Chosen Keyword: Consumer Sovereignty
Assignment 2: Marketing Keyword Discussion
Assessment Weighting: 60%.
Length: 2,250 words +/-10% (= 2,025-2,475 words) excluding title page and reference list.
Due Date: 14 January 2016.
Relationship between Assignments: Assignment 2 is longer than Assignment 1 (by 1,000 words); Assignment 2 has a higher assessment weighting (at 60%); Assignment 2 requires more reading of marketing literature.
Note that Workshop 9 (8/9 December) is devoted to Assignment 2. The task of Assignment 2 focuses on discussing a marketing keyword.
Assignment 2 requires that you make explicit choices in three categories – ONE (1) MARKETING KEYWORD, TWO (2) ORGANIZATIONS AND/OR INDIVIDUALS, AND AT LEAST FIVE (5) READINGS – in order to help you generate a discussion, as opposed to describing a marketing keyword. The requirements in three categories provide supporting guidance of expectations to reduce the reliance on basic search engines that generates descriptions of keywords and a random list of PDFs (as readings).
ONE (1) MARKETING KEYWORD: The first choice is to select one (1) marketing keyword from the following list:
- Advertorial (advertising and editorial)
- Anthropomorphism
- Brand equity
- Cause-related marketing
- Chugger (charity and mugger)
- Cold calling
- Consumer culture theory (CCT)
- Consumer sovereignty
- Deceptive advertising
- Early adopter
- Ethical consumer (or ethical consumption)
- Experience economy
- Freemium (free and premium)
- Generation X
- Glocal (global and local)
- Kidult (kid and adult)
- Macromarketing
- Millennials
- Price segmentation
- Product innovation
- Servicescape
- Sharing economy
- Social marketing
- Subvertising (subversive and advertising)
- Target market
- Telemarketing
- USP (unique selling proposition)
(Some of the marketing keywords are portmanteau words – ‘a word blending the sounds and combining the meanings of two others’ such as brunch from breakfast and lunch or, of most recent use, jeggings from jeans and leggings and frenemy from friend and enemy – represent clever marketing communications. Popular keywords like 4Ps, diffusion of innovations, Maslow’s hierarchy of needs, product life cycle, and product placement have been excluded.) TWO (2) ORGANIZATIONS AND/OR INDIVIDUALS: In discussing the selected marketing keyword explicit reference in your response must be made to at least two (2) organizations and/or individuals. The organizations can be from the for-profit, not-for-profit, or public sectors of the economy. Organizations can be from different sectors. The individuals can be writers associated with a keyword. AT LEAST FIVE (5) READINGS: In addition, there is a requirement to access and use at least five (5) readings to support the discussion of the selected marketing keyword.
Assessment of Assignment 2 includes the ‘level of reading’, which includes how readings are applied in your response, and the ‘quality of referencing’. You are reminded that, as in the case of Assignment 1, ‘intellectual qualities expressed’, ‘structure and organization’, and ‘writing style’ continue to be used as assessment criteria.
As there is self-selection on your part – two organizations/individuals and at least five readings – in how you discuss the marketing keyword, creating a title can help to focus your attention.
Diagrams or other visual material can be used to support your marketing keyword discussion.
A variant of Assignment 2 (based a list of different marketing keywords in 2013/14) received the following feedback by the external examiner: ‘In Assignment 2 [Keywords in Marketing] students at the bottom end really struggled to define their concept in any meaningful way and didn’t really engage with the academic literature. At the top end students demonstrated a good ability to critically review literature relating to their chosen concept’.
The following are technical requirements in making a submission for MN1305:
The Y1 Administrator, Mandy Ubbey, will provide details of how to label and submit work online. Ensure that you receive an automated receipt once you have submitted. Monitor your Royal Holloway email account for any messages from the Y1 Administrator, which will include faulty submissions.
Bear in mind the following points in the production of your MS Word document:
- Font: Times New Roman is a standard font for the submission of academic work, though you are free to use another standard font (such as Arial, Calibri, Courier, Garamond, or Palatino Linotype).
- Size: Use 12.
- Line Spacing: Use either 1.5 or 2.0 line spacing.
- Margins: Use standard page margins (i.e., 2.54cm for all four sides).
- Paginate: Remember to include page numbers. Running order of pages:
- Cover (or title) page: Include course code (MN1305) and your candidate number. Do not include your name.
- Main text: Provide a title to your paper. This should be followed by the main text (i.e., what counts in terms of text for the word count).
- Reference list: Ensure you have adopted a correct form (see above).
Reading List
Contact the course coordinator [email protected] or [email protected] if you encounter difficulties in accessing any of these reedings. You are likely to encounter some of the same readings in Y2 and Y3.
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Alderson, W. and Cox, R. (1948), “Towards a Theory of Marketing,” Journal of Marketing 13(2): 137-152.
Andreasen, A. (1982), “Nonprofits: Check Your Attention to Customers,” Harvard Business Review (May/June): 105-110.
Andreasen, A. (1994), “Social Marketing: Its Definition and Domain,” Journal of Public Policy & Marketing 13(1): 108-114.
Andreasen, A. (1996), “Profits for Nonprofits: Find a Corporate Partner,” Harvard Business Review (Nov/Dec): 47-56.
Araujo, L., Finch, J., and Kjellberg, H., eds. (2010), Reconnecting Marketing to Markets. Oxford: Oxford University Press.
Arndt, J. (1983), “The Political Economy Paradigm: Foundation for Theory Building in Marketing,” Journal of Marketing 47 (Fall): 44-54.
Arnould, E.J. and Thompson, C.J. (2005), “Consumer Culture Theory (CCT): Twenty Years of Research,” Journal of Consumer Research 31(4): 868-882.
Balmer, J. M.T. and Gray, E.R. (2003), “Corporate Brands: What Are They? What of Them?,” European Journal of Marketing 37(7/8): 972-997. Bagozzi, R. (1975), “Marketing as Exchange,” Journal of Marketing (October): 32-39.
Bagozzi, Richard P. and Paul Warshaw (1990), “Trying to Consume,” Journal of Consumer Research 17(2): 127-140.
Bartels, R. (1967), “A Model for Ethics in Marketing,” Journal of Marketing 31(1): 20-26.
Bartels, R. (1974), “The Identity Crisis in Marketing,” Journal of Marketing 38 (October): 73-76.
Bartels, R. and Jenkins, R. (1977), “Macromarketing,” Journal of Marketing 41 (October): 17-20.
Baumol, W. (1957), “On the Role of Marketing Theory,” Journal of Marketing (April): 413-418.
Belk, R. (1988), “Possessions and the Extended Self,” Journal of Consumer Research (September): 139-168.
Berger, J. (1972), Ways of Seeing. London: BBC and Penguin Books.
Berry, L.L. (1995), “Relationship Marketing of Services,” Journal of the Academy of Marketing Science 23 (Fall): 236-245.
Borden, N. (1964), “The Concept of the Marketing Mix,” Journal of Advertising Research 4(2): 2-7.
Brown, S. (1995), Postmodern Marketing. London: Routledge.
Brown, S. (1999), “Marketing and Literature – The Anxiety of Academic Influence,” Journal of Marketing 63(1): 1-15.
Brown, S., Hirschman, E. and Maclaren, P. (2001), “Always Historicize! Researching Marketing History in a Post-Historical Epoch,” Marketing Theory 1(1): 49-90.
Buzell, R.D. (1964), “Is Marketing a Science?,” Harvard Business Review (Jan/Feb): 32-41. Cayla, J. and Eckhardt, G. (2008), “Asian
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Christopher, M., Payne, A. and Ballantyne, D. (1991), Relationship Marketing. Oxford: Butterworth- Heinemann.
Converse, P.D. (1945), “The Development of the Science of Marketing – An Exploratory Survey,” Journal of Marketing 10 (July): 14-23.
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Drucker, P. (1958), “Marketing and Economic Development,” Journal of Marketing 23 (January): 252-259.
Ellis, N., Fitchett, J., Higgins, M., Jack, G., Lim, M., Saren, M., and Tadajewski, M. (2010), Marketing: A Critical Textbook. London: Sage.
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Fournier, S. (1998), “Consumers and Their Brands: Developing Relationship Theory in Consumer Research,” Journal of Consume Research 24 (March): 343-373.
Gaski, J. (1999), “Does Marketing Ethics Really Have Anything to Say? A Critical Commentary on the Literature,” Journal of Business Ethics 18 (February): 315-334.
Grafton-Small, R. and Linstead, S. (1989), “Advertisements as Artefacts: Everyday Understanding and the Creative Consumer,” International Journal of Advertising 8(3): 205-218.
Grönroos, C. (1990), “Relationship Approach to Marketing in Service Contexts: The Marketing and Organizational Behaviour Interface,” Journal of Business Research 20(1): 3-11.
Grönroos, C. (1994), “Quo Vadis, Marketing?: Towards a Relationship Marketing Paradigm,” Journal of Marketing Management 10(5): 347-360.
Hackley, C. (2009), Marketing: A Critical Introduction. London: Sage.
Hatch, M.J and Schultz, M. (2003), “Bringing the Corporation into Corporate Branding”, European Journal of Marketing 37(7/8): 1041-1064.
Hirschman, E. (1991), “Secular Morality and the Dark Side of Consumer Behavior: Or How Semiotics Saved My Life,” Advances in Consumer Research 18: 1-4.
Hirschman, E. and Holbrook, M. (1982), “The Experiential Aspects of Consumption: Consumer Fantasises, Feelings and Fun,” Journal of Consumer Research 9 (September): 245-256.
Hobsbawm, E. and Ranger, T., eds. (1983), The Invention of Tradition.
Cambridge: Cambridge University Press. Holbrook, M.B. (1987), “What is Consumer Research?,” Journal of Consumer Research 14 (June): 128-132.
Hollander, S.C. (1960), “The Wheel of Retailing,” Journal of Marketing 25 (July): 37-42.
Holt, D. (1995), “How Consumers Consume: A Typology of Consumption Practice,” Journal of Consumer Research 22 (June): 1-16.
Holt, D. (2002), “Why Do Brands Cause Trouble? A Dialectical Theory of Consumer Culture and Branding,” Journal of Consumer Research 29 (June): 70-90.
Holt, D. (2003), “What Becomes an Icon Most,” Harvard Business Review 81 (March): 43-49.
Holt, D., Quelch, J., and Taylor, E. (2004), “How Global Brands Compete,” Harvard Business Review 82 (September): 68-75.
Howard, J.A. (1983), “The Marketing Theory of the Firm,” Journal of Marketing 47 (Fall): 90-100.
Hunt, S.D. (1971), “The Morphology of Theory and the General Theory of Marketing,” Journal of Marketing 35 (April): 65-68.
Hunt, S.D. (1976), “The Nature and Scope of Marketing,” Journal of Marketing 40 (July): 17-28.
Hunt, S.D. (1981), “Macromarketing as a Multidimensional Concept,” Journal of Macromarketing 1 (Spring): 7-8.
Hunt, S.D. and Morgan, R.D. (1995), “The Comparative Advantage Theory of Competition,” Journal of Marketing 51 (April): 1-18.
Hunt, S.D. (1983), “General Theories and the Fundamental Explananda of Marketing,” Journal of Marketing 47 (Fall): 9-17.
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Keller, K.L. (1993), “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity,” Journal of Marketing, 57(1): 1-22.
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Levitt, T. (1960), “Marketing Myopia,” Harvard Business Review (July/August): 45-56.
Levitt, T. (1965), “Exploit the Product Life Cycle,” Harvard Business Review 43 (Nov/Dec): 81-94.
Levitt, T. (1972), “Production-line Approach to Service,” Harvard Business Review 50 (Sep/Oct): 41-52.
Levitt, T. (1975), “The Industrialization of Service,” Harvard Business Review 54 (Sep/Oct): 63-74.
Levitt, T. (1980), “Marketing Success Through Differentiation – of Anything,” Harvard Business Review 58 (Jan/Feb): 83-91.
Levitt, T. (1981), “Marketing Intangible Products and Product Intangibles,” Harvard Business Review 59 (May/Jun): 94-102.
Levitt, T. (1983a), “The Globalization of Markets,” Harvard Business Review 61 (May/Jun): 92-102.
Levitt, T. (1983b), “After the Sale is Over,” Harvard Business Review 61(Sep/Oct): 87-93.
Levitt, T. (1988), “The pluralization of consumption,” Harvard Business Review 66: 7-8.
Levitt, T. (1993), “Advertising: The poetry of becoming,” Harvard Business Review 71 (Mar/Apr): 134-137.
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Sample
The New Unveiled Delivery Service
This article [2] introduces the brand-new delivery feature – Uber Rush – developed by the international transport net company Uber. It also reveals the news of service expansion to New York and San Francisco. Uber is a privately held company that was founded in March 2009, which provides transportation services to customers by using handy mobile app. [3] In early October [4], they released Uber Rush, which aims to offer cost-effective, efficient and reliable way for small businesses to deliver their products to customers.
The new feature “Uber Rush” was unveiled in 2015 after the pilot stage in New York City the previous year, and Uber has decided to expand their delivery business to other cities. The objective of this unique service is to help small businesses gain market power, and be able to compete with large retailers like Target and Amazon.
Stakeholders play different roles that have benefits and risks. They are sellers in businesses or stores, couriers from Uber Rush and customers who requested the products.
For sellers, they come from diverse industries, such as food and beverages, textiles and electronics etc. Their duties are to send the ordered products to customers through the delivery services provided by Uber Rush. This allows sellers to “fulfill more orders, faster and at the same time save costs” [5]. Low delivery cost is made possible as Uber Rush outsources their delivery services to small companies and entrepreneurs, so that they only have to pay when they need the services. Therefore, no wasted resources and zero overheads [6] are made possible. However, potential risks might be present in the quality of service. Unexpected events like traffic jam or accidents might affect the quality of the products as longer delivery time might be required. Each of the services has different types of characteristics; their quality might deteriorate during the delay period, particularly with hot food and perishable goods. This might damage the brand image as its promotional gimmick is “instantaneous pickup”. [7]
For couriers, they are self-employed drivers from Uber Rush. Their job is to take orders through the mobile app and deliver the products to the destination where customers are. Drivers have complete flexibility in their working hours and they can “work on [their own] schedule”. [9] Ultimate flexibility is provided which can attract more delivery employees to join the family of Uber Rush. As drivers can be their “own boss” [10], they can enjoy a higher autonomy. According to Herzberg’s finding on motivators [11], job empowerment implies delegating decision-making power over drivers’ areas of work, allowing boost to employees’ morale in general and thus are more motivated. Uber Rush can also help save costs in locating business in busy districts like New York and San Francisco. Despite having an abundance of freedom, this laissez-faire management style might lead to several problems. Firstly, the “hands-off” style is only suitable to highly-motivated and self-disciplined workers.
Secondly, Uber Rush cannot clearly identify drivers’ productivity and the quality of their services, which pose management difficulties. In turn, employees received less recognition and job security as they may not be supported by management. Drivers may also suffer from social isolation, as they would not have any interaction with other employees, which might affect their productivity as well.
For consumers, they have the most benefits and bargaining power. They order products from businesses or stores and receive the products from Uber Rush driver at a certain location. In between the driver and the customer, “real time tracking” from the mobile app can provide an accurate delivery location, providing visibility on the map which “helps make for smoother pickups and dropoffs”. [12] In this case, customers know exactly the time it takes for their order to arrive. This reduces possible stakeholders’ conflicts and offers an extra comfort to the customers, which could build their loyalty and confidence towards Uber Rush. However, it is risky for Uber Rush to just rely on the online mobile map as the only communication platform between customers and drivers. Unanticipated connection errors might occur during any delivery service processes. This affects service quality and creates misunderstanding on the arrival time and location. This could also confuse customers and bad impression might be generated.
According to Chris Hackley [13], “marketing, as sub-field of management and business studies, is a huge academic and publishing enterprise.” Marketing is a widely discussed topic that occurs in our daily life; for example, the advertisement that we see on television, discounts given in a boutique, and promotion on food packaging in supermarkets. Nowadays, most of the marketing activities attempt to boost their competitive advantages by adopting the market orientation approach. They target on meeting customers’ actual desires and needs. Uber Rush is one of the businesses that adopt such outward looking approach as they focus on introducing services that customers need, rather than the possible services that they could offer.
Referring back to the article from The Guardian [14], it stated several kinds of feedback from owners of small businesses, such as Lisa Chu (the owner of Black N Bianco), Chris Webb (CEO and co-founder of ChowNow) and Olivier Plusquellec (co-founder of Ode à la Rose). They all highlighted the sufferings of not having enough financial resources to hire drivers, wasting time to deliver one item as the businesses do not have a big labour force. Meanwhile, large companies like Amazon provide “faster and cheaper delivery options”, allowing them to fulfill more orders at lower costs. Therefore, all these small businesses’ owners are pleased to have Uber Rush. It “enables small businesses to tap into large network of local delivery drivers with the click of button”, as they have been struggling to keep up with the large companies. According to these given researches, they prove that Uber Rush can strongly support small businesses and help them gain competitive advantages. This shows that Uber Rush is successful in meeting the needs and desires of customers and consumers.
Yet, the main disadvantage of market orientation strategy is that such market research is expensive, as Uber Rush needs to do surveys and investigations in order to develop services that fit customers’ needs and wants. There is no guarantee that this approach will be applicable in the future. Therefore, uncertainty is present due to the dynamic nature of the business environment.
Moreover, Uber has widen its product mix through its family brand. Expansion of product portfolio can be seen as there are many services that have been created under a single brand name; for example Uber Rush, Uber Boat, Uber Pool and Uber Eat. By using family branding, brand extension strategies could help the new services gain a higher chance of success. Consumers’ loyalty and trust can be built for Uber Rush with this marketing strategy. However, bad publicity for one of the services might lead to bad influence on all the services under the family brand. Maintaining consistency in the quality of delivery services can also be questionable, which Uber has to find ways to control.
With relation to service marketing, place is a significant factor in the marketing mix. Since the services from Uber Rush coexist with its production that could not be transported, location is an important aspect to be considered in order to maximize its full potential. According to the article from The Guardian [15], New York and San Francisco have been chosen as the new locations for Uber Rush as these two cities have many small businesses. Small businesses make up 99 percent [16] of the New York market, while San Francisco has more than 85,000 small businesses and entrepreneurs [17]. Service providers have to keep in mind of where the delivery services should be provided, and they have to choose places where there are plenty of small businesses that could need Uber Rush’s services.
To conclude, based on the collected information and various analyses, the article is related to the topic of marketing. Uber Rush’s marketing event can be separated into sectors that lead to the marketing topics: roles of stakeholders, market orientation strategy in the role of marketing, and types of branding and product and place analysis in the marketing mix. These topics clearly reveal the relation between Uber Rush and marketing, and meanwhile, accentuating the importance of the reliance in marketing.
Word Count: 1359
Footnotes
[1] Uber Rush – Google Search.” Uber Rush – Google Search. Seth Fitzgerald, 29 Apr. 2015. Web. 5 Nov. 2015. (P. 8) Retrieved from <https://www.google.co.uk/search?q=uber+rush&espv=2&biw=1280&bih=678&source=lnms&tbm=is ch&sa=X&ved=0CAcQ_AUoAmoVChMI4YWSzIb4yAIVhdEUCh24kQih#imgrc=XvHNaQEdE_mA fM%3A>.
[2] Uber Rush Could Bring Delivery Relief for New York and San Francisco’s Small Business Owners.” The Guardian. Alison Moodie, 27 Oct. 2015. Web. 5 Nov. 2015. (P. 8) Retrieved from <http://www.theguardian.com/business/2015/oct/27/uber-rush-uber-small-business-san-francisco-new- york-amazon>.
[3] Uber: Overview.” Uber. CrunchBase. Web. 4 Nov. 2015. (P. 9) Retrieved from <https://www.crunchbase.com/organization/uber>.
[4] Uber’s New Courier Service Will Deliver for Small Businesses.” Mashable. Seth Fiegerman, 14 Oct. 2015. Web. 5 Nov. 2015. (P. 9) Retrieved from <http://mashable.com/2015/10/14/uber-rush- rollout/#FLfGf9JVZZq9>.
[5] Uber Rush Could Bring Delivery Relief for New York and San Francisco’s Small Business Owners.” The Guardian. Alison Moodie, 27 Oct. 2015. Web. 5 Nov. 2015. (P. 8) Retrieved from <http://www.theguardian.com/business/2015/oct/27/uber-rush-uber-small-business-san-francisco-new- york-amazon>.
[6] UberRUSH – How It Works.” UberRUSH. Web. 5 Nov. 2015. (P. 9) Retrieved from <https://rush.uber.com/how-it-works>.
[7] Uber Rush Could Bring Delivery Relief for New York and San Francisco’s Small Business Owners.” The Guardian. Alison Moodie, 27 Oct. 2015. Web. 5 Nov. 2015. (P. 8) Retrieved from <http://www.theguardian.com/business/2015/oct/27/uber-rush-uber-small-business-san-francisco-new- york-amazon>.
[8] Shontell, Alyson. “Uber Now Lets New Yorkers Hail Bikers To Deliver Packages – Here’s How
RUSH Works.” Business Insider. Business Insider, Inc, 8 Apr. 2014. Web. 5 Nov. 2015. (P. 8) Retrieved from <http://www.businessinsider.com/how-uber-rush-works-2014-4?IR=T>.
[9] UberRUSH – Delivery Partner.” UberRUSH. Web. 5 Nov. 2015. (P. 9) Retrieved from <https://rush.uber.com/delivery-partner/>.
[10] UberRUSH – Delivery Partner.” UberRUSH. Web. 5 Nov. 2015. (P. 9) Retrieved from <https://rush.uber.com/delivery-partner/>.
[11] Hoang, Paul. Business and Management. Melton, Vic.: IBID, Victoria., 2007. Print.
[12] UberRUSH – How It Works.” UberRUSH. Web. 5 Nov. 2015. (P. 9) Retrieved from <https://rush.uber.com/how-it-works>.
[13] Hackley, Chris. Marketing in Context: Setting the Scene. Palgrave Macmillan, 2013. Print.
[14] Uber Rush Could Bring Delivery Relief for New York and San Francisco’s Small Business Owners.” The Guardian. Alison Moodie, 27 Oct. 2015. Web. 5 Nov. 2015. (P. 8) Retrieved from <http://www.theguardian.com/business/2015/oct/27/uber-rush-uber-small-business-san-francisco-new- york-amazon>.
[15] Uber Rush Could Bring Delivery Relief for New York and San Francisco’s Small Business Owners.” The Guardian. Alison Moodie, 27 Oct. 2015. Web. 5 Nov. 2015. (P. 8) Retrieved from <http://www.theguardian.com/business/2015/oct/27/uber-rush-uber-small-business-san-francisco-new- york-amazon>.
[16] New York SBDC – Small Business Statistics.” New York SBDC. Web. 5 Nov. 2015. (P. 8) Retrieved from <http://www.nyssbdc.org/resources/smallbizstats.html>.
[17] Small Business Week San Francisco 2015 » About Us.” Small Business Week San Francisco 2015 RSS. Web. 5 Nov. 2015. (P. 8) Retrieved from <http://www.sfsmallbusinessweek.com/about-us/>.
Bibliography
Selection of the marketing event in 2015
“Uber Rush Could Bring Delivery Relief for New York and San Francisco’s Small Business Owners.” The Guardian. Alison Moodie, 27 Oct. 2015. Web. 5 Nov. 2015.
Books
Hackley, Chris. Marketing in Context: Setting the Scene. Palgrave Macmillan, 2013. Print.
Hoang, Paul. Business and Management. Melton, Vic.: IBID, Victoria., 2007. Print.
Internet
“New York SBDC – Small Business Statistics.” New York SBDC. Web. 5 Nov. 2015. <http://www.nyssbdc.org/resources/smallbizstats.html>.
Shontell, Alyson. “Uber Now Lets New Yorkers Hail Bikers To Deliver Packages – Here’s How RUSH Works.” Business Insider. Business Insider, Inc, 8 Apr. 2014. Web. 5 Nov. 2015.
<http://www.businessinsider.com/how-uber-rush-works-2014-4?IR=T>.
“Small Business Week San Francisco 2015 » About Us.” Small Business Week San Francisco 2015 RSS. Web. 5 Nov. 2015.
<http://www.sfsmallbusinessweek.com/about-us/>.
“Uber Rush – Google Search.” Uber Rush – Google Search. Seth Fitzgerald, 29 Apr. 2015. Web. 5 Nov. 2015.
“Uber’s New Courier Service Will Deliver for Small Businesses.” Mashable. Seth Fiegerman, 14 Oct. 2015. Web. 5 Nov. 2015.
<http://mashable.com/2015/10/14/uber-rush-rollout/#FLfGf9JVZZq9>.
“Uber: Overview.” Uber. CrunchBase. Web. 4 Nov. 2015. <https://www.crunchbase.com/organization/uber>.
“UberRUSH – Delivery Partner.” UberRUSH. Web. 5 Nov. 2015. <https://rush.uber.com/delivery-partner/>.
“UberRUSH – How It Works.” UberRUSH. Web. 5 Nov. 2015. <https://rush.uber.com/how-it-works>.
Solution
Consumer Sovereignty
Consumer sovereignty is one of the crucial aspects of market participation that ensures consumer welfare and continued organizational development. It is a concept applicable both in normative and descriptive form depending on the focus of key market players (O’Hara, 2002). Regarding the descriptive form, consumer sovereignty refers to directing all the economic activities towards the fulfillment of the customer wants. It directs focus on production, distribution, exchange and consumption. As the final stage, consumption represents the consumers and determines the market performance depending on consumer needs and preferences (O’Hara, 2002). On the other hand, the normative concept outlines how an economy fulfills the consumers’ wants. Therefore, the concept depends on the structural formation of the whole economy, which involves policies, consumer behavior and other external influences (Fournier 1998). Therefore, this paper will focus on the normative description of consumer sovereignty to determine how organizations such as Apple Inc. and Beats Electronics LLC perform in relation to fulfilling the wants of their consumers.
Consumer Sovereignty: A Case of Apple Inc. and Beats Electronics LLC
According to O’Hara (2002), 90% of the modern global market lies within free market economies guided by democratic principles. Therefore, organizations such as Apple Inc. and Beats Electronics depend on market knowledge to produce quality products. Being knowledgeable of the market involves knowing what consumers want and how they express their wants. These factors influence their processes of production and aligns them with the customer needs and preferences. However, there must be laissez-faire in competitive markets for the public policies to be functional to ensure consumer sovereignty (O’Hara, 2002).
Based on freedom of choice among the consumers, companies like Apple Inc. hold special events annually. These events provide a special marketing platform, which the Company uses to introduce its new products to the public to ensure consumer sovereignty. Additionally, the Company introduces new products in these organized special events around its stores globally. However, the introduction of the new products is always based on geographical and demographic factors that determine what products are suitable for what specific markets. This helps in meeting the customers’ demands and preferences of consumers in the specific market niches. The strategy enables the organization to determine what consumers want and the type of resources needed to fulfill the consumers’ demand in the market.
The events are always entertaining and present an opportunity for the company to learn about how customers respond to various products they produce. Additionally, the company also determines the impact of Consumer sovereignty depending on the market performance of different sophisticated gadgets available on the market. The Apple Inc. also uses the events to introduce consumers to new products that included new brands of Apple watches and improved iPods according to consumer preferences. Therefore, the events are a marketing and advertising strategy that gives the company a competitive advantage over other manufacturers within the mobile and electronics industry.
Holding the events also ensures consumer sovereignty as the Company uses the platform to create awareness of upcoming products and promoting existing brands made according to the users’ preferences. Therefore, Apple Inc. uses the events as an opportunity to learn how it can offer services and the rates it can charge for new products and upgraded existing products. The events also provide an opportunity for the expansion of its market share through the retention of its customers and convincing others to adopt and use Apple products. For instance, while Android and Samsung products pose significant competition, the Apple Inc. promotes its products as sophisticated, of higher quality, and as essential for every smartphone user. Using the events, the Company promotes its electronics from phones to watches and other electronics to its applications and software. Moreover, Apple Inc. promotes new improvements in new gadgets to convince consumers of the quality of the products.
Considering the success Apple Inc. has achieved over the years, many individuals aspire to work with the Company. It offers broad experience to its employees. In addition, Apple employees are accommodating and helpful individuals shaped by the strong organizational culture. Apple’s work policy and ethics consider the client as the most fundamental part of the organization whose needs and preferences must be prioritized. This principle is always customer oriented and as an Apple’s employee, an individual must be ready to serve. The employees play a crucial role in the events as they address the clients’ issues and sell new phones and other gadgets from Apple Inc. They also educate people on how the new gadgets and upgraded ones work to make the products user-friendly.
On predicting the number of sales that the company could acquire from the new products, the Company has a significant opportunity in generating the desired revenue to ensuring consumer sovereignty. In addition, Apple is always determined to make new products such as the Apple Watch OS2. Consumer sovereignty is also crucial because it can make the company sell more of its new products and the new upgrades that meet specific consumer demands like addressing people’s health conditions. That is, Apple users can use their devices to get updates from their personal doctors or determine how the body’s vital organs are working. Such features can make Apple products essential gadgets that promote individuals’ health care. Therefore, the company depends on consumer sovereignty to acquire more sales from its new products due to the new upgrades that make the products user-friendly. Moreover, ensuring consumer sovereignty has enabled Apple to establish a brand name associated with quality products thus improving sales and profitability.
In most cases, when consumers of Apple products decide to purchase the products, their sovereignty as customers is guaranteed. This is due to the significantly high level of competition availability of close substitutes and increased level of awareness among consumers. Showing the level of impact of freedom of choice on the consumer sovereignty is not difficult because the consumer sovereignty is mostly reflected by their daily choices of purchase. However, the company can find it expensive if they engage in indirect market inquiries to determine the wants of their potential consumers. Also, it is important for the organization to observe the freedom of choice principle to satisfy consumer sovereignty.
Consumer sovereignty has also forced companies to form mergers and acquisitions in order to improve product quality and ensure consumer loyalty in accordance with public policies. Mergers and acquisitions can be defined as a type of restructuring in which the result is consequent entity reorganization in order to provide the much-needed growth or alternative positive values. Apple Inc. is one of the global leading companies that manufacture different information technology products. Over the years, the company has developed and implemented different competitive strategies with an aim of increasing its returns, one of these techniques included mergers and acquisition. Mergers and acquisitions are key factors in the business sector with regard to strategic management and ensuring increased market share (Hirschman & Holbrook, 1982).
For example, Apple Inc. established a merger with Beats Electronics LLC to ensure a market monopoly. The probable primal reason behind Apple’s deal with the Beats Electronics was the increasing competition in the music and electronics industry. The merger targeted towards the expansion of Apple’s market share in the industry. Following the merger, Apple Inc. dominates the music and related electronics industry with a seamless flow of products and relatively easy interface that was associated with the iPod and iTunes, with essentially the iTunes Store being the fundamental glue that mostly served as to hold the entire store together. The merger played a significant role in coming up with an extremely dominant niche product that meets the consumers’ needs and preferences in comparison to other competitive electronic devices from competing companies.
It is important to note that there seems to be truly little concerning what could be inspiring about the purchasing of Beats Music. Apple Inc. has been able now to gain the needed technological breakthrough that will enable it to gain the chance to enter new and radical markets. Additionally, Apple has been able to acquire a company that has managed to dominate the music and electronics market. The Beats Music headphones are more or less like the original iPod that was a premium priced product. Many of the critics felt that the Beats would have little chance of success, never even considering the fact that it could be able to engross the dominant market share.
In fact, it is estimated that Beats Electronics sells more than half of all the premium headphones in the entire world, in sharp comparison with Apple, which was once able to sell about 70% of all the MP3 players. The merger has managed to make as much as $1.5 billion in relation to business in the year of 2013 in the headphone business and target to increase its profit margins. In the previous years, for instance in the 2012/2013 business year, it managed to double its sales. It is quite pertinent to note that this category essentially was non-existent before the entry of Beats in the market.
One of the premium motivations that lie behind the move is Apple’s desire to differentiate, especially in a country where approximately 42% of all the smartphones, in use are iPhones. The key goal of Apple is to ensure that the brand is well exported and seek to prevent some of Beats’ Android customers from leaving the fold. Another strategy that may prove vital for Apple is using the Beats system as an avenue for launching a cheaper iOS phone. They could be able now to keep the Apple brand for the premium product, at twice the price and begin the use of Beats, which is now a subsidiary of Apple Inc., to sell the colorful and less costly models. In such a case, the primary target would be the emerging and new markets and the rather price-sensitive consumers. Therefore, observing the consumer sovereignty through contracts such as mergers is an added intervention, which is supposed to be upheld based on fair terms, and conditions that favor all the parties involved.
Apple is one of the established companies in the global market with successful sales and a significantly high annual revenue. The company is always associated with reliable products that are user-friendly and can easily be customized according to the user preference. Apple also uses its annual special events to update their clients on new products or potential defects of their products where they issue a recall. Based on these quality-performance characteristics and appropriate customer relationships, the Company will continue recording significant success.
However, the organizations can face few challenges in determining the aggregate demand of the consumers. This normally results from the existence of scarcity in the economy where an organization decides to compromise production of one product to another. The level of scarcity is normally determined by the type of technology available and the resources, which act as an important part of the production. Therefore, the compromises can have a severe impact on other individuals in a population. In addition, it is always important to determine the aggregate gains and losses among all consumers based on the concept of consumer welfare (Holt, 1995).
In some situations, the existence of free choice in a free market requires government intervention due to the resultant externalities. Externalities exist because of the actions of the consumers and the organizations. For example, it is illegal for Apple and Beats to produce products without giving consumers’ safety instructions and the potential harm that can result from using their products. Therefore, it is important for the government to intervene and enforce welfare regulations. It also imposes taxes and special duty that act as a source of revenue and payment of the potential harm to the environment. Therefore, government participation in a free economy is crucial as it also ensures that consumers enjoy subsidization on certain products they consume daily (Nelson, 1970).
There is also the identification challenge, which limits the organization in aggregating the consumer wants. That is, identifying the aggregate demand in the market requires that there is a complete satisfaction of the consumers demand without compromise. However, the assumption does not reflect on how an organization can fulfill the consumer sovereignty. In a normal circumstance, all the consumers are expected to have wants that are reflected on preferences among numerous commodities that exist in the market. In addition, the preferences can be determined through observation of choices customers make in the market influenced by freedom of choice. To make a choice, the clients are always required to have access to the relevant information that they can use in making appropriate decisions according to their wants. Therefore, the existence of such a situation leads to a serious difficulty in identifying what exactly are the consumers’ underlying wants depending on the choices they make.
Conclusion
It is evident that the consumers dictate their preferences to an organization through their choices. Therefore, each consumer’s expression is important for organizations like Apple Inc. and its subsidiary (the Beats Electronics LLC) in determining the aggregate demand for their commodities. According to the consumer sovereignty principle, all the consumers have their choices based on the type of product they decide to consume. The preferences are typically reflected by the level of demand for a product in the market. The level of demand is usually influenced by the quality of a product that is available and the market price. It is also important to note the impact of the level of income in the economy and the freedom to choose between two commodities. For example in the case provided above of Apple and the Beats, there can be a serious challenge in ensuring consumer sovereignty in developing countries. iPhones, iPods and Beats speakers are rated among the best electronics in the world based on quality, user-friendliness, and durability.
Therefore,
there can be a serious challenge in providing the products in developing
countries due to high prices and scarcity of resources. This forces the two
companies to compromise a certain section of the population in these regions.
Therefore, commodity price and quantity is serious in influencing the consumer behavior,
which is crucial in determining the consumer wants based on demand. There is
also the impact of substitution effect where an organization can lack the
ability to observe the consumer sovereignty. Close substitution offers the
consumers much freedom to choose especially when there is huge price difference.
However, individuals with low income are always indifferent due to constrained freedom
of choice due to the existing financial constraints. Consumer sovereignty
involves fulfilling the wants of consumers and requires a free market economy
with a competitive market. In addition, it can also be interpreted in various ways
depending on the primary goals of an organization and the government policies.
References
Fournier, S. (1998), “Consumers and Their Brands: Developing Relationship Theory in Consumer Research,” Journal of Consume Research P. 343-373.
Hirschman, E. & Holbrook, M. (1982), “The Experiential Aspects of Consumption: Consumer Fantasies, Feelings and Fun,” Journal of Consumer Research P. 245-256.
Holt, D. (1995), “How Consumers Consume: A Typology of Consumption Practice,” Journal of Consumer Research P.1-16
Nelson, P.J. (1970), “Information and Consumer Behavior,” Journal of Political Economy 78 P. 311-329.
O’Hara, P. (2002). Encyclopedia of Political Economy: 2-volume Set. New York: Routledge.
