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Consumer Awareness

Consumer Awareness

Consumer awareness is the extent to which a brand is recognized by potential customers, and is correctly associated with a particular product.

LEARNING OBJECTIVES

Discuss the impact on consumer awareness as it relates to brand awareness and a company’s profitability

KEY TAKEAWAYS

Key Points

  • Brand recall and consumer recognition are the two components comprising brand awareness.
  • Brand awareness is an essential part of brand development, helping the brand stand out from competitors.
  • Since brand awareness plays a major role in consumer buying decisions, brand awareness influences company sales and profits.

Key Terms

  • brand extension: also known as brand stretching, brand extension is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category
  • Market Share: The percentage of some market held by a company.

Consumer Awareness

Brand awareness is the extent to which a brand is recognized by potential customers, and is correctly associated with a particular product. Expressed usually as a percentage of target market, brand awareness is the primary goal of advertising in the early months or years of a product’s introduction. Product awareness can consist of consumer knowledge of brand benefits, features, slogan, tag lines and other brand messaging elements.

A billboard advertisement for Apple's iPad

iPad Billboard: Apple’s marketing strategy around the iPad is a brilliant example of high brand recognition and anticipation of a new product.

The Foundation of Brand Awareness

Two components comprise brand awareness: brand recall and the consumer recognition of the brand. Brand recall is the ability of consumers to remember brands with reference to the product. Similarly, brand recognition is the potential of consumers to retrieve past knowledge of the brand when asked or shown an image of the brand logo. Brand awareness is an essential part of brand development, helping brands stand out from competitors. An organization that is highly successful in creating strong brand awareness within the consumer market is often referred to as a “household name. ”

Impact of Brand Awareness

The eventual goal of most businesses is to generate profits and increase sales. Brand awareness plays a major role in a consumer’s buying decision process, and is essential to helping companies build market share. Word-of-mouth marketing from family and friends, or high recognition of the product through repeated advertising, can drive consumers to purchase certain brands over others. Consequently, integrated marketing communications strategies are instrumental in helping companies expand their customer base and encourage repeat purchases.

High brand awareness about a product suggests that the brand is easily recognizable and accepted by the market in ways that differentiate the brand from similar products and other competitors. Effective marketing campaigns that increase brand awareness also eliminate confusion between similar brands, as well as inconsistencies that may arise in brand extensions under single brands.

Social Responsibility and Welfare of Customers

Adopting socially responsible practices that benefit customers and society is fast becoming a competitive advantage in global business.

LEARNING OBJECTIVES

Apply the premise of social responsibility and customer welfare from a company’s marketing perspective

KEY TAKEAWAYS

Key Points

  • Despite accusations of greenwashing and self-regulatory maneuvering, large and well-known companies have built social and environmental programs into their overall business agendas.
  • Brands that adopt CSR or social responsibility ideologies either focus on improving the welfare of customers and communities, and or producing products and services that directly benefit society.
  • Consumer protection laws helped bring about the adoption of ethical policies that drive socially responsible behavior in corporations.

Key Terms

  • greenwashing: A form of spin in which green public relations or green marketing is deceptively used to promote the perception that an organization’s aims and policies are environmentally friendly.

Social Responsibility & Welfare of Customers

Critics argue that corporate social responsibility (CSR) distracts from the fundamental economic role of businesses. While brands are incorporating social responsibility efforts into their marketing communication strategies, media and industry critics have accused companies of greenwashing human rights and environmental issues. Others argue that social responsibility efforts are an attempt to impose self-regulations and preempt the role of governments as a watchdog over powerful corporations.

Protestors in a street hold up a sign that says "Stop the Greenwashing."

Greenwashing: Critics of social responsibility often accuse corporate brands of “greenwashing.”

Despite these accusations, mega brands such as Walmart and Coca-Cola have built social and environmental programs into their overall business agendas. Recent scientific data pointing to climate change and dwindling natural resources, as well as concerns over human rights, have promoted companies to recognize its societal role and act to benefit society at large. It has also been a marketing exercise for business-to-business and consumer companies, as they strive to educate stakeholders on their social responsibility efforts and initiatives. Social responsibility has thus become part of the latest management strategies where companies try to create a positive impact on society, while strengthening their brand image and doing good business.

Social Responsibility

For example, a large information technology (IT) firm can produce IT products that enable instructors in the United States to teach online courses to students residing in poor and developing countries. Developing energy-efficient products made with non-toxic and recyclable materials is another way that brands can generate profit while considering the welfare of society and the environment. In other words, social responsibility drives organizations to discover and satisfy the needs of customers in ways that also provide for society’s well-being.

Customer Health and Safety

Ensuring that industrial factories and production sites create safe and reliable products is integral to the trustworthiness and ultimate survival of a brand. Since the beginning of the 20th century, there has been a concerted effort in the United States to implement consumer protection laws related to food, drugs, and cosmetics. The emergence of consumerism during the 1960s intended to increase consumer influence, power, and rights in dealing with corporate institutions.

Today, many of the ethical issues arising from consumer health and safety concerns have led to practices that prevent or reduce the frequency of unethical behavior in companies. Organizations are expected to have a “code of conduct” or set of ethical policies that help guide employees, partners and suppliers in safe, legal, and fair business practices. Though organizations establish corporate ethics policies to facilitate the process of recovery in the case of an ethical scandal, it also serves to promote ethical standards throughout the organization. Marketing organizations communicate these values by developing campaigns and programs designed to influence behavior that improves both the consumer’s personal welfare and that of society. From providing free leaflets offering “green” tips, to advice on how to safely dispose of electronics, social marketing is fast becoming a competitive advantage in global business.