Marketing case studies

Question 1

Case study: MISLEADING AND DECEPTIVE ADVERTISING (Consumer Law & Specific Requirements)

Answer 1

Nurofen started offering a range of ‘targeted’ painkillers such as for back pain, period pain and migraines, sold at twice the price of regular Nurofen

These ‘targeted’ painkillers actually had the same basic ingredients as regular Nurofen

In 2016, the ACCC fined Nurofen $1.7m for misleading customers, and required Nurofen to publish newspaper notices explaining the decision

Question 2

Case study: PRICE DISCRIMINATION (Consumer Law & Specific Requirements)

Answer 2

Price Discrimination refers to when a business changes prices for the same product. (Illegal unless anti competitive)

In 2017, Uber also began increasing prices for trips to wealthier suburbs due to customers’ increased ability to pay. This is price discrimination, but in this case it is legal because it wasn’t deemed to be anti-competitive.

Question 3

Case study: IMPLIED CONDITIONS (Consumer Law & Specific Requirements)

Answer 3

In 2017, activewear retailer Lululemon falsely stated that consumers were not entitled to a ‘return or refund under any circumstances’, even if the products were faulty,

The ACCC fined Lululemon over $32,000 for falsely telling customers they were not entitled to a refund or replacement products.

Lululemon said it had resolved the issue and made sure its commitment to consumer rights is clear and in accordance with the law.
Lululemon said if a product did not perform for a customer “we’ll take it back”.

Question 4

CASE STUDY: WARRANTIES
(Consumer Law & Specific Requirements)

Answer 4

Some iPhones froze after customers downloaded a software update, but Apple denied customers replacements if any part of their device had been previously repaired by a third party - even if the repair was unrelated (such as a screen replacement)

The ACCC fined Apple $9 million

In 2022, Apple responded to criticism by beginning to sell spare parts for third-party repairs

Question 5

Case study: GOOD TASTE
(Ethics)

Answer 5

H&M uses social media data to track social media trends and the opinions of key influencers.

By using influencers, making engaging posts and quickly replying to comments, H&M has become the most followed fast-fashion brand on social media, with 9 million engagements per month.

In 2018, H&M advertised on its website a hoodie worn by a black child model that read “Coolest Monkey in the Jungle”. The real-time market research quickly detected backlash and H&M apologised on its social media platforms

Question 6

Case study: TRUTH AND ACCURACY
(Ethics)

Answer 6

McDonalds partnered with the Heart Foundation to get the ‘healthy tick of approval’ for some of its meals with a lower fat content (despite still being considered unhealthy by other metrics and nutritionists)

In response to negative publicity about the decision, McDonalds removed the tick from its products and the Heart Foundation abolished its healthy tick rating system entirely

Question 7

Case study: PRODUCTS THAT DAMAGE HEALTH
(Ethics)

Answer 7

The Australian Government passed cigarette plain packaging laws in 2011

Plain packaging and graphic health warnings reduce the appeal of cigarette branding and helps people kick the habit

The Government estimates there were 103,000 fewer smokers in the first three years

Question 8

Case study: ENGAGING IN FAIR COMPETITION
(Ethics)

Answer 8

As well as having their own warehouses, Amazon also allows third party sellers on its website. Amazon uses data to identify the third party sellers’ most popular products, and then produce private label versions themselves.

Despite this abuse of market power, businesses still sell on Amazon because of its market share.

Question 9

Case study: GOV INFLUENCES
(Factors affecting consumer choice)

Answer 9

The Australian Government passed cigarette plain packaging laws in 2011

Plain packaging and graphic health warnings reduce the appeal of cigarette branding and helps people kick the habit

The Government estimates there were 103,000 fewer smokers in the first three years

Question 10

Case study: ECONOMIC INFLUENCES
(Factors affecting consumer choice)

Answer 10

Hotel occupancies fell by 65% during the covid pandemic, due to border closures and low consumer confidence

Quest Apartments responded by cutting its prices. It also shifted the focus of its marketing campaigns from business and international travellers to promoting local tourism and ‘staycations’

Question 11

Syllabus: STRATEGIC ROLE OF MARKETING

Answer 11

Business objective to increase sales revenue in order to increase profits

Question 12

Syllabus: 3 TYPES OF MARKETING Approaches

Answer 12

Production: Making as much of product as possible
Selling: Focus on persuading customers
Marketing: Focusing on making goods that customers want and catering to them

Question 13

Syllabus: 6 types of markets

Answer 13

1. Resource market
2. Industrial market
3. intermediate market
4. Consumer market
5. Mass market
6. Niche market

Question 14

Syllabus: 4 psychological factors
(Factors affecting consumer choice)

Answer 14

1. Motives
2. Self-image
3. Perception (How an individual views a product)
4. Learning

Question 15

Syllabus: 4 sociocultural factors
2 economic factors
(Factors affecting consumer choice)

Answer 15

1. Peer groups 1. Booms
2. Culture 2. Busts
3. Family roles
4. Social class

Question 16

Syllabus: 3 government factors
(Factors affecting consumer choice)

Answer 16

1. Laws and regulations
2. Subsidies
3. Regulations on advertising

Question 17

Syllabus: Explain the consumer laws and ACCC
(Consumer laws and ethical influences)

Answer 17

• Introduced in 2011 to protect consumers and increase competition
• Set by the competition and consumer Act 2010
• Breaches to the laws can result in
  - Fines up to $50 million by ACCC
  - Public warnings by ACCC
  - Being sued by customers

Question 18

Case study: SWOT
(Situational analysis)

Answer 18

Strengths: H&M have over 5000 stores in all 6 continents allowing them to target all individuals on a global scale. This reduces risks that unfavourable economic conditions in certain countries will not severely impact the clothing brand and ensure sustainability and stability

Weaknesses: Over dependence on outsourcing as H&M does not produce in house, meaning that H&M is at the mercy of their suppliers

Opportunity: Australia is a wealthy market with similar fashion tastes to Europe and few brands that cater for all ages. As such, H&M entered the Australian market in 2014

Threat: Covid-19 reduced sales in stores. H&M launched online store in 2020

Question 19

Case study: MARKET RESEARCH
(Market research)

Answer 19

Market research is the collection and analysis of data to please meet consumer preferences

H&M use social media data to track social media trends and the opinions of key influencers with 38 million followers on Instagram

They use analytics software such as Google Analytics and Curalate to track trends in likes and shares for different product designs. This helps to inform which product lines are extended and deleted.

It also helps respond to negative word of mouth. In 2018, H&M advertised on its website a hoodie worn by an African child model that read “Coolest Monkey in the Jungle”. The real-time market research quickly detected backlash and H&M apologised on its social media platforms.

Question 20

Case study: TARGET MARKET
(Identifying target market)

Answer 20

H&M’s target market are people aged between 15-35

Based on this target market, H&M’s marketing mix involves a lot of e-marketing, becoming the most followed fast-fashion brand on social media, with 38 million followers on Instagram

It uses social media influencers and celebrity opinion leaders who are well-known to this market

It has also improved the labour standards of its suppliers and
its use of recycled materials, as CSR is a particular concern to younger consumers

Question 21

Case study: MARKETING STRATEGIES
(Developing Marketing strategies)

Answer 21

H&M use social media posts and influencers, in addition to traditional billboards and celebrity opinion leaders

They also conducted public relations by hosting public events for World Recycling Week and by using its supply chain to provide protective equipment such as face masks during the Covid-19 pandemic

Question 22

Case study: Market Segmentation

Answer 22

Unilever own multiple deodorant brands - Lynx, Dove and Rexona, each marketed at different market segments

Unilever has used sexualised advertisements to position Lynx as an edgy brand for young men. At the same time, Dove’s ‘real beauty’ campaign criticised sexualisation of women, and positioned itself as an ethical brand

By segmenting the market and positioning separate brands for different demographics, Unilever has captured 58% of the Australian deodorant market.

Question 23

Case study: Product

Answer 23

Coca-Cola ran the ‘Share a Coke’ campaign with 150 of the most popular names on the packaging of their drinks. The sociocultural appeal of the campaign increased sales amongst young adults by 7%

In 2022, Coke announced that 25% of its sales will be from refill stations, and all bottles will be made from recycled products by 2030

Due to its marketing, Coke’s recognisable and trusted brand is worth $120 billion

Question 24

Case study: Market-based pricing

Answer 24

The Uber app uses market-based pricing, changing prices based on the level of supply (how many drivers are on the road) and demand (how many customers are trying to book a ride).

This ‘surge pricing’ prevents a shortage of cars on the road, and maximises profit.

This was utilised during the heavy flooding within 2022 where uber capitalised on low supply of drivers and high demand by raising prices as much as 300% to maximise profits

Question 25

Case study: Price penetration

Answer 25

US streaming service Netflix aimed to make an aggressive push into the Australian streaming space by undercutting its two main competitors, Stan and Foxtel, and countering high rates of online piracy.

Netflix launched in Australia with a price of $8.99 per month compared to Foxtel’s prices of up to $50

Netflix is now the most popular TV subscription service in Australia, with double the market share of its closest competitor Amazon Prime

Question 26

Case study: Price skimming and loss leader

Answer 26

Sony usually releases its consoles at a premium price for those willing to pay for the most up to date technology, and then reduces prices over time. The price of a PS4 fell by 25% within 3 years of its release.

But Sony is now selling its PS5 for below cost price to maximise market share, to then refer its customers to purchase games and online subscriptions to then ensure that consumers keep coming back to buy more from Sony

Question 27

Case study: Promotion (Opinion leader case)

Answer 27

Wrigleys sponsored singer Chris Brown as an opinion leader to use his new song as their theme song and to appear in advertisements, to target the African-American demographic

Sales improved by 14% in a year

Chris Brown was then charged with domestic violence and sales dropped dramatically

After comparing sales before and after the incident, Wrigleys decided to end the endorsement

Question 28

Case study: Promotion (word of mouth + Relationship marketing)

Answer 28

Uber launched an advertising campaign focusing on safety after previously being targeted for being unsafe for women. It included background checks for drivers, sharing live locations of routes travelled and limited driver hours.

Uber uses relationship marketing by offering an Uber VIP service that matches highly loyal riders with the highest rated drivers.

Uber also issues existing customers with a personalised referral code that they can send to friends and family to access a discount on their first ride, acting as a form of word of mouth.

Uber has achieved 65% market share in its major markets, including Australia, the US and Europe

Question 29

Case study: Marketing Strategies (public relations)

Answer 29

H&M also conducted public relations by hosting public events for World Recycling Week and by using its supply chain to provide protective equipment such as face masks during the Covid-19 pandemic

This appeals to their specific target market of people aged 15-35

Question 30

Case study: People and Processes

Answer 30

Uber has a more simplified process than ordering a taxi: consumers order on an app, track their driver’s arrival time, pay automatically through the app, and rate their driver after the trip

Drivers with a poor rating are suspended from the app, ensuring high quality people and customer service

Uber has achieved 65% market share in its major markets, including Australia, the US and Europe

Question 31

Case study: E-Marketing

Answer 31

H&M’s marketing mix uses social media influencers and celebrity opinion leaders such as singer Katy Perry

By using influencers, making engaging posts, and quickly replying to comments, H&M has become the most followed fast-fashion brand on social media, with 38 million followers on Instagram

Covid-19 reduced sales in stores, so H&M also launched an online store in 2020

Question 32

Case study: Global marketing

Answer 32

Because Amazon is a global business, it uses global branding, with the same name, logo and services around the world. Due to being so recognisable, it now has a global brand value of $450 billion.

Amazon expanded its Prime service from the US into Australia in 2018 it . To localise the brand, it customised its advertisements, using the Australian phrase “Easy As” for its slogan and using Australian terms for items such as ‘nappies’ and ‘pool floaties’ to seem less like an American retailer.

Amazon also customises its products for the market. It has a far smaller product range for its Amazon Prime delivery service in Australia and stocks different local products such as Australian books and sports merchandise.

Amazon Australia’s revenue has since reached more than $1 billion annually.

Amazon also uses globally customised pricing, with higher prices on Amazon Australia due to Australia’s low population density as well as the government’s requirement since 2018 that online purchases from overseas now include GST.

Question 33

Case study: Standardised pricing

Answer 33

Prior to 2015, Chanel sold its ‘Boy Bag’ and ‘2.55’ bag for higher in China, where it was seen as a particularly prestigious item to own.

However, this lead to counterfeits being sold in China at discounted prices on the basis that they were genuine Chanel products imported from Europe for cheaper.

To address this issue, Chanel adopted standardised pricing, raising prices in Europe by 20% and decreasing them in China by 22%.

The increased prices in Europe led to a 9% loss in sales, with net profit dropping from $1.34 billion to $874 million from 2015 to 2016.

Question 34

Case study: Place and promotion

Answer 34

Tesla does not spend anything on advertising

To gain publicity, Tesla and owner Elon Musk conduct high-profile stunts such as sending a car into space in 2018 and posting viral social media content

They use an exclusive, direct distribution strategy to increase prestige and ensure they have full control over how personal selling is conducted

Tesla has recently closed most if its stores and now focuses on online sales to reduce costs and allow customers to customise their cars

Tesla’s revenue has risen by 800% in the past 5 years

Question 35

Case study: Marketing objectives

Answer 35

CASE STUDY: H&M
● H&M are expanding product range by launching an ethical line of clothing
● In 2020, they introduced a line of clothing made from recycled materials, with the goal of using only recycled and sustainable materials for all products by 2030