marketing case studies

Question 1

Economic influences

Answer 1

Quest Apartments;

• Hotel occupancies fell by 65% during the covid pandemic, due to border closures and low consumer confidence in the recession
• 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 2

Government Influences & Products that damage health

Answer 2

Vaping;

• In 2024, the NSW Government launched the ‘Every Vape is a Hit to Your Health’ advertising campaign, at a cost of $3 million
• The NSW Gov also spent $2.5 million on the online service iCanQuit for people who need help quitting vapes
• From March 2024, it will be illegal to purchase vapes unless it is from a pharmacy with a doctor’s prescription - causing vape shops to close down and pharmacies to gain more customers
• Tobacco producer Philip Morris International responded by offering below-cost vape devices to Australian pharmacies as a loss leader if they agree to continue to purchase vape refill pods from Philip Morris

Question 3

Misleading & Deceptive Advertising (Consumer Laws)

Answer 3

Nurofen;

• 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 4

Price Discrimination

Answer 4

Uber;

-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 prevents a shortage of cars on the road, and maximises profit.
-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 5

Implied Conditions

Answer 5

• 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 6

Warranties

Answer 6

Apple;

• 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 7

Good Taste in Advertising

Answer 7

H&M;

• H&M use 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 8

Truth & Accuracy

Answer 8

Mcdonalds;

• McDonalds partnered with the Heart Foundation to get the ‘healthy tick of approval’
for some of its meals with a lower fat content
• 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 9

Fair Competition

Answer 9

Amazon;

• 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.