Table of Contents
Definition ............................................................................................................................................................. 1
Gronroos (1995) on the strategy continuum:....................................................................................... 1
Relationships – Berry ...................................................................................................................................... 2
The concept of customer intimacy ............................................................................................................ 2
Payne (2000) Loyalty ladder: ...................................................................................................................... 2
Customer Experience ...................................................................................................................................... 6
Marketing practices and strategy – with CRM ...................................................................................... 7
Customer trends are changing - demographics ................................................................................ 11
Cultural .............................................................................................................................................................. 11
Evaluation .......................................................................................................... 12
Terrorists and the internet – social changes ...................................................................................... 12
Customers as hostages ................................................................................................................................ 12
Use marketing tools wisely........................................................................................................................ 12
Strategy pitfalls............................................................................................................................................... 13
Evaluation on Payne’s ladder: .................................................................................................................. 13
Customer Managed Interaction ............................................................................................................... 13
CSM – Robert B. Woodruff (1997) .......................................................................................................... 13
Economics – consumers are becoming less confidence to buy .................................................. 14
General criticism ............................................................................................................................................ 14
Definition
Establish, maintain, enhance and commercialise customer relationships so
that the objectives of parties are met
Mutual relationships of marketing and fulfilment of promises - Gronroos
(1990)
Consumers are no longer only focused on the functional attributes of
new products, but on other aspects of value
Gronroos (1995) on the strategy continuum:
Service firms have always been relationship oriented
As the firm grows larger the customers are becoming into statistics
The notion of the need to market services internally to the personnel first
(Eigler and Langeard, 1976) – People in Apple, Gap’s CMO Tamsin Smith
Some people cannot establish relationships (Barnes, 1994)
A relationship marketing strategy is well applicable in service businesses,
whereas a transaction marketing strategy often fits the marketing situation of a
consumer good company.
Relationships – Berry
Developing a core service around which to build a customer relationship
Customizing the relationship to the individual customer
Augmenting the core service with extra benefits
Pricing services to encourage customer loyalty
Embed marketing in employees
The concept of customer intimacy
The idea that companies succeed by selling value is not new. What is new is how
customers define value in many markets. In the past, customers judged the value
of a product or service on the basis of some combination of quality and price.
Today’s customers, by contrast, have an expanded concept of value that includes
convenience of purchase, after-sale service, dependability, and so on. One might
assume, then, that to compete today, companies would have to meet all these
different customer expectations. This, however, is not the case.
Companies that have taken leadership positions in their industries in the last
decade typically have done so by narrowing their business focus, not broadening
it. They have focused on delivering superior customer value in line with one of
three value disciplines—operational excellence, customer intimacy, or product
leadership. They have become champions in one of these disciplines while
meeting industry standards in the other two. (For a discussion of companies that
excel at more than one discipline, see the insert “Masters of Two.”)
Customer intimacy, the second value discipline, means segmenting and targeting
markets precisely and then tailoring offerings to match exactly the demands of
those niches. Companies that excel in customer intimacy combine detailed
customer knowledge with operational flexibility so they can respond quickly to
almost any need, from customizing a product to fulfilling special requests. As a
consequence, these companies engender tremendous customer loyalty. Home
Depot, for example, is better than any other company in its market at getting the
customer precisely the product or information he or she wants – by Michael
Treacy and Fred Wiersema, HBR, 1993
RELATE THIS WITH THE CRM
Payne (2000) Loyalty ladder:
Partner:
We were marrying these companies – dating wouldn’t work – Shriver, cofounder
Partners changed the ways the worked to accommodate product RED – the
product red had to be communicated differently from other products because it
had to feel red, be red, capture the brand assets – Shila Roche, Head of
Communication Department
Armani - Metal wrap-around sunglasses (style EA 9285/S) launched worldwide.
Available in green, rose, blue, smoke grey, grey and brown, all embossed with the
Emporio Armani Red logo. The forked frame arms, available in shades of
ruthenium, gunmetal and light gold, are superimposed on the single lenses.
Also Product Red Fragrance
Gap - INSPI(RED)"Gap T-shirt: Made in Africa from 100 percent African cotton,
the T-shirt debuted in the UK in spring 2006. We've sourced product from Africa
for more than a decade
Clothing Line
Kids clothing line
Converse
Motorola
Dell
Microsoft – You get what you want people get what they need
American Express
Hallmark – Greeting cards, note books
Apple - Gift card for purchases at Apple's iTunes online store, for movies, TV
shows or music. Currently only available in the US at Apple's online store.
Also iPod nano and shuffle red
Motorola:
http://direct.motorola.com
/hellomoto/red/
Red Motorola SLVR L7 launches in the UK
Sprint PCS launches the Red Motorola RAZR in the United States
“Don’t just make a call, make a statement”
Dell & Microsoft:
(Product) Red is available with the XPS One (80 dollar
donation), XPS 1330 (50 dollar donation), XPS 1530 (50 dollar
donation), and the AIO 948 (5 dollar donation)
XPS One, XPS 1330, XPS 1530, and AIO 948 Printer (Product) Red
Special Edition; All computers include Windows Vista Ultimate
(RED)[17]
“MAKE A DIFFERENCE
Every day we use our computers to connect and collaborate with
others.
And now you can use them to help change a life.
Dell is a proud partner with (PRODUCT) REDTM . When you
purchase
Dell (PRODUCT) REDTM signature products part of the proceeds
will
go to the Global Fund to help eliminate AIDS in Africa.
It's that easy, and it's no extra cost to you.
You have the opportunity to join in the fight against AIDS.
Buy Dell. Join (RED)TM . Save Lives.”
Windows and Dell have joined (RED) to help eliminate AIDS in
Africa. When you buy a Dell (PRODUCT) RED PC with Windows
Vista Ultimate (PRODUCT) RED, Windows and Dell will jointly
contribute $50 or $80, depending on the product, to The Global
Fund. With Windows Vista Ultimate (PRODUCT) RED, these aren’t
just the ultimate PCs, they’re a powerful way to improve
lives.
YOU GET WHAT YOU WANT.
PEOPLE GET
WHAT THEY NEED.
Microsoft:
Every day, hundreds of millions of people use Windows to bring
their passions to life. Changing the world inspires all of us
who work on Windows, and it’s at the core of our mission to
help people do amazing things using the power of software. And
when people do amazing things, they can change the world.
(PRODUCT) RED is an innovative and sustainable way businesses
and consumers can work together to change the world. Working
with (RED), companies create special versions of their
products with the (PRODUCT) RED brand. When you buy (PRODUCT)
RED, a portion of the profits goes directly to The Global Fund
to help eliminate AIDS in Africa. There’s no extra cost to
you.
(RED) reflects our values and is a perfect fit with our belief
in the power and potential of the individual. Windows is proud
to work with Dell and (RED) to help eliminate AIDS in Africa.
Now your choice of a PC can help change the world.
American Express created a red credit card:
American Express Red Card launched in the UK. Only UK
residents with UK bank accounts are eligible.
About RED
With American Express RED, you can help eliminate AIDS in
Africa, because with every purchase made on the Card, 1% is
contributed directly to the Global Fund.
Eliminating AIDS is not just a huge challenge, it's one that
will define this generation. It will require a level of
passion and altruism humanity has hitherto failed to reach.
But every challenge needs a big idea and we recognised (RED)'s
potential to transform lives and knew we could create an
extraordinary (PRODUCT) RED™ for people who want more from
their life, their Card and who want to make a lasting
contribution to those less fortunate than themselves.
That's why American Express was the first company to join
(RED). We believe that its power to change things
fundamentally for the better is real, and we're committed to
help make it happen.
With American Express RED it's easy to join the fight against
HIV/AIDS, because every time you shop we will give 1% of your
total spend to the Global Fund, to help fight AIDS in Africa.
What's more, it's a totally fee-free Card, so there's no
annual charge. All you need to do is apply for your Card today
and use it as often as you can.
1 REDmoney is not payable in respect of any quarter in which
the minimum payments are not received by the due date.
REDmoney is not payable in respect of Cash Withdrawals,
interest, fees, amounts subsequently re-credited to your
account due to refunds, or expenditure in any one month
exceeding the amount of your Credit Limit.
WHY WE'RE (RED)™
Why we're (RED)
AIDS kills an estimated 8,500 people every single day. Find
out why we just had to get involved in the (RED) movement
REDmoney
How it works and what treatments your money can provide
About (RED)
Bono and Bobby Shriver - why they started (RED) and what it's
all about
The Global Fund
The fantastic organisation that makes sure your REDmoney gets
to where it's needed most
Advocates:
Facebook RED page
My space
Celebrities: Oprah, McPherson, Charlie Sheen
YouTube
Customer and clients – ones that already buy from the particular firms,
depends on the firm and its loyalty audience
Prospects:
People that did not hear about product red – for example Cyprus, UK universities
– but have it at US universities, 6 campuses such as San Francisco State and
North Carolina universities
Terrorists:
African Network for Strategic Communication and Health and Development
– Not effective, distortional impact in relation to advertising
Buylesscrap.com – attack red’s marketing practices and
encourages readers to contribute directly to charity
Newspaspers, publications etc: Advertising Age, Social Innovation
Rewiew at Stanford
Philanthropyaction.com
National Labor Committee for worker and human workers
Sheth (2001) – Dissatisfied customers with no choice might
become terrorists
Customer Experience
Although few companies have zeroed in on customer experience, many have
been trying to measure customer satisfaction and have plenty of data as a result.
The problem is that measuring customer satisfaction does not tell anyone how to
achieve it. Customer satisfaction is essentially the culmination of a series of
customer experiences or, one could say, the net result of the good ones minus the
bad ones. It occurs when the gap between customers’ expectations and their
subsequent experiences has been closed. To understand how to achieve
satisfaction, a company must deconstruct it into its component experiences.
Because a great many customer experiences aren’t the direct consequence of the
brand’s messages or the company’s actual offerings, a company’s reexamination
of its initiatives and choices will not suffice. The customers themselves—that is,
the full range and unvarnished reality of their prior experiences, and then the
expectations, warm or harsh, those have conjured up—must be monitored and
probed.
Such attention to customers requires a closed-loop process in which every
function worries about delivering a good experience, and senior management
ensures that the offering keeps all those parochial conceptions in balance and
thus linked to the bottom line. This article will describe how to create such a
process, composed of three kinds of customer monitoring: past patterns, present
patterns, and potential patterns. (These patterns can also be referred to by the
frequency with which they are measured: persistent, periodic, and pulsed.) By
understanding the different purposes and different owners of these three
techniques—and how they work together (not contentiously)—a company can
turn pipe dreams of customer focus into a real business system - Christopher
Meyer and Andre Schwager, 2007
This failure to listen carefully to all customers, to empathize with
their needs and desires, results in reduced service levels,
streamlined product lines, and uniform product designs by Francis J. Gouillart and Frederick D. Sturdivant, 1994
We need to figure out how people can give something—even $1—
every day. That’s why convincing people to give a portion of
their utility bills to (RED) might be great.
“You bought a phone. Now what? You’re probably not going to
buy another phone for a few years. We need to figure out how
people can give something—even $1— every day. That’s why
convincing people to give a portion of their utility bills to
(RED) might be great. Similarly, coffee or water, soap or
toothpaste, even chewing gum might be great. People have to
buy these things anyway, so why not give them a chance to do
some good when they do?” – Brady
“Making that connection is a critical part of completing the
value circle,” she explained. “People want to know where the
money is going and we need to show them, not only to say thank
you but to encourage them to keep choosing (RED) over non (RED)
The team also considered how aggressively (RED) should try to
convince consumers who bought
one (RED) product to buy other kinds of (RED) products.
Shriver noted:
give them all an affinity card?
create a loyalty programand try to motivate them to buy
everything (RED)?
Do we havean online (RED) store to make shopping (RED) easier
or more exciting?
We need to be smart about choosing our partners because we
depend on them to create the
cool products that will keep our brand fresh and relevant to
consumers.
Continuance customer commitment is negatively related to switching intentions
– Gordon Fullerton (2004)
Marketing practices and strategy – with CRM
1) Metagroep (2000) defined CRM as ‘the automation of
horizontally integrated business processes involving front
office customer contact points (marketing, sales, service and
support) via multiple, interconnected delivery channels’
a. CRM positioned in the ‘IT corner’
b. Technology facilitates or makes customer contact possible
between employees from different departments via the Internet,
telephone and the ‘face-to-face’ channel
c. On the Internet, technology essentially replaces people,
and a human-machine interaction arises
2) CRM is ‘a process that addresses all aspects of identifying
customers, creating customer knowledge, building customer
relationships and shaping their perceptions of the
organisation and its products’
a. Still referred to as a process/ a sequence of activities
but IT is not necessary to do these activities
b. Above definition suggest that more attention is paid to the
customer
c. Would like to get to know the customer and develop a
relationship with him or her; not only interested in closing a
deal
d. Important that customer’s and supplier’s interest in one
another covers longer period of time than simply moment of the
transaction
i. More expensive to acquire a new customer than to keep one
3) Gartner group’s definition (2004) of CRM: ‘an IT enabled
business strategy, the outcomes of which optimise
profitability, revenue and customer satisfaction by organising
around customer segments, fostering customer-satisfying
behaviours and implementing customer-centric processes’
Online organizations
The important social and cultural insights that can be gained from studying these
communities are likely to be missed. Online ethnography is also called cyberethnography (Fox and Roberts 1999) and netography (Kozinets 1997, Kozinets
and Handelman 1998)
Corporate attempts to instigate customer communities tend to be motivated
more from a desire to provide easier company to customer 1-to-1 contact than to
facilitate consumer to consumer (many to many contact). Such communities
brought “death of distance” (Thomas 1999) – Muniz and O’ Guinn (2001)
highlight how a strong brand community can be a threat to a marketer in the
event of the community rejecting particular marketing activities or changes to a
product. One unsatisfied customer can become thousands in a nano second. –
Anti-brand communities (such in the case of Amway and “Boycott Nike” sites”.
Apple –
• Apple Ipod is aimed at young adults particularly those between the age of 12-25
• It will appeal to both males and females
• Targeted at the niche market creating product desirability
• Middle/high class
• People who have a passion or interest in music and/or literature
People who like to be on the cutting edge of something new and cool
Macs also sell to creative types - photographers, videographers, writers, musicians, artists

Age: 15 to 45 years old. This range covers a broad scope from teenagers and up to their
parents. Even grandparents own and download music to their iPod, but we believe
iPod’s target audience ends with the middle-aged.

Household Income: $25,000 to $80,000. The income level for iPod begins at a level that
allows consumers to afford the device, which can cost several hundred dollars. iPod’s
appeal is also strong through middle class and even upper middle class income levels.

Urban Dwellers. Although a great number of iPod owners do not live in urban centers,
the target audience clearly seems to be urbanites or those who view urban life positively.
iPod commercials and ads most often show images of people walking through cities or
using public transportation while utilizing their iPods.

Technology Users. iPod marketing is geared toward adopters of “cool” technology. This
psychographic includes consumers who like to own the newest, most advanced gadgets
– the “early adopters”. In addition, because of iPod’s attractive user-friendly interface,
even consumers who are lower level users of technology are included in the target
audience.
Gap
The Gap brand's main focus is casual attire targeted at consumers between the ages of 18 and 25.
Additionally, The Gap has stores utilizing the Gap brand which target narrower segments of the retail
apparel industry, including GapKids, babyGap, and gapbody.
Drexler declared Gap's target market to be 20- to 30-year-olds who crave fashion
Since 1969, customers have looked to Gap for updated, casual clothing and accessories that help
them express their own personal sense of style.
Their clothing is tailored to fit many different age ranges
Converse
Rock orientated youth cultures, junior high school girls, youth orientated 15- 25, fashionable, not
basketball orientated as much any more, sexy and streetwise, edgy and provocative, not to
mainstream, want to make a fashion statement, half the price of competing brands, It's retrofashion for people in their teens and in their 30s," target young, hip audience, They no longer
seem to be worn by their original target market of basketballers (at least not in the professional
sphere), but instead by the average boy or girl in the street, They are also quite popular amongst
musicians. Converse All Stars have been popular for decades in the American punk and indie rock
scenes, and Hollywood has popularized Chucks in countless motion pictures
Motorola
Originally Motorola produced very conservative, classically styled phones aimed at business
users. Later on, they switched to the new clamshell phone casing in an attempt to gain new users
and increase their market share. fashion phone market, The handset was bought by the fashion
conscious initially
"The Razr is coming down in price and broadening its target market, and the Motofone combines
usability and design at an affordable price," he said
Motorazr was a cool, stylish and thin phone so they easily attract the consumer especially the young
generation
Segmentation strategy on – age, income, lifestyle, occupation, attracting its target audience on price,
slim and stylish, fashionable and light weight, innovative technology.
Amex –
Traditional cards targets over 40, mostly men
gold and platinum cards – specific customer bases
Blue card - targeting single young 25-35, dine out often, like to drink and aspire to be hip,
lifestyles of those in ‘sex and the city and ‘friends’, very familiar with the internet (young
segment) and women
25- 40 years old, young educated with a salary of £15000 +, a high disposable income and enjoy
spending on luxuries, tendency to be upwardly mobile, confident, nnotive and trendy, have busy
lives, work to live, rather than live to work.
Armani
The signature Giorgio Armani line: This is the main collection of apparel that consists of the
signature Armani suits, Oscar gowns and so on, which are of the ultra-premium price points and
essentially targeting consumers in the 35-50 year old age group.
Armani Collezioni: This is Armani's venture into a slightly lower market segment. This basically
caters to the segment of people who aspire to wear Armani apparel but cannot afford the
ultimate signature line, or to those who crave to add extra products to their existing portfolios.
The Armani Collezioni brand, with a price point of almost 20% lower than the main line, provides
an excellent line of affordable fashion.
Emporio Armani: Targeted especially at the young professional segment in the 25-35 year old
age group, the Emporio Armani brand provides contemporary designs that are relevant to the
target customers.
Armani Jeans: This is the lowest range of Armani apparel. This is to the value segment what the
signature line is to the premium segment. Catering necessarily to the young adults in the 18 to 30
year old age group, the Armani Jeans collection provides a trendy yet fashionable and luxurious
line of apparel.
A/X Armani Exchange: This is the licensed brand of chain of retail outlets of Armani fashion
house. This serves as the ultimate testimony to the power of the brand. By providing the entire
range of its apparels and accessories, Armani Exchange provides customers with the complete
feel of the luxurious fashion of Giorgio Armani
(In early 2008, the team began targeting a select group of
“influencer brands” to extend the (RED)brand into new
demographics
Since the launch, some partner companies had also linked their
brands not only to (RED) but to each other. Gap stores became
a point of sale for Converse sneakers and soccer superstar
David Beckham wore a Gap (RED) shirt in a commercial for the
Motorola (RED) RAZR
Two new partnerships were formed
1) Hallmark in the late 2007
2) Dell and Microsoft - At the 2008 World Economic Forum in
Davos, Bill Gates and Michael Dell announced the launch of
(RED) Dell personal computers, installed with a (RED) version
of Windows Vista Ultimate, and Dell printers - Dell and
Microsoft made a combined contribution of $50 to $80 to the
Global Fund, depending on the type of computer purchased,
while purchase of a Dell (RED) printer generated a $5
contribution from Dell - Reached sports fans - LAUNCH AT
SUPERBOWL!
Customer trends are changing - demographics
Today graying college leaders on the verge of retirement continue
to carry the ideological torch, crusading for various causes in ways
that often irritate their younger Gen X colleagues. Meanwhile,
undergraduates are showing yet another generational personality:
The members of this rising Millennial Generation tend to be
upbeat, team-oriented, close to their parents, and confident about
their future. Unlike Boomers, they do not want to “teach the world
to sing.” Unlike Gen Xers, they don’t “just do it”—they plan ahead.
- by Neil Howe and William Strauss, 2007
Cultural
National cultural priorities reflect the basic issues and prob-lems that societies must
confront in order to regulate human activity (Schwartz 1994). The shared cultural
priorities in society help shape the social and economic reward contin-gencies to which
people must adapt in the institutions in which they spend most of their time (families,
schools, busi-nesses, and so forth) in order to function smoothly and ef-fectively (Smith
and Schwartz 1997). People belong to a particular national culture and are therefore
subject to the conflicts and compatibilities between their own value struc-ture and the
national cultural priorities. National cultural pri-orities will encourage the activation of
certain types of values and attitudes, that is, those that are in line with and conducive in
maintaining these national cultural priorities, whereas values and attitudes that run
counter to those cultural priorities are discouraged (Schwartz 1994; Triandis 1989). Thus,
as standards, national cultural priorities influence how individual values and attitudes are
evaluated and what kinds of expressions are encouraged or discouraged. These positive or
negative social reinforcement mechanisms, which operate between the two types of
constructs, give rise to interactions between national cultural- and individual-level
variables. Empirical evidence supporting such cross-level interactions is provided in
several studies. Smith and Schwartz (1997) report that national culture moderates the
magnitude of the effects of individuals' value priorities, and Lee and Green (1991) find
that the effects of personal and group-orienteda ttitudeso n purchasei ntentionsa re
moderat-ed by the degree of national cultural individualism in a country. We posit three
interactions between individual-level characteristicsa nd nationalc ulturald imensions.
There is a basic congruence between resultant conserva-tion and uncertaintya voidance.T
he higher a person is on re-sultant conservation, the more importance is attached to
values that motivate him or her to preserve stability and the status quo compared with
values that motivate him or her to follow his or her own ideas in unpredictable, uncertain,
and novel directions. This value dimension fits with national culturalu ncertaintya
voidance, that is, the degree to which a society feels uncomfortable with uncertainty and
ambiguity. A society characterized by high uncertainty avoidance sup-presses deviant
ideas and behavior, shows resistance to in-novation, encourages stability and
maintenance of the status quo among its members, and supports institutions that pro-tect
conformity (Hofstede 1991). Thus, high national cultur-al uncertainty avoidance
reinforces the effect of high individual-level resultant conservation. The converse is true
for societies low in uncertainty avoidance.
Evaluation
Terrorists and the internet – social changes
Seboyld et al (2001) – Customers taking over the internet and start
interacting and initiating all over the place, the consumers know what to
do with that knowledge
Customers as hostages
At the same time, we have to think about fatigue, too. If we
push this brand too hard, there’s a chance that consumers will
become tired of our message and we’ll lose our relevance and
our impact.
There is an interaction between affective ad continuance customer commitments
such that the positive relationship between affective customer commitment and
advocacy intentions becomes less positive at higher less of continuance
customer commitment – Fullerton (2004)
Use marketing tools wisely
Selecting Management Tools Wisely by Darrell Rigby and Barbara Bilodeau
Rudimentary implements—though they often generate buzz—are for a number of
reasons underdeveloped. Sometimes, developing them would be overly complex;
other times, the problems they’re meant to address are deemed not worth the
investment
Specialty tools fill niche needs and are highly effective when applied correctly.
When used in the wrong situations in the wrong ways, however, they can be like
crowbars in the hands of children. The team also considered how
aggressively (RED) should try to convince consumers who bought
one (RED) product to buy other kinds of (RED) products.
Shriver noted:
give them all an affinity card?
create a loyalty programand try to motivate them to buy
everything (RED)?
Do we havean online (RED) store to make shopping (RED) easier
or more exciting?
Blunt instruments attack pervasive problems in cumbersome ways. Often,
managers trying to meet a widespread need in their organizations see the
instrument as the best available (if imperfect) option
Power tools, which get high scores in both usage and satisfaction, can be applied
with rigor in a variety of settings. They’re used by many managers with success
and thus incur very little risk. Strategic planning has consistently been rated as a
power tool by nearly all managers in all industries and company sizes—even
when management gurus and journalists have declared it dead (witness business
thinker Tom Peters’s 1994 review of Henry Mintzberg’s book The Rise and Fall of
Strategic Planning) PRODUCT) RED (B)
Improved current practices --> In order to achieve better
results for existing partners and to allow strategic
recruitment and management of new ones, (RED) undertook more
intensive customer research to better understand different
consumer segments, to refine communications, and to prioritize
new target partners.
Strategy pitfalls
Gap took advantage of various channels of promotions including television, print,
outdoor and online. However, its advertising is sometimes unclear and
confusing. Also advertising is a non core business activity for Gap. Evaluating
the effectiveness of its advertising is a difficult job. It may be a good idea for Gap
to outsource it advertising operations.
Evaluation on Payne’s ladder:
Are the customers keeping relationships with product red or Armani?
Look into fashion trends
Look ways affects the social relations
Cultural relations
Trump consumers behavior
Value in use
Customer Managed Interaction
By Richard Watson (2004) - counter approach to CRM
CSM – Robert B. Woodruff (1997)
CSM – Customer Satisfaction Measurement
CSM has emerged to bring the ‘voice of the customer’ into
quality efforts. This has come about due to the fact that
nowadays managers have been implemented to consider their
customers when determining which improvements are needed. CSM
could be applied by the various businesses affiliated to
(PRODUCT) RED as well as (PRODUCT) RED themselves. It would
give them an evaluation on whether customers are satisfied
with the products offered. If RED can successfully undertake
CSM, it would give hem an in-depth analysis of the consumers
and enable them to more appropriately modify products to
satisfy consumers. If done correctly, the value derived from
the products would be higher for consumers and result in
greater satisfaction which in turn results in word of mouth
advertising between consumers. Moreover, this leads to greater
awareness regarding RED.
Thus, CSM can be an effective technique by the individual
affiliated firms to assess the RED products in addition to
benefiting brand awareness of RED itself.
Economics – consumers are becoming less confidence to buy
Index of consumers' attitudes rises in March but
remains near historic lows as unemployment rises –
CnnMoney
http://money.cnn.com/2009/03/31/news/economy/consumer_confidence/ind
ex.htm?postversion=2009033111
General criticism
Many accuse the campaign of profiting by using diseases as a marketing vehicle. ^
Philanthropyaction.com, News & Commentary: "The Global Fund Not Seeing Red", April 29,
2008
In the Stanford Social Innovation Review, Mark Rosenman wrote that it was an "example of
the corporate world aligning its operations with its central purpose of increasing
shareholder profit, except this time it is being cloaked in the patina of philanthropy."[9]
The National Labor Committee for Worker and Human Rights criticised Product Red for its
links with Gap,[10] which was historically a target of anti-sweatshop activists, although
anti-sweatshop organisation Labour Behind the Label states that Gap has "come further
than many"[11] clothing companies to counter exploitation.[12] Gap's Product Red clothes
are made in Lesotho rather than simply for the best price in China (this goes beyond the
requirements of Product Red). Labour Behind the Label criticises Product Red for not
requiring more measures to protect the rights of the workers who make their
products.[11]
Data released by Advertising Age claims retail participants in Product Red including Gap,
Motorola and Apple, Inc. have invested $100 million in advertising and raised only $18
million for The Global Fund[4]. Apple donated $10 of the sale of their $149 iPod during the
initial stages of the campaign, and no longer discloses how much it donates.[13] Product
Red states on their website that they donate "up to" half of their gross profits.[14]
One spoof campaign known as BUY (LESS) mocks the consumerist bent of (RED) with its
own call to "BUY (LESS) CRAP!"[15]. The BUY (LESS) campaign encourages people to forgo
the premium-level products and donate directly to excellent charities that deal directly
with critical humanitarian needs. The BUY (LESS) campaign boasts the slogan, "Shopping
is not a solution. Buy (Less). Give More." In place of consumerism, the BUY (LESS)
campaign site features a short list of recommended charities - including World Vision,
Global Fast, and Habitat for Humanity. The (LESS) campaign also holds out a critical letter
to (RED) CEO Bobby Shriver, posted online at http://buylesscrap.com.