Month: May 2020

Bank overdraft

Bank overdraft is a temporary arrangement with the bank that allows the organization to overdraw from its current deposit account with the bank up to a certain limit. The overdraft facility is granted against securities, such as promissory notes, goods in stock, or marketable securities. The rate of interest charged on overdraft and cash credit is comparatively much higher than the rate of interest on bank deposits.

Commercial Paper:

Commercial paper is a form of financing which consists of short-term promissory notes which are unsecured and are sold in the money market. They are issued by large companies and pri­marily sold to other business firms, insurance companies, pension funds, and banks. Because they are unsecured and are sold in the money market, they are restricted in use to the most credit-worthy of the large companies.

Though the commercial paper market has a long history, much of its tremendous growth has occurred in recent years with increases in the installment financing of automo­biles and other consumer durable goods.

As credit tightens in terms of the banks’ ability to make loans, the commercial paper market increases. Many of the companies that issue these notes now look at this market as an alternative source of financing.

The Commercial Paper Market:

The commercial paper market includes a dealer distribution system and a system of direct placement. Most industrial firms, utilities, and medium-size finance companies utilize the dealer market to place their commercial paper.

Five major dealers com­prise the market, which purchases the paper from firms and then sells it to investors. Denominations of commercial paper range from Rs.25,000 to several rupees, and maturity runs from about two to six months, with an average of five months.

The cost of this paper is from 0.5 to 1 per cent below the prime lending rate. Considering that there are no compensating balance require­ments, the rate differential is still more significant. The commis­sion on the sale of paper runs from 0.125 of 1 per cent. Many firms are looking at this source of financing more in terms of a perma­nent source than as the traditional seasonal instrument.

Appraisal of the Commercial Paper Market:

Commercial paper is a much cheaper source of financing than short-term bank financing, as we have noted. Many companies are considering commercial paper as a supplement to bank credit. A company could make use of the paper market when the interest rate differential was large and borrow from the bank when the gap narrowed. This would result in the lowest borrowing cost to the firm in the short term.

Evidence has indicated that it is imperative for a firm not to impair its relations with a bank by using its services only during periods of extremely tight money, however. It is often suggested that a firm should have a backup line of credit with a bank to cover its borrowing position in the commercial paper market.

One factor which has helped the growth of the commercial paper market is a regulation that the maximum loan a national bank can make to a single borrower is 10 per cent of the bank’s capital and surplus. It is the perpetual need of short-term capital that has helped the commercial paper market to boom.

Factoring Accounts Receivable:

When a firm factors its account receivable, it actually sells them to a factor who actually buys the receivables. This may be done with or without recourse. With recourse, the factor can look to the seller of receivables for payment if there is a default on the pay­ment of the receivable. Without recourse, the factor cannot look to the seller of the receivables for collection in case of default.

The factor maintains a credit department which can undertake a credit check of a customer. If a firm sells without recourse, utilization of this service can allow it to forego the cost of main­taining a credit department of its own.

In this case, the factor assumes risk and bad-debt losses and all expenses associated with collecting slow accounts. The customer of the firm who is factor­ing the receivables may or may not be told of the factor agreement; this decision is made between the lender and the seller of the receivables.

Associated with the assumption of risk and servicing of the receivables is an added cost to the seller. Usually a fee is attached which runs from 1 to 3 per cent of the face value of the receivables. In addition, there will be interest charges for funds that are advanced before collection by the factor.

The cost of using a factor can be illustrated with the following example. A firm factors on the average Rs.100,000 per month for a year. The factor will lend 80 per cent of the face value of the receivables and will charge a factoring fee of 1 per cent of that face value.

In addition, the factor charges 1 per cent interest per month on the amount borrowed. The interest cost and the factoring fee are taken out in advance of all funds given to the firm. Assume that the firm borrows the full amount each month.

We can calcu­late the annual cost to the firm of utilizing the factoring service as shown in following equation:

Inventory Financing:

Inventory is another asset that has considerable merit as collat­eral for short-term financing. The lender usually will advance only a specified percentage against the face value of the inventory. This loanable value is based on the type of inventory being consid­ered and the ability of the lender to dispose of it in case of default.

The more specialized the inventory and the market for the prod­uct, the more unwilling is the lender to advance a large percentage of the face value.

The more standard and salable the inventory, the higher the loan percentage. Frequently lenders will loan 90 per cent of the face value when they feel the inventory is standard and has a ready market, apart from the marketing organization of the borrower.

Lenders usually consider such items as marketability, perish­ability, market price stability, and difficulty in liquidating the inventory in determining the percentage value that they are will­ing to advance on an inventory loan.

The most important aspect of a lender’s analysis is to substantiate that there is enough liquidat­ing value in the inventory to cover the loan and accrued interest in case of default on the part of the borrower.

In addition, the lender must determine the ability of the borrower to service the debt by examining the cash flow structure of the firm. There are several ways in which inventory can be collateralized.

These methods are discussed below:

1. Floating Lien:

A feature of the Uniform Commercial Code permits a borrower to pledge inventory “in general” as collateral against a loan, with­out specifying the inventory involved. This allows the lender to obtain a floating lien or claim against all of the borrower’s inven­tory. This type of arrangement is very difficult to police, and in general it is made only to provide extra security for a loan.

A floating lien can cover both receivables and inventory; thus it allows a lender to obtain a lien on the major part of the current assets of a firm. The floating lien also can cover both present and future inventory.

2. Chattel Mortgage:

A chattel mortgage provides for the borrower’s inventory to be identified specifically by a serial number or some other means. The borrower still holds title to the goods, but the lender has a lien or claim on the inventory. Under this arrangement, the lender has to give his consent before the inventory can be sold.

Any inven­tory that has a rapid turnover or is not readily identifiable would not be suited for this type of lien arrangement. Capital asset items such as machine tools and other heavy equipment are well suited for a chattel mortgage.

3. Trust Receptions:

With a trust receipt loan, the borrower holds both the inventory and the proceeds from the sale of inventory in trust for the lender. Consumer durable goods, automobiles, and equipment are good examples of the types of inventory that are well suited to serve as this form of collateral.

The automobile dealership system is an excellent example of how a trust receipt collateral system works. When automobiles are shipped to the dealer from the manufacturer, the lending institu­tion will pay the manufacturer under an arrangement made with the dealer. The dealer in turn signs a trust receipt agreement which specifies the handling of the inventory.

The dealer is allowed to sell the cars and must turn the proceeds over to the lender. Under the trust receipt arrangement, the inventory is serialized and is periodically audited by the lender. The purpose of the audit is to determine if any cars have been sold without the proceeds of the sale being remitted to the lender.

Each time a new batch of cars is acquired from the manufac­turer, a new trust receipt agreement is signed to take account of the new inventory. Though this method provides a wider margin of safety than a floating lien arrangement, there is always the possibility that a dealer will sell cars and not remit the proceeds to the lender in payment of the funds advanced.

4. Terminal Warehouse Receipt Loans:

Under another arrangement for using inventory as collateral for a loan, the borrower’s inventory is housed in a public, or terminal, Warehouse Company. A warehouse receipt which speci­fies the inventory located there provides the lender with a security interest in the inventory.

Because the goods in inventory can only be released on authorization by the lender, it can maintain strict control over the inflow and outflow of inventory. In addition, an insurance policy is usually issued which contains a loss-payable clause for the benefit of the lender.

The warehouse receipt can be in a negotiable or nonnegotiable form. If it is negotiable, the receipt can be transferred from one party to another by endorsement, but before the goods can be released the receipt must be presented to the warehouse man.

A nonnegotiable warehouse receipt is issued in favour of the lender, which has title to the goods and is the only one that can release them. The nonnegotiable receipt arrangement provides that the release of goods must be authorized in writing. Most arrange­ments are of the nonnegotiable form.

5. Field Warehouse Receipt Loans:

With the form of collateralization known as the field warehouse receipt loan, the inventory remains on the property of the bor­rower. A field warehouse company sets off a specific part of the borrower’s storage area in which to locate the inventory being used as collateral. Often this area is physically fenced off and only the field warehouse company has access to it.

Once the collateral value of the inventory is verified by the field warehouse company, the lender advances the funds. This arrangement is desirable when there is great expense involved in locating the inventory elsewhere, especially true when the borrower has a high inventory turnover ratio.

There is no question that the cost of this form of collateral financing is very high. This is primarily due to the cost of the warehouse company which acts as a third party in this arrange­ment.

The evidence of collateral is only as good as the warehouse company issuing the receipt. Historically there has been evidence indicating fraud in terms of the validity of the inventory actually being stored in a particular spot.

Concept of Risk

A person making an investment expects to get some returns from the investment in the future. However, as future is uncertain, the future expected returns too are uncertain. It is the uncertainty associated with the returns from an investment that introduces a risk into a project. The expected return is the uncertain future return that a firm expects to get from its project. The realized return, on the contrary, is the certain return that a firm has actually earned.

The realized return from the project may not correspond to the expected return. This possibility of variation of the actual return from the expected return is termed as risk. Risk is the variability in the expected return from a project. In other words, it is the degree of deviation from expected return. Risk is associated with the possibility that realized returns will be less than the returns that were expected. So, when realizations correspond to expectations exactly, there would be no risk.

Elements of Risk

Various components cause the variability in expected returns, which are known as elements of risk. There are broadly two groups of elements classified as systematic risk and unsystematic risk.

(i) Systematic Risk

Business organizations are part of society that is dynamic. Various changes occur in a society like economic, political and social systems that have influence on the performance of companies and thereby on their expected returns. These changes affect all organizations to varying degrees. Hence the impact of these changes is system-wide and the portion of total variability in returns caused by such across the board factors is referred to as systematic risk. These risks are further subdivided into interest rate risk, market risk, and purchasing power risk.

(ii) Unsystematic Risk

The returns of a company may vary due to certain factors that affect only that company. Examples of such factors are raw material scarcity, labour strike, management ineffi­ciency, etc. When the variability in returns occurs due to such firm-specific factors it is known as unsystematic risk. This risk is unique or peculiar to a specific organization and affects it in addition to the systematic risk. These risks are subdivided into business risk and financial risk.

Measurement of Risk

Quantification of risk is known as measurement of risk.

Two approaches are followed in measurement of risk:

(i) Mean-variance approach, and

(ii) Correlation or regression approach.

Concept of Return

Return can be defined as the actual income from a project as well as appreciation in the value of capital. Thus there are two components in return the basic component or the periodic cash flows from the investment, either in the form of interest or dividends; and the change in the price of the asset, com­monly called as the capital gain or loss.

The term yield is often used in connection to return, which refers to the income component in relation to some price for the asset. The total return of an asset for the holding period relates to all the cash flows received by an investor during any designated time period to the amount of money invested in the asset.

It is measured as:

Total Return = Cash payments received + Price change in assets over the period /Purchase price of the asset.

In connection with return we use two terms realized return and expected or predicted return. Realized return is the return that was earned by the firm, so it is historic. Expected or predicted return is the return the firm anticipates to earn from an asset over some future period.

Social marketing is the systematic application of marketing along with other concepts and techniques to achieve specific behavioural goals for a social good. For example, this may include asking people not to smoke in public areas, asking them to use seat belts or prompting to make them follow speed limits.

Social marketing is marketing designed to create social change, not to directly benefit a brand. Using traditional marketing techniques, it raises awareness of a given problem or cause, and aims to convince an audience to change their behaviors.

So, instead of selling a product, social marketing “sells” a behavior or lifestyle that benefits society, in order to create the desired change. This benefit to the public good is always the primary focus. And instead of showing how a product is better than competing products, social marketing “competes” against undesirable thoughts, behaviors, or actions.

Social marketing is commonly used for causes like

Health and safety, including:

• Anti-smoking
• Anti-drug
• Promoting exercise and healthy eating
• Safe driving
• Railroad station safety

Environmental causes, including:

• Anti-deforestation
• Anti-littering
• Endangered species awareness

Social activism, including:

• Illuminating struggles that people of color, people with disabilities, etc. face, then inspiring people to fight against mechanisms that create inequality
• Anti-bullying
• Fighting gender stereotypes

Who initiates these social marketing campaigns? Nonprofit organizations and charities run the majority of social marketing campaigns. Government organizations, highway safety coalitions, and emergency services (police, fire, ambulance) run them as well. But social marketing is not out of the question if you’re a commercial business. Commercial brands will sometimes run social marketing campaigns for causes they are passionate about.

The primary aim of social marketing is ‘social good’, whereas in commercial marketing the aim is primarily ‘financial’. This does not mean that commercial marketers cannot contribute to achievement of social good.

Applications of Social Marketing

1. Health promotion campaigns in India, especially in Kerala and AIDS awareness programmes are largely using social marketing, and social workers are largely working for it. Most of the social workers are professionally trained for this particular task.
2. Anti-tobacco campaigns
3. Anti-drug campaigns
4. Anti-pollution campaigns
5. Road safety campaigns
6. Anti-dowry campaigns
7. Protection of girl child campaign
8. Campaign against the use of plastic bags
9. Green marketing campaign

Social marketing applies a customer-oriented approach, and uses the concepts and tools used by com­mercial marketers in pursuit of social goals such as anti-smoking campaigns or fund raising for NGOs.

Advantages of Social Marketing

Social marketing a new marketing tool can be a great asset if used properly. The beneficial effects of social marketing for a business can be tremendous, but one must remember that it must be used in the most efficient possible way.

Social marketing allows businesses and web sites to gain popularity over the Internet by using different types of social media available, such as blogs, video and photo sharing sites, social networking sites and social bookmarking web sites.

There are six distinct advantages of social marketing that make it a vital tool to any marketing campaign:

1. Promotes consumption of socially desirable products.
2. Promotes health consciousness in people and helps them adopt a healthier lifestyle.
3. It helps in green marketing initiatives.
4. It helps to eradicate social evils that affect the society and quality of life.
5. Social marketing is one of the cheapest ways of marketing.
6. One of the best advantages of social marketing is that anyone can take advantage of it, even from their own home.

What is NOT social marketing?

Often, people get confused about what social marketing is and isn’t. So, before we keep going, let’s break down 3 types of marketing that do NOT count as social marketing.

1. Social Media Marketing

Many people think social marketing is the same thing as social media marketing: marketing on social networks like Facebook, Twitter, Instagram, and YouTube. Well, that’s not true. Sometimes, social media will be used to spread, and generate buzz around, social marketing campaigns. However, most marketing on social media is oriented towards promoting a product or service. Those viral tweets by Wendy’s, and that influencer’s promotion of Fashion Nova on Instagram, are definitely not social marketing!

2. Self-Serving Donations

If a company publicizes a donation they make to a charity or cause, that isn’t social marketing, because their aim is partially to boost their own reputation.

3. Marketing “green” or “charity tie-in” products

If a company is marketing its own line of eco-friendly water bottles, hybrid cars, reusable lunch containers, or other “green” products, this doesn’t count as social marketing. The marketing of products with a charitable donation tie-in (such as TOMS) doesn’t count either. In both of these examples, the primary focus is on selling a product. Meanwhile, with social marketing, the focus is solely on changing behaviors for the public good.

Here’s an example:

• An ad with alarming stats on the number of disposable water bottles thrown out per year, which promotes Hydro Flask reusable bottles as environmentally friendly, and that is made by Hydro Flask to sell its own bottles, is not social marketing.
• Meanwhile, a general campaign to promote reusable water bottles, made by an environmental organization, that does not promote a specific brand of reusable bottle, is social marketing.

Social media networks are mode of social interaction. It is a platform of sharing and discussing information among human beings. Social media can include text, audio, video, images, podcasts and other multimedia communication elements. Social media sites are nothing but a group of special and user friendly websites.

Social marketing is a very broad term. Social marketing is a technique of building a business using various social media networks. For instance, videos and blogs that gives exposure to your company.

When someone talks about social media marketing people often think that they may be talking about Facebook and Twitter. But social media networks also offer effective marketing tools that can bring more traffic to your website and improve your online popularity. Social media marketing has many characteristics. To attain a good marketing strategy, you need to have a look at the following SMM characteristics.

1. Participation

Social marketing encourages contributions and feedback from everyone. Social marketing includes delivery of ideas at the time of online conversation. It tries to bridge the gap between companies and audience. With all the new channels of social media, people are enjoying this process of participation.

2. Openness

Social marketing success requires honesty, transparency and authenticity. You should maintain a trust worthy relationship with your customers in your SMM (social marketing) strategy. One fake or negative comment can destroy your online reputation.

3. Build relationships

Social marketing is a two-way communication channel. It requires participation from both companies and customers. As a business owner, it is very important to make good connections with your target audience. Online conversation through various social media tools happen in real time with real people. You get a chance to interact with your target audience and you can answer to their queries. Answering to their queries is a good way to build relationship with customers.

4. Reliability

To make your profile reliable, you need to consistently show your online presence. Effective social media marketer visits their targeted sites regularly. They also get involved with new users and promote their products. They talk to their target audience on a regular basis.

5. Build communities

Social marketing sites allow you to build communities quickly, this helps you communicate more effectively. Communities share common interests, such as a love of photography, a political issue or a favorite TV show. These communities help you to know about your target audience. You can also support other communities which you think are good for your business.

6. Customer service

It is very essential to take care of your customers. Social media networks are all about helping each others. It’s about providing value to your customers, not just promotion.

7. Avoid spamming

Don’t give importance only to promoting your links. Also share insightful content about your company. Do not send the same message to your community again and again, it works as a spam and it may irritate your customers.

Social marketing is the most powerful platform for small businesses. An effective social media marketing campaign grows your business and brings more traffic to your website. Social media marketing is the best marketing strategy allows you to promote your company at the same time build relationships.

Social Marketing is quickly becoming one of the most important aspects of digital marketing, which provides incredible benefits that help reach millions of customers worldwide. And if you are not applying this profitable source, you are missing out an incredible marketing opportunity, as it makes it easy to spread the word about your product and mission.

1. Improved brand awareness

Social Marketing is one of the most stress-free and profitable digital marketing platforms that can be used to increase your business visibility. To get started, create social media profiles for your business and start networking with others. By applying a social media strategy, it will help you significantly increase your brand recognition. By spending only a few hours per week, over 91% marketers claimed that their social marketing efforts greatly increased their brand visibility and heightened user experience. Undoubtedly, having a social media page for your brand will benefit your business and with a regular use, it can also produce a wide audience for your business in no time.

2. Cost-effective

For an advertising strategy, social marketing is possibly the most cost-effective way. Creating an account and signing up is free for almost all social networking platforms. But if you decide to use paid advertising on social media, always start small to see what you should expect. Being cost-effective is important as it helps you attain a greater return on investment and hold a bigger budget for other marketing and business payments. Just by investing a little money and time, you can significantly increase your conversion rates and ultimately get a return on investment on the money that you primarily invested.

3. Engage with your customers

Social Marketing is a good way for engaging and interacting customers. The more you communicate with the audience, the more chances you have of conversion. Set up a two-way communication with your target audience so that their wishes are known and their interest is catered with ease. Moreover, communication and engagement with customers is one the ways to win their attention and convey them your brand message. Thus, your brand will reach more audience in real terms and gets itself established without any hassle.

4. Improved brand loyalty

When you have a social Marketing presence, you make it easier for your customers to find you and connect with you. By connecting with your customers through social media, you are more probable to upsurge customer retention and customer loyalty. Since developing a loyal customer base is one of the main goals of almost any business. Customer satisfaction and brand loyalty typically go hand in hand. It is essential to often engage with your customers and start developing a bond with them. Social media is not just limited to introducing your product, it is also a leading platform for promotional campaigns. A customer sees these platforms as service channels where they can directly communicate with the business.

5. Healthier customer satisfaction

Social Marketing plays a vital role in networking and communication platform. With the help of these platforms, creating a voice for your company is important in improving the overall brand image. Customers appreciate the fact that when they post comments on your page, they receive a modified reply rather than a computerized message. A brand that values its customers, takes the time to compose a personal message, which is perceived naturally in a positive light.

6. Marketplace awareness

One of the best ways to find the needs and wants of your customers instead of directly communicating with them is Marketplace awareness. It is also considered as the most valuable advantage of social media. By observing the activities on your profile, you can see customers’ interest and opinions that you might not know otherwise if you didn’t have a social media presence. As a complementary research tool, social media can help you get information and a better understanding of your industry. Once you get a large following, you can then use additional tools to examine other demographics of your consumers.

7. More brand authority

For making your business more powerful, brand loyalty and customer satisfaction both play a major role, but it all comes down to communication. When customers see your company posting on social media, especially replying to their queries and posting original content, it helps them build a positive image in their minds. Regularly interacting with your customers proves that you and your business care about them. Once you get a few satisfied customers, who are vocal about their positive purchase experience, you can let the advertising be done for you by genuine customers who appreciated your product or service.

8. Increased traffic

One of the other benefits of Social Media is that it also helps increase your website traffic. By sharing your content on social media, you are giving users a reason to click-through to your website. On your social account, the more quality content you share, the more inbound traffic you will generate while making conversion opportunities.

9. Enhanced SEO rankings

Social Marketing presence is becoming a vital factor in calculating rankings. These days, to secure a successful ranking, SEO requirements are continuously varying. Therefore, it is no longer enough to simply optimize your website and regularly update your blog. Businesses sharing their content on social media are sending out a brand signal to search engine that speaks to your brand validity, integrity, and constancy.

There is no denying that Social media marketing has many advantages for startups and established brands. By regular updating the right social media marketing strategy, it will lead to increased traffic, better SEO, improved brand loyalty, healthier customer satisfaction and much more. Your competition is already increasing on social media day by day, so don’t let your competitors take your probable customers. The earlier you start, the faster you see the growth in your business.

Social marketing has the primary goal of achieving “social good”. Traditional commercial marketing aims are primarily financial, though they can have positive social effects as well. In the context of public health, social marketing would promote general health, raise awareness and induce changes in behaviour. Social marketing has been a large industry for some time now and was originally done with newspapers and billboards, but similar to commercial marketing has adapted to the modern world. The most common use of social marketing in today’s society is through social media. However, to see social marketing as only the use of standard commercial marketing practices to achieve non-commercial goals is an oversimplified view.

Evolution of Social Marketing

Many scholars ascribe the beginning of the field of social marketing to an article published by G.D. Wiebe in the Winter 1951-1952 edition of Public Opinion Quarterly. In it, Wiebe posed a rhetorical question: “Why can’t you sell brotherhood and rational thinking like you can sell soap?” He then went on to discuss what he saw as the challenges of attempting to sell a social good as if it were a commodity, thus identifying social marketing (though he did not label it as such) as a discipline unique from c mmodity marketing. Yet, Wilkie & Moore (2003) note that the marketing discipline has been involved with questions about the intersection of marketing and society since its earliest days as a discipline.

A decade later, organizations such as the KfW Entwicklungsbank in Germany, the Canadian International Development Agency, the Ministry for Foreign Affairs in The Netherlands, UK Department for International Development, US Agency for International Development, World Health Organization and the World Bank began sponsoring social marketing interventions to improve family planning and achieve other social goals in Africa, Sri Lanka, and elsewhere.

The next milestone in the evolution of social marketing was the publication of “Social Marketing: An Approach to Planned Social Change” in the Journal of Marketing by Philip Kotler and Gerald Zaltman. Kotler and Zaltman coined the term ‘social marketing’ and defined it as “the design, implementation, and control of programs calculated to influence the acceptability of social ideas and involving considerations of product planning, pricing, communication, distribution, and marketing research.” They conclude that “social marketing appears to represent a bridging mechanism which links the behavior scientist’s knowledge of human behavior with the socially useful implementation of what that knowledge allows.”

Craig Lefebvre and June Flora introduced social marketing to the public health community in 1988, where it has been most widely used and explored. They noted that there was a need for “large scale, broad-based, behavior change focused programs” to improve public health (the community wide prevention of cardiovascular diseases in their respective projects) and outlined eight essential components of social marketing that still hold today:

• A consumer orientation to realize organizational (social) goals
• An emphasis on the voluntary exchanges of goods and services between providers and consumers
• Research in audience analysis and segmentation strategies
• The use of formative research in product and message design and the pretesting of these materials
• An analysis of distribution (or communication) channels
• Use of the marketing mix—using and blending product, price, place and promotion characteristics in intervention planning and implementation
• A process tracking system with both integrative and control functions
• A management process that involves problem analysis, planning, implementation and feedback functions.

Speaking of what they termed “social change campaigns”, Kotler and Ned Roberto introduced the subject by writing, “A social change campaign is an organized effort conducted by one group (the change agent) which attempts to persuade others (the target adopters) to accept, modify, or abandon certain ideas, attitudes, practices or behavior.” Their 1989 text was updated in 2002 by Philip Kotler, Ned Roberto and Nancy Lee. In 2005, University of Stirling was the first university to open a dedicated research institute to Social Marketing, while in 2007, Middlesex University became the first university to offer a specialized postgraduate programme in Health & Social Marketing.

In recent years there has been an important development to distinguish between “strategic social marketing” and “operational social marketing”.

Much of the literature and case examples focus on operational social marketing, using it to achieve specific behavioral goals in relation to different audiences and topics. However, there has been increasing efforts to ensure social marketing goes “upstream” and is used much more strategically to inform policy formulation and strategy development. Here the focus is less on specific audience and topic work but uses strong customer understanding and insight to inform and guide effective policy and strategy development. Social marketing in most cases stands in contrast to business marketing and serves for society wellbeing. The techniques of this marketing are used for change of attitudes and behaviours of different audiences in public life.

Social marketing is also being explored as a method for social innovation, a framework to increase the adoption of evidence-based practices among professionals and organizations, and as a core skill for public sector managers and social entrepreneurs. It is being viewed as an approach to design more effective, efficient, equitable and sustainable approaches to enhance social well-being that extends beyond individual behavior change to include creating positive shifts in social networks and social norms, businesses, markets and public policy.

Many examples exist of social marketing research, with over 120 papers compiled in a six volume set.). For example, research now shows ways to reduce the intentions of people to binge drink or engage in dangerous driving. Martin, Lee, Weeks and Kaya (2013) suggests that understanding consumer personality and how people view others is important. People were shown ads talking of the harmful effects of binge drinking. People who valued close friends as a sense of who they are were less likely to want to binge drink after seeing an ad featuring them and a close friend. People who were loners or who did not see close friends important to their sense of who they were reacted better to ads featuring an individual. A similar pattern was shown for ads showing a person driving at dangerous speeds. This suggests ads showing potential harm to citizens from binge drinking or dangerous driving are less effective than ads highlighting a person’s close friends.