Context and Regulatory Framework of Business

The article “Responsibility and brand advertising in the alcoholic beverage market’” by Debra Jones Ringold (2008) describes the problems and controversies faced by companies and alcohol producers in brand advertising and marketing. The author claims that brand advertising is responsible for alcohol messages and alcohol consumption rates persuading consumers to try new alcohol beverages and buy alcohol. Ringold claims that the task of brand advertisements is to get customers or markets to progress from a state of ignorance, or even negative reaction, to one of positive perception of alcohol products. The stages in this progression are ignorance, consciousness, comprehension, conviction, and purchase. Ringold summarizes the main trends and approaches in alcohol marketing and evaluates their messages and 8impact on the potential consumers.

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Ringold states that the majority of alcohol producers are mature companies. Alcoholic beverage marketing and promotion is just one major element of the communications mix used by marketers. A major problem confronting marketing management is how much of the sales task should be performed by brand advertising and how much by other elements of the marketing mix. Brand advertising can be appraised meaningfully only in terms of its effect on other aspects of marketing. As in all decisions, management is concerned with the returns on resources expended. A suitable rate of return should be realized on any investment in brand advertising, and since promotion has become a large item in the corporate budget, it necessarily creates considerable opportunities for increasing productivity. Alcohol consumption messages are meeting increasing competition from a plethora of other ads, from other media, from competitors, and from all the activities that vie for a person’s attention. As output swells and communications facilities increase, more claims will be made on consumer time and the cost of marketing communications will skyrocket. Moreover, a saturation plateau may be reached where larger expenditures yield proportionately smaller returns

Following Kotler (2003), Ringold underlines the importance of social marketing and its role in education of consumers. “A key objective of such social marketing efforts is to reduce the psychological, social, and practical obstacles hindering the adoption of a behavior beneficial to the target consumer and society as a whole” (Ringold 2008, p. 129). Opposing the brand advertising in this way are such countervailing forces as competitors’ communications, predispositions, noise, brand loyalty, and habit. The concept of thresholds or limits is also a useful one in understanding market communications. Beyond this level advertising messages have a sharp impact, keep increasing in effectiveness, and then tend to reach a limit — another threshold. For expenditures greater than b, little additional influence is realized. The advertising theory of information is one that holds promise for the measurement of advertising messages. To date, its primary application is in alcohol beverages market. It deals with measuring the information content of an advertising message, self-information, bits of information, entropy, and the value of average data, loose channels, and noisy and noiseless channels. It provides ready definitions, measures, and a diverse basis for thinking about marketing communications. The idea of measuring the information content of stimuli, though chiefly relevant, is not yet tractable, and the application of this part advertising messages theory to practical marketing situations remains unclear.

A special attention is paid to such concept as the promotion of “responsible drinking”. Following National Institute on Alcohol Abuse and Alcoholism, the author claims that marketing mixes should be designed to switch customers to their own brands. Thus, executives are concerned with brand switching–they wish to increase the switch-in rate and decrease the switch-out rate. It adopts the broad decision-theory format in which the advertiser is involved in a game against consumers. Having chosen a marketing strategy and committed advertising messages, the company waits for nature to reveal its hand and the respective profits or losses. Much attention is directed to the selection of the reasonable or best plan under conditions of risk. Use is made of reasoning by applying payoff matrices and choice trees to arrive at marketing decisions.

The purpose of this sort of public health education effort is to change our thinking about health behavior problems as being solely the responsibility of individuals and to highlight the role of those who shape the environment in which individual decisions about health-related behaviors are made (Ringold 2008, p. 129).

Formal brand advertising channels do not account for all marketing communications. Publicity, which is an integral part of many promotional campaigns and sometimes precedes the brand advertising and sales effort, lies outside them. Although it can be important in gaining market acceptance for alcohol beverages and companies, publicity, like word of mouth, is often a relatively low-grade advertising channel with a high degree of interference, distortion, and noise. Promotion of alcohol beverages serve four basic management purposes. First, they bridge information gaps existing among manufacturers, stores, and customers. Second, they help organize the promotional activities of the total marketing system to achieve a synchronized thrust. Third, they help correct the system to customer and consumer needs. Fourth, they alter and help in adjusting the alcohol beverages to customer demands.

The advantage of the article is that it analyzes effects of alcohol consumption and its threats for an average consumer. In any population survey or epidemiological study, the complex nature of drinking behavior also gives rise to problems of measurement. Respondents differ in the types of beverage they drink, the amounts of each beverage they drink on occasions of drinking, and their frequency of drinking. Within personal considerations raise further complications. The same consumer drinking the same beverage on different occasions may drink different amounts, while in consecutive weeks an individual may undertake different numbers of drinking occasions which may involve the use of different beverages. When assessing the various methods in use to measure alcohol consumption, it is important to bear in mind that in epidemiological research the most important aspect is the classification of consumers by individual levels of consumption. Similar ideas are expressed by Quigley and Collins cited in the article. These researchers state that education of consumers is crucial in order to examine the relationship between individual experience of disease and consumption, and, in the population, is essential to calculation of possible risks. A subcategory of cardiovascular mortality which has been linked with alcohol consumption is hypertensive disease. The author concluded that the long-term effects of restriction of alcohol intake as a public health measure to reduce levels of hypertension required further investigation by means of long-term controlled trials, particularly among moderate consumers. It is clear from experimental work that there is a fundamental effect of alcohol on blood pressure among patients with normal blood pressure and that on restriction of alcohol intake blood pressure rapidly returns to normal.

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Ringold find that the nature of brand advertising tasks is indicated by the decisions that must be made: the amount of money to be spent on brand advertising, the allocation of the budget among channels of media, the specific mass media to be selected within each class, the incidence and continuity of ads, the makeup of the specific messages to be presented, and the kinds and amount of brand advertising research. These are difficult decisions to make. For instance, marketing team is faced with the decision of whether to advertise in markets where sales are high or low. Absolute decision guides are lacking, but fragmentary information may exist. Agostinelli and Grube (2002) agree that for alcohol products sales increased significantly more in those areas where sales volume is already highest. Short-run advertising impact may be greatest when directed to marketplace segments where consumption is already high: the alcohol beverages already have acceptance, and social and institutional barriers have been hurdled. Likewise, the expansion of sales in low-consumption areas may require a longer-run point of view of alcohol and its impact on society.

The role of brand advertising in the marketing mix varies with the alcohol and its stage of development. Brand advertising changes time horizons for the acceptance of alcohol beverages and facilitates the introduction of new alcohol beverages. The author explains that alcohol beverages may be a fundamental, functional, or strategic innovation. Fundamental and functional innovations require basic changes in consumer habits, which are difficult to achieve and require heavy brand advertising. Strategic and tactical changes in the market do not demand great change in consumer habits, a fact that may shift the focus of the brand advertising job. During periods of increasing markets, volume, price, and marketing channels are important factors and mass brand advertising supports them. As markets of alcohol beverages mature, brand advertising becomes a competitive weapon. Now minor alcohol adjustments are stressed to persuade consumers who know the product to select it over competitors’ products, and to endeavor to increase consumption of alcohol.

The main weakness is lack of statistical data and samples of current alcohol consumption rates and alcohol brands. The author simply underlines that brand advertising does support the actual distribution of alcohol beverages, and can be used to push or pull alcohol through distribution channels. By creating demand at the ultimate consumer level, brand advertising can influence retailer and wholesaler decisions to carry alcohol beverages — this pulls the alcohol through the channels. Conversely, by aggressive promotion, by the development of dealer and retailer campaigns, by providing brand advertising allowances, and by preparing merchandising programs, brand advertising can also push alcohol through the channels of distribution to final consumers. Brand advertising also helps create and maintain marketing systems. It can foster harmonization and linkages of manufacturers, wholesalers, and retailers. For the marketing task is not complete with the sale of the alcohol; satisfied customers must be retained. Reaffirmation of consumer choice, an activity, is important. Sustained brand advertising after a purchase gives the customer public acknowledgment of his wise choice, and tends to eliminate or reduce cognitive dissonance. The customer is reassured and resold. Repeat business is the avenue to continued success, and brand advertising often the course to repeat business. “Industry-sponsored responsible drinking campaigns have been the object of three basic criticisms. First, the major brewers have been accused of using “vague slogans and other brand advertising strategies that fail to define ‘moderate’ drinking” (Ringold 2008, p. 129).

Social learning theory of drinking helps Ringold to explain the impact on brand advertising on consumption patterns. Thus, marketing management is confronted with making a significant decision about how much to spend on brand advertising. There are several problems in determining an brand advertising appropriation: the cause-and-effect relationship between brand advertising and sales is complex; brand advertising is diverse; the appropriate balance between creativity and systematic data is not easily attained; and the relative importance of brand advertising, price, alcohol, channel, and other promotional changes is hard to assess. If the sales or profit generated by brand advertising could be foreseen clearly, the problem of determining how much cash should be allocated to brand advertising would vanish. Although parallel cost-value estimations can often be made for physical production, they cannot be made for brand advertising. Yet the problem is not one to be attacked by uniformed guesswork or without logic. “Recall that media advocacy is defined as the strategic use of mass media for advancing social or public policy initiatives” (Ringold 2008, p. 137). The principles of spending brand advertising dollars in total, or for a campaign, can be stated in economic terms: management must take a marginal approach. Ignoring the allocation of resources among the creative aspects of brand advertising such as copy, layout, and theme, and the sticky problems of forming media schedules and evaluating rate cards, circulation, number of potential readers, listeners, and viewers, we shall concentrate on the problems of establishing brand advertising appropriations. Despite progress in the use of quantitative methods, the best possible appropriation cannot be determined. At best, administration can adopt a logical approach to the matter of appropriation, discover alternatives, raise questions, and try to assess outcomes. Although no best methods are available, several qualitative guides exist for management. Both the alcohol beverages and the status of the market impose strong constraints on brand advertising appropriations and tasks. Budget requirements differ for innovations and mature, established alcohol beverages, and declining markets present still different challenges to keep them stimulated and maintained.

The advantage of the article is that it gives recommendations for further research and suggestions for alcohol marketers. “The extent to which industry-sponsored moderation campaigns introduce “prodrinking themes and images that are typical of the companies’ standard beer commercials” is an empirical question best addressed through formal, comprehensive content analyses of both brand and responsibility brand advertising” (Ringold 2008, p. 136). Conceptually, the decision of the relative amounts to be spent on each is simple. Advertising theory furnishes the marginal approach. But this optimal amount is impossible to determine because we cannot get such data, and also because it assumes an adequate promotional budget. Even if market information are not available, it behooves management to think of the total promotional task and match resources with market potential. For example, with a relatively small budget many alternatives are not feasible. Once a total budget is set, management should think in terms of the possible impact of different combinations: the extremes of spending the total financial plan on brand advertising or on personal selling, and the results expected from different combinations of each. It is impossible to get precise data, administration estimates can be made. Brand advertising affects both costs and revenues; used effectively, it can increase sales and profits. As a principal means of illuminating the attributes that differentiate alcohol, brand advertising is a competitive weapon that can secure a market niche and assure some stability in the marketplace by shaping demand curves, making them more inelastic, and extending alcohol markets.

In sum, Ringold clearly and carefully describes and analyzes the impact of alcohol advertising on consumption patterns and comes to conclusion that it has a negative impact on the population. Such techniques as industry-sponsored responsibility and education of consumers should be a part of every advertising campaign. The main causes of ineffective consumer education about alcohol are vagueness of objectives and goals; misconceptions and conflicting ideas of the function of brand advertising among all those who influence brand advertising decisions; lack of planning; insufficient emphasis on tactics and day-to-day activities; and failure to use available research aims. A lack of agreement often exists within a company as to what brand advertising is designed to do. Is it aimed at immediate sales impact, the introduction of a new alcohol product, the development of a general image, or the promotion of a new brand name? All of these are rightful brand advertising tasks, each of which demands a different solution.

It is relevant to distinguish the task of developing market position from that of humanizing and developing new markets. Alcohol manufactures must understand their brand advertising tasks unambiguously before effective programs are launched. Both brand advertising and selling provide communications with mass consumers. But brand advertising and promotion furnishes a one-way channel, and selling can be two way. Brand advertising is set, standardized, less adaptable, and impersonal. so, education of consumers and awareness of alcohol threat should be the main priority of marketers.

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Bibliography

Agostinelli, Gina, and Joel W. Grube. 2002, “Alcohol Counter-Brand advertising and the Media: A Review of Recent Research,” AlcoholResearch and Health, 26 (1), 15-21.

Ringold, Debra Jones. 2008, ‘Responsibility and brand brand advertising in the alcoholic beverage market’, Journal of Brand advertising, Vol. 37, Issue 1, pp. 127-141.

Quigley, Brian M., and R. Lorraine Collins. 1999, “The Modeling of Alcohol Consumption: A Meta-Analytic Review,” Journal of Studies on Alcohol, 60 (1), 90-98.

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