Amazon’s advertising platform turns off customers…

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It seems like we talk about Amazon a lot here at Teach the 4 Ps. For several reasons Amazon is a great class example. First, it is a brand that everyone knows and most of our students use on a regular basis. Second, they are at the leading edge of so many new marketing practices. Third, Amazon offers the opportunity for examples that reflect many marketing practices (and many chapters). Today, we are talking about Amazon the online retailer, as an advertising medium. After Google and Facebook, Amazon is growing fast as an advertiser. A Wall Street Journal article earlier this year pointed out that “54% of people looking for a product now begin their search directly on Amazon…” Search advertising has traditionally been Google’s sweet spot.

This article, “Ad Business a Boon for Amazon But a Turn-Off for Shoppers,” (November 26, 2019) points out that Amazon may need to be careful with all the advertising. Some customers are getting annoyed with the online retailer for serving up too many ads. Customers just want the product they are looking for–but they often have to search through many “sponsored posts” before they get there.

This article or example may be used in your marketing classroom in a number of ways. If Amazon wants to do well by customers, is this the right way? Is this customer-oriented behavior (Chapter 1)? An interesting counter-example might be drawn out by asking students if they have ever gone to Amazon looking for one thing, then seeing an ad for a competing product, and ended up buying the competing product. Was that information useful?

The question gets further muddled when the article also notes that ads like this might help Amazon deliver one-day service that customers love (Chapters 10 and 12). It also suggests changes in consumer behavior (Chapter 5). And then of course the article highlights how Amazon is becoming a new advertising medium (Chapter 15). Lots to potentially talk about here.

“Green” attitudes change consumer behavior—the “5 Rs” (#M4BW)

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The following is a direct quote from the forthcoming 17th edition of Essentials of Marketing.

Many consumers are showing increasingly positive attitudes toward sustainability—and these attitudes are changing some people’s behavior. While some are choosing brands they view as more sustainable, others are changing their behavior more radically. Some advocates of sustainability encourage people to practice the “5 Rs of sustainability”: (1) refuse—stop buying stuff; (2) reduce overall consumption; (3) reuse—choose reusable, not disposable, products; (4) repurpose—use product packaging, for example, for some other purpose; and (5) recycle. While most of us are familiar with the last R, the other 4 Rs are moving from fringe behaviors to being increasingly common. This may have implications for marketing managers: greater practicing of the 5 Rs may lead consumers to buy less stuff and to be more selective in what they buy.

This might be another way to foster debate around marketing for a better world (#M4BW). While a brand like Patagonia, which positions itself as extremely environmentally-friendly, might be able to get away with an advertising campaign like its “Don’t Buy This Jacket” from a few years ago, can other brands promote reduced consumption? This certainly puts #M4BW to the test and may be worth a classroom debate.

Opposing Strategies for Customer Loyalty

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Marketing strategies universally need to incorporate mechanisms to attract, upsell, and retain customers.  Some companies focus more on one aspect than another but they’re all there somewhere.  Loyalty programs are one of the mechanisms used to help with both upselling and retention and this Marketing Dive article takes a close look at some of the changes taking place with retail loyalty programs.  Interestingly the article talks about conflicting strategies.  Some stores are moving more toward inclusivity and trying to let as many customers join as possible.  Others go the opposite direction.  Amazon increased the price of Prime membership, Wayfair implemented a $29.99/year fee for their loyalty program, and Lululemon is testing a program that would cost $128/year.  The article also talks about how services can impact loyalty as well.  For instance, offering same-day delivery increases loyalty for 61% of shoppers.  A significant benefit of loyalty programs is detailed information about the customer and their browsing/shopping history.  Stores are using that information to try to foster a stronger emotional connection and thereby increase loyalty even further.  The article is full of content that could be used for a great in-depth discussion with students debating the merits and drawbacks of different strategies.

Pour One Out for the Fading American Beer Industry

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My students frequently tell me how important beer is in their lives.  Yet despite their outward proclamation, their actual drinking habits have changed and the beer industry is facing some significant headwinds.  Bloomberg talks about the industry’s challenges in their article “Pour One Out for the Fading American Beer Industry“.  Despite a significant increase in craft beer consumption, overall beer consumption has declined for three straight years.  The carbs and calories in beer are pushing consumers toward alternatives like wine and hard liquor.  Changes in consumer preferences pushed Bud Light to create their 2019 Super Bowl commercial focusing on their competitors’ use of corn syrup in their beers (by the way, this is a great example of comparative advertising).  The article talks about other influences such as the legalization of marijuana which may serve as another alternative to beer, especially to the college crowd.

Ben & Jerry’s to Eliminate Plastic Straws and Spoons

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Ben & Jerry’s is the latest company to join the movement to discontinue use of plastic straws.  This follows similar decisions by Disney, Starbucks, Royal Caribbean, the city of Seattle, and more.  Ben & Jerry’s reported that they currently use 30 million plastic spoons and 2.5 million plastic straws each year.  Concern over social responsibility is a growing trend and a great marketing tool for attracting employees and loyal customers.

Interestingly, if you want to talk about market research and validating secondary data, there’s another angle you can take on this story.  If you search the Internet to see how many straws are used by Americans each day one of the most frequent figures you’ll find is 500 million.  That statistic is quoted by National Geographic, government agencies, news networks, and more.  However, that statistic hasn’t been well authenticated.  This New York Times article covers the history of that statistic.  It originated in 2011 from a 9 year old boy named Milo Cress.  According to the NYT article, more rigorous studies suggest the number of straws is likely between 170-390 million.  It’s still a very large number but this helps illustrate the need to authenticate the actual source and validity of secondary data.