Truth in advertising? Packaging that truly reflects the product enclosed? Well, sometimes it happens, and sometimes it doesn’t. Oftentimes a beautiful package is used to disguise the contents, and the side-effects of the contents. What we can’t see can’t hurt us. Or can it?
On December 1st of 2012 a new law went into effect in Australia relative to cigarette packaging. No longer can cigarette makers show colorful packages and eye-catching logos to induce consumers to smoke their products. Instead, the new packaging now shows real-life pictures of what happens to those people who smoke. Australian cigarette smokers now buy cigarettes in packages with graphic pictures of gangrene-mangled limbs, skeletal cancer victims, blindness, and throat cancer. The images take up the bulk of the packaging, and restricts company branding to using only the brand name (no logo) printed on the bottom of the package in plain text.
The goal of the new packaging is to cut smoking rates in Australia by five percent within the next six years. The Australian government is trying to both protect its citizens as well as save on health care costs; the country spends out roughly $33 billion annually on health care costs that result from smoking.
The jury is out on how the new packaging will affect sales – and smokers. While many people are reconsidering their choices, others are undeterred by the graphic images. Even when the truth is ugly and plain to see – consumers still maintain habits.
As consumers, we are exposed to literally hundreds of different messages and advertisements every single day. Many of these are forced upon us – we have no choice but to wade through the ad or video in order to get to our intended goal. But every now and then an advertisement grabs our attention to such an extent that we actually choose to watch it. We might even like it so much that watch it multiple times, or share it with friends, or post it on our own social media sites.
Google Insights has gathered the top 20 ads from 2012 that are the ones that fans themselves have chosen. The 2012 YouTube Ads Leaderboard lists the U.S. ads that have the most views. The list of companies in the top include: Old Spice, Nike, Pepsi, Volkswagen, Samsung, Audi, Chrysler, and others.
View the ads – how many can you recall seeing, and perhaps forwarded to your friends and neighbors?
(PS – My personal count is 13 ads, each viewed multiple times or shown to friends!)
China is too big a market for U.S.-based companies to ignore. While it presents a very different culture – along with marketing challenges that accompany that culture – many companies have been working hard on expansion into the growth market. Among the companies working on reaching China’s 1.3 billion consumers is Starbucks. With 700 stores already in place, the company has been in China for 13 years and is about to ratchet up its efforts to get the Chinese people embrace its products. Starbucks plans to double its store-front locations to 1,500 in the next three years and the company expects China to become its second-largest market by 2014.
Although coffee sales increased 20% in 2011, China is not known for its coffee consumption. Starbucks has been adjusting its menu to carry more tea drinks as well as local food items such as Hainan chicken and rice wrap, shredded ginger pork panini, and red bean frappaccios.
In addition to food changes, the company also has to address cultural issues in China. For example, while the U.S. has a “grab and go” mentality to coffee, Chinese customers tend to linger for hours over food and drink. Starbucks is viewed as a place to socialize; most Chinese visit in large groups or pairs, requiring larger community tables, couches and armchairs. Starbucks’ baristas also need to teach customers about the products and drinks.
Group Activities and Discussion Questions:
Discuss the need for U.S. firms to expand into new global markets.
What attributes do companies need to successfully navigate different cultures?
Divide students into teams. Have them examine the U.S. offerings from Starbucks.
Next, have teams develop a marketing research plan for examining Chinese customs and tastes.
Finally, what should a Starbucks store in China look like? How should employees act?
Discuss key issues that need to be handled with international expansion.
Source: Wall Street Journal,Ad Age Daily, Brandchannel.com, other news sources