Ethics

Personalised advertising online can be an excellent tool for advertisers; a. to reach their target audience directly b. not to waste money advertising to the wrong consumers and c. to measure the effectiveness of the adverts by monitoring clicks.

However, adding to my previous blog post on the use of cookies, there are much stronger ethical concerns which I have noticed recently (mainly from Yahoo and Facebook).

So when I was booking flights to Malaga recently, I was clearly searching for a good deal and using Google searches to do so. I clicked on to various 'money saving' comparison sites. Then once I had booked the flights, for the next 2 weeks I was bombarded with adverts such as "hotels in Malaga" "car rental in the Costa del Sol" etc.
Clearly this is effective advertising and the companies behind the adverts are reaching their target audience (i.e. me).

On the other hand, I was also searching to buy a juice diet book and some raspberry ketones (big slimming movement before Costa del Sol....) and was again using google, amazon etc to search for these and checking out celebrity body results from using the diet regimes.
Now everytime I click on to my facebook timeline or on the side of a website I see photos of skinny celebrities, flat stomached women and 'quick-fix' diet plans.
This is driving me mad as it's making my self-image = 0 and my motivation to get thin = 100. I am quite a receptive person but also have a level of self-control HOWEVER surely someone suffering from an eating disorder making the same kind of searches as me, or more specific weight loss searches would also be bombarded with the same types of advertising (considering their cookies settings were similar etc.) but imagine the effect this would have on them!?

Showing skinny celebrities is one ethical consideration however displaying them to an unconfident, potentially vulnerable target audience is an entirely different ethical consideration!
I think companies should consider the effect it has on their stakeholders- particularly the vunerable ones.

The media can't be blamed for everything.

Changing Perceptions

Coming home to Lancashire this weekend for Easter has opened my eyes to how certain perceptions of a brand/organisation can stick in a consumer's mind and can often be unchanged.

Firstly, I grew up in Preston and started going out there when I was 16/17 and used to love it, however after I started visiting friends in Manchester/ Birmingham/ Liverpool/ Lancaster/ Wigan etc. I started to hate Preston nightlife and especially when I moved away to Bristol I never considered going out in Preston as I was put off by the previous experiences I'd had in Preston due to associating the nightlife with the places I used to go and the experiences I had when I was 16 and 17. I always thought they were a bit chavvy, cheap and not very sophisticated however this was only because they had been back then.

However, over the Easter weekend I decided to try Preston again and some new bars I hadn't been to before and was so pleasantly surprised! I had a really good night and actually felt as though I was in Manchester not the Preston I knew!

I also popped in to my nail salon where I have been going for years now, and whilst I was speaking to the beauty therapist, who happens to be the new manageress, she was telling me about the problems they had been having with staff letting them down and how this had negatively affected some of their most loyal customers and how certain customers had been put off coming due to the fear of their appointments not being secure or receiving bad service. She was explaining to me that she had to drop the prices of certain services to try and regain the reputation the salon had before the problems had occured due to a member of staff who had been layed off due to the consequences of her actions.

This made me think of how difficult it can be to grow back a good reputation or change a consumer's perception from negative to positive. These examples may sound specific to me, but it can happen so many times when consumer's purchase products and services. Once a product has been taken out of a consumer's evoked set i.e. the products they are willing to buy, they are very unlikely to ever purchase that product again.

Once a customer has made up their mind about a brand- it is almostn  impossible to change it. Despite the fact a company's product may meet the consumer's needs and wants perfectly, if they are unwilling to consider purchasing it or associate the brand with negative feelings due to a bad experience with it- the product's benefits will never reach them.

People cannot form new perceptions of a brand WITHOUT A NEW EXPERIENCE

This means that it is up to the brands & marketers to provide these new experiences...

Despite the fact I have had a number of negative experiences eating at harvester, from food & service quality- when I complain they always make an effort to put it right by offering money off or free dessert, which provides me (the customer) with a positive experience as I leave Harvester happy.

This not only relates back to my customer service blog about retaining customers, but also the fact is- without turning negative experiences into positive ones, companies will lose customers and therefore business.  

Successful rebranding is hard to achieve & the fact is- some brand owners only realise the negative brand perceptions far too late- once the brand relevance and customers have already left.....

Why you may be paying way more for your coffee or your train.... (unique target pricing)

Recently, I saw a controversy on facebook regarding thetrainline.com’s use of cookies in determining ticket prices online. This meant they were using consumer’s browser history in order to determine train prices and charge a premium price to customers who had used the service before or those who were frequent users of the website. Clearly when consumers found out there was an outrage and a number of disappointed posts on their facebook and website pages. I feel as though their public relations department dealt terribly with the situation- not issuing a formal apology and even DELETING negative posts. However, I am not concerned with the public relations in this case (see previous blog post), yet the fact that as this has just come to light- consumers are astonished to find this kind of technology in place. Yet it has been used SO many times before, not just online.

 

This sort of exploitation is called ‘unique target’ pricing strategy also referred to as ‘first degree pricing discrimination’ and uses simple economics. Amazon hit the spotlight for using the method a number of years ago, when two customers were charged different prices for the same products when based on their previous purchases. However when cookies were deleted the prices dropped and once consumers realised this there was an outcry, which resulted in Amazon having to change their pricing strategy and stop using the ‘unique target’ approach.

Yet, outside of the online retailers world this careful analysis of a unique customer who is willing to pay a higher premium on a product is in action constantly. A good salesperson can put a higher premium on a car or a house, simply by analysis their customer and determining the price they are prepared to pay for it. Think of when you go to buy a coffee at starbucks for example, a cappuccino might cost you £3 or a hot chocolate £3.20, yet a caffé mocha for £3.40 is just mixing the two together. You can then increase the sizes for an extra 50p, or add caramel for an extra 30p etc.

The fact is- the cost to add extra chocolate powder, caramel sauce or a bigger cup is very minimal is terms of Starbuck’s variable costs, maybe a few pence- yet the higher mark-up transferred to the customer is considerably more. This reflects the fact that people who are willing to pay more for their cup of coffee will choose these extras to bump up the cost- rather than those who are looking for a budget drink who choose to pay for the bare minimum product.

Another example is tickets- OAP’s and children are usually charged less for certain tickets, not because the services provided to them cost any less. They take up the same amount of room on a bus or at a football match for example, yet offering different prices to members of these distinct groups seems reasonable? This is due to the price-sensitivity of the individual members of these groups. Adults are prepared to pay more for their tickets, as stereotypically they have a larger disposable income.

Clearly, this strategy relies on collecting a lot of information about potential customers and isn’t popular with customers who realise it is being used, yet due to the increase in the development of new technologies, it is becoming increasingly popular and provides companies with an easy way to target a number of target audiences and obtain higher profits.

A fab book which goes in to this in a lot more detail is “The undercover economist” by Tim Harford- a must read for any business student.