As PepsiCo Beverages Canada considers the launch of a new product, organic Gator

Question

As PepsiCo Beverages Canada considers the launch of a new product, organic Gatorade, in the Canadian market, the company must analyze market trends, such as the move toward healthier foods and drinks, and the challenges consumers face regarding healthy eating. PepsiCo must also keep in mind its long-standing competition with the Coca-Cola Company, and how that affects its strategic choices.

6) Is it moral for marketers to nudge consumers? If it is not moral, what is the preferable alternative?

Answer it in 500 words atleast

Explanation / Answer

Nudging consumers is not a right thing to do for the marketers. Nudge marketing refers to deliberately manipulating how choices are presented to consumers. Its goal is to influence what consumers choose, either to steer them toward options that the marketer believes are good for them or simply to stimulate purchases and increase sales. Some nudges work because they inform people; other nudges work because they make certain choices easier; few nudges work because of the power of inertia and procrastination. But there are nudges that backfire too.

Basically there are two things that should qualify for the nudge.

When people make decisions, they do so against a background consisting of choice. But sometimes they get carried away by the way marketers try to manipulate their choices. Like for example, a women goes to supermarket to buy some grocery for the week. When she enters into the supermarket, plastic mats with huge arrows marked “Follow the green arrow for your health” pointing shoppers toward the produce aisle. Naturally, she is driven towards that aisle, and she starts purchasing something else than what she has intends to purchase. Instead of grocery she buys some organic stuff that is related to her health. This is nudging, where supermarket tried to change the choice / decision process of its consumers and it seemed to be successful.

Nudging is also used to increase the sales of the slow moving items. Let's take same example of the supermarket. Supermarket places plastic mats with huge arrows marked “Follow the green arrow for your health” pointing shoppers toward the produce aisle. Within two weeks, produce purchases increase by 9%. That is because, consumers choice is influenced by marketers decision to instigate people to buy the products.

Similarly, a company automatically enrolls new employees in its retirement savings plan unless they opt out. Enrollment in the plan rises from 60% to 95%. A restaurant lists a fish entrée at a clearly overpriced $35 on its menu. It is not interested in selling the entrée; the fish is there as a decoy to make other, more profitable items appear attractive. Hence, by over pricing fish entrèe, something that restaurant do not want to sell, it influences the consumer behavior of the people. Then people would buy something else which looks more attractive and profitable to them.

Hence, for marketers, nudging is a moral act. They nudge their consumers to influence their decision making and choices. Nudging is their way of telling the consumers that your choices do not matter now. It is we who give you choices and you need to choose one out of it.

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