“Skechers USA Inc. will pay $40 million to settle charges by the Federal Trade Commission that the footwear company made unfounded claims that its Shape-ups shoes would help people lose weight and strengthen their butt, leg and stomach muscles. Kardashian, Burke and other celebrities endorsed the shoes in Skechers ads. (USA Today, May 17, 2012)
This case provides a current example of deceptive advertising.
Many of us have used the fact that grocery stores place milk at the back of the store as an example of how the stores try to get you to buy more. In this recent Consumer Reports video titled “Supermarket Savings,” reporter Tod Marks explains some “tricks” that grocery stores use to get consumers to spend more. We have also posted this at Learn the 4 Ps.
It might be interesting to show this to students and ask if they think these are ethical practices. Should it be buyer beware? Are these customer-oriented practices? I think one could question whether they are customer-oriented — and even raise a debate on their ethics.
Interesting little story of social entrepreneurship on NPR, “Company Ties Shoes And Ethics Together” (April 7, 2012). Gideon Shoes was born out of a desire to support The Street University, a retreat for marginalized kids in the suburbs of Sydney, Australia.
The shoes are not cheap ($190 – $320 a pair), in part because the company emphasizes production in safe, ethical, highly monitored conditions — significantly raising production costs. The company has done a marvelous job generating publicity, but right now is selling just about 60 pair of shoes per month.
The story brings to mind another social entrepreneurship venture in the shoe biz — Toms (read or listen to more at “‘Soul Mates’: Shoe Entrepreneur Finds Love In Giving,” NPR All Things Considered, November 26, 2010).
This might make a fun case study to have students address with a written assignment or in-class discussion. You could assign students to read (or listen to) the NPR story about Gideon Shoes — then look at the other media reports and the company’s website. Then they could be asked to develop and defend a marketing strategy for Gideon Shoes. Any such plan should keep in mind the company’s limited resources and its values. Also posted at Learn the 4 Ps.
I thought I understood how much my privacy was being compromised as I surfed the web — well I didn’t know the half of it. The future is now. Recently the NPR Fresh Air show titled “How Companies are ‘Defining Your Worth” Online” (February 22, 2012, the link will take you to the 39 minute interview as well as a shorter written set of highlights) included an interview with Joseph Turow (Professor at the Annnenberg School for Communication at University of Pennsylvania) about his new book The Daily You . Marketers are increasingly connecting data from our credit cards, web-surfing and search, Facebook, etc. to create fairly specific profiles of many individual consumers. Marketing managers can go to catalogs from companies like Acxiom and purchase e-mail or street addresses of target customers: a) likely to have diabetes, b) likely to vacation in an RV, c) who are overweight, and much more.
The interview raises a lot of questions about consumer privacy and ethics. On the one hand, receiving ads and perhaps coupons for new skis when we are in the market for new skis might be a good thing. I tell my students that it is only junk mail or spam when we don’t want it.
But what if we prefer our privacy? What if we are diabetic and there are new products to help make my life easier — do I want to know? Or if I am overweight — do I want to receive promotional materials from health clubs and diet programs? What if potential employers can also pull this information — and don’t want to hire me because my health problems might lead to higher health insurance costs down the line?
This whole issue is complex and in a state of flux. This interview and book might help get you up to speed. The topic can be used to stimulate a discussion of marketing practices and related legal and ethical issues.
Imagine walking along a city street and seeing your own face in ad for a shirt you are checking out. Or perhaps a friend’s face in an ad inviting you into a restaurant. Technology may not be too far from making this a possibility. How creepy would that be? Or perhaps it wouldn’t be creepy at all. Would we get used to it? This Slate article, “How’d My Avatar Get Into That Sneaker Ad?” (January 4, 2012) lays out this type of scenario as a thought experiment.
There are already examples of parts of this technology. My Virtual Model allows you to build an avatar with your body type and face can be placed on a “virtual model” — allowing you to virtually try on clothing. Lands’ End has used this technology for several years now. What is to prevent Facebook ads from using the photos you post to put you in a Facebook ad? The natural next step, suggested by the article, is that you may walk by a billboard or store and see yourself in an ad. Also posted at Learn the 4 Ps.
It might be fun to engage your students in the same thought experiment described in the article as a way to open a discussion into technology, privacy, and ethics.
Sustainability as it relates to marketing is an important issue for students (and managers) to wrestle with. The subject of sustainability can get complicated. This video offers a quick and simple overview that might lead to some in-class discussion. I have also posted this at Learn the 4 Ps.
A couple of interesting stories about how retailers utilize high-tech analytics to better understand customer shopping behavior. I heard “The secret life of discounts” (Marketplace radio, December 16, 2011, link to listen or read the transcript) as I drove to the airport last night to pick up my daughter who was coming home from college. There are some examples about how stores use analytics to try to remain profitable with consumers conditioned to buy only at a steep discount.
In “Big Brother is Watching You Shop” (Bloomberg Businessweek, December 15, 2011), you can read about retailers using in-store video cameras and tracking your cell phone to better understand how you move through a retail store. Analyzing video from a Miami store allowed Montblanc managers to more strategically locate merchandising, signage, and salespeople. The result — a 20% bump in sales. Other retailers follow customers’ cell phone signals to track and map movement through stores. This of course is raising privacy concerns.
These two stories can be useful examples for marketing research (where we cover dashboards and marketing models), retailing, and in discussions of privacy. Also posted at Learn the 4 Ps.
In “A Dinner with Drug Reps” (November 1, 2011) Dan Ariely describes a dinner with some former pharmaceutical and medical device salespeople. After plying them with a few drinks, he and a colleague elicited some pretty interesting stories of personal selling to medical doctors. To be successful in the industry do you need to:
It might be fun to describe each of these actions — and ask if students thought each was an ethical practice — and why. It is easy to say they are not ethical, but then how would sales reps get their information to doctors? And how do they compete with other drug makers that may be utilizing these practices? Users of our text books might find it useful to contrast this description with the video we have that shows a sales call for a Johnson & Johnson sales rep and a doctor. Also posted at Learn the 4 Ps.
Should the U.S. government ban food marketing to kids? Should kids cereals no longer include cartoon characters, free prizes inside, and other promotions directed at children? That is the position taken by one side in a debate at USA Today “Ban food marketing to kids” (October 16, 2011). The other side of the debate can be read in “Food fight over marketing to kids misses the mark” (USA Today, October 16, 2011), which advocates new voluntary guidelines created by the food industry. We have also posted this over at Learn the 4 Ps with some questions for our students to answer.
The debate could be extended into your classrooms when you cover ethics, legal, or corporate social responsibility — which comes in the first and last chapters of our books. It could also be discussed in the segmentation chapters (we have an Ethics Exercise on a topic relevant to this in our segmentation chapter) or in ethics when covering promotion or product.
Marketing managers at ConAgra Foods thought they had a great take on the old “hidden camera” ad. They invited food bloggers and mommy bloggers to dinner in New York City where they would hear a talk by a well-known food expert hosted by a famous chef. They would also enjoy a four course Italian meal. Who could refuse? Of course the guests didn’t know that the lasagna they were being served was Marie Callendar’s Three Meat and Four Cheese, a frozen line from ConAgra foods. ConAgra managers hoped that guests, being filmed on hidden camera, would rave about the meal and appreciate finding out they were tricked and eating a frozen lasagna. Many did not appreciate being duped — and blogged (and not too kindly) about it. The whole thing turned into a nightmare for ConAgra. You can read about the whole thing here at “Bloggers Don’t Follow the Script, to ConAgra’s Chagrin” (New York Times, September 6, 2011).
Sometimes students like to hear about marketing mistakes — and this one works. It might be interesting to tell students about the idea — and ask if they like the plan and would have any suggestions to improve it. Then lay out the “what happened.”
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