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ADVERTISING MAKES YOU BUY THINGS YOU DO NOT NEED! IT MANIPULATES YOU!

GROUP PROJECT
Members: CALL Guillaume, AUDOUSSET Geoffroy, BAYRAK Samet, VASKOVA Petra, PISTECKY Jan, KOPECKY Daniel, HEYDRICH Lukas, FISER Martin

MarketingProjectGroup7,Msc.CULSPrague,2010

God damn it, an entire generation pumping gas, waiting tables; slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy sh** we don't need.

TylerDurden,FIGHTCLUBMovie

MarketingProjectGroup7,Msc.CULSPrague,2010

TABLE OF CONTENT:
TableofContent:.....................................................................................................................................3 Introduction ............................................................................................................................................4 . Psychologicalperspectiveandconsumerbehaviour..............................................................................6 Motivation...........................................................................................................................................6 Perception...........................................................................................................................................7 Thebuyingsituation............................................................................................................................8 Examplesoftechniquesandpsychologicaleffects.................................................................................9 SalesmansTechniques .......................................................................................................................9 . Limitedtimeoffer............................................................................................................................9 Buyonegetonefree.......................................................................................................................9 Loyaltycards..................................................................................................................................10 GuerrillaMarketing...........................................................................................................................11 Psychologicalpricing.........................................................................................................................13 Oddpricing....................................................................................................................................14 Questionis,howareweinfluenced?............................................................................................15 Prestigepricing..............................................................................................................................15 DreamsandIdols...............................................................................................................................16 TheBandwagonEffect ......................................................................................................................18 . TheSnobEffect .................................................................................................................................19 . Codeofadvertising ...........................................................................................................................19 . Wordofmouthmarketing................................................................................................................20 Summary...............................................................................................................................................23 References.............................................................................................................................................24

MarketingProjectGroup7,Msc.CULSPrague,2010

INTRODUCTION
Aim of this paper is to discuss the question whether advertising manipulates us to buy things we dont actually need. In other words, we would like to debate the issue of the impact of marketing and advertisement on our rational thinking and decision making process. Based on various examples, we would like to show that the statement can be proven to be true. We believe the statement can be denied only by either using different definition (understanding of advertising) or by argument that advertising manipulates only several groups of people that are vulnerable to be manipulated. Nevertheless, the previous statement only supports the validity of the statement. Man can argue that the behaviour of the people depends on the individual personality, economic condition and the way a company advertises their product and the discount offers given to the product. Our point is, that there are various advertising techniques with various targets. Another big question is how can we judge what kind of goods and services are necessary, and which good is bought only to show-off among their friends and relatives? What is a need, and what is just a will? This paper will argue the manipulation via marketing exists and the advertisement is making us to buy things we do not actually need. We want to support the statement by using real examples, that are divided based on the common psychological effect or methods used to manipulate peoples mind. We would like to stress the importance of psychology which is seen as a main tool used by advertising companies. Only via careful use of psychology are marketers able to create touching advertisements. To create advertisements, that touches our minds, our senses and feelings that push us to buy things. Our work takes into consideration both perspectives of the issue and support or disproves the statement and ideas that are discussed below. To discuss the main points, it is crucial to define and understand the meaning and the definitions of used terms: Manipulation Mirriam-Webster encyclopaedia defines the term manipulation as following: Manipulation 1. to deal with (something) usually skilfully or efficiently

MarketingProjectGroup7,Msc.CULSPrague,2010 2. to control or take advantage of by artful, unfair, or insidious means

We understand the definition and therefore the meaning of the word manipulation as follows: Manipulation is a skilful process of taking advantage of something/someone by artful means. In other words, manipulation should not be understood as only exploitation of someone by unfair practise. Moreover, we would like to distinguish between a manipulation and the influence. Despite the fact these two words can have similar meaning; we see manipulation as a more active and maybe even successful way how to influence someone to act. To buy things, not only to consider buying. Advertisement We have seen various definitions of advertising. Namely some people are using Kotlers and Armstrongs (Kotler, 2001) definition: "Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services through mass media such as newspapers, magazines, television or radio by an identified sponsor". However, we do not take into account such definition, because: 1. Not every advertisement is paid 2. Advertisement is nowadays personal thanks to various technology 3. Not every advertisement has identified sponsor at the beginning, see latter guerrilla marketing

Therefore we use more general definition by Mirriam-Webster encyclopaedia: to make something known to This definition serves us as a boundary for our argumentation.

MarketingProjectGroup7,Msc.CULSPrague,2010

PSYCHOLOGICAL PERSPECTIVE AND CONSUMER BEHAVIOUR


To define our perception of manipulation, we have to think what can explain consumers behavior and how companies try to influence it. Traditionally, there are four different theories around consumer behavior:(Consumer Behavior, 2010) Psychological models Sociological models Economic models Stimulus respond models

Therefore, we have to consider the psychological aspect to understand the problem. Indeed, to show how consumers are manipulated by companies, we have to describe aspects that can influence consumers mind.

Motivation
First of all, each consumer has his own motives to buy. These motives arises from consumers needs and wants which are based on factors such as wealthy, sex or religion of the person. According to this fact, defining consumers needs is a huge stake for companies to elaborate a good advertising campaign. If we consider Maslows hierarchy as one of the basis of our work, as many authors do, we can imagine how companies can manipulate us through advertising. Indeed, according to Maslow (Maslow's hierarchy of needs, 2010) needs can be divided into essentials to survive and wishes that are connected with our desire. When psychological and safety needs are satisfied, consumers seek for the other wishes. As Maslow described, following need could not be satisfied if the previous is not satisfied. As companies are aware of this effect, they try to exploit consumers perceptions and offer them products and services according to their needs. Also, using special techniques can create essential needs from basic want. These techniques are described below. However, Maslow hierarchy could not be used for all consumers while each consumer thinks differently and has own scheme of his needs and wants. Therefore, consumers are exposed to offers that are more and more designed for individual wants. Moreover, not only individuals play important role in various needs. Cultural and national changes across the whole world must be taken into the account. What is considered as need in one country could not be reflected as need in another country.

MarketingProjectGroup7,Msc.CULSPrague,2010 In developed world, nobody can imagine the life without social networks, however, consumers in developing countries do not have access to Internet at all. That is why we believe that the crucial point when talking about manipulation is not really tailoring an advertisement campaign to peoples need but creating the need itself. As an example could be used Facebook. Many years ago, nobody needed social networks, however the situation has changed in past years and people desire to use them every day. Thus, changes from wants to needs are driven by companies. They use special techniques to manipulate with consumers minds and change the way of thinking.

Perception
The fact how an individual perceives an external stimuli and the influence of such stimuli on his reaction is the common tool used in advertisement. Many authors and marketers proved that there are different reactions for the same stimuli, which can be changed according to time, situation or context. Traditionally, there are three main types of reactions: Selective attention: consumer screens out the majority of stimulants. Selective distortion: consumer adjusts his/her perception to his/her current mind set. Selective retention: consumer does not remember everything. He remembers information which reinforces attitudes and beliefs.

Through our various examples, we can see the background of companys way of thinking and how they exploit particular kind of advertisement in particular moment, in a specific place and by particular person. These techniques can be seen as typical manipulation because marketers know their product and its features and benefits, each product or service is intended for particular segment or target group. Moreover, the product is designed to satisfy particular needs. There is an obvious objective behind these activities - to sell as much volume as possible. To discuss the objection, we can divide consumers on easily influenced consumers and rational thinking consumers who will prove all received message. We have to state that advertising techniques target on both groups. It means that all consumers are exposed to advertisements that can evoke consumers stimuli to buy goods they do not need. Also, these reactions can be used as arguments to prove the statement that people have natural defences against manipulation; for example, many buyers have beliefs which protect them from a majority of stimuli. Thanks to different studies, companies can predict purchasers reaction and manipulate with their decision making.

MarketingProjectGroup7,Msc.CULSPrague,2010 Nowadays, a referred stimulus is used by blog creators for attracting new readers to monetize the discussion. Blogs and discussion are no more used only for sharing ideas but they become more and more useful for making money via various methods of monetising and advertising. Used tools are for example Google adwords, affiliate links or direct payments. Blog authors use psychological techniques to attract people to their blogs. They manipulate people by using their curiosity and sometimes angriness among brand fans and so-called haters to push them to spread the words about blog and posts on the blogs and moreover to add the comment below the posts. All the comments attract traffic which is needed to monetize the blog.

The buying situation


When people purchase stuff, they go through different stages(Consumer Behavior, 2010): Problem recognition Information search Emergence and evaluation of alternatives Purchase decision Purchase Post purchase evaluation

At each stage, they have different motivation and reaction which can be different according to the kind of buying it is habitual, limited decision making, extensive decision making or impulse. All these stage are opportunities for companies to convince, to influence and manipulate the customers. For instance, manipulation is when advertisement changes a buying from a habitual one to an impulse one. Indeed, in such kind of buying, each stage which is a time of reflection is shorted to push the consumer to purchase. The classical example of impulse buying is Apple iOS App Store, where majority of applications are often priced below 3 USD, usually 0,99. This aggressive pricing makes us to do spontaneous buy so we do not care about the small amount of money spent. Man can argue 0.99 is not a big deal, however, the whole App Store is a huge multi-billion dollar business. To continue, we are going to present many techniques used by companies to show How companies and firms deal with all these psychological aspect to manipulate the client?

MarketingProjectGroup7,Msc.CULSPrague,2010

EXAMPLES OF TECHNIQUES AND PSYCHOLOGICAL EFFECTS


Lets start with the statement: During a recession, sellers will be working extra hard and even more strategically to get your money. Large corporations have entire departments that research and apply tactics concerning the psychology of buying and selling. (Hubpages,2010) The statement is going to be supported in this section. The section contains Salesmans Techniques, Guerrilla Marketing and Psychological pricing.

Salesmans Techniques
Limitedtimeoffer It is the persuasive technique in advertisement that accelerate the customers purchase of particular product due to limited time for purchase. The task is to frighten people, if the product is not bought before the end of the limited time offer, there is no other opportunity to purchase the product for lower price. However its not common that the product in the camping is the cheapest on the market. To be more specific and give some example of buying certain product according to special offer, even that it is not needed: there are many people who study newsletters - instead of newspapers - to find any special offer and consequently buy more than they really need. Usually its under pretence that now it is cheap and they are worry about future prices. This is also about best beforefood, which unfortunately in many cases evokes ineffectiveness in consumption. Buyonegetonefree As with so many retailing innovations, the buy-one-get-one-free offer was imported from the USA during the economic downturn of the 1970s when food inflation was running at more than twice the current level. (Daily telegraph, 2010) The offer that is called BOGOF can be time limited or permanent. BOGOF creates the opportunity to sell something despite there is no need for it. For retailers and producers its amazing occasion to spread products across the market widely. When the market is saturated it creates disadvantage for competitors. It also cause ineffectiveness in consumption and increase revenues for sellers. The psychology influence is used in this sales promotion technique as well - for many consumers it is interesting and catchy if there is something free, they have feeling that this occasion will never happen again.

MarketingProjectGroup7,Msc.CULSPrague,2010 Loyaltycards Loyalty cards are widespread feather of supermarkets and retailers. It is an key approach in marketing techniques which allows to collect important data about consumers and consequently find the best way how to create most attractive and catchy product offer. On the other hand it can be consider as a part of positive relationship with customer. There are numbers of similar shops offering identical portfolios of products. However, for consumers it makes difference to get something extra (collect points, receive extra vouchers for birthday etc.) or just buy a product. Most of the consumers will prefer supermarket where its possible to get something free and be part of the community. On the other hand retailers might sustain regular consumers that stabilize the sales. As a side feather retailers receive sensitive data about their consumers that helps to plan future development and expansion. According to ACCA Selling technique statement As part of your marketing strategy, you have to decide who your target customers are, and how you will approach them. (ACCA, 2008)

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MarketingProjectGroup7,Msc.CULSPrague,2010

Guerrilla Marketing
When talking about forms of advertising and its marketing tools, to be wholly consistent its impossible to omit Guerrilla Marketing. The term Guerrilla Marketing was first officially used in 1984 by Jay Conrad Levinson. In his book he was describing unconventional and aggressive product propagation with very low costs. He describes Guerrilla Marketing as a tool of achieving conventional goals, such as profits and joy, with unconventional methods investing energy instead of money (LEVINSON, 1984). Guerrilla Marketing is about attracting our attention differently than in traditional way. It derives benefits from the moment of surprise and our astonishment. Strangeness and innovation are also its key factors. Guerrilla marketing also allows getting side attention, causing panic and rousing the public. The reality, that it catches us off guard and causes an emotional response is its big advantage, because emotions (laughter, shock, sadness) are always great sellers. The fact, that the advertisement is hidden or invisible is substantial. For Marketers is very beneficial and important, that their potential customer dont know, they are using guerrilla marketing. If customer knows their secrets, he may just stop responding, which makes space for question if we really arent manipulated by advertisement? Who would voluntarily let someone to control him? It seems that marketers are very clever and well versed in principles of human psychology, so that they can make us want to buy their products. On the other hand we could say that todays severe and unconventional ad campaigns are the only way how to attract our attention in presence over advertised world of marketing. Other relevant topic is connection of law and guerrilla marketing. Someone could say that we are certainly manipulated by advertisement; otherwise we do not need to regulate it. However law regulates marketing campaigns from more reasons. There are for example problems with illegal putting up of posters, so its no always only about ethics and protection public against the high level of advertisement influence. The second part of this chapter will introduce various types of guerrilla advertising with some explaining examples of its diverse forms. The division is different according to source.

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MarketingProjectGroup7,Msc.CULSPrague,2010 Viral marketing is a highly visible form of guerrilla marketing these days. It is basically any marketing technique that includes Web sites or users to pass on a marketing message to other sites or users. It uses existing communication networks, not very reliable sources and has the potential to be unstoppable, thats why a viral campaign cant be planned or predicted. It utilizes the advantage, that people like to share interesting and entertaining objects and they do so willingly with no persuasion. Ambient marketing allows a business to create brand recognition without necessarily pushing their products. The advertisement usually somehow coincide with its surrounding, so that for first sight the campaign may not appear as a product promotion. For example a campaign of an Italian advertising agency (Admcom) for the promotion of the Casino Di Venezia. The marketers have changed a traditional luggage claim belt to a giant roulette wheel at Venice Marco Polo Airport.

Source: http://weburbanist.com Presence marketing has same base basic principles as ambient marketing. Its about making the business name recognizable, familiar and always there to target audience on daily basis. This can be achieved through product placements in movies and TV shows, stalls at local festivals and markets, regular Twitter updates, or whatever else which makes product name visible in everyday life. Grassroots marketing is other form of guerilla marketing campaign. This advertisement can take on many forms, some grassroots campaigns have elements of presence marketing or viral marketing. However grassroots marketing is mainly about winning customers one-by-one rather than on a very 12

MarketingProjectGroup7,Msc.CULSPrague,2010 large number. It is all about building relationship and emphasizing the personal connection with customers, which can stand against the opinion, that advertisement manipulates us to buy what we dont want to. Even it may seem old-fashioned, Wild postings are still wildly popular and are part of guerilla marketing. Wild posting is favorite mainly with indie bands and indie image. Its aim is to attract maximum attention of course, but a great portion of their effectiveness lies also in the secret that they can make us believe were witnessing and part of something eventful. Most of us would love to have a poster from the wild posting days of the Beatles, right? Undercover marketing, also known as buzz marketing, is about selling something to someone who has no idea, that theyve just witnessed a sales process. Very important part of undercover marketing is Word of Mouth. Quite unethical part of guerrilla marketing is Astroturfing. It is about creating an artificial buzz about a product or company on online forums, blogs and others However all those references arent made by the public, but by shills, or people associated with the company, who are paid to express a positive opinion. Publicity that looks like it is completely removed from the company itself is characteristic of Alternative marketing. For example (even it has been suggested more than once that the whole event was a controlled publicity stunt) when Paris Hiltons Sidekick was hacked, sales of Sidekicks jumped overnight, while T-Mobile probably (maybe?) had nothing to do with that publicity, it was excellent marketing for them. Experiential marketing connects people to the product by experience. Owing to todays abundance ad campaigns, it is very easy for us to ignore product promotion and tune it out. But interaction and experience associates immediate emotional responses, either with the product or with its brand. On Internet can be experiential marketing seen in form of for example offering trial version for free. Experience helps to make an intelligent and informed purchasing decisions, which is far away from manipulation. Tissue-pack advertising is also a part of guerilla marketing. However this way is so known that we could consider it as traditional marketing technique.

Psychological pricing
The price is very important and crucial element of the marketing mix. Pricing is a part of business strategy and can be based on different factors, for example profitability or market penetration,

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Imagesource:Pricingpsychologyreport MarleneJensen

MarketingProjectGroup7,Msc.CULSPrague,2010 however price influences the character of promotion and can be a very efficient advertise. Thats why it is efficient to ground it on psychological aspects. Firms must offer their products for a price their target market is willing to pay. There is still a question how do customers perceive the value of the product? Companies have to find a price that enables them to make a fair profit and seems fair to their customers. Oddpricing Consumers respond to numbers and psychological pricing tactics, this method is used to give an illusion of value: to pay less. For example, what is the difference between a price ended in the number 9 and another ended in the number 0? The first one represents approximately 60% of the product prices and the other one represents only 7%. This idea was firstly used by Czech entrepreneur Tom Baa at the beginning of the 20th Century. Now we are accustomed to see this kind of pricing but the impact is still very strong. Moreover, a survey shows that the 9.99 price will probably pull 10-20% more buyers than the 10 price. This experience was tested on American customers in 90s and it reveals the strength of the technique.

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MarketingProjectGroup7,Msc.CULSPrague,2010

Questionis,howareweinfluenced? Certainly not because of the single penny saved. According to researchers have demonstrated that people are more likely to buy odd-priced items because the mere image of odd prices makes products seem less expensive (Schindelr, 1991). Of course that is not true with all products but sometimes there is a correlation. Furthermore, a survey from the French University La Sorbonne reveals that children are more receptive to this odd pricing and can easily be manipulated. Prestigepricing This technique is very often used in the luxury industry. It adjusts high price for a product or service in order to create an image of high quality. Prestige pricing is useful for consumers who believe price and quality are related. Why do we prefer the more expensive product? Is it really better? Is really there a difference between pasta, jeans or alcohol? Sometimes its true but generally not and firms use this idea to manipulate us. Do we perceive a product from luxury industry as a bad product? No. Why? Its not a secret that we pay the brand and not the quality. To conclude, psychological pricing is very often used to manipulate us and we cant ignore it. Of course, everybody is not influenced by this technique but its efficiency is proved and thats why firms use it.

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MarketingProjectGroup7,Msc.CULSPrague,2010

Dreams and Idols


Companies are using our dreams and wishes to manipulate us to buy goods and services. For instance, they are creating (and furthermore using) our idols to help them to sell things. Man can even say we are not buying the actual products; we are buying the feeling to be members of some social or cultural group by using advertised goods. So we are spending money for something that we already have, i.e. our dreams, ideas and feelings.

Source: http://img641.imageshack.us/img641/3286/gillettethierryhenrytig.jpg From the psychology perspective, people want to be a members of any society or cultural groups. This sense have been inherited from the past. Advertising companies are using that so in the advertising, they are picturing groups of either rich, famous, beautiful or talented people to enhance our need for social belongings. These are words of a marketer: How do famous people play an important part in advertising? This is called endorsements. A company banks on the idea that a person's celebrity will drive fans to try a product or service, simply because Celebrity X has. I don't like this approach - although it's widely accepted - simply because the corporation seems to imply that we are shallow enough to do something only because someone else has. (Sheikh, 2010) Marketers have been using celebrities in commercials, print campaigns and promotions for years, because it just works. Celebrities get the viewers attention; but whether they work to sell the product depends on proper celebrity casting. The billions of dollars spent per year on celebrity endorsement 16

MarketingProjectGroup7,Msc.CULSPrague,2010 contracts show that celebrities, like Cristiano Ronaldo, Megan Fox, Troy Polamalu and Tiger Woods, play an important role for the advertising industry. Female athlete Venus Williams, tennis player and Wimbledon championship winner in 2002, for example, has signed a five-year $40 million contract with sportswear manufacturer Reebok International Inc. . Theory and practice prove that the use of super stars in advertising generates a lot of publicity and attention from the public. The underlying question is, if and how the lively interest of the public in the rich and famous can be effectively used by companies to promote their brands and consequently increase revenues. History has proven people can be manipulated, either by advertising or propaganda. For example, the Nazi propaganda during WWII, Communist revolution, etc. Manipulation is done by using our emotions and dreams (i.e. having a good life, future, belonging to social group, Nationalism, supreme race, sharing culture, equal life, etc.).

Source: http://chelseamia.corriere.it/Blog_Hitler_Speech.jpg However, human beings are not completely stupid and thanks to gained experience we can somehow resist the temptation. Man can say They use our dreams as tools to sell their products; they try to manipulate us by our idols. Contrary, we are human beings; the most important difference between us and animals is that we are wise beings. We have our brains to use it, to think. Maybe some of us can

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MarketingProjectGroup7,Msc.CULSPrague,2010 be fools to buy these lies, but in general we dont be cheated anymore. But we have to remember that the worst habit of human kind is repeating mistakes.

The Bandwagon Effect


The origin of the word bandwagon comes from the band-wagon, which means the wagon which caries the band (or other entertainer) on a parade or circus. The reason why this is used in the purpose of marketing (also economics and psychology) comes from late 19th Century when a famous US clown used his bandwagon with music to gain attention for one of the candidates political campaign. It was followed by many other politicians who used this method in their campaigns. This psychological phenomenon which is also called cromo effect or social proof means that the customer is willing to purchase one product which is purchased by others. The reason can be various, this product can be modern and the customer wants this product just to be in, example can be products like cell phone with 5 Mpix camera, or e.g. specific brand which holds with particular sport (Uncle Sam in fitness centre, Wilson on tennis court etc.). Or this product is a very useful one and this customer wants it for example to be connected with others, like Skype, TV, laptop etc. Another psychological reason can be that the customer thinks that the others are better informed about the market and the product, so he just follows the main stream. So, when the customer thinks more customers are purchasing, the more he is willing to buy it. Marketing campaigns especially in cell phones are very well developed, e.g. Samsung places new phone on market almost each month and promotes it in a modern and sometimes futuristic way, so it forces you change your old phone for a new one. The technologies in cell phones also change rapidly than in computers so the customers just want to be in. I personally change cell phone each 6 month to have the up-to date technology in my pocket, just in order to not be out. Another market segment which can be well manipulated by this effect is children market. Especially children want to belong to the group of others and when the child sees particular product e.g. LEGO or iPhone games in other childs hand, it automatically want the product too and force the parents to buy it. Good example of this can be free samples of toys or ice cream in the kindergarten, or TV advertisements on toys and games before the Christmas. We can say, that the bandwagon effect, when used wisely, can be very powerful tool to manipulate people to buy a product. But, on another hand, what works perfectly on children does not need to work on other people.

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The Snob Effect


This event is caused by the desire to own a unique product, which nobody, or very few people have. A good example can be piece of art (e.g. paintings and sculptures from famous artists), luxurious clothes (e.g. brands like Gucci, Prada, Dior, Armani and Versace), expensive cars (e.g. Porsche, Aston Martin, Jaguar and Rolls Royce), the newest technology (early adopters of 3D TVs, cell phone in watches etc.). The less of the goods is available on a market, the higher the snob value is. When this customer thinks more people have the particular good his need to have these goods decrees, so the snob value of the good is then lower. This often leads to shifts in the price of the good. First, the price for some special snobbish good is very high, so, snobs will buy the good. But then more and more snobbish customers own this good, thus it is not as unique as it used to be, hence the price for them is lower and the good go to discount. The snob value depends on these customers and it differs from person to person, so it is hard and sometimes even impossible to predict their behaviour. People who suffer this effect are not always so called snobs, but also collectors, like philatelist, for instance. Luxurious automobile companies like Aston Martin and Rolls Royce design some cars only in a limited number. The advertisement is tailored on wealthy people and the information that the particular car is ruinously expensive and made only in 20 pieces is very important for them and create the desire to own such car. Company which is focusing on the high end of the market surely know the principles of the snob effect and treats the customers and advertisement in such way, but there are other principles which should be taken into an account. Another barrier to this phenomenon is that wealthy people are not so much predictable and possibly omit the advertisement itself.

Code of advertising
If we want to support the statement of our thesis from legal perspective, we have to take into the consideration Code of Advertising and its effects. Code of Advertising serves as a regulation factor. Moreover, it protects consumers against deceptive advertising of advertising agencies. Even that each country has its own regulations design for their competitive environment, there are some general conditions that must meet the requirements. Responsible advertising practice should include: accuracy and clarity, disguised advertising techniques, price claims, safety, unacceptable depictions and portrayals, and advertising to children. In general, there is code that regulates conditions of using advertisement and direct which practice are allowed and which are forbidden. If we admit that the code is developed to protect consumers rights, we have to also admit that the advertising can influence consumers and manipulate with their decision making. It means that advertising can have positive or negative effect on consumers perception.

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MarketingProjectGroup7,Msc.CULSPrague,2010 Nevertheless, if forbidden practise are not applied, the impact of advertising is not maximise, therefore, allowed advertising practice cannot be harmful for consumers.

Word of mouth marketing


Word of mouth marketing is specific type of promotion. The aim of this technique is to create such attractive and appealing story that will be spread through people. Furthermore, word of mouth effect serves to create positive awareness of some product through spontaneous way. There could be discussion if word of mouth is or is not advertising. (Kotler,2006) and other authors describe advertising as paid and non-personal promotion. On the other hand, word of mouth is defined as unpaid and personal form of promotion. There is a clash in two aspects paid/unpaid form and personal/non-personal. We agree that word of mouth is a personal but the unpaid form is issue to discuss. It is important to stress that word of mouth can be either paid or free. Nowadays, there are many paid influencers who communicate the best features through the crowd and use superlative recommendations regarding to particular product or service. As companies exploit special teams to spread positive messages, word of mouth advertising is no more only unpaid form. Statement that word of mouth is a part of advertising can support many word wide marketing agencies such as Nielsen that classify word of mouth in their advertising research and reports together with other forms of advertisement. In their research, word of mouth advertising is ranked as the most reliable source and three-quarters of consumers consider consumers experience and recommendation as most effective form of advertising. It is obvious that personal opinion has high credibility. Word of mouth marketing relies on its reliability and it can influence and manipulate potential consumers. Without doubt, it has more presumptions to successful influence than other types of advertising. Speaking about paid and unpaid form, we have to take in account that companies develop special strategies to spread positive messages. There are some techniques used to evoke word of mouth effect: provide consumers sample to try, provide them space to express consumers opinion and feedback, distribute special coupons providing an advantage, provide extraordinary service or develop website to share ideas and recommendations. All these actions create positive awareness of the product or service and consumers start to share their experience. Further, their recommendations influence decision making of potential consumers. We can have a look on word of mouth marketing from other perspectives. If two or more friends are discussing about product, it is not paid. However the discussion has not started spontaneously. There must be story behind. At first, people are exposed to paid

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MarketingProjectGroup7,Msc.CULSPrague,2010 advertisements and later they started to talk about it. It means, that intermediator is influenced by commercial or other type of advertisement and later he starts speak about it. Advertising is not the only tool which affects consumers perceptions. It is a part of eight models marketing communication mix. Besides advertising, communication mix covers sales promotion, events and experiences, public relations, direct marketing, interactive marketing, personal selling and word of mouth marketing. All these communications mix tools are interconnected and they have the power to influence consumers way of thinking and change decision making. We can consider that people are rational and they will verify all messages they receive and recognize. But is this statement really applied in real world? The answer is certainly no. Companies are aware of consumers lack of knowledge and they want to exploit it. For those reasons, advertising attacks on consumers perception and try to manipulate with consumers. If we get back to the presumption that people are rational, they are exposed to thousands of messages and it is hardly recognize what message needs to be verified and what message is really truthful, especially in terms of word of mouth effect. As it comes from somebody consumers know and are familiar with or from somebody who is not employer or other stakeholder of the company, consumers tend to trust the person. Somebodys recommendation tends to be as independent source of products features and qualities. We would like to demonstrate the power of word of mouth effect on the example of Czech Insurance Company called Direct Pojistovna. According to this example is seen word of mouth can manipulate with people and their way of thinking. The insurance company focuses their effort on motorcars insurance. One year ago, they come up with advertising campaign that was highly supported by word of mouth effect. Before they start their official campaign, they change public perception and awareness of stealing cars. The company uploaded on youtube.com and other social networks a video where one guy stealing Skoda Fabia in very easy way using erotic tool and tooth breast. The video was uploaded anonymously and nobody had the idea that the company stands behind it. This video has such a big success in peoples discussion that it has been seen by more than 10% of Czech population (at current, there are more 1 400 000 views on youtube.com). Side by side with this amateurishly recorded video was campaign of Dircet Pojitovna to arrange the insurance and protect consumers cars against thief. People were influenced by the video they saw before and start looking for the solution. The solution was provided by Direct. As there was huge campaign focused on car insurance, people spontaneously react on the commercials and advertising and start signing contract with this particular company. Although there were other companies advertise in media, Direct Company invest more money in the particular period and they 21

MarketingProjectGroup7,Msc.CULSPrague,2010 advertisements had been seen most. The story of Direct Company shows how people can be manipulated and influenced by word of mouth marketing that is supported by well-prepared campaign.

Video related to this story is available at: URL: http://www.youtube.com/watch?v=qMCNoMdF3Xw

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MarketingProjectGroup7,Msc.CULSPrague,2010

SUMMARY
Based on our examples we have proved the statement: Advertising manipulates us to buy things we dont actually need. Most of us are suggestible and psychology techniques in marketing are really powerful tool to manipulate us, to change our needs. Based on the fact of growing knowledge of psychology, some of the methods are so powerful that have to be regulated. Traditional ways of advertising, such as psychological pricing, various sales techniques, and new methods of advertisements, such as usage of social networks, guerrilla marketing and others are nowadays able to adjust the advertisements to fit to expected needs and manipulate with specially targeted groups. However, due to culture differences we are influenced unequally and that complicate the direct aim on us. There are also other factors, for example different personal purchasing behaviour and different perceiving external stimuli that does not straight the process. On the contrary they make the advertisement techniques more inspiring and creative. Companies are maximizing their profits and they will do the best to sell their products. More investments will go to the development of new approaches in psychology as the most important tool to increase sales. Nevertheless, a proper manipulation by advertisement and others will create needs that could have the disposition of survival needs that are definitely included in our rational thinking. Finally interaction between psychology and advertisement are apparent. However psychology without advertisement is something obvious, advertisement without psychology is not possible.

Source: http://antiadvertisingagency.com/category/projects/bus-stop-ad-project/

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MarketingProjectGroup7,Msc.CULSPrague,2010

REFERENCES
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<http://uk.accaglobal.com/pubs/uk/members/support/public_practice/resource_centre/general/ directors_briefing/selling/selling_technique.pdf> 7. LEVINSON, Jay Conrad. Guerrilla Marketing: Secrets for Making Big Profits from Your Small Business. Boston: Houghton Mifflin Company, 1984. ISBN 0-395-35350-5 8. (Umair Sheikh,2010) available online: http://www.docstoc.com/docs/12162917/CELEBRITYENDORSEMENT (cited 3. 11. 2010) 9. Kotler Philip. Marketing management. Prentice Hall 2006. 816 pages. ISBN-13: 9780131457577.

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