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After buzz marketing, stealth marketing is the latest marketing communications craze. You are the General Manager of a new entrant in the mobile phone network market, competing with the likes of O2, Vodafone, Meteor and 3. Like these competitors, you see your main target market among young, highly marketing literate consumers. Your marketing manager has mentioned stealth marketing as a possible way of increasing market share but you are not convinced that this is an ethically sound approach to marketing communications.
Please write a report to your board of management presenting the possibility of a stealth marketing campaign, but also your concerns with this technique. Please take into account the characteristics of your target market as well as public debate on marketing methods. You are required to give a recommendation to the board of management whether or not to adopt this technique. Table Of Contents Introduction……2 Stealth Marketing……2 Target Market……3 Advantages of Stealth Marketing……4 Disadvantages of Stealth Marketing……5 Ethics……6
Conclusion……7 Bibliography…8 Introduction “Over 2 billion people in the world are mobile phone subscribers. ” Considering the population of the world, as of the 1st of January 2006, was approximately 6. 5 billion , the number of people who have access to a mobile phone is absolutely astonishing. This is a technology that was almost non-existent 20 years ago, and no telling where it can end up in the next 20 years. Because of the nature and high cost of its market, there are not many competitors in the mobile service provider sector.
With that being said, the players in this market usually divide the market share pretty evenly with one or two dominant companies slightly higher than the rest. Breaking into this very selective market is no easy task and it is probably the reason why competitors are so few. Not only does it require a very large cheque book, but also a near perfect marketing plan that can grab people’s attention away from the informal cartel that usually owns the people’s minds. I am the general manager of a new entrant in the mobile phone network market, Direct Line.
We are a new and upcoming provider and hope to increase our market share in an already developed market. Competing with the likes of O2, Vodafone, Meteor and 3 will be no easy task and that is why we are looking into which marketing strategy we can use to promote our brand. Our marketing manager brought up several ideas in our last meeting and has asked me to look deeper into one of the strategies. My assignment is to discuss stealth marketing as a possible method we can adopt to increase our market share.
I hope to explain in this report what stealth marketing is, how it can be used in relation with our target market, discuss the advantages and disadvantages of implementing this strategy, talk about the ethical issues surrounding this issue and come up with a conclusion that will help me in giving an honest recommendation to the board of management on whether or not to adopt this technique. Stealth Marketing When thinking about marketing, it is very much like feeding a child, you want to give him as much food as you can before he gets turned off by it and rejects it.
Because people have become so skilled at reading through advertising campaigns and so sick of being hassled by companies, marketing directors have had to find a new way get through to customers. Stealth marketing is a technique that is becoming more and more popular in the marketing industry. It is a highly controversial technique in which the consumer does not know he is being targeted or marketed to. It usually involves a company paying and sending out “agents” that do not publicly address themselves as sales representatives.
They then market the product to potential customers in an informal way hoping that they bite on their bait. This can be done in several ways, first of which is to pay people to talk up the product in public locations. For example, take how Sony Ericsson used stealth marketing in promoting their then new phone, the T68i . They paid people to carry the phone in tourist attractions and have the simple task of asking, “Hey, excuse me, would you mind taking a picture of us? ” to “fellow tourists. ” Then out of a simple deception, the undercover salesman is telling the tourist about all the new and exciting this phone can do.
Another way in which stealth marketing can be carried out is through celebrity or well known figures. Company pays them money to just appear using or talking about their products indirectly so that others do not know they are working for the company. A person then sees these products as the way to go, thinking if so and so is using this, then it must be a good product, not knowing that so and so is only using the product because he is being paid. Target Market Having discussed what stealth marketing is, we can move on to define what our main target market is.
A target market is the market segment to which a particular product is marketed to. Of course we will offer service to any customer who is willing to pay, but our main marketing focus is on the section that we feel if we concentrate the most on, then that will result in the highest profits. Like most of our competitors, we feel that targeting the young literate consumers is the wisest. This age group starts from the tender age of 10 to the age of 24, the start of true adulthood and most careers. There are several reasons why we are targeting this particular age group or demographic.
To begin with we start with the age of 10. “Eight-year-old kids with mobile phones might sound like a crazy idea, but according to a report carried out last year, that is the average age of a child owning their first mobile phone. ” From the age they first own their own mobile phone to the age in which they start to focus on other things such as work, lives, bills etc. This age group usually does not supply for itself, rather it gets its disposable income from parents or guardians. So they are not as careful about their spending as say someone who provides for himself.
A report has shown that youths spend about 11. 6% of their income on mobile phone bills . In general, they are not considered price savvy yet because they have not experienced “the real world. ” This demographic is also more susceptible to fashion trends which leads them to spend more on accessories and the latest phones. They are also much more likely to play and download games off their phones than the older working customer. This belief is backed up by the fact that about 40 % of all subscribers in the U. S are between the ages of 13 and 34.
Advantages of Stealth Marketing Using a stealth marketing strategy does of course bring along several advantages. Even more so because of the particular age group we are targeting. This demographic is probably the first of its kind. What I mean by that is we are dealing with a new generation that has had to deal with high geared advertising ever since they learned how to read and write. Their parents never really had the exposure to the mass media that they have been victims of because the introduction of elements such as the internet and looser media restrictions.
Having said that, this generation is all but tired of the constant pitches being thrown at them by companies. This leads us to our first and main advantage of this strategy. What differentiates these targets from targets of blatant advertising campaigns is that they don’t know they are being marketed to. “By the time the message gets out, they don’t even know they’ve been hit; they don’t know that they’ve been marketed to. All they know is that their interest has been piqued. ” This leads us to the second advantage.
The faith customers once had in sales representatives has begun to fade away. Not necessarily because what they are saying is unconvincing, but because they are not prepared to listen to every employee who wants to convince them of something. What is different with stealth marketing is that the consumer won’t know they are talking to a sales rep. to them the person is just a fellow consumer of the corporate world, so they take what they have to say seriously and listen with interest. This is especially true when talking about our target market.
Youth are much more likely to listen to a friend or a peer’s advice rather than someone whom they know is trying to sell them something. Just to empathize, this does not change what is being said, it just changes who, and how it is being said. Another advantage of Stealth marketing is it’s relatively low cost. Compared to the vast expenses that companies must incur to promote their products, which can include TV commercials, billboards, flyers and a lot more, stealth marketing only costs a fraction of that. The final advantage that stealth marketing provides is the effect it causes.
Stealth marketing, when done properly, convinces the target so much that he then becomes a “sales agent. ” For example, I am touring the Statue of Liberty in New York City and I come across a couple who very politely ask me to take a picture with their brand new mobile phone which contains a very sophisticated digital camera. I take the picture and chat to them for a while, where they explain how wonderful the phone is and that I must have one. I then, having no idea that I have just been marketed to by Sony Ericsson, go buy the phone and later that night meet with friends at a restaurant.
I ask the waitress to take a picture of the group and attract a look of amusement from my friends. I then explain to them how I came about buying the phone and explain to them how wonderful the phone is. This effect can be explained as the “buzz” effect, where people begin to talk about a product, raising its popularity amongst consumers. Again, these advantages are all as a result of a correctly carried out marketing plan. If the plan is not carried out correctly and there are mistakes, it can lead to the demise of an organization. Disadvantages of Stealth Marketing
A stealth marketing plan is meant to be carried out with only the company and the marketing associates having knowledge of intent. Otherwise it is useless and can actually hurt the company. So no information can be leaked out to the customers, media or anyone in fact. This is where most of the disadvantages come from. First one, and the probably the most essential one, is the consequence of the public finding out about the plan. Customers would see it as a scam to get them to buy the product. They see it as being dishonest and sneaky.
As a result they turn their backs on the company and side with the competitors. Another disadvantage is the lack of gauge for success; it’s almost like a leap of faith. It is extremely hard to predict what the outcome of the plan will be because it is such a confidential plan. If the company invests a lot of money and then customers don’t react to the product, or the company is beaten out by large spending on an advertising campaign by competitors, then there is nothing to show for the investment. These disadvantages can be crucial when talking about the age group in question.
Because a large portion of them are teenagers which are infamous for their spontaneous behavior, there is no telling how they would react to a certain product, let alone how they would react to a company they feel cheated them. Ethics Now that we are done with the practical discussions, it is time to get philosophical. Stealth marketing has stirred up a lot of controversy in the marketing world. The new age age-old question, how far can companies go before they become unethical. In the case of stealth marketing the two points of view are as follows.
The first point of view, arguing against stealth marketing states that: •They get paid to talk up a product •They deceive the consumer by not enclosing their true identity •”When there exists a connection between the endorser and the seller of the advertised product which might materially affect the weight or credibility of the endorsement (i. e. , the connection is not reasonably expected by the audience) such connection must be fully disclosed. ” •They do not give their honest opinion about the product, they say what they are paid to say • “Identifying the weak spot in their defensive shields” is just so… wrong. It’s predatorial.
It conjures an image of pedophiles luring naive or vulnerable young girls or boys into their cars with the promise of candy, not marketers trying to clearly identify value and build genuine relationships with prospects and customers. ” On the other side, the point of view arguing for stealth marketing states that: •They not presenting things in a false manner. All they are doing is presenting them in a way that gets the attention of the consumer •We do not force the consumer into doing anything, we just inform them about the product •There is deception in other advertising, they make cars seem slicker, faster and shot in a articular way to fool the consumer While both sides give a compelling argument, but in my opinion, the issue of stealth marketing is unethical in its roots. Because of the fact that they are deceiving a consumer into thinking he is taking to a fellow consumer, in addition to the fact that the opinion he is given is the opinion the company wants him to memorize, not the honest word on the street, they are tricked into a sneaky deception to get them to listen to their idea.
The reason this is different than regular advertising, is that in regular advertising the consumer has the choice of either listening or not, a choice that I think most people are quite glad to have. The only way this would be ethical was if the consumer was notified, before the “presentation,” of the presenters’ affiliation with the company. Their idea is to have the consumer thinking he has stumbled onto this “hot” new product, while in fact he was merely a prey in a vicious game of cat and mouse. Conclusion
In conclusion, while the marketing world has gone and is going through changes that have changed the way companies market their products and services, these changes cannot dictate how a company operates. Stealth marketing is a cheaper alternative and it does offer many advantages, as mentioned above, but in my opinion it is not the way to go for an up and coming company trying to establish its name in a dangerous market. While this technique can offer short term benefits and profits for the company, it would put it at a much greater risk of falling out with the consumers.
What we are trying to establish is a long term and trustworthy relationship with our customers, and this would be near impossible if we adopted stealth marketing and consumers found out. In saying that, my final recommendation to the board of management is to not adopt the stealth marketing strategy, rather opting to incur the short term costs in hope of building a customer relationship built on trust. Bibliography •Reference #1: BBC News, 22nd October 2006, Mobiles have “key role for young”, Website, viewed on October 25th 2006, http://news. bbc. co. uk/2/hi/technology/6070378. tm •Reference #2: Business Opportunities WebLog, August 2002, Stealth Marketing, Website, viewed on October 20th 2006, http://www. business-opportunities. biz/2002/08/30/stealth-marketing/ •Reference #3: Communities Dominate Brands, February 2006, Music or Mobiles? Youth clear preference is, Website, viewed on October 20th 2006, http://communities-dominate. blogs. com/brands/2006/week7/index. html •Reference #4: CorpWatch, December 2004, US: Marketing under the radar, Website, viewed on October 18th 2006, http://www. orpwatch. org/article. php? id=11762 •Reference #5: Viral One, July 2006, Counterpoint on stealth marketing, Website, viewed on October 20th 2006, http://viralone. wordpress. com/2006/07/18/counterpoint-on-stealth-marketing/ •Reference #6: Metroactive, May 2004, Secret Agents of Capitalism: Is that hottie really flirting with me? , Website, Viewed on October 21st 2006, http://www. metroactive. com/papers/metro/05. 12. 04/marketing-0420. html •Reference #7: Wikipedia, 20th October 2006, Mobile Phone, Website, viewed on October 22nd 2006, http://en. wikipedia. rg/wiki/Cell_phone •Reference #8: CNET. co. uk, August 2006, Mobile phones for children, do we want them? , Website, viewed on 24th October 2006, http://crave. cnet. co. uk/mobiles/0,39029453,49282815,00. htm •Reference #9: Technews world, April 2006, Cell Phone Services Vendors Banking on Mobile Gaming Apps, Website, viewed on 19th October 2006, http://www. technewsworld. com/story/49707. html •Reference #10: Advertising Standards Authority for Ireland, 2006, General Rules, Website, viewed on 25th October 2006, http://www. asai. ie/entiresection. asp?
Section_Num=2&Section_Desc=General%20Rules •Reference #11: Mobile tracker, May 2005, Total mobile subscribers top 1. 8 billion, Website, viewed on 23rd October 2006, http://www. mobiletracker. net/archives/2005/05/18/mobile-subcribers-worldwide •Reference #12: CBS News, July 2004, Undercover Marketing Uncovered, Website, viewed on 25th October 2006, http://www. cbsnews. com/stories/2003/10/23/60minutes/main579657. shtml •Reference #13: University of North Texas, August 2006, “Stealth marketing” latest way for businesses to reach young consumers, says UNT