Introduction to Marketing Option One: “The ASA is the UK’s independent regulator of advertising across all media, including marketing on websites. We work to ensure ads are legal, decent, honest and truthful by applying the Advertising Codes. ” With the use of examples review current advertisements banned by the ASA. Critically analyse the rules imposed by the Advertising Standards Agency, are they reflective of public demand. Introduction2 How does the system work? 2 The ASA and Marketing4 Real life examples5 Conclusion8 Appendix A The UK Regulation Bodies11 OFCOM11 THE ADVERTISING STANDARDS AUTHORITY (ASA)11
The Advertising Standards Codes12 TELEVISION ADVERTISING12 RADIO ADVERTISING13 OTHER ADVERTISING13 Appendix B Adjustments14 HEALTH AND BEAUTY14 COMPUTERS AND TELECOMS15 Introduction The Advertising Standards Authority (ASA) is the UK’s independent regulator of advertising across all media, including marketing on websites. We work to ensure ads are legal, decent, honest and truthful by applying the Advertising Codes. (The ASA, 2011) Appendix A presents information about the major regulatory bodies in the UK. Although it is a regulator, the ASA is not a statutory organization.
It has no legal powers to take advertisers to court, fine them or impose any legal sanctions, but in some exceptional cases when the advertiser ignores the Codes and is continuously misleading the audience the ASA can refer to some legal support from the Office of Fair Trading (OFT) (The ASA, 2011). How does the system work? Complying with Advertising Regulations provides a number of business benefits, including: * Ensuring your advert will be allowed into the marketplace when complete. * A working knowledge of the regulatory codes, allows you to manage the creative process more effectively. Avoiding damaging complaints, publicity or costly revisions through non-compliant advertising. * Working with the regulatory bodies can allow innovative or challenging ideas to be developed in line with the regulations. The ASA deals with more than 25,000 complaints per year. Another step in controlling the world of advertising is to monitor and control networks, apps and web-pages. “When this goes live next March this will be the most comprehensive approach to the regulation of advertising in website space anywhere in the world,” said Chris Smith, chairman of the ASA. (Bradshaw, 2010).
The ASA is now taking up the challenge to control web-pages, mobile applications, social networking including Facebook® and Twitter® and even Youtube® videos. It happens as the complains about internet ads have doubled in recent times and people become aware of misleading ads in the internet and child safety on social networks. The ASA and Marketing The ASA is a part of the marketing macro-environment, combining both political and social influence on advertising . Although the ASA does not have enough power to ban an advertising campaign as a whole, it has a huge influence.
The ASA is committed to upholding high standards in advertising. The system takes a holistic approach to regulation, which includes pro-active monitoring, comprehensibly enforced rules and training and advice for advertisers to help them comply with the Codes. With the ASA having powers to request the removal or amendment of an ad, all this can increase the cost of a promotion if the ads is already published or shown on TV. Each reedit involves not only the money which could go on different spheres of product research and development, but as well requires the time of the company’s marketing specialists.
So we see the UK Advertising Watchdog as a deterrent for a successful product promotion and advertising campaign. Taking into consideration the perspective of Marketing Principles. A company should find a balance between a product’s performance and customer expectations. The idea of modern marketing is to win customers’ lifelong loyalty by satisfying their expectations. So if a company promises more than it can deliver, that means it will not meet the customers’ expectations, which results in the loss of customer loyalty, customer dissatisfaction and a poor impression of the company as a brand.
Real life examples If we look at the claims that have created a huge frenzy we would remember a TV ad for Apple’s iPhone saying “You never know which part of the internet you’ll need … which is why all the parts of the internet are on the iPhone,” (Sweney, 2008). Complaints were received as the ad was misleading, because the iPhone device does not support Java and Flash which are now integrated into many web-pages throughout the internet. Apple provided technical justification for the advert, but nevertheless the ASA ordered that the TV advertisements must not be broadcast again in the same form.
The ASA is only one part of a marketing environment and it can only order the ad to be changed but not impose any legal sanctions on the company. In the above-mentioned situation, looking back on 2008 we would notice that demand for the iPhone increased by over 30% among potential smartphone purchasers (Figure 1). The reasons for this phenomenon lie firstly in satisfaction in the Apple brand as whole; secondly, the customers of smartphones are highly diversified by age, gender and location and, finally, the in 2008 iPhone became fashionable and fashion is an extremely powerful factor.
Along with demand comes customer satisfaction, which is the reflection of actual experience of the product. According to the ASA as the iPhone advertising is misleading, so the potential buyers of the device after the purchase will be dissatisfied as the device cannot reach “all the parts of the internet”. However, this is not always the case. Figure 2 shows that satisfaction remains stable and on a quite high level, which means that the influence of the social factors of marketing on some occasions is not that high.
By contrast with the iPhone ad we should refer to the L’Oreal ad showing world famous actress Julia Roberts and model Christy Turlington. A complaint was placed by the MP Jo Swinson saying that it was: “not representative of the results the products could achieve”(BBC, 2011). The ASA agreed with the complaint saying that: “If advertisers go too far in using airbrushing and other post-production techniques to alter the appearance of models and it’s likely to mislead people, then that’s wrong and we’ll stop the ads,”(BBC, 2011).
See full review of the complaint in Appendix B. L’Oreal as well as many other companies is looking for the possibility to attract new customers and maintain existing ones. However, by imposing misleading advertising L’Oreal creates, perhaps unintentionally, extremely high customer expectations, which can lead to future dissatisfaction and loss in product demand as the female audience is rather sensitive to questions concerning beauty and make up.
L’Oreal’s ads deliver the idea that by using an airbrush every woman would look as beautiful as the above-mentioned celebrities, unfortunately that could not happen due to the peculiarities of the human body and the negative effects of lifestyle and environment. An ASA investigation can affect public demand by creating negative publicity for the marketing campaign. In the trading session of L’Oreal we can see rather high volatility which may suggest customer uncertainty about the company as a brand (Figure 3). Note the high volatility followed by a price drop (Figure 4).
Stock price is a rough indicator, but the price drop happened at the same time as the ASA investigation and all the publicity surrounding it. Here can be seen a strong influence of the external marketing powers on the brand in general and on the product in particular. This means that a marketing department before launching the advertising campaign should focus on every part of the marketing environment. Conclusion Customer satisfaction is able to help business to accomplish a sustainable competitive benefit. The customer’s expectation should be met, otherwise the customers will be dissatisfied and tell others about their negative experience.
Expectations of Apple’s iPhone in August 2008 were not as high as nowadays, as there were not so many similar products available. External factors of marketing, and in our study it is the ASA, could not significantly influence the product due to a low level of competition in the market and the Apple product being in high demand. L’Oreal, as a brand with a significant number of rivals, is more sensitive to customer attitude to the product. By delivering the wrong impression to its consumers, L’Oreal could probably lose some of its loyal customers by providing misleading ads, and creating unrealistic expectations.
Perhaps the marketing department of L’Oreal should follow the example of Dove with its Campaign for a Real Beauty (Dove, 2011) which shows real woman, and delivers the message that Dove is closer to its customers and demonstrates knowledge of the market (Picture 1) The Advertising Standards Authority (ASA) is now a part of the marketing environment. The agency is a social factor that can influence an advertising campaign and product demand. From the viewpoint of the marketing department and management the ASA should be seen as a helpful guide.
It can reveal customer attitude to the ads the company has launched. The examples above show us that in almost every sphere of products, an ad can be found misleading or offensive. So the results the ASA achieved in the end can be trusted and used by the marketing department in order to avoid future marketing mistakes. Another point is the external influence of the ASA on the company. The change of the marketing strategy and the whole advertising campaign, because of the consumers complains to the ASA, can be rather expansive for the company.
However, in the long run the feedback from satisfied customers can be much higher and lucrative for the company, as by listening to the customers’ needs, wants and expectations the company can achieve customer loyalty and so the company could achieve success. Bibliography Bloomberg, 2011. L’Oreal SA. [Online] Available at: http://www. bloomberg. com/quote/OR:FP [Accessed 14 October 2011]. Bradshaw, T. , 2010. UK to launch ‘comprehensive’ policing of online advertising. Financial Times, 1 September. Dove, 2011. Compaign for real beauty. [Online] Available at: http://www. dove. co. uk/campaign-for-real-beauty. html [Accessed 18 October 2011].
MacDailyNews, 2009. Report: demand for Macs, iPhones on the rise. [Online] Available at: http://arstechnica. com/apple/news/2009/07/report-demand-for-macs-iphones-on-the-rise. ars [Accessed 15 October 2011]. News, B. , 2011. Airbrushed make-up ads banned for ‘misleading’. [Online] Available at: http://www. bbc. co. uk/news/uk-14304802 [Accessed 2011 October 20]. Sweney, M. , 2008. Apple iPhone ad benned over misleading Internet claims. Guardian, 27 August. p. 62. The ASA, T. A. S. A. , 2011. Adjudications. [Online] Available at: http://www. asa. org. uk/ASA-action/Adjudications. aspx [Accessed 12 October 2011].