Risk assessment of challenge marketing and techniques of mitigation

Abstract

Modern day advertisement is characterized by innovative ways of communicating the message to the target consumers. Advertisement has evolved to be the most potent tool for marketing strategy. One of the recent trends in this area in India is “Challenge or Claim Based Advertisement”. Major players ranging from FMCG giant HUL to Automotive big players Audi to Retail giant Future group have indulged in similar strategies in the recent past. The first thing that comes to consumers’ mind when such a campaign is directed at them is the validity of the claim. Simply because of the fact that the main purpose of these kind of advertisements is to create an immediate impact or unsettle the consumer’s preference or faith in the competitor’s brand. This paper aims to look at this new marketing trend from a holistic view point; more so from the impact perspective. The key theme of the article is to assess the risk associated with these kinds of advertisements and come up with certain recommendations which can minimize the risk both from consumer’s angle as well as the advertiser’s point of view. In order to arrive at these recommendations various aspects have been looked into. First of all, a detailed study on the nature of such advertisements along with the rationale behind adopting such a strategy has been done. The strategy has also been criticised from a marketer’s point of view. The risk associated with this genre of advertisements essentially depends on the regulatory environment. In the subsequent section the paper looks at that structure in this domain. In order to assess the associated risk, a thorough study on so called “banned advertisements” (or flagged as inappropriate for consumers’ or industry interest) has been conducted. Thus multiple avenues on which an advertisement can land in trouble have been identified. Live examples have been taken to highlight the real life problems that consumers face through misleading advertisements. The effectiveness and efficiencies with which the institutional mechanisms, laws and regulations deal the redressal of issues are also highlighted. In the concluding section all the preceding sections have been used as a building block and subsequently recommendations have been made ranging from structural changes in the organization to ensuring due diligence to policy related issues. The essence is that combination of these recommendations would minimize the risk on both sides of the spectrum i.e. consumer as well as advertiser.