Consumers - in a state of sensory overload

List of contents

1. Prologue

2. Introduction

3. Main Part
3.1. Market Conditions
3.1.1. Market Saturation
3.1.2. Same Quality and Like Brands
3.1.3. Growing Brand Development
3.2. Change in the Media and Communication Markets
3.2.1. Growing Advertising Volumes
3.2.2. Increasing Number of Media Offers
3.2.3. Newly Deployed Communication Offers
3.3. Consumers
3.3.1. Overload for Society as a Whole
3.3.2. Research into Advertising Effectivity
3.4. Communication Competition
3.4.1. The Changed Future of the Media
3.4.1.1. Alternative Media on the Advance
3.4.1.2. Basic Strategy: Classical Media
3.4.1.3. Change in the Population Structure

4. Conclusion

5. List of Literature – Books

6. Internet Sources used

1. Prologue

“The origins of media advertising are directly linked to the beginnings of the production of goods which no longer served only to cover the consumer’s own needs.”^[1] Documented history shows that as early as the times of ancient Babylon merchants used boards to list the goods available in order to offer their products to visitors to the market. In those times criers were also employed to advertise produce for others. (Der nächste Satz macht im Englischen wenig Sinn, weil „Criers“ das Wort ist und bereits benutzt wurde). These two media could be presented as the first advertising media ever used or as the communication instruments of “personal communication”.

In past centuries our society has gone through technological, ecological, political and legal changes. Within this development process, for example during the industrialisation era, a very varied range of products and services was created. The invention of movable type printing (by Johannes Gutenberg around 1440) subsequently led to the removal of all restrictions on mass communication, product advertising and the rise of the use of media advertising.

The subject of my paper is „ Consumers - in a state of sensory overload “. The following sentence represents in my opinion the result of a fantastic social evolution, but also reflects the overload of information existing throughout society:

„It is only little known, that the Ten Commandments contain 279 words, the American Declaration of Independence 2,928 words and the EU directive on toffee sweets more than 28,000 words“.

2. Introduction

A review of the German market economy over the past 60 years shows a „transition from product competition to communication competition“^[2]. I should like to consider this development briefly as we approach our subject.

After World War II, German businesses were operating in a sellers’ market. Demand was higher than the supply and, in most cases, the products were sold without any problem. Once produced, the products sold almost “on their own” and, as a result, the companies devoted their interest solely to technical progress. At this point in time market requirements were not of any great relevance.

During the course of the 1960ies the market developed into a buyer’s market. The companies’ concern was to get their products to the buyers effectively. To support distribution, travelling sales staff were employed with the aim of achieving maximum product sales. During this sales oriented phase, the use of such communication instruments as advertising media, sales promotions and personal selling was particularly popular.

When the markets became very dynamic in the 1970ies, companies were forced to aim their activities directly at their customers. Marketing focused on accentuating features in comparison with the competition and concentrated on evaluating customer requirements. This led to the use of marketing instruments becoming increasingly specific to the target group. The process was constantly accompanied by market research and analysis.

In the 1980ies integrated marketing was marked by the expansion of strategic competitive advantages, always with an eye to future market developments. Putting across the USP (Unique Selling Proposition), a genuine advantage for the customer based on factual information, became of prime importance in advertising. This development was intensified by the arrival of new communication instruments such as Direct Marketing, Sponsoring and Event Marketing^[3] , giving rise for the first time to a so-called “inter-instrumental competition” .

The USP was developed in the course of the 1990ies to a holistic concept of the UCP (Unique Communication Proposition) or the UAP (Unique Advertising Proposition^[4] ), in which the psychological, emotional brand difference was of foremost importance. The UCP is one determining factor for market success and secures survival in the communication competition. Both in the midst of permanently changing values and in building up their own strategic communication advantage, the companies always tried to portray a „credible and non-contradictory image“ over and beyond the brand itself.

Since 2000 we have been in a phase of dialogue communication. All activities centre on differentiation from the competition and long-term bonding with the customer who may tend to be disloyal, but is still quality conscious. The company now has new interactive media at its disposal – Internet, E-Mail, Call Centre – which also increase the pressure on the media and communication market:

„A vast number of communication possibilities and combinations have come into being because everybody has only one objective: to achieve a sustainable effect efficiently and to contact customers in an innovative way (Tomczak et al,. 1995).“^[5]

3. Main Part

The word “Atomisation” comes from the Greek átomon, which can be translated as „indivisible“ or „smallest part“. Atomisation is the splitting of a whole into separate, individual parts. In connection with the media, this means the splitting up of the intramedia offers between the individual communication instruments. This results in the development of a considerable number of media^[6]:

illustration not visible in this excerpt

3.1. Market Conditions

In the following I should like to describe the present situation on the German industrial, media and communication markets and in so doing, also describe the structural changes on both the supply side - the companies doing the advertising - and the demand-oriented recipients^[7] or consumers.

3.1.1. Market Saturation

When viewing the present markets, it is fair to say that the discerning consumers of today have a multitude of very varied products and services available, so that all their individual requirements can be satisfied. This positive development and improvement in the standard of living and prosperity in our society is undoubtedly to be attributed to companies driven by the monetary background and ever on the lookout for top quality technical results, but “not least due to measures of consumer politics“^[8]. It is for this reason that, for over a decade, 75 % of all sectors of industry have been reporting stagnating markets.^[9] There is destructive competition^[10] between the suppliers as market potential is largely exhausted and market shares can only be won at the competitors’ expense.

3.1.2. Same Quality and Like Brands

The market just described is characterised by competing products. The differences in quality still existing are only very marginal. The products are fully matured and the criteria used by consumers in their decisions to buy are no longer based on functional product information. Information on quality is more of a back-up character. The consumers assume it to be there on the basis of modern standards. Such slight differences in quality mean that the products are increasingly interchangeable. This is supported by the tests carried out by Stiftung Warentest in which “85 % of all test products are given the mark “good” straight away”.^[11] Thus such rational advertising causes the consumer to lose interest and information on quality of this kind are seen as weak arguments for brand preference. As the advertiser, one should ask oneself a simple question: Why should the consumer decide on one brand if he can get a comparable product at a lower price?

„Ten out of ten tested colour detergents received the Stiftung Warentest mark “good” regardless of whether they were a brand detergent or a dealer’s brand. The prices for the individual detergents ranged from 2.50 Euro to 5.70 Euro. In a test of microwave ovens a product from Quelle for 80 Euro received a better mark than one from Siemens for 208 Euro”^[12]

[...]

^[1] Bruhn, Manfred, “Unternehmens- und Marketingkommunikation“, Munich 2005, Page 219

^[2] Bruhn, Manfred, “Unternehmens- und Marketingkommunikation“, Munich 2005, Page 71

^[3] Compare Bruhn, Manfred, “Unternehmens- und Marketingkommunikation”, Munich 2005, Page 72

^[4] Compare Töpfer, A., “Positionierung auf deutschen Märkten”, Hamburg 1986, Page 266

^[5] Gaiser, Brigitte, “Praxisorientierte Markeführung”, 1st Edition, Wiesbaden 2005, Page 331

^[6] ZAW – Werbung in Deutschland 2006, Page 218

^[7] In Communication Sciences the recipient is the person receiving in a communication process (e.g. reader, listener, audience). The counterpart is the sender (e.g. speaker, author), who is called the communicator. Therefore the recipient is the person who wants to get or is to be given information. He already has an active role to play, as he is already „receptive“, in the state prior to „receptiveness“ one speaks of a percipient. The roles of communicator and recipient can change during the course of a communication process.

^[8] Kroeber-Riel/Esch, “Strategie und Technik der Werbung”, 6th Edition, Stuttgart 2004, Page 24

^[9] Harrigan, K. R. , “Unternehmensstrategien für reife und rückläufige Märkte”, Frankfurt/Main 1989, Page 23/28

^[10] Compare Meffert, H., “Strategische Planungskonzepte in stagnierenden und gesättigten Märkten” 1983

^[11] Michael, B. M., “Herstellermarken und Handelsmarken… wer setz sich durch?” Düsseldorf 1994

^[12] Esch, F. R., “Strategie und Technik der Markenführung“, 3rd Edition, Munich 2005, Page 33