this is the fact that in a study carried out in India of the influencers of online purchase decisions, 93% of the respondents indicated that they considered online word of mouth much more reliable than all the other sources of information including the typical online ads (Bakshi and Gupta, 2013).

Thus it would logically follow that having bad reviews would correlate with poor sales whereas good reviews would mean good sales (Murphy, 2015). A case in point is the sale for a t-shirt on Amazon which shot up a staggering 2300% in 2009 after a joke review for the T shirt went viral on the the internet (Murphy, 2015). Till date the t-shirt which features three wolves howling at a full moon has garnered over 2000 reviews (Murphy, 2015). Another example is a study which showed that the biggest influencer for holiday shopping recommendations was from friends and family on social media with 63% swayed by Amazon reviews and 24% were from blogger endorsements (Morrison, 2014).

Social Media/Social Networks

Directly related to online reviews where it concerns online advertising are social networks which could be considered as the platform through which online reviews are exchanged albeit they should be considered separate elements and influencers (Morrison, 2014). Social network platforms such as Facebook which grew by 22% between October 2011 and November 2011 and Youtube which grew 67% percent between the same time frame are the new age medium of online advertising reaching millions of people at a go (Darban and Li, 2012). A study carried out between 2013 and 2014 found that 64% of respondents were convinced of what holiday gift to purchase by a social medium. Social media appears to be so effective that there is at least one social medium guiding consumers through their path to purchase. For example, 58% of respondents to the aforementioned study used Pinterest to find ideas and inspiration, 60% use Facebook to seek promotion whilst 48% share the the purchases they have made on Facebook inspiring others to also make purchases (Morrison, 2014). To this end, 11 out of 12 respondents confirmed that they have made purchases as a result of interacting with the producers on social media or interacting with their peers on social media and getting a sort of first hand advertisement of the product online (Darban and Li, 2012). In addition consumers have also indicated that they are able to communicate directly with producers via social media thus speeding up the purchase process as they also indicated that the length of time it sometimes takes to get the information they need from producers can put them off buying the product in the first instance (Darban and Li, 2012).

General Online Advertisements

In a study carried out on the effects of online advertisements on consumer buying behaviour of branded garments in Pakistan(Afzal and Rabbani Khan, 2015), it was interestingly discovered that there is no direct effect of online advertisements on the buying decisions of branded garmets whereas it was found that there is a significant indirect effect of online advertisements on consumer buying decisions because of advertising characteristics and consumer attitudes (Afzal and Rabbani Khan, 2015). Conversely, in another study carried out it was found that contrary to the the discovery of the study in Pakistan there was a direct link between online banner advertisements and the making of purchases or purchase decisions (Li and Leckenby, 2004) . Interesting another study showed that revenue garnered as a result of online banner ads (which attracted the most revenue) were on a high from 1998 when 56% of revenue made by the respondent company were from online banner ads. However, by the year 2001 these numbers had began falling until 2003 when it was only at 21% (Li and Leckenby, 2004). These studies did not give the reason as to the decline banner ads generated revenue. However the study in Pakistan had reported that consumers seemed to place more stock on word of mouth such as online reviews and a large percentage of the revenue generated by the participating companies were from loyal customers and refferrals (Afzal and Rabbani Khan, 2015). These go back to reiterate the points of discussion in the previous section of this paper as to the effectiveness of social media platforms and online reviews as a method of marketing. Thus it would appear that other methods or forms of online advertisement do not perform as well as social media platforms and online word of mouth it terms of being revenue generators.

The logical question to ask then is why this is so? The answer is not far-fetched and probably lies in the results of a study carried out on consumer perception of online advertisements (Priyanka, 2012). The options provided were entertaining, informative, irritation, credibility, interactivity and purchase. The respondents to these study were further adjusted for age in order to get a clear picture as to the age range of consumers and their perspective (Priyanka, 2012). Of the 100 respondents to the study, irrespective of age, 22 found online advertisements informative, 18 found them irritating whilst 18 respondents have made purchases because of online advertisements (Priyanka, 2012). Of those the respondents who made purchases 6 were between the ages of 41-50 whilst 5 respondents were of the older than 50 age group (Priyanka, 2012). In addition a very small percentage of this age group found online adverts credible which could mean that perhaps if they percieved online adverts as more credible they could be looking to making more purchases (Priyanka, 2012). Surprising this age group also found online adverts less irritating but also less informative (Priyanka, 2012). This could logically be reasoned to be as a result of the fact that most purchasers of this age actually want more information before they make purchases and are willing to suffer through online advertisements perhaps because they are not skilled in surfing social media platforms to gain more information of the product (the study also showed that only a very small percentage of the above 50 age group do not surf the internet or engage in online window shopping) (Priyanka, 2012).

Thus it would appear that forms of advertisement other than social media and online word of mouth walk a tight rope of being irritating and putting the consumer off thereby having a negative impact on consumer purchasing decisions.

Other Forms of Advertisements and its Impact on Consumer Purchase Behavior

In a study of 175 respondents carried out by Iqbal et al (2013) to determine the relationship between brand perception, advertising and consumer purchase behavior. Their findings, analysis and results showed that advertisements had a positive effect on brand perception and consumer purchase behavior, particularly in teenage consumers (Iqbal et al, 2013). Similarly Mel et al (cited by Malik et al 2014) argues that over time, advertisement plays a major role in influencing the consumer such that they become less price sensitive. In the same vein, Ackerbergm (cited by Malik et al, 2014) also argues that advertising is a great source of product learning for consumers. However image advertising and prestige advertising appears to have less significance in creating or instigating a learning process about the product (Malik et al, 2014). In other words, advertisements have a more positive effect on consumer purchase behavior if the advertisement includes informational content (Malik et al, 2014). Added to this is the fact that, it has been discovered that the more interactive an advertisement is the more it captivates the attention of the consumer and the more impact it actually has on consumer decision (Iqbal et al, 2013).

In comparison to online advertisements, the general consensus amongst scholars about traditional methods of advertisements appears to be that there is some positive impact on consumer purchase behavior ranging from product learning, to a decrease in price sensitivity and an increase in actual purchases (Kumar and Raju, 2013). This paper argues that perhaps this is due to the fact that producers or marketing managers have more control over traditional methods of advertisements. Wheresas with online advertisements, consumers are able to ignore the advertisements, pro-actively initiate the product learning process themselves thus controlling what they learn about the product which could be positive or negative.

Conclusion

This paper focused on the impact of advertisements (with a focus on online advertisements) on consumer purchase decisions. The strong and weak theories of advertisement were examined in order to determine the way in which advertisements work. Furthermore, some key elements of online advertising such as word of mouth by way of online reviews on social media platforms were examined in detail as well as their impact on consumer purchase decision. Finally online advertisements in general and how they influence consumer purchase decision was also examined. From the aforementioned examination and analysis, it can be concluded that online advertisements in whatever form can have either a positive or negative impact on consumer purchase decisions. Marketing managers appear to have very little influence on how the advertisements will impact consumer purchase behavior. Thus making the results inconsistent. Perhaps this is because the internet is such a fast-paced and volatile environment. In sharp contrast, it was discovered that traditional methods of advertisements have consistent (across various studies) positive impact on consumer purchase behavior. It can also be concluded that of all the forms of online advertisement, online reviews are perhaps the most volatile and prone to resulting in a negative impact on purchase decisions. Nevertheless, it is also quite likely to bring on the most amount of sales within a short period of time. It was discovered that consumers find some online adverts annoying which also influences their decision to allow the engagement of their attention and consequently their money in making the final purchase. In addition, it was also found that there are positive correlations between online adverts and consumer purchase behavior in that the online adverts triggers the customer’s interest in a product and eventually leads to a purchase.

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